ML19329E834

Answer of DOJ to Applicant Objection to Document Requests & Motion for Protective Order.Objections Should Be Denied. Certificate of Svc Encl

ML19329E834
Person / Time
Site:	Midland
Issue date:	11/02/1972
From:	Brand W, Leckie D JUSTICE, DEPT. OF
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8006180623
Download: ML19329E834 (46)

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//-2 73 UNITED STATES OF AMERICA BEFORE THE THIS DOCUMENT CONTAINS P00R QUAllTY PAGES ATOMIC ENERGY CO'OiISSION _

In the Matter of

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g Consumers Power Company

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Docket Nos. 50-329A (Midland Plant

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50-330A Units 1 and 2)

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AUSWER OF THE DEPARTMENT OF JUSTICE TO APPLICANT 'S OBJECTIONS TO DOCUMENT REQUESTS AND MOTION FOR PROTECTIVE ORDERS The Department of Justice hereby answers Applicant Consumers Power Company's Objections to Dccument Requests and Motion for Protective Orders filed in this proceeding on Octobt.r 26, 1972.

The Department urges denial of Applicant 's motion and asks the Atomic Safety and Licensing Board to order Applicant to provide discovery. as sought herein pursuant to the Board's authority under Section 2.740(c) of the Commission's Rules of Practice,10 C.F.R. Part 2, as amended, 37 F.R.15127 (July 28, 1972).*/

The Department further requests that the Board deny Applicant's motion for oral argument.

Sections 2.730(c) and (d) of the Rules express the policy that a motion and an answer should ordinarily be sufficient to permit disposition of a questien without further reply or oral argument.

• / Section 2.740(c) says in relevant.part: '"If the-motion for a protective order is denied in whole or in part, the presiding officer may, on such terms and conditions as are just order that any party or person provide or permit discovery.g 37 F.R.

at 15133.

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l There'is no need to depart frcm that policy here.

All parties -have had ample opportunity to set forth their positions, and postponing decision until oral argument can be scheduled and heard would only further delay the already snail-paced discovery in this proceeding.

Counsel for the parties have met three times--on September 8, September 18, and October 5--to attempt to resolve Applicant's objections to and purported difficulties in complyitig uith the First Joint Request for Docum'ents of July 26.

As a result the joint discoverers agreed to cur-tail or modify. many of the specific requests so as to substantially reduce the Applicant's burden, and Applicant engaged to comply accordingly.

The requests objected to in part A of Applicant's Objections and Motion are those on which agreement was not reached and fucther discussion.uas deemed unlikely to pro-duce any agreement.

We ask below that Applicant be compelled to comply with each of those requests in their present, post-discussion form.

At - the October 5 meeting, counsel for Applicant under-f took to.obtain his client's response to the joint discovers'

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proposals: to modify Requests Nos. 3(b),19 and 22, to which l

Applicant had objected in their original form.

As yet Applicant's response has not been reported to the joint discoverers.

We had anticipated that Applicant would either t

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r respond affirmatively to our proposed mcdifications (or make timely counterproposals) or else object to the modified requests in its comprehensive Objections and Motion.

Under the circumstances, we do not consider these requests as "still being discussed among the parties," per App'licant's footnote 1, and ask that they be ordered conplied with in their proposed modified form.

To our knowledge, there are no requests remaining under discussion with respect to the

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basic matter of compliance.

The Department's August 16 Motion to Compel the Production of Four Catagories of Documents, etc., was treated as a request for documents following the Board's order of August 31 staying decision thereen.*/

Applicant was not prepared to discuss possible ccupliance at the September 8 meeting.

On September 18 its counsel reported that no decision had yet been made as to compliance or opposition, and on October 5 he had nothing to say on the subject save a minor query concerning our interpretation of one item.'

Now we' find after all this time that Applicant simply main-tains its original objection, expressed at the July 12

• / The De Chairman'partment requested the stay in response to the s telephonic statement that the Board desired the parties to discuss the possibility of Applicant's voluntary compliance--even as to pre-1960 documents--before seeking the Board 's assistance on the matter.

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prehearing conference to producing any pre-1960 documents.

We ask that the Department 's Motion to Compel, which was renewed 2tt' the prehearing conference on October 25, be granted.

We are troubled by Applicant's disclaimer of waiver in footnote 2 to its Objections and Motion.

We believe that any claim that a specific document or category of docu-ments requested is irrelevant or privileged should be made at this time,and the Board's decision thereon must control future production of that document or category of documents.

We would certainly oppose relitigating the relevancy or privilege of documents within the categories which Applicant has ' agreed to provide or the Board orders to be provided, should Applicant's file search disclose particular documents it would prefer, for whatever reason, not to produce.

The joint request does not seek any documents protected by the attorney-client privilege, and no objection would be neces-sary to prevent their discovery.

A recurring contention in Applicant's Objections and Motion is opposition to discovery on grounds that a request improperly " constitutes no more thcn a fishing c::pedition,"

-citing Section IV(a) of the Commission's Statement of Policy, os amended.

37 F.R.15139 (1972).

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To properly dispose of Applicant's " fishing expedi-tion" accusation, we must consider it, and the Commission's Policy Statement in' the context of this proceeding.

Applicant has come before the Commission seeking licenses--

and, more particularly, seeking a finding that the activi-ties under the projected licenses would not create or maintain a situation inconsistent uith the antitrust laws so as to require the imposition of appropriate corrective license conditions.

In this role as proponent of sn unconditioned license, Applicant clearly bears the ulti-mate burden of proof.* The Department of Justice recog-nices that a certain amount of difficulty inheres in establishing a proposition stated in the negative and, in cooperation with the Commission's Staff, therefore assumed, as its role in the antitrust review, the preliminary burden of making out a prima facie case of antitrust inconsistency.

See Attorney General's letters of advice to AEC, 36 C.F.R. 17883, 36 C.F.R. 20256 (1971).

The role of the. Department is thus substantially inquisitorial'in nature--and analcgous to that of a grand jury, rather than

• Administrative Procedure Act, 5 U.S.C.A. 5556(d); Atomic 5181, 42 U.S.C.A. 52231; Section 2.732 of the Energy Act;s Rules of Practice, Commission 10 C.F.R. Part 2; Sections V(c)(1), V(d)(1) of the Cc= mission's Statement of Policy, as amended, 37 F.R.15140; Joint Committee on Atomic Energy, Hearings on Prelicensing Antitrust Review, Part 1,. p. 81 (Statement of AEC General Counsel).

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l that of litigant in an adversary judicial proceeding.

This distincticn was explained in United States v. Morton Salt Coe, 338 U.S. 632, 640-643 (1950), dealing with powers of the Federal Trade Commission:

The only power that is involved here is the power.to get information frca those who best can give it and who are most interested in not doing so.

Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues in litigation, it does not follow that an admin-iscrative agency charged with seeing that the laws are enforced may not have and exercise e

powers of original inquiry.

It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function.

It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being vio-lated, or even just because it wants assurance that it is not.

338 U.S. 642-643.

The ultimate burden remains on Applicant and it necessarily includes providing the information required by the Depart-ment (and the AEC Staff) in carrying out their duty of inquiry.

Under these circumstances, a certain amount of latitude in the conduct of discovery, exceeding even that which might be allowed in a purely judicial context, is necessary and appropriate.

We trust Applicant is not seriously contending that the Department must have in its possession all evidence necessary to establish a prima facie case of antitrust inconsistency prior to rendering its advice to the,

Cor.:nission.

A requirement that the Department's inquiry 6

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be complete at that point in time would likely place the burden of full prehearing discovery on all license applicants, rather than merely those for which a hearing is finally deemed necessary.

The Commission's Rules plainly envision that discovery may be had following the taltial, special prehearing conference.

Sections 2.740(b)(1), 2.751a.

AUS97ER TO OBJECTIONS TO FIRST JOINT REOUEST 1.

Request for Description of Aoplicant's Filinn System Applicant objects to Request No. 2 of the First Joint Request as a " fishing expedition" to obtain additional issues or evidence.

The Ordinary sense of the term is that of an attempt to discover original grounds for a proceeding, or to broaden its scope, by indiscriminately searching an oppo-nent. - Request No. 2 is nothing of the sort.

It seeks no e'

new issues beyond those contemplated in the Board's Prehear-ing Conference Order of August 7, nor does it even call' for any production of evidentiary documents, assuming arguendo that this could somehow be improper.

The request is narrowly directed to obtain discovery of information " relevant to the subject matter involved in the proceeding,

. including the existence,.. -. custody,... and location of any.

documents.

. and the identity and location of persons having knowledge of any discoverable matter," as permitted by'Section-2.740(b)(1) of the Rules.

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The joint discoverers desire a detailed det:ription of Applicant's filing system in order to obtain a clear

-picture of the sources of documents provided in response to their requests--and with it an ability to focus subse-quent discovery with the specificity the Board has indicated it will require.

The information sought is patently

" reasonably calc'ulated to lead to the discovery of admissi-ble evidence," Section 2.740(b)(1), and the request should be custained.*/

2. -Request for Documents Relating to Applicant's Efforts to Influence Legislative Executive, Administrative and Judicial Action Applicant objects to producing any documents which it characterizes as " relating to its constitutionally pro-tected right to petition legislative, executive, adminis-trative and judicial officials and tribunals."

It thus apparently opposes any compliance whatsoever with "[aj t least seven of the document requests" because they " seek such documents on their face,"gy and would undertake to

• / We expressed willingness to accommodate Applicant in Ecducing any burden of complying with the request as originally written (such as suggesting that the minimum number _ of documents giving a complete description of the filing system would suffice, or that a response might be specialty prepared in the form of an answer to an inter-rogatory).

Applicant, however, was and is adamant in

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• • / Many of these requests, like others discussed herein, Have been modified to meet Applicant's objections regarding burden.

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comply only insofar as Applicant deems fit with the "many other requests [which] will undoubtedly sweep such material into their broad ambit."

Applicant's objection on this point is, in all essen-tial respects, identical to that recently made in the United States District Court, NEddie District of Louisiana, by another electric utility, Gulf States Utilities Company, in opposing discovery by the Department of Justice of government; influencing ' documents sought by under th'e civil investigative demand procedure.

Antitrust Civil Process Act, 15 U.S.C.A. SS1311-1314.

The District Court, following submission of briefs and oral argument, rejected Gulf States '

contentions and ordered it to ecmply uith the Department's demand.

A copy of the court's opinion.is attached as Appendix A.

This is the only case directly in point of which we are aware.

As with Gulf States, there is simply no marit to Applicant's present objection.

The Commission's Rules permit

" discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the proceeding.

Section_2.740(b)(1).

The Rules certainly do not condition discovery on_a prior shcuing that the requested documents will themselves prove something ( for example, that they will _ on their face demonstrate inconsistency with the antitrust laws).

In fact,. Section 2.740(b)(1) makes it a point to

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emphasice that discovery is not objectionable "[even if]

the information soucht will be inadmissible aj the hearing if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." (emphasis added)

All that is required, then, is that the matter sought to be discovered be relevant and not privileged.

Both criteria are satisfied here.

Applicant itself has made a compelling case for rele-

.vancy.

By previously rai ing substantial issues concerning the degree of pervasiveness of Federal and state regulaticn of its business activities, the appropriateness of rate schedules presently filed with regulatory bodies in provid-ing its competitors access to the benefits of nuclear generation and high-voltage transmission, the degree to which regulation restricts its. wholesale and retail competi-tion, and the relevancy to the Board's decision of any advantages. government may have conferred upon its competitors

--to mention just a few--it has brought its own dealings and relationships with government irrevocably into the fore-

- front of this proceeding.

Furthermore, in its present objection on this subject, Applicant carefully points out that "[t]he very nature of Applicant's operations as a public utility in Michigan serves to thrust, Applicant into the political process with e

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-great frequency" and goes on to asscre that "through its frequent interaction with various executive, legislative, administrative and judicial forums and officials, Appli-cant inevitably participates in a significant way in the political and legal arena."

It is this very fact of constant, intimate involvement with government that Appli-cant's day to day conduct of business that makes it essential to discover and consider its government-influencing activities in this proceeding.

They are an inextricable part;-just as threads woven into a fabric--of the total content of Applicant's business conduct which the Board must consider in making its antitrust finding.

The failure to obtain particular desired action from a legislature, executive official, court or administrativo agency could be an impor-tant part of the background explaining a decision to subse-

- quantly employ other, unlawful. means of building a monopoly.

Or attempts to influence government may shed new light on the purpose and character of prior and contemporaneous conduct--and perhaps even give form to an overall plan of monopolization.

See, e.g., American Medical Association v.

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- United States,130 F.2d 233, 250-252 (D.C. Cir.1942).

Documents concerning Applicant's government-petitioning activities may, in the Board's discretion, be introduced as evidence of the antitrust inconsistency of other conduct, even' though the political activitics themselves could not-11.

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r be found illegal.

United Mine Uorkers v. Pennington, 381 U.S. 657, 670n.3 (1965).*/

Finally, of course,

activities ostensibly directed toward influencing govern-mental' action, but in reality a mere sham to interfere with competitors' business relationships may be held to violate the antitrust laus--or be found inconsistent uith those laws.

Eastern Railroad President's Ccnference v. Noerr Motor Frei?ht, Inc., 365 U.S. 127 (1961); California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972).**/

We cite this last possibility not as an allegation that any of Applicant's political activities were only a sham, but rather to highlight the absurdity of Applicant's claim that

• / It would of course still be within the province of the trial judge to admit this evidence, if he deemed it proba-tive and not unduly prejudicial, under the " established judicial rule of evidence that testimony of prior or sub-sequent transactions, which for some reason are barred from forming the basis for a suit, may nevertheless be introduced if it tends reasonably to shou the purpose and character of the particular transactions under scrutiny."

See also Household Goods Carrier's Bureau v. Terrell, 452 F.2d 152 (5 th Cir. 19 71).

• • / The " sham" principles expressed in California Motor

~ Transport clearly go beyond the mere denial of access to courts or agencies.

404 U.S. at 512-513.

See, e.g., Woods Exploration and Producing Co. v. Aluminum Co. of America, 438 7.2d 1256 (5th Cir.1971) (providing false information to an administrative agency), and United States v. Otter l

Tail Power.co., 331 F. Supp. 54, 62 (D. Minn.1971) (systema-tic initiation and support of litigation to prevent or delay the establishment of municipal electric distribution systems),

prob. juris. noted, May 22, 19 72, 40 U.S.L.W.

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whatever documents il may choose to classify as " political, administrative or adjudicatory activities" are necessarity irrelevant to the Board's decision and that discovery thereof should not be permitted.

There remains the question of possible privilege from discovery, and we understand Applicant to contend that a privilege, or something akin thereto, operates in support of its objection here.

The argument goes this way:

(1) the Noerr and Pennincton ' cases served to wholly immunide Appli-cant's political, administrative and legal activities from antitrust scrutiny; (2) given this imT. unity, to permit discovery of such activities--and particularly access to its internal discussions--would " chill" Applicant's exercise of First Amendment rights; (3) given this chilling. effect, and lacking any ccapelling interest for discovery, the Department cannot require disclosure.of Applicant's internal records or any other documents relating to its political, administrative, or litigating activities.

e On examination, Applicant's argument dissolves.

completely.

First, as our discussion of relevancy has already indicated, to read Noerr and Pennintton as unqualifiedly l

l immunizing all of Applicant's government-related. conduct

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from antitrust scrutiny at-the command of the First Amend-loerr simply decided that ment is a. gross overstatement.

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no violation of the antitrust laws can be found in mere attempts to influence the passage or enforcement of laws and reversed a judgment enjoining such conduct.

One stated basis for the Court's holding uas its belief that a contrary construction of the Sherman Act would raise important ques tions concerning invasion of the Firs t Amendment right of petition.

Pennincton then added the rule that such

" political" conduct would not be illegal even as part of a broader scheme of violation.

Neither case even suggested that First Amencment values might restrict or prohibit the mere discoverv of political conduct as sought here; the Pennington footnote cited earlier in fact saw no problem in admitting evidence of such conduct.

Lacking the necessary support in Noerr and Pennington, Applicant reaches for the cases that have denied requests for disclosute of information on finding that First Amend-ment associational rights vould be " chilled" by requiring the disclosure.

It boldly steps into the shoes of the individual members of the National Association for the Advancement of Colored People who demonstrated 'that compelled disclosure of their identity as members would likely bring them irreparable injury in the form of economic reprisal, loss-of employment, threat of physical coercion, and other manifestations of public hostility--and that real fear of e

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such injury effectively impaired their exercise of the First Amendment right of association for advocacy.

See, e.g.,

NAACP v. Alabams., 357 U.S. 449 (1958).

The analogy is bizarre, to say the least.

Applicant--a mighty electric utility, with over $2 billion in assets and annual operating revenues in excess of $600 million; member of an industry long feared for its exercise of political power */ and subjected to some regulation of that power as a result;$*/

and with, by its cun admiasion, a record of frequent, significent participation in the political arena--now asserts that it will suddenly be seiced with fear to cxercise its First Amendment rights if its files on political activity are opened to discovery of relevant matter in this proceeding.

• / Sec 70th Congress,1st Sess., Summary Report of the Federal Trade Commission to the Senate of the United States Pursuant to Senate Resolution No. 83, Part 71(a).

Efforts by Associa-tiens and Agencies of Electric' and Gas Utilities to Influ-ence Public Opinica and Report-on Publicity and Propaganda Activities by Utilities Groups and Companies (Part 81(a)),

pp. 229-230.

See also the results of the carlier Federal Trade Commission investigation reported in Federal Trade Commissien, Electrical Equinment and Competitiva Conditions, Senate Doc. 46, 70th Cong.1st Sess. (1928), xviii-nix.

And see Lobbying and Lobbyists, Senate Report 43, 71st Cong.

2nd Sess. Part 7.

• • / Section 12(h) of the Public Utility Holding Ceccany Act cGE 1935,15 U.S.C. 9791(h); see also Southwestern Electric Power Co. v. F. P. C. 304 F.2d 29 (5 th Cir.1962), cert.--

denied,.371 U.S. 924 (1962).

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How this'could come to pass is not apparent to us.

Mere discovery would neither punish, nor enjoin (as was sought in Noerr), nor. indirectly restrain Applicant's free exercise of First Amendment rights.

If discovery is granted, and political material produced is later sought to be introduced into evidence, Applic. ant would then have the opportunity to argue its inadmissibility as not proba-tive or unduly prejudicial.*/

If the natorial is neverthe-less admitted as evidence, Applicant would have yet another opportunity to argue its lack of probative value when the Board preparcs to make its antitrust finding.

Any real punichment or other sanction flowing from the discovery could tbere fore come only af ter o Board determination (and probsbly one or more appeals) that what purported to be political activity was in fact an unprotected sham, or that elements of political activity, taken in content, tended reasonably to prove the antitrust-inconsistent purpose or character of other, unorotected conduct.

The only conceivable injury' to support a chilling effect claim is thus very remote--and would necessarily be the direct result of an

• / This was the course success fully followed by the ~ defendant In United' States v. Johns-Manville Corp., 259 F.Supp. 440,

' 452-453 (E.D. Pa. 1966).

The court expressed concern that First Amendment rights vould be infringed by the proposed evidentiary use of. constitutionally protected activities to show anticompetitive intent'and exercised its discretion to exclude the -evidence, as permitted by the Pennington footnote.

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ultimate finding that Applicant engaged in antitrust-inconsistent conduct--conduct which there is no public, let alone constitutional, interest in encouraging.

Applicant simply has not made a plausible showing that its exercise of First Amendment rights would truly be inhibited in any way by being called upon to mche discovery here.

All Applicant really claims to fear is the possible embarrassment of having the nature and entent of its cons titutionally protected cctivitics made known--a highly dubious fear in view of its past record of proud perticipa-tion in the political arens. There is no prospect uhatacover of irreparabla injury of the sort found cr cial in the UAACP cases to justify preventing disclosure.

Even if Applicant's vague protestation of fear and possible embarrassment could somehow be deemed a chilling e f fec t, that would not suffice to resolve this issue in its favor.

Discovery may be compelled even in the face of a chilling e ffect if the Government has a legitimate, justi-fiable, interest in making the discovery, and the incidental effect of inhibiting the exercise of First Amendment rights is minor in relation to the need for discovery.

See Younner v. Harris, 401 U.S. 37, 51 (1971).

In this proceed-ing, the chilling effect on Applicant is de minimis or nonexistent.

On the other hand, the reques ted discovery i

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has been shown above to be both relevant and neccesary to accomplish the goals of this proceeding mandated by the Atomic Energy Act.

The Board should therefore deny Appli-cant's objection and order it to comply with these discovery rcqucsts.

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3.. Request for Finutes, Reports and Related Documents of Pooling and Coordination Committees Request No. 4 asks for minutes of meetings, repo cs and related documents of cach committee, subcommittee or task force established under Applicant's pooling or coordi-nation agreements.

Applicant's objection contends the request calls for irrelevant documents, citing as an example documents relating the details of day to day pool operation.

We disagree.

A primary issue in this proceeding is whether Appli-cant has engaged in conduct inconsistent uith the antitrust laus by unreasonably depriving municipal and cooperative electric utilities in its area of the advantages of large-ccala generatica Applicant possesses because gf its menber-ship and participation in the Michigan Pool and through interconncetions with large electric systems outside Michigcn.

This necessitates comparing th'c benefits available to the municipals and cooperatives (and the limitations imposed upon them) under wholesale purchase contracts offered by Applicant uith the benefits of coordination enjoyed by Appli-b cant (and ti.e responsibilities it undertakes)/yreason of pool membership and-interconnections.

Request No. 4 is designed to secure detailed informaticn of the benefits and burdens of Applicant's pool membership.

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The term " pooling" in the abstract is very nebulous.

Even specific pooling agreements do not tell the full story of what benefits are realized and what responsibilities incurred thereunder.

The true nature of a pool can only be ascertained by studying its day to day operations as three general categories of documents:

reflected in (1) minutes of the administrative (or executive) committee dealing with general business and financial effects of the pooling; (2) minutes of the planning ccmmittee dealing with clanning neu generation; and (3) minutes of the operating cc=mittee dealing with coordinating the day to day operations of pool facilitics.

He note here that the operating committee minutes relate closely to the planning ccamittec materials in that the former often discuss the effect of matters under the jurisdiction of the planning committee on present or anticipated operations.

The Department recognizes that these are some co==it-4

tees whose output is not necessary to the preparction of its case.

For example there would be no need to see discus-sions concerning protective relaying--nor matters dealing with analyzing. a particular equipment nalfunction. Hevertheless,

a list of committee names provided by Applicant included not_one committee or subcommittee that appeared by its name to be irrelevant to our requirements and excludable f

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-from the request.

We ' offered to sample documents from various committees in an effort to exclude irrelevant matter.

Applicant was unwilling to permit this, however.

The gist of the discussions that take place in the various ccmmittee meetings (and are-reported in the minutes) is, along with implementation of any decisions made, the essence of power pooling.

If the Department is properly to present its case, and be'able to describe with particu-

- larity the refusals to " pool" and the " pooling" rel'ief that may be sought from the Board, it vill require access to these uinutes and related documents.

We note that when the Federal Power Co=nission has a proceeding involving cven the more limited power pooling that it mny compel, it has often found that minutes of meetings of operating

- committees are discoverable.

i The requested documents are relevant to this proceeding, 4

as required by Section 2.740(b)(1) of the Rules and the call 4

for "[m]inutes

. reports and documents relating thereto" satisfies Section 2.741(c) 's standard of particularity.

Production should be ordered.

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Request for Documents Indicating Applicant's Activities in the Matural Gas Itrhet Which May Have Been Intended to Harm Its Electric Utility Comnetitors Applicant has objected to Request Mos. 5(d), 5(e) and 5(1) as wholly irrelevant and oppressively burdenscmetecause they relate to Applicent's operations as a natural gas utility.

We maintain that they are clearly relevant to Applicant's operations as an electric utility--specifically to its alleged pattern of anticompetitive conduct tcward municipal and cooperative electric utilities which is at

- issue in this proceeding.

Request No. 5(d) inquires into the " sale by the Connaav of natural gas as boiler fuel go electric utilities tiich are wholesale electric custerers of the_ Connany (c:: cept invoices)" and Reqt est No. 5(i) asks about "ver.ivit-ice b-the Ccarany to affect the cost of fuel for electric power generation by other persons in Michigan" (emphasis added in both cases).

These requests a're on their face licited to

- matters here at-issue.

The essence of monopoli ation is eliminating alterna-tives available to competitors in a market--here, bulh pover supply--so that they are eventually compelled to deal uith the monopolist on its terms.

One alternative that could be available to competing bulk power suppliers is coordination with the Applicant on fair terms; and a key issue in this

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proceeding is whether Applicant has misused its monopoly power to grant er deny access to coordination by denying such coordination to municipals and cooperatives in its area.

Another normally available alternative is inclated self-generation using fossil fuels (since nuclear generation would require ccordination).

Any steps Applicant may have tchen to increase the cost of isolated fossil fuel generation for its competitors and thereby decrease its avcilability as an alter 6ative would enhance the value of Applic" ant's monopoly power over the ability to use nuclear generation.

It seems obvious that if isolated fossil fuel genera-tion would make pouer.available as cheaply as nuclear power, the Lability to deny your competitor the advantages of nuclear

. generation would be worthless.

The greater the cost differ-ential between the alternatives of isolated gas generatien and nuclear generation, the greater is the monopoly pouer

- inherent in the ability to_ grant or deny access to coordina-tion.

Here we seek two types of data which would help docu-ment Applicant's conduct in this regard.

Request No. 5(e) deals with "cennetition between naturalLgas sold at retail by the Company and electric power in areas where the Comoany sells nas and electric service is 23 6

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A furnished int other electric utilitics" (emphasis added).

Once again -the request is concerned with the effect of Applicant's conduct on electric utility competitors.

Here 'the Department seeks general evidence showing

? Applicant's intent to monopolize the retail electric business by its use of methods other than dominance over bulk power supply.

The evidence thus.cbtained would help show the pur-pose and character of Applicant's conduct with respect to

' bulk. power supply and uould flesh out the showing 6f mono-polistic intent with respect to the retail electric distri-bution business.

The vere and cre prepared to reduce in any way practic-able Applicant's burden of file secrching its gas side, short of foregoing cur requests entirely. For example, we proposed the possibility of limiting inquiry to top gas officials, their files, and any leads to documents developed there from.

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Recuest for Dccuments Located in Files Designated as Pertaining to Wholesale Custcmers of Aonlicant Applicant has obj ected to producing documents sought by Request No.10, claiming a failure to adequately designate, describe, or particularize the documents requested.

The request asks for " designated documents" as required by Section 2.741(a) of the Rulec, and "cet[s] forth the documents to be inspected.

. by cate ;c;y, and describ2[s]

cach..

category uith reasonable particularity,".as permitted by Section 2.741(c).

It calls for particular categories of documents:

"[All] dpc6:ents comprisinz the Company's individual files nertaininn to each wholesale electric customer of the Ccmpany.

This is'not a

" fishing expedition" attempting to search indiscriminately and without foundation all of Applicanc's files, as implied by Applicant's citation of Schwimmer v. United States, in which an "all files" subpoena was quashed.

The designation of documents by their location in the specific individual files pertaining to each of Applicant's wholesale customers is most appropriate in this proceeding.

The main thrust of the inquiry concerns the various means and techniques by which Applicant is believed to have retained and expanded its monopoly of bulk power supply at the expense of these very wholesale customers.

Some of these means and techniques are known to the 25

Department prior to discovery; others may not be and-we arc not at.all certain that our other requests will bring them all to 1ight.

We believe that the surest path to fully discovering the anticompetitive means and techniques employed by Applicant over the years in dealing with this one, very 1Laited, class of customers is to obtain the entire record of their day to day relationships

-as maintained in the designated individual files.

We recognize that these files could possibly be, voluminous; how voluminous, we have not been advised.

Routine billing data were specifically excluded from this request, and we would be quite willing to sample and exclude other repetitive, routine documents should their existence be made known to-us.

Finally, it must be pointed out that all-that this request secks is production of dccuments for inspection.

There is certainly no requirement that Appli-cant make ccpies for us, and, in fact, it may permit the desired inspection without even removing the files from their present location.

6.

Request for Duclicate Tax Returns

, Applicant luus contended in this proceeding that government subsidies and tan and financing advantages enjoyed by municipal and cooperative electric systems are relevant in determining _whether Applicant is responsible for a situation inconsistent with the antitrust laws.-

O y

26 9

- i r

l Although we believe 'such matterc are wholly irrelevant to a determination lof antitrust violation or inconsis tency --

-Applicant must simply take its competitors as it finds them, and cannot rely on their alleged competitive advantages

.*./

to excuse its antitrust-inconsistent conduct v-we nevertheless recognine that Applicant may percuade the Board to consider them in this proceeding.

If so, fair consideration would require the Board to ascertain what similar benefits -- including tan advcntages -- Appl'icant itself ecy enjoy, **/ and to compare them with those of the municipals and cooperatives.

Request No. 23, to which Applicant now objects seeks information to enable the Department.to respend to this issue Applicant har raised.

I a

• /

E.g.,

American Federation of Tobacco Growers v. Neal, T83 FT2u-859, 872 (4th Cir. 1950).

• • /

Congressional awareness of and conern with such advantages is evident in the legislative history of the 1970 Amendments to the Atomic Znergy'Act, as well as that of thel 1954-Act itself.

E.g., Joint Committee on Atomic Energy,

' Hearings on Participation by Small Electrical Utilities in Nuclear Pover, pp. 1219-1225 (1958) (Rescrks by Rep. Holifield);-

100 C.R. 11828 et seq. (Remarks of Sen. Horse) (1954).

3

• • .+6

1. e p

27 c

L We were and are willing to limit this request sub-stantially so as to reduce any burden on Applicant.

Federal and state income tax teturns are still desired for all years since 1960.

For all other returns, we would rcquest that only a list thereof be initially provided, with the opportunity to obtain particular returns or a sampling of returns subsequently.

Applicant, however, has chosen to object to any production of tax returns whatsoever.

As Applicant admits, despite scme judicial reserva-tions, there is no privilege against discovery of retained copies of rax returns.

St. Renis Paoer Co. v. United States, 368 U.S. 208, 218-219 (1961); 411oore, Federal Prcetice 126.61 [5---2] (1971).

This is an appropriate case for their production.

Applicant itself has tendered the istue f tax advantages, and courts have often seized upon that c1ccumstance to justify ordering the production of returns,-Kingsley v. Delcware L. & W. Ry. Co., 20 F.R.D.

~

156,1581(S.D.N.Y.1957); its absence was noted in the

~ Wiesenberger and Richland cases cited by Applicant.

The

- tax returns; themselves are the best evidence of exactly what tax benefits ' Applicant may enj oy.

They show not only what taxes were paid, but also why other taxes were not paid: by specifying the exclusions, exemptions or 9

6 y

28 m

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deductions Applicant has claimed.

This evidence is "aot readily obtainable otherwise" -- the test Applicant would apply, citing Richland.

Form No. l's filed with the Federal Power Commission merely state the taxes actually paid; and, unlike the tax returns themselves, do not reveal how much tax vas not paid.

Regulatory accounting under the Federal Power Act and tan accounting as reficcted in the returns are two different animals, and our require-ments deal with the latter.

Some regulatory accounts do reconcile differences between the two systcms, e.g.,

Uniform System of Accounts Nos. 231-283, but they do not purport to show all of them and, particularly, the vital underlying details of how they arose.

Applicant suggests that Section 2.740b of the Rules, which deals with interrogatories to parties, provides other means to obtain the desired data.

Interrogatories, however, are not nearly as satisfactory for cur purpose as the requested tax returns.

The returns necessarily speak for themselves, while answers to interrogatories would merely be Applicant's conclusions as to tan benefits enjoyed.

We wish to argue the tax benefits question from the objective evidence itself, rse.ey than relying en Applicant's reading of that evidence.

We therefore ask the Board to order compliance with Request No. 23, modified as suggested above to reduce the burden of production.

29

DEPARTMENT OF JUSTICE-MOTION TO COMPEL THE PRODUCTION OF DCCUMENTS, INCLUDING THOSE WHICH MAY BE DATED PRIOR TO 1960 Ju; ' mentioned earlier, the Department's August 16 Motion to Compel was stayed to permit _ discussion as to possible voluntary compliance by Applicant.

The ensuing j

discussion was very limited and did not reach at all the issue of relevancy of pre-1960 documents.

Dis-cussion having thus failed, the Department renewed the Motion to Compel at the prehearing conference en October 25, and Applicant now objects to any pre-1960 document discovery a.a'not relevant to this proceeding.

The documents requested in Item Nos. 1, 2 and 4 relsta to conduct ubich ic at the very Lcart of the i

factual controversy in this proceeding, as set out in the Board's Prehearing Conference order of August 7, 1972--- namely the existence, use and effect of the power to grant or deny access to coordination.

Item No. 3 documents are sought to confirm the existence of monopoly power in bulk power supply to retain and extend monopoly power in the retail _ distribution of electricity,

-which-is ciso an effect of the power tc grant or deny access to' coordination.

The relevancy of Item Nos. 1-4 was discussed in

- the Motion to Compel, which we incorporare by reference

$y 9

30 4

4=

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herein. - None of our contentions as to the relevancy of these documents has been disputed by the Applicant, excepting only its general objection concerning the pre-1960 date of the documents.

Item Nos. 1 and 2 ask for doctments relating to s

power pooling that is taking place right now.

As the Supre=c Court said in United States v. El Paso !!atural Gas Co., 376 U.S. 651 (1963), speaking of the natural gas pipeline industry:

"This is not a.

field where merchants are in a continuous daily struggle to hcid old custcmers and to win new ones over from their rivals."

(Emphacis added.)

What tha Court said of the natural gas pipeline industry is equally true of the bulk electric power supply industry.

This is not an industry where an importanc decision to embark on a coordinating relationship with cnother electric utility is made daily.

Such a decision may occur only once la several decades -- and the coordinating relationship, once formed, lasts many years. */

Documents relating to the intent and purpece of a power. pooling agreement, including evaluations of the

• /.Indeed, the 7-10-year lead' time for generation and transmission, and the 30-year life of generating plants,

- prec-lude separation from an intensive pooling arrange-ment except on nany years notice.

m Y

g 31 4

arrangements and their competitive effect, will only be prepared prior to the initiation of the pooling arrange-ments, and hence, with respect to the Michigan Pool, probably only prior to 1960 -- and, specifically, in the period 1944 - 1950 when intensive pooling first came under consid2 ration.

The Department's request is neither vague nor ill defined.

As stated in IEEE conference paper 65-234 actached to the Department's motion:

It was recognized by both the inter-connection committees and by managecants that fully coordinated planning on a one-system basis might afford worthuhile cavings.

Ac c ord ing ?.y, task forces t;ere appointed and extensive ctudies were made to determine the advantages of a one-system planning approach.

It is these studies api documents reflecting management consideration of them that the Department seeks.

Further, the IEEE conference paper indicates an agreement was reached on future relationships between the Michigan Pool me'mbers and other possible intercon-necting utilities:

All pooling arrangements 'vich other parties outside the State of Michigan must be handled as a joint venture with tee tuo Michigan companics acting as a unit.

e W e p

32 P

All arrangements uith utilities, municipals, industrials having generation, etc., within the State of Michigan, will be _ippotia ted individually bv ene comucnv in unosa nrea such cener odrev is locatec.

The documents tihich the Department believes are available supporting the Applicant's consideration ~ of the proposed agreement on dr.is point may indeed show a specific intent to confirm in Applicant the powcr to grant or deny access to coordination uith respect to "utilitics,_municipals and industrials having generation within the State of Michi~,an.

in [its) area."

Item No. 4 documents deal ~with. participation by 1

j Applicant's high level management in conferences trith chief onceutives of other major utilities uith respect to tha

- overall strategy cf pooling as an anticompetive weapon

- against smaller municipal and cooperative systems.

Appendin B is an example of the type of document that might.be disclosed if the Board orders. production of Item

)

No. 4 documents.

The purpose or effects of entering into

-joint unit arrangements permitting the joint venturers or power poolers to use large, low-cost nuclear units, which uculd provide. cdvantages frca which others would be' oncluded, may be ascertained from such documents.

n

( ~

~

33 w

N

With regard to Item No. 3 documents, the Department is preparing.to show that Applicant engages in vigorous competition uith smaller systems for large loads, and, except for the Alpena Power Company, with which it has made 'its peace, refuses to join others in asking the

- Michigan Public Service Commission for territorial allo-

^

cations which would cover these types of retail custcmers.*/

Its arrangements with Alpenc Power show particularly well the effect of cost-price squee:c on a small system which, lacking access to' coordination, is compelled to deal with its vertically integrated competitor for its bulk power supply.

While Applicant's arrangemenes with Alpena are centinuing even today, the document: concerning Appli-cant's initiation of the present arrangements, and particularly its realization of Alpena's need for pro-tection against price squeeze and its analysis of the competitive effect of the market structure absent such an arrangement, will be dated prior to the time the arrangements were entered into.

We ask the Board to rule that where discovery is otherwise relevant, and relates to continuing conduct, the' fact that some documents uhich are readily available bear dates prior to 1960 should not har discovery.

• /

With respect.to Alpena, it insists on such terri-terial allocction, refusing even.to obey a Public Service Commission order requiring compe tition. -

34

.~.

APPLICAirf 'S OBJECTION TO FRODUCING FORTIONS OF POST-1960 MANUSCRIPTS RELATIf*G TO PRE-1960 EVENTS Applicant's final objection concerns three unpublished manuscripts discussing its history.

Applicant has the manu-scripts readily available at hand and is prepared to produce those portions concerning events since 1960, but would go out of its way to c::orcise all of the pre-1960 historical material, relying on the Board's Prehearing Conference Order of August 7 and claiming that its pre-1960 corporaf.e history is irrelevant to this proceeding.

The Ecard has, of course, interproted its order to call for discussion of possible voluntary compliance, even

hora pre-l?60 documsnts are involved, prior to e"h #e*ing a mocion for its decision.

Given Applicant's firmly expressed position, however, we believe a motion to the Board would now be timely on this point.

Accordingly, we hereby move to compel the production of the pre-1960 portions of the three historical manuscripts Applicant has kindly brought to our attention.

Without any evidence of the history of pcwer supply in' Michigan, the Board might well conclude that from the very beginning there were three large power companies in the lower peninsula, and these companies grew.as the market grew, Iiith a' few other, insignificant entitics beccming tl inefficient backwaters of the business. _

35 9

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o The actual facts are quite the contrary.

There were litorally hundreds of electric utilitics offering central station service in Michigan in 1915.

When the ccncept of intercennecticn and coordination or integration uns developed, and when technology had prcduced high-voltaga transmission (and suitchgear) as the integrating and coordinating redium, many of these centr:1 stations were ccabined into what were then called "superponer" systems.

We end up in 1970 uith three superpower systems in Michigan's lower penins'ula and a few isolated systcas with some of those trying as bcst they can to obtain the advantages of.superpouar uith the limited coordinating opportunities remaining.

We will not c9iticine Appliennt's concentration of control to the entent it has produced for it the ability to tahe' full advantage of the blessings of suparpower.

h"ns t is relevant here is that by acquiring so mcny of the independent systems in its area, it has precluded the municipal and cooperative systems from themselves obtaining the advantages L of-superpower'.

Because~ the Applicant has refused to assist in preparing

'a stipulated history based en information in it s posacosion,

.the Department.has undertaken the burden of preparing its own thistory of. the Applicant.

We seek, of course, to present the most accurata picture of that history to the Board, and desire the historias ccmp.iled by the Company simply for the~

' purpo'ses of checking our own.

L 36 tz

COECLUSIOL Most laws are not self-enforcing.

Very few have

, incentives for enforcement, such as treble damages, rewards for inform: tion on polluters, and the lihe.

4 Section 105(c) relics principally for' its enforcement on the Department of Justice and the AEC s taff, and on any

~intervanors to the preceeding who vish to protcet their interests and are financially strong enough to do so.

All three are 'r'epresented here as joint discoverers.

ithout i

discovery the law cannot be enforced.

The Applicant does not come here with a presumption that he has net violated the lau.

He comes seeking an unconditioned license to which he is entitled enly if the activitics thereunder vill nct create or maintain a situation inconsistent with the enti-truct leus.

Unless the necessary discovery is provided, the Applicant may-be able to obtain an unconditioned license to which it is not entitled.

The Attorney General has already found that there is

(

reason'to-believe the antitrust-inconsistent situation enists

. and that the activitics under the license will ~ probably

' naintain it.

Given these circumstences and considering that a large proportion of the information concerning the situa-tion is in the sole possession of the Applicant, it is under-

_standable that -it resists discovery.

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Ronpectfully submitted,

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Dated:

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Septeract 1,.1972 c..

UT.3T, J.

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r CULF ST!.TES L*IILITIES CO::PldPI vercus CIVIL ACTIO:I RICrand 17. M:722::, Asr.!:I/dt:

13, 71-1C2 ATTO.7::EY C7".Fr.'.L

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I M:in scusc ctre on for hMrins thir. day c: the Cncerant'a petition ior s

ccforcuacat of Civil Irctesti;;ntivt !%.*.nd Po. 3259 of ti-a Pn rt..nt of Justi.:0, i

r.ition fcr preJu:ticn of docuatr.tc in c.. ara, c:.d rn:Jun fer cener.*

TP.ESE'Tt: Ta 2. Ihilli;<, Esq.

/.ttoiney for F.laintiff "a' lace E. Erend, L g.

David A. L :kic,1::q.

Lou;1cs '.i. C:n::cles, Ese:.

I!c:x!?.; ua had c:t the mtien of ih:- n T. P.;uper, A:-sistant !.iterney Cenaral Arititrest Pivisia, Unitcd.Stctos Pepartz:rit of bstice, to c rd::

enfomecat of Civil Investicative Dra.rd::. lW with respect to two cc.tegoric.

of docu cnts, t* -5 production of which was cbjecced to by C-Af States Utilitier.

Co.g ay in its Pctitien for Order to See Aside or l'odify crid Civil In estica-tive Der.nnd, cnd the Ccurt, af ter hesrf n;; crtv.ent cnd con:idering the briefs

.of c6cnsel, orders the prede tf on 17 Calf St t es Utilities C=p n'f within !.5 dayr. of all d:cuccat:: viti h:ld by it prsur.r.t to the et.jections recited in paraCrt.ph: 5 (b) t.nd (c) in its ' Petition for Or'er to fer t :f de or 1:odify caid dem.nd; ftirther, the Ceurt ::ceptr for in-canc.

cu..inadca.ccr: sin dec r.cnts furnished by Gulf States Utilitier Ccr.?a.y, the preduction of w:ll:h was vit!. held upon the clai:s' of thc. cttorncy-client privilc;c tr.d the Prart'e. >et e'hi.v t.' e M

,e s

Wther 0- net de ;rttil--

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2,

?d: I: :t: > ; 11::.: kr7z w fc, eu; M i

ininteined, or whether t. Prima iscic cs;c for the culuien of the privilcce t s con

• caded by the CMetrr:n.t to.r leca c::tcblished vill be defm ed ent!1 the i.-

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Sep te:.b er 15, 1972 c7vIL !.cTI:7.:

UEST, J.

10 71-102 n.

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Capany vill be given en opportunity to cu'r.it ddditional crgu.: cut with re-cpcet to the privileged nature of any of tha doctrento thich the Court, after revic.w, city consider not prctected by the atec:ncy-client privilego or ct bject to en execpcion to,the privilor.e as c1ciacd by the United Stater, f.r,of f 1'A kM++ +.s:**

,D, /

1;ote :

Fcragraphs 5(b) and (c) of Culf Stacca' Petitien,,

.hich co thp Ccurt s.cken reference, recd ac folicm,: -

5.

I Alt ernatively, the Demand, ecch part cnl pcragraph thereof, and the pcrtinent porticnc of ecch part cud par graph should be codifica cnd 1..iuitC to excludte ther.e.f.. rom th.e.fo..l.l. e.-inn :

./.

r

.(U).Lcettnent's involving ce tivities of and ncsctiatione enr!

declings with governacnt:1 cudheritic:: sad instrr::.entclitics, which cetivicies are 'exonpt frca tifa application of the r.ntitrust 1 c.: a "

and therefero are not prcpor =atters fcr investigatien to support the dendnd; and (c)

'ctters reinting to litinction, legicictiva end rc M ere:.f agency activities of Petitionce, and ccticar of Petitiener to influence govere: tent cetica, uhich cro cetivitie.- not violative of tih2 cnt it rust Icws and which arc protected under the First Amendment to the United States Con::titutica and are therefore not proper t&tters fcrl nvesti.:ntien to ru m ert-tjo d;n;d.

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APPENDIX 3

~ ore ai e w in.

the ehart. we can Subcomm. ttee of Houce Cora. ttee on Government aat out commereir Operations, Hearings on Private Electric Utili-anteo vos.wt up.

ties ' Organized Efforts to Influence the n.

T:m conu:ott..e Secretary of Interior, pp. 399-402 (84th Cong.

wu'e. of the G< n.

ad fr.:rnerly witt, 9.d Sess. 395ga)

- AilC: all of you

, : tion mn! the pros.

I ta tot the tumt out I

in lud ry bec,.ine ImtC

. mt iton wtty corn.

Dulust ry engeru.

JoutrtY L*Lm.ornu At:cA l'uwr.r.rr.a.vts as A In.n:ssa A ats r Nr u n.a t:ox 4.@ pet:dently the C.1.L P.cher l

The area 1;on erpi.nt !=ror;:ht about 1 y :he joint e1Toit s r f two or rat.re.*ynems is not a ocw t'evehq :.cnt in the util;ty sndury. Altho:2gh the 1:.e of this duIce

.yg,,

p',IPU I'I "I ha:,Icen limucd. en. nWes of th? jvituly av! ed p?aut datir;.: b:!(k over 25.t.u s that (oice to faithl a;e the Windeer ; hu:t aif Wut l'e'n:' l'0wer Co uf"! G.i4

...s be.n:,t done b' Power G. :: car Whu!ing. W. Va the :%uto:: pbud of n nnsylvauht Po.ver &

_l Lh;bt Co., abd Scran 4 Ceetric Co.. D r nicru Pen?c ania, atai lkt pmit er l

I

.:er Wla e.iw a n,t l

p?nnt er! l'hil.i.el; hia I: Wet ric Co.. a:ui a t :aidic. Ci:*r 12curic..ro. en t he De.ts we re l

J.tv er.

Tbo latter. J..c:..tntaHy., set erted.to ain;;i? Wirerwip iecently wiu. the

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t gn Lg,;,,gt y (,0 The ia >tiva: ion in t.e s a-e of the e e triy M nt venre< was the Imcutt.ent i

atal e;mra::n: eum.cr. Ice of lar;;er n:.us..!:el t o.-o... r ext..ar. the ad !cd f:na n. 51 I'

eJpicity repn <emed by two syriema involved..hth ;.;o.nactition of J.w t u-tuent lowt r wm n.

in imlortant im tw : t the ti:ne.

l O.t r t!.e in*en crn!.; y ears, eme >yr:c:a5 crew to have loads w bb h would l

Juelfy tla itatulat an of rea*nnMy in.ge nn:ts for t!+;r own nec^ent r.a.!

i somr t oh!hy n. :.p.tde* with crouN ef <tNhh.e ri.w ep -rn ting as pon er p ed.r I

buiu phants for the f Ot to. ef the-e e.;n:ain: twut awe < cnd 10 a.:rve t he lorol i

vf Ge L.vap. O! hts c.ie, t;u elop:aa :a au a'.wou,:h the t,.ts;c twuorne asa.

acat:c.a for th as e.. I hui evtithaiah Ib e c::tlys.t.intly ow:.M lar;c rowe#nnN hr.ve act.in com to the fore. P; It

,...Ited to supp!y. '

e.n, the !!s.t. ei exat u.' 3 of, t his i.ite :t t h,a> > of th" %. /:t - is the Jeopa plat t of i

L.

Lmt rie e.nercy. Inc 1.nzar Dihn te u n::.ny vf you hi. yrer the uory of how, t

O'" ** # #"i"*"

l

^"d A W UWE *.'"I E* ""' '"I'W ".hou t a 1,g\\ yon k i Mv.u te nt Pa*.n r.h

.ay are coulblen.

'd I"'".ud hy, coq &,ucd f r a A powr, the hve pnre to l

the t.:ndortion 4

W. LA M.f. hwinal n centr +ct a h. WW m in

' " hnN enfored P

WHu nt ce rr',b, g.

{

M psaw (nW rW to tuWy a baif ndHMn hilowatts II-e Joliu phint rm dollar =. cc.de a ner.al unique 1 mane!r:: arranco nt, an.t

..dr tha con.

.q t

under motruction th.nully d6 zno! cith 4 init< with a total net capa

.. t of 052.Gi0 kilowatts a to be enhnj. ed t.,nd.Hn: O no:31a.it.s es a re-ult i f it N

d it c-contr.tet recently oc dmled for cetitu.. ;-ower to AIA bra:;in; the rontr tet i the r.v:n lt* but enlount up to W.D Mowatts and the r er ecNHt/ of ti e statioa to 'M.""O i

kibswa t t.. A dered n A latut eu:ap.e

..I' kiut own.vship on a 1.irge c de is i

.. N g wiU not

- @ N Yu11ty De trie Co. and its wb 4./ wuc I m: ~idiar. ImMana h'e:.:ueky 1 tr 3

- t Com.

Tm tre a mep d D ol. crating wn. rat.:m-vn,e appoint *[rit]

cut tutm*,.m N 8 am 62% M 3 hmM Wn enmunew

• cet or s inc

. s g og. p; 6perating in (Gle. In !.ana. 3tichh.au. IOntwky Pen %3 ennia. W6t Virghda, j

Vit gtnia, nral 3(arya..h It has cut.trae:c 1 to ct;p'y the nov P!he Cmn:ty, Ohio, Dlisota Co" hs diCuen ritnt of the \\!-:C w;th LWU W kHo.vatts ut Z ! ;ru nt load facNr for I,

r, yea r.<.

To.lo t'.3 ir is pro!"-ed 1, bn;ht a L2"o.m tilowatt phn'. '.ar t

$ ni Sir *.Tn=11n Madben. Int and a 1 nSen4G; watt ]< uit : car t;ampo!L., Ohio, nWn: 20n./N 5 A. t te.tefor.

kUowatt utdt= in cach ca*e. ami : :'.:Fn!:

ene of the hree t i.cete imver load < ibm. tit traa>m.% ion syste.ta.n the worn. win te survaal entire.thk.

Thus n

5

.y t y "h ral nui tance

. n.ould eYpett taxpayin. :t eleur:e rou;ataes r.nd the nu ther,.te:.d et sseialnwd power arruhd In taat trupottant air.t.

f* 'h" Ok"f f h' l

L>.: us esandte for a urnuent the ba :e e va.m.!c 1"m!h!!!tles of a Joi,a or i

""""W' 05h. VaHey type of i ar.e :vwert Lud auumed to h.

..:nt rvri d for Mrvt:.

r.ormal utuity carapw k.*

Cha:t 1.-L.o comr.rMn of inve ment b..tw een

.a it *..!! In.w, o 3 M.uta cath havin; four W...n#;w.ut m.f u o-a to:at cap teur of 1. mum g,9 E;ta whict's wik-l "Y DI * " ? #*$ N * '# D t'A W.au m c@ w yh. N D M.

watt un tv. top titer wah.Philotrsit trun-rui>.4n.-p ttat to f ond cercer. :5.tving I

t g

i F

r

• • .p

.4 p p%,w,,.

• 9 ee.e %

g, gp ywwe.p spee -

g

• • • W**F M-se q

p.a; p

a g.9,,, y g.;.ag

m i

.n.a.b a s :.

u :

ai.:.:%. wiM.

?

s"

, p,.

,mm

=

i

!l j

4()O EIT011TS T0 INFL1:13Cl? SFCIIETM;Y OF TILE INTEll!OI:

?

In inverttuent cf $1". million ia somo 6% percent. Chart 2 shmvs annual pendnation 1

costs for the saine plants. The frcfor ou coal for nit nunmed 100-:ap.e hani in the case of the O p! ant

• 1s a sihti.ntial itens. The f.otnparatiseir b>w enst of l

u l

movin;t energy from inine toinad by wire is necounted for in part by the f:.et that

.I very lar;;e b!ucks cf power are hivelve d uti!izing transmim. inn at Eo Liinvolts aiu!

i

+

th:* distances annuaed are not lanz. The production cost saving in favor of the 1 lar;:e plaut is O!I perecut in this instance for the N1me amount of dcUtered ener y.

8, Ara exaruple of j" int endeavor where the size c.f u. tit < intn!ved l< mera mount is the sdtt:ation in n.3ildwestern State-tu.w threatened with severe public power

{

inroadsthere six prin< lpal cotrpnnie= hate ferinod a power po<d and ere consf rticting a netwerk intercoraiectine all systems. The underlying.hAi!Icaticn ri f

fer this tool is based on (1) lower kilowatt co<ts for large get.erding units a.s cantrasted with the s:aall units that wouhl be require.1 if enth con. pane contin tod l

t to davelop ite sy>t et t independetc.ly. (2) the lo.vtr prataction cost <, (3) the lower reserve capacity te<tuirnd, and (11 service impree: wnts, all cf u bi-h more than l

cem)+nnte for t!:e inscstmeut :ind operation; cNpent.e of the laterconnect!vn

.t fac!;itles.

.I Chart 3 Fhows the entaparative lavettmePt estiamted for thid sit ua tio!! f0F l

3 the 2 possibbs prn;* rams-nouem rditrited deveb p:nsnt with W unitA tho !cr:e3t.

00J.M hilowatts ver-t:< a emu 6inr ted pr< ram innlvia: 10 unps of 1%fo) to 4

?

IM,0NJ klion nit capacit y.

Th" Savia:!n int-tment of nearly Ma ini!!!on is ever P

23 percent. Chart 4 fon: pares the.n:ncal Production est for these tvin bierrat.s.

j SasIngs in c.thei than fnel costs nre marked In titis sitration. TLe Mal pr. ine-L tion.wt snvirg of nearly.*H n:1!! ion per y ear i<.<ome :!2 percent. It Le pr):riun I

s.hould prove very 1.ci;.ful in pWin: tids ;.roup in a imirion to 1%. r mee t the f

4 I

threat of public pun er. In thi< *ituntle.n the dicienity of Enaneitm the itatullation l'urther pmihin re luetion in pn.ver c. <ta in Jn!nt plants may b. avaihth!r of larm tenoratiu.; uni;s b.s any of th? siv relativ(ly small noto+. latM com-

)

f.

pctde* makes the bir.t'y c.rcred Uptut rttractive.

['-.

to the extent ren:iatory appraval may be ut.tain. J f ir und wund twiMy decleieni i

I adn;.t the um of sprial tion:ri d structurc< nnd wthods sut ' as those of 3

j.

f l

E!*tric Ener:y. Inc., or the Ohla Ynlloy IMe tric.

Chart ;i slas a c.onpariron of a mon wion d uMUry finane lal structure with

.J that which mir obtain in the < am of Quo VnUey Deetrie initially. Th=e pH -

i (centv,e3 for Ohio Vaney are bw.i on mn9nnm 1"trmvino fer ivid, h arrang -

meets hnre le-a ?mb.

If the ps Wr <*ts a re on. h ni to te.p:irr !eu total cepitrL tbn eenitt erwl in 1+in; a timi amount in dothtr*. the born.u:nu wi!!

bc correspondin ly teduced. re;aluts: the relationsinn of Sd inuuau moi.cy tn $1 of Lauk hm<. The in urence imm nre bw d on 0% pemnt. 0~.-year level

{

d(bt serv!cc Imts, b. ice ar" fully anAr:imi in 'Imt perW1 w hi"h bee!W when the twveni?nnrs are compkted and fullwcala aperation beein<. W uey 14 nf

{y[

conne, taken down from both b.<nrance companba nnd bank < a< expondm! dur-8 ing the ;I or tunre ye r construM!ca perlad which precede < the 05 ynts of full a

operation. The bank innne cre nr 4 pirrent. Tat slepreciaticn t:0.en durin: tb-p*riod from the completion of the firrt unit to the rim the pl.,nts sra fully y,

completed p nvMe9 ca-h to pay <d wma:hing over N pertent nf the hant loans.

p nuti the I.alane is paid off over the Cr<t 10 yenre of full or+ratinn amit for l

n balloon of leibly 15 percent. ubich wi!! Late to be ret 1Muced at the <.nd p

of the 10th ycor. In order ta do thN the araortization of insurante to im will La l.

cut Onwn dur'n: tl.e first 10 yeare ta just connch ta keep that dnbt at A percent of ect plant, naing 0'. percent per year deprecintion for th' in:rpost-* of this de.

I I

termir.atinn only..\\ll other amanintian maner em ta pay off bank Inana and S sup;.lemented by the equity h41er8 reinvc< ting half of their dirWnn in 4 parcant noies for tl.e hrst 10 years, which ni!1 Le pabt off over the 13th to 004 year of

[

the Olyent perbd of the enntrm t.

Wh!!c thme compbwities bureduco soma v::riations, the rc< ult < will trt vnty si:miticantly from t!.oec show n on this and the succeedini dairt whici. have lwn <f mplitie<L 3

c mparativo a ? na' !Md clarec=. In the ense of ennsentinual Chsrt 6 showa o

ntility 1;nancin. typical inurc<t and depree:atten rates. preferred disiderds and cotumon. stock i ttnin:4 hase been u-ed.

In (Le raw ef tba ' >hi s Valley r.

method, nnnrtimtion La< been taken at the averate value for 05 year <. W t.er-I cent s.inkin; fund ucthral, u hich le 0.:5 percent on debt. or Ont perernt en total cntdt:d. intertwt at 4 pers:ent en lenk !aam and 0; porcent on inaurane* mney.

g.

2 udh enmmenenck divulends are nr % pcreent. The nyern:1 enmi ariwn shows a

en ndvantaea of $3mc W lercant leveer thed etnt:e rate a[p!;rd to total es.pi:al under the special financing arransment.

I k

s I

-.-4-.,.-.--..

~ ~.-. - - - -,

_.m F

s.

,._.c

..o._..

i s

I

. ;;l TAny O}. THl INT,. Iliol.

Erronts To ixn.msca srn:cnnr or Tur. ixTrt: ion 401 I

t st Chan t 7 !!btitratc< tbc stprmin' ate (flet t the factors di euced naar ha*.e un Chirt O rhm auntml iswh <@.

.4,.,o.

-n 'Nutned.10mt 11!c ~mul l i overau ev. t of deIivare.1 %wer, J t is in ters s of nulb eer kilow:.tt hour. of.t::t f'J.. "a Co:na tratively tw c tg.. r"ef l

.Wi 8

adding fact ami other proh:tfen costa :en ! hwd ch.tr;:e.<. 'he latter inea:ma?

J.i s

aem.

....tc.; tad f.sr in tu tt_sly ll.e !lnc;u sh.at a

,un cl:mvsr.te for ::d v'thiretn tues an 1 Inv!mr:w claitte.1 in the previens charr.

l i

Tha a

.,ie. :tr.r.9.. #ime a t. i kih%:14 an<.

(

g.

.l mb u t' M i fer to the d ces.;pany c. stents in I riidwestern Nate c.d 6 NM co u m A dw n:t.se 15 21.15 rail:5. V.M h

. pa r..

roi >

6 tin.: !n favor cf the 1 W

<j devolepwnt it h re-luced Ti Ivrrent to t.:;1. T!!b rlwhd fa::ar.~in:

r th,.,et:..e rngnt <.f delivered co rgr.

t gr.a v.ni.3 invn:ved ie ra..*e :nedest g,, gg g y g.,,,e*, n M ut !a.ce, to C.JU Ini!!w i'a t he richt 1.: I we M a-M-

U W 9ts ver. is ) very large 1.lan: the latter i.N I e thic.dened v.ith < mare puMie 1 ower 8

a power gqd nr M eurcent!0nal :.n:l n; a+:1.41 1:nn ueDr2. There is roine vatiation in inad fac-L.m. fori.,.e i i t.: t n.!rt 13 lie: Ju.l.j.1 cre cut these two fets of charts as iu.ih ated. Coal endt< m er tha er. tire nr. a

.c.tti n i y.tc.s.

(

.rt er.y f *r large generatin;: indt ax

.g gy. W 0 Cr: r nu the len :.a..I for the :;-l. int c.ue on the richr.

1

'.n. repured if c.n b ennipan.,,y cout hined W

co e!! ml.he ;.,' le bein:: in the :G to OS t.e.rcant Imr in!! lon Mritish

.a a ra i 1

therlan! unir tas:re.

slu;!c lo.atti ca:n at the enr right have 14 2 cen.

. be.wr pre liktien cNtt, (. ) t3. t gwer 8

g

vi f g g, Eitcd in this ca-e thealer by wire.

h-n.:ahaJ.the p:U.ts nie at suiu. telth and er9ry.s

. it. cover e::u, all of which more ibau

(

ls triu; '

In tl e e chara ett the !! Pt i

.risa expene of. the juretconneetbts di M c:: that the n d.Klian i:t cost fio:n the i1lant nrr.uteentent in 1 lar:.e e c4l.un:ited for thl4 stuatinu fer pla t:t (uta !be f cure 17 pa reid, whi!21 he :aidis S.and iMential by credul 1; nan-:n:

.i b ab.sut 20 pon

.%it hetua denliv, t h.'

nrea of c.dt n eu. en.t.tt.in in t he ales 4.-; ecn.r ef. re. there b a nh tandal !atenti.i

..u :1r+ :n nt ri.,h G unl!<. t!.c br&t.

t

- 'M el..

i..na nvit:4,.

c r. ::t e.p, yJ unip of 1W..y.N t o D - wh t conditium f.n:p eial.<tra-unet approachit.: the special of.c de er:mi y..rly641:di,naa o orar

.., y, t, *'

a v.

d ' d W.

and unt thr.t Mll h:ne to he wn:kel out for e..ch >ltuation.m c d.m h

..t n m be m re ! b. 4 wirm O,h' M p Um,:

s

.", ' t 'e t he<' he t ot a'iw* rn.u s-t

- 1 In,t.a.

vi

• t v:o i

ilon. T

. pr uc~

lu t.te v are n< Im t

. cr i-u.e. prt ent.

'I.m pro.ani l'

Cectric 1;nury. I e. and Ohio Vn'!ey Lectric Co.. the facilldes ar" hir;>ir f..

.h..f N.wr

' "d W u.ty of I 5:jhe.ta better n:r+t t!.o-hatt Ir rglv t n :he eu.u E. M @ m N W' theb ap: rovat h,unt thair

- - - m-in a p...t r n t

e

.i: t he in. tall s tiott

ene2ea of n.;do:ia!.,e:ee and reserre: I.!uraMe t.un on t. o e

questian d 1:ltimte retvinnt.ility of >t*k ia ihe terly for sued conibihics by 0 e o

s e..tivt ly 4 ml ; onaw_ernt"d ema.

t

.u mil in &.

.u ps, in :he aluo Vahey situatin:. t!c. interest en four yt< 1;. J !Pr p'eute ta;y bo availahio l

Intrastric en..:1.uJes was hi c.tch v> !c-4 then ~, percent an:i their ac@it! var 7

i c,; g y.en mit Sub'ect to SI:C sp'erm a! In the U!do Val! y emo. s nce b th ni.

a o...! cr i.r..,. murrl al!cr u,ed Cig g

g3.,s c.m pany end h M bum

.-u Sidir.rv wet e forn'ed. t he M:C hsiete I ":

r. < o t.d sa a.. A such as thme n'

' ' d

i havhu: sto.imvnersion r f the Ohio enIp :ny rent in the I. Idi:rf capanis

}

Inzolned

4. !!< y J.'. < r t h:!;,al stru,ct.ure rei:h relatics:..<.tather than in the (4ert. tin w:apanies to avoid a go'utcrandfather ul n. mitt t.m.vri uip.

o

. ally.

T.it e pot.

.x i l.trwi in for win,ch p rr.ino l

.Another :,ec19e exenipte of st."cial Sn.uirPc Is that of the.%*th CatMhu h erathnt t k. Dr ned by the Foath t o rnti:.a 1:!cetri: & t h:s Po. to prm 7:s.n.p :p. rer,'dre leu.ry. t he borrow.n.<

wdl

e.r tgal j

3 g g,,3,.;..M 0-neuk Wn M.4 eA%* nWM b d *r cohn-i the parent c. -i a p,,,g g,.;.,l.:n:r and the i.ther ledf 1. G urnia Purcer Co.

tif thi< p ;.uti t!"no p n 4 ip nt re tyi.ey I

u f c,.,, porre:;t. y. ra r. vc.

, gg, 3, g g,,.;, M ir d #.'.it ;'O t ercent, ai r t

g, gg,. g g p,,g

., ; g,.y gg g

, g g., y y,,g

,.1 % I.,:t h,h>

!?ui./.tC n 1 :.t' l

• 94 1

r.r:T ;;" d.

.L.4

..4 to i s osHl<d o)'.- n..:Um i re'.f)rt. Ott l!H p,g,,,., J, I.erre:. t 4 :e :e ur:r;; ni e....q.a nies, :oid l a_'

Ha <lf of.. l'D: r'*".it.

,.f otew b. nf e

!' m a i e u.~tn-o

.r..-yea r 48

.:,;70.. s ta.o,.ej.od,< a7 c3. pended dur-p.-i du r.,,9 -yea r.,,

y.

g.,.g,,,, h N

• m m e @.

b. h t h M W L' 1 '.

w.i i *(' ' w < t v *o years n. f.dl

.7.ir u -

c.4 tin'n takt n durin: t h.*

Y. h'de D a jerC+31 deet b.'i:f v fW1bl hav.; bor n obtal!:*.d. t he itNtraf/c lloi o L

tynnd I to 1.rnvide f"r red::esi"a to 9. pern Ya of net ph:ut -b. !d t!.o Gove:

<; in th7 lino the phtnt-nig PtHy

,.n g ;.3,t L.= enne.l.-d.

1 b<u. am.h*,

W. *b..r M ern:ailon a vailah!c in !ic u '

1.L Si t.* 4 er b n eM r f t ho b in s I o p <.

s 3

g..n a M M M t W 4-bmW.m ri. ia:cd in sind h inn:: suutracts with ;

(:.? 3 ear < -

,d! q rouen evert ; i"r g g.y.g m ;ggy y,,.dd mmE I L tri u m-m medh sittractive rates b.

1 hm e 16 1 t ennaa<'ed at t! e t ni rta1tio., w in<nraire loana will ha l

the extent of F, l eu cut of c.'p9alizatien I'n the ul.sence'of at.y Guver sarent con trur:t.

/h t+ h;.+p thnt debt at b wrent

.wuining f. r a :urnrent that rezuhttury ap:.rnval snar be o ;iained, the "s-re.4 tis:

3r tha ;.ntpose4 of th! de.

t.

tent to w hh-h Tec al hYh debt [cr~l. tare tmaheine shoiIhi b~ 11%ted in Font 4

1 y < to p ry 44 bnnk loans and b g yp,g.,,<18a

• 'hy

-r m b. : b.1 Md e.mM Mic n.

Where the

.c

.o. r f tn,.c dic5dands in i pere < nj f

Imd N. urce the 13th to PN year o' I creent.ee wn 'rship..f e inity i< sal.m:autiah the pare:.t utiFrie riu.st enmi ter the peia. c%;t on t;w:r.Nu dobNhen sin:: co -rs.;f the Lich combinul ih t i..

=e..-

lexit tec Intre.duca snn."

rnNrmth' L e d W. de t m WW r-m mui:t stockhaZ.$rs of the creater

- n:alv frma the se shown nu thD. 90.jl ri*k< of Id :h d - u rar.o Stu:n::ial strw to:es in the event of a drop in 1.u-inee.

• he r.7 e. In !? a case nf contem,innal ncm.muy -d

..aaunumrr,ue e.ua d..-c~ u>.

Nreid ewq unbn.' tm l h N ma % ' s tbc e n'um.n mochheiders talo tbc "to P:nn rpres. preferred ehtne:jds f

riFk :.nd the ratera)er tNts the bendt, in.. ati.)ne nie th:.t the equity *ca-

"h In il:a e aae of the Oh,o afar serv vrans f.ir S years.1}3 br-1 rittes enubl 10 w;d to in !ctendent interns. th:r utintv c<>mrany des.cr. din.: o a i

• pt o : M t. or 0 M per.*ent en k8'il

! M.h rm me u !. r W.n M t m q/, thus obtaikin: t ha bene.'its of 'aw-

. h4.. -. preent en !nsuralNe WWT.

g era pun h d. d '.we by s trtm M d;e iuhere t huancing and tax sdn.,

2

' y t.

'l he nrea!! coincarison :. hot <<

tb!s type of otteial high debt.ctup.

It is posnble thu tarz-ins s"Infloas inY.n

..Wd chur,*e tsia cppHed to total g anta::e r>f B:rt of tho financing ps.s<!bihtia hailea ed in the ia t chart :an)

I,

. u.

O

1. 1. E* l.8

".-*N9 8 *T Wee

• .g mom

• 1s

, g ON9 *TV NO %W my #..T u r* **%IP * $ $ e% p e.e hi p. -[*'. -

smyey. eea m-(.A y-g r

a s

• e p

WC

,.w..

- g.-

p~. -

e i

I 1

ixri:ntol:

402 clToi:Ts To ixrixtxcc sl:ci:nrain or T211:

be dere!or.e ! witimut iLing viniet t e to a seunti e cneption nf a rm mnable 1stsi.

reu ri A und which pi ' O.

'in a nersinar v..,Il _!va l he neec.ua ry tr.a rui.i to n:et a thre: t of snr alization schit h otherv iw w eO! plare a ecwpruty an>l la f

l stodheb!".'in t e.il jm c.i roy.

l PN lnridirth n.ecer e.in;nnies not otherwim -uh. lect when they on*er T

• .ome hint vent uir i< a:.otla prob: era to u hk h to deneral < dution i< avail:a!.1".

t i

The PlV' lui< ju-t i.: rained :n extraption to th" foar in?ia-tale < Hapardes f u the t Rio Y.tlley ; ro.ip un:i! the new plant < are in 1 pe<ition to carry t he all' profe< t hud.

l i

In sene situations. u bere the w rvinti:.e t;n.-t pih!ic le er inroah dietate. tiie L

he:'eelty for.iqint-ren-tre. tion and coot Un.d ed operntlon to brine dacn emt < it niav be necc%:r'r to c19 me the le ur of t wo evil--.17t ' juri d:d on over an et h'et wbe Int ra-ta'.. cato; a ny or pelein you r-M f out of bn-hiew f

I Obt ninire pe:vd !on t re:n the P. ore.tu of leur trul iM nue to ve the 3 percent 8

f' shd!n.: f u si, 3-> ca r :oo li'.at:ou b.i,i.. In lien of r ouventior:1 hpreciation fortax p' apace. w.:- a pioneer a f ort of ET'T.

The sa!re ba-!s e. it h P. perce:.t ra h. i < p: n ri otly e.? :a ! : r a sh!, V.dley I t i-in.p-

• u.t in >ct titm 1 p I he typ -

a i

cf r; erial f.mr:cin: A-om. e! ! ding Inxes to a sw.narm i

Tnt.N a t.

env Of :1.o bic h - o

. f i hr 1 : ats ial. f t.:r.'a t or y, n".d t u a s peeH o.

i a joint-pi. int pro it.

hith a ct bor with State recuhtoly prohk ra. have. in ha i

1 wori;tel out for rach e 1-e.

I In achiiiio 1 thero r.t o the ptwrient dhlir nities of c.s t!ne n tremp !nyther lu tha 1

l first I him r.u l wo kitz o o r !.e a.. u nen..en t s w hii h. n.. Iaat ter hw '.n ;de arol I

sn.nd !u pritvlib. 3: e ban:g! '. i; Ten t [o.= vari ot- -y-4 pi< ditief ently tu!.vtich C

l draw sht:nent re: e t i c.4 f r. : i - i.'et ent L t n n 1. a.:s In t L.. (. Liv T.d!ay ( ae it 3

(evk a lot of c onfe: r!Le to yt lu !. i m.. r t:i.'. p. N rrier p-on' et srer, v nd 8

at han that numy L;wyr rs niih tha Le!p of a !c - en':-ul a::1 < t o d~ iae they l

vcanted hi J.ia the ::r - p ud thea nil a?ree on a p:opeal.

el G: :dv a e'Hinita a

cota ract.

It e riy 1 t o.me s iht IMt wit h 11la rd in < th:o n n 11 is Indiana. n:t l

Ohb : nd a n In.Th.n ; < omp ny u t re th#i: cJO for I.zal a u l re.:';!a t m t ra-ou*.

Much thoe ws I.i :tn up wo h di-cowens of u ber her :l." OL'o c..ru t a n:. -hocid l

j be the 1. p c..rnpey c.nd :'+ 1.:Oc:a.on; ny t Le et -1 h ry or vi< e seN.

Whila ILc ar:Un.t r.t 4 u tr e la; 2elv h c.-l. it sei n il in me tV t thme put fort h by tLe propouceu of in i. a not coitr.* rons ine p a.. tho e for Lavin.: the c

1' 0:de of.:pa ny ca i u -I':.

a (d.i i.

1 Lave rM M ml v'th wet

f. ' ir pe:!t%

of La r!s !C,inhc wn*

I in tl 0 re:

[titd t'eted.q i'.t...Ii L+Irh 1 !n t j o., ;. f.. } f G.. \\* '. y W M l.;*

e ri n4 : l e la ;ne si D.e I to t ' "t:a r i.1 u t s b'.-o. % in en ebs rW 11 e tiend to m i:di-ra t bn. 'Jhe ptI:a m: - ai - !d :. :.1 : apte : s.arcer ca.;L> u Mh pwcer m. ! !aw.

i n:er.t t.t.1 leu r r tan:. erstit c o %. I ro;w r ca. ruination :4

nical ;huae ir ;:.

l In vi..w of tlc : c c:.it ude.< nf t he i. a r iv t i a a.

dt :.mnd : uso : ? ' vt:lhy in-duet r y, tim lar~er sh. sl ei niin: nuiu ni a ih;bb. the in'er. ourr< :i.I aetwork

[

t.f syr t en -.n en ::. r far si prac' hat purpo < cm et ha.t tin' Unib d ?!nics. T he

'reater qu u

titi=> i f it. 1 be:n:' c on an.c L a:al the n ni etitim hat.:cter of t. '

l utility 1.teGPs. tho P :."tiy i.. i.-l ;v.er;. nt r:av n e:; liLd ini ter-il.1 es otmaic ju3tif;?ation in.-cu m! - t av Mn s o h t -

1. For lam y 'ne-in ! ;h 1..al de

.ty arm vciUt a lar:e tnine-mouth l

nM nt ord hi.'I.. :.-ien t r:.n-nd - on to L a4 ce n:. i ne n.;. tic-t. ' pp:ng cual to several >ma 'er 1.:.i n s 2

2. Unr t he si t u.u io r. u : ore the we vice c rea< of 2 or 'l sy'reta< reay J..in und a jo ntly s xrmt Iirre ;.! ant nmy serv. loads of a!! of th.: pat tinpuin.: cot:i-e t

Jianies in th0 a rm.

l

't. In le.-s d~n<e!r < 1 -. t rifk d.6 ren e v. het ' m'a int r. ! itis t ly sr WI syectue develop.'d indeleti ? a!y e;nnin jvt:! a br/c nnit an< aie 11aent at a i

particu!ar di.ds antene u ae: in i p 5:i. r er m:tes< tia y cerdinate their w

sye:nq cad b' !d 6."r emnm: cal ;. lana.

4. Por t h.

. *nt e. if a r. to: ener y h-,

e

% fra db;c r:t.1 cc * :.inie n a a wurre for clettri.,

I'rt ^nt. owr: - m :h.t in 5 n Foxorp!. int niu. t h Mrre and l~can.! ri r

.:y fr ta n. t...rs o! r it ilFati^n.

.% b..

e phnt n.?y l!.

fore fnti i.1 fly ;N ca ts%ory abu s e and b(

.M-Dod pdutiy by t

ce&ral large p rn.

np~ n ir g-I have trie 1 M -per t!..:e na.* me p^ -ihl iti" r.nd raie sore <;"c-tion

• ra ther r

than n nsv er th ta. 'vit if tho.; are ca.: i:+ nm on wlach :. o0 h.n o qt e-ti..n<, I will be ciad to endeavor ta an<wer theia.

Ithan

~vr.u.

s 4

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• 9. D -- 8Mr ='=,e te y erje ee mgoep nugme whugm9"ea

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5

- UNITED STATES OF A' ERICA SEFORE THE ATOMIC El' ERG. CD'EISSIGH In the Matter of

')

)

COUSUMERS FCWER CO':PidY Dochet Kos.-50-329A I'

50-330A (Midland Plcnt, Units

)

1 cad 2)

)

- CERTIFICATE OF SERVICE I hereby certify that copies of AU3UER OF THE DEN.b:2ET OF JUSTICE TO A??LICS.'T'S OLJECTIONS TO LCCU: M i BEQUESTS

- AUD'MGTION FOR PROTECTIVE ORDERS, dated Movember 2, 1972, in the above captioned mattar-htve been served en the follcuing by deposit in the United States 'uil, first clrss cr air mail, thic 2nd day of Movcaber:

Jerece Carfinkel, Esquire James F. Fairman, 2 squire Chairnm. Atenic Safety cad 2600 Virnnia tvemm, N.W.

-Licensing 3 card Haahington, D. C.

20037 U. S. Atenic Energy Corricsion Washington, D. C.

20545 Atcaic Safety and Licensing Board Par.cl Hugh K. Clark, Esquire

'U. S. Atomic Energy Commission Post Offica Bo : 127A Uashington, D. C.

20545 Kennedyville, Maryland 21645 Chairman, Ato nic Safety cud Dr. J. Venn Leeds, Jr.

Licencing Appeals Board Post Office. Bc : 941-.

U. S. Atcmic Energy Com.nission

- Houston, Te::as. 77001-Washington, D. C.

20545

- William Warfield Ross, Esquire Mr. Abraham Drairman, Chief Keith S. -Untson, L Esquire Office of Antitrust and Indearaity Wald,_Harkrader & Ross U.-S. Atcuic-Energy Commission r

1320 Hinetcenth Street N.W.

Washington, D. - C.

20545 Washington, D. C.

20036 Harold P. Graves, Esquire Honorable Frank Kelly Vice President and General Counse:

- Attorney General Consumers Power Co.npany

- State of Michigan 212 West Michigan Avenua

. Lansing, - Michigan 40913 Jackson, Michigan 49201

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a i

w

_ jf K_

r Joseph Rutberg, Esquire

Ir. Frank U. Karas, Chief Benjamin H. Voglar, Zscuire Public Prcceedings Dranch Antitruct Counscl for 1.1'C Office of the Secretary of Regulatory S taff the Corctission U. S. Ltcnic Energy Ccamission U. S. Atomic Energy Cceni.ssion Washington, D. C.

20545 h%shington, D. C.

20545 G: V. :) ai. Li!. ic.

c'... c 3'. 4,.., a-L. l'.,.,;.e.,:. u,n

$ t r.- n..m.., y-.,

. +-

Daoartcant of Justicc l

Uchhingten, D. C.

20330 1

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