ML20032D438
| ML20032D438 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 10/22/1981 |
| From: | Toalston A Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20032D437 | List: |
| References | |
| NUDOCS 8111160415 | |
| Download: ML20032D438 (30) | |
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NUCLEAR REGULATORY COMMISSION DOCKET NO. 50-416A MISSISSIPPI POWER AND LIGHT COMPANY AND THE SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION NOTICE OF FINDING 0F 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 licensees' activities or proposed activities have occurred subsequent to the previous construction pennit review of Grand Gulf Unit 1 by the Attorney General and the Commission. The finding is as follows:
"Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an application for an operat-ing license if the Commission determines that significant changes in the licensee's activities or proposed act.vities have occurred subsequent to the previous construction permit review.
The Commis-sion has delegated the authority to make the 'significant change' to the Director, Office of Nuclear Reactor Regulation.
Based upon an examination of the events that have transpired since issuance of the Grand Gulf Unit 1 construction permit, the staffs of the Utility Finance Branch, Office of Nuclear Reactor Regulation and the Antitrust Section of the Office of the Executive Legal Director, hereafter referred to as ' staff,' have jointly concluded, after consultation with the Departmnt of lustice, that the changes that have occurred since the antitrust construction permit review are not of the nature to require a second antitrust review at the operating license stage of the application.
"In reaching this conclusion, the staff considered the structure of the electric utility industry in western Mississippi, the events relevant to the Grand Gulf construction permit review and the events that have occurred subsequent to the construction permit review--including on-going settlement negotiations.
"The conclusion of the staff's analysis is as follows:
'MP&L's exercise of its market power in western Mississippi necessitated instituting license conditions at the CP stage of the Grand Gulf antitrust review.
MP&L was continuing to fore-close competitive options to smiler power entities in the area at the time a notice of v.olation was issued by the NRC in May of 1980.
In the notice of violation, the staff concluded that MP&L was not in compliance with its license conditions pertaining to transmission services, wholesale power services, and ownership participation in the Grand Gulf nuclear plant.
However, all present indications are that MP&L has reversed its apparent policies that ocessioned the notice of violation in May of 1980, has essentially reached a settlement agreement with the complaining parties, and is pursuing acceptance of 8111160415 611022 PDR ADOCK OMOO416 M
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1 rate schedules and agreements before FERC that would bring it into full compliance with its license conditions.
In the unlikely event that.the settlement negotiations or the rate schedule implementations are unsuccessful, these matters can be resolved before the NRC in the present compliance proceeding wh'ich will remain in effect until the matters.are satisfactorily resolved.
'No additional remedies will result from a formal operating license antitrust review.
Furthermore, a significant change finding is not now warranted under the Osnmission's criteria as set out in the Summer decision.
For the above reasons, staff does not recommend making an affirmative significant change finding regarding the application for an operating license for Grand Gulf Unit No.1.'
" Based on the staff's analysis, it is my initial determination that an i
operating license antitrust review of Grand Gulf Nuclear Unit 1 is not i
required."
Signed on October 9,1981 by Harold R. Denton, Director Office of Nuclear Reactor Regulation.
l 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 l
Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission Washington, DC.
l 20555 by (30 days).
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FOR THE NUCLEAR REGULATORY COMMISSION i
dtp) 3. 4 %
Argil Toalston, Acting Chief Antitrust & Economic Analysis Branch Division of Engineering Office of Nuclear Reactor Regulation l
f 9
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GRAND GULF NUCLEAR PLANT, UNIT 1 MISSISSIPPI POWER & LIGHT COMPANY AND SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION DOCKET NO. 50-416 FINDING OF NO SIGNIFICANT ANTITRUST CHANGES
Index Introduction Structure of the Electric Power Industry in Mississippi Investor-Owned Systems Municipal and Cooperative Systems Market Power of MP&L' Case Background Changes Since the Construction Permit Review Clarksdale Dispute Notice of Violation Status of Compliance Proceeding Summary and Conclusion Appendices A.
NRC Decision in South Texas, June 15, 1977.
B.
Memo Delegating "Significant Change" Authority from Hendrie to Denton and Dircks, 9/12/79.
C.
Ne ' Decision in Summer, June 30, 1980.
D.
Section 105c(2) of the AEC Act of 1954, as amended "Significant Change" Reference.
E.
SMEPA's CP Application.
F.
Stampley letter to Denton Dated June 18, 1980, Re Denial of Any Violation of CP Commitments.
i
Index Continued Appendices Continued G.
MP&L CP License Conditions, Accompanied by the 00J "No Hearing" Advice Letter.
i H.
MP&L's Response to Regulatory Guide 9.3. February 1979.
I.
MP&L's Response to Follow-Up Questions from NRC Staff Dated April 12, 1979.
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J.
Letter from McDiarmid to Denton Dated May 29, 1979 Re Request By 5
MEAM to Take Enforcement Action Against MP&L.
\\
K.
MP&L Response to Request for Enforcement, June 1979.
L.
00J Response to Request for Enforcement 7 November 1979.
/
c M.
Notice of Violation, W/ Accompanying Staff Analysis, Dated May 29, 1980.
N.
MEAM Request to FERC to Establish a Settlement Conference Dated July 23, 1980.
O.
Changes that have taken place since CP.
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[ I' Introduct ion
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Un1'ika the procedure established for review of construction permits,
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" pr prospective operating licensees are not required to undergo formal antitrust
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1 that there have been revieks unless the NRC staff has made the determination "significant changes in the lice.isee's activities or proposed activities" subsequent to the review, by'the Attorney General and the Commission at the construction permit stage.2
-1.
The. Commission in its recent Summer 8 decision has established certain stand.pds to be applied by staff in its antitrust review of prospective oparhting licensees. ' The Commission's interpretation of Section 105c(2) of the Atosic Energy Act of 1%4, as amended,4 is embodied in the recent Summer decision, and establishes three criteria which must be addressed by staff as a iminimum' or threshold in mak'ing an af firmative significant change determination.
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'iThe statue contemplates that the change or changes (1) have occurred s'ince the previous antitrust review of the licensee (s); (2) are reasonably attributable to the licensee (s); and (3) have antitrust implications that would most likely warrant some Commission remedy."5 Staff, in its review of the Grand Gulf operating license has documented various changes in the licensee's activities that have s tisfied.the first two criteria, a
but,only-partially satisfy the third criterion.
,2The Commission at p.1318 of its South Texas decision, 5 NRC 1303 (1977),
raised the ppssibility of delegating the "significant change" determination to staff.
This responsibility was officially delegated to staff in a memorandum dated September 12, 1979 from Chairman Hendrie to the Directors of NRR and NMSS.
(See Appendices A and B respectively.)
2Section 105c(2) of the Atomic Energy Act of 1954, as amended.
i( 3 Memorandum and Order, Docket No. 50-395A, Virgil C. Summer Nuclear Station,
.No/ 1, dated 6/30/80.
(See Appendix C)
Ui
. 4The " sign'ificant change" portion of the Act.
No OL review is necessary I
unless licensee's activities or proposed activities have changed since the CP antitrust re, view.
(See Appendix D) f
/
55ummer, p. 7.
r These changes are the subject of' charges of non-compliance with license conditions attached to Mississippi Power & Light Company's (MP&L) Grand Gulf construction permit following the CP antitrust review.
Presently, MP&L and the Municipal Energy Association of Mississippi (MEAM) are involved in negotiations that would bring MP&L. into compliance wi" the CP conditions. Staff anticipates that these negotiations will prove u sitful and remedy the changes that have occurred since the CP review.
In the event that negotiations are unsuccessful, staff can take enforcement action to bring about compliance.
By pursuing the compliance procedures established under Commission rules, staff believes,1) an adequate remedy will obtain, and 2) a duplicative parallel pro-ceeding resulting from an affirmative significant change finding will be averted.
Structure of the Electric Power 'ndustry in Mississippi In terms of load served and generatten and transmission facilities owned or controlled, Mississippi is not unlike the other areas of the electric power industry in the United States, i.e., the larger investor-owned utilities (IOUs) supply the bulk of the power produced and serve the overwhelming majority of customers that purchase power and energy.
Inves_ tor-Owned Systems The 100s that have been granted certificates of convenience in Mississippi are Mississippi Power & Light Company and Mississippi Power Company. Of these two, Mississippi Power & Light is the larger -- in terms of load served and generation / transmission facilities owned.
In 1978, MP&L had a peak load of 1,899 mw, generating capability 97 2,789 mw, 3,740 circuit miles of trans-mission lines and approximate y 3.M0 pole miles of distribution lines. MP&L serves primarily in the x c er junties of the state, encompassing an area of 297,000 customers (85% ra>ide w 2.').
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MP&L is an operating subsidiary os Middle South Utilities, Inc. (MSU), a regis^crad holding company.8 In 1979, MP&L had total revenues of $400 million and net earnings of $28.8 million.
Mississiopi Power Company (MPC), had a peak load of 1,306 mw in 1978, generating capability of 1,96G mw, 2,034 circuit miles of transmission line and approxi-mately 4,500 pole miles of distribution lines.
MPC serves approximately 155,000 customers (85% residential) in the southeastern portion of the state.
MPC is an operating subsidiary of the Southern Company (SC), a registered holding company.7 In 1979, MPC had total revenues of $208 million and net earnings of $16 million.
Municipal and Cooperative Systems There are many smaller (than the 100's) municipal and cooperative-owned power syscems in the state, however, only a small percentage of them possess generating capability - most are full-requirements customers of the federally-owned Tennessee Valley Authority (TVA),8 or the two privately-owned utilities mentioned above.
Many of the municipal and cooperative systems that possess generating capability have joined among themselves to form regional associations. Three such associa-tions, doing business primarily in western Mississippi, are:
the Municipal Energy Agency of Mississippi (MEAM - municipals); the South Mississippi Electric Power Association (SMEPA - cooperatives); and the Western Mississippi Electric Power Association (WMEPA - cooperatives).
6The other operating subsidiaries of MSU are Louisiana Power and Light Company, Arkansas Power and Light Company, New Orleans Public Service Company and the Arkansas-Missouri Power Company.
70ther operating subsidiaries of the Southern Company include, Alabama Power Campany, Georgia Power Company and Gulf Power Company.
8The TVA is limited by federal law to serving existing customers.
In Mississippi it serves primarily the northwestern portion of the state.
3
The Municipal Energy Agency of Mississippi (MEAM) is an organization of eight9 municipally-owned Mississippi electric systems which was formed in 1978 to help search out ways to reduce the cost of electric power to the citizens of the respective cities.
In 1978, the cities had a combined peak load of approxi-mately 116 mw, generating capability of 147 mw and no significant transmission line facilities.
Prior to the formation of the' joint action group, the smaller members were full-requirements customers of MP&L.
Two of the cities, Clarksdale and Greenwood, were self-sufficient in generation while a third, Yazoo, supplied a major portion of its own load =while purchasing the remainder from MP&L.
The South Mississippi Electric Power Association (SMEPA) is "an operating public utility engaged exclusively ~in the generation and transmission of electric energy for seven member Rural Electric Cooperatives in the State of Mississippi."10 SMEPA (headquartered in Hattiesburg, Miss.) had a peak load of 266 mw in 1978; generating capability of 573 mw; and 1,210 miles of transmis-sion line. The Association had total revenues of approximately $71 million and an excess of revenues over costs 11 of approximately $1.3 million.
The Western Mississippi Electric Power Association (WMEPA) requested Grand Gulf ownership participation in 1972.
The group was comprised' entirely of electric power cooperatives located primarily in western Mississippi. -After negotiations involving WMEPA, SMEPA and MP&L regarding separate ownership shares in Grand Gulf, SMEPA and WMEPA agreed among themselves to share an ownership _
participation in Grand Gulf of approximately ten percent.
These negotitations
- Members include the cities of:
Clarksdale, Greenwood, Yazoo, Leland, Kosciusko, Canton, Durant and Itta Bena.
Clarksdale and Greenwood are the largest members with peak loads of 34 mw and 28 mw respectively and generating capability of' 68 mw and 47 mw respectively.
(There are other large municipally-owned systems in the state, which are not members of MEAM, for example Tupelo (93 mw peak),
Starkville (45 mw peak) and New Albany (39 mw peak), however, these systems are not located in the western portion of the state -- i.'e., the area most relevant to this inquiry.)
10SMEPA's " Application for Amendment of Construction Permit Nos. CPPR-118 and CPPR-119-toAddCo-Owner," dated March 31, 1980, at p. 4 (See Appendix E) 11The Term "nat patronage capital" used by the Coop is analogous to a profit figure for a similarly organized "for profit" corporation.
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concluded wh< n "the WMEPA cooperatives decided to join SMEPA as members and by SMEPA agreeing to acquire a ten percent interest in the facility."12 Market Power o' MP&L In 'erms of load served and generating capability owned, MP&L is approximately 5
greater than the other 100 licensed to serve in the state (MPC) and many times larger than the remaining municipal and cooperative systems serving the state.1a Through interconnections with its sister companies and other companies throughout the south, MP&L is able to explore many power supply options which enable it to make efficient use of its system.
By virtue of its ownerhsip of the bulk of the transmission facilities in its service area, MP&L is able to control the power supply options of power entities doing business or desiring to do business in the area - principally those in western Mississippi.
In short, many of the smaller generating entities (notably the municipally-owned facilities) are unable to actively seek out and consummate bulk power agreements without first entering into an interconnection with MP&L and then negotiating a transmission rate with MP&L.
This control over market options instills a significant degree of market power to MP&L vis-a-vis other power entities in its service area and to a lesser extent over power entities wishing to enter into transactions with entities in MP&L's service area.
Case Background In announcing Mississippi's first nuclear project, MP&L in 1972 made public its plans to construct two 1290 MW units to be located in Claiborne County 125tampley letter to Denton dated 6/18/80, p. 6.
Closing of the agreement is contingent upon various regulatory approvals and a satisfactory financing commitment from lenders.
(See Appendix F) 18The privately-owned systems would presumably be significantly larger in the absence of the huge federally operated Tennessee Valley Authority (TVA) which serves many smaller municipal and cooperative systems in the northeastern portion of the state.
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approximately twenty-five miles south of Vicksburg, Mississippi.
Initial inquiries regarding some type of access to the plant were received from:
(1) South Mississippi Electric Power Association (SMEPA) in February 1972; (2) West Mississippi Electric Power Association (WMEPA) in August 1972; (3) Yazoo City, Mississippi in March 1973; and (4) the City of Greenwood, Mississippi in August 1973.24 Prior to and during the period of the antitrust review at the CP stage of the Grand Gulf Nuclear Plant, the City of Clarksdale expressed the desire to become a more active competitor to MP&L in serving electric load growth within the City of Clarksdale.
Clarksdale's electric system was dependent upon MP&L for alternative power supply options, and had experienced problems with MP&L in securing power supply alternatives in the past.
After 1972, the City and MP&L entered into "an agreement whereby Mississippi Power & Light and the City of Clarksdale could exchange power with each other or with others when either needed it."15 Any power purchased from others or sold to others by Clarksdale would have to be wheeled by MP&L over its transmission lines or purchased directly from MP&L on its own terms and conditions.
Following negotiations between 00J and MP&L, MP&L entered into a set of policy commitments in 1973 which basically required MP&L to interconnect with any electric power entity in Western Mississippi, as well as offer ownership in its Grand Gulf Nuclear Plant with accompanying service schedules necessary for meaningful use of Grand Gulf power.
As a result of MP&L agreeing to these policy commitments, D0J issued a no hearing recommendation to NRC re MP&L's CP 14SMEPA has recently become a co-owner of the Grand Gulf plant, acquiring a 10%
interest from MP&L.
HEAM has been offered a 2.48% interest in the plant as part of an outstanding settlement agreement with MP&L. WMEPA, after reviewing the cost data on the plant, declined participation on its own and just recently has merged with SMEPA - thereby,irticipating in SMEPA's 10% share.
15 Letter dated August 25, 1980, from Newton Dodson, Mayor of Clarksdale, to Thomas Kauper, Assistant Attorney General, Antitrust Division of the Justice Department.
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- antitrust review in May of 1973.
The Grand Gulf CP was subsequently issued in September of 1974 with these policy commitments as license conditions.18 Changes Since the Construction Permit Review i
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As a part of its operating license' application for Grand Gulf, MP&L submitted answers.in response to Regulatory Guide 9.3 and to other specific questions
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posed by staff'in_ connection with this operating license review.27 A number of changes with respect to MP&L's system and operations have occurred since i
the construction permit review including changes in load, generation,'trans-mission, interconnections, Grand Gulf ownership, rate schedules, wholesale customers, service territory and interconnection agreements which staff does not consider to be "significant changes" in the context of this review.
These changes which are not the primary focus of this analysis are discussed in
. Appendix 0, d
Over the past six or seven years (1973-80) various municipal and cooperative electric systems in MP&L's service area have been trying to consummate workable transmission and power supply arrangements with MP&L - using the Grand Gulf CP license conditions as a basis for negotiations.
These negotiations have led to various allegations and disputes which are the focus of staff's investigation 4
in this review.
The Clarksdale Dispute The City of Clarksdale has spearheaded the efforts by municipals in western-Mississippi to seek out alternative bulk power supply.
Clarksdale, independently and as the representative member of MEAM, has arranged to buy approximately l
16The conditions provide for access to Grand Gulf, reserve sharing, emergency-and maintenance power sales, transmission services and the-sale of power for resale to' entities in Western Mississippi.
Generally, the conditions contribute to the opening up of alternative power supply options among electric power entities in Western Mississippi.
See Appendix G for a complete listing of the conditions and 00J's "no hearing" advice letter.
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175ee Appendix H for February 1979 response and Appendix I for April 12, 1979-response.
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14 mw of power from the City of Lafayette, Louisiana. To transmit the power from Lafayette to Clarksdale, Clarksdale had to work out a " contract path" over Gulf States Utilities' lines through MP&L's lines to Clarksdale. MP&L initially refused to wheel the power over the GSU interconnection point because the two companies had no formal interconnection agreement.18 MP&L suggested contracting for the power over the GSU/LP&L (Louisiana Power & Light) inter-connection point - primarily because LP&L and GSU had a formal interconnection agreement and accompanying transmission schedules. Clarksdale, not wishing to pay the additional (to MP&L's) wheeling charge regt' ired by LP&L, deaanded an interconnection agreement with MP&L, as required by the existing Grand Gulf license conditions.
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Following curtailments of natural gas in 1976, Clarksdale, whose system is heavily dependent upon gas-fueled peaking units, began to seek new sources of base load generation to replace its gas units. Consequently, Clarksdale (individually, and as a member of MEAM after its formation) formally requested ownership participation in MP&L's Grand Gulf nuclear plant in December of 1976.
(This request is currently being negotiated between MEAM and MP&L as discussed below).
Notice of Violation MEAM and MP&L have been engaged in negotiations primarily regarding access to the Grand Gulf nuclear plant and to MP&L's transmission grid since shortly J
l after MP&L obtained its construction permit in 1974. Negotiations continued until early 1979 when the parties reached a loggerhead.
In May of 1979, counsel for MEAM sent a letter to the NRC expressing concern over MP&L's I9 non-compliance with its CP license conditions and requested NRC to take i
enforcement action against MP&L.
(Notably, license conditions:
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participation in' Grand Gulf; D5(a) re transmission services; and D6 re obligation to sell power for resale).
In response to MEAM's request, the NRC staff initiated an investigation into MP&L's alleged failure to abide by its licensing conditions. After contacting luGulf States Utilities Company was unwilling to transmitt power over this interconnection point for the same reason.
I9Letter from R. McDiarmid to H. Denton, dated May 29, 1979.
(See Appendix J).
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the Applicant and various' federal agencies,20 staff concluded that MP&L was
-not living up to its license conditions and issued a " Notice of Violation" to MP&L on May 29, 1980.21 In the Notice-of Violation, the staff concluded that:
(1) MP&L has violated and continues to violate Grand Gulf antitrust j
license condition 4(a) by refusing to offer the City of Clarksdale, MEAM,.or the other members of MEAM, the Apportunity to participate in Grand Gulf; 4
(2) MP&L has violated 'and continues to violate Grand Gulf antitrust license condition 5(a)'by not facilitating the transmission of Lafayette, Louisiana power f rom the MP&L - Gulf States' Utilities interconnection near Felps, Louisiana, to the City of Clarksdale; i
and (3) MP&L has violated and continues to violate Grand Gulf antitrust license condition 6 by refusing to sell partial requirements power for resale except at incremental costs.
The Notice required MP&L to admit or deny the charges and/or provide NRC staff with justification for its activities _and explain what course of action it I
intends to pursue to correct the violations.
Status of Compliance Proceeding By letter of June 18, 198022 MP&L denied the charges in the Notice, but at the same time offered a settlement proposal bhich MP&L believes "May be in the 3 See letter from Conner to Denton, dated June 9,1979 (Appendix K) and letier from Flexner to Denton, dated November 21, 1979 (Appendix L).
2tSee Appendix M.
22 Letter-from N. Stampley, Vice President of MP&L, to H. Denton, Director of NRR (see Appendix F).
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best interests of all the parties." The MP&L proposal, which was proffered to MEAM via letters of June 6 and June 18,'1980, includes the.following
" general conditions":
1.
An offer' to MEAM and its members of an undivided membership in the Grand Gulf plant of up to 2.48% (offered on the same terms and conditions by which SMEPA is acquiring a ten percent interest in the plant);
23 2.
MEAM and its members shall have until September 1,1980 to notify MP&L in wri+ing of their intention to. participate; subsequently, MEAM will have until January 1,1951 to secure financing to purchase its share and secure all necessary regulatory approvals for same; 3.
MP&L would file with FERC a partial requirements wholesale rate schedule and make same available to any member of MEAM with which MP&L has an interconnection agreement; and 4.
Upon acceptance by MEAM of the settlement offer, MP&L (and MSE) is forever released from any claims or future claims "f hat may be based upon or arise out of any matter upon which the Nc,tice of Violation is based."
According to counsel for both MP&L and MEAM, the settlement negotiations have progressed smoothly over the past year and an agreement on plant access, transmission ar-i partial requirement wholesale rate has been reached. A final agreement is scheduled to be signed in the next two months.
A temporary transmission rate schedule between MP&L, GSU and MEAM representa-tives was accepted for filing by the FERC staff on December 31,1980 and became effective January 29, 1981. This agreement is scheduled to terminate 23This date has subsequently been held in abeyance.
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m on October 31, 1981 and be superseded by a pennanent interconnection agreement between MP&L and GSU which is presently.being negotiated.
The interconnection agreement and the partial requirement wholesale rate
' will be subject to approval by FERC.
The ownership participation by MEAM in GRAND GULF will be subject to an antitrust and financial qualification review by NRC.
Summary and Conclusion MFSL's exercise of its market power in western Mississippi necessitated instituting -license conditions at the CP stage of the Grand Gulf antitrust review. MP&L was continuing to foreclose competitive options to smaller power entities in the area at the time a notice of violation was issued by the NRC in May of 1980.
In the not!ce of violation, the staff-concluded that MP&L was not in compliance with its license conditions pertaining to transmission services, wholesale power services, and ownership participation in the Grand Gulf nuclear plant.
However, all present indications are that MP&L has reversed its apparent policies that occasioned the notice of violation in June of 1980, has essentially reached a settlement agreement with the complaining parties, and is pursuing acceptance of rate schedules and agreements before FERC that would bring it into full compliance with its license conditions.
In the unlikely event that the settlement negotiations or the rate schedule implementations are unsuccessful, these matters can be resolved before the NRC in the present compliance proceeding which will remain in effect until the matters are satisfactorily resolved.
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No additional remedies will result from a' formal operating license antitrust review.
Furthermore, a significant change. finding is not.now warranted under the Commission's criteria as set out in the Summer: decision.
For the above reasons, staff'does not recommend making an affinnative significant change finding regarding the application for an operating. license for Grand Gulf Unit No. 1.
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Appendix A l
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Cite as 6 NitC 130311977)
CLI7713 uni 1ED STAILS Of AMEttlCA NUCLEAR HEGULATORY COMMISSION COMMISSIONEHS:
}
Marcus A. Howden,Chainnan Victor Gatinsky stichard T. Kennedy.
i In the Matter of Docket Nos. 50-498A 1
50-499A ilOUSTON LIGitTING & POWER COMPANY Tile CITY OF SAN ANTONIO Tile CITY OF AUSTIN and CENTRAL POWER AND LIGHT COMPANY (South Texas Project, Unit Nos.
1 and 2)
June 15,1977 i
i Under 10 t FR Q 2.758, co-apphcant ilouston Ughting and Power Com-pany moved the Conunission to waise the requirement that initiation of operat-ing heense antitiust review proced,uses await submission of the FSAR,which,by j
Conuniaion rules,inust accompany the filing of an application for an operating 4
heense. The Conunission, in an opinion delineating its antitrust jurisdiction, i
authorizes the Director of Nuclear Reactor Regulation to accept the application for the operating license without the FSAR and directs the Nuclear Regulatory Commiaion staff to seek the Attorney General's advice on whether changed circumstances h,vc occurred witida the meaning of Section 105c(2), whidi would wairant Ilic holdirig of asi operatisig license antitrust licaring.
A'lOMIC ENFRGY ALT: ANTITRUST JURISDICTION Section 105 of the Atomic Fnes,;y Act defines the Conuniaion's antitrust responsibdities; the broad powcas that the Commission lus by virtue of Section 186 to revoke or to malify existing licenses is subordinate in regards to antitrust matters to the segime set out in Section 105.
ATOMIC ENLHGY ALT; ANTIIMUST JURISDICTION The Commiaion's authority to initiate an antitrust review is hmited to the scheme of pieticensing aniitiust review established by Section 105c. Tb.t sectio:
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icqunes all apphcanons to a construction peimit to undesgo antitinsi saniiny MEMOHANDUM AND OllDEll and allows a second seview at the opeiating hcense stage if m 'he iniciun ug-maicant changes have occursed m the heensee's pmposed activitics.
'Ihe llouston Iighting & Power Company (llouston), Central Power and I aght Company (Central), and the Cities of San Antonio and Austm, Texas,are AIOMIC ENLl(GY ACI: OPERA'llNG LICLNSE ANTilituSTltEVIEW joint holdens of construction pesmits for the proposed South Texas Project, Unit Nos. I and 2. When the application for construction persnits was filed in in contrast to the moic thosuugli antitrust review at the construction pe mit May 1974, a copy was tiansmitted to the Attoincy General sccking his advice
>iage, the scope ut antitsust seview at the operating license stage is mose lumted.
whether a heasing simuld be held to consider ponible antitsust implications, as locusing on signiheant changes, if any, that have occursed in the licensec's requised by Section 105c(1)of the Atomic Energy Act. Lly letter of October 22, aslivnies unce the tonstinction peinnt antitiust review; however, in analysing 1974, the Attorney General responded in the negative. Ihs letter was duly pub-i allegations ol sirmlicani (hanges, some account inay be taken of the unchanged lashed in the Federal Registcr. with a notice of oppostunity for any interested teatuies ut the peopmal as a whole.
penon to hie a petition for leave to inte vene and to request a hearing on the antitiust aspects of the pioposed project. No such petition was filed and,consk Mr. J. A. Bouknight, Jr. (with whom Messrs. flobert scut with the Attorney Gencial's advice,no antitsust psoccedmg was imtW Lowemtein, Finis E. Cowan, Charles G. Theash, Jr., J. Gree-Dusing that same period of time, the health, safety and environmental se.
ory copet.nd, ft. Gordon Gooch, and John P.Mathis were view of the South Texas Project went forward. An initial decision favorable to en the bocf) to the llouston IJghting & Power Company.
the applicants was inued in late 1975 (IllP.75-71,2 NitC 894), construction pennits were duly inued, and the Atomic Safety and Licensing Appeal Iloasd Mr. Jon C. Wood (with whom Mr. W. Itoger Wdson was on alhnned the initial decision in early 1976. ALAB.306,3 NitC 14.The Conunis-the biict) for the (.ity of San Antoino.
uon chose not to review the Appeal Naid,s decision, and judicial seview was not Mr. Georgo K. Elbsedit (with whom Mours. Jerry L. llartis sought within the prescribed time. At that point, the construction permit and Don it. Butler wese on llic brict) for the City of psocceding, including its antitrust review aspect, had come to an end.
'the events secited hereafter'are those upon which the paities appear to be Austin.
in genesal agiccment. In May 1976, following the time when judicial review of Mr. Midwel I. Miller (with whom Messrs. Itidiard D.
g g
g Cudahy, Joseph Galto, and Itubert F. Loef fler weic on the g
laief) fos the Cential Powes and I.ight Company.
Mi bob CW Pm W @ M I
action occuned after Central had c>tablished an interconnection between its Mr. Jay M. Galt for Conunittee for Powcr for the South.
distilhution faulities and those of certain out of state utihties.8
- Prior to the l
we,,,ine, estabhsbment of this iniciconnection, the distobution system of which llouston Mr. Ilaymond W. Phittips (willi whom Mr. John D. Whitter and Cential wese past had served only Texas intrastate commerce. We under.
was on the Iniel) for the United States Depaitment of stand that, for this reason, llouston and other latiastate Texas utihtics have not
~
Justice.
in Ilic past been, and are not now, segul.ited by the Federal Powc Coinminion
- a utuation llouston would appasently psefer to snaintain. Centralis owned by Ms. Mastm G. Matsde (with whom Meurs. Josepta Itutberg a paient hohlitig company subject to the Public Utahty lloiding Company Act of i
and Mich.sel D. titume weie on the bitel) los the Nuclear llegulatony Comunssion statf.'
l
' Pusua4nt to the CunnnisA>n's osdci ul Apsd 27,1977, she pastics to ocstain pluscs.t-ings tuvobing i tuoda Power & 1 gld Co. puticas (4ohucs wcic granicJ tsave to file annitus
- Cent:4t's bsicf huhtetes that this took plate **4s a result of interstate transminion of
'1 6unac biicts and scply t.sich in this pautccJmg. A baici f auna a gsuup uf 1 kuida suuuhap4 538'takaty by {Wcat Tsaas tjuhticsl," a wholly owncJ subsidia:y of Centsat's t utding com-unhines and scply t.secas leoni the segulatuiy stall anJ l'tualJ4 Powcs & t ight Co. wcse i
subsolucn tly moved an.: 1. ave beca tunuJescJ in uus Jaspoutsun ut this mance.
j pany.Ccutsat an t Suuibwest Curpuratsun. thicf at p 6-
r a
A 4 e kl
[.' h )
I I ~ ~
IMS, and the acqunements of that Act inay have been a factor in Central's 3
appaient deemon to enter interstate connnesce and thus to sub ect aspects of any NitC antstrust proceedmg, but Central disputes this (thief pp. 2123).
i Central's pussuit of interstate regulation
- had led it, with other subsidiaries in its its operations to segulation by the I;cdesal Power Conunission. lluustan casts its di>cuocection of Central in a defensive mold, as a means of avoidmg its being system, to lite a petition wl.n the l'ederal Power Conunission seeking Com-caught in the net ofinterstate cannnerce and, thus, Federal :egulationi, inission exercise of regulatosy authority over it.The results of that psoceeding
'Ihese apparently inte related actions have been niatched by a complex set are cunjectural at this poisit, but it appears that one possible result would be to j
of judicial and adminntsative actions. Ilouston gesponded to Ccntial's mic:
establ.h 1;PC jurisdiction over tlouston,on account ofits interconnections with State Cenud.
connection by seeking an order finni the Texas Pubhc litility Comrnission to sequue Cential to sever slut connection. llouston's claun, also made in the in sesponse to llouston's breaking off of inte: connections, Central has also judicial action shoilly to be descobed,is that Centralis cont:actually and legally hied a civd action in 1:cdesal dmuct court in Texas allegmg violations of the bound to paesesve the intrastate cha:acter of the " Texas Interconnected Sherinan Act, and becking an injunction against interruptions of interconnected System," of winth both at and Central aie a part and whidi the South Texas service, llouston has counterclaimed in this suit, denying any antitrust violaticas Pioject was intended to serve.11y a >nbmi>> on dated May 4,1977,llouston has and seeking an oider coinpelhng pesfonnance of Central's obligations under its t
brought to our attention an "mtesim order" of the Pubhc Utihty Comnnssto"-
contractud arrangernents for the construction of the South Texas Pmject.
]
issued on May 2,1977, direcanig re>umption of interconnections betwee" We come now to the proceedings raising these issues befoie the Commission.
't he matter first came fonnally to our attention in June 1976,when Central filed llouston and Central and disconnection by Central of interstate ties Iloust""
8 a petition which styled itself a respimse to the notice of opportunity for anti-fuilher infunns us that " physical seconnection of the Texas Interconnected i
Systems m accordance with the interim oider has been completed."On May 18, tiust hearing which had been pubbshed some 19 months earlier. Central, a 1977, Central acquested that the Umted States District Count for the Western co applicant, had neceived the cashes notice, but it maintained that " good cause" thsinet of Texas declase mvalid and set aside the intesim order of the Utdities now existe.1 for allowing it to intervene and obtain an antitrust hearing. It i
contended that ilouston's breakmg of f of interconnections was a supcivening Connm:,sion.
i Central's inteiconnect.,ns with out uf4 tate utihties are under scrutiny in a Ovelopment which warranted the unposition of antitrust ctmditions.1he dis.
pioceedmg pendmg befose the Secusities and Exchange Conunission under the positism of that petition is outhned in detail in the Appeal lloand's decision in j
Public Utdaty lhildmg Company Act of 1935, involving tentral's patent lioldmg A1 All.381, 5 NitC 582 (hlarch 18, 1977), and need not be restated here.
company. Ilouston tells us (11rief p. 26) that the SliC proceeding could nmot Central pievailed before the licensing board to which its petitiort had been routinely refearcJ, despite our stall's opposition on jurisdictional grounds - that s1hc Act,1511 S C.19 ci seg, allows segistcrcJ hulJnig companics to "tuntanuc to the con > tinction permit psocceding having been terminated, the antitrust issues tunnut une or muse +tJmunat integatcJ pt he utilny syncms,"in ustain cuc.unstanus
'lu be so allowcJ, the St C must land that associated with it could not bc scopened. On appeal by our staff the Appeal (A) 1%h of such addniunal sysicms canwu be upcratcJ as an hidepenJcut sysicna
[30ard gegessed ( A[A[J.381), agreeing with the staff that the canistructiota perinit without the has of substantial ccunomics wMdi can t,c accurcJ I,y the scication of proccetibg had turmally come to an end with the expuation of time to seek tuntrol by such hutJmg 6umpany of such sysicm; judicial seview, and tlaat the hcensing boards lacked delegated authority to (11) All of su.h adJanunal systems are hetatcJ in onc state, or an
- n.ang states,or in
- N* N" O
a tunnguous tusogn country, and As uniters developed befuse the Appeal lloard, all pastics agiecd that an (C) 't he tuniniucJ comtanatmn of such sysiums unler the toutsul of such hul.inig antitsust brasing shonid be held at the eastiest opportunity,ditfering only on the cu'npany is not to l.pge (6unsiJcong the state ut the set and the arca or scgion aticited) as to ampaar the +1vantagss ut' lutalistJ suanagemeso e elitient ut,ciatsun us the clicc-j appropgiate plocrdure for acconaptishing that objective. Followuig argument j
aveness ui segulation.
bc[oge the Appeal lloard,110:35t011 suggested that we pernnt,an cally beginning i
to the sidsutony anilleust CVjCW p:ovided for in CCalairt cJSes at (bC opCratillg i i..t
.ac, p,..v.acs.n p.. t i
hcense stage, by walving the sequiscinent that initiation of staf f operating license It is therctuic the Oblil R un thu Cunnusm n that the p.unics hcseto umueJulsly reestabtah the 'Icsas inicat.sincticJ Syst6sr as at existed un klay 1, IM. as.J as
~acVIew proceduses await the applicant's subinission of a l'inal Safety Analysis auntrarually ar ecJ to 1,y auth pastics and we any and all Jacunnctis which must t.c "N kh mM m hm We whO the Miic8 4 War to be m gencial apecmcat.
r m.ste to semove the cuntsat snpedunents to such seconnection be made immediascly.
Wc du not sucan to asenbc a motive to thn cunduct. Ocutsal arul ltuuston <ath avc that its l
in late klay, the tinhay Conunanson issucJ a "Innal usJes"(unfirming and appiovin6 the utions are intended tu 14ncfit its consumers thiuugh obtaining more schabic, towc cost at,uve LikJ anscinn orJct.
clatstsny unJes a naute cif'icient segulatory systein. We nced not Jetide at this jun(suse wt (thes this or some othen purpose Jraves cishes an the pienent jurnalittionat Jaspute.
i... - w m.u % a n., uAmd.LM.AhanaNenie J4504h Itepmt II: Salt). 't his suggenion was placed behne us on Febiuaiy 10,1977,in a toonal snotion im w.nves ut Conuni:,sion sules putsuant to 10 Cl R $2358?
should not have major innplications for the regulatory process. Ilowever, the shap divergences among the paties over the appropriate legal basis for holding a Oui stalf beheves that, as a jum heensee, Central's inteivention petitbn may be hearing now have su: faced significant issues for resolution. The legal b.sts for tsealed as a request los construction petmit amendments, under 10 Cl R g50SO. sequams ihmston to intesconocct with it, and that the Comminion going foswand now will determine the scope of the proceeding - whether the entine proposal will be open to scrutiny de noro, as during the construction snay thereupon dnect, pmsnant to 10 (1 X h 2.104,that an antitrust heating he
{
peimit proceeding, or whether it is only the antitrust implicatons of significantly Leid on the reque.t. 'Ite Stalf also believes that initiation of a show cau:.e changed ci cmnstances that are relevant. And thece may be questions of finality pmcecJnig males 10 CI lt s2.202 would be " legally permisable." la Febru.ny in the event that fusther changes should occur befote operating licenses are l'177, the lust statf suggestion was placed before us in a stalf paper which we taused to be served on the pasticip.mts heicin, with an invitation for icsponse.
scady for issuance. More fundamentally, as developed in our analysis of the
'the Depaiement ot Justice, which did not appear befote the Appeal 11oand, statutory 1.inguage and its legislative history, seholution of this dispute requires a suggested in a Januaiy 25,1977,let ter to the lixecutive 1 cgal Director that "the definition of the scope of our responubihty in enforcing the antitrust Laws and I)epartment can see no season why the hearing should not proceed at alas time, the policies unde: lying them in relation to the enforecment responsibihties of sather than awaiting the fihng of the apphcation for an operating license " but it other agencies, paiticularly the Department of Justice. Some of the parties' a guments would assign to us a broad and ongoing antitrust enforcement role; pmifered no specihc leg.d basis for that view. Finally, the Appeal 11oaid suggested, in dicium, in its opimon of March 18, AI.A11381, that the Conunis-they envision that u would have a continuing policing sessmubility over the uon had the authoaity to onter a heaiing at this inne. Attematively, the llo.nd activities of licensecs th oughout the hvcs of operating licenses. As we shall bchewed that the linector of Nuclear l<cactor 1(egulation could onder an anti-show, we beheve that the Congress envisioned a narrower role for this agenc),
trust heasmg through the inuance of an under to show cause under 10 ClIt with the responsibihty for initiating antitrust review focused at the two-step hcensing process.
g 2.202.
Section 105 of the Atomic Energy Act, as amended, defmes the Commis-In our ordct ol Mmh 31,1977, we announced our decision not to review Al.Alid81 and our miention to rule on the llouston motion and the staif sion's antitrust responsibilities. That section,as most recently amended in 1970, catablishes a particulasiecd regime for the consideration and acconunodation of suggestion 4tiowing boeting and oral argument,in which we invited the Depart-possible antitrust conceins asi>ing in connection with the licensing of nuclear ment of Justice to pasticipate. ha declining to review ALAll-381, of cour>c,we l
power plants. The statute contemplates imbsition of conditions in connection
,nc not to be taken as liavmg agieed with everything that the Appeallioud had with our issuance of construction permits and, in some circumstances, at the said in that opimon.
it might appean that a dupute over the procedure to be followed for initiat.
operating license stage where necessary to remedy situations inconsistent with the antitrust laws.
mg a heanng, whcse the panties largely agree that a hearing should be held?
The section's lluce subdivisions scflect three distinct forms of Commission
- lhe proccJune prewnbcd by tu CI R 9 2.758 for necking waiver uf a Cununission sul sesponubihty. Thus, subsection (a) provides for enforcement of antitrust judg.
n by na teima htcrahy apphsauls to onguing adjudwatory paucccJmgs, not to a requcst los W
h aEM mb b MW b h M **M waives los the purpose ut f.nslatating unitiation of a paucccJmg. Ncverthrless,we bctieve tha selieve any pfison from operation"of the full ange of the antitrustlawsinclud.
unJcr the cucumssances llouston paupcity invuhed this sule and that 6t= sequest los waiver was propcaly adJacued Jually to the Conuninson. Ahhuugh acqucsts undes the rule are ing the Sherman,Clayton and FederalTrade Conunission Aus:
noni,4 4JJacucJ to the pic>iJmg ullater un the unguang psucccJing, such requests must t c In the event a hecnsee is found by 7 Art of competent jurisdiction,cither cunilicJ o the Cununhoun fus detbaon if a primafacu showsng is m.nic. No pasty objectcJ in an original action in that court or in a proceedmg to coforce or review the to llouuun a invueation of the 10 t'l R 6 2.758 waives procedusc.
.I
- Cenhal. the segulatuiy statt and the ikpattunut of justics agree that a hu.ing shoulJ laws cited above, to have violated any of the provision of such law in the be held in sta testel, llou> ton touh the posmon that is did not utsject to Jctermuung w hether these had been a "ugmucant change" in the South Temas proposal since the conduct of the hcensed activity, the Commission may suspend, sevoke, or con >truction pcennt scucw. At orat assument, iluuston asLcd as its fust picfcacnce that we take such other action as it may deem occessary with respect to any hcense than no heasing would be ucccuary now us, tusnug ulher changes with antitrust issued by the Conunission under the provisions of this Act. (Emphasis rule in.phcations, at the upcrainig lascnic stage. San Antonio and Austm are uppuncJ to a heanng but agrce with llouston that 114 hearing ss neccisasy.it shouht ticgan now to prevcsit gm9ble Jctay in usuante of an operaimg htcnic.
Subsectian (b) m;uires the Connnission to seport promptly to the Attorney
~;
I Go.cial any intoiniation si may have w nh sespect to any "utatuation ol'sputal No past of the Atomic linergy Act other than Section 105 explicitly deals nuclear mateiial os aioinic cucigy which appeans to violate on tend towaid the with antitiust matters. Under Section 186 of the Act.however, the Conunission uolation" of any on the hsted.mtionst laws, or to testanct lice competiuon in has general authonty to revoke licenses for ar,y reason which wou:d have war-puute enierpose, but pioudes no entorcement or heanng initiation sesponsi-unted the Conuninion in refusing to grant a license on an original apphcation.
hiluy wnh sespect in this intuniunon.
t he powes to sevoke would normally imply the lesser power to modify licenses A sesponuhihty los mniating and conducung a hearing piocess is.ct out in to incorporate conditions which would have been hnposed at the time ofinitial i
Secuon 105. Sulaection M spells out an intiieate proceduie by which the 1, censing had subsequently developed ciicumstances Lt.en been known. If tids Commbsion sohetts the view > of the Atto ney Gener.d on ponible antitrust seasoning apphes to our antitrust responsibilitics,Cosomission initiated antitrust emphcanons of cath apphtation to t.einituton to const uct a conmiencial powe' heatings woukt be possible beyond the hmited circumstances set forth in Section scactor. Any such heense appheation shall "piomptly" be taansmitted to the 105. Indeed, all concede that other language in Section 186 gives the Canunis-Anorney General who shall, "withm a seasonable time, but in no event to sion authority to initiate a postlicensing enforcement proceeding in the event of enced Ibu days alter secca.mg a copy of such appheation..scuder such advice vwbtion of a specitic antitrust licensing condition.' For hke reasons we would to the Conumsion as he detenmnes to be appmpriate in regard to the fmding to not be limited to mere reference to the Attorney General if a license applicant he made by the Conumnion punuant to paiagraph (5) of this subsection."
had fahilled pertinent antitrust review information or had othe: wise obtained an paiagiaph (5) ol subsecuon (c) :cqunes the Conuni>> ion to determine, in cases unconditioned beense by some sort of fraud or conceahnent,but no such allega-whese an antitiusi inoceedmg n held,"whethen the activities under the license tion is contained in the matter befuse us now. it is the further question whether would cicate or mamtam a situanon inconsistent with the antitrust laws.
Section 186 expands the antitrust hearing settings defined in Section 105,how-Upon acceipt ol the Altmney Genesal's advice, the Conunission must ever, that diives the current debate. For the reasons that follow, we find that the pubbsh the aduce in the FedaalRegister. t he Attorney Gencial may advise that generahty of Section 186 should be treated as subordinate to the specific, theie wdl he advene antinust aspects to the beensee's proposal,and reconnnend hunted segime adopted by Congress as recently as the 1970 amendments to the a heanng. In suth a case, the Attmney Gencial may pasticipate "as a p,sity in the
- Act, pioceedings theicalics held by the Conuninion on such licensing matter in con-llouston argues that, with narrow exceptions not relevant here, our nettion with the subject matter of his advice." Thus, the Act provides for auth<nity to initiate antitrust igview is limited to the Section 105 hcensing in depth antitrust icview with the ani>tance ami advice of the Attorney General context, hi the present circumstances they contend that a hearing at this junc-
.ind the possibihty of a inll scale adjudicatomy hearing at his sequest or the tune could only be an operating license hearing based on " changed circum-equest of a inivate party, at the construction peinnt stage.
stances" ami suggest that we waive the FSAR filing requirement for proceeding For reactors which have undergone subsection (c) antitrust seview in con-with such a hearing if we believe a hearing otherwise appropriate. Our staff, necuan with a consuucuan peanut apphcation, paragraph ic)(2) govems the Cenual Power and 1.ight Company, the Department of Justice and the Florida quesuon ol.mininst seview at the opesaung beense stage. It requires the Com-Cines in an amicus filing argue that the Conunission is empowered to consider mtaion to inale a lineshohl detenninahon beime the Attoincy Gencial's advice antitrust matters at any time, regarJless of the pendency of an operatinglicense conceining a ponible second anutiust pmceedmg an be sought - n.unely a or construction permit application, under Section 186 of the Act. The Depart-tmdag that the hcensee's asuuues have >ignificantly thanged subsequent to the ment abo finds authority in Section 161 of the Act, empowering the Commis-t onsu ut tion penna antnaust r eview. 'the language of pragraph (c)(2) is sion to " hold such sueetings or hearings as the Commisuon may deem necessary exphcit:
or pioper to assist it in exercising any authority provided m this chapter or 'n paugiaph (l) lwhhh sets f orth construction peinnt antitsust seview the admimstration or enforcement of this dupter.."The Florida Cities amicus pioceduresl shall not app;y to an apphcation for a heense to operate a lihng aigues that "the Act nowhere states that Section 105 asone provides unduation or pmducimn iacility.. unless the Conunission deterunnes sm.h the Commission with the means it may use to enforce the procompetitive review is ad,:uh!e on the gmund that signifscant changes in the licenscci i
actn'irics or juoposed acuvilles have occinsed subsequent to the previous pohcies of the Act." thief amicus cuilae of Florida Cities at 34. Finally.we are l
iesiew by the Alimney General and the Commission unJer this subsection g
g g
gg g,,
l in connection with the construction penmt los the facihty. (hmphasis mtludmg a faituse to,. upcute a fauhty in acco:Jance wish the terms of the.
added.)
incnic."
M g pg kk
- ' ' 4 i
s asked by Central and the stalf to conshne Central power and I.ight Comp.iny's linergy Act. Concein with the cosupetitive aspects of hcensing in the nudear anutinst allegations as an apphcation for a " modification" o! the construction asca, however, goes back to the originallegislationi enacted si 19Ms;asitMpato8Y permus winth if gianted woull " constitute a new or substantially dificicnt antitanst seview in the licensing context, coupled with refenals to the Attorney lacdity,"insgesmg antuinst seview under 10 Cl lt g50.90.
1;eneral, began then? In 1954, the Congiess rewsoie the Atomic Energy Act to lhese are ingemous and m some respects uppeatuig arguments. lispecially provide for domestic development of atomic energy, with a two stage hcensing ugmficant ni our view, however, as the extent to which these arguments avoi.I os pmtess for piivately owned seactoss. Under Section 104(b) of the Act,hcenses stum the language ut Section 105-ould be obtained for the construction of reactoss involved in the conduct of We fmd the specilicity and completeness of Section 105 sis Lang. 'Ibc acc-sesearch and development activitics without antitrust review.Not until a demon-1 tion is comprehensive; it addresses cath occasion on which allegations of anti-Siration of the " practical value'* of sucli facilities forindustrialor coinmercial use, competitive behavan in the connnercial nuclear power industry snay be raised, or in the event of licensing under Secilon 103 of the Act, would the and provides a procedu e to be followed in each inst.mce. 'the Act links Conunis-then-Section 105(c) provisions, requinng antitrust review and possible condi-sion antitiust seview with the licensing process, demanding a thosough antitinst tioning of hcenses come into pl.ty.
review at the stage of application foi the constinction pesmit and allowing a Such a "piactical value" finding was never made, but in 1970 Congicas narower second seview at the operating license stage,if such a review is deemed lound nudear power to have acquired "conunercial value," and amended the advisable on the b. isis that sigmlicant changes have occursed in the licensees Act to semove the " anachronism" sequiring an ALC l'mdmg of conunercial activities. 'the dear unphcation of the "significant diange" language is that the value. I16 Cong. l(ce. II. 9447 (daily ed., September 30,1970). Changes in the 9
holdes of a construction penniiis not subject to a second antitsust seview at the two-step liceming procedure made datification of the provisions governing anti-l operating license stage unless "significant dianges"in the proposed project with isust scview necess.ny. The legislation that emerged was charactesiecd by antunust imphcations have occuned in the interim. Nor can it reasonably he Sen. dor pastme, a memhet of the Joint Conunittee on Atomic Energy, as a aigued that Congiess did not loseve that antarust allegations might be raised
" carefully penfected compromise" and a " balanced, moderate framewoik for a outside the htense review context. Subsequent allegations that hcenses are being reasonable licensing seview preceduse." 116 Cong. llec.19253 (daily ed., De-used in such a way as to violate the antitiust laws are to be referred to the cember 2,1970).
Dep.utment of Jesstice for investigation and possible enforcernent action, anil af violations are founkt by.: court, the Conunission is given express st.atutony
,Scotson 7(6) ca thc Atumie l'ncrgy Act uf l946 psoviJcJ ahat authority to take such laccuse sclated remedial action as is necessary '
wie vi k usaJc any htense mkht serve to foster the gsuwth of monuputy, t his reading of the statutc is supposted by its legislative history. 'lhe picscnt seuraint of naJc, unlawful compctation, or othes traJe puutson inimical to the entry of language of Section 105 was fashioned in the 1970 amendmehts to the Atonne new, faccty compenn c cnicipaises in die licu, the Cmumindon u audiorucJ and JncticJ to scluse lo taue such htcine us tu estabhah such conditions to prevent these sesults as the Comminion,in consultanon wula the Attosncy General, snay Jcacimino.
'it is 6mpustant to semember that (lic Alumic i ncigy Act pcrnois horinang unty (
'the Comsniaiun slutt scpost promptly to the Attorney General any informanun whis.h specitic Imdmgs asc made that "the unituation us psuJuotaun ut secotal nuttear matess.J ws11 at anay have with scapcot tu any utduation of fasdonable matesial or atusnse energy be su accand wnh stie cuanmun Jcfcase and secussty and will1 sovide adcatuate psuic6tauri to wisasts appeass to laave usese renahs.
dic heahh and sah,ty ut the pubtac." Section 151. 'Ihis standaril as usitas'Le or c whada
'Mrks of Starasrs& t AM, HI FR %2 @C h, NM game an dM h authusues hcensing lur sate scumgl under.: bauad "pubhc inicscat" standa:J. In the latter ocatain suunicipahiies and oth as to have the Comminion consiJcs, bi the 6untcat of Section case, agtncics punutug the objectivos ul the segulatusy statute weigh a multuuJe oflattues, IG4(b! pubhc health and safcty and nattunal scousily bccnung, wlicther tuuance of the including the eficca ui the peupuscJ acInna un compentors and the genesal (uinpcinese license wouki viotate provaduns of the anturust laws. In an en b.me Jccision, das D.C.
snuation, ue e r Rican Du. Asng 03 v. US, 32I U S. 67 (1974). It is not surpn.n.g Cututt fourmi that Congscas had not intended that the 105(c) antatrust pauvaduns of ths therciose, that (Lc annuust juriwiktaun of the Conuninton is specific, rather th.an genc, shcwAtI be injected into R<b) bccrh, itathcr, Congscss had intended that Sectiu,
t
~llus sellects the natusc ut the Conunisdon's uther scapsmisbihncs wnh scapcci to nusic,
1041 t< "patendy scatnotcJ m Shut,n M hoendng.,..in cunt Scu, the Gunnhua is plants - a scaponubihty that as not plenary t,ut spculic.1 ur emmanple, unJc Scotion 2 /8 uf bansd, wnh cesiam caccptions mh as Q 103 Incusing)Isom condJesing affamarke. nrm the Atomie Lucsgy A6e this Cunnuisdun has no authusily to segulate otstaus cousanna pirury antnsust sanctions" (cmd. ads in LN esiginal) With scspect to 104(b) htxnscs, the 6
asectim of nuticar powes plants. suth as sales. 't hus, tases decided in the contcal of Lauad Connui don suuld unty sustwnJ. Icwoke, or take other such action with icspc6 to a hcense segulatory statutes, used to us painiasily by the Ilorida Caties amkus buef, asc la as it Jam J nctenasy alter a tourt fumlang of monupuly.
twasu. nave than mght otheswhc t>e the case. Sec Cary of Lafayerre v. Sec,4541. 2J 94 ?,
it la sicuukant that in Jacundng the Coinminion's dutics under Sc6 tarn 105(c), tie Court 948 (D C. Cu.19 71i sevtsat tunes scacsrcJ to its duty there to condJer "sarkspatory statitiust hupact."
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'llnoughout the he.innp and debates runs a camsistent thsead What was at Simdas reasons were cited by the Acting Assistant Attorney General for the stake was "pichunsmg" or "anucipatosy" antitrus seview. lhis theme w.is Antitinst Ihvision who contrasted prelicensing review with suose general anti-emphasued by Congressman llusmes,who stated tomt enforcement, stating " facing [these questions) at the outset of the licens-Ily hke token, th:2 billin no way enlarges the substance of the antitrust eg proceeding, and obtaining the Attorney General's advice on the issues, can review m any respect over the provisions of the existhislaw for conunercial I
pemi an cady md ordenly resolution of antitrust problems befoie much money licenses. What we aie ying to do u clear away procedural uncertaintiesin and tin.c hu Hm spent." Statement of Walker 11. Comegys,llearings at 121.
the manner in which both the Justice Department and the AliC aie to And in respc ise to urgings by Corgiesunan llosmer to employ trshtional anti-proceed.1 I(2 Cong. l(ec. 119447 (dady ed., September 30,1970)'8 trust remedies in the nuclear field, the Assistant Attorney General stated:As to l
those matters which are cimed, namely both licenses having been granted, that On the one hand, the C.mgicss was mged "not to burden nuclear plants will a is the only accourse availabie to us."llcarings at 140. It is difficult to seconcde special prelicenung antitrust seview." Testimony of Call lloin Jr., for lidnun these statements on the part of the active supporte s of pre!icensing review tileenic instnute, lle nings on l'achcense Antitrust Review of Nuclear Power with the view that the Congress was considering placing a general antitrust plants beloie the Jamt Comunittee on Atomic linesgy,91st Cong.,2d Sess.,
pohcing authusity in the Conunission.
(hoemaller "llcamigs") at p. 328. Opponents of any agency antitsust review An asca of special concern during consideration of the 1970 amendments i
argued stienuously that appheants foi nudcar facihty licenses weie subject to centesed on whether antitrust review should take place at both the construction the antitiust laws "all the time,and if we aie violating them in any way,it is not pesmit and operating heense stages.'lhe AEC proposed that review take place at in bmiding any specalie plant;it would be m the ma:Leting of our total system both stages, with a medianism to " exclude from consideration at the operating l*'*-
Id license stage cases that had been handled at the construction permit stage to the -
liut even among those who argued in favor of prelicense review, no evi_
satisfaction of the Justice Depa tment" at 38.
dence emesges that anything more th.m license connected review was considered.
Chaisman llolifield expressed considerable concern about this suggestion 1hese is no hint m the legislative histo y that anyone - advocate or toe of (lleurings at 37 38):
i I am conceined with the mandatory requirement in die AEC bill review Inchcensing seview - anneipated anything snose. Indeed, the seasons undedying support for the bdl as enacted indscate the unguntance of anticiparury review to l
at both the construction and operating license stages. It seems to me that its advocates. Su c r., statement of Chade. A. Robinson, Jr., Staff Counsel to the Joint Committee's bill which requires mandato:y review on the antitrust problem at the construction stage is a practical and sound way to approach the General Manages, Nanonal Rural filectile Coope ative Association,llcarings I
at42R it. I think if you hold over the head of any investor of $100 million L a plant,let us say, the fact that he builds the plant to dunnel the power into his own system of di>tsi'uution, at that pomt he should be made aware of I
The big advantage of anutiust senew at the prelicensing stage is,in our view,its semeihal practicahty. thiedy stated,it shifts the procedural bmden any (uuni m from that plant to another sot,rce. lie shoull not be put in a to the appheant, where it sightfully belongs. lie is not stigmatiud as a positioa,it seems to me,of double jeopardy in that he is given the consuuc-wiongdoer. And he has,dus:ng the beensing procedure, a time aclated incen.
tion pennit to proceed withom 4atitsust review and then sudderdy 6 years tive to expedite the entire process and to comply with reasonable antitrust later, or 7 years, whenever his piant is finished, he is faced with an inter-venor or a legal situation in which he has to go again through the process of safeguards belone any compet tot is damaged. Problem useas can be anuci.
9 I
antitrust review.
pated and avoided wnh mininuun distuibance to all pa, ties.
.hese again you have a permissive act on your part,and a benevolent None of these advantages acciue to the da>>ical,after the fact anmaust l
act on your past, or an antagonistic act at tids time,5 or 6 or 7 years later, piosecution, whescin the defendant's mtesest hes in delay whde competiton sulles during yeais ul hequently inconcluuve htiganon, f
alter the investment has been made and the plans of the utihty,regardless of who they might be, were made at the time of construction as to the feed.in of that power into their systems.
rongsc,unan it.,sme, io.,L care in cmphasue n wcu u.at ".ous w h.ie a,,m,n,,
Suddenly they are faced with a diversion,let us say, of 25 or 30 or 40 smew in nie runonmon s hsensmg pioun,, in m, ay %g,, g, mg,,,
percent of their power into another system. So, at seems to me that the anucu any os u.e annou,i tm o, p,,,,,a, uicir apphan ni, mp g i, %,
wnnen by subic6non t05ta) ud the Alumac Lue:gy Act, wluth gemains unchanged."/J Joint Committee's position of mandatory review before construction as far i
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't as the.nnnont piohlem is concemed ought to be linal in laisness to the did the Congress, that these use snose suitable forums for antitrust cuforcement, mvestois. 't hey no in ihen with thcu eyes open asid they aie treating the Nevertheless, selying on dictum from the Caries of Statesville case, Central problem on the haus of a detennuicd fact which does not damage then and others argue slut we have general antitrust police powcas in the nuclear pitor pl.onung and the acason for investing in the first place.
industiy puisuant to Section 186 of the Act, and that we may thereby reopen la seems so me that tins shoubl be mandatory rather than dependmg hcense pmceedings for cause in the event that there ase allegations that a upon an act ut pemiissiveness or benevolence.
hcensee's activities are anticompetitive.
the Statenille case actually held that Congress intended Cummission anti-Chainn.m llohheld's omteins were seHetted m the finallanguage of the sectmn, tmst review only in certain limited circumstances. N.10, supra. In the course of providing lui th,nough erview at the constsuction pennit stage, and a second the opinion, however, the Court reviewed biicily the Conunission's antihunt seview only upon the lindmg of ">igmhcant thanges." The scetion by-section sesponubihties as they then existed and made the statement rehed on here:
aiulysis of the bail, paesented on the floor of the Congiess by Chairman llohned, This section l1861 invests the Commission with a continuing " police" stated "
lihe conmnitee sees no sense in two such lantitsust seviewl excicises power over the activity of its licensees and provides it with the ability to mden there h.sve been segmficant intesvening changes." This linntation on the take remtslial action if a license is being used to sentrain trade.
scope of antitrust review at the ope:Jung license stage is inconsistent with the notion of ongoing anhirust enfoicement responubility being hidged in this
'lhis dictum is a weak foundation upon which to budd a claim of such wide agency-ranging powers. The statement itself is amenable to another interpretation more Thus, we ihmL Congiess contemplated that this Commission would review consistent with holdmg of the Statcaille case itself: 1he Court of Appeals may antHrust allegations piimanly, if not exclusively,in the context oflicensing and have been speaking of this Conunission's continuing police power over condi.
that such review would take place in. two-step seview process, the second such tions psopeily placed on licenses, after 105(c) antiin st review. In any event, the neview of a muse hunted scope than the first.
Congscssional contemplation of a more rutskt:d antitrust review function in aildition to the statutory language and its legislative histo y, such a retleuted in the 1970 amendments is inconsistent with a broad re., ding of the legisla;i e aheme is most consistent with tlns Conumnion*> special responuhdi.
quoted Statesvdle dictum.
ties.1hese a,e strong policy reasons why this Conunission has expansive heahh in sununaiy then, we concl,ude that Congress had no intention of giving this and safety junahclion, winch contmues through the lives of outstandmg Conunission authonty which could put utdities under a conunuing sisk of anti.
heenses. Nuclyas power is an area of considerable technical complexity. Its trust review. Ilad Congress agreed with the proposition that this Commission governance should be entsusted to an agency which embodies that pasticular should have broad antitrust policing powers independent of licensing, the statute expertise. Ilut in the fic!d of ant trust, our expertise is not unique. We mesely that emerged from these discussions would have looked quite different. Utile apply principles, developed by the Antitrust Ihvision, the Federal Trade Com.
attention would have been paid to defining a two-step review process. The minion, and the Federal counts, to a pasticular industry. linough the licensmg terminology of all participants in the drafting process would not have been pmcess, we can ef fectuate the special concern of congress that anlicompetuive focused so disectly on "prelicensing" review. And, if a broad, ongoing police induences be identined and conceted ii their incipiency. No nuclear power can ',
power la ;he antitrust area had been assmned, the language in luS(a) authorizing be generated without an NRC license and the hcensing process theseby allows us.
the Commission to act with respect to heenses already issued, in light of the to act in a unique way to fashion semedies,if we lind that an applicant's plans '
antitrust findings of courts would have been, if not supcilluous, certainly may he inconsistent with the antihust laws or their undeslying pohcies.
sedundant. Con >cquently, we fmd that the Cosmnission's antitrust authority is liut in the poubtensmg posture, ilns Counninion's capacity to act is not delined not by the bioad powers contained in Section 186, but by the more unique.1here as no longes any quesuon of "lo6Llmgl the bain door befose the innited scheme set forth in Section 105.' 2 ho se is stolen.
" Statement of Sensator Pastore,Ill lerislative thstory of the in so concluding it is not necessary for the purposes of this case to go Atomic !!ncrgy Act of 1954, at 3101(1955). When nuchas power plants have beyond that, once an initial, full antitrust review has been perfonned, only been consunsted and are operahng, anticompetitive behavior can be remedied "significant changes" warrant reopening. In the event a "significant change" only by muihfying or condihoning exisung behavior. Whatever form ofiemedy were to occur in a licensee's activ tics before operating license review, this fact i
the agency c.m of fer is not appicciahly ddierent from that whidi may be i nsinnia,,ca,ons teaa us to,cject the ocpastment of Justice's suggestion that section tashioned by the ttadiuonal antmust fonuns. In lins posture, we recognue, as 161 may acnc as a suusce of authomy indepenJcut of Sechon 105.
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possibly through rulemaking. For the present, we uced only to find that ius wouki make some fann of.mtitrust review at the operating license stage appiopsiate means to pcimit the Conmnssion to scach the signficicant chariges psobable, abstut a seulement agsceable to all parties, the Attoiney General and question has been suggested by the petition of Ilouston asking that we waive the this Commission. 'the only question then semaimng is whether initiation of the requnement that the htmg of a: apphcation for an operating hcense be ac-second somul, "operatmg hecuse" review must await the hhng of the I SAR l
companied by the liling of the 1SAR.Sce 10 CFR 6 950.30(d) and 50.34(b).
whk.h, by our rules, must accompany the hhng of an apphcati,n for an opesat.
gte g:SAR is a technical document which provides infonnation necenary to ing hcense.
cvaluate the health and safety aspects of a plant in construction. Normally, As a mattes of sound practice, such an outcome would be undesisable.
however, no past of the infunnation contained therein is sclated to, or sheds l' aced with the pmspect og an antitiust heanng, we must seahstically consides lit s upon, the impact of the operation of the plant on aspects of competition or h
the impact of.lciay upon the overall hcensing piocess. Antitrust heanngs tend typically to be tune consuinnig. Itecogni ing this,our segulations p ovide lui the the competitive conduct of the apphcant.Our waiver of the normalrequirement f
that this document accompany the operating heense application wdl have no cady and separate iding of antiliust intornation, at the construction permit impact on antitiust seview and will f acihtate early consideration of the possible stage, to peanut the antionst review procca to be completed concurrently with other hcensing seviews. Scc to CI:n g50.33a and selated Statement of antitiust implications of the circumstances that have arisen in this case. Ac-Conuderations, 38 l ed. Reg. 34394. Smolaily here, we think that of antiisust condmgly, the Director of Nncicar !teactor Regulatien is authoiized to accept an review as found necesmy in the pcsiod I etween issuance of a constiuction apphcation for an operating liccuse for the South Texas Project without the peinnt and apphe.nion for an operating hcense, we can f.ishion remedics to l
necenity ol filing with it the 1 SAR desciibed in 10 CFR 650.34(b), and to seck expedae the sesiew. 'this necessasy ikxdahty can allow us to sesolve antitinst l
the infonnation outlined in lleg. Guide 9.3.' 3*
in acccpting the substantial agacement among the parties that the circum-allegatmns in a inucly I.ssidon,without unduly delaying the licensing proccw stances whiJi have developed warrant, at the least, sccking the Attorney Thus, we need not and do not decide whether antitrust review may he General's advice, we are making the Section 105(c)(2)"detennination" that a mitiated in case of an apphcation foi a hcense amendment which would ten,lt in luilhes antasust review is " advisable" because of "significant changes" in the a "new or substannally thficient facihty," on where an apphcation for taansfer heensce's activaies occursing subsequent to the antitrust review previously 01, control of a heense has been made,or where "signilicant changes" occur alter an operating license is inued. We note, however, that the seport of the Jomt completed at the const:uction pennit stage. Ily setting in motion the operating heense antitrust review incchanism, we do not mean to imply any judgment on Conunutce exphcitly refens to our authonty to conduct a review ni the inst situation, il R. Rep. No. 91 1470,91st Cong. 2d Sen.,3 U.S. Code Cong. and our part as to the necessity for a heating,let alone any necessity for the imposi-Lion of hcense conditions. 'that judgment wdl be delened as the statute Adm. News, 4981, 5010 (1970). Autho:ity in the second situation, not emphcitly acferred to in the statute os its histosy, could be drawn as an bnphca.
conteinplates pesidmg acceipt and evaluation of the Attoincy General's advice and will then be made in the same maimer and following the same procedures as tion hum our regulations.10 CI:n g50 80(b). 'the third situanon presents the issues pendmg in the Hor /JJ hwcr and Light pmceeding, n. I supra, which we we employed at the construction penuit stage.
We decide only that the events detailed above are of sudt a nature as to do not have before us and need not sc>olve to decida this case.We p uo huther convince us that the Attoincy Gene al must be consulted.1n this regard we are than to conclude that Section 186 can have at best hmited application,in hght of the "significant thanges" icstriction of Section 105(c)(2) and its relation to awaic that the staff sought the Attomey Gencial's advice on the antitrust Signific.mce of the picsent interconnection dispute and that he responded by the overall scheme of Section 105.
't he mechantun for making "signincant cle.mges" detenninations is not letier dated Januaiy 25,1977. Followmg a sununary of the facts of this dispute to that date, the Attorney General suunnarized the antitsust contentions of the spelled out in our mies altinyugh an Al:C Regulatory Guide,9.3 (October 1974),
$ cts fuith information to be supphed to the staff in connection with its
. panties as follows:
Central Powcr & Ught has alleged that this situation substantially impairs its 01l crating license anutanst leview. 'the making of a "sigmlicant change" deler.
abihty to pioduce competitively psiced power and also that its participation mmauon ingtesing a seteiral to the Attoiney General for his advice on its antitiust imphcations is a lunction which could and peihaIis should be deleEated
aGur finding that the present accord shows evidence of u.gnificant changes warraniing to the regulatory stall. 3 We intend to egploie that piocedusalquestion fusthes the Attuincy Ccacral's attentiur, thus is not inicudcJ to preclude his consideration of the e
snius scoosJ of events subsequent to the CP aniitiust review as this may bc Jcveluped
- *t:munng Jagan.,us uenics aushuany unty with lespcci to Section t0$(c)ng thiuush the infunnation etssiscJ by the.iatt in coniunction with stic application pauccas.
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b' h-in the South 1cus Psoject will be jeopaidued. llouston 1.sghting & Powci, J ust ice' '
argue against any such lunitation, we have concluded that this on the othee hand, wnsends that it acted undatcsally, wnhout anticompets.
second look at the opesating license stage is to be a sest:icted one, focusing on live puipose, to picsciv.. its status.ns an intiastate utih6y not subject to I:PC the changed circunistances. 'the se.asoning whidi leads to this conclusion -
lmisdittion. and the GES p.ntiopanon in the South Teus Psoject will aheady surgested by our casher discussion - is as follows.
not be advencly altect. d.
I:i >t of all, the sisuctuse of the complex statutory schen c estabinst;ed by Section 105(c) sesongly imphes that these is to be a hmitcd seview,if any,at the We need the Attinney Gencial's evaluaiion of the legal significance of these opeuting bcense stage. If no "significant changes"in a consuuction pennittee's vasions lace > and contenu.nis to descimine whether an ansiteust heanng is pioposed activities have ocenned, then the sjatute is expheit, that these is to be I
wananted indeed, las letter was specslic that no such advice was being no untin ust review at the ope:ating license stage - the antitrust review l
ps ovid ed. ' '
piocedure "shall not apply to" such a p o,eMec's appbcation for an operating t he question upon whi h we are now sccking advice is why enforcenient of hcense. As we view it, a full blown de nom antissust review, with the Conunis-
.i mussact night, known to all paitses and the Attoincy General at the sinne of sion's "> gnilicant changes" detennuiation acting only as a Iniggesing snechanisin, would be inconsistent with the st.itutory scheme of immumt/ Isoin a second l
constinctum peinnt antinust icvsew, niay constitute "thanged ciscumstances,"
i such as snay jusuly the imposition of antitsust conditions This is p.irticulasty I
seview for unchanged proposals.
cutical bec.iuse among the f.ators cumined at the time the construction pennit I
hioscover, a limited scope of seview at this stage is stiongly suggested by the antitrust seview was mnducted, as imhcated m the Ationney General's letter, legislative history. In our cashes discuaion'* we noted the Congressional was that "none of these unhuesoperated inte connected with an clectiic utshty concein with pmuble unfaisness to utshties and their investois should they be I
outside Texas so as to he subject to the jurisdiction of the Fedesal Power scquued to run the antitsust review gauntlet twice, at both the construction Conunission (110), and interconnection cont: acts with one another were con.
pennit and operating hcense stages. Chaism.m llohrteld exp.essed the view that ditioned specifically to pieclude interelate connections."In addition,we bcheve the constspction pennst seview should be "linal to fairness to the investors."
that the Attoincy Genes.il should provide us with his evaluation of the piobable With the sesults of that seview known to them, they could proceed with con-l cifects of pioceedmgs in other losums, as they have then piogicssed,in develop-struction (or not) "with their eyes open...on the basis of a detennined fact which does not d.unage their pt or planning and the season foi investing in the l
ing ins seconunendauons conceaning fuither.munust pioceedmgs.
i Our desca nnnation of thanged tucumstancca foseshadows a sciies of liat place." he legislative history sellects that the compiomise version of subsidia y qncsuous which need not be adJacssed compichensively at this Section luS(c), as enacted. contemplated himted ieview at the operatiny hcesise juncime, but conce ning winth unne Connutnion guidance is appropriate. lhe stage. As Chainnan llohlield stated in u:ging floor apptov.d, "t he Coounillee only stated conscquence of a Connnisuon deteammation th.it "sigmficant sees no sense in two such excicises unless thcie have been significant intervening thanges" h.sve occuned is that parags.iph (1) of subsection 105(c) - the changes."
p.iragiaph piovhhng f or Attorney Gencial sevicW and advice - applies. Palagraph Furthennose, a hmited review at the opesatinglicense stage isconsistent with (c)(2) does not exphtitly state whethes his considesation or any subsequent the well citabhshed considerations consolidated in the doctrines of ses judicata hearing is to be hunted to the subsequently developed circumstances underlying and laches. Although these judicially developed doctrines ase not fully applicable the Conumssion determination and scleience to the Attoiney General. Whde in adminisuative proceedings, particulaily where, as heie, these was no adjudica-unne of the p.nues helme us -- notably Central and the Department of tory pioceeding at the construchon pennit stage, the considerations of fairness to pasties and conservation of sesoluces embodied in them are relevant here.We see no seastm why the Attorney General,our staf f,and possibly a hearing board should plow the same ground twise. Nor,in faisness to utilitica engaged in long
.. a he A inna nc y (.ecncaat seasol that; sange plannmg, should a potential petitioner for antitsuit intervention be able to We necJ nui Jaa& ihe utannaie vahdisy ot : Pa t.'s tunicutions or its &p's sestunnes to stand oil the sidelmes at the constsuctioni permit stage and raise a claim at the tout ude that the 1.scwns suu.nson en Icsas wnh scsusttions on sniesunhiy tuo Jma-non sosulnng uom she Jivraon ol' she untanca in she state into two g oups, pscmucJ on "PC'3 "E II'E#
suitastaic and inteniac upcianon sesectiivtty, wnh 'lIS otiminded as a tuo:Jmaung 7'Sec isanscript of usat assmucnt, pp. 34,54. The stairs position on this runnt was vchatic, and wnh quaisons sancJ as so the uabalay of plauncd patadpanun in the unticar. lsanscsipt p. 66.
nutIcas unas - waoanas an annnusi heasang.
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This as not to say that "sigmlicant change >" in a heen>ce's progniul cm or N as 6 E W W 4 WW should necesunly be viewed in hobtion faom unchanged features ol the psopoul. 'the antitiust unpbcations of a "sigmlic.n.t change" may indeed asise UNITED STATES OF AMEftlCA liom its : elation >lup to unthanged leatutes of the proposal. Obviously, some NUCLEAll flEGULATOllY COMMISSION account will have to be taken of the pmpoul as a whole,but as the pmpowl or COMMISSIONEllS:
its nnpacts have been alleged by changed cisemnstances.
Fmally, we thmL si appmpsi te to anticipate and say a word about a Marm A. h% CWim g,g, g;ggg ponible comse of evonts wheseby the present contione:>y sinay be sesolved r
befoic ao opesating heense antitiust review would nosmally occur. Undessiami.
flichard T. Kennedy ably, if these is to be an antitsuit proceeding at this point,llouston woull pieler l
In the Matter of that that pauccedmg go foiward expeditiously and that these be no fusther audi pioceedmgs." itut as was obseived at oral argument, we may have an unfoldmg NEW ENGLAND POWER Docket Nos. STN 50-568 sequence of circumstances here, m.my of which might have to be taken int account beloie a detennination is made on antitrust matters." Knowing that COMPANY, et al STN 50 569 (NEP Units 1 and 2) operating heense seview typically occurs a substantial period of time following construcuan pennit issuance, Congrea must have contemplated that we woulJ PUBLIC SERVICE COMPANY OF Docket Nos. 50443 consider sigmficana changes with pouable antitiusi implications occuning during NEW llAMPSillRE 50-444 that permd. In oidering an expedited ope:ating hcense antitsust seview, we aie I
accommodating the passie>* deshe for an caily resolution of the ponible anti-j trust implications of the piesent intercoonection controversy. Ilowever, tids (Seabrook Station, Units 1 and 2)
June 17,1977 action is not 89 psejudice the sight of the Conuniaion to consider the antitrust
)
implications of any subsequent developments, including developments guaably The Connnission decides not to review ALAB.390 but to consider the ques-I umelated to the present dispute, so long as such consideration would othe: wise hons these raised in a rulemaking context.
have been timely under our usual antitsust review procedures. In this negard, should the present dispute be sesolved in a hearing, the board would be MEMORANDUM AND ORDER authmized to reopen the record upon an appiopriate and timely showing of further changes.
The Comminion has decided not to review the decisionsin ALAB 390.The The llouston request for waiver of the FSAR liling sequisennentis granted.
questions raised there, as the Appeal Board has recognized, are more ap-
'the regulatory staff is directed to seek the advice of the Attorney General propnately addressed through rulemaking, given their complexity, their broad pursuant to Section 105(c)(1). Any fuither proceedings shall be conducted in application, and the consistent past interpretation of our present rules.Our staff accordance with this opinion.
has underway studies intended to produce proposals for rulemaking dealing with it is so ORDERED.
these questions, among others, which will be presented to the Commission Shortly. We direct tids study to be carried forward as a priority matter, and intend to initiate a rulemaking at an early date.
Samuel 1. Chilk Seesetasy of the Conunission For the Commission Dated at Washington, LLC.
the 15th day of June 1977 Samuel J. Chilk Secretary of the Commission "sec uananpi ur or argument as pp 87 20.
Dated at Washington, D. C.,
"u as it 19.
this 17th day of June 1977.
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Distribution:
Chairman (2)
OCri (4)
. LVGossick EDO September.12,1979 cGC
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Central Files EGCase Secy tiail Facility (3) 4
' Harold R. Denton, Director OELD MEHORANDUM FOR:
Office of Nuclear Reactor Regulatio'n HRR Reading AIG Reading William J. Dircks, Director..
Office of Nucleai'-fisterial Safety anc
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RUood IDinitz*
Safeguards ---
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Joseph M. Hendrie,'Chaiman pseg M. Hendda FROM:
, DELEGATION OF AUTHORITY TO MAKE "SIGNIFICANT CHANGE" DETERMINATION FOR OPERATING LICENSE ANTITRUST R
SUBJECT:
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The Comission hereby delegates the authority to make the "significant.
change" detemination under Section 105c(2) of the Atomic Energy. Act of -
1954, as amended, 42 U.S.C. 52135c(2), for the purpose of obtaining the Attorney General's advice pursuant to section 105(c)(1) o or the Director, Nuclear fiaterial Safety and Safeguards i
the revised Operating License Antitrust Review Procedures -(attached to i
this Memorandum) which shall control the " method of detemining whether there have been "significant changes" in the licensee's activities or proposed activities subsequent to the previous antitrust review by the Attorney General and the Corrnission in connection with the construction pemit.
The above delegations are in accordance with Comission' action taken in cannection with SECY-79-353 and reflected in the Comission Secretary's l
This delegation will be appropriately tienorandum dated July 26, 1979.
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reflected in the URC itanagement Directive System.-
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MEMORANDUM AND ORCER g /g7;-j t
Pending before us is a petition of Central. Electric Pcwer Coc;erative,
- nc. (Central) for a "significant changes" de armination under section 1C5c(2) of the Atonic Energy Act of 1954, as amended, 42 U.S.C. i F35c(2).E Central urges : hat we take a inding that the.e have been significant r
changes in the activities and proposed activities of South Carolina Electric and Gas (SCEG) and South Carolina Public Service authority (Santee Cooper)2/
4 so as to initiate antitrust review on their application for an operating license (OL) for the Virgil C. Sumter facility.3/ SCEG and Santee Cooper If Unless otherwise stated " Petition" refers to the "*cended Petition for, a Finding of Significant Change" filed by Central on sianuary 31, 1979,.
oursuant to the Commission Crder of January 2,1979 and any reference to section 105 is a reference to that section of the Atomic Energy Act.
y The South Carolina Public Service Authority derived the name " Santee
. Cocoer" _by which it is commonly known from the Santee Cooper hydro d
f acility with which it began' crerations in 1942.,
3.f Central's original petition requested an antitrust hearing as well; hcwever, Central withdrew the recuest for hearing and only the recuest for a significant changes finding remains for Cemnission determination at this time.
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(~the Applicants or Licensees), who filed that aoplication in April,1977, urge us to" dismiss the petitian or to deny it. The NRC Staff (Staff), also, opposes the petition.
i, In' this memorandum we discuss briefly the elements for the section
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105c(2) "significant changes" detennination.
e then set forth the facts of r
this case and apoly those' facts to that standard in order to resolve the issues. As'se will explain more fully below, we are requesting the assist-ance of the. Attorney General for the final step in this process and conse-
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c3 quently do not today finally determine wnether or not there have been i/
signi,isant chances as contemplated by the statute.
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I.
' STANDARD =0R THE "SIGNIFICANT CHANGES" CETEMINATION On only 0.vo previcus occasions -- in South Texas and Conanche ?eak1/
has the Commission been called upon to make a finding that there have been "significant changes."
In both cases there was by the ' time of Commission involvement substantial agreement that a detennination in the affirmative should be made. The South Texas case presented the issue whether or not a second antitrust review might precede an operating license application and provided the occasion for us to explicate hcw the timing of the antitrust
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review process was related to the statutory intent.
In Cccanche Peak we declined an invitation to delegate our authority to make the "significant changes",dytarmination, and in light of the fact there was no opposition 17 Houston Lichkine & Pewer Ccmoany, et al. (South Texas Project, Units 1 5 2), 5.NRC 1303 (197 7) and Texas Ut lities Generat'nc Co., et al. ;r -
.(Comanche Peak Steam Electric Statien, Units I and 2), 7 3RC 950 (1973).
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3 ma'de the cetermination ourselves " deciding only that the events (which have oc:urred] were of such a nature as to convince us that the' Attorney General must be consulted."5/ At'neither time, therefore, did we discuss explicitly -
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by what yardstick a contested significant changes determination should be measu red.
Consideration of Central's request r auf res us to enunciate the stmdards for the 'significant changes decision. A related event makes it especially
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useful for us to provide adcitional guidance in this esgard. Subsecuent to the filing of Cantral's petition, which was correctly lodged with the Commission, we have delegated to officials of the Staff 5/ authority to make the significant changes decision for the Ccemission. At that time we approved procedures the Staff 4111 cuploy in the implementation of our delegation.
Cur c:mments here will provide cur views on the substance of the significant changes determination.5/
ROLE CF THE "SIGNIFICANT CHANGES" DETI?fiINAT*0N IN THE STATUTCRY SCHEME Because the standards for the "significant changes" deter =ination are essential to that determination's fulfilling the statutory intent, a brief 5/
Id. at 951, citing South Texas, 5 NRC 1303 at 1319.
-5/
To the Director of Nuclear Reactor Regulation (for reactors) or the Director of the Office of Nuclear Material Safety and Safeguards (for production facilities), as acpropriate.
I 7/
While we use this opportunity to issue guidance on the significant changes i
determination, we do not mean to suggest tha.t the instant case illustrates I
the typical determination. To the contrary, develop ents in agency law l~
(see infra n.33) and procedures (see infra n.36) provide assurance that tne factual circumstances of this matter will not be receated.
Furthermore,
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~we do not anticipate a recetition of the two tiered decision process involved in t: day's ooinion (see infra p.29). We expect in the future that all of the ele.nents of the deternination sill be decided at the time of issuance. We take the tiered course on this oc:asion only because we feel that scme response on our part to the parties is past due, and because we wish to provide an opportunity for comment where earlier opcortunity did not exist.
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4 recapitulat on of the statutory framework and our role in antitrust area is d
warranted.
In licensing nuclear facilities the Commission has the statutory rispensi-bility to avoid the creation or maintenance of situatiens " inconsistent with the antitrust laws".
It is well established that conditions which run "ccunter to the colicies underlying these laws, even where no actual violation of statute was made out, would warrant remedial license conditions under Section 105c of the Atomic Energy Act." E As we carefully reviewed in our South Texas opinion c/ section 10Ec "estab-lishes a particulari:ed regime for the consideration and accccmodation of possi-ble anti' ust concerns arising in connection with the licensing of nuciaar ;cwer pi a n ts. "10/ Provision for D mission and Capartment of Justice antitrust review
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In the "atter of Consumers Pcwer Ccecany (Midland Plant, Units i and 2), 5 NRC 392, 908 (1977) cit 1ng 5. Rec. No. 91-1217 and H.R. Rec. No. 91-1470, 91st Cong., 2nd Sess., 14-15 (1970) Recor:s of the Joint Cc mi tee on Atcaic Energy on Amending the Atomic Energy 'ct of 1954 to Previce for
, Relicensing Antitrust Review of Production and Utili:ation Facilities, inter alia.
Our Appeal Board has recently reviewed the antitrust responsibilities of this agency.
See In the Matter of Toledo Edison Cc om (Cavis 3 esse Nuclear Pcwer Station Units 1, 2 & 3) and tne Clevelana Electric Illumin-atine ccmcany, et al. (Ferry Nuclear Power Plant, i,nt:s 1 ano 2), ALAS-560, 10 NRC 265, 211-273 (1979), (appeal pending in U.S. Court of Appeals for the Third Circuit). With regard to remedial license conditions the Davis Bessc opinicn concluded as folicws:
If the hearing record demonstrates with " reasonable probability" that an anticcmpetitive situation within the meaning of section 105c aculd rasult free the grant o an apolication, the Conmission ay d
refuse to issue a license or issue ene with remedial conditions.
Findings cf actual Sherman or Clayten Act violations, hewever, are not necessary. Under section 105c, crocomcetitive license c:nditions are also authorized to' e'efedy situations incens1s ent witn tne " cob 1cias
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Ser.rly uncerly1ng" the antitrust laws. Midl and, sucra, ALa3 452',- 3 '
NRC at 907-09 and authorities there cited.
See also, scuth Texas, succa, CLI-73-13, 5 NRC at 1315; Waterford I, sucra, CLi-13-25, 6 AEC at 29 (emphasis provided).
9/
Meuston Lichtinc & ?cwer Co. (Scuth Texas Project, l' nits 1 & 2), CLI-77-13, 5 NRC 1303,1309-1322 (1977).
10/
id. at 1309.
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5 is tied to the C mission's two-tier licensing process -- a thorough antitrust review is to occur at the c:nstruction permit (CP) stage,11/ a " narrower second review"12/ at the operating license stage, if -- and only if -- in the words of i
the statute "the Cc= mission determines such review is advisable on the ground that significant changes.in the licensee's activities or procosed activities have occurred subsequent to the previous review by the Attorney General and the C: mi:sfon... in connection with the c:nstruction pennit for the facility." 13/
- 'e said in South Texas, by way of explaining the narr:wer scope of CL i
a stage antitrust review, that "a full-bicwn de nevo untitrust review, with tre Cc= mission's 'significant changes' determinat;:n acting only as a triggering echanism, would be inconsistent with the statutcry scheme of 4
1]/ At the ::nstruction permit stage the Cornission is cbliged by statute l
pr:motly to transmit : the Att:rney General a c :y of the lics.:se acclication. Within 130 cays tne Attorney General is recuired to give j
the Ct mission' *such advice... as he determines :: be a::r::riata '
with regard to the finding the C : mission must make in whether or not to c:nduct an antitrust hearing.
If the Att:rney Ganeral advises tha there snculd be a hearin The statute ;r:-
vides (section 105c(5)) g, a hearing rust he held.that the Att:rney Ganeral's advic Oublished in the Federal Register. At the time of publication of the Attorney General's advice letter, if the Attorney General does not himself advise a hearing, the C missien offers an opportunity for-any d
interested party to recuest a hearing on antitrust matters and to i
recuest the right to intervene.
It may be seen, therefore, that it is j
the publication of the advice of the Attorney General that serves OJtice of the right to request a hearing on antitrust matters.
The Cc= mission's determination on whether or not to hold a hearing in rasconse to such a request is determined by the provisions of the Administrative Procedure Act and the C = mission's rules on intervention.
12/ 5 NRC at 1312.
Jj/ The practical icport of this provision is that the C : ission must determine that there have been significant chances before a formal
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recuest may be made for the Attorney General's advice concerning 4
'a possible~ antitrust proceeding. The :ublication of the Attorney General's advice triggers an ecportunity for interested parties to-
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immunity frca a second review for unchanged proposals,"15/ We further fcund that a full-bicwn review would be inconsistent with "well established considerations consolidated in the doctrines of res judicata and laches."15/
But, as we also pointed out:
4 This is not to say that "significant changes" in a licensee's proposal can or should necessarily be viewed in isclation frem The antitrust implications unchanged features of the proposal.
of a "significant change" may indeed arise from its relation-
' ship to unchanged features of the proposa. Obviously, scme l
account will have te be taken of the proposal as a whole, but as the proposal or its impacts have been altered by changed circumstances.lj/
The limitation on the scope of review at the CL stage does not impose any limitation en the nature of the finding to be made at the conclusion of tha:
review, nor on the remedies then available. While, as we have just discussed, any review at the OL stage would proceed with a more limited sc:pe than would obtain at the CP stage, focussing on changed circumstances, the ultimate question is the sar.e-fo. OL as for CP review. That questien is: would the c:ntemplated license create or maintain a situ'ation inconsistent with the antitrust laws?
In the event that questien is answered in the affirmative, irrespective of the licensing stage, cur full remedial authority may be invoked to prc/ide such license modifications as would best serve the policies of the antitrust laws under the circumstances.
Since our full arsenal of antitrust remedies is available when an CL antitrust hearing shows that remedies are warranted and since a determination d
lif 5 NRC at 1321.
15/ id.
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7 that there have been "significant changes" is the necessary precedent to an CL antitrust hearing at the OL stage, it fo11cws that the recuirement of such a determination establishes a threshold of some importance.
The legis-lative history of the antitrust provisions demonstrates that Ccngressional a-tentien was focused on whether and under what circumstances antitrust review at the OL stage was desirable.
The issue was considered both in nearings and in the Ccemittee report.17/ The statutory language reveals expifcitly and by implication the standards Congress intended be employed by us in esking the "significant changes" determination.E Criteria for the Cacision The s stute contemplates that the change or changes (1) have cccurred since the ;revious antitrust review of the licensee (s); (2) are reasonably attributacle to the licensee (s); and (3) have antitrust im:lications that 4cule likely warrant some S mission remedy.
These are explained balcw:
1.
Occurrence since the previcus antitrust review.
The statutory language is explicit that the significant changes, if any, need to have occurred " subsequent to the previcus review by the Attorney General and the Ccmmission under this subsection in connection with the j_7/ See notes 33 and aa belcw.
j_3] Cur recent delegation institutes a procadure by which a record deter-mination vel non will be made on the significant changes questien in the case of eacn OL application. Until that delegation the statutory intent that ther,e should be an OL stage antitrust review where signifi-cant changes had occurred was PJ1 filled in the folicwing.anner.
Staff deter :ined whether or not it in its view significant chan;es".ac - ~
occurred, and only wnen a determination of significant changes was recommended aas the Commission approached.
8 constructicn permit for the facility." That language refers to a formal review process that contemplates at the least the publication of the advice of the Attorney General, as required by section 105c(1), and extends to include a subsequent antitrust hearing conducted by the Ccamissicn or its delegees.
2.
Reasonably attributable to the licensee (s)
The act explicitly provides that the change or changes be those which occur in the activities or proposed activities of the licensees. The legislative history makes clear an intent to avoid a situatio., where the applicant will te subjected for a sec:nd time to antitrust re few because the ccmpetitive picturt had been al tered 4-.oys for which the acplicant could not reascnably be held answerable.19/
3.
Antitrust implications that would be likely to warran C:rmission remedy With nis element of the ce:arminaticn *e make ex:lici: the in:ar: lay bet..een :ne requirement that -he :harges :e 'significan;" arc the thresrcld nature of the determination. Were the significant changes determina; ion to require mere than a likelihood that the antitrust implications of changes w~,'J warrant Cccmission remedy -- i.e.,
that changes had occurred that required Ccamissien remedial action -- it would be bearing an unwarranted freight. This is true because the significant changes determination is prcvided to trigger an inquiry that would have as its ultimate finding a determination of whether the c:mpetitive situation arising frca the changes required Ccenission remedial action. Were it to require less, it would offer scant protecticn against sub-jecting the. applicant to a second r. view process, especially given :ne possibility for a hearing that folicws even a nc-hearing recccmendition by the Attnrney.. -
General.
lof See cita: ions infra n.20 and al.
9 These matters, whose outline we have sketched in brief,avill be further discussed as we evaluate whether the facts of this case warrant an affirma-tive significant changes determ nation.
i II.
STATEMENT CF FACTS 'AND FOSITIONS SCEG, a public utility, filed as sole applicant its appifcation for a CP for the 'if rgil C. Summer Nuclear Station (Unit 1) on June 30, 1971.
In con-necticn with SCEG's CP application, an antitrust review was conducted by the United States Cepartment of Justice pursuant to section IC5c(1) of the Atomic Energy Act.
The Justice Capartment sent the advice letter (Attorney General's letter) to the NRC cn March 31, 1972, and the letter was published in the
~ deral Racister on Aoril 12, 197222/ pursuant to i 105c(5), 22 U.S. I 2135c(5).
e The ;ttceney General's letter examined the acclicant (SCEG), discussed its relations with other utilities, among them Santee-Cocper and Central, and described the overall competitive situation in the relevant area of Soutn Carolina.
In that regard, the letter noted:
n its service area the applicant faces strong ccmpetition in bulk pcwer sales, and, until recently, in retail distribution.
The principal ecmpetitive alternatives for bulk pcwer open to municipals and cc-ops in the area are SEPA and Santee-Cooper. 2T/
and further, In wholesale purchasing, the power output of Santee-Ccocer, as supplemented by SE?A and made available by the Central - Santee -
Cooper transmission system, crovides a competitive altarnative to SCEG. _22/
20/ 37 Fed. Rec. 7255.
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21 / Id. at 7256, col. 2.
r/T -J 22/ Id. col. 3.
10 It also noted the 1969 amendments to South Carolina law restricting distribution of electricity by private invester-cwned utilities and rural electric cooperatives with a resulting limitation of retail c:mpetition.E Tne letter described the intertwined power supply relationship betseen Santee Cooper and Central, both regarding the actual pcwer supply itself and Central's leasing of generation plants and transmission netsocks to Santee Cooper.b In concluding, the Justice Depart =ent advised that negotiations were proceeding between Santee Cooper and SCEG to enable Santee Cooper's par-ticipation in a substantial share of the plant's output.
It observed that "Cantral is definitely interested in obtaining the benefits of a share in the Se=er facility, but because of its c:ntractual relations with Santee
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Cooper is awaiting the outcc e of the negotiations-between the latter and SCEG." b In lignt of all of the foregoing and SCEG.'s commi'::ent to removing some restrictions in its wholesale contracts that Justice found to be
" unnecessarily restrictive", b the Justice Depart:ent reconmended that no antitrust hearing need be held on the CP application. No one requested a hearing folicwing pitblication of the advice letter, and none was held. A construction permit for Smmer 'Jnit I was issued to SCEG on March 21, 1973.
M/
H., Col. 3.
E id.., Col. 2.
It shoul:t be noted that ultimate cwnership of generation and transmission facil ties will reside in Santee Coccer. NRC Staff Response,to k ended ?stition of Central, March 19,1979, p. 24 and citations therein.
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25/ id, Col. 3.
26/ Id. at 7257, Col. 1.
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11 On July 9,1973 two enactments of the South Carolina legislature relevant to this matter became effective. One, introduced on February 16, 1973, authori:ed Santee Cooper to participate as a joint owner in the Virgil Sum =ar nuclear facility. The other, introduced close to the final passage of the joint cwnership bill, restricted service territories. That isgislation also centained varicus previsions relating to sales at wholesale and of loads exceeding 750 KWs.
On May 17,1974, SCSG filed an application to amend its CP to add Santee Cooper as a co-owner and co-licensee, having executed a sale of a;;reximately 1/3 of Summer Unit 1 to Santee Cooper on Oct:ber 18, 1973.
Sc e antitrust information concerning Santee Cooper was filed along with the amendment apolication; however, from the submissions of the parties it appears that c molete Aopendix L 27/ information about Santee Cooper was not scught or su plied.55/
On Cc::ber 17, 1974, a Federal Register notice was published si:h respect to receipt of SCSG's amencment application.2E/ This notice offered an opportunity for members of the public to request a hearing and to file petitions for leave to intervene.5E/ No petitions were filed and on December 3,1974, the amendment adding Santee Cooper as a co-licensee was issued.
2'/ Appendix L enumerates the information the Attorney General requires for his antitrust review.
28/ See Staff's Attachment 2, SCSG's Amendment 21, May 17,1974, p.14 t
29/ 29 Fed. Reb. 37088.
30/ No s;ecific cention was made in the notice of rights to an antitrust ~~ '
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12 Cn December 10, 1976, SCEG filed its application for the Summer Unit 1 cperating license and contemporaneously submitted additional antitrust information on both itself and Santee Cooper which it expanded in a February 24, 1977 filing. A Federal Register notice concerning receipt of the OL application was published en April 18,1977.b That notice related exclusively to the health, safety and environmental aspects of the OL application.
The NRC Staff then undertook its own review in order to determine whether or not "significant changes" had occurred.
Staff declared that it "was in the final stages-of assimilating its information and feming a rec:cmendation as to ahether 'significant changes' had cccurred"r'2/ when Cantral filed its original petition with the Cc: mission on December 5,1973.
Central, in its original and amended petition and other correspondence and pleadings,El contends that SCSG illegally wielded 0nc:oly ;cwer to condition its sale to Santee Ccoper of a share of the Sumer facility on Santee Cooper's
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agreement to join in asking for legislation to divide territories. As a result, I
Central argues, Santee Cooper is no longer a strong cc=cetitor in the South i
Carolina market.
Further, according to Central, Santee Cooper has instituted 31 / 42 Fed. Rec. 202'03.
i 32/ NRC Staff Response to Amended Petition of Central, :' arch 19,1979, p. 9.
33/ 3ecause cur reculatiens do not explicate the nature of a significant changes preceeding nor the rules for response and reoly, confusion existed among the parties that led to an unusually large number of
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correspondence and pleadings. Although some pleadings aere sc: swnat recetitive, we d'ecided to accept them all in the interest of having the _.
full facts and claims before us.
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13 an antic npetitive dual rate structure in its supply of p:wer. Central-ccmplains also of SCEG's unwillingness to make power transmission arrangements other than' cn an ac! hoc basis' and Santae Cooper's refusal to pent.it Cantral to share e,vnership.34/ As evidence of anticcmpetitive intent, Central relates a carger offer fe:m Santee Cooper which Central asserts would result in the ra:cval of Central as a market force.35/
SC5G and Santee Cooper responded by urging that Cantral's petiticn be dismissed as untimely.
In the alternative they urged in essence that the 1
changes alleged did not occur in tr elevant-time period, did not cccur at all, or are shielded from our antitrust scrutiny by well acceoted exemptions frem the
- era
- icn of the antitrust laws.
Staff :akes the position that Cantrai's petition should be al':wed, that the changes alleged Occurred within the a'l wable tice frame, but that' as a mattar of law certain changes may not be :cnsidered by us and that.,o changes 3
allegec are *significant" uithin the eaning of the act.
III.
R55CLUTION OF ISSUES Timeliness Before attampting to unravel the complexities of the issues before us, de deal with the threshold issue of timeliness.
23/ Cantral's amended petition, p. a.
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14 Cur regulations do not spacify a period during which requests for a significant change will be ti=aly. 36/
SCEG invokes the criteria of 10 CFR 2.714(a)(1); however, those criteria related to a late plea to. intervene in a hearing and are not nacessarily directly applicable to the threshold detar-mination we have before us.
We have also had our attantion directed to the Congressional intant embodied in the legislative history that a potantial intervenor not be permitted to stand by and raise at the OL stage matters that could have been brought at the construction stage.
Mcwever, this cbjection to Central's alleged "untice-liness" is in our view precluded by the requirement that a "significant change" nust be One that has occurred since the antitrust review of tha CP stage. We uill pur:ue this ratter further below.
The relevant questian in determining ticeliness is whe:ner Central's esquest-has #all wed sufficiently promptly tne CL appli:ation. Our af#irma:iva res;0nse rests On two facts.
Fir'st, the significant changes decisi n 4as still pending.
By its own admission, Staff had not finally determined the nature of its recemcendation regarding the significant change deter =ination. Second, i t -
apesars to us that there was not earlier an unambigucus notice of opportunity for antitrust comment. 5 /
In consequence, fairness dictates that the Central lj/ Cur new procedures include notification by publication in the Federal Register of an invitation to interested cembers of the public.to ::mment on antitrust aspects of an CL application. They also provide that in the event there is a detarmination that there have been no "significant changes", that detennination will be published in the Federal Registar with notice that any request for re-evaluation of that decision snould be made within 50 days.
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ji/ Federal Register notices fivited ccament specifically on health and safyty issues, and c:uld be therefore read to exclude an op:crtunity f:r antitrust c:: cent. Al so, we think staff stretches When it characteri:es its May 3, 1977 letter to Cantral's lawyer William Crisp (Attachment 9 to Staff's (Contint ed en' following page)
+
15 cetition be considered timely. And, it was useful for Staff to have before it all of Central's c:==ents when reaching its conclusions.
It should be recalled that we haue said "[i]n dealing with antitrust issues, the NRC's role is scme-thing more than that of a neutral forum for econcmic disputes between private parties." Florida 2 wer and Licht Comcany (St. Lucie Plant, Unit 2), CLI-73-12, 7 NRC 929, 989 (1973).
Paralleling Staff's cbligation to present a complete picture of the competitive situation to the Licensing 3 cards that we described in St. Lucie, Staff has an chligation to ccmcrehand the c mplete picture when it advises, or new initially determines, whether or act there have been significant changes.
E/
(C:ntinued fr:m preceding page)
Marcn 19,1979 submission) as an invitation to e m ent. Tnat letter has
~
one substantive paragraph which states in its entirety:
To date, the Applicant's antitrust information [a: the operating license stage] has been submitted pursuant to Rule 9.3, but the Federal Register notice reflecting that submission has not yet been published. Tqe notica, as I understand it, does not f:mally invite c:=ments. Howev er,
I would imagine that ccmcents -ould be considered if they were receivec by our Staff or the Commissien's Antitrust and Indemnity Group.
Among the impifcations a reader might draw fecm that' statement is one that a Federal Register notice on antitrust catters cculd be ex ected.
'Je have been referred to none.
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J s-16 Whether the change or changes have occurred since the revious antitrust review of the licensees The Attorney General's only advice letter concerning licensing of the Summer facility was issued on March 31, 1972. 1?at f atter rec :: ended that i
no hearing was necessary on SCEG's application for a c:nstruction pennit, and a
ncne was held.
All of the changes alleged by Central have occurred or were alleged to have c urred en dates subsecuent to March 31, 1972. Therefore, those changes on their face T.eet the criterien that they have cccurred since the previcus ar.ti trus: review of the licensees unless (1) scoe latar antitrust review than the Attorney General's took place and should be considered the benchmark in this matter, or (2) the alleged changes were antici:ated by the Attorney General so that their review was in 2ffect airsady undertaken and included in the earlier advice.
In cur ceder of January 25, 1979 we solicited assistance frc= the parties in deter =ining whether or not sc=e date other than the Att rney t
General's past advice letter should be the operative data and whether the Attorney General's advice anticipated the changes in arriving at a no h;aring rec:mmandation.
Both Central and Staff agree that the appropriate date from which to analy:e significant changes is March 31, 1972, the date of the Attorney General's setter. We concur, having fcund no subsecuent antitrust review tt.at 3cuid authofire a subsecuent date nor any indication that the Attorney Gener11 anticipated the ratters of which Central c:= plains.
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17 SCEG and Santee Cooper would have us look to the date of amending the c nstruction permit to inclrde Santee Cooper as a ec-licensee.
In consider ing antitrust matters relative to licensing the Enrico Fermi facility, it was determined in 1978 that the addition of a co-cwner as a co-licensee was in effect an initial application of the cc-cwner and as such required formal antitrust c:nsideration. 221of That decision was based on the necessity for an in-depth review at the C? stage of all applicants, lest any applicant escape statutory antitrust review.
Implementation of fermi was prospective only.
Consequently, Santee Cooper added as a co-licensee by amendment in 1974, avoided the formal antitrust review process. Applicants shcJd not be permitted to bootstrap that emission into a shield fr m antitrust scrutiny at the OL stage, as they would do if they prevailed in their claim that the c;erative
previous [ antitrust] review" date is the date of the if cense amendment admit-ting Santee Cooper.
The an:malous nature of the result urged by Applicants is obvi:us when one considers that they are in effect arguing that tne ifcense amendment date is the cperative ene because there might have been antitrust review even though ncne took place.
Furthermore, the date urged by applicants would not serve the statutory purpose of providing for consideration of any changes not previously considered in depth by the Commission or Department of Justice but noc allowing the same ground to be ploughed twice.
It would ler e the years between the Attorney General's letter in 1972 and the amendment in 1974 unable to be plcughed at all.
Nonetheless, it would be ecually inconsistent with One Congressional intent if contemolated-changes that had, b,een subject to anticipatory antitrust analysis 33/ Detroit Edison, et al. (Enrico Fermi Atomic ? ver ?lant, L' nit "o. 2),
7 NRC 583, 587-89 (1973), aff'd ALAS 475, 7 NRC 752, 755-55 n.7 (1973).
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18 triggered OL stage antitrust review simply because the actual time of effecting the anticipated changes folicwed the completion of their antitrust review.
We. therefore review the response of the parties to the cuestien whether the Attorney General's advice letter anticipated the changes new alleged by Central. Cantral c:mplains not of the sale, which was anticipated, but of Santee Cooper's changed c:mpetitive role, wnich was not. Staff agrees with Central that the letter d es not centemplate the alleged anticcmpetitive changes, al-though Staff believes that some consideration should be given to the " explicit awareness of the Attor.Ay General... of Scuth Carolina's engoing legislative pian designed to restrict retail c:mpetition icong private u:ilities and electric c:ccaratives enacted in 1959."
/
o Soth SCEG anc Santee Cooper also view the ;;::eney General's c:nsideration of similar ;rior territorial legislaticn :: be signif t: ant, while admitti ; t'at it was cbvi us that the Attorney General could not Pave : ad under c:ns'jerat'on the 1973 enactments.
Santee Cooper notes that the Capartment Of Justica had
" actual kncwledge" that negotiations between SCEG and itself %ere underway c:ncerning its participation in the Summer facility and also that "i: was a matter of public record that SCEG and the Authority were then negotiating as to service areas as well." Cited for that propositicn are a Santee Cooper press release of February 3,1972 and an article in the Columbia, Scuth Carolina i
newspaper on February 5,1972.
There is no suggestion that the Justice Capart-men; was advisec or haa kncwledge of either the release or article at the time of writing the advice letter issued on March 31 of that year.
29/ NRC Staff Response, p.13-14 I
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19 The point is made that the Department of Justice discussed and accepted anticompetitive aspects of the 1969 acendments similar to the 1973 amendments.
Whether the Cepartment of Justice will view the 1973 enactments, their effects and the resultant relationships among the parties substantially as it viewed the 1969 enactments or in any canner that would imply that there had been no significant changes in the competitive picture is a matter that is relevant i
to a significant changes determination.
But any purported similarity betseen the 1959 and 1973 legislation is no't relevant to the standard that alleged changes must have occurred since the previous antitrust review.
We can find no evidence that suggests the Cepartment of Justice c:ntem-plated the. changes alleged by Central at the time it issued the advice letter.
In light of the foregoing we find that the changes alleged by Central have occurred since the last antitrust review.
Whether the Change or Changes Are Reasonably Attributable to the 'colicants While there were changes alleged by Central that have no cbvicus relation-ship to the 1973 enactments of the South Carolina legislature and for which at least one of the Applicants c:uld be held clearly to be answerable, $S/ an issue has arisen of whether for 105c purposes the applicants may be reascnably held responsible for changes resulting from the Scuth Carolina legislation. Resolution of this issue is of utmost importance because it seems to be generally conceded jg/ Whether we ulticately determine that the allegatices of dual rates or
. refusal ta share transmission Ownershio nr to make ongoing transmission arrangements have any s;gnificance, there is no suggestion that neither..
3cplicant is to be held res;cnsible or answerable for tne factual situat!~ n c
that exists.
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20 by all parties that the legislation establishing territorial limitations and the activities stemming from that legislation resulted in substantial changes in the l
ccmpetitive situation in South Carolina, and that those changes are at the heart of Central's complaints.
There appears to be no disputa of fact among the parties that the terri-torial legislation was in the main 41/ presented and actively sought by the apolicants.E The question is whether this kind of involvement on the part of' applicants is sufficient to satisfy the legislative intent of 105c(2) that second antitrust review should occur only when the changes are reasonably attri-P butable to the applicants. 'de find that it is.
t n enacting Section 105c(2), Cangress staered a careful c:urse between the alternatives of antitrust review only at the C? stage and aut:matic antitrust review at both the C? stage and the OL stage.
Given the.'GC's mission to assure that use of nuclear ;cwer would be consistent with the proccmpetitive policies i
j underlying the antitrust laws, it aculd not have been unreascnable to require in i
all cases a second look at the ';:?D c:mcetitive picture within the relevant i
11 / An amendment to the legislation as originally submitted was apparently 7
requested by Central, although this fact did not c:me to light in Central's petition.
-42/ There is dispute whether Santee Cooper freely joined SCEG in seeking the legislation or whether SCEG used its monopoly position to recuire Santee Cooper to join in the quest for territorial. limitations in return for an ownership share in the Summer facility.
Ou r decision here does not decend on a resolution of that matter.
It is a. fact that the South Carolina legislature considered and passed the legislation and the parties are entitled, as we'shall develop more fully below, to c:nforn their behavior to it.
Froof establishing that one of the parties ccmitted an antitrust violation in preparing to pet,it. ion fcr the legislation would not serve to
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repeal that legislation.
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i 21 markets at the time of granting an operating license. On the other hand the disadvantages of such a regime were obvious -- both in terms of wasted time and rescur:es and in the element of unfairly creating uncertainty in the planning af licensees. The course chosen eschewed both alternatives and resolved the preolem by providing for OL antitrust review only when significant changes had occurred in "the activities or ; reposed activities of the licensees."
The report of the Joint Committee clariffes the intent by stating as folicws :
The term "significant changes" refers to the licensee's activities or proposec activities; the committee considers that it would be unfair to ;enalize a licansas for significant changes not caused by the licensee or for which the licensee c:uld not reascnably be held res: nsible Or answerable. 13/
The expectaticn was that licensees would maintain the situation that existed at the time of the grant of the c:nstruction permit. $$/
If they did not, they 4ere to be subject t: additienal scrutiny at the ::erating licsnse stage, oroviding other c:ncitions were met. The Joint C. mittee considered that fair-ness dictated where there had been changes, otherwise significant, they shculd not trigger antitrust review when the changes cccurred independent of the action of the license applicant.
l 1
jjf 3 U S.. Ccde, Congressional and Administrative News, 91st Cong., 2d Sess.,
I 1981, 5010 (1970);
ad/ See the collocuy between AEC General Counsel Josech
. Hennessey, Chairman Holifield and Representative Hosmer, Hearings before the Joint C:mm4ttee 'on l
Atomic Energy or Frelicensing Antitrust Review and.'luclear Power Plants, I
15: Sess., 1969, pp. 72-73.
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22 The lang;qe of the report, " changes... for whicn the ifcensee could not reasonably be held responsible or answerable", provides the latitude for a c:::en sense detarminat4n of when it is or is not fair to subject.particular licensees to a secenc review. We judge that here Applicants' involvement in securing the changes was sufficient u make it fair to censider how those changes affect the ccapetitive situation. We thus find this criterian is met. This can not be an instance where the licensees are caught off guard by figuring in an,anticcc-petitive situation, if One is found to exist, which has been thrust upon them unkncwingly.
Santee Cooper and SCEG actively and successfully -scught to change the situation that existed at the time of the earlier antitrust review.
We note in passing that the
- cerr-Fennincton S/ dcctrine does not govern A
our limited causation-type deterr.ination here.
The !!cerr-Fenninc:cn doctrine stands for tne principle that the. antitrust laws' prohibitions of ccmbination in restraint of trade do not intend to catch in their net c: binations that seek gcvernment action even. thcugh the action sought be antic:=petitive in intent or effect.
'cerr-Fennincton does not address problems of causation; in finding that the changes fr:m the state legislation may reasonably be attributed to applicants we find no antitrust violation.
-25/ The 'foerr-Fennincton doctrine results fr:m a line of cases, of which the principal case is Eastern Railroad Presidents Conference v. ? cerr Pot:2 Freient, Inc., 365 U.S.127, 5 L.Ed.2c 464 (1961), nolcing cc cinations to urge legislation that will have the effect of restraining trade are not c:abinations in restraint of trade under the Sherman Act. and accord, Unitac Mina Ucr'<ers rf berica v. Pennincton, 281 U.S. 557, la L.Ed. 525
._(1965), noising in tnis regarc, a concertec effort to influence puolic officials 's shielded by the Sherman Act regarclass of antitrust intent,,
3.
or purpose.
23 Cur determination that the changes resulting in this instance frem state legislation are reas:nably attributable to the licensee shculd not be read as cc= ent :n the cause, purpose or. independence of the South Carolina legislature in enacting that legislation. Our result is limited to a view th2t the appitcants' indecendence of the changes legislated by the state was insufficient to excuse them frem accitional antitrust review on the grounds that the "reascnaoly attributable" criterien had not been =et.
Whether the changes have antMrust inclications that would be likely to warrant Commission remedy This critsefon focuses on the eaning of the word "significant"; it fleshes cut the statutory provision that cnly the C : mission's detamination that "sienificant changes have occurred" shall initiate antitrust review at the OL stage.
As we explair.ed abcve 5/ our understanding of the eaning of "significant" in the ICEc(2) c:ntext c: prehends the threshold nature af the detarmination and the nature of tr.e incairy that such a detaminaticn initiates.
In brief, it is our view that this critarion requires us to take a sufficiently hard iock at the same matters that would be addressed after an affirestive significant changes decision in order to =ake a preliminary judgment whether there is a genuine likelihood that the oute::e of antitrust review, were it to occur, would be a greater than inconsequential alteration or adjustment in i
j furtherance of the policies underlying the antitrust laws. Otherwise stated, we
- 3. / See sucra p. 8.
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24 believe it was intended that we not undertake the process without an expectatics that it would have greater than de_ minimis results.
Like other threshold tests that require a prediction of outccme, this criterien requires us to tak-an early lock at both the facts and the law.
We address do distinct questic is (a) whether an antitrust review would be likely to conclude that the situation as changed has negative antitrust implf-1 cations, and (b) whether the Cc: mission has available remedies.
To review the background:
Central alleges significant changes in the activities and projected activities of the Aoplicants under the Summer license.O Cantral discusses the authori:stien by state law of Santee Cooper's purchase of a share of Summer and addition as a co-licensee as a major change since the last anti-trust review.
Ye t, it is clear to 'as that this change is nct in itself the subject of Central's ::ncern.
Central, as well as the Capartment of Justice, was aware of negotiations t: ward that and, and such a result acpeared to be l
satisfactory to Central when Central perceived itself as strongly aligned with Santee Cooper and saw Santee Cooper as a strong c:mpetitive force in the market.
The gist of Central's c:mplaint is Santee Cooper's sucsequent realign =ent with SCEG and termination of its role as a streng competitor vis-a-vis SCEG in the market. Central cbjects to territorial limitations on the cperations of each of the Applicants that were enacted by the State, and attests to an attempt f-]/ In footncte a2, suera, we have discosed for the purpose of this determina-
.;ien of Central's alfegation of a Sherman Act section 2 violation by SCEG in allegedly usi'ng its monocoly position to coerce Santee Cooper into...
Joining its effort to secure territ: rial limitations.
25 by' Santee Cooper to rencve Central by merger or absorption fecm its role as an active participant in the pcwer marketplace.
Also, as we have noted earlier, Central cceplains of an inability to make satisfactory arrangements for power transmissions and of an application by Santee C oper of dual rates for bulk pcwer supply to Central.
These cc: plain:s are ade independently of the realigr.ent complaint, but are censistent with and supcort that cceplaint.
Central has made several assertiens regarding ;cwer exchange services.
The gist of the matter is that Central, folicwing its perception of a realign-ment of ccmpetitive interest, proceeded to seek bulk power supply alternatives; hcwever, as Cantral points out, the key to participation in the bulk ;cwer market is access to pewer exchange services and facilities.
Central alleges that it nerefore sought ownershio interest in transmission fecm Santee Coccer and ;cwer exchange agreements frem SCEG.
It alleges that Santee Ccoper has refusec to permi: i: to share cwnersnip and that SCEG has agreed only to_ wheel discrete accunts of power between discrete points on a case-to-case basis.
While there is disagreement abcut the implications, the parties do not discute eit.9ar Santee Cooper's refusal to share cwnership or SCEG's unwillingness to i
centract other than on a case-t:-case basis.
?egarding Central's allegaticn that " dual rates" have been imposed by l
Santee Ccocer, it apcears to cite only one instance to support this allegaticn
-- the sc-called Fee Cee centract centained in an amenceent to Central's and Santee Cooper's centract for ;cwer to be supplied by Santee Cceper. Whtie the
- revision is, not in itsel,f in dispute, the interpretation to be put centrac
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25 u;on'it is.
Other facts that bear on the issue are that Santee Ccoper operates pursuant to a State mandate to provide power at " cost of servica;" and Central's requirements contract enables it currently to receive power at a fixed price even though 'that price may be less than ~ cost.
" State acticn doctrine" The facts reveal that state action since the last Attorney General's let ar is a significan't ingredient of the mix that makes up the c: petitive situation in South Carolina as it currently exists. And we have fcund that a determina-j tion en both the issues we address in this section -- negative antit.ust impli-cations and available racedies -- involves an understanding of the nature and extent of the role of the " state action doctrine"13/ in the Cc mission's per-i formance of its antitrust functions.
Therefore, we turn our attentien to this eubject.
I l
There can be no doubt that the Cc mission takes the antitrust izws as it finds them.
"The Cc mission must ' apply princ'iples developed by the Antitrust i
Division, the Federal Trade Cc mission, and the Federal Courts, to (the nuclear] industry. '
Houston Lightinc & Power Co. (South Texas Project, Units 1 & 2, suora, CLI-77-13, 5 NRC at 1316.."
Davis Eesse, succa,10 NRC at 272.
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i 23/ The " state action doctrine" is otherwise known as the Parker v. Brown doctrine, Parker v. 3rewn, 317 U.S. 341 (1923), which nelc immune frem Sherman Act pronibitions California's ragulatory scheme to centrol the sucoly of raisins in crder to enhance prices.
The peccess of carving Out the limitations of that immunity is a continuing One.
n California Ee ail Licuor Dealer's Association v. Midcal Aluminun, Inc.,
U.3.
A8 U.5.L.W. a238 (Xaren 3,1920) tne Ocurt built uocn, na 5arie? analysis to deny state ac, tion immunity to a California pregram of resale price maintenance and price posting ^ rtatutes for the wine business.
- n that..
case a state regulatory schere failed to. eet -he second of two essentiaP' requirenents. While (1) it was clearly and affirmatively articulated, the policy was not (2) actively supervised by the state itself.
~
.27 Just as it gives full force to the antitrust laws and to the policies underlying those laws in order to assure the maintenance of comeetition, it must equally credit the exemptions and it. unities specifically estabitshed by legislation or carved out by the judicial process. '4here there is an overall plan of state regulation the state plan is exenpt as a-e the activities of those conforming to enversely the antitrust laws are not r
that plan.
Parker v. 3rewn, suora.
di:placed where there is no overall ;!ar. of economic regulation,5# where the state has no di'scernible legitimate interest,30/ or where the actions taken are C
4 unsupervised actions.b
'4 hen there is immunity for state action and activities of private parties pursuant to state requirement, the antitrust laws are displaced only insofar as necessary to ake the state schene work. Lafavette v. Louisiana
?cwer and Licht, 435 U.S. 389 (1978).
Conduct that occurs beyond the recuirerents of a regulatory arrangement established.by the state continues to be subject to the antitrust laws.
St. Paul.Jire & Marine Ins. Co. v. Harry, 438 U.S. 531.
Thus it is clear that the mere existence of state regulation of the electric utility industry, by itself, is not sufficient to displace :GC's statutory anti-trust responsibilities.
The antitrust laws give way only if there is found to be a " plain repugnancy between the antitrust and regulation provisions." United States v. Philadelchia National Bank, 374 U.S. 321, 351 (1953). 'Jere no anti-trust considerations able by law to survive the establishment of a state regulatory scheme, eur construccion permit stage review would in many states be futile and l
meaningless.
But on the contrary, by statute, we review each C? apolication to n/ See, e.g., St. Paul Fire & !*arine Ins. Co. v. Barry, 435 U.S. 531 (1979).
~~
h/ Cantor v. Cetro : Edison Co.l ~a23 U.S. 579 (1975).
- .g.
51 / Goldfaro v. '/ircinia State !ar, 421 U.S. 773 (1975); Senweccann 3ros. v.
Calver: Coro., 241 U.S. 284 (1951).
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23 ensure that insofar as possible activities under the license will be c:nsistent with antitrust laws and the policies underlying them. What this means is that the Commission with the aid of the Capartaent of Justice ust choose the c:urse of accommodation.
Respect must be shewn for a state's regulatory plan where it exists; however, proccmpetitive policies cust be furthered when they are not in c:nflict with the state plan.
Although deteminations of the extent to which the antitrust laws may be acc:nnodated by state regulation must be nade with sensitivity en a case-t:-case basis, certain questions will serve as a lit =us paper test in any situations.
- n evaluating ahether activities or proposed activities c nflict with the anti-trust laws, the following tests are relevant. Mas the ifcensee a free choice with respect to the activity in question, in the sense that the state is neutral with regard to the c:urse chosen? Oces the chosen ::urse foll:w so naturally fr:a activities required by the state that to actly an antit.ust standard would work in unfairness on the licensee?
n deciding whether a pr::: sed tr::: :eti-tive license modification is repugnant to the state sche e, variati:ns of the preceding cuestions should be asked:
Could the licensee procerly ch:ose this course of action without conflicting with the state regulatory sche e? Neuld the modification if required be so unnatural in the regulatory setting as to work an unfairness on the licensee?
With this view of the law and the tests for applying it, we return to the issues befora us.
a.
Whether an antitrust review would be likely to concluce inat the situ 3 tion as changed has negative antitrust implications Having detamined that changes oc:urred within the relevant tire and were sufficiently causally linked to 'pplicants to satisfy the causation critaril;
/
lt-29
.)
/
/
we must make a threshold analysis of the competitive situation.
In' order to predict the cut:: e of review, we lock to the same fa :ces that w ald be analy:ed during a full scale review after a significant changes detartination had been' affirmatively made.
In this posture, we seek the c:: ent of the Oepartnent of Justice _wnether s
a its threshold analysis of this matter 'eads it to believe that it would rec::-
=end a hearing were it t's conduct a statutory CL Surrer license review.
"e note' that the legislative history reflects the Congressicnal intent that we c:nsult with the Cepartment of Justice 32/' in reaching our significant changes-i datartinatien. We think Justice's ?r:per role in the threshold pr:cers ;ar ?
aliels what its role will be in the review process when a review is held.
In the review process the analysis and reccamendation of the tttorney 2eneral
/[
are critical to the decision of whether to hole a hearing and weigh heavily in the C ::ission's deternication of what license c:ncitiens may be warranted.
We ask the att:rney General, On the basis of Our cer randum and ceder and the rec rd in this matter that we forward herewith, to :rovide us with his tentative views On whether a hearing would be recuired. We request this 4
advice by 50 days fr:: the date of this order.
In turning :) Justice for its assistance, the C : ission expresses the folicwing views on the merits.
It is beycnd cavil that South Carolina has adoptec a regulatory scheme in the Ocwer supply market, and that the Parker v.
j2/ Re:ce: Of Joint C ::ittee, rucra, p. 29.
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9 30 3r:wn; doctrine is properl_y in cked. 3/ On the other hand, Appifcants seem to 2
possess considerable fheedem of choice under the state regulation. They may i
choose whether to allcw Central to participate in the facility itself and such a choice appears to have a neutral effect on the state plan.
Similarly,
'pplicants seem to have considerable freedom in arriving at terms for transmissicn services. 4/ Using cur test, we find then that were activities 2
in these areas to have anticompetitive implications, they could be properly considered by us and would require a determination as to whether the 2.
Ccemis,sion~ has available remedies that it could require as license modifica-tions were careful analysis to reveal that proc mpetitive policies would be aided tnereby, bI Are d.lere available remedies?
As we have indicated earlier in this memorandum, we believe that the Can;ress,did not int:nd fcr us to ;c f:rward with OL stage an:itrust review
~
without the likelihcod that it wculd result in greater than c]t minimis ifcense modifications.
Consequ,ently an incuiry must be directed toward resolving the 4
53/ An issue was raised by Central wnether the state's "authori:ation" of Santee Cooper's purchase of an interest was sufficient to invcke Parker
~~'
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- v. Brown immunity in light of authorities holding that state c mmano 1s as here, a public utility ressensive only to direct essential. '4here,a legislative enact; nest is authori:ed to take action by the State legisla-ture, that authoriza tion is tantamount to cccmand.
Cf. Frfnceton Cecmunity Phene Bock v. Bate, 582 F.2d 706 (3d Cir.1978). However, since no claim acpears to be mace that the purchase of a share is in itself an anticom etitive act, this determination is not essential to our ccnclusions.
~j/ 3ased on the information before us we tentatively conclude that Central's dual rate claim-is not meritorious, and that State recuirements apcear to preclude Santee Ococer's setting' *ates higher than their actual cost _sf..
ser/ ice,< so that no antic:mpetitive activity may be fcund here.
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31 question whether activities with anticompetitive implications that are revealed are susceptible to our remedy.
In the case of any significant changes determina-tien such an inquiry is required; however, in most cases it is to be presumed that the Commission will ce able to tailor some relief.
See, esg., Cavis Besse, suora. '4here there is a state regulatory plan, c'irker considerations require us to inquire whether the relief we would provide would be repugnant to the state plan or would be so unnatural under the plan as to work some other unfairness.
If it would, it must be considered to be unavailable.
For the present, suffice it to say that the parties' representations that there have been nt;otiations for arrangements regarding participation in the facility and power transmission facilities are strong indications that there is sufficient flexibility in the overall pian to accccmodate at least scme significant remedial modifications that the Commission might consider imple-canting were they deternined to be warranted.
1-State of the Record In referring these matters, by way of consultation, to the Department of Justice, we are aware that the record is stale. Most particularly because of Staff's and the Applicant's repeated reliance on asserticns tcat good faith negotiation was proceeding and that offers were anticipated, we invite the parties to provide information with regard to any new developments to us and to the Department of Justice.
Furthermore, because we have established the critaria for a significint changes decision in our analysis of the instant matter, we reques: that the
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32 parties and the Attorney General provide us with any cer ent they might have on those criteria and how we have applied them in this memorandum.
Cor: ents should be flied within 30 days frca the date of this order. 'le will censider such cc :ents as well as the Capartment of Justice predictive c:crents on the merits before reaching a final decision.
Ccenissicner Gilinsky abstained fr:m this cecorancum and order.
It is so ORDERE0.
For the Com=ission f
0 : LU1b r Nib -
f
$;;wEL J. :HILK Secre:ary of tP= C:.-ission f
Cated at Jashing:0n D. C.
this 70{1
- day of M
1930.
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UNITED STAUS.OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
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SOUTE C.GOLINA ELECTR$C AND" GAS )
Docket No.(s) 50-395A CCy?A!;Y, ET AL.
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('.'i 311 C. S:=ar Nuclear Station))
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CERTITICATE OF SERVICE I hereby certify that I have this day served the foregoing docu=ent-(s) upon each person designated on :he official service list compiled by the Office of the Secretary of the Co=ission in this proceeding in accordance with the requirements of Section 2.712 of 10 CFR ?ar 2-Kules of Fractice, of :he Nuclear Regulatory Co=ission,'s Rules and-Regulaticas.
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Oa:ed at Washington, D.C. this
. (( k' day of Odi !GM 197h y
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Office of/the Secretary of the Cc==ission Joseph Ru: berg, Isq.
South Carolina ?ublic Service Antitrust Counsel Authori:7 Counsel for NRC Staff
?.0. Sox 398 U.S. Nuclear Regulato:7 Comission Monche Corner, South Carolina 29461 Washington, D.C.
20555 i
Hugh F. Morrison, Jr., Esq.
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- -:r. Jere=e D. Sal::=an, Chief Charles S. Leeper, Esq.
Antitrus: and Indem i:y Group Cahill, Gordon & Reindel
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-Office of Nuclear Reactor Regulation 1819 n Street, N.N., Suite 900
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U.S. Nuclear Regulatory Co._ission
- ashin gten, +D. C.
20006
~m-Ur..= Ein gton, D. C.
20555
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Mr. P.T. Allen, Executive Vice-Antitrust Division President s'1 General Pana'ger U.S. Oepart: an: of Justice Central Electric ?:.er Cooperative, Inc.
i*ashington, D.C.
20530 P.O. 3cx 1455 Cole =bia, South Carolina 29201
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t Icard and earties continued:
50-395A
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Orand, nsq.
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- i Fearce & 3:asd 1300 Connec:icut Avenue,.N.W.
~.~ashington, D. C.
20036 r
C. ?ischney Rober:s, Esq.
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Oial, Jennings, Wi=cha=,
sac =as &.-o.certs
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Colu=bia, Sou:h Carolina 29202 Troy 3. Conner, Jr., Esq.
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C ::er, Moore & Corber 1747 7e::sylvania Avenue, N.W.
- ash 1:::ce, D.C.
20006 r
rh.ard C....so:er:s, i.sq.
1 South Carolina Elec:ric and Gas Cc= any
?.0. 3:x 7:4 Colu:'ia, Scu:h Caro ina 23202 4
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Appendix D
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17
-Ili vidcd, /wwever, That paragraph (1) shall not apply to of a birm.e to such peison wouhl I.e inimical to the cona-an application for a heenso to operato a utilize.ima or V,
mon defenm and i,ecuiity or to the heahh usul safety of prodnition facility for which a construction per. nit was inued imder ucction 103 unless the Conunision deter-the public.
mines such review is advisablo on tho ground that sig-
".iir. In5. A vra rims r PmnissuNs.-
"u. Nothing contained in this Act " shall reliese any nificant changes in the licensco's activities or propmed n o e n,,,
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f rom the operation of the following Ac83, ni peison netivities have ocentred subscitueitt to the previoins amended,Mu Act to protect trado uml commerce uganist review by the Attorney Ocneral and the Commission unlawini teatra'inth und n.onotuslies' approved.luiy see-under this subsection in connection with the construction ond,eighneca hundred aint ninety; bections seventy-thite permit for the facility.
to deventy seven, inclusive, of an Act entitled 'An Act to
"(3) With respect to any Commission permit for the reduce taxation, to proviile sevenue for the Gove mnent.
construction of a utilization or production facility issued u m.
m n, o a c. :- r.
and for onher purpows' upproved August twenty-seven, pursuant to subsection 101 b. prior to the enactment into eighteen hundred and ninety-four;'An Act to supplement law of this subsection any person who intervened or who emting laws against unlawfut restraints umt anonop-sought by timely wr,tten notice to the Cinnmission to i
olics, and for other lauleses'sipproved October lificen, intervene in the construction pennit proceeding for the nineteen hundred and fomtren; uml 'An Act to create facility to obtain a determination of antitrust considera-U ll, ?da a Federal Trado Ummuiaion, to define its powers und a m.a aiu is u s e.
d utie3, and for other purpows' approved Sepicania r tions or to advanco a jurisdiction basis for such deter-mination shall have the right, upon a written request to N i5M'l.4 tuenty-six, nineteen hundred and fourteen. In the esent the Commission, to,obtain an antitrust review under this a licensee is foimd b a comt of competent jur,isdiction, ni is u a c.
cither in an originaf action in ihat comL or in a par section of the oppheation for an operatmg licenso. Such n "M; '?-
written ren}uest shall be mado within "5 days after the ceciling to enforce or review the findingwr ordcas of any dato of initial Conunission publication in the Federal Goveinment agency having jurisdiction under the latvs Itegister of notice of the filing of an application for an I
cited nhuse, to have violated any of the provisions of such operating license for the f acility or the date of enactment j
y laws in the conduct of the licensed activity, the Comnos-intolaw of thissubsection,whicheverislater.
sion may smpend, revoke, or take such other action as it
"(4) ligmn the reiluest. of the Attorne General, the n
Commission shall furnish or cause to be furnished such may deem necessary with respect to any licen.e iwued s
I by the Conuniaion umler the provisions of this Act.
information as the Attorney General determines to be
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"b. The Cenunission shall retunt promptly to the Al-appropriato for the advice called for in parugraph (1) torney (lencial any information it may have with sespe.;t of thissubsection.
to any utilization or special nuclear inaterial or utonac Generul's adv(ice, the (ptly i,ipon receipt of the Attoiney,omnnssion shall pub
" 5) 1* rom I
eneigy which appears to violato or to tend towaad the violation of any of the foregoing Acts.or to rest ict freo Federal llegister. Where the Attorney General advises competition in private enterpiise."c. (1) The Lonunission shall promptly t ransmit to the that tliero may leo adverse antitrust aspects and recom-las designeo may part, hearing, the Attorney Gencial or mends that thero be a Altmney (ienend a copy of any licenso application pro-icipate as a party in the proceed-vided for in paragraph (2) of this subsectmn,and a copy ings theicafter held by the Cominission on such licens-of any written request provided for in paingsaph (3) of ing matter in connection with the subject matter of his this subsection; and the Attorney General shall willan a aavice. Tho Commission shaii givo au consiaeraiion to reasonable time, but. in no event to exceed Iso days.fier the advico neceived from the Attorney General and to iteeiving a copy of such upplication or wriden rc<p3 cst, such ovidenco as may be provided during the proceedings i
sender anch advice to the Conunission as ho deteimines m connection with such subject matter, ami shall make a to be nppropriate in regard to the finding to be nnule finding as to whether tho activities under the license by thu Conunission pursuant to paragraph (5) of Ilus would ciento or maintain a situation inconsistent with 5
subscition. Such advico shall includo un esp!anatory tho antitrust laws as specified in subsection 105a.
stalcinent as to the reasons or basis therefor.
"(6 In the ovent, the cmmnission's limling under para-graph)(5)in determining whether the licenso should i
"(d) l'aragiaph (1) of this sunsection shall apply to is m the allirmative, the Conunission shall also an applicati<m nor a license to con.truct or operato a s
- consider, N-J utilitation or production facility under section 103:
Issued or continued such other factors, including the L
peed for power in tho atTeeted area, as the Comnassion j
-' l7!.!!',j "i C..M.l.lNN'n Wu'U,'ht;gfglgy;gg m its imigment deems neccMary to protect il o pubhe l
i m,
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48 19 s
of its findings, the Conunissiot "c. designate the amounts of special nuelcar mate-interest. On tho basis,ty to issue or continuo a licenso rial availablo for uso by each such facility.
shall havo thu authon l
ea <
as applied for, to refusa to issuo n licenso, to rescind a "Sco.107. Orxarrons' Liczusrs.-The Cormuission f,ije' gap'"y, l
heense or amend it, and to, issue a h,eenso with such con-gg ditions as it deems uppropnato.
"a.
rescribe unifonn conditions for licensing "* 88"-
"(7) l'ho Comnuss, ion, with the approval of the At.
indivibuals as operatom of any of the variou3 classes i licensed in torney General,,may except from any of the reignisementa of this subsection suela classes or types of heenses as the 8,f. Iiroduction and utilization facilit es o
j Ci npino would mit significantly atfect.
",8g,, gc{ennine the 'lualifications of such individ-Commision may dete, ties under the antitrust laws as tho appheant's activi y
l "e issue licenses to such individuals in such fonn U
aIy application for a construc-as the Conumssion may presenbe;mnd itt s.
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tion permit on li e at the time of enactment into law of d: ampend such heenses for violat,ons of any i
this subsedion, which permit would be for issuanco under provision of th,is Act or any rule or regulation issued section 103 and with respect to any application for an thefeunder whenever the Commission deems sub i
operating licenso in connection with which a written resguest for an imtitrust review is, mado as provided for q" ']g {[A oa N A'noNAs.EMEnoENCT.--Whenever W8' *'
the Congress declares that n stato cf war or national ES"r paragraph (3), the Comnu,ssion, after considtat3on er..ergency exists, the Commission is authorized to sus
- e*,.u,,c;g' in,tti the Attguney General, u,iny, upon d,etermination wi that such action is necessary in the pubbe interest to pend any licenses granted under this Act,if in its judg-avo,id unnecessary delay, establish by rulo,or order ment such action is necessary to the common defenso and lienuds for Comm,ission notification and receipt of, ad-security. The Commission is authorized during such vico dmenng from thoso set forth abovo and may issue period, if the Commission finds it. necessary to the com-l a cos,isvaction perunt or pperat3ng heenso ni advanco of mon defenso and security, to order the n: capture of any l
consuleration of and lipdings with res cet to the mattens special nuclear materiala or to order the operation of c
and is cpvered m alus subsection: 1,ruvulcJ, ' hat any const ru, -
any facility licensed under section 103 or 101,ility in i
o authorized to order the entry into any plant or fac y
tion permit,or operntmg b,eenso so issued shall cont.""to serato such facil-order to recapture such material,or to ofor any damages such conditions as aho Comnassion deems a propna g
to assuro,that any subsciguent findings and ori ers of the ity. Just compensation shall be paid l
Conumssion willi iespect to such umttens will be given caused by the recapture of any special nuclear matenal orby theoperationof anysuch facdity.
full force and etfect.
"m.101 Couse r m hm Pairra or Facu.1 Da=au.
"Sec.106. Ca. Asses or Facu.rnes.,l'ho Conum..
ssion acHelles cia... e, neaan.
t i rs.-
(sellitice gngY -
eensed e.ther under acc-
"a. With respectio those ntilization and production fa 'lltmf,ihn.m i
.: u a c.
"a. group the fac. lit.ies b.
i i
t,on 103 or under sect, ion 10-1 auto classes wigich may cilities which are so determined by the Conunission pur 42 u.s.c. mis.
I u 2:24.
iinclude either production or utihzatwn facdities or suunt to subsection 11 v. (9) or 11 cc. (2) the Ctmunission both, u on the basis of the sumlarity of operating may issuo generallicenses for domestic activities reiguired and tec u,ucal characteristics of the facilities; d on to be licensed under section 101,if the Commission deter-mines in writing that such general licensing will not con-
"b. dehno the vanous activities to Lo carn.e ateachsuchclassof facility;and stituto an unreasonablo risic to the conunon defenso and
- security, suL'fr'fre't"e U *$.'! A"r'ni, t'di,J. ! '* " * * *""d "b. After consulting with the Secretarics of Staie, 82 pat unaus.
4' Energy, and Comn.erce and the Director,ihe Cmumission pe,.';o. i"i Eli,m Mi It'3.ifItUU l'oe'i'i C. J. IM0r. It g' is niitliorized aiid directed to deterinine wliicli coniponesit
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pn.g.o.ca una.. naa ime prop..e4 teria. na4 <..i.,
]
ain ihere eacept U',o.flIG.rU,'Id.fr'.i."I='t"h *ilr'Iile'*".'*iI'.'ll.i.1"i=$n"E*aff0d parts us delined in subsection 11 v. (2) or 11 cc. (B) and aca. inn unaer Ine anmrut inws. p d a i. h-en a which other items. or substances are es[becaniso of their>ccially relev oi nun.-
iSH4 Wil a reswomabie tiene la me event tis escred tse days af ter frosis die standpoint of export cointrol rcrehing.blesuch hollacntteis, the Attorney oemeral alieu adel.se the Com-'
d "" E 8 8 8-t'"'lf'"", *,';.',',',";,'"l,"'i f fil l ',fi,, fife"i,'",",'ff,f,'fP"ffs8 j'ig"Caf,7",j significance for nuclear e dosive purposes. Execpt as h
"d' a
I laws, and such advice shan be pubumbed la the Federni Itcstater. tipos proygded ju seClkon 136 b.
)a no such Component Sub-p the remicot of the Attorney oemersi.the commtma.too shalt tural h er cause i
to be furntahed muah Inform.ation as the Attorney ocaeral detersalmes to m i wi,nc law 88 373 j,73 stat. Sh8) fiSSui. see. 2. amended see. 308 t,- appropriate or necemmary to enable bha to give the adelet caint4 for I'
by delettug the ptarase distributed under the gresistana of evi.eettles hs thte sectl a "
03 a.." af ter the words "special nuclear sistertas la the sesond seattacaw q
Appendix E 6