ML19340D296
| ML19340D296 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 12/03/1980 |
| From: | Stahl D CENTRAL & SOUTH WEST CORP., ISHAM, LINCOLN & BEALE |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML19340D297 | List: |
| References | |
| NUDOCS 8012300225 | |
| Download: ML19340D296 (16) | |
Text
o o
' ~r j ss f
UNITED STATES CF AMERICA fl7 G,'.,
0 NUCLEAR REGULATORY CCMMISSION I.". -
^
,===.l, f.,
f.
'. ~\\)4 47[/
,~ s t A
3EFORE THE ATCMIC SAFETY AND LICENSING BOARD',
.% /
.(.' v.<
'C4 '_
In the Matter of
)
HCUSTCN LIGHTING & PCWER CCMPANY
)
FRC Occket Nos. 50-498A PU3LIC SERV!CE BOARD OF SAN ANTCNIC )
)
CENTRAL POWER AND LIGHT COMPANY
)
(Scuth Texas Project, Unit Ncs. 1
)
and 2)
)
)
TEXAS UTILITIES GENERATING
)
NRC Docket Nos. 50-445A CCMPANY, et al.
)
50-446A (Comanche Peak Steam Electric
)
Station, Units 1 and 2)
)
REPLY COMMENTS OF THE CENTRAL AND SOUTH WEST COMPANIES TO CCMMENTS OF THE PUBLIC UTILITIES SCARD CF THE CITY CF 3RCWNSVILLE, TEXAS OPPOSING PROPOSED SETTLEMENT LICENSE CONDITIONS Pursuant to the order of this Scard, Central Pcwer and Light Ccmpany, Public Service Company of Cklahoma, Scuthwestern Electric Power Company and West Texas Utilities Company (cc11ectively the " Central and South West Companies" o r "CSW " ) hereby respectfully submit their reply ccmments to ecm=ents filed by the Public Utilities Board of the City of Brcwnsville, Texas ("Brcwnsville").
Preposed license con-ditions and related stipulations in these consolidated proceedings were submitted to this Scard en September 14, 1980.
At a prehearing conference held on October 24, 1980, the Scard directed Brownsville to file comments on the proposed license conditions by November 10, 1980; by crder of Chairman Miller this date was extended to November 12,
's)go%
s, O
8012300246 g
s t 1980.
The Board directed other parties to file reply comments to Brownsville's ccmmenta by November 24, 1980; on November 20, Chairman Miller extended this date to December 3, 1980.
During the last several months, CSW has conducted extensive negotiations with Brownsville regarding many issuer with a view tcward arriving at an overall settlement of differences between Brownsville and CSW in this proceed-ing and in related proceedings before the FERC and 3EC.
Because an overall settlement has not yet been finalized, CSW will not refer herein to the details of tentative agree-ments already reached on specific issues, but will answer Brcwnsville's contentions as though no agreement had been reached on any issue.
Introduction Brownsville makes numerous allegations regarding deficiencies that it finds in the proposed license conditions, but few of these allegations bear any relation to the anti-l trust laws or the policies underlying those laws.
The only l
general allegation directly implicating antitrust concerns l
is the assertion that a conspiracy exists to keep interstate l
,cwer out of the area served by members of the Electric Reliability Council of Texas ("ERCOT").
CSW agrees that r
f such an anticompetitive conspiracy existed in the past, and indeed argued at length to that effect coth here and in West Texas Utilities Co.
v.
Texas Electric Service Co.,
470 l
F.Supp. 798 (N. D. Tex. 1979).
CSW believes, however, that L
y-w--
>4gry.
-e-v y*
w-
- + - - **
> the overall settlement upon which the proposed license conditions and Stipulations were basad will adequately remedy that situation if the direct current interconnections envisioned by the settlement are implemented.
The license conditions do not by themselves guarantee that the inter-connections will be constructed, but they do require Houston i
Lighting & Power Co. ( "HLP " ) and the Texas Utilities Companies
("TUCS") to use their best efforts to secure approval of the interconnections at FERC.
CSW believes that prospects for such approval are reasonably good.
Once the interconnec-tiens are installed, 3rcwnsville's only real antitrust concerns will have been remedied; an interstate market will for the first time beccme available to systems within ERCOT.
Although CSW supports all of the proposed license conditions, these reply conments address only those issues raised by Brownsville that impact directly on CSW or CPL.
Therefore Brownsville's extensive comments opposing the so-called disconnect provision are not addressed herein.
CSW would add only that Brownsville's suggestion (Co mments,
- p. 7) that action on the so-called discennect provision be deferred "until FERC has made its determinations" is not apprcpriate.
The disconnect provision contained in the license conditions is not an issue in the interconnection case pending at FERC.
The Supplemental Offer of Settlement filed in that case on October 9, 1980 explicitly recognized this fact:
l
e 3 Proposed License Conditions with respect to the establishment, maintenance, modifi-cation or utilization of any interconnection between ERCOT and the SWPP have been agreed upon by the Nuclear Regulatory Commission (NRC) staf f and the Department of Justice and by the signatories hereto and led in proceedings at the NRC.
Any condi*.:cns imposed by the NRC in these proceedings are independent of the prcposed orders herein.
The proposed order attached hereto contains the only provisions at the FERC governing the establishment, maintenance, modification or utilization of the Interconnections.
Since the FERC will not be reviewing the disconnect provi-
~
sien contained in the proposed license conditions this Board should not defer its approval of the provision.
I.
3rewnsville's Objections to Proposed License Conditions Relating to Transmission Services 3rewnsville offers a baker's dozen of cbje:tions to the transmissienrelated provisions of the prcposed license conditions.
All of these allegations, however, repeat the same argument in dif ferent ways.
The argument is that because CPL has allegedly engaged in past anticompetitive activities regarding the provision of transmission services to Brownsville, it cannot be trusted to carry out the wheel-ing provisiens contained in the license conditions in a fair manner.
Consequently, Brownsville suggests that in order to prevent recurrence of such anticompetitive situations CPL must be required to submit transmission rates to this Com-mission before the proposed license conditions may be approved.
This suggestion would, if followed, impose an unnecessarv
a p burden upon this Commission.
As part of the overall settle-ment, CSW has ccmmitted itself to file wheeling rates at the i
FERC within three months of approval c f the settlement, such rates to employ a specific methodolog r identified in the September 11, 1980 letter agreement between FERC litigation staff, ELP, TUCS and CSW.1/
An Atomic Safety and Licensing Appeal Board has already recognized that specific rates, terms and conditions of wheeling shculd be left to the FERC.
In Cleveland Electric Illuminating Comcanv (Davis-Besse Nuclear Power Station, Units 1, 2 and 3) ALAB-560, 10 NRC 265 (1979) the Appeal scard approved license conditions requiring the Applicants to " wheel power to, from and between the other systems in the CCCT, subject to allocations of available trar.3 mission capacity in certain circumstances".
10 NRC at 281.
The only reference to actual wheeling rates, hcwever, occurs in the final paragraph of the license conditions:
"The above conditions are to be implemented in a manner consistent with the
.cisions of the Federal Power Act and all rates, charges or practices in connection therewith are to be subject to the approval of regulatory agencies having juris-diction over them". 2 /
CSW submits that the approach of the l
Appeal Board in Davis-Besse is the appropriate one.
- Moreover, 1/
This letter agreement is referred to in Paragraph I.3.(10) l of the proposed South Texas Project license conditions.
l 2/
10 NRC at 296-97.
j
, there is even less reason for the Scard to get involved in setting wheeling rates here than there was in the Davis-Besse proceeding.
Here there is not only a ccmmitment by the Appli-cants to wheel, but also an actual mothedclogy for fixing wheeling rates, as well as CSW's commitment to file a wheel-ing rate at FERC within three months of final approval of the Supplemental Offer of Settlement by FERC.
This and all of Brownsville's remaining cententions regarding the lixing of transmission rate structures are issues appropriate for consideration by the FERC in connec-tion with the required wheeling rate filings, and need not and should not be considered by this Scard in determining whether the proposed license conditions are consistent with the antitrust laws.
Finally, Brcunsville conter.ds that "it is not clear where FERC jurisdiction ends and Texas PUC jurisdict;cn begins en an instantaneous joint-system wheeling trans-action".3/
Brownsville decs not appear to request any speci-fic relief in connection with this contention.
CSW submits that the contention bears no relation to the question whether i
the proposed license conditions are consistent with ;he antitrust laws.
The respective jurisdictions of FERC and the TPUC are fixed by statute.
This Board can neither l
enlarge nor contract the jurisdiction _of either agency.
l 3/
Comments at 23.
t l
. II.
Brownsville's Contentions Regarding Participation In The South Texas Project 3rcwnsville ar~ues that although the propcsed e
license conditions require CPL to offer Brownsville parti-cipatif a in the STP cn reasonable terms, as well as to pro-vide asscciated transmission and backup services, the license conditions should not be approved until "the precise terms and conditions of STP participation includinc. rates terms r
and conditions of related transmission and backup service" are finalized.4/
There is no warrant for this demand.
The license conditions specify that reasonable terms will be effered.
It would not be apprcpriate for this 2 card to act as an arbitrator and write a centract for the participants in STP.
If disputes arise later, Brownsville can always seek to enferce the license conditions, which require a reasonable of fer.
3rewnsville has not indicated its intent to participate in the STP and has until January 1, 1983 to de so.
Surely this Scard cannot be expected to wait =cre than eac years to approve the proposed license conditions, while Brownsville decides whether it wants to participate in STP, and then while the terms of its participation tre negotiated.
Moreover, a Participation Agreement for P.he STP is already in existence between the current cwners of the STP, the terms of which will form the basic terms for any 4/
Ccmments at 25.
a
, participation by 3rewnsville in the STP.
Brownsville has net indicated how, if at all, any of the terms in this Agreement are cbjectionable under the antitrust laws.
For the same reason Brownsville's suggestion that it be given until six months after the " participation agree-ment and all related centractcal matters are finalized" before it must elect to participate in the STP is unjusti-
- /
fiable.1 This cart-before-the-horse approach would require the parties to engage in fetailed negotiations, perhaps to no avail, if 3rewnsville decides it does not like the final terms.
Brownsville will have a wheeling rate to it from STP long before January :. 1983, as well as capital cost estimates and the basic terms of its participation as set forth in the Participation Agreement.
This information should certainly be sufficient to permit Brownsville to make a meaningful decisicn by January 1, 1983.
3rewnsville objects to the provision in the license conditions that allows CPL to refuse to construct additional transmission facilities to acccmmodate wheeling if construc-tion would be infeasible or would unreasonably impair system reliability or emergency transmission capacity, as that might be applied to 3rewnsville's participation in the STP.
Brownsville argaes that the license conditions should not be approved until "all arrangements under that provision" are 5/
Comments at 25.
~_, - -
. agreed to.6/
This demand is obviously impracticable because the provision clearly speaks to a situation that might arise at any time in the future.
The possibility that CPL might invoke paragraph I.3.(4) of the license conditions at some time in the future is remote and speculative and need not and should not now be considered by this Board.
For this Board to specify further those circumstances under which CPL would be excused from constructing additionaA facilities would require a degree of prescience which would be r e
indeed.
Moreover, CPL is obligated by the proposed license conditions (I.B. (1) (b) and I.B.(3)) to provide reasonable transmission services.
If, in the future, CPL refuses to provide any specific transmission service, Brownsville can request that this Commission enforce those obligations.
III.
3rcwnsville's Argument Regarding Particication in TIS and STIS Brownsville argues that the license conditions must contain some provision that current TIS and STIS policies 4
will not be changed to its disadvantage and that the Appli-cants will not withdraw from those groups to its disadvantage, alleging as a basis that Brownsville was excluded from those groups in the past.
It is simply not clear what Brownsville is proposing here "r,
more importantly, what relation this question has to approval-of the proposed license conditions.
6/
Comments at 25.
i
. TIS and STIS are volur.cary organizations of which Brownsville is a full member like all other members.
CSW submits that 3rewnsville has not shown any situation inconsistent with the antitrust laws that the relief recuested, insofar as it is intelligible, would be necessary to remedy.
IV.
Brownsville's Comments Regarding Bulk Power Offers Brownsville argues that the provision in the license conditions that recuires CPL to sell bulk pcwer to entities with 200 MW or less of generation (I.B.(5)) should be modified to read 200 MW "as of the date f the license";7/
otherwise, Brownsville argues, bulk purchas ers may be dis-ccuraged from installing generation.
Like so many of Browns -
ville's arguments this is wide of the mark in that it fails to specify why this Commission should make such a modification pursuant to its jurisdiccion to remedy situations inconsistent with the antitrust laws.
Brcwnsville's suggestion that the absence of such language as it proposes might discourage the addition of generating facilities not only has nothing to do with the antitrust laws, but also has nothing to do with realistic electric utility system planning.
One would suppose that the decision whether to install additional generation would be based on whether that generation would be more economical than purchased power.
Surely Brownsville
_7/
Comments at 27.
. would not elect to forego installing its own generation merely to retain the right to purchase more expensive elec-tricity from another utility.
Brownsville demands that bulk power services be made available on a non-discriminatory basis.
The conditions already require CPL to provide Brownsville the full range of bulk power serviess, including full and partial requirements bulk pcwer (I.3. (5) ) ; transmissicn services (I.B. (3) ),
including pisnning for transmissicn facilities necessary to accommodate transmission services (I.3.(4)); to share informa-tion and conduct joint studies (I.B. (2)) and to provide an opportunity to participate in the South Texas Project, as well as reasonable transmission services and reasonable ccordination services (including reserve sharing, back-up power, maintenance power and emergency power) necessary to permit Brownsville to have effective access to powar from STP obtained from CPL.
(I.3. (1))
Nhat Brownsville seeks in addition is not specified; nor is it clear what Brownsville means when it argues that these services should be provided "with the same availability" that other services are provided to other customers.
Brownsville argues, with respect to the last sentence of Paragraph I.B. (5) of the STP conditions, that
"[clurtailment should be reasonable and non-discriminatory not only 'where possible' but generally".a/
How Brownsville 3/
Comments at 27.
.~
can possibly object to this condition in its present form is inconceivable.
Under this condition any curtailment of full or partial requirements sales must be non-discriminatory unless for some reason this is not possible.
Surely CPL should not be required as a matter of law to perform an act that is not possible.
Brownsville contends, again with respect to Para-graph I.3. (5), that centralized dispatch among the four CSW cperating companies constitutes a discriminatory basis for bulk power transactions.
CSW submits that this conclusory allegation is wholly untenable.
In the first place, Section 11 of the Public Utility Holding Company Act, 15 U.S.C.
Section 79k, requires that a holding company constitute an integrated system, one criterion of which is coordinated planning and operations and the econcmies they make possi-ble.9/
Moreover, Brownsville cites no authority to support the proposition that economic dispatch among the operating subsidiaries of a holding company has ever been regarded as unfairly discriminatory against non-affiliated systems.
In fact, it can be expected that centralized, economic dispatch of the CSW System will inure to the direct and substantial benefit of Brownsville, in that it will result in lower costs for all CSW customers, including Browsnville, than if such economic dispatch did not occur.
9/
- See, e.g.,
Middle South Utilities, 35 S.E.C. 1 (1953).
. V.
Brownsville's Comments Concerning the Procosed DC Interconnections Brownsville argues that the de interconnecticis proposed as part of the overall settlement encompassing this proceeding as well as those before FERC and the SEC "are not in the public interest and would create or maintain a situa-tion inconsistent with the antitrust laws."1'0/
Brownsville attempts to substantiate this general allegation by alleging several ways in which the proposed interconnections would be inferior to alternating current (ac) interconnections.
CSW =aintains that comparison of the proposed interconnections with an alternative is irrelevant to approval of the proposed license conditions by this Board.
The only situation inconsistent with the antitrust laws that Browns-ville has discussed is the past conspiracy by certain members of TIS to bar interstate interconnections.
The present proposal for the first construction of interstate inter-L connections ends that situation and is therefore pro-com.
petitive.
This in itself r aoves the clear antitrust viola-tion that existed in the past.
As the Department of Jus-tice's representative stated at the October 24_ pre-hearing conference:
The Department believes that the DC inter-connection or an interconnection is pre-ferable to no interconnection We think that will be pro-competitive.
That will
_1_0/
Comments at 23.
create some opportunities for interstate power transfers that didn't exist before.137 i
Nothing in the antirust laws indicates that this Board should withhold its approval from the proposed license conditions on the ground that another form of interconnec-tion, which might be implemented af ter lengthy litigation, might be preferred by one system over the proposed inter-connections, which are broadly acceptable to the other affected utilities and govern = ental parties in this proceed--
,,7 ing.11 This is particularly so since Brownsville will retain its rights to construct whatever interconnection it chooses in the future, and will have rights under the Supple-4 3
e
' 1,/
Transcript at 1227.
--12/
Under the Antitrust Procedures anu Penalties Act of 1974, 15 U.S.C.
S16, United States District Courts have an independent duty to determine that any consent judgment aroposed by the Department of Justice in a civil anti-e trust action is in the public interest.
In applying this standard the district courts have held that they need not determine whether the proposed settlement is the best settlement possible before approving it:
It is not the court's duty to determine whether this is the best possible settlement that could have been obtained if, say, the government had bargained a little harder.
The court is not
-settling the case.
It is determining whether the settlement achieved is within the reaches of the public interest.
United States v.
Gillette, 406 F.Supp. 713, 716-(D. Mass.
1975).
CSW has recently filed with the FERC Supplemental Comments on the Petition of the Department of Justice for Leave to Intervene containing more detailed citation of authority that an antitrust settlement need not be
-the best possible settlement that could be obtained.
A copy of these Supplemental Co=ments is attached-hereto.
. mental Offer of Settlement at FERC to have access to the dc interconnections.
CSW therefore, maintains that none of 3rewnsville's specific contentions regarding the superiority of ac interconnections tends to show that the proposed de interconnections create or maintain a situation inconsistent with the antitrust laws.
CONCLUSICN Brownsville's comments should not persuade this 3 card to modify or disapprove any of the license conditions submit ad to it in these proceedings.
The vast majority of Brownsville's cbjections have nothing to do sith the anti-trust laws or the policies underlying those laws and Browns-ville has in fact made no effort to shew this Board or the other parties how any of the propcsed license conditions may result in any anti-ccmpetitive effect either en Brownsville er anyone else.
It is worth noting again, in conclusion, that the only antitrust analysis set forth in Brownsville's comments relates to the anti-competitive effects of a perpe-tuation of the electrical isolation of ERCOT.13/
The overall-settlement an: tg CSW, ELP and TUCS provides for a remedy of this situation through de interconnections with guarantees of access to these interconnections by other systems.
The license conditions are consistent with this remedy by recuir-13/
Comments at 31-80.
. ing CSW, ELP and TUCS to use their best efforts to secure a FERC crder implementing de interconnections as well as providing for wheeling and other coordination services as noted.
The license conditions further remedy the intra-state only restriction addressed so extensively by Browns-ville by prchibiting agreements to refuse to deal for the purpose of =aintaining an exemption from Federal Pcwer Act jurisdiction as well as disconnections or refusals to inter-connect which are the result of concerted action.
The central antitrust issues are adecuately addressed by the proposed license conditions, and this 3 card should approve these conditions.
Respectfully submitted, ISEAM, LINCOLN & SEALE
/ cr, /
r
/am./
, /,
c_
s Attorneys for THE CENTRAL AND SOUTH WEST CCMPANIES Suite 325 1120 Connecticut Avenue, N.W.
Washington, D.C.
20036 202/333-9730 One First National Plaza Chicago, Illinois 60603 312/558-7500 4
Dated:
Cecembei 3, 1980
.-...