ML19330C583

Response in Opposition to Tx Border Cooperative Petition to Intervene.Good Cause Not Shown.Cooperative Interests Can Be Protected in Pending FERC Hearing.Petitioners Failed to Show Participation Would Assist in Development of Record

ML19330C583
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	08/07/1980
From:	Flynn P HOUSTON LIGHTING & POWER CO.
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19330C584	List: ML19330C583 ML19330C585
References
ISSUANCES-A, NUDOCS 8008080562
Download: ML19330C583 (15)

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AUG 71980 e si UNITED STATES OF AMERICA gga g .}

NUCLEAR REGULATORY COMMISSION ,,

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BEFORE THE ATOMIC SAFETY AND LICENSING BOARD n In the Matter of HOUSTON LIGHTING & POWER COMPANY, ) Docket Nos. 50-498A et al. ) 50-499A

)

(South Texas Project, Units 1 )

and 2) )

)

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TEXAS UTILITIES GENERATING COMPANY, ) Docket Nos. 50-445A et al. ) 50-446A

)

(Comanche Peak Steam Electric )

Station, Units 1 and 2) )

ANSWER OF HOUSTON LIGHTING & POWER COMPANY TO THE PETITION OF THE TEXAS BORDER COOPERATIVES FOR LEAVE TO INTERVENE More than twenty-six mondis after the expiration of the time allotted for intervention in the South Texas Project anti-trust proceeding, and more than twenty-two months after the time allotted for intervention in Comanche Peak, the Texas Border Cooperatives (" Coops") pow petition the Board for leave

! to intervene. After having remained on the sidelines through-out the prolonged period of extensive discovery, the Coops now seek to intervene at a time when parties have substantially prepared their cases for trial and are diligently negotiating in an effort to settle their remaining differences. The Coops fail to state good cause for their extreme tardiness, and they 8008080 ff 1

otherwise are unable to satisfy the criteria governing non-timely intervention pursuant to Section 2.714 of the Commis-sion's regulations. Aside from untimeliness, the petition does not meet the specificity requirements of Section 2.714 as applied by the Appeal Board in Wolf Creek. Houston Lighting &

Power Company (" Houston") therefore urges that the Board deny the Coops' nontimely petition for leave to intervene.

I. Factual Background As the Coops correctly note (Petition at 1-2), notices of the South Texas Project and Comanche Peak antitrust pro-ceedings were published in the Federal Register on April 14 and August 7, 1978, respectively. / Pursuant to those no-tices, timely petitions co intervene were due by May 15 and September 6, 1973. Although admittedly aware of these oppor-tunities for intervention,- /**the Coops at that time chose not to intervene.

Following the special prehearing conference in South Texas, in July 1978, the parties began an extensive discovery effort covering all of the alleged issues, and this discovery was consolidated with Comanche Peak in December 1978. Pursuant

• / 4 3 Fed. Reg. 15811 (1978) (South Texas); 43 Fed. Reg. 34850 (1978) (Comanche Peak).

• • / Petition at 1-3. Requests to make limited appearances in the South Texas proceeding were filed in a timely fashion by South West Texas Electric Cooperative (Peti-tion at 1 n.1) and by Taylor Electric Cooperative. Both cooperatives are now seeking to, intervene here as part of the group of intervening Coops.

to Board order, all discovery terminated on March 31,1980.

Although the consolidated hearing on the merits was scheduled to begin May 14, 1980, the Board has wisely deferred the hear-ing to permit intensive settlement discussions to continue.1/

On July 31, 1980, however, the Coops reversed their deci-sion and filed their extaordinarily untimely petition to inter-vene in this consolidated antitrust proceeding. It is against this background of a completed discovery program and the par-tial settlements that the Coops' untimely petition must be evaluated.

II. The Coops' Nontimely Petition for Leave to Intervene Does Not Satisfy the Standards for Lateness in Section 2.714 of the Commission's Regulations.

The standards governing the determination whether to per-mit a party to intervene out of time are embodied in Section 2.714 of the Commission's regulations. Section 2.714 (a) states in relevant part as follows:

. . . Nontimely filings will not be entertained absent a determination by the Commission, the pre-siding officer or the atomic safety and licensing board designated to rule on i.he petition and/or request, that the petition and/or request should be granted based upon a balancing of the following factors in addition to those set out in paragraph (d) of this section:

(i) Good cause, if any, for failure to file on time.

(ii) The availability of other means whereby the petitioner's interest will be protected.

-*/ Partial settlements have been announced between the Texas Utilities Companies ("TU") and the Tex-La Electric Coopera-tives, and between the Central and South West Corporation

("CSW"), Houston and TU.

(iii) The extent to which the petitioner's participation may reasonably be expected to assist in developing a sound record.

(iv) The extent to which the petitioner's interest will be represented by existing parties.

(v) The extent to which the petitioner's participation will broaden the issues or delay the proceeding.

These criteria are applied in an especially stringent manner to late antitrust petitions. Florida Power & Light Company (St.

Lucie Unit No. 2), CLI-78-2, 7 NRC 939, 946 (1978).

Houston submits that a fair balancing of the factors em-bodied in Section 2.714 (a) leads to the conclusion that the Coops' petition to intervene should be denied.

A. The Coops Have Not Asserted Good Cause for Their Failure to File on Time.

The Coops allege that changed circumstances since the pub-lication of the noticos of hearing constitute good cause suf-ficient to permit their nontimely intervention. Specifically, the Coops claim that a change in the rates, conditions and terms of wholesale power available from West Texas Utilities

("WTU") and the proposed DC interconnection between the Elec-tric Reliability Council of Texas ("ERCOT") and the Southwest Power Pool ("SWPP"), constitute good cause. Both asserted l

l justifications should be rejected.

The Coops were aware at the time the notices of hearing l

were published in the Federal Register that their power supply contracts with WTU were subject to termination, and that WTU, subject to the review of the Federal Energy Regulatory Commis-sion ("FERC") , could alter the rates, terms and conditions

upon which it supplied wholesale power. Thus, the changes in the Coops' power supply arrangements with WTU were eminently foreseeable. For distribution electric cooperatives that are entirely dependent on the purchase of wholesale power to meet their requirements to allege that they have only recently be-come aware of the impact that the cost of bulk power will have on their future operations is indeed preposterous.

As an alternate basis upon which to justify their delay, the Coops state that they had no compelling reason to intervene at the time the notices of hearing were published in the. Federal Register because it appeared that their interests would be ade-

• /

quately protected by other parties, particularly CSW7 However, in light of the partial settlement between CSW, Houston and TU, and the proposed construction of a DC interconnection between ERCOT and the SWPP, the Coops now complain that their interests are not being adequately represented by other parties. Conse-quently, the Coops now seek to intervene in their own right.

This argument borders on the absurd. The Coops made the deliberate decision not to intervene and to rely on CSW to rep-reFent its interests with full realization that parties to law-

! suits sometimes settle. CSW had no obligation to represent the Coops' interest at the hearing. Having consciously decided not to intervene, the Coops assumed the risk that CSW might enter into a full or partial settlement.

• / Petition at 2-3.

.~

The Coops' argument cannot be squared with the plain language of the Appeal Board in Puget Sound Power and Light Company (Skagit Nuclear Power Project, Units 1 and 2), ALAB-559, 10 NRC 162 (1979). In affirming the denial of a non-timely intervention, the Board stated in part:

[W]e once again must record our belief that the promiscuous grant of intervention petitions inex-cusably filed long after the prescribed deadline would pose a clear and unacceptable threat to the

, integrity of the entire adjudicatory process.

More specifically, persons potentially affected by the licensing action under scrutiny would be encouraged simply to sit back and observe the course of the proceeding from the sidelines un-less and until they became persuaded that their interest was not being adequately represented by the existing parties and thus that their own ac-tive (if belated) involvement was required. No judicial tribunal would or could sanction such an approach and it is equally plain to us that it is wholly foreign to the comtemplation of the hearing provisions of both the Atomic Energy Act and the Commission's regulations. Although Sec-tion 2.714 (a) of the Rules of Practice may not shut the door firmly against unjustifiably late petitions, it assuredly does reflect the expecta-tion that, absent demonstrable good cause for not doing so, an individual interested in the outcome of a particular proceeding will act to protect his interest within the established time limits.

10 NRC at 172-73 (citations and footnotes omitted) . See also, Easton Utilities Commission v. Atomic Energy Commission, 424 l F.2d 847, 850-52 (D.C. Cir. 1970); Nader v. Nuclear Regulatory Commission, 513 F.2d 1045, 1054-55 (D.C. Cir. 1975).

Furthermore, the implication in the Coops' petition that I

the outlined DC interconnection is a startling development of which they have only recently become aware is wholly disingen-l l uous. The Coops are parties to the proceeding Central Power &

Light Co., Docket No. EL79-8, now pending at FERC. Houston

,m., . . . .

first proposed the alternative of a DC interconnection between ERCOT and the SWPP in that proceeding as early as March 30, 1979. Moreover, as a party to that proceeding, the Coops have been de facto participants in a study evaluating alternative DC as well as AC interconnections between the two power grids.

For the Coops to imply that they have only recently become aware that the construction of DC interconnections might be an outgrowth of this and related proceedings is irreconcilable with the factual record.

The requirement that a party demonstrate good cause for failure to file on time, applicable to all nontimely petitions to intervene, should be accorded a particularly stringent in-terpretation in the context of an antitrust proceeding. St.

Lucie 2, 7 NRC at 946. In this case, neither of the petitioners' asserted justifications for their failure to intervene in a timely fashion can reasonably be considered good cause.

B. The Petitioners Have Other Means to Protect Their Interests.

The petitioners will not be left without a legal forum to l

' hear their case if they are denied intervention in this pro-l Other means are available whereby the Coopr- interests ceeding.

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will be protected.

The rates, terms and conditions upon which WTU provides i

wholesale power to tne Coops is the subject of a pending pro-ceeding at the FERC. If the new rates, terms or conditions of service are not just and reasonable, the FERC has the authority to formulate an appropriate remedy retroactive to January 1, 1980, the date the new power supply arrangement became effective.

The Coops' concerns with regard to the proposed DC inter-connection will also receive adequate consideration at the FERC.

The Coops are already parties in Central Power & Light Co.,

Docket No. EL79-8, a proceeding in which Central & South West Corporation, with the support of Houston and the Texas Utilities Companies, is seeking to obtain the FERC's approval of the construction of DC interconnections between ERCOT and the SWPP pursuant to the Public Utility Regulatory Policies Act ("PURPA"). Among the findings that the FERC must make prior to approving the DC interconnection are: 1) the interconnections are not likely to result in a reasonably ascertainable uncompensated economic loss for any utility, 2) the interconnections will not place an undue burden on an elec-tric utility, and 3) the interconnections will not impair the ability of any electric utility affected by the order to render adequate service to its customers. / If the Coops can demon-strate that the DC interconnection is not in the public in-terest, then it will not be approved by FERC. Under these circumstances, the Coops will have an adequate opportunity to j

litigate their concerns.

Nowhere in their petition to intervene do the petitioners even mention nuclear power or allege any nexus between the l issues they seek to litigate and the licensing of either nuclear l power plant. Rather, petitioners seek to present the sort of interconnection, rate-related and cost allocation issues which

• / See 16 U.S.C.A. S 824k.

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are routinely decided by the FERC. -Thus, not only do the petitioners have a means available at the FERC to protect their interests, but here the FERC would appear to be the more appropriate forum to address the concerns which the pe-titioners seek to raise.

C. The Petitioners Have Failed to Demonstrate that Their Participation Would Assist in the Development of a sound Pecord.

The petitioners fail to provide any information which in-dicates that their participation would assist in the develop-ment of a sound record. All of the witnesses that the Coops expect to call, except for their proposed expert, will apparently testify regardless of whether the petitioners are allowed to intervene.

The one witness who apparently would not testify unless the petitioners are allowed to intervene is Mr. Stephen Collier, the_ Coops' proposed expert witness on transmission systems.

.'.n light of the fact that Houston, TU, CSW, the Public Utilities Board of Brownsville, Texas and the NRC Staff all in-tend to call engineering experts of their own, it is indeed questionable whether Mr. Collier's testimony would add anything to the proceeding.

The petitioners do not identify any specific evidence  !

which they intend to offer, anc which would not otherwise be introduced during the course of the hearing. Consequencly,  ;

the petitioners have f ailed to demonstrate that their partici- e pation would in any way enhance the development of a sound record.

D. The Petitioners' Interest Will Be Represented by Existing Parties.

The petitioners' interests will be represented to a sub-stantial extent at the hearing by both the NRC Staff and the Department of Justice. This is evidenced by the fact that the government parties have named five of their potential witnesses from representatives of the Coops.$! Thus, representatives from the Coops will likely have an opportunity to testify regardless of whether the Coops are allowed to intervene.

To the extent that the petitioners believe that their concerns will not be represented by existing parties, the Coops have the opportunity to present their concerns to the Staff and the Department and to encourage them to pursue points at the hearing which are of particular interest to the Coops. Both the Staff and the Department throughout this proceeding have exhibited concern for the effects of intrastate operations and, more recently, D.C. interconnections, on the operations of I smaller systems, including the petitioners. The Coops cite no particular concerns which the government parties are unable 1

to assert. I i

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1/ Ralph Yarbrough and James Driver of the Gate City Electric  !

Coop, Elton McGinnes of the Southwest Texas Electric Coop, Parker Wetzel of the Midwest Electric Coop and Donald Hart of the Taylor Electric Coop.

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E. The Coops' Participation Will Broaden the Issues and Delay the Proceeding.

The intervention of the Coops at this late date would necessitate a further postponement of the hearing in order to permit for additional discovery, and would broaden the issues for resolution at the hearing.

Substantial additional discovery plainly would be necessary if the Coops are permitted to intervene. Although the Coops state that they are willing to accept the record as it is, that is not the case; the time for witness designations and contentions has long been closed. To add a new party and an expert witness at this point would necessitate interrogatories addressed to the Coops, document discovery, depositions of various Coop personnel, depositions of sources their expert adverts to or relies upon, and discovery from at least some of the entities named in their petitions, such as the Southwestern Public Service Company.

Permitting the Coops to intervene without permitting further discovery would be manifestly unjust. The Coops have the benefit of the extensive discovery of Houston's case which has been conducted by the numerous other parties to this pro-ceeding. However, Houston has previously had limited reason to conduct meaningful discovery against the Coops. The effect of proceeding to hearing on the present record would be to ex-empt the Coops from the normal rigors of discovery, and to deny Houston an adequate opportunity to prepare to rebut the Coops' evidence.

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In short, permitting intervention at this point would wreak havoc upon the orderly course of this proceeding and would necessitate a further delay in the hearing. As the Appeal Board has previously noted:

Undeniably, the delay factor is a particularly significant one; indeed--barring the most com-pelling countervailing considerations--an in-excusably tardy petition would (as it should) stand little chance if its grant would likely occasion an alteration in hearing schedules.

Puget Sound Power and Light Company (Skagit Nuclear Power Pro-ject, Units 1 and 2), ALAB-552, 10 NRC 1, 5 n.1 (1979), quoting Long Island Lighting Company (Jamesport Nuclear Power Station, Units 1 and 2), ALAB-292, 2 NRC 631, 650-61 (1975) (Opinion of Mr. Rosenthal).

The Coops' intervention would also broaden the issues to be resolved at the hearing. As the petition to intervene in-dicated, the Coops' primary concerns apparently pertain to their power supply arrangement with WTU, and the allocation of costs associated with the construction of the D.C. intercon-nections. These concerns are at best only tangentially rele-vant to the issues pending before the Board, and appear to have little or no relation to considerations of antitrust.

Indeed, in light of the deposition testimony of the Coops' representatives, it is plain that they cannot legitimately level contentions against Houston. Representatives of the Coops have already testified that they do not compete with

Houston or TU /, that they have no present plans to purchase power outside of ERCOT- /, and that they do not seek to parti-cipate in either the South Texas Project or Comanche Peak. ***!

The Coops' principal interest concerns issues which lie out-side the focus of this antitrust proceeding.

III. The Coops's Petition for Leave to Intervene Does Not Satisfy the Specificity Requirements of Section 2.714 as Interpreted by the Appeal Board in Wolf Creek.

Aside from considerations of timeliness, the Coops' pe-tition is fatally deficient in its failure to comply with the specificity requirements of Section 2.714 (a) (2) . The

• / Deposition of James Driver at 76; Deposition of Elton McGinness at 85.

• • / Deposition of James Driver at 58-59; Deposition of Elton McGinness at 18.

• • • / Deposition of James Driver at 75; Deposition of Donald Hart at 38-39.

• • • • / The pertinent section of the regulation reads as follows:

The petition shall set forth with particu-larity the interest of the petitioner in the t proceeding, how that interest may be affected by the results of the proceeding, including the reasons why oetitioner should be permitted to intervene, with particular reference to the factors in paragraph (d ) of this section, and l the specific aspect or aspects of the subject l matter of the proceeding as to which petitioner l wishes to intervene.

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Appeal Board in Kansas Gas and Electric Company (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 NRC 559, 574-77 (1975), ruled that a petition to intervene which seeks to raise antitrust issues must set forth with particularity:

1) facts which describe a situation inconsistent with the anti-trust laws or_their underlying policies, 2) facts which de-scribe the existence of a meaningful nexus between the activi-ties under the nuclear license and the aforementioned anticom-petitive situation, and 3) the specific relief sought. See also Detroit Edison Company (Enrico Fermi Atomic Power Plant, Unit 2), LBP-78-13, 7 NRC 583, 596-97 (1978). The Coops' pe-tition is wholly inadequate to satisfy these requirements.

The Coops have made no effort to plead specific facts which describe a situation inconsistent with the antitrust laws. Nor have the Coops alleged any nexus between the issu-ance of operating licenses for either the South Texas Project or Comanche Peak and the maintenance or creation of a situation inconsistent with the antitrust laws. Under these circumstances, the Coops' petition to intervene is grossly deficient on its

! . face, and should be denied.

l IV. Conclusion L The petitioners' total disregard of what must be alleged l In a petition to intervene and of the standards governing late-ness renders their nontimely petition to intervene frivolous.

\

Houston respectfully requests that the Coops' petition to intervene be denied.

Respectfully submitted,

55) , 1&

Peter G. Flynn -F Attorney for Houston Lighting &

Power Company OF COUNSEL:

Baker & Botts' 3000 One Shell Plaza Houston, Texas 77002 Lowenstein, Newman, Reis, Axelrad & Toll 1025 Connecticut Avenue, N.W.

Washington, D.C. 20036 DATED: August 7, 1980 i l

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