ML20011A624
| ML20011A624 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 10/26/1981 |
| From: | Hulme J, Kucik G, Sward E PARSONS & WHITTEMORE, RESOURCES RECOVERY (DADE COUNTY), INC. |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| Shared Package | |
| ML20011A617 | List: |
| References | |
| ISSUANCES-A, NUDOCS 8110290196 | |
| Download: ML20011A624 (63) | |
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-1 P&W 10/26/81 l
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l UNITED STATES OF AMERICA ,
NUCLEAR REGULATORY COMMISSION )
BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD
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InEthe Matter of )
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' FLORIDA POWER & LIGHT COMPANY ) Dochet No. 50-389A.
(St..Lucie Plant, Unit No. 2) )
) Dated: Octobo" 26, 1981 BRIEF OF PARSONS & WHITTEMORE, INC., AND RESOURCES RECOVERY (DADE COUNTY),'INC. IN SUPPORT OF THEIR APPEAL FROM DENIAL OF THEIR INTERVENTION PETITION AND REQUEET FOR HEARING I. INTRODUCTION i This is an appeal from the denial of a petition for-leave to intervene and request for hearing in an ongoing antitrust proceeding concerning Florida Power & Light company's ("FPL")
St. Lucie Unit No. 2. Petitioners Parsons and Whittemore, Inc.
and Resources Recovery (Dade County), Inc. ("RRD") sought.to intervene to protect their interest in a solid waste processing, electrical generating plant which is a qualifying facility und .
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E8110290196 811026 3.
.fPDR ADOCK. 05000309i
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the Public Utility Regulatory Policies Act of 1978 ("PURPA"), 92 Stat. 3144. The April 1981 intervention petition was prompted by the public disclosure, one month earlier, that PURPA facilities were specifically covered by a settlement agreement that was pending approval in this docket. On August 5, 1981, the Licensing Board denied RRD's petition, and that denial was reaf firmed cp October 2, 1981. RRD respectfully requests this Appeal Board to reverse the decision below and to order the Licensing Board to grant RRD's petition to intervene.
II. STATEMENT OF THE CASE A. The Factual Background P&W is a New York corporation engaged in a variety of industrial activities in the United States and throughout the world. Those activities include the construction and operation of facilities for processing solid waste.
RRD is a Delaware corporation wholly owned by P&W. On September 28, 1976, RRD and Metrcpolitan Dade County, Florida, entered into a contract under which RRD agreed to construct a solid waste resource recovery facility ("SWRRF") for Dade County at a cost exceeding $128 million. Parsons & Whittemore guaranteed
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As planned and constructed, the SWRRF is capable of accepting 18,000 tons per week of solid waste for conversion into fuel. This refuse-derived fuel is then burned to produce steam which, in turn, is used to generate electricity.S! The SWRRP is the largest facility of its kind in the United States; its installed nameplate generating capacity approximates 76 megawatts at 13.8 KV, 3 phs, 60 cycles.
In late 1977, Dade County contracted with FPL to transfer title to the EGF after the completion of construction and.
after satisfactory testing of the SWRRF. That transfer to FPL was, of course, contingent upon Dade County's prior payment of the SWRRF purchase price to RRD and its consequent receipt of title from RRD pursuant to the contract between them.E!
RRD began construction of the SWRRF in 1979 and the work thereafter proceeded apace. The Dade County-RRD contract obligated RRD, alone, to bear the entire cost of construction 1/ Portions of the RRD-Dade County contract are attached as Exhibit B to FPL's " Partial Response, etc." filed in this docket on June 26, 1981.
2/ The electrical generating portion of the SWRRF is Hesignated as "EGP."
3/ A copy of the FPL-Dade County contract is attached to the Affidavit of J.T. Blount, Appendix A to FPL's response of May 6, 1981, filed in the companion St. Lucie operating license proceeding, Docket No. 50-389-OL.
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I un.il t the facility was substantially completed. At that point, i
l RRD was to receive an initial payment of $90 million from the County. Upon final completion, RRD was to receive the balance of l the payment due and was to transfer title to the County. The contract provided that, until the facility was completed and the purchase price paid, title was to be held by RRD., See Section 5.02 of the contract, attached as Exhibit A to FPL's Partial Response dated June 26, 1981. Even after final completion'of the SWRRF, RRD's interest in the facility was not to abate, for RRD had contracted with the County to operate the facility for twenty years.
During the Fall of 1980, Dade County and RRD had discussions about the prospective operation of the SWRRF and its economic viability. Those discussions alarmed Dade County and led l
it to file suit against P&W in late 1980 seeking, inter alia, to rescind the contract. Metropolitan Dade County v. Parsons &
Whittemore, Inc., No. 80-333-Civ-EDS (S.D. Fla.). That suit was dismissed by the Court sua sponte for lack of diversity of i
citizenship.
On January 20, 1981, RRD notified Dade County that the SWRRF was substantially complete and that the $90 million intitial payment was due. When the County refused to act in accord with that notice, RRD terminated the contract, on January 23, i
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1981.A! RRD was then faced with the possibility th6t it might be forced to continue, permanently, to hold legal title to the SWRRF -- a possibility that became less and less hypothetical as Dade County persisted throughout the Spring of 1981 in its refusal to make the S90 million substantial completion payment.
As the impasse deepened, RRD had the SWRRF qualified under PURPA and it duly notified FPL on March 13, 1981 of its intention to "begin sales of electric energy to Florida Power &
Light on or after ninety days from the date hereof."E! ~
Then, on April 3, 1981, after RRD had discovered the NRC settlement agreement mentioned supra, p. 2, it formally asked FPL, in accord with that agreement, "to transmit electricity on behalf of RRD to potential customers other than FPL."b! FPL refused that request.
4/ The January 23 letter, which refers to the January 20 letter, was ~ attached as an Exhibit to FPL's response in opposition to RRD's petition to intervene in the companion operating license proceeding. That response is dated May 6, 1981.
5/ The March 13 notification to FPL was attached as Exhibit A to PRD's petition to intervene in the operating license proceeding, which was incorporated by reference into its petition to intervene in this proceeding.
6/ The April 3 letter was attached as Exhibit B to RRD's petition to intervene in the operating license proceeding.
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4 Since.early 1981, the contractual dispute between RRD and Dade County has been in arbitration under the. auspices of the American Arbitration Association. In Re Resources Recovery (Dade County) Construction Corp. v. Metropolitan _Dade County, AAA No.
32-10-0031-81-F. That proce'eding was initiated by RRD; it concerns only the Dade County-RRD contractual dispute, and FPL is
,". not a party to it.
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B. The Intervention Petition and the Decision Below This proceeding comprehends the antitrust review th'at is a prerequisite to issuance of a construction license
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for St. Lucie Unit No. 2. During an earlier segment of that
) review, FPL, the United States Department of Justice and the NRC staff negotiated a settlement agreement that imposes certain license conditions upon FPL. Although the agreement was concluded.
)- in, September 1980, it was not made public until March 1981.1/
). 7/ A January 15, 1981 Federal Register notice (46 Fed. Reg. at 3683) of a prehearing conference in this proceeding revealed nothing of the content of the agreement. Nor was the.public invited to comment. That notice simply stated:
l The Atomic Safety and Licensing Board will conduct
)- a prehearing conference in this antitrust proceeding. . . to consider:the Joint Motion [ filed L September 12, 1980] of the Department of Justice, NRC
- Staff, and Applicant to. Approve and Authorize
' Implementation of Settlement Agreement.
(continued on next page)
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The public disclosure of the NRCo agreement' in the Spring
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(); - o'f 1981 coincided with1RRD's ' growing recognition that it might-
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iwell have no alternative but.to retain title to.the-SWRRF.due to Dade County's refusal to pay the $90 million that was'then'due.
()l After RRD reviewed'the settlement agreement, RRD learned that the agreement had singled - out 'PUPPA facilities in- its transmission license ~ conditions.(Section X). Since-RRD then held-lega1Ltitle'
() to~afPURPA facility with no prospect of divestment in the near-fut'ure, RRD filed, on April 24, 1981, a petition-for leave tol-intervene in this proceeding to protect its facility's PURPA 0
(continuation)
C)L The board will receive advice from the parties on the following:
1, Whether the proposed license. conditions would have a material adverse impact upon the intervening Florida-cities.
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- 2. Whether-the proposed license conditions contain anticompetitive,' discriminatory, or unfair provisio~ns '
which would create or maintain a situation inconsistent with the antitrust laws.
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- 3. If, in the1 view of the Florida Cities, the proposed license conditions [ including Applicant's December 3, 1980 commitments] do~not relieve!the alleged situation inconsistent with the antitrust laws, what procedures are appropriate'to' adjudicate remaining l issues?
lC):
All parties or their counsel are directed'to attend.
[ Emphasis added.]
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k rights and to raise serious antitrust objections to FPL's conduct in relation to the Section'X " transmission" conditions.O In its April 24 petition, RRD raised ~three separate but interrelated claims for consideration by the Board:
(1) FPL's refusal to deal with RRD by denying RRD
_ access to its transmission lines. Specifically, RRD alleged that FPL has refused to interconnect with its facility and to wheel for it, and that as a result of FPL's monopoly over the transmission grid in southern Florida, this refusal to deal hac prevented the SWPF from operating commercially.
(2) FPL's use of the NRC settlement process to maintain and to entrench its monopoly over the wholesale sale of bulk power. Specifically, RRD alleged that FPL refused to deal with it because '
RRD is a potential competitor of the utility.
(3) FPL's use of the NRC settlement process to circumvent and to undermine the procompetitive policies of'PURPA. Specifically,'RRD alleged that the settlement agreement would allow FPL to avoid its PURPA duties, thereby inhibiting the ability of small power producers to compete.
No owner or operator cf a PURPA facility has participated in the settlement proceeding or commented on the settlement terms. As RRD pointed out in its petition (p.5):
FPL has used the settlement process es part of a calculated effort to dimi dsh qualifying facilities' benefits undec 8/ On April 7, 1981, RRD had filed a petition for leave to Intervene in the companion operating license proceeding. That petition was denied on jurisdictional grounds on June 3, 1981.
RRD's appeal was taken under advisement by this Board on August 20, 1981.
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l' PURPA, thereby weakening them .
! compe*.itively.' This'has occurred without L prior nocice to.the'affected qualifying l facilities and without their participati'n o or comment..
l RRD has'also observed:that since the NRC alone was empowered to elter the. license conditions resulting from'the settlement-agreement,'only the NRC could redress RRD's grievances as a PURPA entity affected by'those conditions, regardless of whether the grievances were based on antitrust or other grounds. .See RRD Objections 2&3, filed 9-25-81. Finally, to obviate any delay from its petition, RRD has agreed to accept the extant record and to
. stipulate that it has.no objection to the issuance of FPL's operating license while the merits of RRD's eIaims are being evaluated (Mem. I. 18).
PPL opposed RRD's petition. Its principal complaint was-that RRD did not have a sufficient ownership interest in the facility to support its standing to intervene. FPL also moved for discovery on that issue.EI '
On July 20, 1981, a conference of counsel was held before the Board pursuant to notice docketed on July 8, 1981. No evidence, either documentary or testimonial, was introduced at the conference.
Thereafter, on August 5, 1981, the Board issued a twenty-eight page Memorandum and Order ("Mem. I. __") denying 1/- FPL submitt~e d an application for issuance of subpoenas to the Licensing Board on May 8, 1981.
RRD's petition. Rejecting FPL's principal argument, that of
) standing, the Board ruled that "RRD has a sufficient interest in the EGF to support its participation in the proceeding" (Mem. I.
26-27).1S! The Board also recognized that RRD had a legitimate interest to protect in the proceeding and that it could assist the Board in fashioning relief; the Board therefore granted RRD " conditional status as amicus curiae for [those]
purpose [s]..." (Mem. I. 19). The Board nonetheless denied RRD's petition to intervene, ruling --
we would exclude RRD solely based on its failure to-show good cause for late intervention and we also would excit.de it solely based on the availability of other means to protect its interest. [Mem. I. 21.]
The Board's order of denial was based specifically upon the following findings of fact and conclusions of law:
(1) "RRD has not alleged the required nexus to the proceeding" (Mem. I. 24).
(2) "RRD's reasons for late filing were-not specific enough" (Mem. I. 14).
(3) "RRD can seek. complete relief for all its grievances from FERC" (Mem. I. 6).
10/ That ruling was plainly correct under the judicial principles of standing which have been adopted by the NRC. See Public Service Co. of Indiana, Inc., (Marble Hill Nuclear Generating Station, Units 1 and 2), CLI-80-10, 11 NRC 438 (1980); Portland General Electric Co._(Pebble Springs Nuclear Plant, Units 1 & 2),
CLI-76-027, 4 NRC 610, 613 (1976); Nuclear Engineering Co.
'(Sheffield, _ Illinois, Low-Level Radioactive Waste Disposal Site),
ALAB-473, 7 NRC 737, 743 (1978). See generally, Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153 (1970); the Statement.of the Case, supra, pp. 3-5.
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f-(4) "[T]he antitrust problem allegedcby RRD'is'not-sufficiently serious to justify intervention" (Mem.'I. 12). ,i
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(5) RRD's." participation in'this proceeding inevitably would complicate and delay it" (Mem. I. 18). ;
i (6) Inquiry into FPL's conduct challenged by RRD "would not contribute"to the development I' of a sound record" (Mem.'I. 19). .
(7) " Florida Cities adequately! represents RRD's interests in-this proceeding up to the-point at
-which its participation' amicus curiae is required to address issues uniquely related.to PURPA
>_ facilities"-(Mem. I. 21).
RRD-filed thirteen objections.to the Board's decision on September 25, 1981. Six days later, the. Board affirmed its I August 5, 1981 Memorandum and Order ("Mem. II. ") with one change.11! Today, RRD filed-a notice of appeal from the Board's August 5, 1981 order, as amended on October 2, 1981.: We
) contend that the Board's procedural and substantive errors outlined in the Summary of Argument, infra, Part III, require that the decision below be reversed and that RRD's intervention I petition be granted.
jl/ The change was as foll.ows (Mem. II. 1):
f The Board is persuaded that were RRD to become a party there would be no
. procedural bar to its challenging the settlement agreement approved in this case.
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III.
SUMMARY
OF ARGUMENT RRD's_ petition sets forth-facts satisfying the intervention criteria of 10 C.F.R. S2.714, i.e,., the three factors governing consideration of'all' intervention petitions and the five factors to be balanced in reviewing late petitions. The petition clearly' alleged RRD's nexus to.the antitrust proceeding, its interest in the proceeding, and the likely_ impact on RRD of any remedial order to be entered by the Board. The_ petition, in sum, met every requirement of law and the NRC regulations; accordingly, it should have been granted.
In ruling that RRD had failed to satisfy the nexus requirement, the Board ignored RRD's direct challenge _to the settlement agreement and its specific allegations of FPL's anticompetitive behavior relating to the settlement license-conditions. The-Board did find, correctly, that RRD had a real interest in the proceeding (Mem. I. 26-27) and that any remedial order entered would affect that interest. The Board's erroneous nexus finding was induced by an unduly restrictive application of the nexus standard enunciated by the Commission. See, e.g.,
Louisiana Power'& Light Co. (Waterford Steam Electric Generating Station, Unit 3),.CLI-73-007, 6 AEC 48, 49 (1973) ["Waterford I"l',
where the NRC held that an intervenor need establish a nexus only with the-applicant's activities under the prospective license l
I and not with the construction and operation of the particular nuclear plant under consideration.
The Board erroneously found that the five factors for evaluating late intervention petitions were balanced against RRD's intervention. The Board misread the record and failed to apply the correct legal standard in its decision on each factor. Since the balance of those factors is a product of the separate appraisal of each, the Board's overall decision must fall as the tainted product of its underlying errors of fact and law.
See, e.g., South Carolina Electric and Gas Co. (Virgil C. Summer Nuclear Station, Unit 1), ALAB-642, NRC, , (1981) (Nuc.
Reg. Rep. (CCH) 130,591].
The Board's failure to recognize RRD's good cause for late intervention was induced by its misreading of the record, by its failure to appreciate RRD's position on fundamental issues, and by its reliance upon the bare allegations of a dismissed complaint and upon unsubstantiated statements by FPL's counsel about matters not of record (e.g., innuendo as to a " letter"). On the other hand, the Board ignored the unassailable' record evidence that RRD had no basis for intervening until the Spring of 1981 when its contractual dispute came to a head and the' settlement agreement terms were made public (in March 1981) -- less than a month before the petition was filed. .
In discussing "other means" available to RRD to protect its interests, the Board misinterpreted RRD's contentions L an'd the respective authoritieslof the NRC and'the.FERC. 'The issues raised by RRD are within the_ peculiar competence of the l NRC. Under the Atomic Energy Act, the'NRC has exclusive jurisdiction to review the settlement agreement in light of RRD's t
i claims. See 42 U;S.C. S2271. -RRD's antitrust allegations that FPL's monopolistic conduct will be maintained or enhanced by the settlement' license conditions are cognizable by the NRC under S105(c) of,the Atomic Energy Act. Those claims cannot be adequately addressed by FERC -- not all of the issues are cognizable by the FERC and, in any event, FERC's antitrust jurisdiction is more restricted than the NRC's. See, e.g., Toledo-Edison Co. (Davis-Besse Nuclear Power Station, Units 1, 2 and 3),
ALAB-560, 10 NRC 265 (1979); Houston Lighting & Power Co..(South Texas Project, Units 1 and 2), ALAB-549, 10 NRC 563.(1979). The NRC provides the only forum able to consider all of RRD's claims and to afford RhD the relief it seeks. Therefore, no other means.
is adequate to protect RRD's interests.
Despite RRD's' stipulation that FPL's operating license may issue pending consideration of its contentions, the~ Board found that RRD's participation would delay the proceeding. .That inexpl.icable finding cannot be credited. An, antitrust review =
proceeding is now being cor. ducted at the behest of the intervenor Florida' Cities; RRD has asked only to participate in that ongoing proceeding; and it has agreed not to dispute the issuance of FPL's operating license (as scheduled), subject to the subsequent imposition of appropriate: protective conditions. .
RRD's agreement,
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in short, to proceed on the same basis - the Cities necessarily obviates any delay that might arise from RRD's intervention.
In finding that the intervenor Cities could adequately represent RRD's interests, the Board failed to recogniz9 that the
' Cities own no PURPA facilities; nor do the Cities' allegations
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of FPL's anticompetitive behavior duplicate RRD's contentions.
Because RRD's claims are separate and distinct from those of the Cities, no existing party could adequately represent RRD's interest in this proceeding. What is more, although the settlement agreement accords distinct treatment to PURPA facilities, it was negotiated and approved without input from any
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PURPA facility. For that reason, RRD's intervention is essential to the development of a complete record.
Several other errors contributed to the Board's
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erroneous order. The Board failed to appreciate the significance of the three distinct but interrelated antitrust claims raised by s RRD: FPL's refusal to deal, FPL's use of the NRC settlement
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procedures to maintain its nuclear-supported monopoly power, and FPL's use of the settlement procedures to undercut the procompetitive policies of PURPA. The Board's suggestion that
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PURPA facilities are not competitive wi:'h utilities like FPL is indicative of its misfocused view of RRD's status. Congress and the courts hatte both spoken to the contiary, acknowledging the
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procompetitive thrust of PURPA. See, .e g , ;Iew York _ State _
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I Electric and Gas Corp. v. FERC., 638 F.2d 388, 402 (2d-Cir.
1980), cert. pending, (Sup. Ct. No. 80-1958), 49 U.S.L.W. 3865 (docketed May 19, 1981) and the legislative history cited therein.
- The Board found that RRD had received early notice of f
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'the settlement agreement from a January 15, 1981'-Federal Register notice. That notice, however, did not reveal the agreement's scope or terms, and nothing in the public record gave qualifying
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PURPA facilities any reason to believe that they might be affected by the agreement. The public record was barren on this point until the settlement agreement was quietly. deposited ir. the NRC's public document room in March 1981. Within a month, , RRD had petitioned to intervene. RRD's timing was appropriate by any reasonable standard. See, e.g., Natural Resources Defense Council v. Costle, 561 F.2d 904 (D.C. Cir. 1977).
'ro conclude, RRD's petition satisfied all of the criteria for late intevention. Indeed, when the Board's' legal errors are overturned and the factual record is corrected, the balance falls overwhelmingly in RRD's favor. RRD has alleged a proper case for intervention, and the Appeal Board should reverse the decision below snd direct the Licensing Board to grant RRD's petition.
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IV. ARGUMENT A. _The Standard of Review -- A Licensing Board Decision Must be Reversed When~it is Based Upon an Erroneous View of the L.aw or Incorrect Hypotheses of Fact.
.The Appeal Board reviews a Licensing Board's
. intervention decision under the " abuse of di,cretion" rubric.
See,'e.g., Public Service Co.'of Indiana, Inc. (Marble Hill Nuclear Generating Station, Units 1 & 2), ALAB-339, 4 NRC 20
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(1976); Virginih Electric and Power Co. -(North Anna P_over Station, Units 1 & 2), ALAB-342, 4 NRC 98 (1976). In that context, the Board's appellate review power extends to all issues of fact and' law th'at underlie the Licensing Board's ultimate ruling. As the Appeal Board recently held:
It is well-settled that the appellate review of licensing. board application of the five factors [for late intervention) is governed by the " abuse of discretion" standard....ButLit is equally clear that this. standard does not_ foreclose our close scrutiny of the factual and legal _
ingredients of the analysis underlying the
. board's_ ultimate conclusion.
-South Carolina Electric and Gas Co. (Virgil C. Summer Nuclear _
Station, Unit.1), ALAB-642, NRC _, (1981)-[Nuc. Reg. Rep.
(CCH) 130,591] (citations omitted, emphasis added). See also, I Consum'er Power Co., 6 NRC 892, 1022-23, ALAB-452 (1977). A Licensing Board's decision cannot be defended as a reasonable i
exercise of discretion when it is based upon an erroneous standard of law or unsubstantiated factual allegations. See, e.g.,
Tennessee Valley Authority (Hartsville Nuclear Plant, Units 1A, 2A, 1B & 2B), ALAB-367, 5 NRC 92 (1977). And, after reviewing the facts of record, the Appeal Board has the power and the concomitant duty to reverse a decision below if the Licensing Board has " distorted the meaning of the testimony." Public Service Co. of New Hampshire (Seabrook Station, Units 1 & 2),
CLI-78-4, 7 NRC 1, 29 (1978).
The remainder of this brief demonstrates that the order of the Licensing Board below cannot be sustained, for it is predicated upon a memorandum opinion replete with er; ors of fact and law. The Licensing Board, in sum, abused its discretion and
_ committed reversible error by failing to adjudicate RRD's right to intervention under the proper legal standards and upon a correct reading of the facts.
B. Nexus - RRD's Interests will be Adversely Affected by This Proceeding The nexus requirement flows from Section 105 of the Atomic Energy Act of 1954, 42 U.S.C. S2135. Subsection 105(c)(5) of that Act provides:
, The Commission . . . shall make a finding as ro whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws as specified in subsection (a) of this section.
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42 U.S.C. S2135(c)(5) (emphasis added). The Commission's regulations allow any person "whose interest may be affected" by activities'under an NRC license to intervene to protect those interests. 10 C.F.R. S2.714(a)(1).
. The " nexus" requirement was first extensively analyzed by the Commission in its 1973 Waterford I decision. Louisiana Power and Light Co. (Waterford Steam Electric Generating Station,
~ Unit 3), CLI-73-007, 6 A.E.C. 48 (1973). There, the Commission held:
The standard [of S2135(c)(5)] requires that:
(1) the a] legations raised by the petitioners describe a situation inconsistent with the
) antitrust laws or the policies clearly undar-lying these laws, and (2) the specified situation be " created" or " maintained" by "the activities under the license." Thus, it would be insufficient for a petitioner simply to describe a situation inconsistent with the
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anti trust laws, regardless of how grievous the situation might appear to be. A more meaningful nexus must be established between the situation and the " activities under the license." . . . Generally, " activities under the license" would not necessarily include all the applicant's generation, transmission, and distribution of electricity.
On the other hand, " activities under the license,"
in most circumstances, would not be limited to construction and operation c f the f acility to be licensed. [p1. at 49, emphasis added.)
In short, any conduct by a ?.censee that affects the petitioner
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and offends the policies of antitrust law provides a sufficient nexus with the licensing proceeding, if the conduct will either be
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" created" or " maintained" by allowable activities under the license. See Waterford I; Louisiana Power and Light Co.
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(Waterford Steam' Electric Generating Station, Unit 3), C LI-73-0 2 5',
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_6_AEC 619,;621 (1973).[Waterford II). .
- Applying that standard in the Waterford cases, L the Commission found a sufficient nexus to support intervention j- based upon allegations'that the app *icant-had monopoly control over " transmission facilities" and "large electric generation units"'and that this " situation" of monopoly control was preserved ~
) by, inter alia, the applicant's refusals to wheel.and to enter-into reserve' coordination agreements with smaller' entities. _. As .
the Comission held in Wat erford II, 6 AEC at 1170:
) Petitioners have alleged that a transmission monopoly is being employed to prevent petitioners from. competing, and that the new nuclear unit 'would maintain or strengthen-Applicant's monopoly position by providing
- _ Applicant with the abi'lity to serve.the
)' increasing demands of present customers while foreclosing petitioners from the ' ability to serve these demands.'
Similarly, in another leading " nexus" case the Appeal
) Board explicitly held _that the commission could properly evaluate the antitrust cons 4uences of.a refusal to wheel when the refusal.
constituted an actisity under the license. Kansas Gas & Electric
)f Co. (Wolf Creek Generating Station, Unit No. 1), LBP 75-13, 1 NRC 268, vacated and-remanded on other grounds, ALAB-279, 1 NRC 559 (1975) [ Wolf Creek I]. In determining whether a given activity
)- occurred under an NRC licens,e, the Licensing Board in Wolf' Creek I-m recognized that'the license " conditions" had to be, considered.
l See Kansas Gas and Electric Co. (Wolf Creek b
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' Generating-Station,. Unit-1),'LBP-75-52, 2 NRC 469,Lreversed and
. remanded on other grounds,'2 NRC 740 (1975) [ Wolf Creek II], in which the Appeal Board reaffirmed its " nexus" holding and! ordered intervention.
RRD's petition plainly meets those criteria.. RRD has alleged that FPL'has monopoly power over the electrical.
transmission and generating facilities in the Southern Florida market; that to preserve its monopoly power FPL has refused to interconnect with, wheel for, or purchase from RRD; and that to disrupt the plans of any qualified small power producer under PURPA, including RRD, to compete with it, FPL has used the
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settlement process to obtain- wheeling ' conditions that discriminate-against and adversely affect PURPA facilities.
Those allegations. describe a situation inconsistent with
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the antitrust laws under the Wolf Creek and Waterford cases. RRD has also alleged that this anticompetitive situation will be maintained by the NRC settlement conditions at issue.
First, the settlement agreement (at p. 26) states that
"(nlothing in this license shall be construed to require Company
[FPL] to wheel power and energy to or'from a retail customer."
RRD is a retail customer of FPL -- a status that PURPA protects.
18 C.F.R. S292.303(b). Yet, the NRC license conditions would dismiss FPL from compliance with its PURPA obligations in any situation where RRD right choose to have FPL wheel its power to a distant customer. The license conditions thus serve to maintain L
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FPL's monopoly power by undercutting PURPA's effort "to serve as a tool for enhancing competition . . . ." See New York State Electric and Gas. Corp. v. FE'RC, supra, 638 P.2d at'402.
'Second, the settlement agreement (at p. 25) provides that M FPL wheels RRD's power to another entity, the receiving entity "will make, during the time and to the extent of its purchases from [RRD's] . . . facility, any sales of ' backup power' and ' maintenance' power . . . to the . . . small power production facility." The import of this license condition -- and its relation to FPL's St. Lucie Unit No. 2 -- is thoroughly anticompetitive. Completion of the nuclear plant will increase FPL's stand-by generating capacity and lower its incremental fuel cost. The license condition, however, would preclude RRD from purchasing its " backup" and " maintenance" power from FPL in any situation where RRD is attempting to compete with FPL (through wheeling) for the patronage of a distant customer. That condition diminishes RRD's competitive ability, making RRD dependent upon the customer's capacity, willingness to make such power available, and cost structure.
Third, FPL's wheeling obligation for PURPA facilities created by the settlement agreement (at p. 25) _is qualified by the precondition that FPL must find that the facility's request can
" reasonably be accommodated from a technical standpoint without significantly jeopardizing Company's reliability . . . . This ambiguous provision could be unilaterally interpreted to lessen FPL's wheeling obligations. Ambiguity in this important context is a serious matter. See Wolf Creek I, 1 NRC 268, 270. There, L .
the 3oard construed a wheeling licen3e condition that allowed the s --
l- - applicant to_ determine availability from a."functionalLand
): technical standpoint." The Board held that ambiguity in the-
- language of that condition ~was.a-serious problem because;it^"could be subject to unil.ateral-interpretation by the applicants _. . . .
h--
-[I] n - the absence of precise definition - in the industry, uits l potential for detriment to the [ petitioners] entitles them to j
~
' develop'this contention at a hearing." -
Id. at 271..
The Licensing Board below ruled that RRD had not' alleged a sufficient nexus with this proceeding because its claims were grounded on PURPA'and were without antitrust significance (Mom. I.
26), and because RRD will not "be hurt by FPL opening a' nuclear..
power plant" (Mem. I. 25).- That ruling was erroneous. As ;
explained above, RRD's claims-are directly related to the-license conditions-approved in this proceeding; the claims have enormous.
competitive significance; and-FPL's anticomnetitive conduct, including _its refusal to wheel for RRD, is-supported by FPL's.
nuclear operations including St. Lucie No. 2. On the fundamental technological level, the Board's nexus ruling simply ignores the developing competition between the' infant small-power production industry, which exploits refuse-derived fuel, and the established-nuclear industry.
-As an affected small power. producer RRD plainly has
- standing to raise its claims in this proceeding, and the Licensing Board's decision.to the contrary shou. be.' reversed.
)
)
^
=C. Good Cause - :The~ Licensing Board Based its." Good- -
Cause" Decision Upon an Erroneous View of the- -
( 'FactsEand an Unwarra'nted Denigration-ofithe Legal.
M . Significance"of RRD's Claims.-
r, The Board.found'that --
(1) I -
b' RRD failed to contradict FPL's-representationsDthat
-RRD should'have-filed soon;after February,'1980.
FPL stated that-by then, RRD knew that it'could not'
' afford to operate the EGF: pursuant 1to the' operating x
contract.. Furthermore, RRD~apparently, learned g
shortly thereafter_thatDits demand for-
~ renegotiation of key payment t'erms would;not txe-met.' [ Me m.- I. 14-15.].
These findings are-based. solely on oral-argument-by FPL's counsel,'
Lard;they are wrong.
1 1The Board relied heavily upon an assertion by~FPL's counsel that FPL hasta letter - 'which istnot in the record (see-
[y Mem. I. 15) -- aJiegedly documenting.a statement.inr RRD in February 1980 that RRD did not intend to operate the EGF pursuant to the' contract with Dade County l(see Mem. I ~. 15). The entire
[( colloquy on this point is found at Tr. 98:
MR. BOOKNIGHT [FPL's counsel): _ And- certainly,-
from'the facts alleged-in the [Dade. county]
complainc -- a complaint like this.does' not just get filed out of the blue --
last. fall was really.the time when the
[j- -
public record was fully documented,.that
- . Parsons & Whittemore was considering'the possibility,of trying to hang'onto this L facility and not transfer title.
l.
jy CHAIRMAN BLOCH: Last: September?;
L MR. BOUKNIGHT: Last September, I-would l' say,_last September.
MR. ADAMS. [of FPL] : The letter is in February _
which' stipulates.it started in? December.
L3
' 2 4 -- -
O-
MR. BOUKNIGHT: Mr. Adams points out to me that he has a letter.
CHAIRMAN BLOCH: Is that letter already in our record?
MR. BOUKNIGHT: No, it is not. But he indicates to me that we can demonstrate that, as early as February of 1980 rather than autumn of 1980, that P&W had communicated that concern or that desire, to operate the facility itself.
CHAIRMAN BLOCH: All right. Now, in your view, they should have known as soon as
) they thought about operating the facility, that they would probably get what they considered to be an illegal refusal to sell power under PURPA from Florida Power & Light.
) MR. BOUKNIGHT: Yes, sir. I understand the implications in the statement of the question, but the fact is that at that point they 'had to know, and they had to know earlier than that, whether they considered it illegal or not, that FP&L's
) position was based on a contract that FP&L had with Dade County.
This exchange led the Board to conclude that RRD should have known in February 1980 that-it would have to operate the facility and
)
that FPL would refuse to wheel the facility's energy output.
The Board's conclusion is simply without record support.
The " letter" was never offered into evidence; RRD had no opportunity to see it, to explain it, to refute it. What is more, FPL's own characterization of the letter indicates only that RRD l
" desire [d]" to operate the facility itself. That is hardly
)'
evidence of an intention to breach the Dade County contract. And counsel's concluding argument that RRD should have known in
' February 1980fthat it would encounter an' illegal refusal to deal i is speculative nonsense.
f The February 1980 date is even inconsistent.with other statements made by .FPL during the conference. For example, at.Tr.
L i38,. counsel statedithat RRD had initially raised-the issue of s
)
- contract renegotiation "sometime in 1979" (Tr. 39). "Thenche
(
suggested that RRD's intent to breach "could have arisen anytime
( after November of 1978" ---the'date when PURPA was passed (Tr.
) 97). He then-backtracked and stated that the intent "could not
~
L realistically have arisen before the'date that...this Dade County complaint was filed, which was in December of last year [1980]"
) (Tr. 97).
The transcript, read as a whole, reflects confusion.and
. unfounded speculation on the part of FPL. It is obvious from
)- counsel's floundering that FPL has no concrete knowledge whatsoever of any intent on the part of RRD to breach the-Dade County contract. Furthermore, while RRD never denied that it had
) asked to have the contract renegotiated, it emphatically did deny that it ever intended to breach the contract (Tr. 74-77; 116-117; see infra, pp. 31-33).
[ The Board's acceptance of FPL's unsubstantiated assertions is remarkable-in light'of: Chairman Bloch's-recognition.
during.the July 20 conference that-the propriety of RRD's 1 ~
intervention must be determined on the-basis of record evidence.
As the Chairman said:
D?
-I tried to focus on what you (Mr. Bouknight]
said.about.a-fact, and I don't;see how we could possibly understand facts that
- 1. . you haven't introduced yet. It seems we have to stick to some extent to-the facts..we'have available-to us. -I;am trying'to decide.this. case based on what-is in the record, and I don't know what we're supposed to do about your statement
)
just'now that P&W had some long-range intent to breach ~a contract. [Tr. 87.] .
Although FPL's continued discussion concerning RRD's unspecified' "intentio'n to breach a contract" seems to-have persuaded the,
~
Board, ther.e is no question but that. Chairman.-Bloch's admonition at. the hearing accurately reflects t he law. 'See, e.g., Gonzales
- v. United. States, 348 U.'S. 407 (1955). By ignoring that D.
cdmonition, the Board erred in its decision. b Turning to the-issue of fair notice of FPL's contentions, RRD was not advised until the July 20, 1981, conference that FPL would.take the position that the contract dispute had reached a.n impasse in February 1980. RRD emphatically denied that assertion during the July N aring (Tr. 74-79 and 116-117). ,
Indeed, RRD contended that it would need discovery as 12/ The Board also erred by relying upon allegations made in Dade County's December 1980 complaint against petitioners ~in the United States District Court for the Southern District of Florida.
Here again,. Chairman Oloch initially reengnized the complaint's lack of probative value, asking, "why are we interested in mere allegations unproved in district court?" (Tr. 93). Yet, in its E decision, the Board erroneously adopted FPL's argument that
" complaints like this do not just get filed out of'the. blue" as its sole reason for relying on the. pleading's naked allegations l (Mem. I. 12 ) '.
(
)
i
( l
}
O I
( to FPL's assertion (at Tr. 116) that it possessed a letter
{ documenting that RRD had said in February 1980 that it "would not lO operate the EGF".(Mem. I. 15). RRD followed that request with a summation of'its position, as follows:
Everything they [FPL] have said l() is' compatible with an honest dispute that did not erupt until April of 1981. Tr. 116. [ Emphasis added.]13/
In sum, the Board's conclusion that RRD should have O recognized its need to intervene in February 1980 is based entirely upon unsubstantiated assertions of FPL's counsel and the allegations of a dismissed complaint. FPL's critical " evidence"
() -- a letter mentioned for the first time at the conference -- was never even shown to RRD or to the Board. Because the Coord rested its decision upon these new, unsubstantiated contentions of FPL, O that decision was erroneous and in violation of RRD's right to due process of law.
It has long been settled that a petitioner has a right
() to have its position evaluated upon facts of record; anything less amounts to a denial of due process. Gonzales v. United States, supra, 348 U.S. at 416 (a fair hearing requires that the record-O contain the facts upon which decision rests). As the Supreme Court roled in the early 1930's, an administrative adjudication, O 13/ It is significant that FPL's oral representations during the July 1981 conference were inconsistent on the contract impasse date, ranging from "[slometime in 1979" (Tr. 38) to December.1980 j (Tr.97).
O O
h like a judicial decision, must be based upon facts of record, and the opposing party must receive fair notice and an opportunity to be heard on_the points at issue. Crowell v. Benson, 285 U.S. 22 (1932). See Kelly v. Herak, 252 F. Supp. 289, 295 (D. Mont.
1966), aff'd, 391 F.2d 216 (9th Cir. 1968) (a party has the rignt to examine, explain, and rebut all eviSence relied upon by an administrative agency in the adjudicative process). Moreover, to be p .per for agency consideration, the evidence the agency relies
)
upon must have probative force. See Coates v. Califano, 474 F.
Supp. 812 (D. Colo. 1979).
The decision below violated all of these precepts. It
)
should be reversed.
(2) The Board's overriding error, explained above, was to find without evidentiary support that RRD should have
)
recogni-ed its need to intervene in February 1980: "RRD may have known of its serious contractual impass on or before February 1980" (Mem. I. 16). That error was compounded by the Board's ancillary finding that RRD failed, at the July 20 conference, to contradict FPL's statements in this regard. As support for this finding the Board quoted the following colloquy from Tr. 77:
CHAIRMAN BLOCH: So your understanding was that the first thing to occur was a refusal to pay based on nonperformance, and that other issues concerning whether or not you were going to operate occurred later.
MR. KUCIK [RF3]: They said that they were afraid that if it were true, what we i
a were saying, that the shortfall was so great that we simply wouldn't be able to operate and we would walk away from it,
'l and therefore they were not going to pay us any money and they were going to go to court. We said, look, we just want to-talk about it, the plant is substantially completed, we need the $90 million
,s We have earned it and we are getting J killed by the interest and we are now in arbitration. We were in court and we are in this. big mix-up. -[ Quoted at Mem.
I. 15-16.]
However it is construed, this quotation could not be referring to the Board's February 1980 date, since the "ninety million dollars" referred to (Tr. 77) was the contract's substantial completion price, and no one has contended that the facility was substantially completed prior to January 1981. The quoted language, in fact, describes the onset of the dialogue in December 1980 and January 1981 that ultimately led to the contract impasse in the Spring of 1981: RRD had indicated that there would be an earnings shortfall under the contract and requested renegotiation.. But Dade County, fearing that the shortfall would be so great that RRD would be unable to operate the facility, filed a lawsuit in federal court claiming anticipatory breach. At
, LSe same time, Dade County refused to pay petitioners the
~; .
$90 millinn due under the contract for substantial completion of
'l O
L
l the-facility. These events all occurred in December 1980.and January'1981.EI The Licensing Board completely ignored this' chronology.
Indeed; in its October 2, 1981, memorandum and order disposing of RRD's-objections, the Board truncated the Tr. 77 quotation and characterized it-as an admission-that petitioners intended as early as Pobruary 1980 not to operate the facility: " counsel for RRD admitted that 'we were saying, that the' shortfall was so great
}
that we simply wouldn't be able to operate and we would walk away from it'" (Mem. II. 2). That distortion of the language quoted supra, pp. 29-30, is inconsistent with its context as explained above. The finding of an " admission" also ignores RRD's straightforward denials that it ever intended to breach the contract, denials which immediately preceded Tr. 77 and which were repeated later (see Tr. 115-116). See, in this connection, the following excerpts from the transcript of the conference:
CHAIRMAN BLOCH: The problem I have is I
} am not sure what your version of the facts is. I don't understand what your position is as to what happened with this plant that's different from Florida Power
& Light's position. You seem to not know about their position.
]
MR. KUCIK [RRD's Counsel): We didn't reach -- what happened is there have been
)' H/ C'ontrary to its p6sition before-the NRC Licensing Board,.
.FPL has argued in its pleadings before the FERC that the Dade County - RRD contract dispute began in December 1980. See FPL's .
Protest, Petition for a Declaratory Order, and Petition to Intervene filed with FERC on May 6, 1981 in Docket No.
QF-81-19-000, at p. 2:
) A dispute regarding the contractual relationships between RRD and Dade County arose in December 1980.
3' a-lot-of negotiations and: changes over time in-these contracts.- There have been some
- discussions and-the contracts have been modified over' time. We proposed another modification to Dade County. Dade ,
County's position, which~Mr. Bouknight keeps quoting, is.that'.we breached.
But we don't agree nwith that. We took it Ul to arbitration. That.is not a breach.
And so we don't agree-that we. breached anything. We don't agree that we are not willing_to,go forward under the contracts- ,
as interpreted by the arbitrators. We are going to abide by the-decision of the- ,
) ,trib*Inal as to the contract. [Tr.74-75, emphasis added.] - ' -
) CHAIRMAN BLOCH: The refusal to breach --
or the refusal [of Dade' County] to pay, I take it, was based onLan argument of.
anticipatory breach and that you'would not operate the facility under'the terms for operation; is that correct?
MR. KUCIK: Not as I understand itt. We sent them a certificate of substantial completion and asked ~under the contracts for a $90 million partial payment.
) They said it wasn't_ ready. That is initially where we ended _up, and-
- then they said we have been.trying ,
to talk about renegotiating the contracts so that we can get more money. They -
said, you're not goingcto operate them
, [the SWPF] ever_and we;said yes, we will.'
~3 And then it, turned out -- .
CHAIRMAN BLOCH: Is P&W ready'now to operate under the terms of the operating-agreement?
MR. KUCIK: The plant is operable, yes.
l L
I l
l-32 -
3-
)) .
L
' CHAIRMAN BLOCH: But they are willing to abide by the terms of the. operating
) agreement right now? Or are'they insisting on a change in it before they
-operate the plant?
MR. KUCIK: We are: agreeable to.do whatever is the position in arbitration' at'the moment. 'It.is under arbitration
) and I think we're not willing to do anything unless we get the $90 million~,
and nobody's offered that. Once we'get the $90 million, my understanding' is that we are willing_to do.whatever, you know, whatever we're supposed to-
) _
do. - [Tr. 7 6--7 7, emphasis added.]
In light of this discussion, where RRD asserts several times that it never intended to. walk away from or breach the .
7ade County contract, the' Board's assertion that RRD failed to contradict FPL's statement is plain error. .In' fact, FPL itself admitted ~ that any intent by RRD to disavow the contract "cculd not realistically have arisen"'before December 1980, the time when Dade County filed its short-lived lawsuit. As FPL's counsel.
.- observed (Tr. 97):
CHAIRMAN BLOCH: What is the earliest time, under your view, P&W knew they were -"
going to have possession of that plant '
and.would not easily divest themselves of
[)
MR. BOUKNIGHT: I do not know the answer. <
I do not know the answer as to when the ,
earliest time was for P&W. Information '
that I have is that P&W communicated that /
that was its. intent as early as last ..
]
" ~
autumn. As to when that intent >was ,'
formed is something'we do not know.- , a i ?
r
/-
s t ,j
!. l l l a
e , .
Y I
Now, PURPA was. enacted.in November ~of 1978. If there was an' intent to take
); advantage of PURPA, notwithstanding the-contracts, it could have arisenLanytime
, af ter November of 1978. Indeed, as you know, PURPA was a much' debated piece of legislation, and it was-no surprise when it was finally enacted. That intent j could have arisen in 1978. Certainly,
. 'all of the facts --
CHAIRMAN BLOCH: Or it could have arisen rometime early this year. [1981] .
MR. BOUKNIGHT: I think that it could not
}. realistically have arisen-before the date-that this Dade County contract (sic).was filEu, which was in December, this. Dade County complaint was filed, which was in DecemDer of last year (1980). [ Emphasis '
j added.]
The transcript itself refutes the Board's finding that RRDlackedgoodc}useforlateintervention. That finding is without recbrd support, and the Board erred in attempting to cure that de#/.ciency by mischaracterizing the argument of counsel at the July 7.0, 1981 conference.
, e
][$ '. (3) The " substantiality" aspect of the good cause j ,
criterion is not a test of the seriousnessoof the petitioners'
' substantive' claims, am the Licensing Board erroneously ruled-(Mem.
'/ -
Florida Power & Light Co. ('St. Lucie j i.
~
I. 12-13). See, e.g.,
Nuclear Power P ant, Unit '- CLI-78-12, 7 NRC 939 (1978); Duke r
Power Co. (Oconee Nuclear Station), ALAB-528, 9 NRC 146 (1979).
l ;?" ' /
I tervention petitions are to be evaulated only on the-factors
}
delineated at 10 C.F.R. S2.714(a), and the seriousness of the !
f allegations is not one of them. The Licensing Board's
, e' ?
) .
I l l : m
- f. . f /C #
>^\ .
9i i ,
i .
)
consideration of that irrelevant factor amounts to an improptr
~
denial of.RRD's petition to intervene by ruling against RRD on the '
merits of its antitrust claims. .
The Commission and the Appeal Board have held on numerous occasions that, when considering a petition to intervene,
)
a Licensing Board may not evaluate the merits of the dispute.
See, eg g., Duquesne Light Co. (Beaver Valley Power Station, Unit 1), ALAB-109, 6 AEC 243 (1973); Mississippi Power and Light'
)
Cn. (Grand-Gulf Nuclear Station, Units 1 and 2), ALAB-130, 6 AEC 423 (1973). This is true even when the Lice' nsing Board suspects that the contentions cannot be supported. To be granted
)
intervention, a petitioner need only state his contentions with specificity -- he need not establish a factual basis for them.
Beaver Valley, supra, at 244; Grand Gulf, supra, at 426.E/
For its substantive antitrust allegations, RRD has
' alleged a refusal to deal and a misuse of the settlement process
~
for anticompetitive ends. As good cause for its filing, RRD alleged that "(i]t was only when petitioners unearthed the j proposed Settlement Agreement that they realized FP&L was using l
- 15/ 'he T specificity requirement applies to a petitioner's l substantive contentions. The Licensing Board below misconstrued j . - , th'at requiremen't, finding that "RRD's reasons for late filing.were not specific enough," and that RRD "did not allege good cause with sufficient specificity" (Mem. I. 14). See Florida Power & Light
-(1978).
) -
V +
)
~~
I -_
~ 1. . . .
s I
this proceeding to undercut their rights. . . . Petitioners' delay was caused i a lack of knowledge attributable to t he secrecy of the settlement process" (Pet. 7-8). All of these allegations have the specificity required by NRC decisions and regulations, and the Licensing Board erred in ruling otherwise.
That error was compounded by the Board's (mistaken) reformulation of petitioners' contennions. The Board stated that RRD claimed "it was inconsistent with the antitrust laws for FPL to decioe to contest RRD's alleged PURPA rights before FERC" (Mem. I. 13). RRD's claims, in fact, are that FPL has refused to
{ deal with RRD and has abused the NRC settlement process for anticompe.titive ends; those claims have notiing to do with the FERC or with FPL's actions before FERC.
Furthermore, RRD's antitrust allegations raise a substantial and serious challenge to FPL's monopolistic behavior.
The proper rcsolution of those issues will affect al.1 small power producers, existent or potential, who may want to exercise their rights under the settlement license conditions. In Klor's, Inc.
- v. Broadway-Hale Stores,_ Inc., 359 U.S. 207, 213-214 (1959), the Supreme Court reversed a judgment similarly based on a finding of antitrust insignificance, holding that anticampetitive behavior --
is not to be tolerated merely because the victim is just one merchant whose business is so small that his destritetion
h l
makes little difference to the economy.
l Monopoly can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving them out in large groups. In recognition of this fact the Sherman Act has j consistently been read to forbid all contracts and combinations "which ' tc.id
! to create a monopoly,'" whether "the I) tendency is a creeping one" or "one that proceeds at full gallop."
The Licensing Board erred in holding that RRD's claims do not allege "the kind of egregious antitrust violation for which O
such late intervention is appropriate" (Mem. I. 13).
D. Other Means -- The Licensing, Board Erred In Holding That RRD Could Protect Its Legitimate Interests Before Forums Other Than The NRC.
O s (1) RRD's intervention petition challenges some conditions of the settlement agreement in this proceeding (Pet.,
O App. A at 16-20). In that connection, RRD has alleged that FPL's activities under the transmission license conditions approved by the Board would create or maintain a situation inconsistent with D
the antitrust laws. That challenge may be adjudicated only by the NRC.
"[0] nly the NRC is empowered to make the initial D
determination under Section 105c whether activities under the license would create or maintain a situation inconsistent with the antitrust [ laws and policies),,and if so what license conditions should be required as a remedy." Houston Lighting & Power Co.
(South Texas Project, Units 1 and 2), ALAB-549, 10 NRC 563, 574 0
D
)
l I (1979) (emphasis added). What is more, only the Attorney General, l
acting on behalf of the NRC, may seek to enforce judicially the l Atomic Energy Act, NRC regulations or license conditions aproved by the NRC. Susquehanna Valley Alliarae v. Three Mile Island j Nuclear Reactor, 619 F.2d 231 (3d Cir. 1980), cert. denied, 499 U.S. 1096 (1981); Liesen v. Louisiana _ Power &_ Light Co., 636 F.2d 94 (5th Cir. 1981); Section 221(c) of the Atomic Energy Act of 1954, as amended by Pub. L.91-161, SS, 83 Stat. 445 (1969), 42
)
U.S.C. S2271.
No other forum, administrative or judicial, has authority to redress RRD's grievances as to the NRC settlement
)
license conditions at issue here. "[T]he only exception (to S221(c)] for private enforcement appears to be the opportunity to j participate in the NRC's administrative proceeding as provided in the Commission's regulations and seek judicial review under [42 U.S.C.] S2239a " SusquePanna Valley Alliance, supra, 619 F.2d at 238; see Liesen, supra, 626 F.2d at 95.
)
(2) The Licensing Board made several erroneous findings of tact and conclusions of law that formed the basis for its holding that all of RRD's interests could be protected by the
)
FERC. Specifically, the Board erred in ruling:
(1) "that RRD can seek complete relief for all its grievances from FERC" (Mem. I, 6);
)
)
)
r (2) that "RRD wants to limit its particioation as much as possible to exactly the same issues as pend before FERC" (Mem. I. 9);
(3) "that the antitrust issues impliedly raised by RRD are peculiarly within the competence of FERC" (Me,m. I. 9); and,
) (4) that FERC's " competence arises because PERC
~ has the responsibility for a6tainistering PURPA and the antitrust issue impliedly raised here is whether small power facilities have antitrust rights additional to their PURPA rights or whether PURPA rights preempt j antitrust rights" (Mem. I. 9-10).
For several reasons FERC's antitrust jurisdiction is not an "other means whereby the petitioner's interest will be protected" within
) the meaning of 10 C.F.R. S2'.714(a)(1)(ii). Toledo Edison _Co.
(Davis-Besse Nuclear Power Station, Units -1', 2& 3), ALAB-560, 10 NRC 265, (1979); Houston Lighting & Power Co. (South Texas j Project, Units 1 and 2), ALAB-549, 10 NRC 563 (1979).
First, in Davis-Besse, the applicants argued that the NRC was required to take into account the "public interest" (and thus impose lesser competitive duties) when making its S105c
)
determinations. The applicants reasoned that this analysis would make the NRC's antitrust responsibilities consistent with the
) Federal Power Commission's (now FERC's) antitrust responsibilities. The Appeal Board rejected that argument:
The "public interest" standard applied by the FPC and FCC is not appropriate for section 105c purposes. Among those
) agencies' primary roles is economic regulation, either of a line of commecce or of a particular industry. NRC responsibilities are not of that kind.
)
)
Rather, section 105c calls upon the Commission to determine only whether the j' specific and (in the overall context of the electric power industry) relatively limited activities of its licensees would cause or continue situations inconsistent with antitrust requirements. The section nowhere mentions -- much less conveys --
the right to relax or ignore settled
)
antitrust strictures in favor of some broad conception of the "public interest" or to further another regulatory scheme with a different purpose. [10 NRC at 284. ]
The Licensing Board in the South Texas case applied
)
similar reasoning to reach a result inconsistent with the decision below. There, the applicants argued that the enactment of PURPA and its grant of authority to the FERC to order wheeling and
)
i interconnection had eliminated the need for S105c hearings where the relief sought was interconnection or wheeling. That argument was rejected. The Board noted that "the legislative history and
)
the language of PURPA clearly establish that it was not intended to divest NRC or any other antitrust tribunal of jurisdiction, nor to require deferral of such matters to FERC." 10 NRC at 576
)
(emphasis added, citations omitted). Quoting Senator Metzenbaum, a member of the PURPA conference committee, the Board ruled:
)
"[T]he authority of the NRC in conducting an antitrust review
[under section 105c] would not be affected by this extremely limited wheeling authority granted to FERC under this new
) legislation. These two agencies are charged with different responsibilities with respect to wheeling. FERC's new authority is conditioned on
)
)
conservation, efficiency, reliability, and public I interest. NRC's authority relates to correcting or preventing a situation inconsistent with the antitrust laws."
q
" Accordingly, it cannot be held that proceedings by FERC based upon this statute in any way supersede the instant NRC proceeding. [Id. at 576-77, citations omitted.]
O Second, there is no issue pending before the FERC as to RRD's wheeling (or interconnection) rights. The issues raised by RRD in this proceeding, om the other hand, are limited to the o
'l wheeling conditions of the NRC's settlement license conditions.
The FERC proceeding involves totally different and unrelated questions.35!
The divergent issues before PERC and the NRC would make it impossible for RRD to limit its NRC participation "to exactly the same issues as pend before FERC" (Mem. I. 9), and RRD has never sought to do so. RRD's agreements "that we would take the
[NRC] record as it existed" (Tr. 22) and that "[w}e weren't going to try to affect the [NRC] outcome based upon the issues that were o
V already joined by the parties" (Tr. 23) were no more than Y
16/ The FERC proceeding was initiated by FPL in an effort to
,"o have RRD's qualifying status under PURPA revoked. Antitrust matters are irrelevant to that limited issue and thus could not be raised by RRD before FERC, because there is no "public interest" standard .to be applied in resolving that issue. -See Gulf States Utilities Co. v. FP,C , 411 U.S. 747, 759-60 (1973). .
O.
)-
statements of its understanding of the requirements of NRC law l
I governing late intervention petitions. That understanding, we submit, is correct. Florida Power and_._ Light Co. (St. Lucie Nuclear Power Plant, Unit 2, CLI-78-12, 7 NRC 939, 948 (1978)(late-
) intervenors should be amenable to limitations on the scope-of their participation); Virginia Electric and Power Co. (North-Anna Power Station, Units 1 & 2), ALAB-342, 4 NRC 98, 109 (1976)(the limited scope of late intervenors' contentions militates in favor of intervention); Nuclear Fuel Services, Inc._(West Valley Reprocessing Plant), CLI-75-4, 1 NRC 273 (1975)(late intervenors.
must take the proceeding as they find it). RRD's compliance with limitations imposed by NRC regulations and precedents cannot 5
fairly be cited against it as a reason for denying its >
) intervention petition, and the Board erred by doing so.
Third, the Board's findings and conclusions quoted
~
supra, pp. 38-39, are inconsistent with its reasons for granting
) RRD conditional amicus curiae status to be heard on "the appropriateness of granting relief to PURPA facilities to supplement rights already granted-by PURPA" (Mem. I. 19). Those
) findings and conclusions also conflict with the Board's recognition that'"(wlere RRD seeking to participate fully in-the adjudicatidnofthemeritsofthiscase, then it is possible that
)
)
,/
I'
r i
)
l relief would be available before the NRC that is'not available before FSRC" (Mem. I. 9, emphasis added). As the underlined h language indicates, the Licensing Board correctly recognized that I the NRC is empowered to afford'RRD relief unavailable in any FERC proceeding.. The Board erred, however, in holding that its power may be diminished or enhanced by cor._iderations of RRD's status (as amicus or intervenor) or of the scope of its participation (as
} to the merits or relief). .
Fourth, the antitrust issue raised by RRD is not "whether small power facilities have antitrust rights additional
} to their PURPA rights or whether PURPA rights preempt antitrust rights" (Mem. I. 10). Rather, the issue is whether FPL, a utility with monopoly power over the South l'.rida transmission. grid, can
} use the nuclear licensing process to subvert tl.a procompetitive policies manifested by PURPA's creation of a class of qualifying small power producers -- a new group of competitors. The
]' interrelationship between RRD's antitrust rights and its separate rights under PURPA was pointed out in the petition to intervene (Pet. App. A, pp. 7-9). And PURPA's competitive thrust was
} recently noted by the Second Circuit. New York. State Electric &
Gas Corp. v. FERC, supra, 638 F.2d at 402. In sum, there is no conflict between RRD's rights under PURPA and its antitrust
) rights, and neither the NRC nor FERC would be called upon.to decide which category of rights is paramoant.
)
)
l The NRC's antitrust role and its correlative
) jurisdiction are unique., For that reason, FERC's authority does not encompass the issues raised by RRD's petition, and the Licensing Board <>rred by holding to the contrary.
(3) The Licensing Board erred in holding that "RRD also is engaged in arbitration, which could completely resolve its problems. During the conference of counsel, we learned that RRD j alrt is pursuing action before the Florida Public Service Commicolon. . . . [Ilt is possible that RRD's entire problem also could be cleared up there" (Mem. I. 7, and Mem. II. 1-2;.
The referenced arbitration proceeding is styled In Re
)
Resources Recovery (Dade County) Construction Corp. v.
Metropolitan Dade County, AAA No. 22-10-0031-81-F. That proceeding involves only the RRD-Dade County contract dispute.
)
FPL is not a party to the arbitration, and the St. Lucie license and its cenditions are not at issue therein.
j The Florida Public Sarvice Commission proceeding (FPSC Docket No. 810249-EU) concerns RRD's petition for an interconnec-tion order against FPL. But that proceeding does not involve RRD's wheeling rights; nor does it involve FPL's St. Lucie license
)
and the conditions thereof.
Not only~are the factual issues in tue arbitration and FPSC proceedings inapposite to the issues raised by RRD's
)
_m .
.intiervention petition before the NRC, as' a matter of law those
) proceedinga provide inadequate substitutes for.the relief RRD seeks herei. Even the paramount method:of private antitrust enforcement, a federal' court lawsuit under the Sherman Act, has b'sen held to be an insufficient sub'stitute for a S105c antitrust hearing. The Appeal Board in this very docket'has obs'erved that l "the barrier to such [ antitrust] relief is~ higher in court.than before us."
In an NRC proceeding, a remedy is available under section 105c to an intervenor who can demonstrate the -
existence of a " situation inconsictent
) with the antitrust laws." According to the Joint Committee which drafteu the provision, "[t]he concept of certainty of contra"antion'of.the antitrust laws or the policies c?.early. underlying these laws is not intended to be implicit it:
) this standard."
Florida Power and Light Co. (St. Lucie Nuclear Power Plant, Unit 2J, ALAB-420, 6 NRC.8, 23 (1977). -
)~ 'This point was elaborated upon in the South Texas proceeding, supra, 10 NRC 563. Finding that a federal antitrust suit had failed to provide adequate relief, the Licensing Board
) held:
The instant proceeding involves a finding under S105c(3).... Such an inquiry covers a broad range of activities considerably beyond the scope-Of the "violati,n" t standard of Section 1 i
?
I of the Sherman.Act.. It is well-established that in-a Section 105 proceeding it in not necessary to show an .
actual violation of the antitrust-
}- laws....There are substantial differences between the standards and issues involved in the Sherman Act, Section 1 suit baced on restraint of trade...when contrasted.with the issues
) involv :d in this proceeding arising from allegations ~ of monopolization, unfair methods of competition, and inconsistency.
with underlying policies of antitrust laws (Section 105c). [10 NRC 570-71, citations and footnote.s omitted.]
None of the mentioned alternatives, the FERC, the FPSC, arbitration, or private antitrust litigation, is an adequate substitute or other means for the protection of RRD's interests.
Only the NRC has the power to consider all of the issues raised in RRD's petition ar#. to afford it the relief sought. The Board's conclusion that access to the NRC would be superfluous and
~
unnecessary was a clear error in construing and applying the applicable law. It should be reversed.
E. The Ongoing Proceeding -- The Licensing Board s Erred In Holding That RRD's Intervention Would Unduly Delay The Proceeding Without Contributing To the Record, And That RRD's Interests Could Be Adequately Protected By The Intervenor Cities or By
)- RRD's Participation As Amicus Curiae At The Relief Stage. -
(1) In its ruling on " delay," the. Licensing noard
) discounted RRD's stipulation not to' oppose the grant of an
)-
y
- ~. . ._ . - - -.
l operating license to FPL'for St. Lucie No. 2. The Board','in
) addition; fa'iled to weigh in .he balance the delaying. impact of
! the ongoing dispute between FPL and the intervenor Cities as to
! 'the timing of the license's issuance. These underlying errors led
.the Board to rule, incorrectly, that RRD's intervention l " inevitably would complicate and delay" the prcceeding (Mem. I'.
t-18).
)
i The Licensing Board found'that "RRD's intervention would not retard the licensing of St. Lucie" (Mem. I. 18). In light of that finding, the Board's discussion of the scope of the-
)- evidentiary questions raised by RRD's petition was premature and irrelevant; the essential reason for allowing delayed intervention is-to take cognizance of new interests and, if necessary, to hear ,
i l
) additional evidence. Intervention cannot be denied simply because' !
the intervenor, in fact, has something tangible to contribute to the proceeding.
i
)- In addition, an antitrust hearing is currently pending in this proceed.ing. In the course of that hearing the intervenor Cities are quarrelling with FPL about when its
) operating license may properly be issued. Regardless of how that- !
dispute may be' resolved,-its very existence demonstrates the' prudence of RRD's stipulation and undercuts the Board's
). speculative attribution of future delay to RRD's intervention.
)' i
=
)
The Commission has held, in construing the delay factor, that the proper focus is on whether the addition of a late
)
intervenor will so protract the proceeding as to postpone the sought-after license or will divert some of the applicant's
) anticipated nuclear capacity to a late intervenor who seeks participation in the plant. See St,. Lucie, supra, 7 NRC at 9-L-947. Neither concern is relevant here, and the Licensing Board therefore erred in holding that RRD's intervention would
) ,.
delay and complicate the proceedings.
(2) The Board concluded that the intervenor Cities
) would adequately protect RRD's interests, finding that its inquiry into RRD's allegations of a situation inconsistent with the antitrust laws "would substantially overlap facts already in
) controversy" (Mem. I. 19).17/
RRD's participation would be necessary, the Board found, only to comment as amicus curiae on ,
the appropriate relief for any antitrust violatica that might be
) revealed (Mem. I. 21). Those findings are factually incorrect and legally unsound. ,
, u
) 17/ That finding cannot be reconciled with the Board's ruling -
on delay, discussed supra, in pp. 46-47.
)
)
48 - .
O 1RRD has raised antitrust issues relating to FPL's i
() refusal to. deal, to FPL's use of the settlement process for ar.ticompetitive~ ends, and to FPL's use of the settlement process to undermine.PURPA's fostering of the growth and development of
[) qualifying small power producers. No other party has raised those issues in this proceeding. .
The record is likewise devoid Lof any basis for the-
[)- Board's conclusion that intervenor Cities will adequately represent RRD's interests. The Board cited no support for its finding that the Cities intend to challenge "FPL's conduct toward j- incipient PURPA facilities".(see Mem. I. 20), and RRD knows of none. RRD, in any event, is snot " satisfied to p?rmit Florida Cities to pursue this issue without its aid," as the Board-
} erroneously believed (Mem. I. . 20). Although RRD does not intend to intrude into the presentation of the antitrust issues raised by the Cities (Tr. 22), RRD is not willing to permit the Cities to
) proceed alone as to the issues that RRD has raised. Otherwise,
! RRD would have had no reason for seeking to intervene.
RRD's antitrust allegations -- which are grounded in its
)
l PURPA capacity as a potential competitor of FPL -- differ "in l nature and kind from other allegations in the proceeding" (Mem. I.
l-l 13). The fact tha:-a " broader scheme of monopolization" (Mem..I.
) -13) may link the intervenor Cities' antitrust claims with those of l
t 1.
T 3
RRD is no reason for denying RRD leave to intervene. Indeed, that linkage demonstrates the complementary nature of the two sets of claims, and is an argument in favor of granting RRD's petition.
See Florida Power and Light Co. (St. Lucie Nuclear Power Plant, q
Uni- 2), CLI-79-12, 7 MRC 939, 949 (1978) (petitioners with claims related to those of another intervenor (the City of Orlando) were allowed to intervene despite their lack of good cause for late a
filing).
RRD's independent participation in the development of the record is essential for full and fair consideration of the antitrust issues it has raised and the subsequent determination of appropriate relief.
(3) RRD will not be able to protect its interests under O the amicus curiae status offered by the Board. That status would deny RRD an opportunity to contribute at the most sensitive and important phase of the proceeding -- the hearing on the merits.
D As the commission has noted, limited participation is not an adequate substitute for party status, because of "a party's attendant procedural rights." Nuclear Fuel Services, Inc. (West D Valley R'eprocessing Plant), CLI-75-4, 1 NRC 273, 276 (1975). See also, Detroit Edison Co. (Greenwood Energy Center, Units 2 & 3),
ALAB-476, 7 NRC 759, 763 (1978).
) As amicus, RRD would be prohibited from participating in discovery (see 10 C.F.R. S2.740) and from adducing evidence at the hearing, either on the antitrust issues or on questions of b
)
~
relief.(see 10 C.P.R. S2.715(a)). A non-party may state its C. position, but it cannot play any other role in the proceeding.
See Iowa Electric Light and Power Co. (Duane Arnold Energy Center), ALAB-108, 6 AEC 195 (1973). Also, the right to appeal O _from an adverse decision on the merits (or on relief) is li:aited to parties before the Licensing Board. See Duke Power Company (Perkins Nuclear Station,-Units 1, 2& 3), ALAB-433, 6 NRC 469 O -( 1917 ) ; Consolidated Edison Co.,of N.Y. (Indian PointLStation, Unit 2) ALAB-369, 5 NRC 129 (1977); Metropolitan Edison' Company, (Three Mile Island Nuclear Generating Station, Unit 2), ALAB-454, O 7 NRC 39 (1978).
The adequate representation of RRD's interests and the NRC's need to develop a sound-record wil?. both be served by RRD's O- intervention. The Licensing Board's rulings to the contrary (see Mem. I. 19, 21) should be reversed.
f5 F. PURPA -- The Licensing Board Misunderstood PURPA And It's Relationship To RRD's Petition to Intervene In This Proceeding.
Two interpretive errors influenced the Board's decision i on the intervention petition. First, the Board improperly ignored the competitive significance of PURPA in appraising RRD's
) antitrust claims. Second, the Board erred in refusing to allow I
i RRD to be heard, in its capacity as a qualifying PURPA facility, l on'the Section X wheeling conditions of the settlement agreeme'nt.
e
' ~
L . .
)
RRD's second point is wholly independent of the questions of PURPA's antitrust significance and the settlement agreement's role in creating or maintaining a situation inco.isistent with the antitrust laws. Esther, it is entirely based on RrJ's right to oppose, or any appropriate factual or legal basis, administrative
)
agency action that adversely affects it.
(1) The Board accepted FPL's assertion during the conferenc<- of counsel that PURPA "doesn't have anything to do with
}
competition" (Tr. 47). Building on this, the Board found that RRD "is not concerned about the impact of nuclear power on its cost structure" and that its petition is therefore " extraordinary"
)
(Mem. I. 24-25). By adopting FPL's unfout.ded characterization of PURPA, the Board erred; it overlooked judicial precedent and j legislative history to the contrary.
The Second Circuit recently ruled that PURPA "was undoubtedly intended, a' least in part, to serve as a tool for enhancing compet,ition by facilitating bulk purchases of power."
)
New York State Electric & Gas Corp. v. FERC, supra, 638 F.2d at 402.18/ Toward that en'd, PURPA was designed to promote competition between qualifying f aciliti es and establis .ed
)
18/ The Court referred to a House Report in which it was noted teat a major concern of the pending utility law reform was to insure " maximum competitive opportunities for the purchase and
) sale of electrical energy at wholesale, at the lowest possible cost. T1.e committee recognizes the competitive impacts of such arran']ements and urges the Commission to promote and encourage the competitive marketplace." H.R. Rep. No.95-496 (IV), >5th Cong.
1st Sess. 151 (1977), reprinted in [1978] U.S. Code Cong. &
) Admins. News. pp. 8593-94. See also S. Rep. No.95-442, 95th Cong. 1st Sess. 32 (1977), reprinted in [1978] U.S. Code & Admin.
News. pp. 7903 and 7929.
)
monopolistic utilities such as FPL. The. Board's mistake in construing the policies underlying'PURPA was a basic error of law ting the eatirety of the decision.below.
RRD is a potential competitor of FPL; that: fact, we.
submit, accounts for FPL's intransigence in refusing to deal with RRD. Yet, despite this competitive reality, the Board denied _RRD the benefit of its observation that " competitive entities may not need to make a particularly strong showing of nexus" (Mem.
) I.
25). It did so because of its misunderstanding of the antitrust significance of PURPA. That same misunderstanding led the Board
) to undervalue RRD's antitrust claims and the antitrust-significance of its survival as a small and economically fragile source of electrical energy. Thus, the Board erred by improperly holding that PURPA is not a procompetitive enactment.
(2) There is no question but that the settlement agreement in this docket creates transmission' conditions that j directly affect PRD's facility in its capacity as a
" qualifying . . . small power production facility (a3 defined by the FederL1 Energy Regulatory Commission in 18 C.F.R., Part 292, j Subpart B)" -- the agency's PUrdA regulations.Section X(a)(5)_ of the settlement agreement. RhD's efforts to intervene to be heard on those conditions -- efforts which began on April 7, 1981, less j than one month after the agreement became publf: --
)
}
have all been denied. Those repeated denials are unwarranted; appropriate relief should be afforded by this Appeal Board.
A person affected by agency action has a right to be heard on that action before it becomes final. As the United States Court of Appeals for the District of Columbia Circuit
)
recently held in Sea-Land Service, Inc. v. Federal Maritime Commission, 653 F.2d 544, 552-54 (D.C. Cir. 1981), agency j alteration of a settlement agreement without an opportunity for affected persons to be heard is a violation of due process. To the same effect is Arkansas _Best Freight System v. United States, 399 F. Supp. 157 (W.D. Ark. 1975), aff'd sp . nom., Bowr;ian
)
Transportation, Inc. v. Arkansas-Best Freight System, _Inc., 425 U.S. 901 (1976). There,'the court held that the Interstate Commerce Commission's failure to afford interested persons
)
adequate notice and an opportunity to comment before expanding a grant of authority " result [ed] in depriving a person or corporation of due process." Id. at 165.
)
The finding of the Licensing Board below that a January 15, 1981 Federal Register publication provided adequate notice to RRD (Mem. I. 14) is incorrect. That "noticc" (which is quoted in note 7, supra), scheduled a prehearing conference with respec'c to the settlement agreement. It was addressed to the
)
partiec and contained no clue that PURPA facilities would be affected by the settlement agreement. The notice did not invite public comment, nor did it make the settlement agreement available for public inspection. By no stretch of the imagination did that notice comply with the judicial mandate that it describo, to the
)
understanding of all affected persons, "the true nature of the issues involved in the order under consideration." Sea-Land, j supra, 653 F.2d at 553.
The constitutional right to intervene to challenge a settlement agreement affecting one's interest was recognized in Natural Resources' Defense Council v. Costle, 561 F.2d 904 (D.C.
)
^
Cir. 1977). There, the Court of Appeals upheld the timeliness of intervention petitions filed pursuant to Rule 24 of the Federal Rules of Civil Procedure. The case was seven years old when
)
petitioners moved to intervene. Their petitions, however, were filed within four weeks of the date on which they first learned of the critical settlement agreement. What is more, the petitioners
)
s
, intimated no intention to relitigate the entire' case; they sought
?
leave only to monitor the future administration of-the. agreement j as it affected them.
Similarly, RRD filed its petitions to intervene within a month of the public disclosure of the settlement agreement,
).
asserting claims for relief limited to the agreement's section r
ten -- the wheeling provisions. There is NRC precedent for allowing late intervention to pursue a limited, but important, I
- ss -
i
yoal such as 'ARD's (see Virginia Electric and Power Co. (North Anna Power Station, Units 1 & 2), ALAB-342, 4 NRC 98 (1976)), and
)
that precedent is inconsistent with the reasoning of the decision below (see Mem. I. 9).
The decision below, moreover, cannot be squared with the
)
prior decision of the Operating Licensing Board in thi's docket.
On June 3, 1981, the Operating Licensing Board denied RRD's
)
petition to intervene, ruling that RRD's interest " lies solely in antitrust concerns" and that that Board was convened only to consider ' health, safety, and environmental issues (Order, p.
) 4).bS! Although RRD's petition to intervene in this proceeding contained substantive allegations identical to those made in the operating license proceeding, the Board below j concluded that "RRD's claim is a PURPA claim and not an antitrust f claim and should not be admitted in this proceeding" (Mem. I.
26).
The two Licensing Boards have thus refused, on
)
inconsistent jurisdictional grounds, to hear RRD's claims.
Neither Board has ruled on RRD's claim of a right to be heard on j the settlement agreement solely because tb4t agreement affects it directly: The Operating Licensing Board failed to mention that point, and the Construction Licensing Board refused to consider it, simply "assum[ing] that the settlement agreement did not i
19/ RRD's appeal from that order is pending before this Board.
)
1
)
create a cause of action but that RRD must rely on an underlying
- j. cause of action, if any" (Mem. II. 2).
It is well-settled that an administrative agency may not avoid addressing a petitioner's claim by assuming it away. In so y doing, the Construction Licensing Board below deprived RRD of its right to a hearing. A Licensing Board has a " duty not only to resolve contested issues but 'to articulate in reasonable detail the basis' for the course of action chosen." Public Service Co.
of New Hampshire (Seabrook Station Units 1 & 2), ALAB-422, 6 NRC 33, 41 (1977), quoting Northern Statss Power Co. (Prairie Island 4
Nuclear Generating Station hits 1 & 2), ALAB-104, 6 AEC 179
)
(1973). This duty to decide is judicially enforceable even when the ultimate decision is discretionary. See, e.g., Safi_r v.
y Gibson, 417.F.2d 972, 978 (2d Cir. 1969), cert., denied, 400 U.S.
850,,later appeal, 432 F.2d 137 (2d Cir.), cert. denied, 400 U.S.
942 (1970); System Federation, No. 30,_ Railroad Employees Department v. Braidwood, 284 F. Supp. 611, 616 (N.D. Ill. 1968).
)
Furthermore, the respective Licensing Boards before which RRD has pleaded its case should not be permitted to avoid
)
the merits by the use of jurisdictional legerdemain. The Commission had a duty to provide RRD with adequate notice of a settlement agreement affecting its rights and with a forum to hear the evidence and argument on the issues. This obligation annot be avoided by so limiting the jurisdiction of subordinate boards that RRD is effectively precluded from being heard. Sanctioning
)
I l that approach by affirming both decisions below would deny RRD due process of law. This Board should exercise its delegated power to l avoid that result. See Kansas Gas and Electric Co. (Wolf Creek Nuclear Generating Station, Unit No. 1), CLI-77-1, 5 NRC 1
( (1977).
/ -
V. CONCLUSION
)
Paragraph one of the Licensing Board's Order of August 5, 1981, as modified a'nd affirmed on October 2, 1981, should be reversed, and the proceeding should be remanded with instructions to grant RRD's April 24, 1981 petition for leave to intervene and request for hearing.
Respectfully s'ubmitted,
$ _m 9. %><A George K. Kucik '
Ellen E. Sward
/f ,
N M -
James H. Hdlmt '
Arent, Fox, Kintner, Plotkin
& Kahn 1815 H Street, N.W.
Washington, D.C. 20006 Telephone: (202) 857-6000 Dated: October 26, 1981 Counsel for Petitioners UNITED STATES OF AMERICA L NUCLEAR REGULATORY COMMISSION.
,In the Matter '
of )
l
)
FLORIDA POWER & LIGHT COMPANY. )
(St. Lucie Plant, Unit No. 2 )
I hereby certify that copies of the foregoing Notice of-Appeal and Brief of Parsons & Whittemore, Inc. and Resources Recovery (Dade County), Inc. In Support of their Appeal from.
Denial of their Intervention Petit *.on and Request for Hearing were served upon the following persons via first-class mail, postage-prepaid, or by hand, this 26th day of October,1981.
Peter B. Bloch, Esquire, Chairman Atomic Safety and Licensing Board
)~. U.S. Nuclear Regulatory Commission 4350 East West Highway Bethesda, Maryland Ivan W.' Smith, Esquire p Atomic Safety and Licensing Board.
U.S. Nuclear-Regulatory Commission Washington, D.C. 20555 Robert M. Lazo, Esquire i
Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Michael A. Duggan, Esquire College of Business Administration University of Texas Austin, Texar 78712 Elizabeth S. Bowers, Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission-Washington, D.C. 20555
William D. Paton, Esquire U.S. Nuclear Regulatory Commission j Washington, D.C. 20555 Peter G. Crane, Esquire Office of the General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Argil L. Toalston, Acting Chief Utility Finance Branch U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Dr. Peter A. Morris.
) Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Michael C. Farrar, Esquire, Chairman h Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 j Dr. Oscar II. Paris Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 23555
)
Docketing and Service Section U.S. Nuclear Regulatory Commission Office of the Secretary 1717 H Street, N.W., 11th Floor Washington, D.C. 20555
- Jerome Saltzman, Chief Antii. rust and Indemnity Group U.S. Nuclear Regulatory Commission Washington, D.C. 20555
((
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) ~\
1 .n Atomic' Safety and Licensing Board U.S. Nuclear Regulatory Commission '. ' J.
) Washington, D.C. 20555 Richard S. Saltzman, Esquire Atomic Safety and Licensing < -
-Appeal Boaird Panel ,-
U.S. Nuclear Regulatory Commission ,
) Washington, D.C. 20555 Mr. Harold Denton, Director Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Joseph Rutberg, Esquire Lee Scott Dewey, Esquire Fredric D. Chanania, Esquire U.S. Nuclear Etgulatory Commissian Washington, D.C. 20555 Ann P. Hodgdon, Esquill Office of the Executive Legal Director U.S. Nuclear Regulatory Commission Washington, D.C. 205S5 Thomas Gurney, Sr., Esquire 203 N. Magnolia Avenue Orlando, Florida 32802 Messrs. Robert E. Bathen
) and Fred-Saffer R.W. Beck & Associates P. O. Box 6817 Orlando, Florida 32803 George Spiegel, Esquire I- Robert Jablon, Esquire Alan J. Roth, Esquire Daniel Guttman, Esquire ]
Spiegel & McDiarmid 2600 Virginia Avenue,.N.W.
Washington, D.C. 20037 4
U 4
,, .s
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William C. Wise, Esquire 1200 18th Street, N.W.
Suite 500
) Washington, D.C. 20036 William H. Cht.1dler, Esquire
, Chandler, O'Neal, Avera, Gray r ,f - ,
& Stripling
)j' P. O. Drawer 0
/ Gainesville, Florida TiG02
, f Janet Urban, Esquire U.S. Department of Justice P. O. Pox 14141 Washington, D.C. 20044
) ,
Donald A. Kapl'an, Esquire Robert ' Fabrikan,t , Esquire Antitrust Division U.S.'Dopartment of Justice Washinoton, D.C. 26530
).
Charles R.P. . Brown, Esquire Brown, Paxton and Williams 301 S... Sixth Street P. O.' Box ~1418 Fort, Pierce, Florida 33450 J.A. Bouknight, Jr., Esquire
" Douglas G. Green,: Esquire L'owenstein, Newman, Reis & Axelrad 1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
)
s lierbert Dym, Esquire Covington & Burling g 888 16th Street, N.W.
i Washington, D.C. 20006
)
' Atomic Safety and Licensing Appeal Board Panel
[ U.S. Nuclear Regulatory Commission Wa'shington, D.C. 20555 w _; s, ,
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1 Alan G. Rosenthal, Esquire -
Atomic Safety'and Licensing Appeal Board-Panel . .
4350 East West Highway, 5th Floor Bathesda', Maryland
~
- - DJ. John Buck N' Atomic Safety and.Licensingt Appeal Board Panel
}? U.S. Nuclear Regulatory Commission
- s. Washington,.D.C. 20555 Christine Kohl, Esquire
.g. - Atomic Safety and Licensing Appeal Board Panel
)4~
s, ~ U.S. Nuclear Regulatory-Commission Washington, D.C. 20555 r, ,
- .- L. Christian Hauck, Esquire 7: , Vice President - Law 3
Florida Power & Light Company r 9250 West r'agler Street E ~
- Miami, Florida 33152
) One-of-Counsel-for Petitioners C,. .,. _
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