ML19329D173
| ML19329D173 | |
| Person / Time | |
|---|---|
| Site: | Perry, Davis Besse  |
| Issue date: | 03/02/1977 |
| From: | Berger M, Urban J JUSTICE, DEPT. OF |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| References | |
| NUDOCS 8002250878 | |
| Download: ML19329D173 (28) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE_THE ATOMIC __SAPCTY AND LICENSING __ APPEAL BOARD In the Matter.of
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The Toledo Edison Company and
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The Cleveland' Electric Illuminating
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Docket Nos. 50-346A Company _
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57=500A (Davis-Besse Nuclear Power Station,
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50-501A Units 1, 2 and 3)
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The Cleveland Electric Illuminating
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Docket Nos. 50-440A Company, et al.
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50-441A (Perry Nuclear Power Plant,
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Units 1 and 2)
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RESPONSE OF THE DEPARTMENT OF JUSTICE TO APPLICANTS' RENEWED MOTION FOR AN ORDER STAYING,
PENDENTE LITE, THE ATTACHMENT OF ANTITRUST CONDITIONS On January 6, 1977, the Atomic Safety and Licensing Board T
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(Licensing Board) issued an Initial Decision (Antitrust) in the above-captioned proceeding.
On January 14, 1977, Applicants filed a Motion for an Order Staying, Pendente Lite, the Attachment of Antitrust Conditions with the Atomic S'afety and Licensing Appeal
-Board (Appeal Board).
By Memorandum and Order dated January 17, 1977, the Appeal Board referred Applicants' Motion to the Licensing Board.
By Order dated February 3, 1977, the Licensing Board denied 1
Applicants' Motion.
Applicants' Renewed Motion for an Order Staying,
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s Pendente' Lite, the Attachment of Antitrust Conditions (Renewed Motion) was filed with the Appeal Board on February 14, 1977.
By Order dated February 15, 1977, the Appeal Board ordered that all responses to Applicants' Renewed Motion be filed no later than the close of business on March 2, 1977.
The Department of Justice hereby files its Response to Applicants' Renewed Motion for an Order Staying, Pendente Lite, the Attachment of Antitrust Conditions.
Because the Licensing Board's well-reasoned decision of l
February 3, 1977, has effectively shown that there is no validity to Applicants' arguments in f avor of a stay, we do not believe that a point-by point rebuttal of Applicants' Renewed Motion is necessary.
Nevertheless, since Applicants have introduced new arguments and I
enlarged upon some of their prior arguments, we believe that we must respond to-Applicants' Renewed Motion.
I.
Granting _Of_A_ Stay Will Not Preserve _The Status Quo While Applicants continue to assert that they only wish to preserve the status guo, it is clear that permitting issuance of the operating license and construction permits without the antitrust conditions prescribed by the Licensing Board as a predicate to the very. issuance of that license and those permits will have a substan-tial effect on the status guo.
Status auo has been defined as the l
last uncontested status which preceded the pending controversy.
Tanner Liotor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 809 (9th Cir.
1963), cert, den. 375 U.S. 821; Westinghouse Electric Corp. v. Free derving Machine Co., 256 F.2d 806, 808 (7th Cir. 1958); Flood v. Kuhn, 2
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Supp. 793, 798 (S.D.N.Y. 1970), aff'd 443 F.2d 264 (2d Cir.
1971); aff'd 407 U.S.
258 (1972), and cases cited therein. 1/
As such, th'e status guo is a situation where Applicants do not have an operating licehse for Davis-Besse Unit 1 or construction permits for the other units which are the subject of this proceeding and are not required to adhere to the conditions which have been found by the Licensing Board to be an essential part of the above-described operating license and construction permits.
The situation Applicants urge, where they would proceed blithely to acquire the benefits of the operating license and construction permits -- but not the obliga-tions of the Licensing Board's conditions -- is certainly not the status guo. 2/
Applicants themselves have stated that power from Davis-Besse Unit I should begin to flow in July.
This is almost certainly prior to the time that the Appeal Board will issue its decision on Appli-cants' appeal on the merits.
The low-cost power from this unit will immediately commence to benefit Applicants and, unless the condi-tions ordered by the Licensing Board a,re attached, will allow them to 1/
These cases all concerned applications for preliminary injunc-tion, where substantially the same tests are applied as in requests for a stay.
2/
In fact, Applicants can preserve the status guo without any action whatever on'the Appeal Board's part.
If the license conditions involve costs which in Applicants' view exceed the benefits to be gained from interim operation of Davis-Besse Unit 1, Applicants may simply decline to commence operations until the appeal is resolved.
It is incon-ceivable, of course, that Applicants will ultimately forego opera-tion and construction'of plants which represent a substantial invest-ment in order to maintain a dogged refusal to conform to antitrust stancards.
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.s enhance their competitive position at the expense of the non-Applicant systems which are already suffering the effects of Applicants' anti-competitive behavior.
II.
Applicants Have Not Made A Strong Showing Of Likelihood Of__ Success On_ Appeal As stated by the Licensing Board:
It is the Applicants' burden to make a strong showing that it is likely to prevail on the merits of its appeal.
Mere establishment of possible grounds for appeal does not meet this standard.
Environmental Defense __ Fund, Inc._ v.
Froehlke, 348 F.
Supp. 338, 366 (W.D. Mo. 1972), aff'd 477 F.2d 1033 (8th Cir.
1973).
Memorandum and Order on Applicants' Motion for an Order Staying, Pendente Lite, the Attachment of Antitrust Conditions at p.
4.
While Applicants deny that this is the standard by which their argu-ments concerning reversal on appeal should be judged, they have intro-duced no cases supporting any other standard.
On appeal, Applicants have shifted the focus of their arguments concerning reversal to the assertion that the Licensing Board should have made findings as to whether competition in the electric utility industry is in the public interest.
However, all of the cases on which Applicants' rely for this assertion arose under statutes in which Congress had mandated economic regulation of an industry by the regulatory agency concerned and had required that agency to make its economic regulatory decisions guided by a "public interest" or "p,ublic convenience and necessity" test.
For example, Applicants quote extensively from Federal _ Communications Commission v.
RCA Communications Inc., 346 U.S.
86 (1953) (Renewed Motion, pp. 6-7).
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That decision reviewed an order of the FCC which had authorized,ew entry into the business of international rad iotelegr aph service --
entry wh'ich the FCC had a duty to regulate under the Federal Communi-cations Act of 19'34.
The Court held that the national policy favoring competition,would not, without more, permit the FCC to abdicate its duty to pass upon applications to provide new service.
In considering applications, the FCC was to employ the "public interest" standard.
346 U.S.
at pp. 92-93. 3/
The Nuclear Regulatory Commission's role under Section 105c(5) is far different.
The Commission is instructed that:
it shall make a finding as to whether the activities under the license would create or maintain a situa-tion inconsistent with the antitrust laws.
[ emphasis suppliedj.
The Commission has no responsibility to administer an economic regu-labory scheme in the electric power industry.
It is not authorized 3/
Each of the other cases cited by Applicants likewise concern decision-making by an agency with a legislative mandate to apply a scheme of economic regulation to an industry:
Hawaii Telephone Co.
- v. Federal Communications Commission, 498 F.2d 771 (D.C. C ir. 1974)
(Decided under the Communications Act of 1934, 47 U.S.C.
S214(a));
California v.
Federal Power _ Commission, 296 F.2d 348 (D.C. Cir. 1961) rev'd on other grounds, 369 U.S. 482 (1962) (Decided under Section 7(c) of the Natural Gas Act, 14 U.S.C.
S717); Pennsylvania Water &
Power Co. v.
Federal Power Commission, 193 F.2d 230 (D.C. Cir. 1951) aff'd 343 U.S.
414 (1952)(Decideo under the Federal Power Act, 16 U.S.C..S791(a) et. seg.);
S.S.W., _Inc.
- v. Air Transoort Ass'n_of America, 191 F.2d 65d (D.C. Cir. 1951) cert. den. 343 U.S. 955 (1952)
IDecided uncer the Civil Aeronautics Act, 49 UT5.C. S40] et. seg.);
Northern Natural Gas Co. v. Federal Power Commission, 399 F.2d 953 (D.C. Cir. 1960) (Decided under Section 7 of the Natural Gas Act, 15 U.S.C.
S717f(c)); Latin America / Pacific __ Coast S.S. Conference v.
Federal Maritime Commission, 465 F.2d $42 (D.C. Cir. 1972) (Decided under Section 15 of the Shipping Act, 46 U.S.C. S814).
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w to act as doorkeeper to the electric power ind us try, controlling who shall be permitted to participate in electric power markets.
It has no power. to regulate rates.
It has no authority to pass upon mergers.
In short, it is not the NRC's function to act as economic regulator for the electric power industry.
Only in such role would it be relevant for the Commission to address the question raised by Appli-cants.
Quite properly, therefore, the Licensing Board eschewed play-ing the role of economic regulator.
The "public interest" comes into play under the Atomic Energy Act only after the Commission has made an affirmative antitrust finding under Section 105c(5).
Section 105c(6) reads:
i In_the event the Commission's finding under paragraph (5) is in the af firmative,
..he Commission shall also consider, in determining _ysether the license _should be issued or continued, such other factors, including the need for power in the af fected area, as the Commission in its judgment deems necessary to protect the public interest.
On the basis of its findings, the Commission shall have the authority to issuc or continue a license as applied for, to refuse to issue a license, to rescind a license or amend it, and to issue a license with such conditions as it deems appropriate [ Emphasis supplied].
In commenting on this provision, the Joint Committee on Atomic Energy said:
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.While the Commission has the flexibility to consider and weigh the various interests and objectives which may be involved, the committee does not expect that an affirmative finding under paragraph (5) would j
normally need to be overriden by Commission findings and actions under paragraph (6).
The Committee believes that, except in an extraordinary situation, Commission-imposed conditions should be able to eliminate the concerns entailed in any affirmative finding under paragrapn (5) while, at the same 6
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.i time, accommodating the other public interest con-cer.ns found pursuant to paragraph (6).
- Normally, the committee expects the Commission's actions under paragr,aph (S) and (6) will harmonize both antitrust and such other public interest considera-tion as may be. involved.
S. Rep. No.'91-1247, 91st Cong., 2d Sess., p. 31 (1970).
It is clear that the Joint Committee on Atomic Energy expected that a fin 6ing that a situation inconsistent with the antitrust laws would be created or maintained by the licensed activities would not be overridden by the Commission under Section 105c(6); rather, the Committee contemplated that license conditions would eliminate that situation while at the same time permitting construction and i
-operation of the nuclear f acility if the Commission, in its role as I
the licensor of nuclear facilities, found such construction and operation to be in the public interest.
The legislative history i
nowhere suggests that Section 105c(6) intends the Commission to i
reconsider, after making an affirmative Section 105c(5) finding, whether and to what extent the antitrust laws and antitrust policy i
really should apply to the electric power industry and then to temper
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its antitrust relief according to some notion of the economic policy 1
it believes should apply to that industry.
1 Although Applicants now charge that the Licensing Board failed to consider the public interest with respect to its Section 105c(6),
findings Applicants have never addressed themselves to the specific 7
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publ_ic in'terest factors which should, in their opinion, be consid-j ered. 4/
The Licensing Board asked the parties to address the issue of. relief under Section 105c(6) in their post-hearing filings.
-In their 900 pages of post-hearing filings, Applicants addressed this question only as follows:
Quite obviously the'public interest is best served by this Board's tailoring its license conditions to fit the particular inconsistency that it finds is in need of a cure.
And this, of course, is the paramount consideration with respect to any remedy devised (See Section 105c(6)).
It is especially important in the present context, since, in view of the fundamental nature of the electric utility industry (See Part IV, supra), any more sweeping approach to the remedy question could well defeat the very "public interest" objective trying to i
be achieved.
Applicants' Joint Brief in Scpport of Their Proposed Findings of Fact and Conclusions of Law, at p. 696.
Even af ter Applicants had seen the relief requested by the parties opposed to an unconditioned license, Applicants f ailed to address the issue' of whether such relief might impair the public interest.
See Applicants' Joint Reply Brief, 126 at pp. 44-45.
We' find it difficult to understand Applicants' sudden j
concern with respect to this issue which they have consistently ignored in the past.
4/ Desite their present protest (Renewed Motion at p.
12), Appli-cants understood and agreed to a proposal that this proceeding
~ encompass both the issue of creation or maintenance of a situation inconsistent with the antitrust laws and the issue of the relief to be granted if the former finding is affirmative.
Tr. 1076-79.
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Since Applicants have not made known any substantial rea-sons why the license conditions would not comport with the public interest, we are unable to comment on their reasons.
We can com-ment, however, on the public interest consideration set out specifically in Section 105c(6): The need for power in the area.
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We find it anomalous that these very Applicants, who now express concern that under the license conditions power may be removed from the CCCT, have in-the past acted to prevent power from coming into the CCCT when that power would supply its competitors.
The Licensing Board found the following:
The Cleveland Electric Illuminating Company (CEI) attempted to forestall the City of Cleveland (MELP) from building new generation (Slip Opinion, ff. 39, p. 62);
i CEI refused to wheel power f rom New York State (PASNY power) to MELP (Slip Opinion, ff. 58, p. 77);
CEI maintained a wheeling policy which prevented MELP from obtaining power from Buckeye Power, Inc., Orrville, Ohio, and Richmond, Indiana (Slip Opinion, ff. 59, p. 78);
Ohio Edison Company (OE) and Toledo Edison Company (TE) entered into territorial agreements with Ohio Power Company (OP) which prevented the introduction of OP power into the area (Slip Opinion, ff. 106-07, pp. 115-16; ff. 164(b),
p.
167);
OE eng' aged in activities which made it impossible for Norwalk to retain its generation and distribution system, thereby removing a source of power from the area (Slip Opinion, ff. 102, pp. 110-113);
OE attempted to enter into a territorial agreement with Columbus &-Southern Ohio Edison Company (Slip Opinion, ff. 109, p.
116);
j OE refused to wheel power to the Wholesale Customers of Ohio Edison (WCOE) (Slip Opinion, ff. 116, p. 124; ff. 124, pp. 128-129);
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TE refused to wheel for Bowling Green at a time when Bowling Green had an expression of interest from OP to supply it with wholesale power (Slip Opinion, ff. 171, p. 174).
TE refused to wheel Buckeye power for Napoleon (Slip Opinion, ff. 172, p. 175).
These activities of Applicants belie their belatedly expressed fears that the power needs in the CCCT area may not be met.
Further, Applicants' concern is belied by their decision to delay the construction schedules of Davis-Besse Units 2 and 3 for two years and of Erie Units 1 and 2 for two years, as well as to delay completion of Manfield Unit 3 for one year.
Applicants' reasons for delaying these units include " revised [orecasts of customer's electrical requirements."
S-7 Registration Statement, Preliminary Prospectus dated January 28, 1977, at p.
3 (attached as an exhibit to this pleading). 5/
The relief prescribed by the Licensing Board is in fact entirely consistent with meeting CCCT area power needs; it will allow non-Applicant systems in the CCCT to obtain power from elsewhere, as well as from efficient, economical nuclear generation in the area.
. Similarly, Applicants' assertion that they are likely to pre-vail on the merits of their appeal, because the Licensing Board a
erred by relying upon the per se doctrine, is totally without merit.
5/ Other reasons attributed for schedule delays were rapidly in-creasing construction costs and the difficulty of raising funds in today's money market.
If we were to join Applicants in specu-lation, we might speculate that municipal participation in nuclear units might ease Applicants' financing difficulties.
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N Applicants have not cited any new law nor made any new argu-ments to support their contention.
Indeed, Applicants are relying on the same cases and the same discussion which was presented to the Licensing Board (Applicants' Joint Brief in Support of Their Proposed Findings of Fact and Conclusions of Law, pp. 59-66) and rejected.
Furthermore, the Licensing Board found that only three types of conduct constituted per se violations of Section 1 of the Sherman Act:
group boycotts or concerted refusals to deal, price fixing, and territorial and customer allocations (Slip Opinion, pp. 20-21).
Applicants do not contend that group boycotts or concerted refusals to deal are not per se offenses (See Applicants' Renewed tiotion, p. 14).
Thus, at best, Applicants are urging that their likelihood of success on appeal on this subject rests on "possible" Licensing Board error in categorizing price fixing and territorial and customer allocations as per se antitrust violations.
This hardly portends Applicants' ultimate success on appeal.
Even a cursory review of the authorities Applicants cite do not support Applicants' contention concerning the per se doctrine.
It is indeed amazing that in this day and age Applicants are con-tending that price-fixing is not a per se violation of the anti-trust laws.
Applicants have conveniently ignored the plethora of cases which rebutt their contention.
See, for example, United States v. Trenton Potteries Co.,
273 U.S.
392, 397-98 11
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(1927); United States v.
Socony-Vacuum Oil Co., 310 U.S.
- 150, 226, n. 59 (1940); United _ States v. Masonite Corp., 316 U.S.
- 265, 276 (1942); Northern Pacific Ry. v.
United States, 356 U.S.
1 (1958); Citizens' Publishing Co.
v.
United States, 394 U.S.
- 131, 136 (1969).,
In addition, the Section of Antitrust Law of the American Bar Association in Antitrust Law Dev'elopments at p.
2 has stated:
Agreements to fix prices, both " horizontal" and
" vertical," have long been condemned under Section 1 of the Sherman Act.
Horizontal _ agreements among com-petitors to fix prices have uniformly been considered by the courts to be_per se_ unreasonable _ restraints.
They present an " actual or potential threat to the central nervous system of the economy."
Vertical agreements between a sel_ler and his customers which fix the customers' resale crices stifle crice comoeti-tion amonc the customers ana have also long been held to be per se_ violations of Section 1 [ Emphasis supplied].
Applicants' reliance on United States v. Citizens _& Southern National _ Bank, 422 U.S.
86 (1975), is similarly misplaced.
The Court never questioned the applicability of the per se test to price fixing but merely concluded that a conspiracy to fix prices had not been proven.
The Court's review of the banking practices involved went to the question of whether or not an agreement or conspiracy to fix prices existed and not to whether a price-fixing agreement would be reasonable under the circumstances.
Applicants' argument with respect to the inapplicability of the por se rule to territorial allocation agreements is also rebut-ted by United States v. Citizens & Southern National Bank, supra, where the Court stated at 118:
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Market division is a per s; f fense under the Sherman Act:
"This Court has reiterated time and again that
'[h]orizontal territorial limitations are naked restraints of trade witn no purpose
- v. Topco Associates, Inc., 405 U.S.-United States except stifling of competition'".
596, 660, quoting White Motor Co. v. United States, 372 U.S.
253, 263.
1 Furthermore, the per se rule with respect to territorial agree-ments has been held to apply in the electric utility industry.
Otter Tail Power Co. v. United States, 410 U.S.
366, 378 (1973).
Applicants have cited no case to the contrary.
Ilowever, even if we assume arguendo that Applicants are correct in their assertion that the Licensing Board erred in relying on the per se doctrine, they still fall short of demonstrating likelihood of success on the merits of.their appeal, since they have not cited any evidence in the record which would indicate that the group boy-cotts, price-fixing and territorial agreements in which they engaged would be held to be reasonable conduct under the rule of reason test. 6/
Mogeover, there can be little question that such conduct would be inconsistent with the policios underlying the antitrust laws, and thus require an affirmative finding under Section 105c(5).
6/
As the Court said in Otter Tail Power Co v. United States, supra, quoting with approval United States v. Arnold, Schwinn & Co.,
388 U.S. 365:
"The promotion of self-interest alone doe 5~n5t dvoke i
the rrule of reason to immunize otherwise illegal conduct", 410 U.S.
at p. 380.
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- III, Applicants Have Not Met Their Burden Of Showing That They Will Suffer Irreparable _ Injury If A Stav Is Not Granted Applicants have made no arguments that they will suffer ir-reparable injury which have not already been discussed and found unjustified by the Licensing Board. 7/
Nor have they presented any evidence or made any f actual statements which support their asser-tion.
Applicants also express concern that the license conditions will result in the irreparable injury of removal of needed power f rom the CCCT.
We pointed out above the questionable validity of this contention in light of Applicants' past actions, condemned by the Licensing Board, to prevent additional power from coming into the CCCT and their decision to delay the construction of 7/
Applicants' assertion tliat the Court in Sto2_H-3 Association v.
Volpe, 353 F.
Supp. 14 (D. Hawaii 1972), reached the conclusion that monetary loss was an inadequate. indication of irreparable injury because of the posting of a bond, is a misreading of that case.
While a bond was posted, the Court said, in full:
1 Traditionally, the irreparable injury con-
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templated by Rule 62(c) is that which vill make the appos1 moot.
United States v. El-O-Pathic Pharmacy, supra; Eastern Greyhound Lines v. Fusco, 310 F.2d 632 (6th Cir. 1962), citing liitchman _ Coal and Coke Co. v. Mitchell, 345 U.S.
229, 38 S.
Ct.
657 67 L.Ed. 260 (1917).
l Thus, prospective monetary damage is not irreparable injury.
That injury, if wrongfully inflicted, is indemnified by bond under Rule j
65(a), and in any_ event, even if the iniury is suffered,- the viability of the appeal is not aIIected Temphails idde_df 353~FT Supp. at pl 18.
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Davis-Desse Units 2 and 3 and Erie Units 1 and 2 and the comple-tion of Mansfield Unit 3. 8/
We.must admit that if Applicants were to observe the license conditions, the business practices to which they have become accus-tomed would be disrupted somewhat.
Since Applicants have made it their practice to engage in anticompetitive activities, as the Licensing Board found, it is only to. be expected that relief wnich requires that they now cease those activities will disrupt their methods of doing business.
As the Court said in Otter Tail Power Company v. United States, supra, quoting with approval, Federal Trade Commission v. National Lead, 352 U.S. 419, 431 (1957):
"those caught violating the Act must expect some fencing in."
410 U.S.
at 381.
Finally, in this regard we wish to note that the Department is not counselling nor does it counsel municipal systems with respect to the length of time it would take a non-Applicant system to make use of license conditions.
We have merely pointed out that because of the planning time involved, physical implementation of a license condition would likely not occur before a final decision is reached in this proceeding.
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The Licensing Board has fully answered Applicants' concerns that large amounts of power will leave the CCCT and that Applicants' system planning will be disrupted by this possibility.
Memorandum and Order, pp. 20-24.
Even assuming grquendo that such a situation could occur, it is so speculative e3s Le far in the future that it 1
cannot be considered as " irreparable injury" for the purposes of a stay.
If, at some time in the future, Applicants were faced with a shortage of power due solely to implementation of the license condi-tions, they could then ask for modification of the license conditions.
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'g IV.
Applicants Have Not Met Their Burden Of Showing That Other Interested Parties Will Not Be Substantially_ Harmed If A_ Stay Is Granted Before discussing the question of substantial harm to others, we would reiterate that Applicants are not requesting that the status guo be maintained but rather that it be altered substan-t'ially:
Applicants wish to obtain their licenses while at the same 4
time continuing their anticompetitive activities.
If Applicants were permitted to obtain their licenses while at the same time staying implementation of the conditions which the Licensing Board has found to be requisite to issuance of those licenses, they would disrupt the status guo by obtaining a valuable asset which is unavailable in any meaningful manner to non-Applicant systems within the CCCT. 9/
On the question of substantial harm to others, Applicants have urged that this Board must find that there is "something unique. about maintaining the status guo that would work to the disadvantage of. parties other than Applicants" (Renewed Motion,
- p. 22).
As we understand it, Applicants, in asserting that a unigue situation must be found, are urging this Board to adopt an " irreparable injury" standard for the harm occurring to other parties.
This is clearly not the law.
The c6urts, when i/
We will not repeat our argument, which was accepted by the Licensing Board, concerning the inadequacy of Applicants' Exhibit 44 as relief in this proceeding.
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delineatine, the tests for a stay, have consistently held that the party requesting the stay must show " irreparable injury" to himself while at the same time showing that no " substantial harm" will bef all others.
We believe that the question of whether substantial harm should be measured from the status guo per se or from a comparison of the status guo to the situation resulting af ter relief has been granted is a semantic dispute.
Where, after a hearing on the merits, a court has ordered injunctive relief, it is saying that' there is something inherently wrong with the status goo.
It is impossible to measure this harm in a vacuum, that is, with-out comparing the situation as it existed before litigation to the situation as it will exist af ter the relief is effectuated.
In any event, whether substantial harm is measured from the maintenance of the status guo or from a comparison of the status guo versus the anticipated situation when relief becomes effective, Applicants have not met their burden of ' showing tha't issuance of the license without conditions will not substantially harm the non-Applicant entities within the CCCT.
As the Licensing Board stated:
The problem is that the status guo was determined to be a situation inconsistent witn the. anti. trust laws.
Without the Board's conditions being in ef fect, there is every reason to believe that the anticompetitive 17
S
-s situation will continue.
The longer the situation continues, the more devastating its effect upon competition and potential competition in the CCCT.
Our findings noted the continuing demise of smaller systems witnin the CCCT.
Cleveland appar-ently is in desperate straits.
The adverse conse-quences of isolated operation continue to be expe-rienced by the majority of non-Applicant entities within the CCCT.
We conclude that the issuance of a stay undoubtably would harm other parties interested in the proceeding.
Memorandum and Order, pp. 29-30. 10/
V.
A_ Stay Would Not_Be__In__The Public_ Interest Applicants have made no showing that the grant of a stay would be in the public interest, nor have they in any way contra-dicted the Licensing Board's well-reasoned findings that a stay f
would not be in the public interest.
VI.
The Appeal Board's Authority To Condition The Grant Or Denial Of A Stay _Upon The Posting Of A Bond The Department is unaware of any authority which explicitly grants the Appeal Board the right to require the posting of a bond, or some other undertaking as a condition to the grant or denial of a stay.-
Nevertheless, we believe that the Appeal Board does have 10/
In its Memorandum Relating to the City of Cleveland's Motion for Clarification of License Conditions, issued the same date as its Memorandum and Order'on Stay, the Licensing Board noted, at pages 4-5, that Applicants now make availa,ble wholesale power to the municipal systems within the CCCT.
The Licensing Board was thus clearly aware that the municipal systems within the CCCT were interconnected witn the various Applicants.
Its statement, quoted above, concerning " isolated operation" plainly refers to the. continuing absence of coordinated operation and development between municipal systems within the CCCT and Applicants.
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the inherent authority, derived from its authority to condition nuclear licenses, to condition the grant or denial of a stay upon some undertaking.
Because the Appeal Board has the delegated authority to issue, refuse to issue, or issue with conditions, nuclear licenses, we see no reason why the Appeal Board would not have authority to require the posting of a bond as a license condition.
By the same reasoning, however, we do not believe that the Appeal Board has the authority to require a party who is not an Applicant to engage in any undertaking as a precondition to the denial of a request for a stay, 11/
Although we believe that this Board could lawfully order Applicants to post a bond, we believe that the post.ing of a bond here would raise such difficulties as to be completely unworkable.
The parties who could be substantially harmed if a stay is granted include present electric entities in the CCCT, potential 11/
In any event, we are unaware of any cases in which the prevailing party was required to post a bond as a prerequisite for enforcement of the relief it has been granted.
The posting of a bond of necessity involves some financial loss.
To require that the prevailing party suffer this loss so that it may obtain the relief to which the trial court believes it is entitled would be inequitable.
If anyone is to suffer the loss entailed by the posting of a bond, it should be the party who has, on its own motion, requested the court to stay its order.
Further, Rule 62(e) of the Federal Rules of Civil Procedure expressly exempts the United States or an agency therof from posting a bond where it has taken an appeal and the decision is stayed pend-ing that appeal.
We believe that this exemption should apply to proceedings before the NRC as well.
19
electric entities in the CCCT, 12/ and all retail customers in the CCCT.
We believe that it would be an impossible task to accurately measure the damages accruing to these parties from a continued in-l ability to compete effectively with Applicants, and from temporarily or permanently lost opportunities for coordinated operation and development with Applicants or non-Applicant systems.
I Furthermore, if Applicants do not prevail on appeal, and all preliminary indications are that they will not, what procedure would be used to determine what parties are entitled to damages and in what amounts?
Would the Commission be expected to entertain accions for money damages-and hold full-scale hearings to determine such damages?
How would parties who are not presently involved in j
this proceeding (i.e.,
the municipal systems in the CCCT other 1
i than Cleveland) come before this Commission to seek their damages?
l How would the Commission evaluate the ef fect of the stay on cities which thought about establishing municipal electric systems but delayed or abandoned tneir plans due to the unavailability of the coordination required by the license conditions?
How would 12/
Potential electric entities would include those municipali-l tics which, given the ability to obtain the benefits of coordi-nated operations and development with Applicants and other municipalities, might wish to enter the electric utility business.
l r
i 20 i
l
.. _ _.., - ~,.. _ _.
m
3 the Commission determine the damages suffered by all consumers of electric power in the CCCT due to Applicants' continuation of their anticompetitive behavior which, for example, h'as kept low-cost PASNY power out of the CCCT?
How would the Commission evaluate the damages suf fered by retail consumers due to a lack of or further postponement of more effective yardstick competi-tion?
How would the Commission evaluate the damages which will result if, during the stay, any of the Applicants should acquire one of the municipal systems in the CCCT?
This damage may weil be irreparable.
Finally, while we believe that the Appeal Board may require Applicants to post a bond, we are unaware of any cases in which an administrative agency has required such an action.
If the posting of a bond is required and is later found to be beyond the jurisdiction of the Commission, the parties for whose benefit the bond was posted, and not the Applicants, will suffer.
CONCLUSION For the foregoing reasons, the Department of Justice urges that the Atomic Safety and Licensing Appeal Board deny Applicants' 21 l
Penewed Motion for an Order Staying, Pendente Lite, the Attachment of Antitrust Conditions.
Respectfully submitted,
/u;!~< a.jy n;,,
MELVIri G.
BERGER 2hl-1-
h-
!E L--
p At1ET R.
URBAll Attorneys, Antitrust Division Department of Justice Washington, D.C.
20530 March 2, 1977
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Dc:sstration No.
t o p r v1Q 1 'CT 7 C.Ls v c
L. A' T a m C Y.7 4..'.it' W C O. is.r 3a' T. u o.7 o k.,T TV OC v uv1 A ;.. 1: aa WASl!1NGTON, D. C. 20549 Fom^iS-7 h
P l0, D
REGISTRATION STATEMENT UoI under THE SECURITIES ACT OF 1933 P y 7) o wnson L,oman r " JL
'5]
T A
7 Oin.
o A.
(E:a:t 1.c
~ cl retG:ra.: as spcrs!cd h d.arter)
Ohio 34 01377SG
- csenta cr c:1.c iu+d:ctin ct u.r. s Er.; !c:,er sssccrpc r ti.ns cr cric six::or )
Ide.[.C::ir. No.)
70 South %dn S!:eet./ hron, Chio 4130S iAJhe.s of : rn:irst aca.::.c cl*ces)
Ile@trent's te'cphe:.c immbct,incla:in;r arca code: (210) 3S?5103 D. D. VOWLES, Sccretej 7G South ',L!r, Strce:
Alsca, Ohio.'.;303 (Name en ! cdircu o! c;c:.t Is r s cr:i:c)
The Cornmi:?:an is requce*cd to s mil s:;cc.] copics of c!: ordcrs, smtic c: c:.d cou.mm.;:aiir.n.s to:
J. H. uY)NCTON, J11.
RIC:IAnD.\\l. D:CKE W:xua or, f n sos. PersAs: & licams St.s:rms Tn. o ra & L.umrrr 40 Wal! Etrect One Literv Pcrh mza New York, N. Y.10003 Nesc York,'N. Y.10D1 C. C.13NC Cu2rwr.axAct.urvr Coxsin.e rs f,0 Pine Strcci New Ycrk, N. Y JUX3 4
A;r. orimatc daic cl conrncn:cment cf proposed.<cle to the ;m!dic:
As soon after the c!Ictive date cf this ligist'ation f t.;tement as markct e mdit'ons gpe. r favo alde.
C ALCULATION OF REGISTR ATION FEE f
Trowed Anot..t Troposed m.n:rnen Amour.: o reg;<:wi.~.f, T;:!c cf ca:h e'am cf Icmg s*ctm::m crc.ccate se:u-ics bctum u cvie cd r@tr ud c!cn.; prico cierus; p: ice ice Common Stock, p ir value 59 per 20' share 5,0M'O shs.
pcr i..nr 0101030,000 520,0:0
- Closial: sale price on January l';,1977, as repmted by The Wall Street Jornal in its repart cf Ccmposite Transactions.
TI,e re. istrant herebv amends this registration str.tement on <uch date or dates as may be neces.
sary to dchiv its c!IEctise d:Itc tmtil the renistrant ?iiall life a findier adt.ndment ul$ich gecifi.
cally St ites "t! at this legistratiun.st te; pent Otll th'.-reafter become e!Icetis e in necordance with Section S a) of the Securities.\\ct of 11h3 or tmtil the registr.tlion statenient shall hcLume c;iectite 3
t on such date as the Commi% ion, acting pursu.mt to sa!d Section S(a), m y delc:mine.
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rnELDI! NARY P20SPECTUS DATED J.iNUARY 23,1977 f
PROSPECTUS 4.r r 5,000,000 Shares
!b.
i a a, r ;. r I*
T 1 h110 S'Q.' SOD sori 7pany I
t.3. ?..
.L 2.,,.
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Common Stock i.5 L
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- 11:
(Par Value 69 Per Share)
I;c t..: a. s t ~.: ii.
['I L i?
,5 ' 3 THESE SECURIIlES II AVE NOT llEEN AlTROVE3 On DISAPPROVED BY THE SECURITIES AND ENCII ANGE COMMISS!ON NOR HAS TllE COSD11SflON PA'SI.D UPON Tile E ? Ji ACCUR ACY On ACEQUACY OF Tills PROSPECTUS. AM FEPRESENTA.
iIE TION TO TIIE CONTR/.MY IS A CRIMINAL OFFENSE.
,,e. 1.
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.e. =z T *. E:
h' ". %
e3
-4 g In the opinion of Pennsylvania counsel (see "Experti), the abose shares are esempt tmder
,"r Pcnns:.lv.mia !..w ficm all esistin; persm.al preperty t.nes in Pennsylvania.
- e. :,: ',
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- P. 9, Y li I'
.'p 1;.,q This Picspectus is to be used in connection with Ohio Edison Ccmp.my's pub!!e invitation for e ::
[ g Y, prepocals for the purch.6e of tl e abme shr.res. The propasc.4.:re to be prevented to the Company at
- [i the ei! ice of Winth
- op. Sti neen. Tutnam & Rcherts,40 Wa'l Stre t New Yml, S. Y., before 4:30 P.M.,
i' f ;
New York Time, en March 15. 3077. An information meetir; niil be held at the oEcc of Bankers Trust
- - ).4 Company, J. C. Komedy Room.19th Floor O. e B.mkers Tru>t Plaza, New York, N. Y., at 2
- 00 P.M.,
t2l New York Tinte, on March S,1977.
5$5 rea
.u 2.:
i 5
. : e.z,
}$Rn The Company's outstandi,; Common Stock is hsted on the New York Stock Eschange and the
- 2. O s M.
Midwest Stock Esch.mge. App!! cat'ons will be inade to inclu.!e the above shares in such listings upon s
1 t.'; E the issu.mee the!cof.
t E?A en D
0) e y g ;'
oa 1'
o m[ T g-The aate of this Prospectus is 3anuary,1977.
o J]l Int.a o
,,,,,,._..~-.~~a..~......ms.~~_..._..
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,t'
}~spcviditures E tin ared E tin $ted by the Total Gv.t Total Cost Cen.pany Untiinated in the per a of
] thrrice Core.paay Kilp att S ptmber 30, Site (n)
Type
.C:pa!,ilit v(1. )
ILtc (cHdi (c)(d)
WG Feaver Wiley Nudor S5G S1W. initial 1%2 5 397,353,000 51,071.11 5 67.051.060 Stat *on, Unit 2, fa 555 S!W-uit!:nate Shippin Port, Pa.
(a) 5 7,M2 f40 D vis.Pe ne Station, Nudear 900 51W exh Cr:t 2-1%5 5 733.E,000
$1,137.20 Units 2 and 3. in Unit 3-]U$7 Onowa County, Ohio Druer WAdd Co l.f. red S25 51W c.uh Ur.it 2-Or.t.1977 5 332,716.000 5 570.79 51R163MO riant. Units l er.d Unit 2-1t50
+
- 3. in Sidppin port, Pa.
Unit 1-1932 5 732,161,000 5 M 133 5 57,707M Terrv Plant Urdts 1 Nuchar 1.205 N!W each and 2, in North Ur.it 2-1953 Perry Viha, Ohb Erie Nedear Mant, Nue! ear 1,060 51W exh Ui,it 1-10%
5 A07,791,003 5 590.54 5 10.1 R OM)
Urnt< 1 ar.d 2. In Urat 2-195S D-rlin 11. ights, Ohio 53,023,573.003 5K%W/s m._.
m (a) The Company and Fenmylvania will h:ve tmdivided intere;ts as tenants in cemn on with one or rnore of the other CAPCO ecmpanies in each of the units listed above. Except fer Mans!!e:d Unit 2. their interests will be 05.6Tc and 6.2S'7. respectisely. With respect to Man >!ield Un. 2. these laten sts will he 39.S?? and 6.5, respectwely It is curnat?y prr.pr-ed thct the Coing ny wi'l a; quire Pennsylvaniis 6.25G i, ten t in Ecas er Vrd!cy Unit 2. Etys..re bein; t.nen t) srmu!at
?..e te as of the acquisi' ion, to obtain all nccessary rcgu!ctory approvals, a:.d to do l'.! !!&;s ot! cru be neces-sary to eficct the acqt:Idion.
(b) The rights cf the owrere cf the vr.rious ur.its to the energy pro:!u '? 1 7 ruth in'.ts are subRet to the capacity and energy entithments describcd undtr Bmince-CAPCO Fre;r.na". See 'Eusiness
~
-Enviromner.tal Matters' with respect to the efie:t on capabGity that the po::ution contial equip.
ment presently being instalicd at the Bruce.iiamEc?d Plant will have.
(c) The costs listcd da not include the cost of fuel for the nue: car ph N (sce ~Bminc<s-Fuel Supply ~) nor do they include the costa (515 772.000. cf which 51.315M wac spent prior te Ocaber 1976 end 52,351.K0 ha< been or will be encaded during Octeber 1976.Dece:nber 1977) cf step-up traniforraers auociated wi*h the various units (except units at the Perry P:. "t1 and related equip-ment necessary to provide (onnection to the system. The listed ca3ts do F: u le costs in connection with the air and water pollution control equipmcat presently LT.own to be reccdred.
(d) The eats listed do not rtflect the efittt of the CAPCO decision. di-ed bclow, to defcr the construction scherhdes of five of the units. Although the deci. ion will increase t':e total coct of each of the deft rt(d nr.its. the Comp.my has nct >ct deterniined tht magnitude ci.uth increase.
Pursuant to an agreement announced by the CAPEO ec.mpanh s e: J.u.uary IS. 19... m ucr defeirah base becn made in the construction xhednics for fise eicetiie genc-in; units. The con true.
tici, schedules for Davis.Hesse Units No.s. 2 and 3 and Erie l'uits Nos.1.. 2 have been dela9.d E.:
approximitely tuo years, and co:npletion of Uruce Emfield Unit No. 3 ha.
dela> ed for apprcxi.
notely one year. The resultant completion dates of these units are ret ee ed in the above table.
l Pnliminary estimates indicate that these changes in the cal'CO construe- - rw; ram will represent a reduction of approximately NO.000Ah! in currently estim ited wcts fer 9 period 19771951 the Companyi > hare of such reduction being appmxinately 5MGJ0.000 and 1 -. :-y hanii.s share approsi.
suately 530.000.000. The cal'CO construction cathaels reflec t decisions b.a.J vn rapid:y increasing constmetion costs. the difhtulty of raising news >ary funds in today's hn.:C market. and revi>cd fmecasts of customer's electrical reiguircinents.
D@O D
5 66 o
, es O
. S bd._3 u
S UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND_ LICENSING APPEAL bot}RD In the Matter of
)
)
The Toledo Edison Company and
)
4 T
The Cleveland Electric Illuminating
)
Docket Nos. 50-346A Company
)
50-500A (Davis-Besse Nuclear Power Station,
)
50-501A Units 1, 2 and 3)
)
)
The Cleveland Electric Illuminating
)
Docket Nos. 50-440A Company, et al.
)
50-441A (Perry Nuclear Power Plant,
)
Units 1 and 2)
)
CERTIFICATE OF SERVICE I hereby certify that copies of RESPONSE OF THE DEPARTMENT OF JUSTICE TO APPLICANTS' RENEWED MOTION FOR AN ORDER STAYING,'PENDENTE LITE, THE ATTACHMENT OF ANTITRUST CONDITIONS have been served upon all of the parties listed on the attachment hereto by deposit in the United States mail, first class, airmail or by hand this 2nd day of March 1977.
I hYem,^) sh ?yz,-
MELVIN G.
BERGER Attorney, Antitrust Division Department of Justice
3 3
vNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BeIore 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
)
)
Docket Nos. 50-440A (Perry Nuclear Power Plant,
)
50-441A Units 1 and 2)
)
)
4 THE TOLEDO EDISON COMPANY, ET AL.
)
(Davis-Besse Nuclear Power Station,
)
Docket Nos. 50-500A Units 2 and 3)
)
50-501A SERVICE LIST
.W n S.
Llo ' stha l., Esq.
Ivan W.
Smith, Esq.
wir:ur,
L..."ni c Saf ety and Atomic Safety and Licensing Peard Lic.:asing appeci 3 card U.S.
Nuclear Regulatory Comi.ssi.c.
U.S. Nuclear Regulatory Commission Washington, D.
C.
20555 Fashington, D.
C.
20555 John M.
Frysiak, Esq.
Jerome E.
Sh
.2 man, Esq.
Atomic Safety and Licensing Boar; Atomic Se iet.y and Licensing U.S.
Nuclear Regulatory Commise..
i Appeal. Board
~
Washington, D.
C.
20555 U.S. Nuclear Regulatory Commission Washiagton, D. C.
20555 Atomic Safety and Licensing Board Panel Richard S.
SL1zman, Esq.
U.S. Nuclear Regulatory Corr aiscion 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 Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.
C.
2000o Appeal Board Panel U.S. Nuclear Regulatory Commission Joseph Rutberg, Esq.
Washington, D.
C.
20555 Benjamin H. Vogler, Esq.
Douglas V.
Rigler, Esq.
EUY.P. Lessy, Jr.,
Esq.
Office of the Executive Chairman, Atomic Safety and Legal Director Licensi 3 Board U.S. Nuclear Regulatory ComnissJ on Foley, Lar.ner, Hollabaugh and Jacobs Washington, D.
C.
20555 Chania Eu!JC c.g - Suite 206 815 Conna, t At?nue, N.W.
Washingtoa. C 7.
23006
g 6
~2-Terence H.
Benbow, Esq.
A. Edward Grashof, Esq.
Gerald Charnoff, Esq.
F.'m Bradford Reynolds, Esq.
Steven A.
Berger, Esq.
Robert E.
Zahler, Esq.
Steven B.
Peri, Esq.
Jay H.
Bernstein, Esq.
Winthrop, Stimson, Putnam & Roberts Shaw, Pittman', Potts &
40 Wall Street Trowbridge New York, New York 10005 1800 M Street, N.W.
Washington, D.C.
20036 Thomas J. Munsch, Esq.
General Attorney Duquesne Light Company Reuben Goldberg, Esq.
435 Sixth Avenue David 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, PA 15230 vincent C "aruy nella, Esq.
Di. ~
- f Lt.w Lee A.
Rau, Esq.
Robert u.
Hart, Jsq.
Joseph A.
Rieser, Jr.,
Esq.
1st Ass't Oirnctor of Law Reed Smith Shaw & McClav City of-Cleveland Suite 900 213 City Hall 1150 Connecticut Avenue, N.W.
Cleveland, Ohio 441.14 Washington, D.
C.
20036 Frank R. Clokey, Esq.
James R.
Edgerly, Esq.
Special-Ass't Attorney General Secretary and General Counsel 4
Rocm 219 Pennsylvania Power Company Towne House Apartments One East Washington Street Harrisburg, 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.
Cleveland, Ohio 44115 l
Paul M.
Smart, Esq.
Edward A. Matto, Esq.
Fuller, Henry, Hodge & Snyder Richard M. Firestone, Esq.
P. O. Box 2088 Karen H.
Adkins, Esq.
Toledo, Ohio 43603 Antitrust Section Russell J.
Spetrino, Esq.
30 E.
Broad Street, 15th Floor Thomas A.
Kayuha, Esq.
Columbus, Ohio 43215 Ohio Edison Company Christopher R.
Schr*##
vs 47 North.}a.,.n Street Assistant Attornev General Akron, Ohio 3.4308 Environmental Law'Section 361 E.
Broad Street, 8th Floor Columbus, Ohio 43215 v
,r