ML20043B251
| ML20043B251 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 05/15/1990 |
| From: | Adensam E Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20043B243 | List: |
| References | |
| A, NUDOCS 9005250142 | |
| Download: ML20043B251 (9) | |
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7590 01
. UNITED STATES, NUCLEAR _. REGULATORY COMMISSION DOCKET NOS. 50-416A AND 50-417A MISSISSIPPI POWER & LIGHT COMPANY, ET AL.
NOTICE OF DENIAL OF AMENDMENTS TO FACILITY LICENSES t
AND OPPORTUNITY FOR HEARING l
On September 2, 1986, applications were filed by Mississippi Power & Light Company (MP&L), System Energy Resources, Inc. (SERI) and South Mississippi ElectricPowerAssociation(theLicensee)toamendtheOperatingLicensefor GrandGulfNuclearStation, Unit 1,(GGNS-1)andtheConstructionPermitfor I
GrandGulfNuclearStation, Unit 2,(GGNS-2). The amendments would:
(1) authorize the transfer of control and authority to operate GGNS-1 and to construct GGNS-2 from MP&L to SERI (On July 28, 1986 Middle South Energy, Inc., a co-licensee, was renamed and reconstituted a SERI.),and(2) delete certain antitrust license conditions that were imposed upon MP&L as a result of the construction permit antitrust review authorization process. Since it l
appeared that evaluation of the antitrust aspects would require en extended i
period of time, the Licensee proposed that the amendments be bifurcated into:
(1)technicalamendmentsdesignatingSERIresponsiblefortheoperationofGGNS Unit 1 and the const,ruction of GGNS-2, and (2) amendments to delete the antitrust license conditions presently attached to the Grand Gulf Nuclear Station (GrandGulf) licenses.
In order to permit the Licensee to make the organizational changes concerning plant operation while perserving for 1
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2-r further review questions concerning antitrust issues, the Nuclear Regulatory Comission (Comission) Staff (Staff) agreed to process the amendment requests using the suggested bifurcated procedure. Because the issues raised in the I
proposed amendments for GGNS-1 and GGNS-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 Amendment 27 to the GGNS-1 operating i
licen u (NPF-29) authorizing SERI to possess, use and operate the facility and to possess and use fuel and ancillary licensed materials. The authority of a co-owner,SouthMississippiElectricPowerAssociation(SMEPA),topossessbut not operate the facility was not affected by the amendment. On December 14, 1989, the Staff issued Amendment lio. 65 to the GGNS-1 operating license which authorizedthetransferofcontrolandoperationof$hefacilityfromSERIto Entergy Operations, Inc. (E01), formed by Middle South Utilities, Inc., now Entergy Corporation, to operate all of its nuclear plants.~
The Staff issued Amendment No. 8 to the GGNS-2 construction permit (CPPR-119)onDecember 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 Amendment 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 F
3-construct the respective facilities to SERI and E01 on the continued obligation 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 Stt.ff believes the proposed amendment 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 ano 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 Staff denies the Licensee's amendment requests to.
(1) remove MP&L from the GGNS-1 operating license and the GGNS-2 construction permit,and(2)deletetheantitrustlicenseconditionsfromtheGGNS-1 operating license and the GGNS-2 construction permit.
DISCUS $10N 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 Comission 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
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4-conducted by the Department of Justice, MP&L and the Department of Justice reached an agreement on a series of policy connitments 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 Generel that accompanied delineation of the commitments, the President of MP&L stated that:
These commitments represent a statement of policy for the 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 that an antitrust hearing would not be necessary in the Grand Gulf construction permit proceeding af ter MP&L agreed to an extensive set of policy conmitments and "... with the expectation that the Commission will include them as conditions to the license...." The l
connitments referenced in the Department of Justice advice letter were attached as license conditions to the Grand Gulf construction permits as a L
result of the antitrust construction permit review and also became a part of the GGNS-1 operating license upon issuance.
- 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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-S-Subsequently, in conformance with Comission 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 construction 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.
MP&L's proposed amendments dated September 2, 1986 sought the transfer of operating and construction responsibilities for Gran Gulf from MP&L to SERI.
As indicated supra, this responsibility has since been delegated to E01. The newly formed E01, a wholly owned subsidiary of Entergy Corporation (which until May 19, 1989, was known as Middle South Utilities, Inc.), will act as a bulk power generator, selling capacity in Grand Gulf to each of the operating subsidiaries of Entergy Corporation, including MP&L. The amendments issued in December 1989 -dealing with E01, 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 from the Grand Gulf facility or make any changes that will mitigate MP&L's existing market power in western Mississippi.
The MP&L antitrust license conditions have been in effect since the issuance of the Grand Gulf construction permits. These license conditions were designed to prohibit MP&L from using the power and energy produced by l
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Grand Gulf to create or maintain a situation inconsistent with the antitrust j
laws. As noted in the GGNS-1 operating license antitrust review, the antitrust
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license conditions have hc6 a positive impact on the competitive process in f
MP&L's service area; and, aside from the proposed amendment requests, the Staff
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would have had no reason to consider the removal of the antitrust license conditions from GGNS-1 and GGNS-2. Notwithstanding the proposed amendment requests, MP&L will continue to control high voltage transmission facilities in' 1
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.
Theissueraisedbytheproposedamendmentrequdststhatmustberesolved by the Staff is whether the changes proposed by the Licensee create a valid l
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)Section103(a)oftheAtomicEnergyAct,asamended, authorizes the Commission to impose license conditions upon persons transferr-ing nuclear facilities to others; (2) although the amendments authorize MP&L to 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 over high voltage transmission facilities in its service area; (3) these transmission l
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facilities and the use of the power from Grand Gulf provided the framework for
.the determination that a situation would be maintained or created by the 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 MP&L and SERI are wholly owned and controlled by Entergy Corporation, a holding company organized under the Public Utility Holding Company Act; as such, Entergy Corporation's subsidiaries, including SERI and MP&L, are under common 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 creationofwhatineffectarepapertransactionsalIwithinthesameholding 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.
In the proposed amendment requests, MP&L cited the improved. competitive situation in the western Mississippi bulk 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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F direct result of the antitrust license condition < at.tacM i to the Grand Gulf licenses. The elimination of these conditions, as req 9ested 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 coments-expressing opposition to MP&L's request to delete the antitrust conditions from o.
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 remove MP&L from the Grand Gulf licenses and to delete the antitrust license conditions now a part of the Grand Gulf licenses. The Licensee was notified of the Comission's denial of this request by letter dated and a copy of this Notice is being forwarded to the Department of Justice for its review.
TheLicenseemaydemandahearingwithrespectfothedenialdescribed above within 30 days of the initial publication of this Notice in the FEDERAL REGISTER.
In the event a hearing is requested, any person whose interest may be affected by this proceeding may file a written petition for leave to intervene within 30 days of the initial publication of the notice of hearing in the FEDERAL REGISTER. A request for a hear %g or petition for leave to intervene shall be filed in accordance with the Comission's " Rules of Practice for Domestic Licensing Proceedings" in 10 CFR Part 2.
Interested persons should' consult a current copy of 10 CFR Section 2.7.14 which is available at the Comission's Public Document Room, the Gelman Building, 2120 L Street,
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- .9 N.W Washington, D.C.
20555'and-at the. Local Public Document Room located
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[at'the' HindsLJunior College, McLendon Library. Raynond, Mississippi 39154.
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FOR THE NUCLEAR REGULATORY: COMMISSION.
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Elinor G. Adensam, Director Project Directorate 11-1 Division of. Reactor Projects - I/11 Office of Nuclear Reactor Regulation DISTRIBUTION
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DATE :5/ /6/90 '
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