ML19329D030

Exceptions of Toledo Edison Co to 770106 Initial Decision. Decision Should Be Reversed.Certificate of Svc Encl

ML19329D030
Person / Time
Site:	Davis Besse, Perry
Issue date:	02/07/1977
From:	Briley M FULLER & HENRY, TOLEDO EDISON CO.
To:
References
NUDOCS 8002240039
Download: ML19329D030 (16)

Text

.

February 7, 1977 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Apoeal Board In the Matter of )

)

THE TOLEDO EDISON COMPANY and ) . -C THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No.'50-346A COMPANY )  :

(Davis-Besse Nuclear Power Station, ) \- -

Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Unita 2 and 3) ) 50-501A

' EXCEPTIONS OF THE TOLEDO EDISON COMPANY TO THE INITIAL DECISION Pursuant to 10 C.F.R. 52.762 of the Commission's Rules of Practice, The Toledo Edison Company (" Toledo Edison"),

one of the Applicants herein, hereby takes the following ex- l ceptions to the Initial Decision rendered by the Atomic Safety and Licensing Board (" Board") on January 6, 1977:

l. In reciting the dominance of Toledo Edison within its respective service area, the Board erroneously ex-cluded the generation, transmission and sale of electric energy by Buckeye Power, Inc. within the service area of Toledo Edison (pp. 32-34).

A

$4 02 240o 3 7 /*7

2. The Board erroneously found that Toledo Edison accounts for 98.60% of firm power sales at wholesale for re-sale within its service area (pp. 33-34).

3 The Board erroneously failed to find, in view of Finding No. 14 (p. 41), that Toledo Edison has engaged in third-party wheeling by transmitting power from Buckeye Power's Cardinal Plant to the rural electric cooperatives located within'the Toledo Edison service area.

4. The Board erroneously concluded that the failure and demise of certain independent municipal systems in Toledo Edison's service area was the result of a considered and deliberate acquisition policy of Toledo Edison (p. 161).

5 The Board erroneously failed to consider evidence of the economic and physical disrepair of municipal systems acquired by Toledo Edison prior to acquisition and erroneously concluded that such systems were profitable to the municipalities involved (p. 161).

6. The' Board erroneously concluded that it was the official corporate policy of Toledo Edison to acquire municipal systems in its service area through anticompetitive and surreptitious means (pp. 161-65).

7 The Board erroneously concluded that actual competition existed between Toledo Edison and the municipal systems acquired by Toledo Edison (pp. 161, 165).

l

8. The Board erroneously concluded, without any evidentiary record to support such conclusion, that Toledo Edison's acquisitions of the municipal systems of Clyde and "Libertyville" [ sic], Ohio were accomplished through anti-competitive means (p. 165).

9 The Board erroneously concluded that Toledo Edison's acquisition of the inefficient and failing municipal system of Waterville, Ohio was accomplished through anticom-petitive means (pp. 183-84).

10. The Board erroneously concluded that Toledo Edison initiated discussions with public officials regarding the sale of municipal systems and also erroneously concluded that such behavior, if it should occur, is anticompetitive (p. 184).

11. The Board erroneously failed to conclude that there is no nexus between Toledo Ed' con's past acquisition of i

municipal systems and the activities under the nuclear licenses. i

12. The Board erroneously concluded that per se unlawful anticompetitive territorial allocation agreements were entered into in the 1960's and adhered to and enforced between Toledo Edison and Ohio Edison and between Toledo Edison and Ohio Power (pp. 166-67).

l 13 The Board erroneously failed to consider evi-dence establishing the absence of the existence, adherence to or enforcement of any territorial allocation agreement between Toledo Edison and Ohio Edison or Ohio Power (pp. 166-67). )

1

14. The Board erroneously failed to conclude that there is no nexus between Toledo Edison's alleged territorial agreements with Ohio Edison and Ohio Power and the activities under the nuclear licenses.

15. The Board erroneously concluded that Toledo Edison had entered into or observed a territorial allocation agreement with Consumers Power Company of Michigan (pp.167-70) .

16. The Board erroneously considered the allegation of a territorial understanding between Toledo Edison and Con-sumers Power Company of Michigan and utilized its ultimate finding with respect to this allegation to support its general finding of anticompetitive behavior on the part of Toledo Edison notwithstanding that (a) such allegation was previously fully litigated in the Consumers Power case (Dkt. Nos. 50-329A and 50-330A), (b) the allegation was not supported by the evidence in the Consumers Power case, (c) the allegation is barred from consideration herein under the doctrine of col-lateral estoppel, and (d) the Board found this finding not to be material to its overall findings herein (pp. 167-70).

17 The Board erroneously failed to conclude that there is no nexus between Toledo Edison's alleged territorial agreement with Consumers Power Company of Michigan and the activities under the nuclear licenses.

18. The Board erroneously found that at least as early as 1966 Southeastern Michigan Rural Electric Cooperative

(" Southeastern") approached Toledo Edison with a request that it provide power to service the Ohio portion of Southeastern's load (p. 167).

l

19 The Board erroneously concluded that Toledo Edison refused to provide service to Southeastern pursuant to an understanding with Consumers Power Company of Michigan (pp. 167-69).

20. The Board erroneously rejected the bona fide technical and business reasons explaining why Toledo Edison did not agree until 1974 to supply power to Southeastern (pp. 168-69).

21. The Board erroneously concluded that the exist-ence of wholesale contracts with municipalities located within the State of Ohio rendered Toledo Edison subject to FPC jurisdiction in 1966 (p. 169).

22. The Board erroneously failed to conclude that there is no nexus between the alleged refusal to supply power to Southeastern (which is located outside of the CCCT area) and the activities under the nuclear licenses.

23 The Board erroneously held bilateral geo- i graphic service limitation language in Toledo Edison's con-tracts with certain municipalities to be per se unlawful and, accordingly, failed to consider substantial evidence that such provisions were necessary and ancillary to a lawful main purpose of promoting efficient operations and preventing duplication of services (p. 171).

24. The Board erroneously concluded that Toledo Edison's contracts with certain municipalities contained pro-visions which had the effect of restraining or otherwise limiting competition (p. 171).

25. The Board erroneously concluded that Toledo Edison inserted restrictions in its contracts with certain municipalities for the purpose of preventing customer transfers from Toledo Edison to the municipalities (pp. 165, 171).

26. The Board erroneously concluded that paragraph 8 of the contracts between Toledo Edison and its wholesale municipal customers constitutes an unlawful restraint of trade (p. 171).

27. The Board erroneously failed to conclude that paragraph 8 is ameliorative of a more restrictive state con-stitution limitation, and thus, as a matter of law, is not inconsistent with the antitrust laws (p. 171).

28. The Board erroneously concluded that any anti-competitive effects which may have been created by provisions in Toledo Edison's contracts with certain municipalities were not eliminated by the deletion of such provisions (p. 171).

29 The Board failed to take into consideration substantial and probative evidence that the City of Bowling Green, Ohio would not have had the opportunity to serve addi-tional new customers even if the bilateral territorial language of paragraph 8 had been absent from its contract with Toledo Edison, that the City did not make any request to so serve new customers, and that the City of Bowling Green has not increased its service area since the elimination in 1971 of any such contractual provision with Toledo Edison (p. 172).

30. The Board erroneously concluded that the bi-lateral territorial language of paragraph 8 of Toledo Zdison's contract with the Village of Edgerton, Ohio was enforced by Toledo Edison and had an anticompetitive effect upon the Village of Edgerton (p. 172).

31. The Board erroneously failed to conclude that there is no nexus between certain alleged restrictions which once existed in Toledo Edison's contracts with municipal whole-sale customers and the activities under the nuclear licenses.

32. The Board erroneously concluded that Toledo Edison has refused to wheel power for municipalities located within its service area, that it has an obligation to enter into general wheeling agreements in principle with other entities without knowing the specific facts of each request, and that unilateral failure to do so is an anticompetitive activity (pp. 173-75).

33 The Board erroneously concluded that Toledo Edison refused to wheel power for municipalities located within its service area and that Toledo Edison justified such refusal on the basis of future financing of nuclear plants in CAPCO (pp. 173-74).

34. Th'e Board erroneously concluded that there is a direct nexus between the refusal to provide bulk power ser-vices (presumably wheeling) and the construction and operation of the nuclear units involved in this proceeding (p. 174).

l l

35 The Board erroneously concluded that if the City of Bowling Green had access to bulk power through wheel-ing.it would have been able to expand its service arca (p. 172).

36. The Board erroneously concluded that Toledo Edison refused to wheel Buckeye power to the City of Napoleon (p. 175).

37 The Board erronecusly failed to take into con-sideration substantial evidence of bona fide engineering and safety concerns on the part of Toledo Edison regarding the establishment of an alternative delivery point from which the City of Napoleon could receive Buckeye power (p. 175).

38. The Board erroneously failed to conclude that there exists no nexus between Napoleon's request that Toledo Edison wheel Buckeye power and the activities under the nuclear licenses.

39 The Board erroneously found that the testimony of William Lewis was generally reliable (p. 176).

40. The Board erroneously found that the Lewis Affidavit of January 19, 1973 (NRC 127) was not prepared in contemplation of these proceedings (p. 176).

41. The Board erroneously concluded that Royce Moran (formerly Vice President of Corporate Planning for Toledo Edison) was not a credible witness and offered in-consistent testimony and accordingly failed to give sufficient weight to Mr. Moran's testimony (pp. 169, 176).

42. The Board erroneously failed to conclude that the provision in the Buckeye contract requiring a disconnect for 90 days is in accordance with the anti-pirating require-ments of Ohio law (p. 177).

43 While the Board properly held that Toledo Edison was not responsible for the insertion of the statutorily provided 90-day disconnect provision in the Buckeye contract, it erroneously agreed with the Department of Justice that the provision was inherently anticompetitive (p. 177).

44. The Board erroneously failed to properly evaluate the December 19, 1967 business review letter of the Depart-ment of Justice which approved the Buckeye agreement, and in particular, approved the 90-day disconnect provision (p. 177).

45 The Board erroneously concluded that Toledo Edison has an obligation to waive the 90-day disconnect pro-vision provided for by state law prior to transfer by a cus-tomer of its load to another supply source and that failure to do so is an anticompetitive activity (pp. 177-78).

46. The Board erroneously concluded, without evidentiary support, that Toledo Edison would enforce the 90-day disconnect provision in all cases (p. 177).

47 The Board failed to take into consideration all of the facts surrounding the City of Napoleon's request of Toledo Edison for a new interconnection from which it could receive Buckeye power and subsequently for a waiver of the statutorily provided 90-day disconnection provision set forth in the. Buckeye agreement (pp. 175-82).

. , .x

48. The Board failed to consider substantial and probative evidence that Toledo Edison's insistence upon a manner of reconnection with the Napoleon system was based upon bona fide engineering and safety concerns (p. 179).

49 The Board erroneously concluded that Toledo Edison refused to operate in continuous synchronism with the l

City of Napoleon (p. 180).

50. The Board failed to take into consideration substantial and probative evidence of the potential negative economic effects of entering into general postage-stamp wheeling agreements without prior consideration of specific facts upon which to predetermine cost factors (p. 180).

51. The Board erroneously concluded that because Bowling Green claimed to have a particular supplier in mind when it requested Toledo Edison to wheel,'the request was not made in a theoretical or abstract capacity (pp. 180-81).

52. The Board erroneously admitted hearsay evi-dence of a non-party (DJ 200), and erroneously relied on that incompetent evidence to conclude that the Buckeye agree-ment was entered into for the purpose of foresta111ng con-struction of an independent G&T (generation and transmission) system (pp. 181-82).

53 The Board erroneously concluded that Toledo Edison entered into the Buckeye agreement for anticompetitive purposes (p. 182).

10 -

l

- - ~

,..~ ,

54. The Board erroneously failed to conclude that there exists no nexus between the Buckeye agreement and the activities under the nuclear licenses.

55 The Board erroneously concluded that Toledo Edison has an obligation to enter into coordination agree-ments with municipalities in its service area without a show-ing of mutual benefit and that a unilateral refusal to do so is an anticompetitive activity (pp. 183, 167-169, 180).

56. The Board erroneously concluded that Toledo Edison refused to sell wholesale power to Waterville, Ohio in an effort to force the sale of the municipal system (pp. 183-84).

57. The Board erroneously concluded that Toledo Edison has an obligation to enter into agreements in principle for joint ownership of generation facilities with municipali-ties without a showing of mutual benefit and that failure to do so is an anticompetitive activity (pp. 185-86).

58. The Board erroneously concluded that Toledo Edison refused to consider entering into joint ownership of generating facilities with the City of Napoleon and failed to consided substantial evidence to the contrary (pp. 185-86).

59. The Board erroneously failed to conclude that there is no nexus between joint ownership of non-nuclear generating facilities and the activities under the nuclear licenses.

.n -

60.- The' Board erroneously and' unreasonably con-cluded that Toledo Edison's alleged denial of access to non-nuclear generating facilities effectively precluded munici-pal entities from obtaining access to the Davis-Besse and Perry facilities (pp. 185-86).

C1. The Board erroneously failed to find that no

! entity within the Toledo Edison service area has ever requested access to nuclear generation.

62. The Board erroneously concluded that Toledo Edison's desire to avoid FPC jurisdiction in the mid-1960's is probative of, or even relevant to, the supervisory role that the FPC does have, and has had, for example, over the operation of Toledo Edison since 1970 (p. 231).

63 The Board erroneously concluded that Toledo Edison's adherence to the provisions of Ohio law had the effect, and was for the purpose of, suppressing competition (p. 234).

64. The Board erroneously concluded that Toledo Edison unlawfully combined and conspired with the other CAPCO companies to restrain competition in the CCCT area (pp. 187-215). -

65. The Board erroneously concluded that Toledo Edison has engaged in mutually supporting actions with the other Applicants in these proceedings having the effect of increasing the dominance of each Applicant within its own ser-vice territory and that such actions may constitute monopoli-

ation, attempted monopoli:ation, and a combination to monopolize (p. 15).

- w e w - r w e -

-, ~.

66. The Board erroneously found, if it did so find, that Toledo Edison is chargeable with any alleged anti-competitive conduct engaged in by CEI in its dealings with other electric entities in the service area of CEI.

67. The Board erroneously found, if it did so find, that Toledo Edison is chargeable with any alleged anti-competitive conduct engaged in by Ohio Edison or Penn Power in their dealings with other electric entities in the service areas of Ohio Edison and Penn Power.

68. The Board erroneously found, if it did so find, that Toledo Edison is chargeable with any alleged anti-competitive conduct engaged in by Duquesne in its dealings with other electric entities in the service area of Duquesne.

69 The Board erroneously exercised its responsi-bilities under Section 105(c)(6) of the Atomic Energy Act of 1954, as amended, by failing to fashion license conditions for attachment to the nuclear licenses of Toledo Edison that bear any relationship to the alleged activities of Toledo Edison found by the Board to be inconsistent with the anti-trust laws (pp. 254-64). j Respectfully submitted, FULLER, HENRY, HODGE & SNYDER NRkaA R MICHAEL M. BRILEY A / \'6 URE4 300 Madison Avenue Toledo, Ohio 43604 Counsel for The Toledo Edison Company Dated: February 7, 1977

n 1

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. 50-346A COMPANY )

(Davis-Besse Nuclear Power Station, )

Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. ) ,

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing

" Exceptions Of The Toledo Edison Company To The Initial Decision" were served upon each of the persons listed on the attached Service List, by hand delivering copies to those persons in the Washington, D. C. area, and by mailing

. copies, postage prepaid, to all others, all on this 7th day of February, 1977.

SHAW, PITTMAN, POTTS & TROWBRIDGE k N o By: bw. WrA ~m-L Wm. Bradford Reynolds.

INITED STAI.7S OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board

'e In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. 50-346A COMPANY )

(Davis-Besse Nuclear Power Station, )

Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING )

. COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, -

) 50-441A Units l'and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A SERVICE LIST .

Alan S. Rosenthal, Esq. Ivan W. Smith, Esq.

Chairman, Atomic Safety and Atomic Safety and Licensing Board Licensing Appeal Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Washingten,s D. C. 20555 John M. Frysiak, Esq.

Jerome E. Sharfman, Esq. Atomic Safety and Licensing Board

. Atomic Safety and Licensing U.S. Nuclear Regulatory Commission Appeal Board Washington, D. C. 20555 U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Atomic Safety and Licensing Board Panel Richard S. Salzman, Esq. U.S. Nuclear Reculatory Commission Atomic Safety and Licensing Washington, D. C. 20555 Appeal Board .

U.S. Nuclear' Regulatory Commission . Docketing & Service'Section Washington, D .' C. 20555 office of the Secretary U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D. C. 20006 Appeal Board Panel U.S. Nuclear Regulatory Commission Joseph Rutberg,. Esc.

Washington, D. C. 20555 Benjdmin H. Vegler,' Esq.

Doualas V. Rigler, Esq. EOY.P. Lessy, Jr., Esq.

Chairman, Atomic Safety and Office of the Executive Licensing Board Legal Director Foley, Lardner, Hollabaugh and Jacobs U.S. Nuclear Regulatory Commission Chanin Building - Suite 206 Nashington, D. C. 20555 815 Connecticut, Avenue, N.W. '

-Washington, D. C. 20006

_ ~

l Joseph J. Saunders, Esq. Terence H. Benbow, Esq.

A. Edward Grashof, Esq.

Antitrust Division Dopartment of Justice Steven A. Berger, Esq.

Washington, D. C. 20530 Steven B. Peri, Esq. '

.Winthrqp, Stimson, Putnam & Roberts M01 vin G. Berger, Esq. 40 Wall Street Jcnet R. Urban, Esq.- New York, New York 10005 Antitrust Division P. O. Box 7513 Thomas J. Munsch, Esq.

Washington, D. C. 20044 General Attorney Duquesne Light Company R3uben Goldberg, Esq. 435 Sixth Avenue Dtvid C. Hjelmfelt, Esq. Pittsburgh, PA 15219 Michael D. Oldak, Esq.

Goldberg, Fieldman & Hjelmfelt David McNeil Olds, Esq.

Suite 550 . Reed Smith Shaw & McClay 1700 Pennsylvania Ave., N.W. Union Trust Building Washington, D. C. 20006 '

Box 2009 Pittsburgh, Pi 15230 Vincent C. Campanella, Esq.

Director of Law- Lee A. Rau, Esq.

Robert D. Hart, Esq. Joseph A. Rieser, Jr., Esq.

1st Ass't Direc. tor of Law Reed Smith Shaw & McClay City of Cleveland' Suite 900 213 City Hall .

1150 Connecticut Avenue, N.W.

Cleveland, Ohio 44114 Washington, D. C. 20036 Frank R. Clokey, Esq. James R. Edgerly, Esq.

Special Ass't Attorney General Secretary and General Counsel Room 219 Pennsylvania Power Company

~

Towne House Apartments .

One East Washington Street Herrisburg, PA 17105

• New Castle, PA 16103 Donald H. Hauser, Esq. John Lansdale, Esq.

Victor F. Greenslade, Jr., Esq'. Cox, Langford & Brown William'J. Kerner, Esq. 21 Dupont Circle, N . W. ,

The Cleveland Electric Washington, D. C. 20036 Illuminating Company 55 Public Square Alan P. Buchmann, Esq.

' Cleveland,. Ohio 44101 Squire, Sanders & Dempsey 1800. Union Commerce Building Michael M. Briley, Esq.. Clevela'nd, Ohio 44115 i Paul M. Smart, Esq.

Fuller, Henry,. Hodge & Snyder Edward'A. Matto, Esq.

P. O. Box 2088 Richard M. Firestone, Esq.

. Toledo, Ohio 43603 Karen H. Adkins, Esq.

, Antitrust Section Russell'J. Spetrino, Esq. 30 E. Broad Street, 15th Floor Thomas A. Kayuha, Esq. Columbus, Ohio 43215

. Ohio Edison Company Christopher R. Schraff, Esc.

76 South Main Street Assistant Attorney General ~

' Akron, Ohio 44308 ', Environmental Law Section 361 E. Broad Street, 8th Floor Columbus, Ohio 43215

. . -_ - ___ _ . - ,, -- - - .- -, - ..