ML20010B257
| ML20010B257 | |
| Person / Time | |
|---|---|
| Site: | Farley  |
| Issue date: | 08/11/1981 |
| From: | Blume M, Lewis S NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | NRC COMMISSION (OCM) |
| References | |
| ISSUANCES-A, NUDOCS 8108140274 | |
| Download: ML20010B257 (11) | |
Text
4 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION M b$(.s y
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BEFORE THE C0W11SSION
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In the Matter of
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Docket Nos. 50-348A Y A.s. w#
u ALABAMA POWER
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50-364A (Joseph M. Farley Nuclear
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Units 1 and 2)
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ANSWER OF THE NRC STAFF IN OPPOSITION TO PETITION FOR COMiilSSION REVIEW BY MUNICIPAL ELECTRIC UTILITY ASSOCIATION Joseph Rutberg Michael B. Blume Assistant Chief Hearing Counsel for NRC Staff Counsel / Antitrust Counsel Stephen H. Lewis Counsel for NRC Staff August 11, 1981 Spl/
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8108140274 810811 DR ADOCK 05000
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8/11/81 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE C0ft11SSION In the Matter of ALABAftA POWER C0!!PANY Docket Nos. 50-348A 50-364A (Joseph M. Farley Nuclear Units 1and2)
ANSWER OF THE NRC STAFF IN OPPOSITION TO PETITION FOR COMt11SSION REVIEW BY MUNICIPAL ELECTRIC UTILITY ASSOCIATION I.
INTRODUCTION Intervenor Municipal Electric Utility Association [ hereinafter MEUA]
on July 27, 1981 filed, pursuant to 10 C.F.R. 9 2.786(b), a Petition for Review of a June 30, 1981 antitrust decision, ALAB-646. The standards for Commission review of decisions 'sy the Atomic Safety and Licensing Appeal Board are set forth in 10 C.F.R. 5 2.786(b).I/
if 10 C.F.R. 6 2.786(b) in relevant part provides:
l (b)(1)
[A] party may file a petition for review with the Commission on the ground that the decision or action is erroneous with respect to an important question of fact, law, or policy.
l (2) A petition for review... shall contain the following:
j (1)
A statement (ine'uding record citation) where the matters of fact or law raised in the petition for review were previously raised before the Atomic Safety and Licensing Appeal Board and, if they were not why they could not have been raised; (footnotecontinuedonnextpage).
t we,
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Staff herein contends that lEUA raises no issues of the type or importance contemplated in 10 C.F.R. 9 2.786(b), and its request should be denied.
II. BACKGROUND Alabama Power Company (hereinafter APC0) in October 1969 filed an application to construct and operate a nuclear power plant, and an amendment to that application in June of 1970 for a second unit. On August 16, 1971 the Attorney General advised the Commission pursuant to section 105c of the Act that an antitrust hearing would be necessary because issuance of an unconditioned license might maintain a situation inconsistent with the antitrust laws. Notice of an antitrust hearing was published on June 28,1972.2f Construction permits were issued to APC0 on August 16, 1972 in accordance with section 105(c)(8) of the If (footnote continued from previeus page).
(iii)
A concise statemint why in the petitioner's view the decision or action is erroneous; and (iv)
A concise statement why Commission review should be exercised.
(4) The grant or denial of a petition for review is within the discretion of the Commission, except that:
(1)
A petition for review of matters of law or policy l
will not ordinarily be granted unless it appears the case... constitutes an important antitrust question, involves an important procedural issue, or otherwise raises important questions of public policy; (ii)
A petition for review of matters of fact will not be granted unless it appears that the Atomic Safety and Licensing Appeal Board has resolved a factual issue necessary for decision in a clearly erroneous manner contrary to the resolution of that same issue by the Atomic Safety and Licensing Board...
2]
37 Federal Register 1320.
i e
a
.3 -
Atomic Energy Act of 1954, as amended.E Discovery in the proceeding commenced in March of 1973, and on May 23, 1974 the Licensing Board, over Staff's opposition, granted APCO's motion for a bifurcated hearing.O The evidentiary hearing in Phase I began on December 4,1974 and ended on April 9, 1976. The Licensing Board found antitrust liability on the part of APC0 in an Initial Decision in Phase I issued on April 8, 1977. The Phase II hearing on remedy commenced shortly thereafter and the Board on June 24, 1977 issued its Phase II Initial y
42 U.S.C. 5 2135(c)(8), (1970) (hereinafter cited as "the Act").
That section provides that the Commission may issue a construction pemit or operating license in advance of consideration of and findings with respect to the matters covered in this subsection: Provided, That any construction pemit or operating license so issued shall contain such conditions as the Commission deems appropriate to assure that any subsequent findings and orders of the Commission with respect to such matters will be given full force and effect.
The construction pemit issued to APC0 provided, in section 2E, that Applicant
... is on notice that the granting of this pemit is without prejudice to any subsequent licensing action, including the imposition of appropriate conditions, which may be taken by the Commission as a result of the outcome of this antitrust proceeding.
A footnote to the condition advised APC0 that among the conditions that the Department of Justice indicated it might seek were access to the Farley units by other utilities, provision of transmission to other electric utilities, interconnection, and coordir.ated planning.
4)
The first phase was to detemine the issue of antitrust liability; the second phase, if necessary, would be to detemine appropriate remedies.
O
. s Decision containing antitrust license conditions designed to prevent the maintenance of the situation inconsistent with the antitrust laws.E/
All parties took e:.ception to the Licensing Board decision, and the Appeal Board issued its decision on June 30, 1981.
III. MEUA'S PETITI0ll RAISES NO ISSUES APPROPRIATE FOR COMf1ISSION REVIEW MEUA's petition raises essentially two questions: first, whether the Appeal Board erred by refusing to remand the pn)ceeding to the Licensing Board for further hearing on remedy; and second, whether the Appeal Board erred in affirming the Licensing Board's finding that MEUA was not an actual or potential competitor of APC0 in the wholesale for resale market, liaither of these issues is appropriate for Commission review under the stand;-ds of 10 C.F.R. 9 2.786(b).
A.
The 'oramission should not review the finding that MEUA is not an actual or potential competitor in the wholesale for resule market The Appeal Board below affirmed the Licensing Board's Phase I holding that MEUA was not an actual or potential competitor in the market for wholesale sales of electricity.5/ These were findings of fact by the Boards below.2/
j/
Commercial operation of Unit 1 began in December,1977.
j/
ALAB-646 at 119.
2/
See, Je.., United States v. General Dynamics Corp., 415 U.S. 486, 491-92 (1974) [ held:
relevant market determinations in antitrust proceedings are factual matters].
O r
.c r
,y
5-
-c 10 C.F.R. 5 2.786(b)(4)(ii) states that the Commission will not review matters of fact
...unless it appears that the... Appeal Board has resolved a factual issue necessary for decision in a clearly erroneous manner contrary to the resolution of that same issue by the... Licensing Boa.d.
ld.
As both Boards below ruled identically on this factual question, the only issue remaining for purposes of 10 C.F.R. 9 2.786(b)(4)(ii) is whether the Appeal Board's ruling was " clearly erroneous." MEUA asserts that because the Alabama legislature in May of 1981 created the Alabama 11unicipal Electric Authority and authorized it to engage in self-generation on behalf of ranicipal electric systems in Alabama as of August 1981, MEUA perforce is a competitor in the wholesale market and the Appeal Board's decision is "now clearly erroneous." MEUA Petition at 3 (emphasis added).E MEUA's argument appears to assume that the legislative restraint on MEUA prior to the authorizing legislation in May 1981 was critical in preventing the Boards below from finding that MEUA was a potential competitor in the wholesale market.
But nowhere did the Appeal Board in l
its analysis of MEUA's potential for wholesale competition mention the l
prior legislative restraint now being raised by MEUA. ALAB-646 at l
l 113-18, 122-25.
Instead the Appeal Board relied upon other factors, and nuted that "MEUA in the past has forsaken generation because of the l
y The exact relationship between the Authority and MEUA has not been explained on this record.
l
costs involved".
_Id_. at 122. Accordingly, the passage of the Alabama statute has no effect on the continuing validity of the Appecl Board's holding that MEUA is not a competitor in the wholesale market.
For the above reasons, the Commission should not review this matter.
B.
The passage of the ' Alabama authorizing legislation does not constitute significant new information that warrants reopening the record 11EUA argues, however, that the passage of the authorizing legislation dictates a reopening of the remedial stage of this' proceeding.E In considering a motion to reopen an evidentiary record, the following three factors are considered:
1.
timeliness of the motion; 2.
significance of the new information; and 3.
whether a different result would have been possible had the nu informationbeenconsidered.E As to timeliness, the legislation was approved on May 18, 1981 and could have been brought to the Appeal Board's attention prior to the rendition of its Decision on June 30, 1981.
Had that been done, the Commission could have had the benefit of the Appeal Board's analysis of the bearing of the legislation on its conclusion that MEUA was not 9]
MEUA Petition at 5.
l 10/ Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant),
l ALAB-598, 11 NRC 876, 879 (1980); Kansas Gas and Electric Co. (Wolf Creek Generating Station, Unit 1); ALAB-462, 7 NRC 320, 338 (1978).
entitled to the remedy of an ownership interest in Farley.N ALAB-646 at 162-63. We do not, however, consider M:JA's failure to raise until now the new legislation to be so untimely as to warrant Commission refusal to consider the new infonnation solely on this basis.
As argued above, the Staff views the legislation as significant only on the question of whether HEUA will be enabled _t_o_ become a o
wholesale competitor of APCO. While not an irrelevant factor, this does not bring into question the grounds relied upon by the Appeal Board.
The legislation does not, therefore, constitute new information of such significance as to satisfy this factor.
Since the Appeal Board, in rejecting the argument that MEUA was a competitor in the wholesale market, relied largely upon MEUA's past decisions not to enter sinto self-generation because of the costs involved (id. at 122), it does not appear likely that the new information would have led to a different result than that reached. Thus we do not believe that MEUA has satisfied this factor for reopening.
The proceeding should not, therefore, be reopened to consider evidence related to the legislation.
C.
The Commission should not review MEUA's exclusion from the rey.dy phase of the hearing MEUA was prevented from offering testimony in the remedy phase of the hearing by the Licensing Board on the ground that MEUA was not an H/ The Appeal Board would also have had the option of reopening the record to receive further evidence on the impact of the legislation.
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actual or potential competitor of APC0 in any market.E MEUA was, however, allowed to make an offer of proof as to what its evidence would have been at the Phase II hearing, and did make such an offer of proof.E n the basis of its examination of the record, the Appeal O
Board substituted its findings in favor of MEUA for the Licensing Board's findings in several areas dealing with the relationship between APC0 and MEUA.
It held that APC0 and MEUA compete in the market for retail sales of electricity ( ALAB-646 at 161), but not in the market for wholesale sales (id.), and expanded the license conditions to prevent APC0 from abusing its dominance in the retail market as it had in the past.
_I d. The Appeal Board based its expansion of remedies in favor of MEUA on the record in the liability phase of the Licensing Board hearing, as well as on its review of MEUA's offer of proof. The Appeal Board stated:
In the circumstances, we could remand the case to the Licensing Board to allow MEUA an opportunity to present evidence on the subject of remedy. We do not, however, believe such a course is either necessary or desirable.
In the first place, our views on remedy are shaped largely by our findings concerning the " situation inconsistent." Defining that situation was the purpose of the Phase l
I hearing, a phase in which MEUA participated actively. Second, MEUA was allowed to and did make an offer of proof at the Phase II hearing. We have carefully reviewed the offer and find nothing therein which would, if developed more fully, cause us to change our opinion on remedy.
13f See ALAB-646 at 160.
14/ See Tr. of Phase II hearing at 27,437-45.
J
...We have found that MEUA and applicant compete at retail. We have found that applicant... has monopoly power in the retail market. And we have found that applicant has placed anticompetitive restrictions on MEUA's right to pursue other bulk power supply options.
On the other hand... we do not believe anticompetitive contractual restrictions have played a large part in MEUA's failure to develop other bulk power supply alternatives; we think MEUA would have continued as a wholesale customer of applicant regardless of the restrictions...
s In terms of access to the Farley nuclear facilities, we do not believe ownership access is warranted in the case of MEUA. MEUA has been able to compete effectively in the retail market in the past; we see no indication that an ownership interest is necessary to pry open the market...
ALAB-646at160-62(emphasisadded)(footnotesomitted).
The Appeal Board thus found that MEUA competed, and competed successfully, in the retail market despite anticompetitive conduct by At.0.
Id. The Appeal Board also found that regardless of APC0's
^
practices MEUA would have continued to be a wholesale customer of APC0, competing only in the retail market. Despite the possibility that MEUA could have somehow been a more successful competitor in the retail market in the absence of APC0's abuse of its dominance, the primary inference to be drawn from the findings of both. Boards below is that MEUA's competitive position both before and during this proceeding -
its lack of self-generation and its failure to compete in the wholesale for resale market - was not due to anticompetitive conduct by APC0.
The conditions imposed on APC0 would increase MEUA's bulk powt:r supply alternatives through transmission and bulk power services other than ownership access to the Farley plant. MEUA had full opportunity in Phase I of the hearing to present evidence that it competed in the wholesale market.
It convinced neither Board below that it was a potential or actual competitor in the wholesalp market. The Appeal Board stated that the record of the liability phase largely shaped its views on remedy (id_. at 160) and that MEUA's offer of proof did not convince it that competition solely in the retail market entited HEUA to access to Farley.
This is not a lack of due process but rather a failure of persuasion.
Thus the Appeal Board conclusions are well-supported and MEUA's due process claims should not be reviewed.
e IV. CONCLUSION For the reasons argued above, MEUA's request for Commission review of the Appeal Board's actions should not be granted.
Respectfully submitted, Joseph Rutberg Michael BTume l
Assistant Chief Hearing Counsel for NRC Staff Counsel / Antitrust Counsel Steph n H. Lewis Counsel for NRC Staff Dated at Bethesda, liaryland this lith day of August,1981 O
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