ML20023E112

Notice of Finding of No Significant Antitrust Changes Since CP Review & of Time for Filing Requests for Reevaluation

ML20023E112
Person / Time
Site:	Midland
Issue date:	05/24/1983
From:	Regan W Office of Nuclear Reactor Regulation
To:
Shared Package
ML20023E111	List: ML20023E110 ML20023E112
References
ISSUANCES-A, NUDOCS 8306140350
Download: ML20023E112 (12)

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NUCLEAR REGULATORY COMMISSION DOCKET NOS. 50-329A, 330A CONSUMERS POWER COMPANY NOTICE OF FINDING OF NO SIGNIFICANT ANTITRUST CHANGES AND TIME'FOR FILING OF REQUESTS FOR REEVALUATION The Director of Nuclear Reactor Regulation has made an initial finding in accordance with Section 105c(2) of the Atomic Energy Act of 1954, as amended, that no significant (antitrust) changes in the licensee's activities or proposed activities have occurred subsequent to the previous construction pemit reviews of.. Midland Units 1 and 2 by the Attorney General and the Comission. The finding is as follows:

"Section 105c(2) of the Atomic Energy Act of 1954, as amended,'

provi8es for an antitrust review of an application for an operating license, if the Commission detemines that significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous construction pemit review.

The Commission has delegated the authority to make the "significant change" determination with respect to nuclear reactors to the Director, Office of Nuclear Reactor Regulation.

"The licensee, Consumers Power Co., was issued construction pemits on December 15, 1972 for Units 1 and 2 of the Midland Plant. Based upon excmination of events since issuance of the Midland Nuclear Generating Station construction pemits to the licensee, the staffs of the Office of Nuclear Reactor Regulation and the Office of the Executive Legal Director, hereafter referred to as the." staff",

have jointly concluded, after consulting with the Department of Justice, that the changes that have occurred since the antitrust construction permit review are not "significant" in an antitrust context to require a second fomal antitrust review at 'the operating license stage of the application for licenses. Staff has concluded that those changes which have occurred either are not reasonably attributable to the licensee or do not have antitrust implications that would likely warrant some Commission remedy.

In reaching this conclusion, the staff constdered the structure of the electric utility industry in Michigan, the events relevant to the Midland construction pemit antitrust review, and the events that have occurred subsequent to that review.

"The conclusion of the staff's analysis is as follows:

'The activities of Consumers Power subsequent to the construction permit antitrust review have been focused on implementing the license conditions attached to the Midland construction pemits.

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. ' Municipal and cooperative electric utilities in Michigan are coordinating their planning and operations with Consumers Power and have purchased ownership interests in some of the company's generation and transmission facilities.

In addition, Consumers Power has filed transmission and wholesale service tariffs for similar service to any electric utility located in Consumers Power's service area.

Under these agreements, Consumers Power provides firm bulk power at wholesale, emergency power, economfener'gy, and short term capacity and energy.

'T.hus, the changes in the applicant's activities since the completion of the Midland construction permit antitrust review do not have any antitrust implications and, therefore, do not require a further, formal antitrust review at the operating license stage.

" Based on the staff's analysis, it is my finding that a formal operating license antitrust review of the licensee with respect to the Midland Nuclear Generating Station, Units 1 and 2, is not required."

Signed on April 23, 1983, by Harold R. Denton, Director, Office of Nuclear Reactor Regulation.

Any person whose interest may be affected pursuant to this initial determination may file with full particulars a request for reevaluation with the Director of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington,D.C.20555by(30 days).

Requests for a re-evaluation of the no significant changes determination shall be accepted after the date when the Director's finding becomes final but before the issuance of the OL only if they contain new information, such as information about facts or events of antitrust significance that have occurred since that date, or information that could not reasonably have been submitted prior to th6t date.

FOR THE NUCLEAR REGULATORY COMMISSION xnn.

Wm. H. Regan, Jr.,

hie Site Analysis Branch Division of Engineering Office of Nuclear Reactor Regulation

MIDLAND PLANT, UNITS 1 AND 2 Operating License Antitrust Finding of No Significant Change A.

Introduction j

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Section 105c(2.), of the Atomic Energy Act of 1954, as amended, provides for an antitiust review of an Operating License application if significant changes in the licensee's activities or proposed activities I

have occurred since the construction pemit antitrust review. Authority l

to make the significant change detemination was delegated to the Director, Office of Nuclear Reactor Regulation (NRR) (for reactors) j and to the Director, Office of Nuclear Material Safety and Safeguards 1

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(NMSS). (for production facilities) as ap'propriate.

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The Nuclear Regulatory Commission in a Memorandum and Order (CLI-

't i.i 80-28) dated June 30, 1980,1 set forth three criteria upon which 1

d to base a "significant change" detemination as follows:

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.(1) The change or chaiiges must have occurred rince the previous u

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(2) The change or changes must be attributable to activities or i

j proposed activities of the licensee; and i

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1 11 NRC 817, 824 (1980).

See also 13 NRC 862 (1981).

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(3) The changed. situation must have antitrust implications which 1,

would likely warrant a Commission remedy.

l The staff,2 has reviewed the activities and proposed activities

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of the-applicant, Consumers Power Company, that have transpired ii since August 4, 1980 when construction permits CPPR 81 and

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i CPPR 82 were amended by appending antitrust license conditions 1

(Docket Nos. 50-329A, 50-330A).

It is the staff's conclusion that no "significant changes" have occurred subsequent to that 1

i time.

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B.

Background

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Consumers Power's application for a construction pemit was filed 1

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on January 13, 1969, before Section 105c of the Atanic. Energy Act of 1954 was amended'to require prelicensing antitrust. review.

J Under Section 105c(8), the " grandfather clause," the Midland I.j construction permits were is' sued subject to appropriate action 4i as a result of the subsequent antitrust! proceeding. On December 15, 1972 Construct' ion Permits CPPR 81 and CPPR 82.were issued, which

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were later amended to include the antitrust conditions accepted by The Atomic Safety and Licensing Board on August 4,1980 as tenninating the construction pemit antitrust proceeding.

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2 The Antitrust and Economic Analysis Branch, Division of Engineering, Office'of Nuclear Reactor Regulation and the Antitrust Counsel of the

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Exe:utive Legal Director in consultation with the Department of Justice.

3 The antitrust proceeding centered on the specific complaints of several cities in Michigan plus the Northern Michigan Electric Cooperative, Inc. and the Michigan Municipal Electric Association.

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After a lengthy proceeding, the Atomic Safety and Licensing Appeal Board found "it reasonably probable that Consumers' activities under ~the-Midland Licenses would maintain the present situation inconsistent with the antitrust laws."3 Subsequently, Consumers Power and the other parties negotiated proposed license conditions R

which were approved by the staff and the Department of Justice.

j These license conditions require Consumers Power (1) to offer neighboring l

g entities an opportunity to participate in Midland Units 1 and 2 and in all future nuclear generating units for which Consumers Power applies for a construction pemit on or before December 31,1999;(2),

to interconnect and share reserves with neighboring entities and to coordinate the sale of emergency power, maintenance power and energy, and' economy energy; (3) to facilitate bulk power transmission between j

two or more neighboring entities; (4) to sell fim bulk power under i

tariff provisions filed with the Federal Energy Regulatory Commission, and (5) to provide access to pooling arrangements.

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3 6 NRC 892 at 1098.

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Changes Since The Construction Pemit Antitrust Review i

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Submission of Antitrust Infomation :!n Connection with the

j Operating License Application 1

On December 14, 1981 Consumers Power submitted information for o

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" Antitrust Review of an Operating License Application." The

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, r'eceipt of this infomation was published in the Federal Register on March 8, 1982. The notice stated that any person i

who wished to have his views considered with respect to a

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significant changes related to antitrust matters which occurred a

in the licenIee's activities since the construction pemit*

antitrust review were to submit their views on or before April 5, g

1982. No comments in response to the Federal Register notice i

l were received.

In addition to the infomation submitted by Consumers Power the staff invited comments from the Lansing Board of Water ar.d Light, the Michigan Public Power Agency, the Michigan South Central Power Agency, and the Municipal Cooperative Pool, c/o Wolveiine Ele.ctric Cooperative, Inc. The only response a

was made by the Michigan Public Power Agency (MPPA), a joint A]

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municipal. power supply agency wh'ich was fomed subsequent to the l,

Midland case and which responded for the Michigan South Central Power Agency.4 MPPA owns generation and transmission, and represents 15 cities and 3 villages as follows: '

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Letter to Stephen S. Skjef, Chief AEAB, NRC from Richard I. Goman, j

General Manager, dated May 10, 1982.

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(1) cities of Bay City, Charlevoix, Croswell, Grand Haven,

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Harbor Springs, Hart, Holland, Lansing, Lowe'll, Niles, e

Petoskey,' Portland, St. Louis, Traverse City, Zeeland,

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,and (2) the villages of Chelsea, Paw Paw and Sebewaing.

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MPPA stated that it had several discussions with Consumers PowerregardingtheimplementationoftheMidlandlicen[e conditions. ~ Based upon these discussions MPPA believes that the matters raised can be resolved, and therefore, they do not request an operating license antitrust proceeding.

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Analysis of the Changes in The Licensees' Activities Since the Construction Pemit Antitrust Review

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Since the construction pemit antitrust review the activities of Consumers Power have revolved around the implementation of the

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license conditions. These activities are discussed in the following.

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1.

Access to Generation Based on recent cost analyses plus other factors, the municipal and cooperative electric systems chose not to purchase an owner-ship interest in the Midland plant.

However, ten members of MPPA

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purchased a 4.8%' undivided owne'rship interest in Campbell 3, a 1

coal-fired unit with a capacity of 770 Mw. The Wolverine Electric i

4 Cooperative and the Northern Michigan Electric Cooperative purchased aj a total 1.89% undivided ownership in Campbell 3.

Some systems are also coiis'idering purch'asing additional capacity froni Consumers

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Power.

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Coordinated Operations 1

Since the settlement reached in August 1980, Consumers has expanded its coordination activities with various municipal and cooperative e

systems including MPPA and the Michigan South Central. Power Agency which represents three cities and two villages.5 These agencies supplement the individual planning efforts of their members, and broaden the options available to the smaller systems. ~ As a result of the Midland license conditions, coordination agreem'ents between Consumers and these various entities are based on an equalized t

reserve basis rather than requiring a fixed minimum reserve percentage. Thus, these entities will not be required to maintain p

an unequal proportion of generation capacity.

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The Michigan South Central Agenci is a joint agency created in 19.79 to J

serve the bulk power supply requirements of the Cities of Hillsdale, a

Coldwater and Marshall, and the Villages of Union Cities and Clinton.

l See Enclosure 1 p. 3 of December 14, 1981 letter from Consumers ' Power Co. transmitting antitrust information relative to Regulatory Guide 9.3.

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,j Negotiations between Consumers Power and the municipal and co-1 operative systems are continuing, regarding future transmission i

availabilityl' The.latter are seeking increased use of Consumers Power's transmission system as well as coordination by Consumers

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Power with systems which are not directly interconnected with Consumers.

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Transmission Service Consumers Power has filed with the Federal Energy Regulatory C6m-mission unifonn transmission service tariffs which provide for finn and interruptible transmission service to any electric utility located in Consumers Power's service area.

These trans-mission service tariffs became effective in January 1980 and remain in effect.

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In addition, several entities have purchased an ownership interest in various 345 Ky transmission lines. The Michigan Public Power Agency,

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Wolverine Electric Cooperative and Northern Michigan Electric Cooperative have purchased ownership interest in 345 Ky transmiss, ion lines which have allowed them to have effective access to Consumers Power's Campbell 3 unit. The purchase by the Michigan South Central Power Agency of an ownership interest in a '345 transmission line will facilitate the transfer

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of bulk power requirements to and among its members including exchanges of tj emergency power, economy energy, and short tenn capacity and energy.

Bay City, a%ol'esale power customer of Consumers Power is negotiating to purchase sub-transmission facilities from the company. Ownership s

of these lines would make the purchase of wholesale power by Bay y

1 City more economical.

fl MPPA and other sytems are continuing their negotiations with Consumers Power in order to facilitate operational power supply coordination, and to facilitate its purchasing of interests in' generating units owned by others.

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4., Sale of Finn Bulk Power

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Consumers Power provides wholesale electric service to 19 electric utilities at average system ' cost under rate "WR" as currently filed with the Federal Energy Regulatory Commission.

While nearly all of these utilities have purchased wholesale power from Consumers Power for the past several years, two cities, Hart and Hillsdale, I

began to receive wholesale service since August 1980.. According'to 1

MPPA, these electric systems are dependent upon wholesale power 1

1 purchases from Consumers Power'to economically serve their load,

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and since the availability of such wholesale power is provided for l

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.1 under the license ~ conditions it is takea into account in the group's system planning.

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Access to roclino Arrangements j

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'i Municipal and cooperative syst<vns in Michigan are considering

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establishing an energy broker system to coordinate the exchange of surplus power and energy. And while the municipal and cooperative systems state that they are seeking rights to the Dstroit Edison and Consumers Power pool, Consumers Power has received no requests, for membership in any pooling arrangement in which Consumers Power is presently a party.

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Conclusion

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+ r The activities of Consumers Poder subsequent t'o the construction s

permit antitrust revief hwe been. focused on implementing the l

license conditions attached a the Midland construction permit.

Municipal and cooperadive alectric u'tilities in Michigan.are co-I s

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ordinating their planning and operations with Consumers ' ower and P

have purchased ownership interests in some of the c'ompany's generation and transmissio[ facilities'.

In addition, Consthers s

Power has' filed transmission and wholesale service tariffs!with the NFederal Regulatory Commission'providing for unifonn tahiffs for similar \\

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'j service to any electric utility' located in Consumers Power's service area.

Under these agreements Consumers Power provides fim bulk power at,iholesale, emergency power, economy energy, and short tem capacity ar

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Thus, the changes in the applicant's activities since the completion

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of the Midland construction pemit antitrust review do not have any..

.i" antitrust implications and therefore, do not require a further,

_.3 fomal antitrust review at the operating license stage.

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