ML19329A968
| ML19329A968 | |
| Person / Time | |
|---|---|
| Site: | Perry, Davis Besse  |
| Issue date: | 11/26/1975 |
| From: | Jennifer Davis, Goldberg R, Hjelmfelt D CLEVELAND, OH, GOLDBERG, FIELDMAN & HJELMFELT |
| To: | |
| References | |
| NUDOCS 8001280706 | |
| Download: ML19329A968 (55) | |
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UNITED STATES OF AMERICA.
6.
NUCLE AR REGULATORY COMMISSION 1
Before the Atomic Safety and Licensing Board
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A s
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In the Matter of
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I '.
The Toledo Edison Company
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Docket Nos. 50-346A The Cleveland Electric Illuminating
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50-500A Company
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50-501A k
(Davis-Besse Nuclear Power Station,
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Units 1, 2 and 3)
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l-The Cleveland Electric Illuminating
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Docket Nos. 50-440A Company, et al.
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50-441A f
.(Perry Nuclear Power Plant,
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Units 1 and 2)
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l PREHEARING BRIEF OF THE CITY OF CLEVELAND l.
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i Reuben Goldberg f
David C. Hjelmfelt Goldberg, Fieldman & Hjelmfelt 1700 Pennsylvania Avenue, N. W.
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Washingcon, D. C.
20006 i
James B. Davis r
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Director of Law.
Robert D. Hart First Assistant Director of Lo.w g
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City of Cleveland City Hall Cleveland, Ohio 44114 i-Novembe r 26, 1975 Attorneys for City of Cleveland, Ohio
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TABLE OF CONTENTS Page TERMS AND REFERENCES USED IN l'HIS BRIEF 2
I T HE P ART IES........................................
3 II THE EI.E CTRIC UTILITY INDUSTRY...................
4 III RELATIONSHIP OF APPLICANTS. CEI AND CITY OF C LE V E LAND.........................................
7 IV
- THE MARKET S.......................................
10 V
SITUATION INCONSISTENT WITH THE ANTITRUST LAWS................................................
12 CAPCO........................................
13 CEI...........................................
25 VI T HE L AW............................................
37 VII NEXUS...............................................
46 VIII RE ME DIE S...........................................
50 C ON C LUSI ON.................................................
52 o
4
I TABLE OF CITATIONS P_a_ge Cases:
1 American Tobacco Company v. United States of America, 328 U.S. 781, 90 L. Ed.1575, 66 S. Ct. 1125 (1946) 40 Eastman Kodak Co. v. Southern Photo Materials Co.,
273 U.S. 359 (1927) 44 Gamco, Inc. v. Providence Fruit and Produce Building,.
194 F. 2d 484 (CA1,1952) 41 International Salt Co. v. United States, 332 U.S. 392, 92 L. Ed. 20 (1947) 44 Lorain Journal Co. v. United States, 342 U.S.143, 96 L. Ed.162 (1951) 44 Schine Chain Theaters, Inc. v. United States, 334 U.S.110, 92 L. Ed.1245 (1948) 43 Silver v. New York Stock Exchange, 373 U.S. 341, 10 L..Ed. 2d 389, 83 S. Ct. 1246, reh. den. 375 U.S. 870, 11 L. Ed. 2d 299, 84 S. Ct. 26 (1963) 44 U.S. v. Philadelphia National Bank, 374 U.S. 321, 10 L. Ed. 2d 915, 83 S. Cc.1715 (1963) 39 Unhed States v. Aluminum Co. of America (Alcoa),
148 F. 2d 416 (CA2,1945) 42, 43 United States v. Arnold, Schwinn & Co., 388 U.S. 365, 18 L. Ed. 2d 1249, 87 S. Ct. 1856 (1967) 45 United States v. E. I. duPont de Nemours & Co.,
315 U.S. 377,100 L. Ed.1264, 76 S. Ct. 944 (1956) 38, 39 United States v. Griffith, 334 U.S.100, 92 L. Ed.1236, 68 S. Ct. 441 (1948) 40, 41 United States v. Paramount Pictures, Inc.,
334 U.S.131, 92 L. Ed.1260, 68 S. Ct. 915 (1948) 43 United States v. Terminal R. Asso., 224 U.S. 383, 56 L. Ed. 810 (1912) 44 United States v. United Shoe Machinery Corp.,
111 F. Supp. 295 (Mass.1963) 40 Statute s:
Atomic Energy Act Section 105a 38 S e c ti on 10 5 c ( 5 ) *........................................... 37, 46 Sherman Act (15 USCA $2) 38 Miscellaneous:
House Report No. 91-1470 37 Kintner, An Antitrust Primer 39 11
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Board In the Matter of
)
)
The Toledo Edison Company
)
Docket Nos. 50-346A The Cleveland Electric Illuminating
)
50-500A
)
50-501A Company (Davis-Besse Nuclear hwer Station,
)
Units 1, 2 and 3)
)
)
The Cleveland Electric Illuminating
)
Docket Nos. 50-440 A Company, et al.
)
50-441A (Perry Nuclear Power Plant,
)
Units 1 and 2)
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PREHEARING BRIEF OF THE CITY OF CLEVELAND This is a proceeding brought pursuant to Section 105c of the Atomic Energy Act to determine whether the activities under an operating license for Davis-Besse Nuclear Power Station Unit 1 and construction permits and operating licenses for Davis-Besse Nuclear Power Station Units 2 and 3 and Perry Plant Units 1 and 2 would create or maintain a situation incon-sistent with the antitrust laws of the United States. If the Board finds that the Applicants' activities under the licen:ses would create or maintain t situation inconsistent with the antitrust laws, the Board must, pursuant to Section 106 of the Act, determine whether the operating license should issue without conditions, should be denied or should issue only with conditions, and to determine and prescribe the conditions.
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2-The Board's Prehearing Order No. 2, docketed July 25, 1974, set forth the issues and matters in controversy to be tried and provided for the filing of pretrial briefs.M s
TERMS AND REFERENCES USED IN THIS BRIEF The Cleveland Electric Bluminating Company, The Toledo Edison Company, Duquesne Light Company, Ohio Edison Company, and Pennsylvania Power Company are referred to jointly as " Applicants. "
The Cleveland Electric Bluminating Company is referred to as t
"CEI. "
j The Department of Justice is sometimes referred to as the " Depart-ment. "
Staff of the Nuclear Regulatory Commission is sometimes referred to as " Staff. "
i The City of Cleveland Division of Light and Power is sometimes re-
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ferred to as "MELP," " City Light," " City" or " Division. "
Central Area Power Coordinating Group is referred to as "CAPCO."
Combined CAPCO Company Service Territory is referred to as "CCCT. "
Prepared written testimony filed by the parties is cited by reference i
to the witness followed by the page number of the prepared testimony.
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l 1/ The Board's Prehearing Order No. 6, docketed October 2,1975, affirmed the issues and matters in controversy and set the date of November 10, 1975 for filing pretrial briefs.
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I THE PARTIES Applicants are the five members of CAPCO. All are large, fully integrated invester-owned electric utilities.
Duquesne Light Company (Duquesne) serves an approximate area of 800 square miles in northwestern Pennsylvania having a population of approxi-mately 1,615,000 persons. Duquesne has a net generating capacity of over 2,300 Mw and its total operating revenues are about $200,000,000.
Ohio Edison Company (Ohio Edison) serves an area of approximately F
7,400 square miles in central and northeastern Ohio. The approximate population of the area is 2,321,000 persons. Ohio Edison's net generating capacity is in excess of 3,300 Mw. The total electric operating revenues of Ohio Edison and ite subsidiaries exceed $300,000,000.
Pennsylvania Power Company, an Ohio Edison subsidiary, serves an area of approximately 1,500 square miles in western Pennsylvania having a population of approximately 324,000 persons. Its net generating capacity is in excess of 560 Mw and its total operating revenues exceed $42,000,000.
g The Toledo Edison Company (Toledo Edison) serves an area of about 2,500 square miles, including the City of Toledo, and areas to the west, south and east of the City of Toledo. The area served has a population of approximately 719,000 persons. Toledo Edison has a net generating capacity I
in excess of 1 200 Mw and its total electric operating revenues exceed i
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$100,000,000.
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The Cleveland Electric Bluminating Company serves an area in northeastern Ohio, including the City of Cleveland, of approximately 1,700 square miles, having a population of more than 2 million person. By the end of 1976 CEI will have total generating capacity of approximately 4,600 Mw. Its total electric revenues are approximately $300,000,000.
City of Cleveland, intervenor, owns an electric system serving approximately 20 percent of the City of Cleveland electric market. The City's peak load is approximately 125 Mw and its largest unit is 85 Mw.
Department of Justice and Staff of the Nuclear Regulatory Commission i
are statutory parties to the proceeding.
f State of Ohio is not a party but is a participant pursuant to Section
- 2. 715 of the Commission's Rules.
II l
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THE ELECTRIC UTILITY INDUSTRY I
i Central to an understanding of this case is a knowledg of the electric
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utility industry. Witnesses Mayben, Mozer, Kampmeier and Wein will pro-1 vide background testimony describing the nature and structure of the electric utility industry. Additional evidence describing the nature and character j
t i
of the electric utility industry will be presented through depositions and docu-t f
ments.
In the early years of the electric utility industry, each power plant served a sma111ocality limited in area by the short distance that power could be carried at low voltage, direct current. The number of entities providing l
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, r service was large. When the technique of transmitting power at higher volt-age and alternating current became practicable, service areas were expanded l
by extending transmission lines and consolidating systems (Kampmeier, 5-6).
In the period 1910-1915 there were more than 4,000 privately owned 1
electric plants and 3,000 municipally owned plants. During that same time period approximately half of the nation's generating capacity was owned by industries which generated their own power needs. Today, self-generation by industry accounts for only about 1% of all electric generation (Kampmeier, f
6).
During the period from World War I to the great depression, the j
number of utilities greatly decreased and the size of the remaining utilities l
greatly increased (Kampmeier, 7). Systems were consolidated and ex-panded through acquisition and merger (Kampmeier, 7). Technical advances in generation and transmission encouraged internal coordination of merged systems (Kampmeier, 8).
Each of the present CAPCO companies is a product of long-standing policies of acquisition and merger systematically pursued for decades f
(Wein, 63). Today only two municipal systems survive in the area served by CEI (Wein, 64) and only one survives in the area served by Duquesne
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Light Company (Wein, 74).
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Large economies of scale exist in the installation and operation of electric generating units. Investment cost per Kw of capacity for a 100 Mw 1
plant is about 60% more than for a 1,000 Mw plant. Fuel costs for a 100 Mw plant are about 60% higher than for a 1,000 Mw plant. Operating and main-
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tenance costs for a 100 Mw are three times as much as for a 1,000 Mw plant (Kampmeier, 22-23).
i Economies of scale are also present in the transmission of electricity.
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The capacity of a transmission line increases approximately as the square of the rated voltage of the line. Therefore, so long as costs increase less than the square of the voltage, higher voltage transmission lines are more economical as voltage increases (Wein, 50; Mozer, 14-15).
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i It has long been recognized in the electric utility business that re-t i
liability of service and economies of bulk power supply can best be achieved through coordination (Mayben,16). Forms of coordinated operations found in interchange or power pooling agreements among utilities include (Mayben, 17; Kampmeier,10-13):
(a) Reserve sharing and mutual emergency support.
(b) Emergency energy interchange.
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(c) Maintenance scheduling and maintenance power exchange.
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I (d) Transmission service.
(e) Short-term power and energy interchange.
(f) Spinning reserve interchange.
(g) Diversity interchange.
g, (h) Economy interchange.
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Electric utilities engage in coordinated planning and development to s
ob4ain the most economic method of expansion of power generation and trans-e 4
mPasion facilities. Forms of coordinated development found in the industry i
inf:1ude (Mayben, 18; Kampmeier,14-15):
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(a) Generating unit participation.
(i)
Common ownership.
(ii) Unit power purchases.
(b) Transmission participation.
(c) Transmission system interconnection and expansion.
(d) Staggered construction of generating units accomplished through planned exchanges of surplus power.
(e) Diversity power interchange (v ' nonal).
(f) Firm power sales.
Large nuclear units such as Perry 1 and 2 and Davis-Besse 1, 2 and 3 are not practical power supply options for other entities in the CCCT (Mozer, 8). Without access to the coordination services available through CAPCO, it would not have been practical for the large investor-owned
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utilitics which comprise CAPCO independently to construct and operate large nuclear units (Mozer, 11, 12).
III
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RELATIONSHIP OF APPLICANTS, CEI AND CITY OF CLEVELAND
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i At the end of 1973, the CAPCO pool reported a net dependable capac-r J
ity aggregating 11,735 Mw. Applicants are installing six nuclear generating
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units which will provide an additional 5,980 Mw (Kampmeier, 51). They
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have 4,753 pole miles of tra:2smission line with nominal voltage ratings of
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F 66 Kv or above, or 99. 3 percent of all such transmission in the CCCT (Hughes, 25-27). In addition, the CAPCO companies have 97.1 percent of the generating capacity in the CCCT and 98.4 percent of the net generation in the CCCT (Hughes, 25-27).
By virtue of membership in the CAPCO pool each of the members of CAPCO has access to coordinated operations and development (Mozer, 8). Moreover, they have additional coordinating arrangements with other electric utilities in Ohio, Pennsylvania and Michigan (Mozer, 8).
For engineering pinnning purposes, CAPCO utilizes the "one-system concept." Thus, the generation and transmission needs of the five member companies are aggregated and considered as one electric system in deter-mining the pool's generation and transmission requirements (Mozer,10-11).
Use of the "one-system concept" permits Applicants to obtain economies i
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of scale, avoid excess capacity, spread risks, share financial burdens, reduce reserve capacity requirements, use higher voltage transmission and minimize the number of transmission lines (Mozer, 11).
The CAPCO Basic Operating Agreement provides the contractual framework in which the Applicants achieve coordinated operations and development (Mozer, 20-23).
The opportunities available to the Applicants to engage in coordina-tion provide them with the power supply options from which they have devel-oped a reliable and efficient bulk power supply system (Mozer, 8).
Similar power supply options are not available to other electric utilities in the CCCT (Mozer, 8).
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4 CEI has grown to its pet.. c size through a process of merger and acquisition. It was formed in 1892 vy the consolidation of two electric com-j panie s.
Between 1907 ar *
.s..!, CEI acquired two privately owned electric t
systems and two municipally owned systems. From 1924 to 1929, CEI further expanded through acquisition of twenty-two additional private and l-municipal systems. In 1946, CEI acquired a small privately owned electric
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system operating in downtown Cleveland. Between 1950 and 1954, CEI acquired two more distribution systems and one municipal generation and distribu-l tion system. In 1956, CEI acquired Brooklyn Acres (Wein, 64). CEI has also pursued an aggressive policy of purchasing industry owned generation facilitie s.
In December 1972, CEI purchased the 184,000 Kw generating plant of the Union Carbide Plant at Ashtabula, Ohio (Wein, 83).
Today only two municipal systems, those of the Cities of Painesville j
and Cleveland, remain in CEI's service area (Wein, 64). There are no
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other private utilities in CEI's servise area (Wein, 65). CEI has a monopoly of generating capacity and retail sales in its service area.- CEI has 94.11
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percent of the generating capacity and 96.44 percent of the retail sales in f
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its service area (Wein, 65).
j DEI owns and operates all existing transmission lines adjacent to
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the City of Cleveland which would be needed for the City to obtain access
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to power supply options available through coordination (Mozer, 47).
The Division of Light and Power of the City of Cleveland has installed i
i generating capacity with reported net dependable capability of 180 Mw. The Division's genera *ing cepcity is made up of three steam electric generating c
b units each rated at 25,000 Kw, one 85,000 Kw steam electric generating unit and three dual-fired (gas and oil) combustion turbines each rated at 16,500 Kw. The City has a 138 Kv interconnection with CEI for the purchase of emergency power (Mayben, 8). The City's peak load in 1973 was 123 Kw (Mayben, 9). In 1973, the City's peak load was only approximately 3.4 per-
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cent of CEI's peak load (Mozer, 46). The City has 1. 6 miles of 138 Kv
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transmission line (Mayben, 9).
IV i
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THE MARKETS i
There are three product markets relevant for analysis in this pro-ceeding. These markets and their geographic boundaries are described in detail in Dr..Wein's testimony. The relevant markets are (a) the retail market for firm power; (b) the wholesale market for firm power; and (c) the regional power exchange market (Wein, 97).
The retail market for firm power consists of sales of power to ulti-mate consumers. A very small proportion of the power sold to ultimate consumers is sold as interruptible power, i. e., the sale is subject to inter-ruption to protect sales to others. Interruptible sales are made to a few large industrial customers. Retail sales are frequently divided by rate schedules into residential, commercial and industrial based on the charac-teristics and size of the load (Wein, 97).
The wholesale product market is composed of firm power sales for re sale. Typically, wholesale sales are made in larger quantities and at m
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higher voltages than are retail sales although large industrial retail customers i
may purchase at higher voltage and in larger quantities than do some whole-sale customers.- Wholesale purchases are made by electric utilities which
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distribute that power and resell it to retail customers. The wholesale market i
is composed of both " captive" customers and independent customers. " Cap-tive" wholesale customers are the retail distribution systems owned by those l
who sell power in the wholesale market. Independent wholesale customers t
are the nonassociated independent customers who purchase at wholesale for I
resale to ultimate users (Wein, 98).
The regional power exchange market is made up of agreements be-t tween interconnected generation and transmission systems to operate their I
l systems as an integrated generation and transmission entity. Typically such agreements provide for a degree of coordinated operations and develop-t ment. This market exists for the purpose of reducing the costs of genera-i j
tion of firm power in order to compete effectively in the hal electric power markets. It provides a method of permitting eae.h participant to optimally combine factors of production without which the participant would experience I
higher costs of operation and higher costs of capacity (Wein,100).
The relevant geographic markt for the retail market is each service
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area of each of the Applicants and each Applicant has a monopoly in its re-I tail market (Wein, 130-131).
Each service area of each of the Applicants also constitutes the rele-L vant geographic market.for the wholesale market (Wein, 136).
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The relevant geographic market for the regional power exchange s.
market is the CCCT. The regional power exchange functions through the P
medium of high voltage transmission interconnections (Wein,140). The 1
geographic extent of the CAPCO regional power ext hange may be viewed
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as the locus of gateways to and from the interconnected transmission o.
facilities (Wein, 142-143).
V i
SITUATION INCONSISTENT WITH THE ANTITRUST LAWS There exists in each of the relevant markets, retail, wholesale, and regional power exchange, a situation inconsistent with either or both Sections 1 and 2 of the Sherman Act and Section 5 of the Federal Trade Commission Act.
As the evidence will clearly demonstrate, the CAPCO pool has ob-tained a monopoly in the regional power exchange market and has utilized its monopoly power to extend, strengthen and preserve its monopoly. The effects of Applicants' activities in the regional power exchange market have been to lessen competition substantially and to hinder the ability of other l'
u electric entities to compete in the regional power exchange market and the wholesale and retail power markets. The focus of the City's case with L-respect to CAPCO will be the use by CAPCO of its monopoly power to deny i
the City entrance to the regional power exchange market.
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With respect to the situation inconsistent with the antitrust laws I
which exists in the wholesala and retail power markets, the City will address the anticompetitive activities of CEI in its relationship with the i
City. Ths City's case will be directed at CEI's use of its monopoly power to extend, strengthen, and preserve its monopoly in the wholesale and retail markets.
t CAPCO. As shown previously the regional power exchange me.rket functions through the medium of high voltage transmission interconnections.
1 Within the CCCT, Applicants have 99. 3 percent of all such transmission g
(Hughes, 25-27). It would be impractical for a municipal system such as I
Cleveland or Painesville to conetruct transmission facilities through the CEI l
system or beyond CAPCO in order to interconnect with other electric entities (Mozer, 57-58). None of the municipal or REA cooperatives operating in c
the CCCT owns any 345 Ky backbone transmission.
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Applicants have a monopoly of generating capacity and net generation j
in the CCCT. Applicants own 97.1 percent of the net dependable generating t
capacity in the CCCT and account for 98.4 percent of the net generation in i
L the CCCT (Hughes, 25-27). All of the large generating units providing I
economies of scale found in the CCCT are owned by the Applicants.
CAPCO is the only power pool for coordinated operations and develop-i ment in the CCCT. It operates in the contractual framework of the CAPCO Memorandmn of Understanding and subsequent CAPCO agreements. The coordination which occurs in CAPCO is made possible by the existence of the high voltage transmission lines owned by the CAPCO companies.
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ps,
CAPCO providec Applicants with essentially all of the potential i
'I benefits that can be obtained from coordinated operations and development (Kampmeier, 48-4.9).
I Nuclear power is among the most important power supply alterna-
[
tives available today for base load power (Mozer, 61). There is a particu-t
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1arly strong need for coordination when a utility has a nuclear power plant.
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Usually a utility installing a large nuclear plant such as Perry and Davis-
- Besse finds coordination essential. A strong relationship exists between a utility's nuclear power plants and its coordination arrangements (Mozer, I
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62). Nuclear power' magnifies the need for access to coordination (Kamp-I meier, 25).
A small electric utility cannot obtain the nuclear power option with-out access to coordination (Mozer, 69). From a practical standpoint, small electric utilities in the CCCT can achieve access to coordination and nuclear t
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power only through arrangements with the Applicants. Applicants control j
the power supply options available to other electric utilities in the CCCT e
and can, if they choose,- effectively prevent such small electric utilities i
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from developing and/or maintaining reliable and economic power' supply
.i systems (Mozer, 70-71).
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It is clear that Applicants, through the formation of CAPCO and their i
t individual efforts to acquire all generation and transmission capacity in the CCCT, have monopoly power in the regional power exchange market. Have I
Applicants sought to preserve, strengthen, extend or exercise their monop-oly power? The answer is yes.
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-4 Almost from the first four.ompany meeting to explore the possibility of formation of the CAPCO pool, Applicants have displayed a desire to ex-clude public power and other sman electric utilities from participation in the CAPCO pool.
At a meeting of the principals of Applicants on February 27, 1967, to work towards formation of CAPCO, Mr. Fleger, Chief Executive Officer i
of Duquesne Light, expressed concern that municipalities might chauenge Applicants' request for a license to construct nuclear power plants.
During March, April and May of 1967, when the Applicants were
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making various studies of the effects of different methods of anocating capacity on the resultant reserve levels, studies were made which would show the effect of those methods on the City of Cleveland should it become a member. The studies indicated that use of the anocation method similar g
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to that finaHy adopted could cause the City to carry more than twice the
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l average level of reserves for Applicants. Applicants were well aware of the economic disincentive the method chosen would have to a system like the City which might seek to join CAPCO.
At a meeting of the Applicants in June of 1967, Mr. Dissmeyer of Ohio Edison suggested the use of a rigid formula for the anocation of capacity in CAPCO. He suggested that if Applicants determined anocations by negotia-
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tion, a new member of CAPCO could also seek to negotiate its aHocations.
A rigid formula would make membership for a new member more onerous. /
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1 2f _ Firestone notes dated 8/28/67.
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Applicants feared that the FPC might require admission of munici-i palities to the pool. In order to isolate as much of the pool activities as l
possible from any FPC review, it was determined to embody the CAPCO Basic Generating Agreement in a separate document which would not be sub-ject to filing with the FPC. 3,,/
Again, at the August 20, 1967 principals meeting, Applicants ex-pressed concern that if the proposed Memorandum of Understanding were filed with the FPC, Cleveland, Oberlin or Hiram might intervene in an C
attempt to join CAPCO. At the same time that Applicants were expressing
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a desire to eccclude municipal electric utilities, Mr. Fleger was expressing i
the hope that Allegheny Power System - an investor-owned system - would ultimately join CAPCO.1/
Also at the August 20, 1967 meeting, concern was expressed that i
if Applicants did not form CAPCO, the FPC might force them to do some-j thing not to their liking - presumably to coordinate with small systems in the CCCT.
During the four-company meeting of Applicants on September 11, 1967,
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the problem of what to do about coordination with municipal systems was again discussed.
i On October 26, 1967, Mr. Dempler of Duquesne Light wrote an in-T
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ternal memorandum to Mr. Munsch discussing the Memorandum of Under-standing, signed by Applicants on September 14, 1967. Mr. Dempler said that the consensus among the Applicants was that public power systems i
3_/ Drafter's comments to Basic Generating Capacity Agreement, 7/18/69.
4/ Munsch's draft memo, 6/5/67.
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should not be admitted to CAPCO but might participate by purchasing capacity and energy from Applicants.
Although no municipal systems were permitted to join CAPCO in September of 1967, Applicants continued to worry that their monopoly might be disturbed. An internal Ohio Edison memorandum from Mr. Travers to Mr. Dissmeyer, dated November 1,1967, discussed the advisability of adopting capacity rating criteria which would have the effect of derating much of the existing capacity of any municipality seeking to join CAPCO. The j
result would be the assignment of greater capacity allocations to such a municipality providing another economic disincentive to CAPCO membership.
Applicants still faced the problem of explaining the exclusion of municipal systems to the FPC. On October 22, 1967 a meeting of the CAPCO chief executives was held to discuss explanations which could be given to r
the FPC for the exclusion of municipal electric systems from CAPCO.O
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f One explanation seized upon was that municipal systems could participate through purchases from Applicants.
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It was not long before Applicants' fears were realized. On Decem-ber 5,1967, the town of Pitcairn, Pennsylvania, in Duquesne Light's ser-vice area, wrote to each of the CAPCO companies requesting membership t
in CAPCO. In a well orchestrated response, each of the CAPCO companies i
informed Pitcairn that membership in CAPCO would not be practical.
Drafts of CEI's and Toledo Edison's responses to Pitcairn were reviewed
- 5_/ Munsch, 10/30/67.
9 by Duquesne Light prior to th2ir being mailed to Pitcairn. When Pitcairn persisted, each of the compuies offered to discuss the matter further if i
Pitcairn really believed membership in CAPCO was desirable. Each of the Applicants refused to provide Pitcairn a copy of the Memorandum of f
Undarst=nding, rendering further talks futile. Finally, Duquesne, in March of 1968, provided a list of reasons why Pitcairn could not join CAPCO.O Pitcairn previously had sought to purchase power at wholesale from Duquesne. This of course was in keeping with CAPCO's explanation that municipal systems could participate through wholesale power purchases.
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Unfortunately for Pitcairn, Duquesne had determined to acquire the 7
Pitcairn system to clean up the last vestige of competition in its service In pursuit of its efforts to acquire Pitcairn, Duquesne refused to sell area.
power at wholesale, thus giving the lie to the contention that small systems could participate in CAPCO through purchases from Applicants.
Pitcairn responded by filing a civil antitrust action against Duquesne r.
Light. The case was ultimately settled when Duquesne Light reluctantly i
agreed to make sales at wholesale to Pitcairn. Interestingly, prior to settlement of the case, Mr. Olds, one of the counsel for Duquesne Light; puggested that a course of action in conduct of the case might be followed which would exhaust the limited assets available to Pitcairn for prosecution
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of such an action. Thus, one is provided with another example of the use of Applicants' monopoly power.
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6/ Applicants'well coordinated response to Pitcairn's request for rnerr.ber-ship, having once been used successfully, was closely followed as a pattern for response to a similar request by the City of Cleveland.
. r Duquesne Light is not the only one of the Applicants to make a mock-ery of the suggestion that small utilities might participate in the benefits
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of CAPCO through purchases of power from Applicants. /
7 Toledo Edison I
refused to sell wholesale power to the City of Waterville in 1967 because Tcdedo Edison wanted to acquire the Waterville electric system. 8/
Like liberty, the price of monopoly is eternal vigilance. Having avoided Pitcairn's bid for membership in CAPCO, Applicants did not let down their guard. On January 16, 1968, Mr. Greenslade of CEI
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wrote to the other Applicants warning that CAPCO itself might be deemed a separate entity. If CAPCO was an entity, he warned, the FPC might j
force CAPCO to permit municipal systems to join CAPCC. He advised that Applicants should take care to prevent CAPCO from becoming an 9/
" entity. "-
~ The specter of municipalities breaching Applicants' monopoly
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remained. Duquesne Light advanced its " Proposal #2" to change the i
method then used by Applicants for allocating CAPCO capaci'. Among the reasons advanced in support of " Proposal #2" wasi he effect of the t
present method of allocation on new members such as an electric cystem having no generation but distributing and supplying 100 Mw of load. Duquesne l-pointed out that "$e present Allocation Procedures applied 'across i
L 7/ CEI's long attempt to avoid interconnections on reasonable terms with i
the City of Cleveland is described infra.
8/ Toledo Edison internal memorandum, Cloer to SchwaIbert, dated 11/9/66.
Letter from Dietle to Schwalbert, 6/29/67.
9/ Letter from Greenslade to Munsch, Henry r.nd White, 1/16/68.
- r. t the board' would not only encourage such entry but would result in minimiz-ing capacity allocations to such new members. " " Proposal #2" with modi-fications was subsequently approved by the CAPCO executive committee.
During the July 7,1972 CAPCO executive committee meeting, the
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l Chief Executives were called upon to determine the method of setting operat-ing reserve requirements for the CAPCO members. One method under con-sideration was the so-called " pro rata" method of allocating operating re-serves. Mr. Arthur, for Duquesne Light, pointed out that if the City joined CAPCO, the " pro rata" method would be very beneficial to the City i
That, Mr. Arthur noted, was "no good. "10/ A method was adopted which removed the problem foreseen by Mr. Arthur.
On April 4,1973. the City of C'leveland wrote to Mr. Rudolph, of CEI, requesting admission to CAPCO.11/ Nino days later the City request-ed participation in the Perry units.12I Mr. Rudolph responded by suggesting that the City meet with Mr. Howley, l
On August 3,1973, the City again wrote to Mr. Rudolph requesting admission to CAPCO and presenting a proposal for participt. tion by the j
City in-Davis-Besse Unit 1, Beaver Valley Unit 2 avid Perry Units 1 and 2.E On September 10, 1973, the City once again wrote to Mr. Rtadolph renewing its request for membership in CAPCO and participation in the CAPCO nuclea; units.14/
H/ Firestone notes of Executive Committee Meeting, July 7,1972.
1_1] Whiting to Rudolph, 4/4/73.
12/ Whiting to Rudolph, 4/13/73.
M/ Whiting to Rudolph, 8/3/73.
H/ Whiting to Rudolph, 9/10/73.
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Finally, at Mr. Rudolph's request, eight months after the City had i
requested membership in CAPCO, a CAPCO executivo committee meeting was held on December 7,1973, to consider the City's request for member-i ship in CAPOO. A joint CAPCO response to the City's request to join CAPCO was formulated with the reply to be communicated to the City by 15/
C EI. -
In addition, Mr. Arthur of Duquesne Light wrote a letter to the City advising that it's membership would not be practical.16/
Mr. Arthur's letter was nand delivered to the City, by Mr. Lee Howley, on December 13, 1973, at a meeting in which Mr Howley also delivered CEI's response to the City's bid for membership.El CEI's response which Mr. Rudolph states reflects the CAPCO joint position was that mem-bership by the City would not be practical. Thus, CAPCO responded to the City in the same fashion that it had earlier responded to Pitcairn.
At the December 13, 1973 meeting, CEI did offer to negotiate with the City for some of the forms of participation and coordination sought by the City. A pre-requisite to tha offer was the completely unaccept-able condition that before the negotiations could commence, the City would first have to withdraw frcm the Perry and Davis-Besse antitrust proceed-ings. A second condition attached to CEI's offer to negotiate was a require-ment that the City not sell power below cost - a condition which Mr. Lans-dale, a director of CEI, admitted would give CEI a veto over rates charged by the City. CEI refused to provide any wheeling se tvices.
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15/ Karl Rudolph deposition, p. 245; Mansfield memorandum,12/7/73.
l M/ Arthur to Perk, 12/10/73.
l E/ Howley to Whiting, 12/13/73.
l CEI's limited offer to enter negotiations after the City acceded to the above described conditions had previously been discussed with CEI's CAPCO partners.b CEI's limited offer to Cleveland of participation in the Davis-Besse f
1, Beaver Valley 2, and Perry 1 and 2 Units was designed to preserve the CAPCO monopoly. It was argued by CEI to its CAPCO partners that restric-tions could be placed in the offer that could not be included in offers made later in the proceedings and that these conditions would isolate the wheeling a
issue. Applicants obviously believed that if the wheeling issue were isolated i
the chance of avoiding wheeling was improved.
CAPCO's monopoly power in the regional power exchange market might not have been so strong had not the Buckeye agreement been negotiated.
The Buckeye arrangement arose from a desire of the Rural Electric Coop-eratives in Ohio to obtain their own generation and transmission facilities.
In order to forestall the construction of a competing transmission grid which 1
might have provided power supply options to all of the small electric systems in Ohio and to industries generating their own power, most of the Ohio investor-owned utilities, including Ohio Edison and Toledo Edison, under the leadership of Phil Sporn devised the Buckeye arrangement. The Buckeye s
arrangement prodded for sale of a large fossil fired generating unit to the f
Cooperatives and an agreement by the large investor-owned utilities to trans-mit the power from that plant to the Cooperatives. This proposal eliminated the need for the Cooperatives to build a competing transmission system.
18/ Davis notes of telephone conversation with Rudolph, 8/9/73.
M/ Munsch memorandum, 5/21/74.
t
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t-The dominant factor behind the Buckeye arrangement was to preclude the Cooperatives from building a transmission system.
/ Ohio Edison pre-20 ferred that the Cooperatives did not have transmi.ssion lines. 21/ The partici-j psting investor-owned utilities other than Ohio Edison, but including Toledo I
Edison, agreed to wheel the Buckeye power to the Cooperatives. Ohio Edison entered into a different contractual arrangement which produced the same result in a manner which could be argued was not wheeling. The purpose of Ohio Edison's separate agreement was to avoid the appearance of wheeling. 22/
i Applicants also participated in the formation of ECAR in an effort to forestall passage of legislation by Congress which would have empowered I
the Federal Power Commission to order Applicants and other investor-owned utilities to coordinate with municipal systems for economic benefits.
- In line with this effort the 14 members of the original C APCO group shifted its emphasis to include additional companies and to have as its single objec-tive increasing bulk power supply reliability (Lentz, 10). Admission of public
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power entities to ECAR could thus be accomplished without at the same time providing public power entities access to economies of scale.
f An agreement by Applicants to wheel power for small electric entities in the CCCT would, of course, curtail their monopoly power. Applicants
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have consistently refused to wheel power for municipal systems.
/
23 l-t At a f
I M/ Mansfield deposition, p.119.
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R/ Mansfield deposition, p.118.
l.
E/ Mansfield deposition, p.120.
l
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Mansfield deposition, p. 22, Tesar memorandum, 04/19/67.
- / Mansfield deposition, p. 21.
2 3,/. CEI's refusals to wheel power for Cleveland are discussed, infra.
i i
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24-meeting between Applicants and their counsel in this proceeding, Applicants reaffirmed their refusal to agree to any license condition which would require them to wheel power from or to a municipal system.
/
24 i
Applicants have acquired monopoly power of generation capacity and transmission facilities in the CCCT. This power was neither thrust upon them nor was it the inevitable result of economic forces. Rather, it was the result of a conscious process of mergers, acquisitions, opposition to the construction of competing facilities and the exclusion of others from the various items of coordination and development necessary for the achievement of their own monopoly power.
The terms of the CAPCO agreements place limits on the ability of any one of the Applicants to engage in coordination with a non-member. By l
I such terms Applicants further restrict the ability of small utilities to obtain access to coordination.
Applicants have used and have attempted to use their monopoly power to preserve, strengthen, and extend their monopoly. To this end, they have used their monopoly power to acquire municipal electric systems extending their monopoly and reducing the number of potential coordinating partners for i
other systems, to deny others the opportunity to participate in the regional i
power exchange market, to restrain competition in the wholesale power market, i
and to obtain substantial competitive advantages in the retail power market.
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l 24/ Minutes of Meeting with Counsel, 12/05/74.
g.
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. The Cleveland Electric Illuminatink Company. CEI has a long history of attempts to eliminate the Cities of Cleveland and Painesville as competitors for retail sales of electricity in its service area. In this portion oi its pre-hearing brief, the City will describe first CEI's use of its monopoly power to exclude the Cities of Cleveland and Painesville from the regional power exchange market and second CEI's use of its monopoly power in an attempt to reduce and eliminate the City of Cleveland's electric system.
Within its service area, CEI owns 632 of the 653, or 96. 8 percent, pole miles of transmission with a nominal rating of 66 Kv and above.
It accounts for 96. 6 percent of the net generation within its service area.
I It owns 3,896 Mw of the 4,128 Mw, or 94.4 percent, net dependable generating capacity in its service area (Hughes, 25-27). Through acquisi-s tion or merger it has acquired all electric utility systems in its service area except those of the Cities of Cleveland and Painesville (Wein, 64-65).
CEI's transmission system virtually surrounds the electric systems of the two Cities (Mozer, 57).
l Cleveland can obtain access to the regional power exchange market only by having transmission connections with other electric systems. Such interconnections can be accomplished by Cleveland by constructing its own transmission or by obtaining access to CEI's transmission. In the early 1960's CEI successfully opposed construction by the City of a transmission line which would have interconnected the electric systems of the Cities of Cleveland, Painesville and Orrville. It would now be impractical for Cleve.-
land to construct its own transmission lines to obtain access to the regional t
power exchange market (Mozer, 57; Mayben, 20). Thus, Cleveland cannot participate in the regional power exchange market unless it obtains access to CEI and CAPCO transmission facilities.
Obviously, before Cleveland could obtain access to the regional power exchange through the medium of CEI's transmission facilities, the City first had to establish a synchronous interconnection at transmission i
voltage with CEI. At aH times relevant to these proceedings CEI has attempt-ed to avoid "like the plague" a synchronous interconnection with the City except upon terms and conditions which were anticompetitive.
In 1962, Mr. Lindseth, of CEI, wrote to Mayor Locher, of Cleveland, offering an interconnection predicated on two conditions: (i) that the City increase its rates to the level of rates being charged by CEI and (ii) that the City lower its rates for street lighting service sold to the City.El CEI 4
offered to roll the City firm power thus aueviating the need for the City to instan its proposed 85 Mw generating unit. This part of the proposal was intended to forestan instanation of generating capacity by the City.NI CEI also offered to provide mutual standby, and economy energy. No other coor-dinatint; transactions were offered by CEI. Because of CEI's insistance on j
price firing, the City declined to interconnect with CEI.EI On June 27,.1963, Mr. Lindseth again wrote to Mr. Locher opposing i
the City's plus to interconnect with Painesville and Orrville and to instan 25/ Lindseth deposition, pp.13-14.
26/ Hauser deposition, p. 87.
. 22/ Mr. Lindseth's letter also stated that CEI had similar interconnection arrangements with other utilities. He did not identify those other utilities with which CEI had entered into price fixing arrangements.
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an 85 Mw generating unit. Mr. Lindseth took the occasion to offer an inter-connection predicated upon price fixing.
On February 12 and 17,1965, Mr. Besse, who had succeeded Mr. Lint *sett as President of CEI, wrote to Maycr Locher and offered to saterconnect with the City if only the City would a' gree to a price fixing scheme.
Again the City declined CEI's offer to interconnect on an anticompetitive basis.
Mr. Besse again offered the City an interconnection conditioned on a l
price fixing scheme by letter to Mayor Locher, dated July 14, 1966. On July 19,1966, Mr. DeMelto, Commissioner, Divisfor of Light and Power of l'
the City, wrote to Mr. Besse requesting an interconnection with CEI to pro-vide emergency backup to the City system. Mr. DeMelto pointed to the rioting which had occurred in the Hough area of Cleveland and noted the im-portance of insuring the reliability of street lighting. Despite the City's request for an interconnection for emergency service to insure adequate street lighting in riot areas as well as throughout the City, CEI continued to refuse to interconnect with the City unless the City agreed to engage in price fixing.
In March of 1968, Mr. Hauser informed a meeting of CEI's "MELP Task Force" that it was official policy that CEI would not interconnect with the City unless the City would agree to fix its rates at the level of rates l
maintained by CEI. 28/ Thus, at a time when CAPCO war takiag the position i
l that small electric utilities could participate through purchases of power i
28/
D. E.J. notes on meeting of MELP Task Force, 3/21/68.
i 8-w
from Applicants, CEI was refusing to even interconnect with Cleveland ex-cept on terms the City could not accept.
In early 1969, the City was faced with the problem of taking some of its boilers out of service to install precipitators. Again the City sought an interconnection with CEI. This time CEI decided that public opinion would demand that CEI provide some sort cf assistance.
/ CEI had previously 29
.letermined that the simplest, cheapest method of interconnecting with the City was a 60 Mw 69 Kv interconnection. 3_0,/ nstead CEI offered the City I
an 11 Kv load transfer scheme. Although the Ce e engineers wanted a permanent synchronous interconnection, CEI felt that it had been successful I
in finding a way to give the City " limited, temporary help without parallel operation. "31/
In June of 1969, Mr. Loshing, Treasurer of CEI, wrote to l
Mr. Howley, ' Vice President and General Counsel of CEI, reporting on the progress of the "MELP Interconnection. "32,/ Mr. Loshing reported on the financial stacus of the City's electric system and its need for additional reve-nue. Mr. Loshing noted that a 80 Mw interconnection with the City providing backup for the City's 85 Mw unit could result in annual savings to the City of $600,000 a year.. He also pointed out that under cleverly designed rates
- the City could be charged'$1,200,000 a year for the interconnection, thereby increasing the City electric system's operating deficit. Air. Loshing con-cluded that there were three courses of action open to CEI:
21/ CEI memorandum, Lester to Howley, 8/8/ 69.
30_/ CEI memorandum, 1/4 / 69.
3/ CEI memorandum, Lester to Bingham, 5/29/69.
31/ CEI memorandum, Loshing to Howley, 6/17/69.
] l 1.
Avoid an interconnection and run the risk of an FPC dictated interconnection, hoping that the financial and service problems will elimi-nate MELP as a competitive threat.
2.
Take the initiative in establishing an inter-connection with proper standby chargen:, to give them reliability but increase the fin =n-cial pressure on them.
3.
Make an all out effort to purchase MELP now while reliability and financial pressures are still present.
i The City had little desire to interconned on the basis of the load transfer scheme proposed by CEI and no agreement was concluded. Then on December 21, 1969, the City experienced a forced outage of its number 11 boiler which was the source of steam to its 85 Mw turbine generator unit.
The City had no emergency interconnection and the loss of the 85 Mw unit caused system shut down. After a system-wide outage of several hours, the City was able to bring other units on line to pickup most of its load.
During the following four days, the City's other units upon which normal maintenance had been deferred for years because of the lack of backup power experienced outagss. The City system remained in a state of crisis until December 24, 1969 when the 85 Mw unit was returned to service.
CEI's response was prompt. On December 30, 1969, Mr. Besse i
wrote to Mayor !/ ikes, offering to purchase the City's electric system.
Also on December 30, 1969, the firm of Squire, Sanders & Dempsey wrote to Mr. Besse providing him with a legal opinion to the effect that the FPC could require CEI to interconnect with the City.
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At the same time CEI was studying methods of interconnecting which I
would solve the City's immediate problem but still avoid a permanent
. parallei interconnection "like the plague. " CEI's dilemma was that if it offered too little the City might resort to the FPC and obtain an interconnection which would be "most distasteful" to CEI, and, on the other hand, CEI did
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i not wish to offer an interconnection which could provide backup for the City's t
85 Mw unit. The proposed solution was a temporary 69 Ky intertie limited to 40 Mva.
Due to the emergency situation of its electric system, the City was forced to enter into an agreement with CEI providing for 11 Kv transfer ser-vice and a promise to negotiate in good faith for a permanent synchronous interconnection.
The 11 Kv load transfer service was perfected in February,1970, but no progress was made toward negotiating a permanent parallel inter-e connection. On May 13,1971, in FPC Docket No. E-7631, Cleveland filed i
a complaint against CEI requesting the FPC to order a permanent parallel interconnection between CEI and the City. Again CEI reacted swiftly and on May 21,1971, filed a notice of cancellation and termination of the load trans-fer scheme. The FPC suspended CEI's notice of cancellation and termina-i tion until May 17, 1972, consolidated it with Cleveland's complaint proceed-l ing,- and set them for hearing.
On February 15, 1972, a CEI brainstorming session developed an interconnection plan which it was believed would " maximize the burden" on 32a/ Bingham to Loshing, 12/29/69..
+
)_3/
Mayben, p. 10.
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. J the City.d/ The plan was to cause any permanent interconnection to come about as a two-step process: (i) a temporary 69 Kv intertie followed by (ti) a permanent synchronous 138 Ky intertie. This proposal was discussed with President Karl Rudolph of CEIN! and may have been one of CEI's 1-motivations for ultimately proposing such a two-step process of interconnec-tion. 36 /
F L.
On February 7,1972, the City experienced another outage of its 85 Mw unit and immediately requested the FPC to order an emergency inter-J connection between CEI and the City. By Order of March 8,1972, the FPC ordered an immediate temporary emergency nonsynchronous 69 Kv inter-connection. On January 11, 1973, the FPC issued its final opinion order-ing a 138 Kv permanent synchronous interconnection.
1 In September 1972, the 69 Kv nonsynchronous interconnection was perfected (Mayben, 11). CEI refused to permit the 69 Ky intertie to be used to backup the City's generation but instead required that it be used as a load transfer point. Limiting the 69 Kv to use as a load transfer point was seen by CEI as a means of delaying installation of the 138 Kv synchronous inter-conneetion.El Not only did CEI seek to maintain its monopoly power in the regional power exchange market by denying Cleveland membership in CAPCO and by l
t-avoiding a synchronous interconnection with the City "like the plague," but f.
CEI also refused to sell firm power to Cleveland at wholesale.EI Once 34/ CEI memorandum, Maugans to Loshing, 2/15/72.
35/ Maugan deposition, p.15.
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36/ Rudolph deposition, p. 93.
31/ CEI memorandum, Hauser to Howley, 8/26/72.
. 38,/ Loshing deposition, p.147.
h
- again we find Applicants refusing even to make wholesale sales of firm power to small electric utilities despite their justification of the exclusion of such entities from CAPCO on the grounds that those entities can achieve the same benefits' through purchases from Applicants.
f In order to further m=in+=in its monopoly power in the regional j
power exchange market and as a direct exercise of that power, CEI has re-fused to wheel power to the City. On August 30, 1973, CEI refused to wheel power available to the City from the Power Authority of the State of New York.EI On August 18, 1975, CEI refused to wheel power available from Buckeye, Inc. on a seasonal basis to the City.
/
40 CEI's adamant refusal I
to wheel power to the City of Cleveland has also prevented the City from purchasing power from the electric system of the City of Richmond, Indiana.
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Indiana & Michigan Electric Company, which would wheel the power from
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City of Richmond to Ohio Power who in turn would wheel the power to CEI, i
has refused to agree to wheel the power unless CEI first agrees to wheel f
the power. 41/
CEI has thus far succeeded in maintaining and even strengthening its
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monopoly power in the regional power exchange market. It has been equally i
j successful in strengthening its monopoly power in the wholesale and retail power markets. The next portion of this brief will discuss CEI's activities directed at maintaining and expanding its monopoly power in those markets and its use of that power for anticompetitive purposes. Obviously CEI's 3_9,/ Hauser to Duncan, l'etter dated 8/30/73.
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l 40/ Rudolph to Perk, letter dated 8/18/75.
h/ Ohio Power has agreed to wheel.
activities in denying Cleveland membership in CAPCO, avoiding a synchro-nous interconnection with the City, refusing to wheel power to the City, I
refusing to sell firm power at wholesale and opposing Cleveland's proposed interconnection with Painesville and Orrville are relevant to a discussion 1-of CEI's activities in the wholesale and retail power markets. Those
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matters having been described, supra, will not be repeated here, r-Most of the wholesale power market in CEI's service area is com-7 posed of CEI's captive customers. CEI's opposition to an interconnection between Cleveland and Painesville and its refusal to wheel power preclude wholesale sales between Cleveland and Palnesville.
c.
CEI has long had a desire to eliminate the municipal electric systems i'
in Clevaland and Painesville. 42/ CEI has made offers to purchase the Cleveland electric system.
/ CEI has made numerous studies with regard 43 L
44/
to acquisition of the electric properties of the City of Cleveland. -
_ CEI has acted on many fronts to accomplish its objective of acquiring the City's electric system. During the period of the mid-1960's when the City's generating reserves were low, the City was reluctant to take units
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out of ' service for normal maintenance (Mayben, 13). As a result, from l
1965 on the City began to experience reliability problems. These problems
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worsened due to lack of back up for the City's 85 Mw unit when it became operational in 1967. This situation could have been avoided if the City had been able to obtain a synchronous interconnection with CEI (Mayben, 13).
t.
I 4/ CEI Five-Year General Planning Reports, 5YGPR 1064 and SYGPR 1065; 1
. Lindseth deposition, p. 33; Rudolph Speech to Investors, 1/24/68.
43/ Letter, Besse to Stokes, 12/30/69.
E/ Hauser deposition, pp. 125-127, 153-164.
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To take advantage of the City's increasing reliability problems CEI embarked L
upon an aggressive policy to encourage the City's customers to convert to I
electric service from CEI. 45/ As a part of its efforts to convert the City's s
customers, CEI offered services to customers in parts of its service ter-L ritory in which it competed with the City which it did not offer in other parts of its service area. 46/ This is a clear example of CEI using its monopoly power in the retail market and in the regional power exchange market for anticompetitive purposes.
CEI's aggressive action to take the City's customers was successful.
By 1969, CEI could identify one effect of its policy as being a need for the City to increase its rates to make up for revenues lost from the conversion of its customers by CEI.
/ CEI had a long standing objective of attemp-47 48/
ting to have the City's rates raised to the level of CEI's rates. -
This
" rate equalization" goal was intended to eliminate the ability of the City to compete for customers by offering lower rates. 9/ The two efforts of CEI, 4
- i. e., to avoid an interconnection which would enable the City to provide more reliable service and i.o force the City to raise its rates, were made
'i 4
side by side from the early 1940's up until the present as part of a plan to
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eliminate the City as a supplier of electricity in the retail market.
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One line of attack by CEI was to attempt to convince the City Council
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that the Division of Light and Power should supply power free to the City s
t 35/ CEI memorandum, Durr to Wyman, 7/15/65.
{6].Rudolph deposition, p.17.
E/ CEI memorandum, Moore to Bingham, 6/5/69 48/ Letter, Lindseth to Locher, 9/17/62.
Q/ Loshing deposition, p.132.
!' l for street lighting. This proposal was made by Mr. Lindseth in 1962 and l
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advanced repeatedly thereafter. CEI obtained a legal opinion from the 1
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City's bond counsel regarding the requirements of the City's bond indenture j
r 50 with respect to the rates the Division must charge for street lighting.
/
iL The effect of providing free street lighting would be to increase pressure l
on the City to make up lost revenue by increasing rates to its other customers.
I CEI also interfered with the Division's efforts to sell $9. 8 million
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of bonds to raise capital to make improvements to its electric system.
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Mr. Hauser prepared an amendment to the proposed ordinance authorizing sale of the $9. 8 million bond issue. The ordinance was originally drafted to provide for the sale of registered bonds to the City's sinking funds. Mr.
Hauser's amendment would require sale of the bonds on the open market without removing the requirement that the bonds be registered.
Coupon bonds are more marketable on the open market than are registered i
L bonds. Mr. Hauser gave copies of his amendment to members of the City Public Utilities Committee before which the ordinance was pending.
/
51
}t An amendment similar to that prepared by Mr. Hauser was adopted and the l
City thereafter was unable to market its bonds.
l CEI also utilized its control over the limited interconnections avail-t able to the City to extend CEI's monopoly. For example, it caused the 11 Kv i4 service to be operated in such a way as to increase the frequency of outages experienced by the City's customers. CEI caused the 69 Kv interconnection 50] Letter, Lansdale to Hauser, 10/27/66.
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51/ Hauser deposition, pp. 199-217.
to be operated in such a manner as to cause the City to experience increased I
costs and unnecessary outages. Further, CEI at one point refused to ener-gize the 69 Kv interconnection until the City first agreed to execute a pro-posed contract for the sale of street lighting service by CEI to the City.
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9
VI THE LAW The ultimate legalissue to be decided in this proceeding is whether 4
I the granting of an unconditioned license to Applicants for operation of
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Davis-Besse Unit 1 and for construction of Perry Units 1 and 2 and Davis-Besse Units 1 and 2 would create or maintain a situation inconsistent with the antitrust laws of the United States.
/ Although the statutory reference 52 to a " situation inconsistent with the antitrust laws" is not defined in the statute, it clearly indicatis that something less than a violation of the anti-f trust laws is required. Had Congress intended to require a violation of the antitrust laws, it could easily have chosen language requiring the Commis-(
sion to make a finding that grant of the license would create or maintain a f
situation in " violation" of the antitrust laws. In addition to the language of the statute itself, the legislative history also shows that something less than a violation is intended. House Report No. 91-1470 (U. S. Code Con-l gressional and Administrative News (91st Congress 2nd Session) pp. 4981, 5011) states:
i The legislation proposed by the committee provides j
for a finding by the Commission "as to whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws as specified in Section 105a. " The concept of certainty 4
of contravention of the antitrust laws or the policies clearly underlying these laws is not intended to be implicit in the standard; nor is mere possibility of
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5_2f Atomic Energy Act $ 105c(5).
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I inconsistency. It is intended that the finding be based on reasonable probability of contravention of the i
antitrust laws. It is intended that, in effect, the Commission will conclude whether, in its judgment, it is reasonably probable that the activities under the l
license would, when the license is issued or there-after, be inconsistent with any of the antitrust laws
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or the policies clearly underlying these laws.
The measuring sticks to be used by the Commission in making its I
determination are the antitrust laws referred to in Section 105(a) of the Atomic 1
Energy Act. Of particular relevance to this case is Section 2 of the Sherman Act
/ which makes it unlawful to:
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... monopolize, or attempt to monopolize, or com-bine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states....
Monopoly or monopoly power is the ability to fix or control prices
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in, or exclude competition from, a relevant market. 54/
Neither one of these abilities needs to be shown directly but may be presumed if there is control of a massive percentage of the relevant market. To find a violation of the Sherman Act it is necessary that there has been an irtent to obtain the monopoly position through unfair or forbidden business practices. If the position of power was achieved through normal business methods, then in order to prove a violation there must be evidence that the firm is seeking i
to maintain or exnand its position by the use of unfair or unconscionable means. These unfair or other-than-normal business methods are generally s
4 i
L M/ 15 USCA $ 2.
l 54/ United States v. E. I. duPont de Nemours & Co., 351 U. S. 377, 100 L
L. Ed.1264, 76 S. Ct. 944 (1956).
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i considered to be those restraints of trade cognizable under Section 1 of the t
Sherman Act. If no such predatory practices can be shown, there must be an indication of general intent to obtain or expand a position of dominance a
or power in the relevant market.
/
55 I
i The forbidden monopoly power must be appraised in terms of the competitive market for the product. In the duPont case, supra,- the Supreme Court said, at page 395:
i In considering what is the relevant market for deter-mining the control of price and competition, no more
-l definite rule can be declared than that commodities reasonably interchangeable by consumers for the t
same purposes make up that "part of trade or com-merce" monopolization of which may be illegal.
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In this case the relevant product markets as defined by Dr. Wein are the retail market, the wholesale power market, and the regional power i
exchange market. The first two are distinct end product markets while the latter, the regional power exchange market, is a market for factors of
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production. A buyer in one market cannot readily substitute a product from another market.
The Supreme Court addressed the quest on of the relevant geographic market in U. S. v. Philadelphia National Bank, 374 U. S. 321,10 L. Ed. 2d i
915, 83 S. Ct. 1715 (1963). The Court held, at page 357, that the test for determining the relevant geographic market is not where the parties do business or compete -
1 SJ/ Kintner, An Antitrust Primer (2nd Ed., The MacMillan Company).
5 r
v-
s
... but where, within the area of competitive over-lap, the effect of the merger on competition will be
{
direct and immediate.... This depends upon "the geographic structure of supplier-customer relations. "
i And at page 359 the Court said:
[
... the " area of effective competition in the known line of commerce must be charted by careful selec-tion of the market area in which the seller operates, and to which the purchaser can practicably turn fo_ r
- I supplies," Tampa Electric Co. v. Nashville Coal Co.,
365 U.S. 320, 327, 5 L ed 2d 580, 586, 81 S Ct 623.
5
[Ernphasis supplied by the Court ]
l.
The relevant geographic markets for the retail and wholesale power i
1 i
markets in this case are the individual service areas of each of the Appli-i cants. The relevant geographic market for the regional power exchange is
(
se CCCT.
Within the relevant product and geographic markets, Applicants f
have engaged in a variety of activities which, when measured by the anti-trust laws, reveal, at a minimum, the existence of a situation inconsistent
- (#
with the antitrust laws. One measure of Applicants' monopoly power and evidence of an effort to attain a monopoly position is Applicants' market shares. Market shares of Applicants all exceed 94 percent. The size of the market shares held by Applicants is by itself sufficient to permit an inference
[
of monopoly power. American Tobacco Company v. United States of America, 328 U. S. 781, 90 L. Ed. 157 5, 66 S. Ct. 1125 (1946); United States v.
j United Shoe Machinery Corp., 111 F. Supp. 295 (Mass.1963).
)
It is not necessary to show that Applicants deliberMely acted to L
create a monopoly. The Supreme Court said in United States v. Griffith, f
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. c l
l 334 U. S. 100, 92 L. Ed. 1236, 68 S. Ct. 441 (1948), at pages 105-106, that:
It is, however, not always necessary to find a speci-i fic intent to restrain trade or build a monopoly in order to find that the antitrust laws have been violated; j
it is sufficient that a restraint of trade or monepoly I
results as a consequence of a defendant's conduct or business arrangements.
Certainly, Applicants' monopoly is the consequence of a conscious, aggres-I sive policy of acquiring competing public and private electric entities in t
1 Ohio and Pennsylvania and acquiring the generating capacity of various I
industrial firms. Dr. Wein's testimony demonstrates that Applicants'
{
monopoly was not the inevitable result of natural monopoly forces or
(
superior business acumen.
I It is not necessary to show a use of monopoly power to demonstrate a violation of Section 2 of the Sherman Act. The Court in United States v.
Griffith, supra, said, at pages 106-107:
So it is that monopoly power, whether lawfully or unlawfully acquired, may itself constitute an evil and stand condemned under 6 2 even though it remains
(
unexercis ed. For 5 2 of the Act is aimed, inter alia, at the acquisition or retention of effective market control.... Hence the existence of power "to ex-clude competition when it is desired to do so" is it-self a violation of 9 2, provided it is. coupled with the 1
l purpose or intent to exercise that power....
In Gamco, Inc. v. Providence Fruit and Produce Building, 194 F.
i 2d 484 (CA 1,1952), the Court said at pages 486-487 that:
The Sherman Act condemns the power which makes pricing abuse possible as well as the abuse itself.
i g
i
. In United States v. Aluminum Co. of America (Alcoa), 148 F. 2d 416 (CA 2,1945), the Court ruled that it is sufficient that one possessing a 1
monopoly power act in such a way as to maintain its monopoly power to prove a violation of the antitrust laws.
i Applicants have utilized a variety of means to maintain their pur-posefully obtained generation and transmission modopolies and hence their monopolies of the retail, wholesale, and regional power exchange markets.
Applicants have refused to sell power at wholesale to municipal electric 4
distribution systems which they wished to acquire. Some Applicants entered i
into the Buckeye arrangement to forestall the construction of competing
(
l transmission lines. Applicants have excluded small systems from CAPCO to deny them the benefits of coordinated operations and development.
i i
CEI has refused to wheel power for the City, has refused to sell firm power to Cleveland, has opposed efforts by the City to construct its i
(
own transmission and has refused to coordinate operations and development s
with the City, i
CEI has offered interconnections to forestall installation of genera-tion by the City and even then has coupled its offer with a requirement that the City join CEIin price fixing.
l CEI has used its monopoly power over transmission to deny the City 7'
access to the normal reliability services available to electric utilities in the regional power exchange market. CEI has capitalized on the resultant s
reliability problems of Cleveland to take over literally thousands t
d k
e
i.
of the City's retail customers. Frequently these customers were offered added inducements to change suppliers in the form of free internal wiring not offered to customers of CEIin the non-competitive portions of CEI's service area.
i Although there is substantial evidence which will show that Applicants did act in such a way as to n$aintain their monopoly, such a showing is not necessary to prove the existence of a situation inconsistent with the antitrust 1aws. The mere existence of the power to monopolize, together with the purpose or intent to do so, constitute an evil at which the Sherman Act is aimed. Schine Chain Theaters, Inc. v. United States, 334 U.S.110, 92 L. Ed.1245 (1948); United States v. Paramount Pictures, Inc., 334 U. S.131, 92 L. Ed.1260, 68 S. Ct. 915 (1948). No specific intent to monopolize is r equired. As was stated by the Court in Alcoa, supra, at page 432, "no monopolist monopolizes unconscious of what he is doing. " So here Appli-
)
cants meant to keep and did keep their monopoly of the retail, wholesale and regional power markets.
(
It is not necessary to rely upon intent to monopolize or acts designed merely to maintain monopoly power in order to find a situation inconsistent i
with the antitrust laws. The testimony and exhibits to be offered in this i
proceeding will prove that Applicants have in fact used their monopoly i
powers to maintain and expand their position through predatory practices such as those restraints cognizable under Section 1 of the Sherman Act.
Many of these acts are discussed by Dr. Wein under the rubric of destruc-tive competition.
e t
,.,,r
t' CEI and Applicants have used transmission monopoly to deny the City access to' the regional power market. Transmission facilities consti-tute a unique facility which cannot be economically duplicated. CEI's utilization of its control of the transmission bottleneck is both an illegal I
restraint and an attempt to monopolize. United States v. Terminal R. Asso.,
- 224 U.S. 383, 56 L. Ed. 810 (1912); Silver v. New York Stock Exchange, 373 U.S. 341, 10 L. Ed. 2d 389, 83 S. Ct. 1246, reh. den. 375 U. S. 870, 11 L. Ed. 2d 99, 84 S. Ct. 26 (1963). The use of this power to exclude i
4 competitors from the regional power exchange market is a per se violation
(
of the Sherman Act. International Salt Co. v. United States, 332 U. S. 392,
(
92 L. Ed. 20 (1947).
The testimony and exhibits will show that the Applicarc.;s have refused to deal with Cleveland for the purpose of maintaining or preserving CEI's monopoly. Applicants have refused to deal with Cleveland for wheeling and joint development of nuclear generation. While in a general sense a business is free to choose those with whom it will deal, it cannot exercise its right
\\
to select those with whom it will deal as a means of creating or maintaining a monopoly. Lorain Journal Co. v. United States, 342 U.S.143, 96 L. Ed.
162 (1951); Eastman Kodak Co. v. Southern Photo Materials Co., 273 U. S.
L 359 (1927).
J l
Toledo Edison and vaio Edison imposed anticompetitive restraints t
on the ability of REA cooperatives to compete for wholesale customers.
The Buckeye arrangement by contract extends the Ohio " anti-pirating statute"
.f Fi
.-_n,
- - - _ _ _ _, ~.
i
. to wholesale competition. Thus, before a municipality could leave one 4-wholesale distributor to purchase power from another, that municipality must endure a period of 90 days between cutoff from one supplier and hook-up with the next. In United States v. Arnold, Schwinn & Co., 388 U.S. 365, t
18 L. Ed. 2d 1249, 87 S. Ct. 1856 (1967), it was held a violation of the antitrust laws for bicycle manufacturers to make sales to retailers on any 4
condition limiting the retailer's freedom as to where and to whom the i
retailer would resell the products.
i The testimony and exhibits to be introduced in this proceeding will i
support a finding that Applicants have violated and will continue to violate I
the antitrust laws. It is not necessary that such a finding be made, how-ever, for the statute requires only a finding that a situation inconsistent with the antitrust laws will be created or maintained.
i
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46-VII NEXUS Section 105(c) of the Atomic Energy Act requires the Commission to make "a finding as to whether the activities under the license would create or maintain a situation incor.sistent with the antitrust laws as speci-fled in subsection 105a. " Once it has been determined that a situation in-consistent with the antitrust lawa exists or will exist after issuance of the licenses, it becomes necessary to determine whether the "situatioh" will i
i be created or maintained by Applicants' activities under the license. In I
short, there must be proof of a relationship between the activitire under the license and the " situation. "
This nexus between the anticompetitive activities of Applicauts and their activities under the licenses can only be understood in the contert of the electric utility industry described in Part II of this brief.
The ability to coordinate is directly related to the ability to install j
nuclear units (Mozer, 62). Toledo Edison put in larger units because it 56 had interconnections.
/ Without the interconnection agreement with Ohio i
i Edison for the Sanmis and Avon back-to-back units, CEI would have installed 300-350 Mw,
/
'I 57 and Ohio Edison would have considered a 300 Mw l-a unit of unit.
/ CEI acting alone would not install the Perry units. 9/
58 5
i j
56,/ Sullivan deposition, p.107; Keck deposition, p. 32.
i.
E/ Buck deposition, p. 30.
g/ Kckla deposition, p. 40.
Sj/ Masters deposition, p. 31.
t i
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-.,n--
,--,,----...--rn,-.
..,a
Only a very large system could construct a nuclear plant alone.
-Without coordination and joint ownership with others, nuclea. plants are not available to small systems (Mozer, 8). Applicants, could not build nuclear plants alone (Mozer,12). The addition of nuclear generation on a
[
system magnifies the need for coordination (Kampmeier, 25).
There is a strong and direct relationship between nuclear and fossil generating units and 345 Kv transmission networks (Mozer, 18). CAPCO has constructed transtnission lines associated with the Beaver Valley 2 and
(
Perry 1 and 2 nuclear units (Mozer, 17). CAPCO generation in periods I -
t IV has a pronounced relationship to the CAPCO 345 Xv transmission system
[
(Mozer, 14). There is also a relationship between Applicants' generation and transmission and the ability of Applicants to limit the power supply options of smaller systems. The need to add nuclear power plants in turn crestes a need te expand and increase the capacity of the transmission net-I work. The expansion and strengthening of the existing transmission network make it increasingly difficult for a small system to construct competing
)
transmission (Mozer, 60). Construction of transmission associated with the Davis-Besse and Perry units by Applicants has a direct connection with the increasing inability of small systems in the CCCT to maximize their i.
power supply alternatives (Mozer, 66).
Each of the Applicants will market its.aclear power in combination with all o.( the rest of its power. To market nuclear power effectively requires the coordinated development of all'of the different kinds of plants
[
I'
't
. 1 throughout the region. The flexibility made possible through wheeling is one of the essential elements of coordination required for the optimum use of nuclear units (Kampmeier, 51).
The ability to market nuclear power in conjunction with the other j
{
I power sources improves the economies of the Applicants (Kampmeier, 52).
The economies of nuclear power were so pronounced that no detailed studies were required for Applicants to determine that the Davis-Besse 2 and 3 units should be nuclear.$/ Toledo Edison has determined that nuclear f
power is 40 percent cheaper. 61/
Applicants point out in their Motion For Determination That Davis-Besse Unit 1 Is " Grandfathered" For Purposes Of Operation, at page 2 that:
I
... Davis-Besse Unit I will be an important factor in assuring the reliability of the power supply in the State of Ohio and, because of its relatively low fuel costs, it is expected to contribute to the stability of electric power costs for consumers of electricity in Ohio beginning in 1976.
Thus, Applicants themselves recognize the nexus between Davis-Besse Unit 1 i
licensed activities and the retail and wholesale power markets.
(
CEI has relied upon its situation of having access to coordination l
and nuclear power as part of its sales campaign to attract retail custcmers.
In sales presentations to industrial and large conunercial customers, CEI regularly stresses its greater reliability from ita interconnections with t
f j.
t 60/ - Rudolph deposition, p.174.
6,1) Williamson deposition, pp. 36-37.
,t
3.- i
~
other utilities and its ability to hold down future energy costs because of its participation in nuclear power. 62/
1 l
Unless small electric systems in the CCCT obtain the ability to participate in coordinating arrangements and to obtain access to nuclear l
I
. power which Applicants have found so advantageous, the small electric i
systems williose their ability to compete wit applicants (Kampmeier, 52).
i It is necessary that Cleveland, like Applicants, have access to nuclear capacity (Mayben, 22) and coordination (Mayben,15).
These facts demonstrate the strong nexus between the situation 1:1-i consistent with the antitrust laws and Applicants 8 activities under the license.
7 Applicants have attempted to maximize their own advantage from nuclear power by denying nuclear power to others. By retaining their monopoly power over transmission, Applicants preclude others from obtaining access 1
to the power supply alternatives available through the regional power exchange l
market. At the same time, Applicants attempt to exploit their nuclear power
(
monopoly in the retail market.
i
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l l
t i
$/ CEI saleu plan for A&W Foods, sales plan for Kindt-Collins Co., sales plan for Lakeside Holiday Inn.
d e
e
VIII REMEDIES 1
l Once the Board finds that Applicants' activities under the license j
will create or maintain a situation inconsistent with the antitrust laws, it must determine what conditions should be attached to the licenses in order i
to eliminate the inconsistency. Cleveland believes the conditions found in f
Exhibit WRM-1 are necessary and appropriate in this case. In essence, the conditions proposed by the City will provide small electric utilities with i
access to nuclear power and coordination on terms that put them on a plane I
of equality with Applicants.
Applicants have long opposed wheeling as a condition to its license.
Indeed, their efforts to isolate and dispose of the wheeling issue are evidence of their recognition of the importance of wheeling to small electric utilities.
- Without wheeling, small utilities remain at the mercy of Applicants.
Wheeling provides options for selling surplus power to others and for shopping i
{
around for short-term power purchases. Wheeling would make it possible 63 for entities such as the City of Toledo to enter the electric utility business.
/
g l
This would threaten Applicants' monopoly by increasing competition.
l Applicants also recognize the benefit of having more than one party to deal with. ~64/
i i
l l
I 63/ Keck dhposition, p. 117.
64 / Keck deposition, p. 207; Frederickson, p.102.
-r l
. r The ability to wheel is an important provision adding to a utility's ability to achieve economies, maximize power supply alternatives and i.
bargain with other utilities in the regional power exchange market.
i I
f i
f I
l t
i t
c I
L t
t
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t i
f i
s I
l
CONCLUSION l
Applicants have monopoly power in the relevant markets. They I
[
have used that power in a manner inconsistent with the antitrust laws.
{
Before issuing the licenses sought by Applicants, this Board must frame I
conditions to those licenses which will eliminate the inconsistencies.
f In this brief Cleveland has attempted to describe the principal f
thrust of its case. It has not attempted to deal with every issue and each item of evidence. Failure to address any issue contained in Cleveland's Statement of the Case to be Presented, filed September 5,1975, should not be considered an abandonment of such issue by Cleveland.
Re etfully sub
'tted, t
/
p 7
7
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dC~.
Reuben Goldberg David C. Hjelmfelt Goldberg, Fieldman & Hjelmfelt 1700 Pennsylvania Avenue, N. W.
g Washington, D. C.
20006 l
Telephone (202) 659-2333 l
James B. Davis
[
Director of Law Robert D. Hart First Assistant Director of Law 213 City Hall Cleveland, Ohio 44114 l
Telephone (216) 694-2737 L
l November 26, 1975 Attorneys for City of Cleveland, Ohio l
l
i j
CERTIFICATE OF SERVICE I hereby certify that service of the foregoing Prehearing Brief Of The City Of Cleveland, has been made on the following parties listed on the attachment hereto this 26th day of November, 1975, by depositing copies thereof in the United States mail, first class or air mail, postage prepaid, or by hand delivery.
0-David C. Hjelfnfelt /
Attachment l
i l
t l
l l
l i
i ATTACHMENT Douglas V. ' Rigler, Esq., Chairman Ivan W. Smith, Esq.
Atomic Safety and Licensing Board Panel John M. Frysiak, Esq.
3 Foley, Lardner, Hollabaugh and Jacobs Atomic Safety and Licensing Board Panel 815 Connecticut Avenue, N. W.
U.S. Nuclear Regulatory Commission l
Washington, D. C.
20006 Washington, D. C.
20555 l
i Alan S. Rosenthal, Chairman Richard S. Salzman, Chairman Atomic Safety and Licensing Appeals Board Atomic Safety and Licensing Appeals Board,
U. S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D. C.
20555 Washington, D. C.
20555 I
Dr. John H. Buck Michael C. Farrar Dr. Lawrence K. Quarles Dr. W. Reed Johnson f
Atomic Safety and Licensing Appeals Board Atomic Safety and Licensing Appeals Board U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C.
20555 Washington, D. C.
20555 i
i l
Howard K. Shapar, Esq.
Andrew F. Popper, Esq.
Executive Legal Director Jack R. Goldberg, Esq.
i U.S. Nuclear Regulatory Commission Office of the Executive Legal Director Washington, D. C.
20555 U.S. Nuclear Regulatory Commission Washingtoa, D. C.
20555 l
Mr. Frank W. Karas, Chief Public Proceedings Branch Benjamin H. Vogler, Esq.
Office of the Secretary Joseph Rutberg, Esq.
U. S. Nuclear Regulatory Commission Robert J. Verdisco, Esq.
Washington, D. C.
20555 Roy P. Lessy, Jr., Esq.
Office of the General Counsel Abraham Braitman, Esq.
Regulation Office of Antitrust and Inderwity U. S. Nuclear Regulatory Commission
(-
U.S. Nuclear Regulatory Couanission Washington, D. C.
20555 l
Washington, D. C.
20555 Melvin C. Berger, Esq.
i Frank R. - Clokey, Esq.
Joseph J. Saunders, Esq.
[
Special Assistant Attorney G o ral Steven M. Charno, Esq.
Towne House Apartments, Room 219 David A. Leckie, Esq.
l Harrisburg, Pennsylvania 17105 Janet R. Urban, Esq.
I Ruth Greenspan Bell, Esq.
Edward A. Matto, Esq.
Antitrust Division l
Assistant Attorney General Department of Justice Chief, Antitrust Section Post Office Box 7513 s
30 East Broad Street, 15th floor Washington, D. C.
20044
,i Columbus, Ohio 43215 Karen H. Adkins, Esq.
Christopher R. Schraff, Esq.
Richard M. Firestone, Esq.
Assistant Attorney General Assistant Attorneys General Environmental Law Section Antitru::t Section 361 East Broad Street, 8th floor 30 East Broad Street, 15th floor Columbus, Ohio 43215 Columbus, Ohio 4215
4 Page2 ATTACHMENT (Continued)
John R. White, Esq.
Leslie Henry, Esq.
Thomas A. Kayuha, Esq.
Michael M. Briley, Esq.
Ohio Edison Company Roger P. Klee, Esq.
47 North Main Stre.et Fuller, Henry, Hodge & Snyder Akron, Ohio 44308 300 Madison Avenue Toledo, Ohio 43604 John Lansdale, Jr., Esq.
Cox, Langford & Brown Pennsylvania Power Company 21 Dupont Circle, N. W.
1 East Washington Street Washington, D. C.
20036 New Castle, Pennsylvania M103 Lee C. Howely, Esq.
Donald H. Hauser, Esq.
Vice President and General Counsel Corporate Solicitor The Cleveland Electric Illuminating Co.
The Cleveland Electric Illuminatong Co.
Post Office Box 5000 Post Office Box 5000 Cleveland, Ohio 44101 Cleveland, Ohio 44101 Gerald Charnoff, Esq.
Thomas J. Munsch, Jr., Esq.
Wm. Bradford Reynolds, Esq.
General Attorney Shaw, Pittman, Potts & Trowbridge Duquesne Light Company 910 Seventeenth Street, N. W.
435 Sixth Avenue Washington, D. C.
20006 Pittsburgh, Pennsylvania 15219 David McNeill Olds, Esq.
Joseph Rieser, Esq.
John McN. Cramer, Esq.
Reed, Smith, Shaw & McClay William S. Lerach, Esq.
Suite 440 Reed, Smith, Shaw & McClay 1155 Fifteenth Street, N. W.
Post Office Box 2009 Washington, D. C.
20005 Pittsburgh, Pennsylvania 15230 John C. Engle, President Terrence H. Benbow, Esq.
AMP-O, 'Inc.
Winthrop, Stimson, Putnam & Roberts Municipal Building 40 Wall Street 20 High Street New York, New York 10005 Hamilton', Ohio 45012 1
Jon T. Brown, Esq.
Duncan, Brown, Weinberg & Palmer Suite 777 1700 Pennsylvania Avenue, N. W.
Washington, D. C.
20006 i
c
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