ML19347A681
| ML19347A681 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 09/25/1980 |
| From: | Jablon R, Roth A, Spiegel G BROWNSVILLE, TX |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-A, NUDOCS 8009300013 | |
| Download: ML19347A681 (32) | |
Text
a-
- fo j$} 920 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD Houston Lighting & Power Company, et al. ) Docket Nos .
(South Texas Project, Units 1 & 2) ) 50-498A
) 50-499A
)
)
Texas Utilities Generating Company, et al. ) Docket Nos.
(Comanche Peak Steam Electric Station, ) 50-445A Units 1 & 2) ) 50-446A MOTION BY THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS FOR DISAPPROVAL OF PROPOSED LICENSE CONDITIONS; COMMENTS OPPOSING PROPOSED LICENSE CONDITIONS; AND REQUEST FOR FURTHER PROCEEDINGS W c, N ,
v' DD 7 p Z -
George Spiegel 9- g[ 7'q $e,e@ Z Robert A. Jablon i e d.hp,d*'ge // Alan J. Roth y Dyh#gIM Marc R. Poirier Cvi p Attorneys for the.Public Utilities Board of the City of Brownsville, Texas Law Offices Of:
SPIEGEL & McDIARMID 2600 Virginia Avenue, N.W.
Suite 312 Washington, D.C. 20037 ,
(202) 333-4500 <
l 1
800ja ao 0: 3 b
TABLE OF CONTENTS Page No.
I. Motion to Disapprove Proposed License Conditions . . . . . . . 2 l
II. Comments Opposing Proposed License Conditions .......... 4 l
I A. The Disconnection Condition Maintains and Creates -
i Situations Inconsistent with The Antitrust Laws and Contravenes Other Requirements of Law; It Should Be ;
Disapproved........................................ 4 '
B. Certain Other License Conditions Require Revision.. 14 i l
- 1. Participation by Brownsville in South Texas Project....................................... 14
- 2. Participation in TIS /STIS..................... 15
- 3. Transmission Conditions....................... 15
- 4. Transmission Construction Conditions.......... 18
- 5. Ac c e s s to Bulk Powe r . . . . . . . . . . . . . . . . . . . . . . . . . . 18 C. The Proposed Conditions Fail to Address Certain Crucial Issues..................................... 20
- 1. The Relative Advantages of AC and DC Interconnections Have Not Been Examined, and DC Interconnections Have Actual or Potential Anticompetitive Effects....................... 20
- 2. The Proposed Conditions Should Require Agreement on Regulatory Jurisdiction over All l Transactions.................................. 22 )
- 3. Overall the Conditions Are Not Sufficiently Specific; And Any Resolution of These Proceedings Should Be Made Conditional On Acceptable Contractual Arrangements........... 22 l l
III. Request for Further Proceedings......................... 24 A. Further Consideration by this Board is Necessary; Further Proceedings are Required; the Applicants
! and Government Parties Should Be Required to Prove Whether and How the Licenses Should be Conditioned to Cure Situations Inconsistent with the Antitrust Laws............................................... 24 CONCLUSION................................................... 26
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD Houston Lighting & Power Company, et al. ) Docket Nos .
(South Texas Project, Units 1 & 2) ) 50-498A
) 50-499A
)
)
Texas Utilities Generating Company, et al. ) Docket Nos.
(Comanche Peak Steam Electric Station, ) 50-445A Units 1& 2) ) 50-446A MOTION BY THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS FOR DISAPPROVAL OF PROPOSED LICENSE CONDITIONS; COMMENTS OPPOSING PROPOSED LICENSE CONDITIONS; AND REQUEST FOR FURTHER PROCEEDINGS The Public Utilities Board of the City of Brownsville, Texas ("Brownsville") in accordance with Board Order of August 13, 1980 and further order at the September 15, 1980 prehearing conference, hereby submits comments on the license conditions for the South Texas and Comanche Peak nuclear plants dated September 12, 1980.1,/ Brownsville opposes settlement on the basis of these conditions for the reasons set out below. Brownsville therefore moves that the Board disapprove the conditions as proposed, and Brownsville requests the Board to institute further proceedings.
1/ Brownsville is an intervenor in the South Texas proceeding and submits comments regarding both plants in these consolidated proceedings; the sets of conditions are similar, and indivisible as a practical matter.
I. MOTION TO DISAPPROVE PROPOSED LICENSE CONDITIONS Brownsville hereby moves the Board to issue a ruling disapproving the proposed conditions for the reasons and bases set forth in the comments below. As a matter of law, the disconnect conditions 1/ are on their face
" inconsistent with the antitrust laws" 2/ under the Atomic Energy Act ("Act") and cannot be found to be "in the public interest" under the Commission's authority to condition licenses. 3/ Indeed, the conditions are part of an overall Settlement of September 12, 1980 4/ which on its face is an agreement in restraint of trade in violation of Section 1 of the Sherman Act and proposes or appears to authorize 1/ STP conditions I.B (6)(a), (b), (c) and (d) and condition I.B (7TT Comanche condition D(2)(1).
2/ Atomic Energy Act, Section 105; 42 USCA S 2135, 3/ Id. Section 105(c)(6).
4/ NRC Staff's Fourth Status Report on Settlement, September 14, 1980; Comanche Stipulation: CSW and TUGCO, September 12, 1980; Comanche Stipulation: NRC Staff, U.S.
Dept of Justice, Tex-La Election Cooperative of Texas, Inc.,
and TUGCO, Sept. 12, 1980; STP Stipulation: NRC Staff, U.S.
Dept of Justice, CSW, Housting 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 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. thereof ("TU"), and CSW;
" Confirmed" FERC Staff, " Accord" NRC Staff.
T activities by individual companies (CSW, HLP, and TU) in violation of Sections 1 and 2 of the Sherman Act. Finally, these disconnect conditions are inconsistent with the policies of the antitrust laws.
There are other provisions which are plainly inconsistent with the antitrust laws and their underlying policies, as set forth in the comments below.
WHEREFORE, Brownsville moves that the propcsed STP and Comanche license conditions be disapproved, unless modified, and that the Board take such further action as may appear appropriate.
l l
l l
l l
1
_4 l
II. COMMENTS OPPOSING PROPOSED LICENSE CONDITIONS A. The Disconnection Condition Maintains and Creates Situations Inconsistent with The Antitrust Laws and Contravenes Other Requirements of Law; It Should Be Disapproved.
l The proposed South Texar license condition I.6.(a) deals with disconnection and interstate commerce. 1/ Despite its appearance of allowing commerco the license condition in 1
fact draws a line against interstate commerce by allowing l l
HLP 2/ to disconnect, to refuse to connect and otherwise to restrain any Entity from " establishing, maintaining, j modifying or utilizing" a connection with facilities in l interstate cammerce. HL&P is prohibited from taking these actions ONLY "provided that" the Entity uses its best efforts j to seek an FERC order " applicable to HLP" requiring the proposed interconnection and wheeling pursuant to SS 210, 211 l
and 212 of the Federal Dower Act. If the FERC denies the '
l order but the Entity nevertheless makes the interconnection, HLP may disconnect or refuse to interconnect subject only to NRC antitrust review or District Court antitrust action.
l l
1/ The corresponding Comat the Peak condition is D.2. (1) .
2/ Brownsville submits that if this section is approved it should be written to apply to CP&L as well.
I
The first problem with the condition is that when-ever a third party decides not to follow the "provided that" procedures, disconnection is apparently allowed.1/ As a consequence no reliable firm power transactions are possible in the Texas intrastate system between systems that might find themselves on opposite sides of a disconnection.
Purchases by Brownsville from HLP or TU for example would be constantly under a shadow, since the actions of any third party disregarding the "provided that" procedures might pre-cipitate the disconnections that have in the past been TU and HLP policy. Such disconnections would isolate Brownsville from its source of supply, with dire consequences. The same could happen to any of the small systems, including those ostensibly given an opportunity, pursuant to these license conditions, to participate in the ownership of the South l Texas, Comanche Peak and eventual future projects. The risk of disconnection thus inhibits transactions, forces the j construction of capacity that would not be required under sensible arrangements, and otherwise deprives the region of the benefits of true pooling.
1/ As Brownsville reads the provision, however, I nothing immunizes HLP from NRC investigation if an Entity does not follow the "provided that" procedure and HLP disconnects. In addition neither the NRC nor the FERC is empowered to immunize the activities of HLP or others from the antitrust laws.
The Commission should keep in mind the disconnections by TU and HLP from other utilities on May 4, 1976, after CSW interconnected its Texas and Oklahoma subsidiaries. This precipitated a crisis in the Texas intrastate electric industry. While CSW remained interstate, Brownsville, dependent on its transmission link with CPL, had no choice but to remain in interstate commerce until ERCOT l
was put back together a year later. San Antonio and Austin, 1
initially linked to CP&L, arranged to be disconnected from
, CP&L and reconnected to HL&P and TU.
I l This proceeding was initiated af ter a request by l CPL to investigate just that situation of coercive threats of i disconnection and actual disconnections. Yet the proposed j license conditions effectively do nothing to assure that disconnections, threatened or actual, will not recur.
i
- It appears that the threat of disconnection, with all its anticompetitive effects, has survived by agreement,
]
f as CP&L at one time argued.1/ The proposed condition mani-fests an understanding among the parties that threats of disconnection may continue.
l 1/ In West Texas Utilities Co. v. Texas Electric Service Company, No. CA 3-76-0633-F. This case is on appeal to the Fifth Circuit, Docket No. 79-2677.
l
To the extent that a previous refusal to deal in interstate commerce is now replaced with a restrictive and restricted arrangement -- over two disconnectable DC ties
--the situation inconsistent with the antitrust laws is not remedied. The large companies with monopoly control of interstate transmission remain in control, and the terms of access to other systems are lef t vague by the conditions.
The terms and conditions of transmission are not specified; if the rates are too high or other terms too onerous ttey would produce the equivalent of a refusal to transmit.
Meanwhile, CSW, and other applicant will have full and best advantage of the transmission and related arrangements, more advantage than the smaller systems.
The settlement may seem to promote commerce but in fact restrains it, inconsistent with the antitrust laws.
First, the settlement seems to enlarge the perimeter within which the signatories are willing to deal; but in fact the agreement would establish an effective perimeter beyond which interstate commerce is restrained, indeed prohibited as a practical matter. The restraint arises because anyone who would venture into interstate commerce would risk disconnection and a collapse of the agreed market area into the separate monopolies. Furthermore, the seeming pro-competitive gains within the agreed perimeter are dubious
at best. As noted above, the risk of disconnection precludes true pooling or other long-term arrangements; and, as a consequence, it heightens system costs disproportionately for small and other less advantaged entities, impeding their ability to compete within the perimeter as before. Thus the agreement is notable not because it promotes trade but because it restrains it. It is plainly an agreement in substantial restraint of trade.
Second, the disconnect provision does not simply leave the entities where they are, free unilaterally to refuse to deal. As monopolies, they are not free to refuse to deal if they have the capacity to deal. Otter Tail Power Company v. United States, 410 U.S. 366 (1973). The arrangement does not leave the parties where they are; if the NRC approves the agreement, it will encourage entities to disconnect under agreed-to circumstances. Accordingly, the proposed settlement is a conditional market division; and, in the event of disconnection, it is in fact a market division because the agreement encourages the signatories to disconnect and restore their monopoly within their present territories.
Even if the disconnection were viewed as occurring unilaterally, it would still constitute a situation inconsistent with the antitrust laws, as a refusal to deal in violation of S2 of the Sherman Act. That is, the disconnection would restore the utility's present monopoly and would thus be an act of monopolization.
The license condition purports to cure present situations inconsistent with the antitrust laws; but the reserved right to disconnect makes the cure spurious. In short, a situation inconsistent with the antitrust laws has existed in Texas for many years, and the proposed condition would allow the licensees to maintain it.
The license condition also condones and helps implement an undue burden on interstate commerce. Under it an Applicant may disconnect or otherwise prevent an entity f rom entering interstate commerce whenever the "provided that" procedures are not followed. Systems are thus compelled to follow the "provided that" procedures, but those procedures seriously burden interstate commerce in terms of delay and expense, as well as direct inhibition. 1/ While 1/ License condition 6(b), which appers to provide for 1 payment of litigation-related expenses, falls far short of )
alleviating this burden of delay and expense. 1) It does l not compensate an Entity who loses at the FERC; 2) it does not compensate for NRC-related procecdings; 3) it does not compesate for any other expenses related to actual or potential refusal to connect into Interstate commerce.
l l
private parties may choose to refrain from interstate commerce, Federal agencies should not condone and facilitate needless burdens on interstate commerce. The FERC has a general duty, for example, "to promote and encourage ...
interconnection and coordination...." S202(a) of the Federal Power Act. But the proposed license condition turns the FERC's PURPA interconnection and wheeling authority on its head; rather than being a way of facilitating interconnections for utilities that cannot otherwise negotiate them, it becomes a hurdle, a minimum set of criteria that must be met under the "provided that" procedure.
The Commission should recall that the FERC'had little difficulty in discerning that a similar state action
-- the order of the Texas PUC in Docket 14, which prohibited interstate interconnections by ERCOT utilities absent an order by the FERC or the Texas PUC -- was unconsitutional because of its burden on interstate commerce. 1/
When a state regulates interstate commerce, it may pursue only legitimate local objectives and may not substan-tially or needlessly burden interstate commerce. Raymond Motor Transpotation, Inc. v. Rice, 434 U.S. 429,(1978); A&P 1/ Order Denying Rehearing and Modifying Prior Order, Issued October 3, 1979 in Central Power & Light Co. et al.,
FERC Docket No. EL 79-8. The FERC held it had no jurisdic-tion under S205 of PURPA to exempt CPL and WTU from state regulation that was not " constitutionally permissible ." Id.
at p. 5. This Order is now on review in Central Power &
Light Co. v. FERC, Docket No. 79-3054 (5th Cir.).
Tea Co. v. Colliell, 424 U.S. 366 (1976); Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). The proposed licen e condition here has dubious benefits, and yet imposes substantial burdens on parties who seek to interconnect in interstate commerce. No state could constitutionally approve the license condition. The NRC should not approve that impedi-ment to interstate commerce.
The disconnection condition also violates statutory provisions of PURPA. The condition contemplates that HLP could disconnect under some circumstances if it wishes, when in fact HLP may not lawfully terminate transmission ordered pursuant to S211 of the Federal Power Act without prior per-mission from the FERC under S211(d) of the Act .1/
One interconnecting line runs to the South Texas project bus; to disconnect from other systems, HLP would also have to disconnect from the South Texas Project. This should 1/ The DC interconnections proposed are 1) a 200 MW Inerconnection of back-to-back DC terminals connecting WTU and PSO, C&SW subsidiaries, near the Texas-Oklahoma border (the North interconnection] ; and 2) a 500 MW tie, with 153 miles of new DC line, connecting the bus of the jointly-owned South Texas Nuclear Project, located on the Gulf Coast midway between Corpus Christi and Galveston, Texas, to the Walker County plant of SWEPCO, located in the northeastern interstate area of Texas [the South interconnection] . CP&L will own 300 MW of the South interconnections; HL&P will own 200 MW.
be of particular concern to the NRC, whose regulations prohi-bit abandonment of a licensed facility without specific NRC authorization.
Furthermore, it may be that all systems are already in interstate commerce and subject to the Federal Power Act.
This matter is before the FERC on remand in Central Power &
Light Co., et al., FERC Docket No . E-9558. If so, the license condition would violate the Federal Power Act and should not be approved by the NRC. The license condition violates the Power Act because it purports to allow the signatories to disconnect voluntarily under certain circumstances, whereas the Federal Power Act prohibits disconnection absent authorization. Pennsylvania Water &
Power Company v. Federal Power Commission, 343 U.S. 414 (1952); Florida Power & Light Co., FERC Docket No. ER 78-282 l
(issued April 28, 1978).
The disconnection condition postpones NRC deter- j l
mination of the invalidity of threatened disconnections under 1 the Atomic Energy Act's antitrust standards. The condition is therefore contrary to the public interest. Because the j situation of restraint continues unabated, the proposed post-ponement -- along the lines of the condition's pecposed proceduce -- is detrimental to competition throughout the Southwest.
l l
l e-,e
Brownsville believes the disconnection condition should be disapproved as a matter of law without need for an evidentiary hearing. Should the Board determine otherwise, however, no better opportunity will likely ever exist than now for the Commission to investigate this matter. The Department of Justice and the Nuclear Regulatory Commission staf fs have invested enormous resources over the last two years in assembling from throughout the state of Texas and the Southwest a mass of evidence of past and continuing effects of the restraints on interstate commerce due to threats of disconnection. It would be a colossal waste of 1
effort and expense to shelve the evidence now and stop short of a determination on this present, unresolved and continuing issue.
B. Certain Other License Conditions Require Revision.
- 1. Participation by Brownsville in South Texas Project.
Re 1 I.B (1)(a). While the condition's framework for participation is acccptable as far as it goes, the basic terms and conditions of Brownsville's participation in STP should be established before issuance of the license. If the applicants insist on unreasonable terms, the license should not be granted. The date for Brownsville's firm commitment should be the later of January 1, 1983 or six months after the participation agreement and related contractual matters are finalized, so as to give Brownsville an opportunity to evaluate the conditions of participation and make a fully informed decision whether to commit.
Re 1 I.B (1)(b) and (c). For the same reasons, the rates, terms and conditions for STP transmission service to Brownsville should be established prior to issuance of the license. Further, CPL should define prior to issuance of license whether transmission capacity is available; if CPL proposes to invoke any of the provisions of 1 I.B (4) with regard to such transmission, all arrangements under that provision should also be agreed to prior to issuance of license. The precise terms of transmission services and backup services are essential for the Board to determine if participation in STP has been offered on a basis that is reasonable and consistent with antitrust laws.
The conditions should also be amended or con-ditioned to reflect that CP&L agrees to reduce Brownsville's Firm Power Demand 1/ by the amount of Brownsville's par-ticipation in South Texas Project if Brownsville enters a firm agreement for South Texas participation by the date pro-vided in the license condition. Otherwise Brownsville would be obligate > to pay a demend charge to CP&L, as though it were purchasic.q power that in fact would be provided by Brownsville's STP share. Failure to amend or condition the license conditions as requested by Brownsville would act as a deterrent to participation while providing CP&L excessive recovery of costs involved in providing capacity.
- 2. Participation in TIS /STIS.
Re 9 I.B (2). The condition should provide assurance that the current TIS and STIS policies and operations, now available to Brownsville as a member, will not be modified so as to substantially disadvantage Brownsville. The condition should also provide assurance that the Applicants will not withdraw from TIS and/or STIS to the substantial disadvantage of Brownville.
- 3. Transmission Conditions.
Reasonable transmission service is of utmost importance, since provisions for bulk power supply, South 1/ As defined in the CP&L/ PUB Interchange contract dated Harch 25, 1980, FERC CPL Rate Schedule 62.
Texas Project capacity, and the usefulness of the interstate interconnections depend on reasonable transmission rates, terms, conditions, and available capacity. Moreover, Brownsville has experienced past anticompetitive harm from CP&L's monopoly control of transmission in South Texas and CP&L's refusals to wheel, its discriminatory transmission planning, and its use of monopoly power in the transmission market to obtain hydroelectric preference power.
Transmission conditions are essential to prevent these situationn inconsistent with the antitrust laws from recurring.
Re 1 I.B (3) and 5 I.B (10). The Board must assure itself that any promised transmission agreement materializes on reasonable terms before the license condition becomes final. Thus the license conditions should require that whatever transmission rates, terms, and conditions are offered, should be finalized before the NRC license conditions are made-final. 1/ The description of the rate methodology in the signatories' letter of September 11, 1980 to the FERC staff does not enable Brownsville to determine even roughly what the rate would be. Submission of transmission agreements is the only way the Board can assure l itself that a reasonable rate - and thus reasonable access to transmission - is being provided.
1/ Otherwise, delay in negotiation may well result in no agreement. Nearly 1M years have elapsed since CP&L agreed to transmit firm power for Br?.insville, but no agreement has yet been reached.
I i
I
4 The Board should note that the transmission conditions 1 I.B (3) in the South Texas proceeding differ substantially from those in 1 I.B (10), which incorporates the letter to the FERC staff dated September 11, 1980.
Before it can approve any settlement, this conflict must be resolved. The 1 1.B (3) condition apparently contemplates that all four applicants will file rates, and that those rates will cover transactions within South Texas and outside it. In the FERC letter, four groups -- CP&L/WTU, PSO/SWEPCO, the TU companies, and HL&P -- are required to file rates at the FERC, relating to transmission to, from and over the DC interconnections. ( Also, CP&L/WTU is required to file a rate for wheeling within ERCOT at the FERC within three months after final approval of EL79-8.)
The Board should require that rate design, struc-ture and underlying cost allocation, and the terms and con-ditions may be changed only if the changes are approved by the governing agency. This will ensure that the systems pro-tected by the establishment of transmission rates continue to receive ef fective protection through regulation. Otherwise changes in fundamental terms, even if subject to refund, would undo the intended curative effects of the license conditions.
I l Any transmission rate must also reflect a credit for investment by any Entity in transmission facilities
integrated with the system. For example, Brownsville is investing in 138 kv transmission line that will be interconnected with CP&L and will, as load flow studies show, be relied on by the CP&L system.
Brownsville submits that the cost of the DC interconnections is likely to be greater than the cost of AC i
interconnections. (See below). The Board should not approve the license conditions, which allow the applicants to charge Brownsville and others for the extra cost, especially because the benefits of DC accrue solely to the major companies seeking DC interconnections for purposes unrelated to provision of service.
I
- 4. Transmission Construction Conditions.
I Re 1 I.B (4). The general condition on construction of additional transmission facilities is l
\
acceptable. As to reservation of capacity in the DC ties l i
(September 11, 1980 le tter to FERC sta f f , 5 3 ) , the general l l
approach is also sound, but Brownsville submits that the 15%
reservation is unsupported and may not be adequate.
- 5. Access to Bulk Power.
Re M I.B (5). This condition requires CP&L to offer full and partial requirements bulk power. Brownsville
agrees that the bulk power offers to small systems should be required. However, HL&P should also be required to make available bulk power throughout the ERCOT system.
9 The corresponding Comanche Peak provision D.2(k) requires bulk power offers to qualifying entities in the North Texas area. This area restriction is unnecessary and unjustified. The available evidence would conclusively show the advantages of long distance bulk power transfers. 1/
The limitation to entities with 200 MW or less of generating capacity should be made "as of the date of this license." Such a provision is included in the proposed license conditions for Comanche Peak. Otherwise, wholesale purchases would be discouraged from installing generation --
an anticompetitive effect.
CP&L should be required to provide bulk power service to any requesting Entity within its service area on the same availability basis as it provides increased or additional service to any other existing or prospective customer. The phrase "(where possible)" should be deleted from the last sentence, to make curtailments likewise nondiscriminatory.
1/ CSW's PTI studies presented to the SEC and HL&P's Stagg studies prepared for the SEC in CP&L et al., SEC Admin. Proc.
File No. 3-4951.
In addition, CP&L should be required to provide centralized economic dispatch and other pooling arrangements to any adjoining Entity requesting them, on the same or equivalent rates, terms and conditions as may be provided for CSW affiliates. Also, the requirement should be extended to CSW. The Board should not legitimize what amounts to a discriminatory basis for bulk power transactions by approving the license conditions which allow CP&L to prefer its affiliates in pool transactions.
C. The Proposed Conditions Fail to Address Certain Crucial Issues.
and DC Interconnections Have Actual or Potential Anticompetitive Effects.
No showing has been made that a DC interconnection, as compared to an AC interconnection, is in the public interest. The Offer of Settlement at the FERC and accompanying testimony of CSW's Chiai engineer, Mr. Jack C.
Wells, do not address the issue, n4n does any other party or witness. In fact, CP&L recently stated DC would be more costly.1/
1/ Central Power & 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 emergency transfers 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 interconnection."
DC may not only be more costly than AC, but may be anticompetitive and inconsistent with the public interest, as asserted by the recent Petition of the United States Department of Justice for Leave to Intervene, filed September 17, 1980 in the FERC proceeding. The Department of Justice there stated at page 3:
"The construction of the two direct current asynchronous electrical interconnections between ERCOT and SWPP, as advocated by CP&L, PSO, SWEPCO, and WTU in their Amended Application of June 27, 1980, instead of the construction of alternating current synchronous interconnections between ERCOT utilities and SWPP utilities, as advocated in the CP&L Application of February 9, 1979, could have effects on utilities both in ERCOT and SWPP and throughout the southwestern United States that would be anticompetitive, inconsistent with the public interest and contrary to the Public Utility Regulatory Policies Act of 1978 ("PURPA").
From the point of view of costs, the settlement conditions can be shaped to protect small systems by providing that any excess costs should not be borne in the wheeling or wholesale rates of the Applicants customers in the absence of evidence justifying the DC connection as preferable from an economic and engineering point of view.
It is not so easy to resolve the broader issue raised in the Justice Department's petition. The DC license impedes interconnection and interstate commerce. The Board should at the least await a ruling of the FERC on the AC/DC issue Justice seeks to present before finalizing its approval of
conditions. It might also consider reviewing the evidence to be presented by the Justice Department or requiring a showing by the applicants on the issue of whether DC is anticompetative.
- 2. The Proposed Conditions Should Require Agreement on Regulatory Jurisdiction over All Transactiont..
The proposed conditions do not clearly set out what agency -- the FERC or the TPUC -- has jurisdiction over the interconnection, power sales and transmission rates proposed, except that FERC jurisdiction over the DC line cates is conceded. Continuing regulation is an integral part of assuring that these transactions are effective. The Board should require jurisdiction be clarified by agreement or ,
order, prior to final issuance of the NRC license. Otherwise unnecessary time will doubtless be consumed in future proceedings over jurisdictional issues. The delay is likely to advantage the applicants and to hurt smaller entities such as Brownsville whom the conditions are intended to benefit.
- 3. Overall the Conditions Are Not Sufficiently Specific; And Any Resolution of These Proceedings Should Be Made Conditional On Acceptable Contractual Arrangements.
The licenses and license conditions proposed by the i
applicanto will subsantially benefit Texas' three major
[
electric systems: Texas Utilities,. Houston Lighting and l
Power and Central and South West (or at least the Texas portion). Absent corrective provisions, the benefits will strengthen these three companies against smaller competitors, such as Brownsville. The proposed conditions afford opportunities for access to these various beneficial arrangements for Brownsville and others, but the conditions are vague and in some circumstances contingent. For example, at this point Brownsville would not know the rates, terms and conditions under which nuclear participation, transmission and coordination would be offered. One thing is certain, however. Opportunities outside of the Texas intrastate system would be limited, as would FERC regulatory protections. If Brownsville is to be limited in its market and regulatory opportunities, at the least it should have the protection of specific contracts guaranteeing non-discriminatory rights in the intrastate system. In the 4
context of the Midland 1/ settlement all parties insisted that rights should be contractually spelled out before agreeing to more generalized license conditions. Specificity is more important here where FERC protection of transactions with Houston and Texas Utilities (and possibly others) would be lacking.
1/ Consumers Power Company, Midland Units 1 and 2, NRC Docket No. 50-329A, et al.
III. Request for Further Proceedings.
A. Further Consideration By This Boerd is Necessary; Further Proceedings are Required; the Applicants and Government Parties Should be Required to Prove Whether and How the Licenses Should be Conditioned to Cure Situations Inconsistent with the Antitrust Laws.
Brownsville recommends that the Board, upon disapproval of the proposed conditions, establish a period (a) of one week to afford the parties an opportunity to re-negotiate the settlement privately and, failing agreement, (b) of an additional week in which the Board would order a conference with the Board on the record for a settlement discussion by the parties with the Board or some of its members using their good offices as mediators, or, as an alternative, it order a conference on the record for discussion of settlement outside the Board 's presence.
These conferences are necessary to exhaust every possibility of settling this large and important proceeding and thereby avoid long and expensive further litigation. An on-the-record discussion is appropriate since two of the Settlement signatories are U.S. Government agencies, many of the parties are state or municipal agencies, and the three electric systems are public service corporations and
1 regulated utilities with important public respontibilities.1/
Failing negotiated agreement, the case can be set for trial.2/ Brownsville will participate; it will present evidence to the extent that the evidence presented by Applicants and Governmerit agencies does not adequately encompass Brownsville's interests. It is Brownsville 's expectation that the NRC Staff will adequately discharge its af firmative responsibilities to make a complete record, 3/
and that Justice, already prepared for trial, will further assure a complete record, and that evidence presented by the other parties will support Brownsville's case. In such event, Brownsville expects it would not need to present cumulative evidence, and would argue its interests in the briefs.
1/ Western Union Telegraph Co. v. Call Publishing Co., 181 U.S. 92,99-100 (1901). " Common carriers, whether engaged in interstate commerce or in that wholly within the State, are performing a public service. They are endowed by the State with some of its sovereign powers, such as the right of eminent domain, and so endowed by reason of the public service they render."
2/ Motion of the Department of Justice to Establish a Trial Date and Other Procedural Dates, May 21, 1980. See also, Tr.
949-954 stating that the Department of Justice is ready for trial.
3/ Scenic Hudson Preservation Conference v. Federal Power Commission, 354 F.2d 608, 620 (2d Cir. 1965), cert. den., 384 U.S. 941 (1966): "In this case, as in many others, the Commission has claimed to be the representative of the public interest. This role does not permit it to act as an umpire blandly calling balls and strikes for adversaries appearing before it; the right of the public must receive active and affirmative protection at the hands of the Commission.... The Commission must see to it that the record is complete. The Commission has an affirmative duty to inquire into and consider all relevant facts."
CONCLUSIONS WHEREFORE, for the above reasons, the Atomic Safety and Licening Board should grant Brownsville's motion for disapproval of the license conditions proposed by applicants and others, unless those conditions are modified in light of Brownsville's comments. Further proceedings should be ordered.
Respectfully submitted :
& ,ly Ol" MM George Spiegel k-Robert A. ablon k9 .
Alan J. Roth mci Marc R. Poirier l
Attorneys for the Public Utilities Board of the City of Brownsville, Texas September 25, 1980 Law Offices Of:
SPIEGEL & McDIARMID 2600 Virginia Avenue, N.W.
Suite 312 Washington, D.C. 20037 (202) 333-4500 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, ) Docket Nos . 50-445A 4
et 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 MOTION BY THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS FOR DISAPPROVAL OF PROFOSED LICENSE CONDITIONS; COMMENTS OPPOSING PROPOSED LICENSE CONDITIONS; AND REQUEST FOR FURTHER PROCEEDINGS to be served on the following by deposit in the United States mail, first class, postage paid, this 25th day of September, 1980.
Marshall E. Miller, Chairman Sheldon J. Wolfe, Esquire Atomic Safety & Licensing Board Atomic Safety & Licensing Board Panel Panel Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 Michael L. Glaser, Esquire Joseph Rutberg, Esquire 1150 17th Street, N. W. Antitrust Counsel Washington, D. C. 20036 Nuclear Regulatory Commission Washington, D. C. 20555 Fredric D. Chanania, Esq.
Michael E. 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.
l Washington, D. C. 20006 l
f
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.
Office of the Secretary Washington, 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. 20036 San Antonio, Texas 78201 Douglas F. John, Esquire Jon C. Wood, Esquire McDe rmott , Will & Emery W. Roger Wilson, Esquire 1101 Connecticut Avenue, N.W. Matthews, Nowlin, Macfarlane Suite 1201 & Barrett Washington, D.C. 20036 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
R. L. Hancock, Director G. W. Oprea, Jr.
City of Austin Electric Utility Executive Vice President Department Houston Lighting & Power Co.
F. O. Box 1088 P. O. Box 1700 Austin, Texas 78767 Houston, Texas 77001 Jerry L. Harris, Esquire W. S. Robson, General Manager Richard C. Balough, Esquire South Texas Electric Coop., Inc.
City of Austin P. O. Box 151 P . O. Box 108 8 Nursery, Texas 77976 Austin, Texas 78767 Do n H . David son Michael I. Miller, Esquire City Manager Isham, Lincoln & Beale City of Austin One First National Plaza P. O. Box 1088 Chicago, Illinois 60603 Austin, Texas 78767 Donald Clements, Esquire Don R. Butler, Esq. Gulf States Utilities Co.
Sneed, Vine, Wilkerson, Selman P. O. Box 2951
& Perry Beaumont, Texas 77074 P. O. Box 1409 Austin, Texas 78767 Knoland J. Plucknett Executive Director Morgan Hunter, Esquire Committee on Power for the McGinnis, Lochridge & Kilgore Southwest, Inc.
900 Congress Avenue 5541 Skelly Drive Austin, Texas 78701 Tulsa, Oklahoma 74135 Kevin B. Pratt, Esquire Jay M. Galt, Esquire Linda Aaker, Esquire Looney, Nichols, Johnson & Hayes l P. O. Box 12548 219 Couch Drive 1 Capital Station Oklahoma City, Oklahoma 73101 Austin, Texas 78767 Robert E. Cohn, Esq.
E. W. Barnett, Esquire Richard J. Leidl, Esq.
Charles G. Thrash, Jr., Esquire Butler, Binion, Rice, Cook i J. Gregory Copeland, Esquire & Knapp !
I Theodore F. Weiss, Jr., Esquire 1747 Pennsylvania Ave . , N.W.
Baker & Botts 9th Floor 3000 One Shell Plaza Washington, D.C. 20006 Houston, Texas 77002 Paul W. Eaton, Jr., Esq. Leland F. Leatherman , Esq.
Hinkle, Cox, Eaton, Coffield McMath, Leatherman and Woods, P.A.
and Hensley 711 West Third Street P. O. Box 10 Little Rock, Arkansas 72201 Roswell, New Mexico 88201 l
l 1
l
Somervell County Public Library P. O. Box 417 Glen 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 i 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
)
x : %
Marc R. Poirier Attorney for the Public Utilities Board of the City of Brownsville, Texas l
September 25, 1980 )
l 1
I 1
l I
l l
-