ML20034A763
| ML20034A763 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 04/18/1990 |
| From: | Virgilio M Office of Nuclear Reactor Regulation |
| To: | Adensam E Office of Nuclear Reactor Regulation |
| References | |
| A, NUDOCS 9004240238 | |
| Download: ML20034A763 (9) | |
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i APR 181990
' Docket flos.: 50i416A-and 50-417A MEMORANDUti FOR: Elinor G. Adensam, Director j
Project Directorate 11-1 Division of Reactor Projects - I/II FROM:
Martin J. Virgilio, Chief Policy Development and Technical Support Branch Program Management, Policy Development and Analysis Staff
SUBJECT:
DENIAL OF REQUEST TO DELETE ANTITRUST LICENSE-i CONDITIONS FROM THE GRAND GULF NUCLEAR STATION d
By applications dated September 2,1986, Mississippi Power & Light Company (MP&L) requested that the antitrust license conditions which are a part of the Grand Gulf Nuclear Station Unit 1 operating license and the Unit 2 construction permit be deleted. For the reasons stated in the attached analysis prepared by my staff and OGC, the staff has denied MP&L's requests.
Martin J. Virgilio, Chief Policy Development-and Technical Support Branch Program Management, Policy Development and Analysis-Staff l
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STAFF ANALYSIS OF REQUEST TO. DELETE ANTITRUST LICENSE CONDITIONS
.FROM THE GRANC GULF NUCLEAR STATION On September 2, 1986, the tiississippi Power and Light Company (MP&L or Licensee)*-
. filed separate applications to amend the operating license for Grand Gulf-Nuclear Station, Unit _1 (GGNS-1):and.the construction' permit for Grand Gulf Nuclear Station, Unit 2 (GGNS-2).* The amendments-proposed the following: :1) to authorize the transfer of control and authority to operate GGNS-1 and'to construct-GGNS-2 from MP&L to System Energy Resources, Inc. (On-July 28,1986, f
Middle South Energy, Inc., a co-licensee, was renamed and reconstituted as Systems Energy Resources, Inc. (SERI).) and 2)'to delete certain antitrust license conditions that were imposed upon MP&L as a result of the construction f
permit antitrust review authorization process. Since.it appeared that evaluation of the antitrust aspects would require an extended period of time, the' Licensee s
proposedthattheamendmentsbebifurcatedinto,1)technicalamendments designating SERI responsible for the operation of GGNS Unit I and the construction-of GGNS-2, and 2) amendments to delete the antitrust license conditions presently attachedtotheGrandGulfNuclearStation(GrandGulf). licenses.
In order to permit the Licensee to make the organizational. changes concerning plant operation while perserving for further review questions concerning antitrust-issues, the Nuclear Regulatory Comission (Commission) Staff (Staff) agreed to process the.
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- The application was filed jointly by all three licensees, MP&L, System Energy.
Resources, Inc. and South Mississippi Electric Power Association.
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amendment requests using the suggested bifurcated procedure. Because the issues raised in the proposed amendments for GGNS-1 and GGHS-2.regarding the antitrust license conditions are substantially the same, the. Staff consolidated its response to each request in this Federal Register Notice.
On December 20, 1986, the Staff issued Amendmut 27 to the GGNS-1 operating license (NPF-29) authorizing SERI to possess, use and operate the facility and l
to possess and use fuel and ancillary
.onsed materials. The authority of a co-owner, South Mississippi Electric Power Association (SMEPA), to possess but l
not operate the f acility was not affected by the amendment. On December 14, 1989, the Staff issued Amendment No. 65 to the GGNS-1 operating license which authorized the transfer of control and operation of the facility from SERI to Entergy Operations, Inc. (E01), formed by Middle South Utilities, Inc., now Entergy Corporation, to operate all'of its nuclear plants.
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TheStaffissuedAmendmentNo.8totheGGNS-2constructionpermit(CPPR-119) on December 20, 1986, to reflect the transfer of control and performance of licensing duties from MP&L to SERI. On December 22. 1989, the Staff issued Amendme~nt No. 9 to the GGNS-2 construction permit which authorized the transfer of authority to construct GGNS-2 from SERI to E01.
Amendment Nos. 27 and 65 to the GGNS-1 operating license and Amendment Nos. 8 and 9 to the GGNS-2 construction permit, explicitly conditioned the authorization of MP&L to transfer its right to possess, use, operate and
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construct the respective facilities to SERI and E01 on the continued obligation 4
by MP&L and SERI to comply with the antitrust license conditions until further authorization by the Commission. The Staff has now completed its review of
-the portion of the request by MP&L to delete the-antitrust license conditions from the GGNS-1 operating license and the GGNS-2 construction permit.
Based upon the available information, the Staff believes the proposed amendment-i requests do not change the underlying factors that led to the imposition of the antitrust license conditions that were recomended by the Department of-Justice l
and agreed to by MP&L during the construction permit antitrust review conducted by the Department of Justice and the Staff pursuant to Section 105(c) of the-Atomic Energy Act of 1954, as amended.
For the reasons set forth below, the StaffdeniestheLicensee'samendmentrequeststo,1)removeMP&Lfromthe GGNS-1 operating license and the GGNS-2 construction permit, and 2) delete the antitrust license conditions from the GGNS-1 operating license and the GGNS-2 construction permit.
l DISCUSSION During the construction permit antitrust review of the Grand Gulf Nuclear Station in the early 1970's, the staffs of the Department of Justice and the Atomic Energy Commission received allegations from members of the western Mississippi bulk power services market that MP&L had misused its market power and inhibited the growth of competition in the western Mississippi bulk power services market. As a result of these allegations and an independent analysis
, conducted by the Department of' Justice, MP&L and the Department of Justice reached an agreement on a series of policy commitments designed to mitigate MP&L's alleged misuse of its market power. These commitments were structured to open up competitive alternatives to a broad cross section of power systems in western Mississippi by providing access to Grand Gulf and ancillary trans-mission. services, as well as interconnection and coordination services that-make access to these products meaningful.. In a letter to.the Assistant Attorney General that accompanied delineation of the commitments, the President of MP&L stated that:
These commitments represent a statement of policy for the 4
future direction of Mississippi Power and Light-Company and are made with the understanding that the Department of. Justice will recommend to the Atomic Energy Commission that no antitrust hearing will be required.*
The Department of Justice, in its advice letter to the Atomic Energy Commission, dated May 24, 1973, concluded thac an antitrust hearing would not be necessary in the Grand Gulf construction permit proceeding after MP&L agreed to an extensive set of policy commitments and "... with the_ expectation that the Commission will include them as conditions to the license...." The commit-ments referenced in the Department of Justice advice letter were attached as license conditions to the Grand Gulf construction permits as a result of the antitrust construction permit review and also became a part of the GGNS-1 operating license upon issuance.
5 Letter dated May 22, 1973, from Donald C. Lutken, MP&L, to Thomas E. Kauper, Assistant Attorney General, Antitrust Division, U.S. Department of Justice, p. 1.
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-O Subsequently, in conformance with Consnission regulations, an operating. license antitrust review was conducted for GGNS-1.
In the process of its review, the Staff received allegations that MP&L was not implementing.the antitrust license conditions imposed during the constru.ction permit review. A Notice of
-Violation was issued to MP&L on May 28, 1980, citing MP&L with non-compliance-with specific antitrust license conditions. After extensive negotiations, it became apparent to the Staff that'a settlement agreement between MP&L and the complaining parties would be consummated. As a result of this agreement, Staff concluded its operating license antitrust review of GGNS-1 on October 9,1981, advising'that no significant antitrust changes had occurred ~
since the construction permit review.
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MP&L's proposed amendments dated September 2, 1986 sought the transfer'of j!
operating and construction responsibilities for Grand Gulf from MP&L to SERI.-
As indicated supra, this responsibility has since been delegated to E01. The i
newly formed E01, a wholly owned subsidiary of Entergy Corporation (which until 1
May 19, 1989, was known as Middle South Utilities, Inc.), will act as a bulk I
power generator, selling capacity in Grand Gulf to each of the operating-1 subsidiaries of Entergy Corporation, including MP&L. The amendments issued in December 1989 dealing with EDI, do not deal with the marketing of power from GGNS-1 or GGNS-2, nor do they modify the amount of power that MP&L will receive 4
from the Grand Gulf facility or make any changes that will mitigate MP&L's existing market power in western Mississippi.
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The MP&L antitrust license conditions have been in effect since the issuance of
-the Grand Gulf construction permits. These license conditions were designed
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4 to prohibit MP&L from using the power and energy produced by Grand Gulf to create or maintain a situation inconsistent with the antitrust laws. As noted in the GGNS-1 operating license antitrust review, the antitrust license conditions have had a positive impact on the competitive process in MP&L's service area and aside from the proposed amendment requests, the Staff would have had no reason to consider the removal of the antitryst license conditions from GGNS-1 and GGNS-2. Notwithstanding the proposed amendment requests, MP&L will continue to control high voltage transmission facilities in its service area and will continue to receive the same amount of power from Grand Gulf. MP&L will continue to possess significant market power in the western Mississippi bulk power. services market. Consequently, MP&L still has the ability to create or maintain a situation inconsistent with the antitrust laws.
The issue raised by the proposed amendment requests that must be resolved by the Staff is whether the changes proposed by the Licensee create a valid reason for excusing MP&L from remaining on the licenses and being subject to the antitrust license conditions. Under the circumstances in this case, the Staff believes that continued application of the license conditions to MP&L is warranted because:
- 1) Section 103(a) of the Atomic Energy Act, as amended, authorizes the Comission to impose license conditions upon persons transferr-
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ingnuclearfacilitiestoothers;2)althoughtheamendmentsauthorizeMP&Lto transfer its rights to operate GGNS-1 to SERI and construct GGNS-2 to SERI, contingent upon continued compliance by MP&L and SERI with the antitrust license conditions, no change is taking place with regard to the distribution of or use of the power from the facilities or with MP&L's control ov;r high voltage transmission facilities in its service area; 3) these transmission l
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j facilities and the use of the power from Grand Gulf provided the framework for j
the determination that a situation would be maintained or created by the i
issuance of the licenses, not the fact that MP&L would own or operate Grand Gulf; 4) in spite of the fact that SERI is a separate corporate entity, both j
J MP&L and SERI are wholly owned and controlled by Entergy Corporation, a holding 1
company organized under the Public Utility Holding Company Act; as such, Entergy Corporation's subsidiaries, including SERI and MP&L, are under comon control and operate as an integrated public utility system with all energy in the entire Entergy Corporation system being distributed by a single dispatch center and wholesale transactions between the subsidiaries being governed by a series of System Agreements filed at the Federal Energy Regulatory Comission;
- 5) the NRC cannot be prevented from regulating within its proper domain by the creation of what in effect are paper transactions all within the same holding company; and 6) the maintenance of the antitrust license conditions is in the public interest since they will enhance competition in MP&L's service area.
I In the proposed amendment requests, MP&L cited the improved competitive situation in the western Mississippi balk power services market and concluded that, as a result of these changes, the antitrust license conditions attached to the Grand Gulf licenses are no longer necessary. The Staff is aware of the procompetitive changes which have taken place in western Mississippi and as noted above, these changes were considered in conjunction with the GGNS-1 operating license review.
The improvement in the competitive process has involved the implementation of interconnection agreements between MP&L and other power systems in western Mississippi. The Staff believes these improvements are to a large degree the
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t direct result of the antitrust license conditions attached to the Grand Gulf licenses. The elimination of these conditions, as requested by the proposed amendments, may obviate any incentive for MP&L to continue these procompetitive practices in the future.
Indeed, the Staff has received inquiries and comments expressing opposition to MP&L's request to delete the antitrust conditions from the Grand Gulf licenses.
For the reasons stated above, the Staff denies the portion of the amendment requests dated September 2,1986 which seek to delete the antitrust license conditions now a part of the Grand Gulf licenses.
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