ML19340C340
| ML19340C340 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 11/12/1980 |
| From: | Landsman R, Spiegel G BROWNSVILLE, TX, SPIEGEL & MCDIARMID |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-A, NUDOCS 8011140542 | |
| Download: ML19340C340 (98) | |
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Op Opl2 Q a { 0 ,8/4, A ! BEFORE THE ATOMIC SAFETY AND LICENSING BOA , 'c e e s o> g\ In the Matter of ) HOUSTON LIGHTING & POWER COMPANY ) NRC Dccket Nos. 50-498A PUBLIC SERVICE BOARD OF SAN ANTONIO ) 50-499A CITY OF AUSTIN ) CENTRAL POWER AND LIGHT COMPANY ) (South Texas Project, Unit No s . 1 ) and 2) )
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TEXAS UTILITIES GENERATING ) NRC Docket Nos. 50-445A COMPANY, et al. ) 50-446A (Comanche 7eak Steam Electric ) Station, Units 1 and 2) ) COMMENTS OF THE PUBLIC (TTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS OPPOSING PROPOSED SETTLEMENT LICENSE CONDITIONS George Spiegel Ron M. Landsman Marc R. Poirier Attorne s for the Public Utiliti ..s Board of the City of Brownsville , Texas Law offices of: z e"' Spiegel & McDiarmid El h.fg; 2600 Virginia Avenue N.W. m, Washing ton , D.C. 20037 ; G3
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l November 12, 1980 -; hE, n Q 25 O u Ut v4 k
4 i TABLE OF CONTENTS Page I. PROCEDURAL STATEMENT .............................. 1 II. INTRODUCTION ...................................... 2 III. COMMENTS ON THE PROPOSED LICENSE CONDITIONS ....................................... 9 A. The Disconnection Provisions. (STP S6 (a) , page 6; Comanche Sl( a) , page 5. ) ...... 10 B. Transmission-Related Conditions. ............. 17 C. Participation In The South Texas Project. .... 25 D. Participation In STIS And TIS. ............... 26 E. Offers Of Full And Partial Requirements Bulk Power. .................................. 27 F. DC Interconnections. ......................... 28 IV. THE ANTICOMPETITIVE SITUATION IN THE TEXAS INTRASTATE UTILITY AREA. .................... 31 A. The Agreement To Prevent The Introduction Of Interstate Electricity Into Most Of Texas. .............. 31
- 1. The bilateral agreements and the participation agreements. ........... 32
- a. TESCO. ............................. 33
- b. HLP. ............................... 34
- c. TPL. ............................... 35
- d. CPL. ............................... 37
- 2. Enforcement of the agreement. ........... 40 B. CPL, Brownsville , and their competitive relationship. ................................ 42 l
Page V. THIS SITUATION IS INCONSISTENT WITH THE ANTITRUST LAWS. ................................... 44 A. The Standard Under Section 105(c) . ........... 44 B. Antitrust Policy. ............................ 49 f C. The Barrier Against The Introduction Of Interstate Electricity Erected By The Texas Intrastate Utilities Is Inconsistent With Federal Antitrust Law And Policy. .................... 54
- 1. The inconsistency of '.he situation with antitrust policy. ................................. 55
- 2. The inconsistency of the individual decisions not to establish additional interstate connections with antitrust policy. ................................. 61
- 3. The inconsistency of the bilateral agreements restricting interstate interconnections with antitrust policy. ................................. 66
- 4. The combination of the Texas utilities is inconsistent with antitrust policy
, by excluding almost all interstate ! electricity from the Texas intrastate a rea . ................................... 69
- 1. The contract. ................. 70 ii. Conspiracy. .................... 76 iii. The combination. ............... 77 ATTACHMENTS l
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TABLE OF AUTHORITIES Page Judicial decisions: Addyston Pipe & S teel Co. v. United States, 175 U.S. 211 (1899) ....................... 71, 74 A.G. Spaulding & Bros. , Inc. v. FTC, 301 F.2d 585 (3d Cir. 1962) ............................................ 53 American Telephone & Telegraph Co. v. Sound , Inc . , -- F . 2d-- , 1980-2 Trade Cases 163.514 (8th Cir. 1980) ........................................ 52, 54 American Tobacco Co. v. United S tates, 3 28 U.S. 781 (1946) ....................... 76 - Associated Press v. United States, 326 U.S. 1 (1945) ................................. 53, 58,
! 75 Atlantic Refining Co. v. FTC, 381 U.S. 357 (1965) ............................... 46 Blumenthal v. United States, 332 U.S. 539 (1947) ............................... 76 Bowen v. New York News, Inc., 522 F.2d 1242 (3d Cir. 1975), cert.
denied, 425 U.S. 936 (1976) ....................... 72 Brown Shoe Co. v. United States, 370 U.S. 294 (1962) ............................... 56 Byars v. Bluff City News, 609 F.2d 843 (6th Cir. 1979) ............................... 69, 77 California Motor Transport Ass'n v. Trucking Unlimited, 404 U.S. 508 (1972) ........... 53 California Retail Liquor Dealers Ass'n
- v. Midcal Aluminum, Inc., --- U.S.
-- ,100 S.Ct. 937 [1908-1 Trade Cases 163, 201 (1980)] ............................ 54
- 111 -
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Calv( rt Clif f s' Coordinating Committee v. AEC, 449 F.2d 1109 (D.C. Cir. 1971) ............... 47 Cantor _ v. Detroit Edison Co ,, 428 U.S. 579 (1976) ............................... 52, 54 Central Power & Light Co. v. Public Utility Commission of Texas, No. A-77-CA-86 (W.D. Tex . , Austin Div. 1978) ........................................ 40 Chicago Board of Trade v. United States, 246 U.S. 231 (1918) ....................... 68, 75 Continental Ore Co. v. Union Carbide
& Carbon Corp. , 370 U.S. 690 (1962) ............... 76 Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977) .......................... 71, 75 Copper Liquor, Inc. v. Adolph Coors Co., 506 F.2d 934 (5th Cir.
T975) ............................................. 75 CPL v. Texas PUC, 592 F.2d 234 (5th Cir. 1979) ................................... 40 Crown Zellerbach Corp. v. FTC, 296 F.2d 800 (9tn Cir. 1961), cert. denied, 370 U.S. 937 (1962) ............................................. 56 Direct Sales Co. v. United States, 319 U.S. 703 (1943) ................................ 76 Dr. Miles Medical Co. v. Park & Sons Co. , 220 U.S. 373 (1911) ................................ 64 Fashion Originators' Guild of America, Inc. v. FTC, 312 U.S. 457 (1941) ............................................ 51, 72, 74 l FCC v. RCA Communications, Inc., 346 U.S. 86 (1953) .................................... 52
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O a Page Federation of Musicians v. Carroll, 391 U.S. 99 (1968) ............................... 79 First National Bank of Arizona v. Cities Service Co. , 391 U.S. 253 (1968) ........................................... 79 Florida E. Coast Ry. v. United States, 259 F.Supp. 993 (M.D.Fla. 1966) aff'd per curiam, 386 U.S. 544 (1967) ............................................ 45 Frey & Son, Inc. v. Cudahy Packing Co., 256 U.S. 208 (1921) .......................... 64 FTC v. Beech-Nut Packing Co. , 257 U.S. 441 (1922) ........................................ 45, 46, 64 65, 66, 78 FTC v . B rown Shoe Co. , 38 4 U.S. 316 (1966) ........................................ 46 FTC v. Motion Picture Advertising Service Co. , Inc. 344 U.S. 392 (1953) ............. 45, 46, 57 FTC v. Raladam Co., 283 U.S. 643 (1931) ............................................ 45 FTC v. Sperry & Hutchinson Co., 405 U.S. 233 (1972) ............................... 46 FTC v. Texaco Inc., 393 U.S. 223 (1968) ........................................ 46 Georgia v. Pennsylvania R. Co., 324 U.S. 439 (1945) ............................... 52 Giant Paper & Film Corp. v. Albemarle Paper Co., 430 F.Supp. 981 (S.D.N.Y. 1977) ............................... 77 Grand Union Co. v. FTC, 300 F.2d 92 (2d Cir. 1962) .................................... 45 Gulf States Utilities Co. v. FPC, 411 U.S. 747 (1973) ............................... 44, 54
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l Page Hobart Bros. Co. v. Malcolm T. Gilliland , Inc. , 471 F. 2d 894 (5th Cir. 1973) ................................... 67 Intern tional Salt Co. v. Ur.ited States, 3 3 2 U.L. 392 (1947) ............................................ 53 Kestenbaum v. Falstaff Brewing Co. , 575 F.2d 564 (5th Cir. 1978) ...................... 75 Klor's, Inc. v. Broadway-Hale S tores, Inc., 359 U.S. 207 (1959) ......................... 51 Lewis v. Pennington, 400 F.2d 806 (6th Cir. 1968) ................................... 77 L.G. Balfour v. FCT, 442 F.2d 1 (7th Cir. 1971) ................................... 45 Luria Bros. & Co. v. FTC, 389 F.2d 847 (3d Cir. 1968) ................................ 56 MCI Communications Corp. v. AT&T Co., 462 F.Supp. 1072 (N . D. Ill . 19 78 ) mandamus denied, No. 78-2457 (7th Cir., November 30, 1978) .......................... 52 National Society of Professional Engineers v. United States, 435 U.S. 679 (1978) ............................... 50, 69, 75 Nationa.'. Petroleum Refiners Ass'n v. FTC, 482 F.2d 672 (D.C. Cir. 1973) ................ 28 New York Gas & Electric Corp. v. FERC,
--- F . 2 d -- , No. 79-4185 (2d Cir.
September 30, 1980) ............................... 12 Northern Pacific Ry. Co. v. United States, 356 U.S. 1 (1958) ......................... 49, 55 Olsen v. Smith, 195 U.S. 332 (1904) ................... 53 Osborn v. Sinclair Refining Co. , 286 F.2d 832 (4th Cir. 1960), cert. denied, 366 U.S. 963 (1961) ............................................ 66 Otter Tail Power Co. v. United States, 410 U.S. 366 (1973) ............................... 50, 52, 53 57, 61, 72
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Page United States v. Consolidated Laundries Corp., 291 F.2d 563 (2d Cir. 1961) .................................... 76 United States v. Consolidated Packaging Corp., 575 F.2d 117 (7th Cir. 1978) ................................... 74 United States v. Container Corp. of America, 393 U.S. 333 (1969) ...................... 74 United States v. DuPont & Co. , 351 U.S. 377 (1956) .............................. 62, 76 United States v. Empire Gas Co., 537 F.2d 296 (8th Cir. 1976) cert. denied, 429 U.S. 1122 (1977) ............................................ 62 United States v. Gasoline Retailers Ass' n, Inc. 285 F.2d 688 (7th Cir. 1961) ............................................. 74 United States v. General Motors Co rp . , 384 U.S. 127 (1966) ........................ 72, 77 United States v. General Motors Co rp. , 3 6 9 F .S upp . 1306 (E. D.Mich. 1974) ............................................. 77 United States v. Griffith, 334 U.S. 100 (1948) ........................................ 56, 61 United States v. Grinnell Corp. , 384 U.S 563 (1966) ................................ 76 United States v. Hilton Hotels Corp., 467 F.2d 1000 (9th Cir. 1972) , cert. denied, 409 U.S. 1125 l (1973) ............................................ 72 United States v. Loew's, Inc., 371 U.S. 38 (1962) ............ ................... 50 United States v. National Association of Securities Dealers, Inc. 4 22 U.S. , 694 (1975) ........................................ 52 1
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Page United States v. Nationwide Trailer Rental Systems, Inc., 156 F.Supp. 800 (D.Kan.), aff'd per curiam, 355 U.S. 10 (1957) ................................ 74 United States v. Parke, Davis & Co., 362 U.S. 29 (1960) ................................ 64, 78, 79 United States v. Philadelphia National Bank, 374 U.S. 321 (1963) ......................... 52 United States v. Radio Corporation of America , 3 58 U.S. 334 (1959) ...................... 52 United States v. Schrader's Son, Inc., 252 U.S. 85 (1920) .......................... 64, 66 United States v. Sealy, Inc., 388 U.S. 350 (1967) ....................................... 51, 56, 71
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United States v. Singer Manuf acturing Co., 374 U.S. 174 (1963) .......................... 50, 77 United States v. Topco Associates, Inc., 405 U.S. 596, (1972) ........................ 50, 51, 56 71 United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290 (1897) ....................... 58 West Texas Utilities Co. v. Texas Electric Service Co., 470 F.Supp. 798 (N. D. Texas 19 79 ) , appeal pending , No. 79-2677, 5th Cir. .................... 33, 38, 39, 71 Administrative decisions: Central and South West Corp. , SEC Admin. Prc. File No. 3-4551 " Notice and Order for Hearing" January 30, 1976 ......................... 40 i ix - i
Page Central Power & Light Company, F ERC Docke t No s . EL 79-2 6, ER79-600 "Ordet Granting Rehearing in Part and Modifying Prior Order," May 2, 1980 .... 4 ................................. 37 Cleveland Electric Illuminating Company (Davis Besse Nuclear Power Station, Units 1, 2, and 3 ), ALAB-560, 10 NRC 270 ...................... 26 Consumers Power Co. (Midland Plant, Units 1 and 2 ), ALAB-452, 6 NRC 892 (1977) .................................... 47 Duke Power Co. (Catawba Nuclear Station, Units 1 and 2), DBP 74-47, 7 AEC 1158 (1974) ...................................... 47 Florida Power & Light Co., FERC Docket No. ER78-282 (April 28, 1972) .................................. 17 Houston Lighting & Power Company, Texas Public Utilities Commission, Docke t No . 14, Amended Final Order, July 11, 1977 ..................................... 40 Kansas Gas & Electric Co. v. Kansas City Power & Light Co. (Wolf Creek Generating Station, Unit No. 1), NRCI 65/6 (ALAB 279) (1975) ................... 47 Tysons Corner Regional Shopping Center, 85 F.T.C 970, modified , 86 FTC 921 (1975) ................................. 57 i Statutes i Antitrust Procedures and Penalties Act, 15 U.S.C. s 16(b) (1979 Supp.) ................... 12, 48
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Page Atomic Energy Act, Section 105(c), 420 S.C. y 2135(c) .............................. 11-12, 14, 44, 46, 61, 66 Civil Aeronautics Act, Section 411, 49 U.S.C. S1381 ................................... 44 Clayton Act 44, 45, 46 Section 2, 15 U.S.C. S13 .......................... 44 Section 3, 15 U.S.C. S14 .......................... 44, 45, 33 Section 7,15 U.S.C. S18 .......................... 44, 45, 7 Section 8, 15 U.S.C. S19 .......................... 44 Federal Power Act Section 201, 16 U.S.C. S824 ....................... 19 Section 210-212, 16 U.S.C. S 8 2 41, j , k . . . . . . . . . . . . 11-13 Section 211(d), 16 U.S.C. S824j(d) ................ 16 FTC Act, 15 U.S.C. S41 e t seq. , Section 5,15 U.S.C. S45 ......................... 45, 46, 64, 65, 66 Public Ut .lity Bolding Company Act, 15 U.S.C. S79 et seq. ............................. 39,740 Public Utilities Regulatory Policies Act of 1978, 5S202-204, 16 U.S.C. S8241, k, See Federal Power Act, SS210-212 Sherman Act, 15 U.S.C. S1 et seq. .................... 45, 46, 49, 61, 64, 67, 78 Section 1, 15 U.S.C. 51 .......................... 39, 44, 51 62, 63, 64 66, 67, 70, 72, 75, 77 78 Section 2, 15 U.S.C. 52 .......................... 44, 51, 61, 62, 63, 64, 70, 76, 77
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Page Miscellaneous l l FTC, Report on Corporate Mergers I and Acquisition (1955) ............................ 45 Joint Committee on Atomic Energy, S. Re p t . 91-1247, 91st Cong., 2d Sess. (1970) ................................... 46, 47 National Commission for the Review of Antitrust Laws and Procedures, Report to the President and the Attorney General (1979) .......................... 62 Petiti to Intervene of the South Texas Electric Cooperative in the Matter of the Interstate Service of Texas Interconnected System, Docke t No . 14, Texas PUC, Janua ry 19, 1977 .................................. 40 Von Kalinowski, 2 Antitrust Laws and Trade Regulation, 51301 ........................... 45, S18.01 .......................... 56
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of ) HOUSTON LIGHTING & POWER COMPANY ) NRC Docket Nos. 50-498A PUBLIC SERVICE BOARD OF SAN ANTONIO ) 50-499A CITY OF AUSTIN ) CENTRAL POWER AND LIGHT COMPANY ) (South Texas Project, Unit Nos. 1 ) and 2) )
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TEXAS UTILITIES GENERATING ) NRC Docket Nos. 50-445A COMPANY, et al. ) 50-446A (Comanche'~ Peak Steam Electric ) Station, Units 1 and 2 ) COMMENTS OF THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS OPPOSING PROPOSED SETTLEMENT LICENSE CONDITIONS I. PROCEDURAL STATEMENT. The Public Utilities Board ol the City of Brownsville, Texas ("Brownsville") hereby respectfully submits its Comments Opposing Proposed Settlement License Conditions. The licenses at issue are for the South Texas Project, in which applicants are Houston Lighting & Power Company ("HLP"), Central Power & Light Company (" CPL"), the City of Auscin, Texas (" Austin") and the City Public Service Board of the City of San Antonio, Texas ("CPSB" or " San Antonio"); and the Comanche Peak Steam Electric Station, in which applicants are the Texas Utilities Generating Company and the operating subsidiaries of Texas Utilities Corporation ( " TU " ) . l l l l
1 l 1 Proposed settlement license conditions in both consolidated ! proceeding =5 dated September 12, 1980, and related stipulations, were submitted to this Board and all parties in the NRC Staff's Fourth Status Report on Settlement, dated September 14, 1980. Brownsville responded on September 25, 1980 with a Motion for Disapproval of Proposed License Conditions; Comments Opposing Proposed License Conditions; and Request for Further Proceedings. Brownsvills also submitted on October 8, 1980 an Initial Trial Brief, and submitted a First Supplement to its Trial Brief on Oc tober 16, 1980. At a prehearing conference on October 25, 1980 this Board suspended all further procedural dates and required Brownsville to file its comments on the proposed settlement license conditions by November 10, 1980 1/ Other parties were provided two weeks to respond to Brownsville 's comments. II. INTRODUCTION. The Board has before it a request for entry of a consent decree type order ef fectuating a settlement agreement adopted by all but at least one party, Brownsville. The settlement agreement would terminate long and complex litigation before federc- and state agencies and federal courts, and it will affect for many years the structure and policies of the electric industry in Texas. 1/ This date was extended to November 12, 1980 by order of the Chairman on November 10, 1980.
i In such perspective , the Board has recognized the need to take a long hard look at the settlement provisions, and the por-tion of them submitted for its order. The tettlement and pro-posed conditions bear typical marks of hard bargaining and last minute compromises, and the Board must now review the product carefully to assure that the larger public interest is protected. Brownsville is a small city at the s30thern-most tip of Texas and it is surrounded for 200 miles by the transmission monopoly of CPL. Brownsville can now buy bulk electric power only from l CPL except to the extent CPL is willing to wheel power purchased by Brownsville from other utilities. In 1979, CPL for the first time agreed to wheel interruptible of f-peak surplus energy which Brownsville is purchasing from a TU company whenever available. If CPL will agree to wheel firm power for Brownsville on f air and practical terms, Brownsville will be able to purchase com-petitive bulk power supplies from a number of utilities directly connected with CPL, and thus compete more ef fectively with CPL for retail loads in and around Brownsville. If the other ERCOT utilities will join CPL in wheeling power, Brownsville can purchase competitive supplies throughout ERCOT; and Brownsville
; can purchase outside ERCOT if there also exists an adequate inter;onnection for power to flow across state lines in the ERCOT 4
section of Texas as it does in the other parts of Texas and throughout the United States. Thus, the Board's order herein is i , h 4 4
crucial to Brownsville : it can open the door for access to com-petitive bulk power market opportunities, or it can leave Brownsville locked away at the southern tip of Texas. In these Comments we seek to state detailed objections to specific defects in the proposed Conditions for the South Texas and Comanche Peak nuclear projects. The Board has requested that we link our objections with the basis for Board authority to pro-vide the particular remedies sought by Brownsville. The first category of objections relate to ambiguities or obscurities in the proposed Conditions, and the Board obviously has the functional authority to refuse to promulgate Conditions which are not clear and unambiguous, and to require that they be made so before promulgation. Secondly, the proposed conditions are submitted by the Staff s of Justice and NRC on the basis "that the licensing ... under these co.sditions if approved ... will not create or maintain a situation inconsistent with the antitrust laws or the policies thereunder in accordance with the standards set forth in Section 105(c) of the Atomic Energy Act ... . 1/ Several Brownsville 1/ Comanche Peak Stipulation, September 12, 1980, by the NRC, Department of Justice, Tux-La Electric Cooperative of Texas and Texas Utilities Generating Company, page 2; South Texas Stipulation, September 12, 1980 by the NRC, Department of Justice, CSW, HLP, the City of Austin, and the City Public Service Board of San Antonio, Texas at page 2. Both these docu-ments were attached to the NRC Staff's Fourth Status Report on Settlement fil 3 September 14, 190^. 1
5-i objections seek modification where the right or obligation, as stated in the Conditions to achieve the Staff's objective, is as a practical or legal matter nullified by other language in the Conditions or related agreements, or by omission of necessary implementation. Many of our objections, particularly with reference to transmission services,1/ fall within this category. Applicants' obligation to wheel is plainly stated, but other Conditions and related agreements disclose that there is no assurance or material likelihood that such services will be pro-vided on a fair and practical basis. In short, it is as though the obligation to wheel has been deleted. Again, the Applicants having submitted these conditions as satisfying consistency with antitrust law and policy, the Board has authority to compel the , submission of, or itself promulgate, prope r modifications tc assure the attainment of the Staff's stated objectives. There are major objections as to provisions which on their face are inconsistent with antitrust law or policy. We believe that the disconnection provisions 2/ (NRC would bless a claimed right to disconnect from systems exercising their right to con-i- nect and do 'cusiness with systems in interstate commerce subject 1/ S"P Conditions SSI.B(3 ) and I.B(10); Comanche Conditions SSD.II1) and D.1(o). 2/ STP Conditions SSI.B(6)(a) through (d) and I.B.(7); Comanche Conditions SSD. 2(1)(a)-(d) and D.2(m). 4 l 6
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E to general jurisdiction of the Federal Energy Regulatory Commission) fall within this category, as inconsistent with Sections 1 and 2 of the Sherman Act and its policies. These the Board simply may not approve for the many reasons stated below in our discussion of antitrust law. Finally, there are provisions which fail to remedy situations i inconsistent with antitrust law or policy as set forth in the pleadings and conference statements. These might require some j limited hearing procedures but for the fact that there are so many other substantial objections which ein be dispatched without hearings. i We think it self-evident as to the categories into which Brownsville's various objections fall. The Board has requested procedural recommendations. Many objections may be resolved by the responsive Comments of the par-ties supporting the proposed settlement. They should be able to clear ambiguities. Further, there are still opportunities for further negotiation and compromise. We recommend that the Board 't then review the proposed Conditions and related agreements, and determine the extent to which it can approve the proposed Conditions. We believe it premature to try to sort out the various procedural alternatives which appear possible af ter such review. Much depenCs upon which objections the Board finds persuasive and the basis thereof. Much depends upon the Board's i
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l views and opinions which may be expressed upon its review of the proposed Conditions. If they are disapproved upon stated grounds, these will provide guidance as part of the law of the case, and could simplify any further hearings. If they are approved, the basis thereof may render further hearings unnecessary. Finally, there are overlaps of statutory authority between I. NRC, FERC and SEC. It thus becomes a matter of determining which i evidentiary issues might better be tried at which agency. For example, we believe that the Board has a last-resort authority to fix fair and practical rates, terms and conditions for wheeling services, but the matter would be more appropriately determined by FERC, to the extent of transactions within its i jurisdiction. In such case, the Board would defer its final j action entil FERC has completed its action, af ter which the Board would determine whether anything additional is required. Similarly, it may ultimately appear appropriate that the discon-nection issue first be heard at FERC which has an immediate and direct interest in eliminating barriers to interregional power exchanges as well as threatened disconnections which can -disrupt regional operations and planning. NRC might thus defer its I action until FERC has made its determinations. Brownsville here identifies three major aspects of the situation which are inconsistent with the antitrust laws: ( i) the agreements, combinations and monopolizations creating barriers to 4 interstate power transactions; ( ii) the divisions of the bulk
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1 .8 - power market within ERCOT resulting from the threat of unilateral disconnection by the major applicants as a means of enforcing this restriction on interstate power transaccions; and (iii) the historic and still unresolved refusal of CPL to wheel firm power for Brownsville on a fair and practical basis and CPL related anticompetitive activities, as alleged by Brownsville. The possibility of unilateral disconnection ((ii) above) raises spe- , cial problems for the Board. Such disconnections could electri-cally separate a nuclear generator from the systems of other Applicants and participants and this would directly frustrate what the proposed operating licenses must assure as a matter of law. Further, such disconnections might electrically separate the proposed DC interstate interconnections from utilities contracting for power over the interconnections, thus frustrating what appears to be the major achievement of the vast 11gitation now to be settled. . At rock bottom, the Board must require an absolute and uncon-ditional commitment from the Applicants not to disconnect any ERCOT utility from access to the Comancne Peak Project, the South Texas Project, or the interstate interconnections, except as nor-mal prudent utility practice requires. The best evidence to sup-port the need for such condition is the settlement agreement of September 12, 1980, in which HLP and the Comanche " Applicants" bargained for and obtained disconnection rights. Further, HLP i and TU, who in 1976 unilaterally disconnected and severed ERCOT l into parts can hardly argue that future unilateral disconnection-is outside the realm of realistic possibility.
l III. COMMENT 3 ON THE PROPOSED LICENSE CONDITIONS i Brownsville first sets out, in this section, its specific comments on the inadequacies of the proposed settlement license conditions, in accordance with the Board's Order. There follows a lengthier section explaining the factual and legal basis for Brownsville's position that the license conditions as proposed would allow activities that create and maintain a situation 1 inconsistent with the letter and the spirit of the antitrust laws. Brownsville refers to the ongoing exclusion by the Texas intrastate utilities of interstate electricity from their service area, which artificially divides the market into two largely i distinct segments, and threatens to disrupt market transactions 1 within the intrastate Texas system as well.
- The proposed license conditions are part of an overall settlement which includes related stipulations and a three-I company letter to the FERC staf f, all of which are dated l September 12, 1980, and collected as attachments to the NRC Staf f's Fourth Status Report. l/ In addition, there are the 1/ NRC Staff's Fourth Status Report on Settlement, September 14, T980, to which are attached: Comanche Stipulation: CSW and TUCGO, September 12, 1980; Comanche Stipulation: NRC Staf f , U. S. Dep t .
of Jutice , Tex-La Electric Coope rative of Texas, Inc., and TUGCO, Sept. 12, 1980; STP Stipulation: NRC Staff, U.S. De p t . of Justice, CSW, Houston Lighting and Power Co. ("HLP"), City of Austin, Texas, and City Public Service Board of San Antonio, Texas, Sept. 12, 1980; License Conditions for Comanche Peak Steam Electric Station Nuclear Units Nos. 1 and 2; License Conditions i for South Texas Project Units Nos.1 and 2, September 12, 1980; Letter of September 11, 1980 to John Cameron, Esq., FERC attorney, from HLP, Texas Utilities Company and operating cos, r thereof ("TU"), and CSW; " Confirmed" FERC Staf f, " Accord" NRC Staff. l I I
i re lated , three-company settlement agreements as amended , and the revised of fer of settlement of the FERC proceeding. The specific objections to specific provisions are discussed below. A. The Disconnection Provisions. (STP $6 ( a) , page 6; Comanche Sl(a), page 5.)
- 1. The proposed Conditions f ail to require the elimi-nation of the restrictions against interstate connections con-tained in agreements covering participation and operations of the STP and Comanche Peak nuclear units for which application for operating license is made in these consolidated proceedings. The existence of these agreements is a matter of public record s. The restrictions are contrary to the purposes of the Atomic Energy Act to assure widespread public benefit from the licensing of nuclear plants, as well as inconsistent with antitrust law and policy. Licensing in the context of such restrictions would authorize activities under the license which would maintain and create a situation inconsistent with the antitrust laws.
- 2. The proposed Conditions fail to require Applicants to eliminate the provisions in many of their contracts which restrict the right of others to interconnect with interstate energy sources. These contractual provisions are a matter of public record. Licensing the operation of nuclear plants to Applicants who are openly engac ed in restricting commerce in interstate energy enhances tneir ability to enforce on others their policies and program to prevent the entry of interstate l
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energy into the ERCOT market, a matter inconsistent with antitrust law and policy, as discussed at length later in these Comments.
- 3. The disconnection provisions (STP S6(a), page 6; Comanche SD(1)(a), page 5 ) respectively provide that HLP and TU may disconnect 1/ from another utility transmitting interstate energy except in severely res tricted , and anbiguously stated ,
circumstances. Thus, if a third utility seeks to interconnect with interstate power in a manner "which could af fect the nonj urisdic-tional status of HLP [or TU] 2/ under the Federal Power Act," HLP may disconnect until and unless the third utility "shall have filed an application with and used its best ef forts to obtain an order from the FERC applicable to HLP under Sections 210, 211 and 212 of [ Federal Power] Act ... . If FERC denies the application "by a valid order" HLP has a claimed right of " continuing re f u sal" to remain connected then throughout an additional period of years of " review" by NRC under 1/ " Disconnect" herein means that HLP and TU may disconnect from , or refuse to connect with f acilities which another utility uses or proposed to use for transmission in interstate commerce, and that they may prevent another utility with which either is con-nected from interconnecting with interstate energy.
- 2/ The discussion here of the South Texas disconnection l t provisions' application to HLP can be equally applied to the
- Comanche Peak conditions' application to TU.
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Section 105(c). 1/ As HLP counsel avowed before this Board at the October 24 conference, HLP and the other Texas intrastate utilities will disconnect immediately from any utility which establishes interstau connections on its own. Tr. 1205, 1211-1212; see also id. at 1215-1216 (Ju suice ) . :
- 4. The proposed Conditions provide utilities desiring to interconnect in interstate commerce no more protection than they already enjoy under existing federal law, that is, the right to seek an interconnection order from FERC under the Public Utili ties Regulatory Policies Act of 1978, or to seek from this Board a license condition under Section 105(c) of the Atomic Ene rg y Ac t . And HLP and TU agree to do no more than they are required to do by existing law in any event: obey future orders of FERC or this Board requiring them to not to disconnect from utilities - which go into interstate commerce in electricity.
But these provisions are worse than simply providing no new i remedy. They postpone the remedy to which Brownsville is 1 entitled under Section 105 in this proceeding and impose the costs of another Section 105(c) proceeding on all parties. Worse, they compel utilities seeking to enter interstate commerce to pursue first one remedy and then another, seriatim, and at considerable expense, by requiring re so rt to FERC under PURPA 1/ It is not clear how and by whom the Section 105 review proce-dure would be initiated, but the burden of proof will be on HLP.
-, - - ~ -
I first, even though that statute permits FERC to dany relief for failure to satisfy any of numerous required showing s. 1/
- 5. The disconnect Conditions contain ambiguities, so i that the burden imposed on those seeking interstate connections may be even greater than at first appears. The Conditions l
; require a utility to use its "best ef forts" to procure a FERC s
l orde r; if ELP or TU claims it has not, may they then refuse to interconnect? And if the utility has used its best efforts, must 1/ To obtain either a wheeling or interconnection order, the pro-ponent must establish that the order (1) is in the public interest, (2) does not impose uncompensated economic losses on
! the utility subject to the order, ( 3 ) will not place an undue burden on it, (4 ) will not unreasonably impair its reliability or (5) its ability to serve ' its customers. Sections 210(c)(1) and , 212(a)(1)-(4), 16 U.S.C. SS824i(c)(1) and 824k( a)(1)-(4 ) . To j obtain an interconnection order, the proponent must also show
! that the order would either (1) encourage overall conservation of i energy or capital, (2) optimize ef ficient use of resources and j facilities, or (3) improve the utility's reliability. Section 4 210 ( c) ( 2 ) ( a)-( c) , 16 U.S.C. 5824i(c)(2)(A)-(C). To obtair* a wheeling order, the proponent must also show that the order would either (1) conserve energy significantly, ( 2) significantly pro-mote ef ficient use of facilities and resources, or (3) improve i the utility's reliability. Section 211( a) ( 2 ) ( A)-(C) , 16 U.S.C. } $824j(a)(2)(A)-(C). This list does not exhaust all of the ele-
- ments which the order proponent must establish. See Sections 4
211(c)(2)-(4) and 212(b), 16 U.S.C. S824j(c)(2)-(4) and 824k(b); see also Section 211(c)(1), 16 U.S.C. S824j(b)(1) in the j following footnote. i i The proponent must also establish that the order would f " reasonably preserve existing competitive relationships.' Section i 211(c)(1), 16 U.S.C. S824j(c)(1). We agree with Chairman Miller 1 that that provision must be viewed in the context of the public interest standard and its preference for competition, and that it is designed to preserve existing competition, ' not existing j- monopoly, but opponents of FERC orders will contend that this j provision requirus rejection of procompetitive orders until FERC
- rules to the contrary. Cf. New York Gas & Electric Corp. v.
F ERC , --- F . 2d -- , No. 79-418 5 (2d Cir. Septembe r 30, 1980), j slip op, at 5942-5943. e
, m . , , -. _. _.m,_ y,, , , - . . . _
y n 7. _ . . _ . _._. ,y _ . . . . .- -
it also await the decision of the Administrative Law Judge or an order by the Commission? Logic would suggest that it must, but if so, why didn't the parties simply say that? More troubling, must the applicant await a final valid order, that is, until HLP or TU has exhausted all appeals and petitions for review or certiorari? Finally, HLP and TU are obligated not to oppose a FERC order " unreasonably," but since they control the disconnect switch, each will presumably determine whether it is unreasonable in its opposition. 1/ The same ambiguities arise with respect to the subsequent Section 105(c) proceeding. HLP and TU have the right to continue to refuse to interconnect pending adjudication under Section 105(c). Does that include the exhaustion of all appeals? Exactly what is the Board authorized to do under the usual Section 105(c) proceeding contemplated in the license conditions? The statute by its terms applies only to license applications, nc t conditions to be imposed on existing licenses af ter their final issuance. It is not clear who would initiate this unusual
; Section 105(c) rev iew, or how. And while HLP uas some burden of proof, it will of necessity carry into the proceedings some favorable rulings by FERC under PURPA ( since the Section 105 pro -
1/ Moreover, the Condition contains a built-in incentive to HLP and TU to oppose a FERC order under PURPA on every colorable ground: they are required to pay the order applicant's costs if FERC relies on a ground other tnan theirs, so that they are encouraged to push every conceivable ground to avoid being sub-jected to the compensation provision.
- - - . . e a -- - - -
e
ceeding is required only if the other utility fails to get an order from FERC) .
- 6. Any utility that attempted to exercise its right to freely contract for an interconnection with an interstate u til ity , subject to Part II o f the Fnde ral Powe r hct , could find itself disconnected and, like CSR cince 1976, seeking to find relief somewhere in the judicial or regulatory system while opposed by a virtual army of lawyers. Between the three federal agencies alone, there are at least five of the country's leading law firms arrayed against interstate interconnection.
Thus, all the litigation to date, and exhaustive and expen-sive discovery and pretrial manuevering , become a nullity under this disconnect condition. The weary game must be played all over again if another uti-lity seeks to break the ban against interstate commerce, but this time it might be more difficult because enfo cement by disconnec-tion would appear to have NRC's blessing. And, as we must not forget, disconnection can shatter the reliability of the ERCOT system. Mo reove r , the thus blessed unilateral disconnection might separate participants from the very nucle ar generators here pending NRC licensing , and from the DC ir-terties which appear to be the principal reason for the settlemer.t. We discuss below the legal considerations which demonstrate that this agreement concerning disconnection violates antitrust law and policies. 1
l
- 7. The Conditions are deficient in failing to include a requirement and commitment that under no circumstances, other than as required by normal prudent utility practice, will any of the Applicants disconnect from the nuclear plants here to be licensed or from the DC tie-lines, or disconnect facilities so as ,
i to prevent any other ERCOT utility from receiving power from either of such sources. Applicants would be specifically enjoined from such disconnections for the purpose of preventing connected systems from engaging in interstate energy transactions. As drafted, the license Conditions appear to countenance exactly such disconnections. Tae disconnect provisions authorize disconnection to avoid interstate commerce notwithstanding any provisions in the other sections of the license conditions. Thus, other owners of the plants may find themselves cut of f from their base load generating units.
- 8. In addition, the proposed potential disconnection is totally contrary to 5211(d) of the Federal Power Act which usually requires transmission approval at the time of discon-tinuance of transmission services. If discontinuance is due to
" changed circumstances" as it would be here, discontinuance must be in the public interest. 5211(d)(1). No " procedures or methods for terminating or modifying" the initial 5211 order are included in the proposed order that would obviate the necessary for a S 211(d) order in the event of discontinuance of
, transmission services. See 5211(d)(3)(B). 1
.. - = . . -_.
O
- The proposed disconnect provisions of the settlement also violate the Federal Power Act because they purport to allow the signatories to disconnect voluntarily under certain circumstances, whereas the Federal Power Act prohibits disconnec-tion absent authorization. Pennsylvania Water & Power Company v.
Federal Power Commission, 343 U.S. 414 (19 5.2 ) , Florida Power & Light Co. , FERC Docket No. ER78-282 (issued April 28, 1978). B. Transmission-Related Conditions. I Transmission service at f air and practical rate *, terms and conditions is necessary to ef fectuate the power supply rights stated in the license conditions (i.e. , nuclear participation, transmission, wholesale power, etc.) . Brownsville has been harmed competitively by CPL's historic refusal to wheel over its monopoly transmissica 'ystem as well as by CPL's discriminatory transmission planning, and other anticompetitive activities. Brownsville needs transmission across CPL's system on reaso-nable rates, terms and conditions with assurance of long teon stability in design and structure so that it can contract for long term power supplies on a firm basis. The proposed conditions and incorporated Cameron letter of September 11, 1980 1/ do not meet the foregoing need and may effectively deprive Brownsville 1/ Letter dated September 11, 1980 to John A. Came ron , Jr . , FERC from HLP, TU and CSW.
~
i of the opportunity to obtain wheeling services either across CPL's system or across the DC interconnections, or throughout ERCOT. The CPL transmission system is the exclusive transmission system for some 200 miles and is Brownsville's only possible con-nection to the ERCOT utilities.
- 1. Wheeling across CPL for Brownsville's purchases from utilities directly connected with CPL is of first impo rtance .
STP condition I.B.(3) requires CPL ("Each Applicant") to wheel "ove r its own system." STP Condition I.B. (10) incorporates the Cameron letter into the license conditions. The Cameron letter, which deals with many aspects of wheeling, does not provide for such wheeling acrosa only the CPL system; it covers in this regard only the wheeling across the combined systems of CPL and W TU. Brownsville and CPL have been negotiating for over lhd years unsuccessfully to reach agreement with CPL for a wheeling "ste and contract to cross CPL's system. The gap lef t by the Cameron letter must be filled by establishment of rates, temas and con-ditions for the wheeling of power from CPL's directly connected utilities to Brownsville. The same reasons which compelled the effort to specify wheeling rates, terms and conditions for other transactions compel the specification of rates, terms and con-ditions for wheeling across CPL, although Brownsville disagrees with some of the methodology in the Cameron letter.
- 2. It is possible that CPL will claim ambiguity ad take the position that the license conditions and Cameron tter foreclose a rate for wheeling across CPL designed in the tradi-
tional manner to recover CPL costs only. Clarification is needed to assure that CPL cannot argue that Brownsville must also pay additional charges to WTU. This should be definitively clarified to avoid any possible argument that the license conditions impose combined CPL-WTU charges in CPL-only wheeling.
- 3. This matter must be further clarified to avoid any rassible contention by the other Applicants for license that they are also entitled to recover additional charges from Brownsville for CPL-only wheeling services, because of the joinder of the Cameron letter with the proposed license conditions.
- 4. The license conditions also cover wheeling transactions between the South Texas area and systems beyond, both within ERCOT and across the interstate interconnections. The Cameron letter is not clear as to whether its terms encompass the latter, i.e. the wheeling of firm power purchased by Brownsville say from TU and wheeled jointly over the systems of HLP and CPL (or purchased from any system twice removed from Brownsville). The rates, terms and conditions must be defined for the same reasons which compel the ef fort to define them for other transactions.
- 5. FERC has jurisdiction under Section 201 of the Federal Power Act over CPL as a "public utility" and over its facilities for the transmission of electric energy in interstate commerce.
Brownsville is of the view that the wheeling to Brownsville from a system twice-removed would be accomplished by a joint rate likewise under FERC j urisdiction. Brownsville has heard argu-ments to the contrary. The question of regulatory jurisdiction
needs to be clarified by requiring definitive statements of posi-tion by the Applicants. This will enable the Board and parties to identify whether a complicated and legal dispute may emerge that would nullify in f act what the proposed conditions seek to grant, the asurance of wheeling services at reasonable rates, terms and conditions. When the jurisdiction issue is clarified, the Board will then be in a position to determine what needs to be added to the Conditions, or what agreements needs to be reached among the parties, to assure that the objective of the wheeling conditions will, in fact, be achieved.
- 6. The Cameron letter deals with wheeling rates to be filed at FERC so cryptically as to be unclear in a number of ways. It is therefore necessary to obtain clarification in order to eva-luate whether there is assurance that the wheeling required under Condition I.B. (3) will in f act be provided on a f air and prac-tical basis. The Cameron letter sets forth bases for determining rates for wheeling power to, from and over the proposed DC interconnection, to be filed at FERC by TU, HLP and CSi at least one year before the DC lines go into operation. It is first not clear whether this requires TU to file tariff s for the intercon-nection wheeling since TU does not own DC facilities. If so , we need to know what services it will be providing and how it expects to be compensated. If TU must file tarif fs, although it does not own DC facilities, what about all the other ERCOT utili-ties which might be providing similar services? There does not i
l i appear to be any provision for tarif fs or rates for other utili-ties to provide TU-type services. Thus, it is not clear that there will be a complete set of tariff s or rates to accomplish the wheeling between the DC interconnection and a utility power purchaser like Brownsville. Thus, the Cameron letter may be construed as defeating wheeling condition I.B. (3).
- 7. The Cameron letter provides for a " single rate for each system" and appears to establish a formula basis using the TIS computer, which cannot be evaluated without quantification on a specifically defined basis to which all the utilities agree.
However, estimates based upon load flows , as computed by HLP (see Attachment), indicate that the rates would be so high as to render transactions by Brownsville clearly uneconomic. Thus, for Brownsville to have power wheeled from the north DC tie would cost an estimated $35 to $70 pr,r kw year, and from the South DC Tie, between $21 and $42 per kw year.1/ This can be compared co CPL's $34 per kw year estimated wholesale cost of service for providing 1980 firm power to Brownsville, which includes both cost of generation and transmission. More complete data and com-putations are necessary, covering service to all ERCOT systems, to see whether there is an agreed-upon methodology and one which produces a f air and practical result for all concerned. 1/ The lower figures use an assumed 1 mill /kwh (100 % load l Tactor) annual transmission cost. The higher figure utilizes 2 mills, based upon our understanding of what uillities are already claiming for ccst of service. l r i l l
- 8. The foregoing methodology assumes the operation of an integrated transmission system and would otherwise make no sense at all . But, in an integrated sy stem , in which the various systems are relying upon each other, and thereby minimizing the costs and maximizing reliability for all, there should be deve-loped a single overall average transmission cost to be charged for wheeling, and the particular load flows would be used only for the purpose of determining the distribution of the revenues as between the systems bearing the load flows. Unde r the pro-posed method, however, the rate to be charged for wheeling may widely swing from transaction to transaction, depending upon load-flow happenstance, although the identical or similar service is provided in each instance. While it is not desirable for NRC to set the transmission rate (only as a last re so rt ) , it mast have sufficient record data and information to be able to de te r-mine whether the wheeling condition can, in fact, wo rk.
- 9. It woald appear that the criteria and methodology writ ~
ten into the cameron latter have no significance as a precedent or stipulation, but are only intended to fix the first rate to be filed at FERC, subject to ref und. If so , the Applicants can so affirm in their responses, 'and not argue otherwise years from now. Even that does not cure the problem.
- 10. The rate will not be filed for many years, and it can be expected that another many years will pass before FERC finally 1
defines the transmission rate methodology. In such cases, small l
1 systems find it almost bupossible to make intelligent planning decisions now, involving investments in the DC interconnection, or investments in plants beyond the DC interconnection: the wheeling cost will not be known until perhaps 10 years hence. In . short, the wheeling condition can only be ef fective if the starting rate is f air and practical, whether established by agreement among the parties or by the NRC order. That rate design and methodology must also ba fixed , subject to change only af ter opportunity for hearing and approval by the regulatory commission. This will establish a continuing fairness: a fair ] rate to begin with, and thereaf ter a f air rate determined by the regulatory commission. The prospect of refunds long af ter the fact is not an adequate substitute for continuing fair rates.
- 11. The Cameron letter also covers a " proposed wheeling tariff, to be collected subject to ref und, applicable to wheeling within ERCOT-TIS for utilities in ERCOT with less that 1500 MW load." (P. 2, Para. (1)(F)). All that we have said above con-cerning the problems of the interconnection wheeling service applies equally to this ERCOT-TIS service. We need not repeat them here; we incorporate by reference.
- 12. . There is the additional problem, as previously discussed, th at it is not clear where FERC j urisdiction ends and Texas PUC jurisdiction begins 0;; an instantaneous joint-system t wheeling transaction over CPL and another ERCOT utility. If there is a jurisdictional division, there is no assurance that the two commissions will fix compatible rates. Absent an I
agreement among the parties, or between tne regulatory agencies, it could be many years of litigation before Brownsville and other utilities will ever know what the wheeling rate will be. The Board can take of ficial and actual notice that many of the Applicants are litigious. An ef fective wheeling condition must assure that the other ERCOT utilities are able to obtain wheeling sc:rvices at f air and practical rates during the long period of likely litigation by the Applicanta.
- 13. The Comanche Peak proposed wheeling license conditions (SSD(2)(i) and (2)(o)) parallel identically those for South Texas.
We therefore submit the Coregoing comments regarding the South Texas wheeling conditions, as applicable to . those of Comanche j Peak. The Board should so consider these comments, irrespective of the precise comanche intervenor status of Brownsville. The South Texas and Comanche Peak conditions are joined together by their respective incorporations of the Cameron letter, as well as their physical integration into the ERCOT network. They arise out of a single factual context, consolidated proceedings and unified negotiations. They cannot make sense if applied and interpreted differently. Modification of one requires modifica-tion of the other. The systems are joined like Siamese twins by heavy interconnections, a mutual desire to avoid federal regulation, and many agreements requiring all of ERCOT to severely restrict doing business in interstate energy.
1 ( I i ] : i i C. Participation In The South Texas Project. -
- 1. Ti. ' proposed conditions generally provide for CPL to of fer Brownsville participation in the South Texas Project (1I.L, }(a)) and to provide the transmission (1I.B.(1)(b)) and l
; backup services (1I.B.(1)(c) essential for participation by a
- small entity such as Brownsville. Only the precise tecas and conditions of STP participation including ratas, terms and con-j ditior s of related transmission and backup service, however, will
! reveal whether the Applicants are now willing to make a reason- I able offer. Brownsville has received from CPL what appeared to I
be deliberately unreasonable of fers. The Board ther Core should l withhold issuances of license until the parties have negotisted the essential "erms covering participation and related 4 transmission.
- 2. Al CPL proposes to invoke any of the provisions of 1 I.B.(4) 1,/ with regard to transmission facilities, all arrange-ments under that provision should also be agreed to prior to i
! issuance of license. The date for Brownsville's firm commitment should be the later of Janaury 1,1983 (established in the con-ditions as proposed) or six months af ter the participation agreement and all related concractual matters are finalized.
Brownsville would then have an opportunity to evaluate the final terms of participation and make a fully informed decision whether to commit. i i 1/ As allowed by 1I.B. (1)(b) . CPL could refuse to construct l additional transmission facilities if construction were infeasible or would unreasonably impair system reliability or i emergency transmission capacity. It could also require .a contri- ! I bution in aid of construction.
l D. Participation In STIS And TIS. ) l 4 For some eleven years Brownsville was excluded from TIS and STIS, and from the advantages of shared information, joint planning for reliability, transmission, and generation, jointly-owned generation t'".1 as STP) and mutual assistance in i eme rgencies. The license conditions should provide an assurance that the current TIS and STIS policies and operations, available since 1979 to Brownsville as a member, will not be modified in the future to Brownsville's substantial discdvantage. The con-ditions should also provide assurance that the Applicants will not withdraw from TIS and/or STIS to the substantial disadvantage of Brownsville.1/ This can be accomplished by agreement by parties, or by an appropriately phrased order. The fact that Brownsville was admitted to TIS and STIS last year is not an argument against requiring that the Applicants not resume their prior practice of exclusion. Rather, the use of exclusion in the past counsels the need for future protection. Cleveland Electric Illuminating Company (Davis-Besse Nuclear Power Station, Units 1, 2 and 3 ), ALAB-560, 10 NRC 270, 398-401 (1979). 1/ Paragraph I.B.(2) of the 50uth Texas conditions is the appropriate section of the conditions to include such a requirement. l l
E. Offers of full and partial requirements bulk power.
- 1. The license conditions require CPL to of fer full and partial requirements of bulk power (TI.B.(5)); they should require HLP to make bulk power available as well.
- 2. The corresponding Comanche Peak provision,1D.2(k) ,
requires bulk power of fers to qualifying encities only in. the North Texas area. This area restriction its unnecessary and unj ustified, and appears to sanction a div ision of the bulk power market into North and South Texas segments. .
- 3. Only entities with 200 MW or less of generation qualify to request bulk power. This language in the South Tbxam conditions should be clarified and made consistent with the Comanche Peak conditions by providing this of fer for entities with 200 MW or less of generation "as of the date of the license." Otherwise, wholesale purchase will be discouraged from installing or acquiring generation -- an anticompetitive ef fect.
- 4. The conditions should require CPL, HLP and 17 to provide bulk power services on a non-discriminatory basis and with the same availability that they provide increased or addi-tional service to any other existing or prospective customer.
Curtailment should be reasonable and non-discriminatory not only "where possible" but generally.
- 5. Proposed South Texas Condition I.B.(5) allows CPL to prefer its operation in centralized economic dispatch with otL_r af filiates of CSW to any outside transactions. The loard l
1
1 1 should not legitimize what amounts to a discriminatory basis for bulk power transactions by approving the license conditions which allow CPL to prefer its af filiates in pool transactions.
- 6. In addition, CPL should be required to of fer
_a.itralized economic dispatch and other pooling arrangements to any adjoining utility requesting them, on the same or equivalent rates, terms and conditions as may be provided fo r CSW affiliates. The holding company pool should not unf airly disad-vantage adjoining systema. F. DC Interconnections.
- 1. The proposed DC interconnections between the interstate and intrastate segments of CSN form an integral part of the overall settlement and also explicitly a part of the pro-posed South Texas license conditions 119, 10, and Comanche Peak condition D.2(o). The DC interconnections as proposed are nul in the public interest and would create or maintain a situation inconsistent with the antitrust laws.
- 2. The economic and competitive advantages of AC lines over DC lines are many. AC lines are much less expensive to build per unit of megawatt capacity.1/ The introduction of AC 1/ CP&L recently stated that DC would be more costly. Central Powe r & Light Company, Form 10K for fiscal year ended December 31, 1979, at p. 17. "DC ties in and of themselves are more expensive than AC ties and their cost would make it infeasible to install sufficient tie capacity to permit large energency trans-fers or substantial wheeling of power for other utilities.
Central and South West believes that for these reasons a DC , interconnection is not as desirable a solution as an AC l interconnection." See testimony of Dr. F. George Arey, page 4 7 l and Exhibit 14 to CSW Exh. 7 in Central and South West i Corportion, SEC Admin. Proc. File No. 3-4951. l
lines now would parait incremental additions of more low capacity, low cost AC lines in the future as demand justifies them, at lower cost and with minimal coordination whereas
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reliance on DC lines now will preclude the economical incremental introduction of additional AC lines in the future. There are, only two DC interconnections, causing more expensive, circuitous and inefficient wheeling arrangements to move power between rela-tively close origins and destinations. AC lines require much less coordination than DC lines for scheduling transactions over them, providing greater ef'fective capacity and flexibility in interstate transactions.
- 3. The capacity of the proposed interconnection may also be too small to allow the benefits of full interchange bet-ween ERCOT and SWPP. Ye t this interchange is the premise for constructing the interconnections. Inadequate interconnection size would also restrict the benefits of large movements of energy, e.g. , coal by wire, that are economical and in the national interest.
- 4. The two DC lines are under the control of CSW and RLP and are committed first of all to serving power exchanges for CSW subsidiaries, South Texas condition I.:2(5). The limited capacity reserved for providing transmission service between the Texas utilities and interstate utilities 1/ is insignficant com-1/ Brownsville notes that the 15% reservation of capacity TCameron letter 113) and the reduction of this reservation due to purchases may be inadequate and should be justified before approval.
pared to either the amount of power with which it will compete within ERCOT or the amount of power which would be introduced into Texas if the interstate barrier were removed by ef fective license conditions.
- 5. The DC intertie also creates a limited access to interstate transactions and placea it in the hands of the large utilities that have restricted small utilities in the past. In addition, according to Exhibit 2 to the June 9, 1980 settlement ag reement , firm power transactions across the DC ties would be treated as generating nnits and would require back-up from within Texas. This provision increases control of interstate transac-tions by the large intrastate companies, since they would con-tinue to play a role in all firm power intrastate transactions and diminishes the competitive possibilities that ought to be available to all utilities on a nondiscriminaory basis through ERCOT-SWPP interconnections.
- IV. TEE ANTICOMPETITIVE SITUATION IN THE TEXAS INTRAST ATE UTILITY ARSA.
A. The Agreement Tb Prevent The Introduction Of Interstate Electricity Into Most Of Texas. A unique situation exists in the state of Texas. Motivated by the desire to avoid federal jurisdiction under the Federal Po we r Ac t , utilities serving the ce7 tral portion of the state have agreed to interconnect only among themselves and not to interconnect with any utility engaged in interstate commerce. They have done what they agreed to do: by declining to intercon-nect with any interstate utility they have succeeded in pte-venting the introduction of interstate electricity via tneir transmission lines into their service areas, the so-called intrastate or "ERCOT" area . 1/ The utilities at the heart of this agreement are the TU com-panies (Texas Electric Company ("TESCO"), Texas Power & Light Company ( "TPL") and Dallas Powe r & Light Company ("DPL") ) , ELP and Central and South West Corporation ("CSW") , and two of its operating subsidiaries, CPL and West Texas Utilities Company ( "W TU " ) . These companies control most of the high voltage transmission and generation within the intrastate system. All excapt WTU are among the applicants for nuclear licenses in one or the other of these proceedings, which concern the first two nuclear generating projects in the Texas intrastate area. 1/ Attachment A is a map of this intrastate area. l 1 l
- 1. The bilateral agreements and the participation agreements. ,
The intrastate utilities' agreement has taken many forms, and been reduced to formal written contracts in addition to the informal understandings and established operating policies of long-standing. The intrastate Texas utilities do not deny the existence of this agreement; to the contrary, they hrve af fir- - matively sought to enforce it before court and agency, and they have succeeded in doing so . In addition to the area-wide agreements,1/ each of the major 1/ The agreement establishing the Electric Reliability Council of Texas (ERCOT), July 22, 1970, as amenced September 5, 1972, provides that members shall engage "in purely intrastate commerce ( that is, not directly or indirectly t'ransmitting , buying or selling electric energy in interstate commerce) ." Article II,
- 11. The two CSW subsidiaries which violated this provision in the May 1976 midnight wiring were expelled from ERCOT.
Similarly, members ot the Texas Interconnected System (TIS) are restricted to intrastate operations by a common understanding , which is sometimes put in writing. For example , the Texas Municipal Power Pool, consisting of four municipal utilities and a cooperative, was required when it was admitted into membership in TIS to assure the other members that it would not introduce interstate electricity onto their lines. Letter, March,1974, Charles Herring (LCRA) to R.M. Jolly (TIS); letter, March 29, 1974, R.M. Jolly to TIS Administrative Committee; letter, Ross A. Segrest (Brazos) to R. M. Jolly. TMPP acquiesced in the intrastate restriction imposed by TIS not becattse it, too, prsferred intrastate operation, but because "it would be uneconomical for TMPP to consider giving up the advantages of intrastate interconnections and working closely with TIS." Jolly letter of March 29, 1974.
intrastate utilities has supplemented them by requiring each uti-lity with which it is directly interconnected to refrain frcm establishing interstate connections as a condition of its own continuing interconnection. The following discussion describes only a fraction' of the existing bilateral agreements restricting interstate commerce.
- a. TESCO. TESCO and WTU were interconnected with each other in 1935. They then " agree [d] that no power . . .
transmitted . . . or received . . . by either party hereto is to be transmitted ... in interstate commerce [andl that neither party will transmit any power or energy delivered to it hereunder beyond the limits of the State of Texas." (Agreement, WTU and TESCO, October 9, 193 5, Article V 11; Agreement, WTU and TESCO, February 16, 1938, Article IV, 11.) By the physical nature of electricity, this precluded each company from interconnecting with any interstate utility. They agreed that neither would interconnect in interstate commerce without the consent of the other. West Texas Utilities Company v. Texas Electric Service Company, 470 F.Supp. 798, 808 (N. D. Texas 1979), appeal pending, No. 79-2657, 5th Cir. If consent were not given, the company desiring interstate interconnection would have to f;rego its intrastate interconnection. TESCO has regularly imposed the interstate restriction in identical language with its customers. See, e.g., contracts l l
1 l with Lone Wolf Electric Cooperative (contract of July 2, 1963, 112) and Community Public Service (contract of March 1. 1967, Article 15).
- b. HLP. HLP also typically requires its wholesale customers and others with whom it is interconnected not to engage in interstate commerce. Thus ELP and the Lower Colorado River Authority (LCRA) ag reed in 1964 that each would
" arrange its system and operations so that ( a) all power and energy ( from whatever source) delive red to [the other's]
ene rg ized network . . . shall have been genera ed and transmitted wholly within the State of Texas, and that (b) all power and energy ( to whatever ultimate recipient) delivered from [the other's] energized network . . . shall be transmitted and utilized wholly within the State of Texas." (HLP-LCRA, Article VII, Section 1 of 1964 knendment to 1953 Agreement.) HLP and TPL created a 345 KV north-south backbone trans-mission line in Texas and limited use of the line to intrastate commerce. (" Power Interchange Agreement," February 1, 1962, Article II.) Both systems expressed the intent to continue to operate "so that power and energy cannot flow from either of such systems to any point outside of the State of Texas or from any point outside of the State of Texas into either of such sy s tem s . . . , " i.e., the systems agreed not only to limit their own transactions to intrastate commerce but also to intercon-1
)
nect physically with a system that could transmit in interstate commerce. 1/
- c. TPL. TPL has used a variety of contrac-tual limitations to assure that those with whom it interconnected would not subject it to transmitting interstate electricity. It has agreed with the Brazos Electric Power Cooperative that they would operate their respective systems so that no power to or from either system would flow in interstate commerce. Agreement, November 17, 1953, Section XIII. It has required the Southwest Power Administration to agree that power received from TPL would be used only in the state of Texas and by customers "whose lines have no connection to or from points outcide the State of Texas."
( Ag reement, April 4, 1947, respecting the federally-financed Denison Dam. ) It has required the Lower Colorado River Authority to agree that power under their contract would be transmitted and utilized wholly within Texas. (Agreement, October 14, 1949, Article VI.) Moreover, TPL requires its wholesale customers to secure the consent of their customers to inspections and record searches by TPL to enforce the exclusion of interstate power. Other agreements by TPL including restrictions cn interstate com-1/ Unless such a system were operating under an exemption from FPC j urisdiction, as provided in the agreement.
O 4 me rce a re , e . g . , with Community Public Service,1/ Southwestern Electric Service Company, 2/ and with the City of Commerce, Texas. 3/ I To meet the requirements of their contracts with TPL, its customers must similarly compel their own customers not to deal in interstate commerce. Thus, Brazos incorporated in its own l contracts the same restrictions imposed on it by TPL. (See Agreement between Brazos and City of Whitesboro for Interchange of Electric Power, Janusry 14, 1965, Section 8.A.) Officials c5 the TMPA Cities of Denton and Greenville have stated that the intrastate restrictions imposed in their contracts with Brazos were due to TPL's agreement with Brazos. Most recently TPL required its customers for economy energy
-- including LCRA, 4/ HLP, 5/ TMPA 6/ and the City of Austin 7/
I 1/ Ag reement , TP L-C PS , De cember 20, 1960, 17. 9 2/ Ag reement , TPL-SWESCO, November 8, 1974, Section 13. 3/ Letter agreement, December 12, 1975, R. K . Campbell (TPL) to Morris K. Howard (City of Commerce) . 4/ Letter, October 28, 1977 R.K. Campbell (TPL) to Charles Herring (LCRA) page 3, paragraph 3; letter, March 6,1978 R.K. . Campbell to Charles Herring , Article VIII. 5/ Letter, October 28, 1977, R. K. Campbell (TPL) to De Simmons (HLP) page 3, paragraph 3; letter, March 3,1978, R. K. Campbell to E. Simmons, Article VIII. 6/ Letter, bbvember 4, 19 77, R. K. Campbell (TPL) to Paul Cunningham (TMPA) page 3, paragraph 3; letter, March 20, 1978, R.K. Campbell to Paul Cunningham, Article VIII. 7/ Letter, October 28, 1977, R.K. Campbell (TPL) to R.L. Hancock (Austin) page 3, paragraph 3; letter, March 20, 1978, R.K. Campbell to R. L. Hancock, Article VIII. i J
- - , . . - - , -,. -ee.,
I
-- not to engage in interstate transactions for any purpose. In a standard contract executed with each of these customers, TPL and the customer "each . . . ag ree [d] that it will not connect its f acilities or pe rmit its f acilities to be connected through other parties ... to any other generation, transmission and/or distri-bution facilities having interstate connections."
- d. CPL. Similar provisions occur in CPL's contracts. CPL's June 8, 1967, contract with STEC/MEC (16.03 )
provided that power and energy supplied or generated by either "shall not be transmitted or delivered outside the State of Texas without the further consent of Central ... ." Other CPL contracts prohibit interstate transactions by prohibiting all resale by the customer (Poner Purchase Agreement, Brownsville-CPL, De cembe r 14, 1971, Article 5, 15) 1,/ and authorize CPL to disconnect immediately if necessary to avoid the introduction of inteestate electricity. CPL's contracts with distribution co-ops 1/ The contract also restricts selling any power and energy from DPL for resale, a condition the FERC has found anticompetitive and unenforceable. Central Power & Light Co. , Docket Nos. EL79-26 and ER79-600, " Order Granting Rehearing in Part and Modifying Prior Order," at 5 (May 2, 1980). Ye t , sLmilar prohi-bitions against sale for resale are in CPL contracts with rural electric cooperatives. lE.., May 20, 1973 Electric Service Contract, CPL-Rio Grande Electric Cooperative Inc. ,14; November 3, 1971 Electric Se rvice Contract, CPL-Medina Electric Coope rative , Inc . 114 ; Electric Service Contract, June 20, 1962, Magic Valley Electric Cooperative-CPL,14. i l I l
routittely required all power to be consumed within the state of Texas. 1/ This discussion by no means exhausts the bilateral agreements incorpora r ,ing and executing the overall agreement, but they are illustrailve of the nature and operation of the agreement. The Applicants also incorporated the interstate restriction into the participation agreements for the nucle ar plants. Participation in Comanche Peak by the Texas Municipal Power Pool was in fact specifically conditioned on a pledge 2/ to remain intrastate. Likewise participation in South Texas was only of fered to utilities within the intrastate system, thus excluding Gulf States Utilities and other Texas interstate utilities. 3/ The South Texas Participation Agreement itself reflects the agreement not to interconnect with any utility engaged in interstate commerce. A provision requiring each participant to 1/ E.g., Electric Service Contract February 22, 1954, CPL-Victoria C"'.nty Electric Cooperative (Greta) , 14; Wholesale Power Contract, Jecembe r 17, 1959, CPL-Kimble Electric Cooperative , Inc. , 14. 2/ Letter of intent, December 9, 1977, signed by representatives of DPL, TESCO, TPL, TUGCO, TMPA and Brazos, at page 6. 3/ Testimony of P.H. Robinson, formerly Chief Executive Officer of HLP, in West Texas Utilities Company v. Texas Electric Service Company, No. CA 3-76-0633-F ( N. D. Texas) , appeal pending, No. 79-2677, Tr. 302-312.
construct and operate its system "in a manner which will not unreasonably af fect the operation of the electric systema of ... the other Participants" was based, according to HLP, on "the reasonable expectation of each member of TIS ... that the other Participants would continue to operate in intrastate commerce," that is, not interconnect with any utility in interstate i commerce. (HLP Counterclaim, page 3, in WTU v. TESCO, supra.) The district court in West Texas Utilities Company v. Texas Electric Service Company, _ supra, agreed that Section 8.2 of the STP Participation Agreement constituted a binding and judicially enforceable commitment among the signatories not to engage in interstate commerce. "[A]Il of the parties in the STP joined in the project with the common intention of continuing to ope rat s on an intrastate basis as they had operated since 1935. Each member of the participation agreement could commence interstate opera-tions upon advance notice to the other members of STP and TIS," and not otherwise. (470 F.Supp. at 836. ) 1/ 1/ The court went on to say that there was no contract "which violated Section One of the Sherman Act," not because there was not an agreement, but because not every agreement is a Section One violation. Id. In finding the intrastate-only agreement the District Court concurred with every adjudicating body that has considered the existence of the intrastate restriction. The Securities and < Exchange Commission, in considering CSW's compliance with the Public Utility Holding Company Act, noted that members of TIS had bound themselves and their wholesale customers not to engage in
- 2. Enforcement of the agreement,. The most spec-i tacular example of the enforcement of the agreement is of course the series of disconnections that occurred on May 4, 1976.
During the night WTU interconnected into interstate commerce, connecting a segment od 69 KV line to serve three communities in Oklahoma. Immediately upon learning of this interconnection, TESCO, TPL and HLP cut of f service to other systems and operated isolated. a 4 This disruption of the normal pattern of interconnection created an emergency among the Texas intrastate utilities, and the Texas PUC held emergency hearings. The sudden disconnections impaired the reliability of all systems, and forced systems to increase their spinning reserve.1_/ CPL and WTU operated in
" direct or indirect exchange of electric energy between TIS and generating end electric utilities outside the State of Texas."
Central and South West Corp., SEC Admin. Proc. File No . 3-4951,
" Notice of and Order for Hearing on Program for Compliance with Section 11(b) of the Public Utility Bolding Company Act of 1935,"
January 30, 1976, at page 5. Again, in Central Power & Light Company v. Public Utility Commission of Texas, No. A-77'CA-86 (W . D. Tex. , Austin Div. 1978), the court noted that ERCOT was the product of " contractual agreements establishing (it] as an intrastate system." The Fifth Circuit, on appe al , ag reed . ERCOT
" members are contractually bound to refrain from engaging in interstate transmission of power." CPL v. PUC of Texas, 592 F.2d 234, 236 (5th Cir. 1979). And the Texas PUC similarly held that TIS contained " contractual prohibitions against interstate sales," and prohibited WTU f rom re-establishing interconnection of its inter- and intrastate systems until those contractual pro-hibitions were " finally adjudicated to be void or voidable."
Houston Lighting & Power Company, Texas PUC, Docke t No . 14, Amended Final Order, July 11, 1977, at page 9. 1/ See, e.g., Petition to Intervene cf the South Texas Electric Cooperative in the Matter of the Emergency Hearing on Intrastate and Interstate Service of Texas Interconnected System, Docke t No . 14, Texas PUC, January 19, 1977.
synchronism with the South West Power Pool from August 28, 1976 to January 22, 1977, but without interconnection to TU and HLP or between TU or HLP and SNPP. This n. ode of ope ration resulted in severe power swings and delayed stabilization time af ter outages. 1/ CPL and WTU eliminated the 69 KV radial tie on May 4,1977, pursuant to order of the Texas PUC in Docket No.14, returning the Texas intrastate system to its accustomed mode of operation. There are other examples of enforcement. In 1953 TESCO disconnected from WTU over a disagreement about protective relays used to assure TESCO it would not indirectly be connected to interstate commerce. In 1975, TESCO threatened to disconnect from WTU because it believed WTU was about to accede to demands of the Gate City Electric Cooperative 'd omit an interstate restriction from a contract under no Lation. The utilities cooperated in exchanging information about the status of CPL and WTU interconnections across the international border into Mexico. The TU systems had a longstanding practice of inspecting the physical facilities of systems with which they we re interconnected to spot any potential breach in their defenses. An of ficial of DPL described this as "a long standing, although pe rhaps tacit agreement that Texas Electric Service Company would maintain surveillance and report back to us on any 1/ LCRA was dissatisfied with the electrical disturbances and increased costs, and sought to be disconnected from WTU and CPL and reconnected to HPL and TU. i
changes involving the West Texas area and that Texas Power & Light Company would generally perform a similar service for us in other portions of the State." 1,/ B. CPL, Brownsville, and their competitive relationship. CPL supplies electric service to a 44,000-se 1 r'e mile area 2/ in 44 counties of South Texas, a population of 1.3 million people, 3/ with a transmission netwnrk of 2,573 line-miles. CPL's 1979 customers numbered 423,000 with a peak load of 2,433 Mw and sales of 12,720,126,000 Kwh. It is some 200 miles as the crow flies from Brownsville through CPL to the nearest intercon-nection with another Texas utility (San Antonio) and some 300 miles to the nearest other Texas investor-owned utility (Houston Lighting & Power Company) . The City of Brownsville, through its Public Utilities Board, owns and operates a generation, transmission and distribution electric utility system in and around Brownsville, Texas, having 23,000 customer connections and a 1979 peak load of 113,000 Kw. Its gross energy load was approximately 497,000,000 Kwh in 1979. It has a single 69 KV transmission interconnection with CPL through which it contractually purchases firm power to the extent 1/ Letter, June 3,1975, R.S. Miner (DPL) to L.F. Fikar (TESCO) and G.R. Coffman (TPL). 2/ Larger than the State of Virginia (39,800 square miles) and Targer than 17 of the statis. 3/ Larger than 15 of the states. l
v of the line's capacity and serves the balance of its load from its own generation. The City's load has been growing at a 6 % compound annual rate. The capacity of the 69 Kv interconnection is insufficient to provide for more than 40,000 Kw reliability at the time of summer peak, althougn City's needs, and CPL's contractual obligation, call for a larger purchase. For many years, CPL has refused to enlarge the capacity of interconnection, thus causing brownouts and blackouts, and thereby inhibiting Brownsville in competing with CPL for new loads and enabling CPL to take a, large industrial customer from Brownsville.1/ Moreover, Brownsville has been subjected fc c many years to continuing anticompetitive actions by CPL including refusals to wheel, exclusion from the Texas Interconnected System (" TIS") and the South Texas Irsterconnected System ("STIS") , buy-out efforts, deprivation of statutory preference power (which CPL obtained for itself though not a preference customer) and exclusion from the South Texas Project. These actions have been to some extent alleviated due to the pendency of the instant proceedings 2/ but it appears that CPL's overall anticompetitive program is continuing, including what appears to be a continuing objective of taking the PUB system over. 1/ The parties have now agreed to the construction of two 138 Kv interconnections, but CPL tied in a 10-year take-or-pay purchase agreement as a condition for such agreement. The 138 KV inter-connection will not be completed until 1981. (CPL FERC rate schedule No. 62, ef fective April 4,1980. ) , 2/ These interconnections, Brownsville's admission into STIS and ! TIS, and Brownsville 's recent arrangements with CPL to transmit i of f-peak interruptible electric energy from Texas Power & Light l Company are the result of the pendency of the current proceeding. l
V. THIS SITUATION IS INCONSISTENT WITH THE ANTITRUST LAWS. A. The Standard Under Section 105(c) . In Section 105(c) of the Atomic Energy Act, Congress directed the NRC and this Board to pay special regard not only to the letter of the antitrust laws, but to the broad national policy of free, unfettered economic competiti,on on the economic merits -- price, quality, service . All agencies operating under the public interest standard serve as a "first line of defense against" anticompetitive conduct which may later be the subject of antitrust proceedings, Gulf States Utilities Co. v. FPC, 411 U.S. 747, 760 (1973), but others -- including NRC and the Federal Trade Commission 1/ -- have a special nandate, beyond that, to prevent anticompetitive conduct and situations which have the same adverse economic effects, but which may never ripen into a violation of Sections 1 or 2 of the Sherman Act, or of Sections 2, 3, 7, or 8 of the Clayton Act, 15 U.S.C. SS1, 2, 13, 14, 18, 19. 1/ The re are others , e .g . , the Civil Aeronautics Board. See Section 411 of the Civil Aeronautics Act, 49 U.S.C. S1381, discussed in Pan American World Airways v. United StaL=s, 371 U.S. 296, 302-308 (1963).
Congress first reached beyond the broad boundaries of the Sherman Act in enacting the Clayton and FTC Acts in 1914. J / It created in the FTC a special agency whose unique but broad man-date was to " nip in th<. bud" anticompe titive conduct, to assure consumers the free economic choice which is the mainspring of our system of free private enterprise "by securing fair opportunity for the play of the contending forces ordinarily engendered by an honest desire for gain." FTC v. Raladam Co., 283 U.S. 643, 647 (1931). Its function was to prevent both deceptive conduct, which made a mockery of free consumer choice, and unf air conduct, which enabls; businesses to deny to their competitors access to 1/ 15 U.S.C SSil-21 and 41-49, respe ctively. The Clayton and FTC Acts are complementary. The function of the fo rmer was to make easier the proof of certain Sherman Act violations whose insidious effect was well-established. It applies in a narrower range of situations than the Sheeman Act and provides only civil penalties. Where it applies, howeve r , its standard of proof of violation requires a lesser " quantum of ef fect." See Florida E. Coast Ry. v. United States, 259 F.Supp. 993, 1003-1004 (M.D.Fla. 1966), atf'd per curiam, 386 U.S. 544 (1967); FTC, Report on Corporate Mergers and Acquisitions 157 (1955); Von Kalinowski . 2 Antitrust Laws and Trade Regulation, S1301, at pages 13-6 to 13-8 (Clayton Section 3), and S15.06, at pages 15-34 to 15-35 (Clayton Section 7). The function of the FTC Act was to reach even more broadly than the Sherman Act. FTC v. Motion Picture Advertising Service Co., Inc., 344 U.S.392 (1953); L.G. Balfour v. FCT, 442 F.2d 1, 11 (7th Cir. 1971). Through the use of adminis trative procedures which protect businesses from the severe sanctions of the Sherman Act, Section 5 of the PIC Act allows the Commission and courts to refine their judgment of what constitutes unf air or deceptive trade practices. FTC v. Beech-Nut Packing Co., 257 U.S. 441, 453 (1922); Grand UnTon Co. v. FTC, 300 F.2d 92, 98 (2d Cir. 1962).
I l the consuming public through the exercise of economic power or other means. FTC v. Motion Picture Advertising Co., 334 U.S. 392, 393-395 (1953); FTC v . Beech-Nut Packing Co. , 257 U.S. 441 (1922); National Petroleum Refiners Ass'n v. FTC, 482 F.2d 672, 684-685 (D.C. Cir. 1973). Section 5 reaches beyond the Sherman and Clayton Acts to conduct inconsistent with their policies,
. though a " full-blown violation" has not occurred. See FTC v.
Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5. (1972); FTC v. Texaco Inc., 393 U.S. 223, 228-229 (1968); FTC v. Brown Shoe Co.,.384 U.S. 316, 320-322 (1966); Atlantic Refining Co. v. FTC, 381 U.S. 357, 369-371 (1965); FTC v. Beech-Nut Packing Co., supra. This agency jurisprudence was well-established in 1954 when Congress carefully and expressly adopted it for NRC's predecessor, the Atomic Energy Commission. Congress directed the Commission to determine whether proposed nuclear licenses "would create or maintain a situation inconsistent with the antitrust laws." Like the FTC, NRC was directed to " nip in the bud any incipient antitrust situation," Report of the Joint Committee on Atomic Ene rgy, S. Rept. 91-1247, 91st Cong., 2d Sess. (1970), at page 14. NRC was not to wait for antitrust violations to mature , but to search for and eliminate situations " inconsistent with . . , the policies clearly underlying th[e antitrust] laws." Id. Congress emphasized its inclusion of Section 5 of the FTC
Act, " normally . . . not identified as antitrust lav," because of its desire to have the Commission deal broadly and ef fectively with problems of competition resulting from the issuance of nuclear licenses. Id. Cong re ss ' choice to have the NRC rely on FTC j urisprudence is thus " scarcely debatable." Consumers Power Co, (Midland Plant, Units 1 and 2), ALAB-452, 6 NRC 892, 910 (1977), and see 909-912 generally; see also Kansas Gas & Electric Co. v. Kansas City Power & Light Co. (Wolf Creek Generating Station, Unit No.1), NRCI 75/6, at page 559, 571-573 (ALAB 279) (1975). Congress has directed the Commission and this Board to employ the same broad standard as the FTC in assuring that nuclear licenses are not used in conjunction with anticompetitive practices or schemes. At a minimmi this Board must determine that the proposed Conditions represent "a reasonable settlement within the public interest..." Duke Power Company, ( Catawba Nuclear Station, Units 1 and 2), LBP74-47, 7 AEC 1158, 1159 (1974). The Board's duty to protect the public interest requires that it scrutinize proposed settlements with great care. Even if Brownsville were not participating in this proceeding , the NRC Staf f and the Board would be required to obtain information on and consider the eco-nomic and competitive impact of the proposed plant and the license conditions. Calvert Cliffs Coordinating Committee v. AEC, 4 4 0 F . 2d 1109, 1119 (D.C. Cir. 1971); Scenic Hudson Preser-1 l l
l vation Conference v. FPC, 354 F.2d 608, 620 (2d Cir. 1965), cert. i denied, 407 U.S. 926 (1972). The presence of a single , small ! intervenor does not relieve them of that duty, particularly where they enjoy access to special knowledge and expertise developed at public expense and bearing directly on the public interest in compe tition. Cf. Calvert Cliff s, 449 F.2d at 1119. 1/ If the issue which divides Brownsville from NRC Staf f and the Justice Department were simply whether proposed conditions would be suf-ficiently ef fective, demanding an absolute yes or no response, their judgment would be entitled to some weight. But that is not the question. Here, there is a plain and continuing affront to the antitrust laws and antitrust policies, and rejection of the settlement is required, despite the Staf f's adherence. The closer questions with respect to the transmission and back-up service requirements is not whether they must be rejected, but whether final approval should be deferred until the conditions 1/ NRC Staf f's obligation, closely related to the Board's own , Is the product of judicial development of the public interest standard. Congress has independently imposed a like duty on the Justice Department staff with respect to its principal activity, civil enforcement proceedings in federal district court. There, before a consent decree becomes final, the Department is required to submit a " competitive impact statement" explaining why the decree achieves adequate enforcement of the antitrust laws. Antitrust Procedures and Penalties Act, 15 U.S.C. S16(b) (1979 Supp.). Nothing comparable has been here provided. l
ripen into negotiated contracts which do in fact provide what Brownsville , NRC Staf f and Justice agree should be provided . In assessing the adequacy of the license conditions here at issue, the first question is what antitrust policy is with respect to the instant situation, the long-standing policies of the applicants to bar the introduction of interstate electricity into the so-called intrastate area, and of CPL to limit Brownsville's competitive position through its control of transmission. B. Antitrust Policy. The principal goal of the antitrust laws is to protect econo-mic competition from private restraints of any kind. The Sherman Act was designed to ... pre-se rv [e] free and unfettered competition as the rule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material pro-gress ... . But even were that premise open to question, the policy unequivocally laid down by the Act is competition. And to this end it prohibits "Every contract, combination
... or conspiracy, in restraint of trade or commerce among the several States."
Northern Pacific Ry. Co. v. United S tates, 356 U.S. 1, 4-5 (1958). The goal of " free and unfettered competition" means that customers enjoy the right to c' noose from whom they will buy their
goods and services, free from legal restrictions or constraints imposed by private agreements or economic power, and that all businessmen enjoy the freedom to compete "with vigor, imagination, devotion, and ingenuity" for the public's trade. United States v. Topco Associates, Inc. , 405 U.S. 596, 610 (1972). " [S] uch freedom . . . cannot be foreclosed ... because certain private citizens or groups believe that such foreclosure might promote greater competition in a more important sector of the economy," or other benefits to society. Id.; National Society of Professional Engineers v. United States, 435 U.S. 679, 695 (1978). Conduct which puts economic barriers on customers' freedom of choice violates the antitrust laws or antitrust policy, e.g. , tying arrangements which subtly coerce customers to buy one pro-duct rather than another, not because it is better, or cheaper, or what the consumer prefers, but because the customer prefers the product to which it is tied, Standard 011 Co. of California
- v. United States, 337 U.S. 293, 306 (1949) (Standard Stations);
United States v. Loew's, Inc. , 371 U.S. 38, 45 (1962); or monopo-lization schemes which deprive competitors of access to potential customers, and thus deprive customers of free access to com-petitive sellers, United States v. Singer Manufacturing Co. , 374 U.S. 174, 192-196 (1963); Otter Tail Power Co. v. United States, 410 U.S. 366, 377-379 (1973). Similarly, arrangements by which l
customers are denied access to competitors limiting their econo-mic choices violate the antitrust laws, e.g., when competitors agree among themselves not to of fer their goods or services to customers in the same geographic area, United States v. Sealy, Inc., 388 U.S. 350, 356-358 (1967); United States v. Topco Associates, 405 U.S. at 602-608, or when a single firm or a group of competitors use their economic power to coerce others to deny competitors access to customers, Fashion Originators' Guild of America v. FTC, 312 U.S. 457, 466-467 (1941); Klo r' s , Inc. v. Broadway-Hale Stores, Inc. , 359 U.S. 207, 213 (1959). The common thread of these decisions is that interf e rence with customers' access to potential suppliers of goods and ser-vices violates the essential purposes of the antitrust laws. 1/ If the interference is the product of agreement or combination, it may fall within Section 1 of the Sherman Act or, in some cases, Section 3 of the Clayton Act. If it is imposed by a single firm and gives or threatens to give that firm monopoly power, it falls within Section 2 of the Sherman Act. And if it is the product of coordinated conduct falling short of agreement or combination, or if it is imposed by a single firm with power short of monopoly, then it is subject to sanctions under Section 5 of the FTC Act. 1/ This is not the whole of antitrust policy, of course. Agreements which restrain competition in other ways, e.g. , price-fixing, or which indirectly restrain competition by increasing industrial concentration, viz. , mergers, limit com-petition as well, and are equally proscribed.
52 - ) In promoting the policy of free , unfettered competition, the antitrust laws apply to every conceivable species of action by which private parties might inhibit this competition. 1/ Where economic factors such as high entry barriers, or legal factors such as licensing or rate regulation, inhibit or restrain compe tition , the antitrust laws apply in the interstices with pirticular vigor to insure that the remaining scope for com-petition is kept open. Georgia v. Pennsylvania R. Co., 324 U.S. 439, 455-456 (1945). Thus, the antitrust laws can not prohibit the possession of monopoly power in natural monopolies, Union Leader Corp. v. Newspapers of New England, Inc. , 284 F.2d 582 (1st Cir. 1960), cert. denied, 165 U.S. 833 (1961), any moria than human laws can control the tides. But the antitrust laws do pro-1/ As the fundamental economic policy of the Nation, the , antitrust laws apply to all commercial conduct, save only where some other federal law is plainly repugnant, requiring action or inaction that would otherwise violate the antitrust laws, United States v. Philadelphia National Bank, 374 U.S. 321, 351 (1963); see also Cantor v. Detroit Edison Co., 428 U.S. 579, 594 n.32 ' (1976); United States v. National Association of Securities Dealers, 4 22 U.S. 694, 729-730 (1975); Otter Tail Power Co. v. United States, 410 U.S. at 374; MCI Communications Corp. v. AT&T, 462 F.Supp. 1072, 1100 (N.D.Ill. 1978), mandamus denied, No. 78-2457 (7th Cir. , November 30, 1978), or where Congress has expressly provided immunity . Even where Congress has displaced competition to some extent by regulation, the antitrust laws
- still continue to apply to the greatest extent possiile. Cf. FCC
- v. RCA Communications, Inc., 346 U.S. 86 (1953), with United S tates v. Radio Corporation of America, 358 U.S. 334 (1959) and American Telephone & Telegraph Co. v. Sound, Inc. , --- F.2d -- ,
, 1980-2 Trade Cases 163,514, at pages 76,733-76,734 (8th Cir. 1980). 1 l l
hibit natural monopolists from using their natural monopoly power to obtain or augment economic power in other markets. Otter Tail Power Co., 410 U.S. at 377-379. And they prohibit those enjoying legal, government-granted monopolies under the patent laws from e::panding those monopolies into other, non-patented markets. International Salt Co. v. United States, 332 U.S. 392, 395-396 (1947). Inherent economic factors, as well as government reg ulation , can impede competition by imposing high barriers to entry. The antitrust laws cannot do anything about that. But they do prohi-bit individual or group conduct which impedes competition by imposing barriers to entry beyond those inherent in the economics of an industry. Associated Press v. United States, 326 U.S. 1 (1945); A.G. Spaulding & Bros. , Inc. v. FTC, 301 F.2d 585 (3d Cir. 1962). Nor do the antitrust laws prohibit states from regulating markets by, e.g., requiring licenses, a form of legal entry barrier. Olsen v. Smith, 195 U.S. 332 (1904). But they do pro-hibit private abuse of those laws which impose additional barriers to entry not inherent in the licensing sy s tem . California Motor Transport Ass'n v. Trucking Unlimited, 404 U.S. 508, 509-511 (1972). More than that, the antitrust laws at least encourage and sometimes require state and federal agencies to minimize the legal barriers to new, competitive entry under the
public interest standard. See, e.g., P.C. White Truck Line , Inc. v. ICC, 551 F.2d 1326, 1328 (D.C. Cir. 1977). 1/ And even though the Sherman Act doec not apply to " state action," Parker v . B rown , 317 U. S. 341 (1943); Cantor v. Detroit Edison Co. , supra, it proscribes the operation of state laws designed to limit the vigor of competition if they are not suf ficiently effective in regulating the non-competitive or anticompetitive conduct they pe rmit. California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., --- U.S. - - , 100 S.Ct. 937 (1980-1 Trade Cases 163,201 (1980)]. In sum, the antitrust laws are protean in takir.3 whatever form is necessary to reach private conduct which interferes with customers' choice in free and unfettered economic competition among sellers. C. The Barrier Against The Introduction Of Interstate Electricity Erected By The Texas Intrastate Utilities Is Inconsistent With Federal Antitrust Law And Policy. The Texas intrastate utilities are isolated from interstate commerce in electric energy. From 1935 to 1976, except for insignificant exceptions, no electricity flowed between any interstate utility and any of the Texas intrastate utilities. As a result of the May 1976 midnight wiring, the two CSW companies, WTU and CPL created AC ties with two interstate utilities, 1/ See also AT&T Co. v.~ Sound Inc., supra,1980-2 CCH Trade Cases at page 76,737, noting that Iowa state policy imposes rate ) and service regulation as a "first line of defense against" anti-compe itive conduct under the doctrine of Gulf States Utilities, supra. 1 l
f Public Service Company of Oklahoma and Southwest Power Company, respectively for a number of months in 1976. Since then there has been no known interconnection with interstate energy. The two DC interconnections now proposed for mid-1980 's construction would have limited capacity and would introduce no more than a competitively dji minimis amount of interstate electricity into competition with intrastate power and energy. Moreover, it is far more expensive than standard AC transmission interconnections, so that the relatively little interstate electricity that would come into Texas would carry a serious com-petitive handicap: uniquely high transmission costs as proposed in the settlement. Thus, the introduction of other interstate electricity into the Texas intrastate area by other means con-tinues to be extremely important competitively. TU and HLP, the majr: intrastate in Texas utilities, have contir.ued their policy of restricting the introduction of interstate electricity into the ERCOT area and continues to operate in isolation from interstate competition, with little improvement to be expected from the future DC interconnections. That insulation, however analyzeu, is flatly inconsistent with federal antitrust policy.
- 1. The inconsistency of the situation with antitrust policy.
The policy of the antitrust laws is free, unfettered economic compe tition. Northern Pacific Ry. Co., 356 U.S. at 4-5.
i l 1 56 - Competition is defined by both the product or service with respect to which firms compete, and by the areas in which they compe te . Von Kalinowski, 2 Antitrust Laws and Trade Regulation, S18.01 at pages 18-5 to 18-9. Firms which can or do offer their products or services to the same customers in the same geographic area are by definition in actual or potential competition with each other. Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962); Luria Bros. & Co. v. FTC, 389 F.2d 847, 864 (3d Cir. 1968); Crown Zellerbach Corp. v. FTC, 29 6 F . 2d 8 00, 811 (9th Cir. 1961), cert. denied, 370 U.S. 937 (1962). Gordon Taylor Dep., at pages 152-155 ( April 3, 19 80 ) . 1/ Barriers to such competition
- which are not the product of technology or economics are incon-sistent with free competition. Thus, where a firm agrees with others not to enter their geographical markets it violates Section 1 of the Sherman Act. Addyston Pipe & Steel Co. v.
United S tates,175 U.S. 211, 241 (1899); United S tates v. Sealy, Inc., 388 U.S. 350, 357 (1967); United States v. Topco Associates, Inc. , 405 U.S. 596, 601-611, (1972). Similarly, a
, firm's exclusion of others from entering its geographic markets violates Section 2 of the Sherman Act if the firm obtains, protects, or is in danger of obtaining monopoly power. United States v. Grif fith, 334 U.S. 100, 106-108 (1948). And even 1/ In this proceeding.
l
absent monopoly power, a firm's exclusion of others from entering its geographic or product markets may violate Section 5 of the FTC Act. FTC v. Motion Picture Advertising Co., supra; Tysons Corner Regional Shopping Center, 85 FTC 970, modified, 86 FTC 921 (1975). Electric utilities throughout the United States are intercon-nected with contiguous utilities in huge, intricately intercon-nected transmission grids. These interconnections a re the pro-duct of the great variety of economies which interconnection provides. Such interconnections increase reliability and reduce costs by making available to each utility back-up and reserve power which relieves it of the need to conetruct extra capacity
- of its own. Moreover, such interconnections alao enable utili-ties to engage in economy transactions with other utilities on an hourly basis; such transactions allow the two utilities to split c' he saving s on using the generation of whichever system has the less expensive generation available in that particular hour.
Such interconnection also facilitates competition by enabling a much greater number of potential suppliers to compete for the sales to each wholesale customer. Actions, whether by a single firm controlling transmission lines or by a group of firms controlling access to common or necessary facilities, which restrict the number of possible sellers are inconsistent with antitrust policy. Otter Tail Power Co. v. United States, 410
58 - U.S. at 378; United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290 (1897); Associated Press v. United States, 326 U.S. 1, 17-18 (1945). Interstate electric utilities cannot now sell power or energy in the Texas intrasta te area in significant amounts because of the lack of interconnections, other than the DC tie line , between those companies and the intrastate Texas utilities. Wholesale customers in Texas, including the major Texas utilities themselves, are thus denied the tenefits of competition in the development and operation of generation capacity, as well as in the purchase and sale of economy energy. G. Taylor Dep., at 187-190, 192-193. (April 4, 1980) Interstate wholesale custo-mers are similarly denied the benefits of competition by the intrastate Texas utilities with the existing interstate utilities, again for both capacity and energy. Firms cr. both sides of the great wall between the Texas intrastate area and the interstate utilities have seriously con-sidered interconnection. See Taylor Dep. , at 6 4-70, 88, 93, 106-107, 291-296. ( April 3 and 4,1980) . Were such interconnec-tions to be established, the benefits of vigorous competition would of course redound throughout the entire Texas intrastate system, G. Taylor Dep., at 311-313, although it is difficult to quantify given the great period of time over which this com-petition has been frozen, now well into its fif th decade. I 1
Although directed primarily at competitive interstate electricity, the agreement also has extremely important anticom-petitive ef fects within the Texas intrastate market. Transactions between utilities which are not directly intercon-nected to each other rely on the availability of interconnection via other utilities. The purchase from indirectly connected uti-liites of ownership interests in plants, entitlements, unit power, or other forms of long term firm power all rely crucially on the future availability of other utilities' interconnections. A utility which invests in generation which relies on such inter-connections thus suffers yet another barrier to introducing interstate electricity, for it would lo a access to the genera-tion in which it has invested if it chose to go interstate. There is yet another anticompetitive ef fect: a utility which relies on generation available through the interconnection of another utility may suddenly find itself cut of f from its genera-tion through the action of a wholly unrelated third party. The continuing right to disconnect and the encouragement to do so because of the continuing arrangement to exclude interstate electricity thus introduces an insecurity into the Texas intrastate market which renders suspect long term firm power transactions. Each small utility is thus impelleu to rely solely on the utility with which it is directly interconnected, further enhancing the monopoly power of each major generating utility. 1
l i 60 - 4 The availability of power from STP or Comanche Peak is , threatened by the TU and HLP's claimed right to disconnect. A 4 third party's decision to go interstate could precipitate discon-nections af fecting the ability of participants to receive their share of output and depriving the regional system of the benefits of nuclear energy. Conversely, ownership of a share in STP will 4 discourage a utility from establishing interstate connecti ;ns
- because of fear that an intervening utility providing transmission service might disconnect, and because of the com-pelled agreements against such interstate connections.
The source of this barrier to competition between interstate and intrastate utilities is irrelevant to whether the isolated situation of the Texas intrastate area is inconsistent with the policies of the antitrust laws. The policy of the Sherman Act is s free, 1.9 fettered competition. It prohibits private parties from restraining competition, either through agreement or through uni-lateral conduct. It also directs federal agencies with market regulating power to permit firms to expand their service offerings to new geographical areas absent some compelling contrary mandate from Congress. P.C. White, supra. If com-petition is frustrated, not by inherent technical impediments or i unavoidable economic costs, but by the willful action or deli-berate inaction of private parties, then the policy if not the lett er of the Sherman and FTC Acts is violated.
( l The question under Section 105(c) is whether the existing situation -- the absence of economically and technically feasible competition between the Texas and interstate utilities -- is inconsistent with antitrust policy. Given the broad scope of the Sherman Act, the answer here is clearly yes: the situation, the f act of non-interconnection between the Texas intrastate utili-ties and the rest of the Americen electric utility industry, is flatly inconsistent with federal antitrust policy.
- 2. The inconsistency of the individual decisions not to establish additional interstate connections with antitrust policy.
By the nature cf electric transmission, the utility which owns, operates and controls the transmission lines in its geographic area has monopoly power over its wholesale and retail customers. Whether the mere possession of such natural monopoly power in particular circumstances violate the Sherman Act, clearly the exercise of that power to exclude competitors in another market -- such as generation -- necessarily violates the Sherman Act. "[T]he use of monopoly power, however lawfully acquired, to foreclose competition, to gain a canpetitive advantage, or to destroy a competitor, is unlawful." United States v. Grif fith, 334 U.S. at 107. The use of " monopoly power ... to beget monopoly" violates Section 2. Id., 334 U.S. at 108; see also Otter Tail Power Co. , 410 U.S. at 377. It is no defense
i . for such conduct that the natural monopolist pe rmitted some competition, particularly where competition was restricted to a small number of f amiliar competitors. If the monopolist uses its power to protect or maintain its monopoly power, Section 2 is violated. The use of economic power to limit competition, but not to extinguish it entirely, may avoid the ban of Section 2, while failing to come within Section 1 if it is single firm conduct. Cf. United States v. Empire Gas Co. , 537 F.2d 296, 308 (8th Cir. 1976), cert. denied, 429 U.S. 1122 (1977). But that is hardly to say that it does not do violence to the antitrust policy of free, unfettered competition. It does. National Ccmmission for the Review of Antitrust Laws and Procedures, Report to the President
- and the Attorney General, at 144-149 (1979). It denies customers the freedom to choose from whom they will purchase their goods or se rvices . In restricting their free economic choice, it denies them the option of choosing the lowest priced good or service available, if that will serve their needs, or, conversely, to elect to buy superior products or services from others, even if at a higher price. That the firm leaves the customer some choice among certain competitors is not to say that it leaves the customer the choice it, the customer, wants. Cf. United States
- v. DuPont & Co., 351 U.S. 377, 391-392 (1956) (presence of some competition is not dispositive of whether there is monopoly;
~
. . i l
63 - l the question is whether alleged monopolist retains power to control price or exclude competitors) . Here, TU and HLP decisions not to permit any interstate electricity to enter its system, and to interconnect only with other Texas intrastate utilities, denies to the wholesale custo-mers in their respective territories the freedom to purchase power or energy from whomever is economically and technically capable of providing it. With respect to each of those customers, including Brownsville , each utility exercises a substantial degree of economic power because of its control over most of the economically available transmission service. Whether or not the refusal to establish interstate connections and to permit interstate electricity into competition with their own-power constitutes monopolization, it reflects a diminution of consumer choice which is contrary to the policy of the antitrust laws. Cf. Standard oil Co. of California v. United States, 337 U.S. 293, 314 (1949) (Standard Stations) . Here, the utilities have offered no economic justification for their decision not to establish interstate connections. Whether viewed under the policy of Section 1 or Section 2, the absence of economic justificetion and the clear anticompetitive effect -- bar against any significant competition between interstate and Texas intrastate utilities -- requires the conclu-sion that, even if viewed as a series of unilateral decisions, these decisions are inconsistent with the policy of the antitrust laws.
United S tates v. Colgate & Co. , 250 U.S. 300 (1919), upon which the proponents of the settlement rely ( see Tr. 1217-1221, Oc tobe r 24, 1980) does not save such individual decisions from contravening antitrust policy in favor of competition. The Colgate doctrine, to the degree that it still retains some limited vitality, was never broad, and now stands for no more than that a simple refusal to deal except on certain terms does not support an inference of agreement with respect to those terms with those with whom the company does deal. Where there is ag reement , either written, United States v. Schrader's Son, Inc., 252 U.S. 85, 99 (1920), reaf firming Dr. Miles Medical Co.
- v. Park & Sons Co. , 220 U.S. 373 (1911), or " implied from a course of dealing or other -circumstances," Frey & Son, Inc. v.
Cudahy Packing Co., 256 U.S. 208, 210 (1921), Section 1 of the Sherman Act is violated. See United States v. Parke, Davis & Co., 362 U.S. 29, 38-40 (1960) (summarizing the early history of Colgate). He re , there are both express and implied ag reements , as explained below, establishing violations of Sections 1 and 2 of the Sherman Act. But even were the Sherman Act not violated , the refusal to deal restrains competition and violates antitrust policy and Section 5 of the FTC Act. In FTC v. Beech-Nut Packing Co., 257 U.S. 441 (1922), the Supreme Court reviewed an elaborate scheme by which Beech-Nut attempted to restrain competition by requiring its jobbers, i
wholesalers, and retailers not only to sell at prices which it established , but also required them not to sell to other jobbers, wholesalers and retailers who in turn did not also sell at the
" suggested" prices. 257 U.S. at 448. The Court reviewed Colgate and subsequent cases, id. at 451-452, noting that Colgate arose under the Sherman Act, which was involved in the case sub judice only "in so far as it shows a declaration of public policy to be considered in determining whe.t are unfair methods of competition" under the FTC Act. Id. at 453. The scheme at issue restrained "the natural flow of commerce and the freedom of competition in the channels of interstate trade which it has been the purpose of all the antitrust acts to maintain." Id. at 454. A dealer's f ailure to satisfy Beech-Nut's conditions would result in his being denied any goods in the future, until assurances of compliance were again made. I6. From such a course of conduct, the Court held, "a court may infer, indeed cannot escape the conclusion, that competition among retail distributors is prac-tically suppressed. . . . Id. at 455. The Federal Trade Commission expressly stipulated that there were no contracts for resale price maintenance, but that did not matter under Section 5 i
of the FTC Act. "[S]uppression of the freedom of competition by methods in which the company secures the cooperation of its distributors and customers, which are quite ef fectual as j agreements express or implied intended to accomplish the same 1
1 purpose," was subject to the Federal Trade Commission's cease and desist authority undec Section 5. Id. The exercise of economic power, even if less than monopoly powe r, suf ficient to coerce others not to buy from compe titors, does violence to the other's right to choose its suppliers. Colgate may, at most, preclude an inference of a contract under Section 1 absent other evidence of agreement, but that does not mean that the intentional refusal to deal to freeze out interstate electricity does not restrain trade -- a violation of the antitrust policy under Section 5 of the FTC Act and Section 105(c) of the Atomic Energy Act.
- 3. The inconsistency of the bilateral agreements restricting intersta*e interconnections with antitrust policy.
The Colgate doctrine does not remove from the prohibition of Section 1 express agreements prohibiting others from dealing with compe titors. Schrader's Son, supra. Under Colgate, traders may choose with whom they will deal, even if their individual, unila-teral choice is based on a purpose or interest, e.g., the desire to control the prices charged by others, which would violate Section 1 if embodied in an agreement. See, e.g., Osborn v. Sinclair Refin ag Co. , 286 F.2d 8 32 (4th Cir.1960), cert. denied, 366 U.S. 963 (1961). But if the improper animus grows beyond the bare refusal into agreement or combination, then the 1 I 1 l
1 4 first element of Section 1 is satisfied, and the only question is whether the agreement restrains trade. See, e.g., Hobart Bros. Co. v. Malcolm T. Gilliland, Inc., 471 F.2d 894, 900 (5th Cir. 1973). The exclusion of competitive interstate electricity from the Texas intrastate market appears to be the product of two levels of agreement: first, an agreement or combination between TU and HLP that neither will introduce interstate electricity into the Texas intrastate area, beyond that over the DC tie of CSN , pro-posed 'IK: ties or as may be approved unde r PURPA and second, ef fectuation of this agreement by a series of bilateral agreements in which each utility requires that other utilities and wholesale customers with which it interconnects will not carry any interstate electricity. The agreements at both levels violate the Sheenan Act and are inconsistent with antitrust policy. In each bilaterai agreement, utility A agrees that it will not permit interstate electricity to flow onto its lines -- from which it could flow onto utility B's lines, in competition with B's power -- so long as utility B remains connected to A. Utility A's agreement not to do business with any utility carrying interstate electricity restrains trade: it restrains exactly that trade which utility A could do but for that agreement. Mo reove r, it compels A to impose the same requirements on those with which it interconnects; the failure of i
68 - any utility to impose the same requirement in turn would under each of the contracts discussed above (see pages 10-17) constitute a breach by A j ustifying B's immediate and complete disconnection from A. The purpose of these agreements is to restrain trade, that is, to prevent interstate electricity from flowing into the Texas intrastate area where it would compete with power generated by the Texas intrastate utilities. Proof of that intent -- the agreements themselves, as well as the letters and pleadings explaining them -- goes f ar toward establishing the effect, Chicago Board of Trade v. United States, 246 U.S. 231, 238 (1918), for reasonable businessmen do not enter into agreements unless the f reasonably expect to obtain the results to which the ag reement is directed. Indeed, this intent to restrain interstate commerce may be the only purpose for these contract provisions. However, even if these provisions are motivated only by a desire to avoid regulation, the case is not improved . An agreement to sell to someone on the condition that they do no business with a competitor 1/ "is inherently anticompetitive (and] is illegal, either as monopolization or attempt to mono-1/ The case cited casts the discussion in terms of refusals to deal on certain conditions, which are functionally identical to l conditioned agreements: the agreement to buy on condition of not buying from a competitor results when the customer acquiesces in the seller's ref usal to deal with customers who buy from compe titors . l l
polize," so that no refined analysis of the ef fect of such agreements is necessary. Byars v. Bluff City News, 609 F.2d 843, 858 861-862 (6th Cir. 1979). And absent a showing that the restraint enjoys some economic pro-competitive justification,
~
National Society of Professional Engineers v. United States, 435 U.S. at 692, the restraints are unreasonable as a matter of law.
- 4. The combination of the Texas utilities is incon-sistent with antitrust policy by excluding almos t all interstate electricity from the Texas Antrastate area.
HLP and TU, it appears , have each agreed that it will not introduce interstate electricity into other utilities of the intrastate Texas area with which it is connected. Neither con-tented itself with simply refusing to deal with the interstate utilities. Each went beyond that, requiring utilities with which it is interconnected not to introduce interstate electricity, and thus necessarily -- from the innate character of electricity --
-- requiring that they in turn decline to deal with interstate utilities as a condition for maintaining their interconnection.
This is spelled out in their interconnection and related contracts. Each utility of course may forego all of the benefits of its existing connections, write of f its investments in the intercon-nection lines, substations, and related equipment, and attempt to l
. . - _ . ~ .
obtain the necessary reserve and back-up power and other power i necessary for reliability now obtained from the interconnected intrastate companies, and replace all of that by an interstate interconnection. This retained "right" is economically doubtful: only a utility willing to commit substantial capital funds to a J whole new system of interconnections would forego millions of dollars in investments and future profits on purchases and sales of power and energy for an interstate connection. In light of i the practical realities of the industry, then, few companies could af ford to bring interstate electricity onto their own 3 lines. The burden of rebuilding a whole system of inte rconne c-tions ef fectively prohibits the introduction of any interstate electricity into the Texas intrastate area. This is hardly surprising: it was and is the Texas intrastate -~. utdl.ities' purpose. Such a concert of action among the Texas intrastate utilities would violate the antitrust laws and competition policy in three distinct ways. If there is " agreement," the intrastate utilities have divided markets, a per se violation of Section 1, and have successfully conspired to monopolize the Texas intrastate area in violation of Section 2. If their concerted action does not rise to an " agreement," they have nonetheless formed a combination in restraint of trade in violation of Section 1.
- i. The contract. The agreement at issue here is the Texas intrastate utilities' agreement that none will
- - . - ,nu . - - . - . - e ,
introduce interstate electricity onto the lines of any other,1/ beyond that from the competitively insignificant DC tie. The effect is to isolate the Texas and interstate markets from each other. Agreements dividing or excluding competitors from geographic or product markets are among the major categories of per se violations. Market divisions are most commonly achieved by consensual agreement among the competitors. They have been repeatedly struck down as per se violations. Topco Associates, supra, quoted with approval in Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 57-58 nn.27 and 28 (1977); United States v. Sealy, Inc., 388 U.S. 350, 357-358 (1967); Timken Roller Bearing Co. v. United States, 341 U.S. 593, 598 (1951), Addyston Pipe & Steel Co. v. United States,175 U.S. 211, 240-241 (1899). The exclusion of competitors from a market, which has many of the same structural anticompetitive ef fects as a market division, can also be achieved by consent among some competitors to exclude others; this is most commonly done by coercion through 1/ It is slightly dif ferent from the agreement enforced by the federal district court in West Texas Utilities Co. v. Texas Electric Service Co. , 470 F.Supp. 798, 808-813 (N. D. Texas 19 79 ) , appeal pending , No. 79-2677, 5th Cir. Unde r the latter, the uti-lities not only agreed not to introduce interstate electricity from the area, but also bound themselves to remain interconnected and intrastate. In the former, the utilities may retain the technical right to withdraw from the agreement at some time, although as we have seen the commercial realities of the industry dictate otherwise. In either case, both the purpose and effect of the agreement is to establish artificial territorial market divisions by private agreement, a per se violation of the antitrust laws. l l
another level of trade, e.g. , where distributors or retailers induce or coerce manufacturers not to deal with their (the distributors' or retailers' ) compe titor. See, e.g., United States v. General Motors Corp. , 304 U.S. 127, 144-145 (1966); United States v. Hilton Hotels Corp. , 467 F.2d 1000 (9th Cir. 1972), cert. denied, 409 U.S. 1125 (1973); Bowen v. New York News, Inc. 522 F.2d 1242, 1256-1257 (3d Cir. 1975), cert. denied, 425 U.S. 936 (1976); see also Fashion Originators' Guild v. FTC, 312 U.S. 457 (1941). And conduct by electric utilities " fencing out" certain competitors constitute per se violations of Section
- 1. Otter Tail Power Co. , 410 U.S. at 378; Town of Massena v.
Niagara Mohawk Power Corp. , --- F . 2d --- [1980-2 Trade Cases, 163,526 at page 76,895-76,808 & n.35 (2d Cir. 1980). The technological and economic characteristics of the electric utility industry give electric utilities unique ability to exclude competitors. In general, the economics of the transmission of bulk power preclude the construction of a second transmission line to serve an area where transmission service is already available, so that electric utilities enjoy unique powe r to fence out competitors. See, e.g. , Otter Tail Power Co. , 410 U.S. at 377-379. That power can be further supplemented where all utilities in proximity agree to withhold their transmission service to a select group of competitors. The greater the transmission distance, the greater the power of the utility which 1 I
owns the transmission lines. Thug, the members of a group of utilities can further insulate themselves from competition and supplement their individual power to exclude competitors by agreeing among themselves to withhold their transmission service f rom all competitors who are not in on the agreement. The very purpose of the agreement here appears not merely to restrain, but absolutelv to eliminate interstate trade in the area. The unique economic characteristics of electric transmission assured the success of their agreement. There can be no dispute that, except when the agreement was breached by CSW in the midnight wiring, the agreement succeeded perfectly in eli-minating all interstate commerce in the greater part of Texas, that covered by the utilities within TIS and ERCOT. 1/ No one utility could have succeeded at excluding interstate commerce without the agreement and cooperation of others. Each would have been compelled by the need for reliability to interconnect with other utilities. They could succeed in pe rpe tually excluding all interstate utilities only by agreement and cooperation among themselves. This, they most certainly did. 1/ Except for the limited WorAd War II transactions under exemptions, which transactions were controlled by the same utili-ties promoting the .?rastate agreement. i l l
l The agreement here is somewhat unusual 1,/ in that the utili-ties we re not required, as manuf acturers normally would be, to operate through vertically related distributors to coerce non-conspiring competitors to stay out of their market. Cf. Fashion Originators' Guild, supra. Nor were they required to come to agreements with the competitors they sought to exclude, which typically occurs when individuals or even groups of competitors lack the power to exclude others. Cf. Addyston Pipe & Steel Co. , supra; United States v. Consolidated Packing Co. , 575 F.2d 117, 125 (7th Cir. 1978). They did not operate that way because they did not have to: collectively they enjoyed the power to exclude without bringing others -- their own suppliers or distributors or other horizontal competitors -- into the conspicacy. Thus, they combined their power in their respective areas to insure that no interstate utility could ef fectively penetrate anywhere within their area. Absent agreement, they too would have lacked the
! power to exclude interstate utilities, since the economics of electricity transmission would have required each of them to interconnect with some others.
1 l 1/ Unusual, even sui generis agreements may fall within a Ler se Han if they seek a proscribed goal and are reasonably designed to i reach that goal. United States v. Container Corp. of America, 393 U.S. 333, 334 (1969) ("unlike any other price [-fixing] deci-sions we have rendered") . For other unique g se price-fixing conspiracies see, e.g., Plymouth Dealers' Ass n oY Northern California v. United States. 279 F.2d 128 (9th Cir.1960 ); United States v. Gasoline Retailers Ass'n, 285 F.2d 688 (7th Cir. 1961); United States v. Nationwide Trailer Rental Systems, Inc. , 156 F.Supp. 800 (D.Kan.), af f'd per curiam, 355 U.S. 10 (1957).
f l . i l Absent this agreement, some interstate connection was likely, even certain. A plaintif f would not have to establish the cer-tainty of tlis competition in an antitrust case. Standard oil Co. of California v. United States, 337 U.S. 293, 309-311 (}949); see also National Society of Professional Engineers, 435 6 . at 692 (assumption respecting normal competition absent competitors' agreement not to compete); Associated Press v. United States, 326 U.S. at 13-14 (same); United States v. Colgate & Co. , 250 U.S. at 307. The intrastate utilities, having agreed to eliminate interstate utility competition entirely, can hardly be heard to complain that victims of the conspiracy should be denied relief because they cannot now establish with certainty the exact degree to which trade was restrained.1/ 1/ Moreover, even absent per se analysis, the agreement would be Illegal under Section 1 Rule oT Reason analysis. The test is whether the net economic effect is to restrain trade; an agreement which imposes some restraint may be justified only by a countervailing pro-competitive ef fect, not by the claim that the restraint was justified by promoting public safety. National Society of Professional Engineers v. United States, 435 U.S. at 692, 695; Continental T.V., Inc. v. United States, 433 U.S. 36, 49 n.15 (1977); Chicago Board of Trade, 246 U.S. 231, 238 (1918); Kestenbaum v. Falstaff Brewing Co., 575 F.2d 564, 571 (5th Cir. j 1978); Copper Liquor, Inc. v. Adolph Coors Co. , 506 F.2d 934, j 944-945 (5th Cir. 1975). Their intent, reliable as a guide to the likely ef fect, Chicago Board of Trade, 246 U.S. at 238 (" knowledge of intent may help the court to interpret facts and to predict consequences"), was to prevent the introduction of interstate electricity onto any of their lines. There are no countervailing pro-competitive ef fects, so that analysis under the Rule of Reason also compels the conclusion that the agreement violated Section 1. l
l l l l i
- 11. Conspiracy. Section 2 of the Sherman Act prohibits conspiracies to monopolize , as well as monopoliza-tion itself and attempts to monopolize. Monopolization is the willfull acquisition or maintenance of monopoly power, that is, the power to exclude competitors or set prices. United States v.
Grinnell Corp. , 384 U.S 563, 570-571 (1966); United States v. DuPont & Co., 351 U.S. 377, 391 (1956); American Tobacco Co. v. j United States, 328 U.S. 781, 793, 809-815 (1946). The essence of l conspiracy is agreement, although the agreement may be inferred i from a pattern of conduct and other circumstances. Direct Sales i Co. v. United States, 319 U.S. 703, 714 (1943); Blumenthal v. _ United States, 332 U.S. 539, 556 (1947). Putting the two ele-ments together, Section 2 is violated where finns ! l [have] a unity of purpose or a common design j and understanding, or a meeting of minds ... [to] acquire or maintain the power to exclude com-petitors from any part of the ... comme rce among the several states . . . , provided they also have such a power that they are able, as a group, to exclude actual or potential com-i petition from the field and ... the intent and
- purpose to exercise that power.
American Tobacco, 3 28 U.S. at 810, 809. In conspiracies to monopolize, no one firm need have power to exclude competitors from the area; it is sufficient that the conspirators have that power "as a group." Id. That was the nature of the conspiracy in American Tobacco. Similar conspiracies were found or ade-quately alleged in Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 708-709 (1962); United States i. 1 .f
l Consolidated Laundries Corp., 291 F.2d 563, 567-568, 572-573 (2d 3 Cir. 1961); Lewis v. Pennington, 400 F. 2d 8 06, 811-814 (6th Cir. 1968); Giant Paper & Film Corp. v. Albemarle Paper Co. , 430 F.Supp. 981, 987 (S . D. N. Y. 1977); and United States v. General Motors Corp. , 3 69 F .Supp. 1306, 1307-1308 (E. D. Mich . 19 74 ) . The essential fact of the intractate utilities' purpose and their common action appears to be documented in contracts, letters, and pleadings before court and agency, and if so cannot seriously be disputed. That this pattern of conduct establishes an agreement under the law of conspiracy can be decided in the affirmative as a matter of law. Cf. United States v. Singer Manufacturing Co., 374 U.S. 174, 193-195 (1963); United States v. General Motors Corp. , 384 U.S. 127, 141-142 n.16 (1966). And that they evidently have the requisite power and intent is shown by their successful. exercise of that power following the
" midnight wiring" in May, 1976. Byars v. Bluff City News, 609 F.2d at 850 (the actual exercise of monopoly power is "the simplest way of showing monopoly power") . Intent is also shown j in the many agreements to exclude interstate electricity.
iii. The combination. Even absent sufficient agreement to establish a contract or conspiracy under Section 1, the concert of action establishes a " combination," an alternative to the contract or conspiracy element of Section 1. The com-bination is the product of the utilities' coordinated and inter-l
l l dependent conduct toward their common goal, like that ut issue in { United States v. Parke, Davis & Co. , supra, differing only in j that this combination has more than one principal fomenter. The government charged that Parke , Davis " conspired or combined" -- not agreed or established contracts --to control the retail pri-i ces of its products through a price enforcement mechanism in which it enlisted the aid of its sales agents, wholesalers, and retailers. 362 U.S. at 30, 32-36. The Court reviewed Colgate and related decisions, particularly Beech-Nut, , supra, and United S tates v. Bausch & Lomb Optical Co. , 3 21 U.S. 707, 722-723 (1944), in which it held that a combination or conspiracy could be achieved "by agreement or by acquiescence. . . . 362 U.S. at
- 43. Here, the lower court held that the government had to establish that there was some contract, even if only implied, to come within Section 1, and the Court reversed on precisely that legal ground. Id. at 43-45. The Sherman Act " forbids com-binations of traders to suppress competition," and even though a trader has the right to act unilaterally in refusing to deal, where the conduct goes beyond the mere announcement of the terms of dealing "and he employs other means which ef fect adherence ...
he has put together a combination in violation of the Sherman Act." Id. at 44. Parke , Davis' error was to induce its wholesa-1ers to join it by their cutting of f discounting retaile rs , for 1 that " created a combination with the retailers and the wholesa-I
1ers to maintain retail prices and violated the Sherman Act." Id. at 45. Parke, Davis has been reaffirmed on this crucial holding a number of times. See Perma Mufflers v. International Parts Corp., 392 U.S. 134, 142 (1968); Federation of Musicians
- v. Carroll, 391 U.S. 99, 120 (1968) (White, J., dissenting);
First National Bank of Arizona v. Cities Service Co. , 391 U.S. 253, 280 n.16 (1968). Texas intrestate utilities have apparently combined in the same way, to allocate markets, in violation of the Sherman Act. A bilateral agreement in which two utilities agree to intercon-nect and not to introduce interstate electricity onto the lines of the other requires that each signatory come to similar agreements with others. Such agreements and the enforcement mechanisms --on-site inspections of facilities and records, overflights to spy on each other's transmission construction -- simply reflect the fact that two parties cannot ef fectively agree in isolation not to carry interstate electricity unless the same prohibition is put on every utility with which they interconnect. Thus, utility A's eg reement with utility B, that neither would introduce interstate electricity onto the lines of the other, and utility B's similar agreement with utility C, necessarily puts A and C into a combination (if not an outright agreement) to pre-vent the introduction of interstate electricity in the Texas intrastate area.
27-The ef fect of such a combination would be to impose extremely high barriers to anyone seeking to enter the Texas intrastate market. Even absent the combination, there is a not incon-siderable barride in the cost of building transmission lines over substantial distances. But the additional burden imposed by the combination makes the cost prohibitively high. Not only would the interstate and Texas intrastate utilities have to construct the new interconnection tie-line, but they would also have to replace existing lines for the Texas utility which provide reserve or back-up power, and forego the profits from the purchase and sale of firm power and economy energy which each enjoys within the Texas intrastate system. Respectfully submitted ,. George Spiegel U
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Yh /WV Ron M. handsman * (M L Marc Poirier x Attorneys for the Public Utilities Board of the City of Brownsville, Texas November 12, 1980 Law offices of: Spiegel & McDiarmid 2600 Virginia Avenue N.W. Washing ton , D.C. 20037
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l l (
UNITED STATES OF AMERICA BEFORE THE NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY LICENSING BOARD In the Matter of )
)
HOUSTON LIGHTING & POWER COMPANY, ) Docket Nos. 50-498A et al. ) and 50-499A
)
(South Texas Project, Unit Nos. ) 1 and 2) )
)
)
)
In the Matter of )
)
TEXAS UTILITIES GENERATING COMPANY, ) Docke t Nos . 50-445A
'e t al . ) and 50-446A
)
(Comanche Peak Steam Electric ) Station, Unit Nos. 1 and 2) )
)
CERTIFICATE OF SERVICE I hereby certify that I have caused copies of the foregoing COMMENTS OF THE PUBLIC UTILITIES BOARD OF THE CITY , OF BROWNSVILLE, TEXAS OPPOSING PROPOSED SETTLEMENT LICENSE CONDITIONS to be served on the following by deposit in the United States mail, first class, postage paid, or as indi-cated by an asterisk (*) by hand this 12th day of October, 1980.
- Marshall E. Miller, Chairman *Sheldon J. # ' 0lfe , Esquire Atomic Safety & Licensing Board Atomic Safe y & Licensing Board Panel Panel Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D. C. 20555 Washing ton , D. C. 20555
- Michael L. Glaser, Essuire Joseph Rutberg, Esquire 1150 17th Street, N. W. Antitrust Counsel Washington, D. C. 20036 Nuclear Regulatory Commission Washing ton , D. C. 20555
*Fredric D. Chanania, Esq.
Michael B. Blume, Esq. R. Gordon Gooch, Esquire Ann Hodgdon, Esq. John P. Mathis, Esquire Nuclear Regulatory Commission Baker & Botts Washington, D. C. 20555 1701 Pennsylvania Avenue , N. W. Washington, D. C. 20006 )
)
)
l
Jerome Saltzman, Chief Antitrust & Indemnity Group Robert Lowens tein , Esquire Nuclear Regulatory Commission *J. A. Bouknight, Jr . , Esquire Washington, D. C. 20555 William J. Franklin, Esquire Lowenstein , Newman , Reis , Chase R. Stephens, Chief Axelrad & Toll Docketing & Service Section 1025 Connecticut Avenue, N. W. Of fice of the Secretary Washing ton , D. C. 20036 Nuclear Regulatory Commission Washington, D. C. 20555
- Frederick H. Ritts, Esquire Law Offices of Northcutt Ely
- David M. Stahl, Esquire Watergate 600 Building Sarah F. Holzsweig, Esquire Washington, D. C. 20037 Isham, Lincoln & Beale 1120 Connecticut Avenue , N.W. *Wheatley & Wolleson Suite 325 1112 Watergate Office Building Washington, D.C. 20036 2600 Virginia Avenue, N. W.
Washington, D. C. 20037
- Robert Fabrikant, Esquire Antitrust Division William Sayles, Chairman and Department of Justice Chief Executive Officer P. O. Box 14141 Central Power & Light Company Washington , D.C. 20444 P. O. Box 2121 Corpus Christi, Texas 78403
- Joseph Knotts, Esquire Nicholas S. Reynolds, Esquire G. K. Spruce, General Manager Debevoise & Liberman City Public Service Board 1200 17th Street, N. W. P. O. Box 1771 Washington, D. C. 20n 1 San Antonio, Texas 78201 1
- Douglas F. John, Esquire Jon C. Wood, Esquire McDermott, Will & Emery W. Roger Wilson, Esquire 1850 K Street, N.W. Matthews, Nowlin, Macfarlane Washing ton, D.C. 20036 & Barrett 1500 Alamo National Building San Antonio, Texas 78205
- Robert O'Neil, Esquire Miller, Balis & O'Neil Perry G. Brittain, President 776 Executive Building Texas Utilities Generating Co.
1030 Fifteenth Street, N.W. 2001 Bryan Tower Washington, D.C. 20005 Dallas, Texas 75201 Ms . Evelyn H. Smith J. Irion Worsham, Esquire Route 6, Box 298 Merlyn D. Sampels, Esquire Gaffney, South Carolina 29340 Spencer C. Relyea, Esquire Worsham, Forsythe & Sampels Dick T. Brown, Esquire 2001 Bryan Tower 800 Milam Building Suite 2500 San Antonio, Texas 78205 Dallas, Texas 75201
. - . ._- . ._. . . .- . . . . . - = - __ . . .
l 4 ,
; 1 3
R. L. Hancock, Director G. W. Oprea, Jr. City of Austin Electric Utility Executive Vice President Department Houston Lighting & Power Co. ! P. O. Box 1088 P. O. Box 1700 4 Austin, Texas 78767 Houston, Texas 77001 1 Jerry L. Harris, Esquire W. S. Robson, General Manager Richard C. Balough, Esquire South Texas Electric Coop. , Inc. j City of Austin P. O. Box 151 P. O. Box 1088 Nursery, Texas 77976 Austin, Texas 78767 Don H. Davidson Michael I. Miller, Esquire
. City Manager Isham, Lincoln & Beale
! City of Austin One First National Plaza i P. O. Box 1088 Chicago, Illinois 60603 j Austin , Texas 78767 Donald Clements, Esquira I Morgan Hunter, Esquire Gulf States Utilities Co. ] McGinnis, Lochridge & Kilgore P. O. Box 2951
- 900 Congress. Avenue Beaumont, Texas 77074 Austin, Texas 78701 Knoland J. Plucknett
. Kevin B. Pratt, Esquire Executive Director Linda Aaker, Esquire Committee on Power for the P. O. Box 12548 Southwest, Inc.
- j. Capital Station 5541 Skelly Drive Austin, Texas 78767 Tulsa, Oklahoma 74135 j
] E. W. Barnett, Esquire Jay M. Galt, Esquire Charles G. Thrash, Jr., Esquire Looney, Nichols, Johnson & Hayes J. Gregory Copeland, Esquire 219 Couch Drive Theodore F. Weiss, Jr., Esquire Oklahoma City, Oklahoma 73101 Baker & Botts 3000 One Shell Plaza Robert E. Cohn, Esq. ; Ho us ton ,- Texas 77002 Richard J. Leidl, Esq. Butler, Binion, Rice, Cook Paul W. Eaton, Jr., Esq. & Knapp Hinkle, Cox, Eaton, Coffield 1747 Pennsylvania Ave., N.W. and Hensley 9th Floor P. O. Box 10 Washington , D.C. 20006 Roswell, New Mexico 88201 Leland F. . Leatherman, Esq. McMath, Leatherman and Woods, P. A. - 711 West Third Street Little Rock, Arkansas 72201 , .i s
,, - - - . - . - - - - , - - + - , , , - - -
w
sf % 1 1 Somervell County Public Library P. O. Box 417
- an Rose, Texas 76403 Maynard Human, General Manager Western Farmers Electric Coop.
P. O. Box 429 Anadarko, Oklahoma 73005 James E. Monahan Executive Vice President and General Manager Brazos Electric Power Coop., Inc. P. O. Box 6296 Waco, Texas 76706 Robert M. Rader, Esquire Conner, Moore & Corber 1747 Pennsylvania Avenue, N. W. Washington, D. C. 20006 W. N. Woolsey, Esquire Dyer and Redford 1030 Petroleum Tower Corpus Christi, Texas 78474 Mr. G. Holman King West Texas Utilities Co. P. O. Box 841 Abilene, Texas 79604 Maurice V. Brooks, Esq. Brooks, Gordon, Long & Shahan P. O. Box 118 Abilene, Texas 79604 John A. Cameron, Jr., Esquire Federal Energy Regulatory Commission 825 North Capitol Street Washington, D.C. 20426 V kh L Marc R. Poirier Attorney for the Public Utilities Board of the City of Brownsville, Texas November 12, 1980}}