ML20049J705
| ML20049J705 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 03/10/1982 |
| From: | Adragna J, Mcdiarmid R CALIFORNIA, STATE OF, SPIEGEL & MCDIARMID |
| To: | NRC COMMISSION (OCM), Office of Nuclear Reactor Regulation |
| References | |
| PROJECT-564M ISSUANCES-A, NUDOCS 8203190253 | |
| Download: ML20049J705 (19) | |
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UNITED STATES OF AMERICE NUCLEAR REGULATORY COMMISSION ,
x- Ng To: Nuclear Regulatory Commission and the NC6 7.yg Director of Nuclear Reactor Regulation 'f[,gg18 1933 -
In The Matter of )
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Pacific Gas and Electric Company ) Docket Nos 4 -275, (Diablo Canyon Nuclear Power ) 25 W
Plant, Unit 1, Unit 2 )
(Stanislaus Nuclear Project, ) Docket No. P-564-A Unit No. 1) )
MOTION TO SUPPLEMENT " PETITION TO ENFORCE AND MODIFY LICENSE CONDITIONS" OR ALTERNATIVELY MOTION FOR LEAVE TO LODGE DOCUMENTS.
On December 4, 1981, the Northern California Power Agency ("NCPA") filed with this Commission a motion to enforce and modify the license conditions attached to PG&E's Diablo Canyon Nuclear Power Plant and proposed Stanislaus Nuclear Project Unit No. 1. 1/ In that document, NCPA adduced evidence which demonstrated that PG&E has chosen to persist in its anticompetitive activities, in violation of its existing license conditions, and has sought "to utilize its interpretation of other license conditions, together with this violation, to attempt to exercise its monopoly power to prevent or impede the development of new sources of 1/ By letter of January 7, 1982, the Director of the Office of Nuclear Reactor Regulation acknowledged receipt of the Petition and informed NCPA that it would be considered in accordance with 10 C.F.R. $2.206. Notice was published in the Federal Register on January 20, 1982, 47 Fed. Reg. 2965.
3 95D s l I 8203190253 820310 PDR ADOCK 05000275 M pan J
generation by NCPA or by others." Petition at 2. (emphasis supplied). 1/ Since the filing of that Petition, PGEE has made public elsewhere its interpretations of the Commitments.
Since PG&E has not yet responded to the NCPA Petition, or if it has done so has not served NCPA as required by this Commission's regulations, there is no attempted explanation from PG&E of this matter in this docket. The interpretations reflected in the two documents here sought to be lodged are conflicting and, in the case of PG&E's representations to the United States Court of Appeals for the District of Columbia circuit, manifestly inconsistent with PG&E's interpretation before this Commission of its obligations under the Stanislaus Commitments. NCPA submits that PG&E's varied interpretations of its obligations evidence the Company's ongoing violation of its license conditions and almost casual regard for the obligations it purported to undertake pursuant to the license it accepted from this Commission.
NCPA submits that PG&E's interpretations 2/ of its 1/ Unless otherwise specified, references to pages in NCPA's December 4, 1981 " Petition To Enforce And Modify License Conditions" will be preceded by the designation " Petition".
2/ Reference to PG&E representations before the Court of Appeals and FERC should not, of course, be construed as NCPA concurrence in or acceptance of such Company statements. As is apparent from tL.e Petition of December 4, 1981 3 while NCPA believes the Stanislaus Commitments oblige PG&E to provide some services, they do not approach a complete remedy of PG&E's anticompetitive conduct and practices. By this motion, NCPA seeks to provide this Commission with the most current Company interpretations of the Commitments.
l obligations under the Stanislaus Commitments, as reflected in these documents, are clearly relevant to this Commission's consideration of the matters raised in NCPA's December 4, 1981 Petition. NCPA believes that PG&E's heedless willingness to abandon and reverse before one forum a position which it simultaneously propounds and relies upon before another forum demonstrates a complete lack of concern or respect for the its legal license commitments to this Commission, and that is perhaps an even more serious matter for this Commission to deal with. Especially in regard to the safety and antitrust matters entrusted to this Commission, there must be an absolute assurance that a licensee's representations are meaningful and that the licensee will do what it tells this Commission it will do.
In NCPA's view, the documents we submit herewith are sufficiently serious evidence of lack of respect for this most basic assumption as to licensees as to raise significant questions about PG&E's basic fitness as a licensee.
Therefore, pursuant to 10 C.F.R. $2.730, NCPA moves to supplement its December 4, 1981 Petition or, should this Commission deem it more appropriate, alternatively requests leave to lodge with this Commission the PG&E briefs which are discussed in detail below.
On December 17, 1981, PG&E filed the "Brief of Petitioner Pacific Gas and Electric Company On Petitions to
, e4-Review Orders of the Federal Energy Regulatory Commission" 1/
with the United States Court of Appeals for the District of Columbia Circuit (" Court of Appeals"). 2/ In its action before the Court of Appeals, PG&E (with Southern California Edison Company) seeks reversal of FERC orders of December 28, 1978, June 14, 1979 an June 2, 1980, requiring it to file various contracts and practices relating to the Pacific Intertie, including Sections I and VII of the Stanislaus Commitments. These orders were predicated upon the FERC's conclusion that these contracts and the Commitments constituted " classifications, practices 4 rules, regulations, or contracts ..." within the meaning of Section 205(c) of the Federal Power Act, 16 U.S.C. 824d(c), which related to the provision of transmission service. PG&E Appeals briaf at 14-16, Attachment A. In PG&E's view, Section 205(c) of the Federal Power Act requires filing of those practices, rules, l or contracts which have "some impact" 3/ on rates and charges for any transmission or sale subject the FERC's jurisdiction.
Therefore, in order to defeat the FERC's assertion of juris-diction over the Stanislaus Commitments, PG&E, before the Court of Appeals, seeks to denigrate their effectiveness.
1/ A copy of this document is appended 'nereto as Attachment A. Citations to this document will be designated "PG&E Appeals brief at , Attachment A."
2/ Pacific Gas and Electric Company v. FERC, CADC Case Nos. 79-1882 and 80-2192.
3/ PG&E Appeals Brief at 21, Attachment A.
On January 8, 1982, however, PG&E filed its "First ,
Post-Hearing Brief of Pacific Gas and Electric Company" l before the Presiding Administrative Law Judge ("PALJ") in FERC Docket Nos..E-7777(II) and E-7796. 1/ It will be noted l that this docket is the very docket which underlies the appeal prosecuted by PG&E in which Attachment A has been filed. The parties to consolidated FERC Dockets E-7777(II) and E-7796 are currently involved in the preparation of the second of three rounds of briefs to be filed with the Presiding Administrative Law Judge ("PALJ"). During the two years of hearings in that case, and now in its brief to the PALJ, PG&E has sought to use the Stanislaus Commitments as a defense to the numerous allegations of anticompetitive conduct and abuse of monopoly power, and as a shield to prevent modification of anticompetitive provisions in existing contracts on file with the FERC. To be successful before the PALJ, therefore, PG&E must contend that the commitments are strong, impose binding obligations upon the company, and prevent it from acting in an anticompetitive manner. To this end, before the PALJ at FERC, PG&E asserts, inter alia:
The Commitments effectively preclude any
' market power' that, in the view of Cities and [FERC] Staff, PG&E possesses ....
1/ A copy of this document is appended hereto as Attachment B. Citations to this document will be designated "PG&E FERC brief at __, Attachment B."
PG&E FERC brief at 34, Attachment B. This interpretation is consistent with the interpretation PG&E would have this Commission believe is correct.
In its brief to the Court of Appeals, however, PG&E maintains that the Stanislaus Commitments commit PG&E to do little more than negotiate. PG&E represents Ehat:
[t]he Commitments in pertinent part are guidelines for the negotiation of future contracts for transmission service. Such principles for future negotiations are not practices relating to rates and charges in existing contracts within the meaning of Section 205(c) [of the Federa' Power Act] ... The Commission previously construed Section 205(c) only to require the filing of ' practices' akin to eligibility requirements for service under a filed tariff schedule. Nothing in the Commitments is comparable to such an eligibility requirement for service under existing rates or contracts. Their operation is prospective.
PG&E Appeals brief at 15-16, Attachment A, (emphasis supplied). By this statement, PG&E suggests Ehat the Stanislaus commitments in no way modify its existing contracts or commit it to provide service.
l Before the Court of Appeals, PG&E repeatedly asserts its view that:
the Stanislaus Commitments are a statement of general principles by which PGandE has agreed to abide in negotiating contracts with other electric utilities in northern and central California for services such as interconnection, transmission, access to nuclear generation, capacity and energy exchange, and reserve coordination.
4 PG&E Appeals brief at 22, Attachment A. The essence of 1 PG&E's position before the Court of Appeals is that the Stanislaus Commitments are but a " blueprint for future contract negotiations, not a modification of existing contracts. PG&E Appeals brief at 24, Attachment A. NCPA believes that the Stanislaus Commitments are more than just an exhortation to negotiate. Rather, NCPA believes that the Stanislaus Commitments were intended to commit PG&E to provide specific services to specific entities. This belief is supported by PG&E's numerous representations to this Commission.
While the Stanislaus Commitments became effective on April 30, 1976, the Atomic Safety and Licensing Board, in part through the efforts of NCPA, nevertheless decidad to investigate NCPA's and NRC Staff's allegations of PG&E's anticompetitive conduct and practices. One of the principal arguments raised by PG&E in opposition to the investigation was that the Stanislaus Commitments mooted much of the conduct and practices through which PG&E maintained a situation inconsistent with the antitrust laws. By way of example, on January 25, 1979, the Atomic Safety and Licensing Board held a pre-hearing conference for the express purpose of hearing statements of counsel:
regarding the commitments, the nature and effect of the commitments ... in what specific ways you believe that the commitments should be added to, supplemented,
modified or otherwise handled in order to remedy or alleviate the situation and the inconsistency with the antitrust laws as perceived by the intervenors i and the staff. .
Tr. 1978. During that hearing, counsel for PG&E made the following representations to the Atomic Safety and Licensing Board (emphasis supplied):
I think if the construction would require construction by the third party . . . requesting it, transmission service, would require duplication of a portion of the transmission system in order to create the transmission that he desires, then under that circumstance, PG&E would have to build a line.
In general, PG&E has a commitment to build to provide transmission services.
[Tr. 2038-39].
The first three clauses of VII-A on page 8 in general there is a commitment made by the company to provide transmission services. One of the exceptions to that general commitment appears on the following page ...."
[Tr. 2068].
But the general scheme is that the commitments require PG&E to provide the transmission services. That is the beginning point. And then it says, with the following exceptions ...."
[Tr. 2082-83].
The commitments recommended a change in certain situations regarding transmission by imposing on PG&E an obligation to transmit, and then carved out from that was this exception about the recaptured hydroelectric facilities ....
[Tr. 2084].
But let's stay for a moment with NCPA, already interconnected. Then what are
! the obligations under the commitments of PG&E7 It says Applicant shall transmit power pursuant to interconnection agreements.
So we have already got the interconnection.
Now, I am over at Roman VII-A under transmission services. [Tr. 2106].
I will say, however, that ... if you take a look at the transmission services provided ...
I think that they are quite substantial.
The company agrees, for example, to provide transmission service from any plant that a neighboring entity may build in the service area to the neighboring entity. It agrees to transmit power between or among neighboring entities.
It agress [ sic] to transmit power from outside the area to a neighboring entity and from a neighboring entity outside the area, subject to some limitations that were discussed by others and which I will discuss." [Tr. 2136] 1/
I also think the point is that if somebody outside the area is willing to pay more under this provision, it doesn't mean the export of the power. But we are required by these commitments to provide services to entities in the area. We are not required to provide services, as they are written, to entities outside the area." [Tr. 2140]
Under that circumstance [where both PG&E and a neighboring entity wished to purchase the same power], the neighboring 1/ " Neighboring Entity" is a defined term of the Stanislaus Commitments. See Section I. NCPA and its individual members all qualify as " Neighboring Entities."
c entity selling the power would have the option to sell it to whoever it wanted to sell it to, because we have a commitment to transmit power from a neighboring entity to another neighboring entity. [Tr. 2142]
First of all, unlike some transmission
- commitments that have been imposed on electrical utility companies as licensing conditions, these commitments do contemplate that we will build capacity to meet firm demand of neighboring entities for transmission if they provide enough notice. [Tr. 2142-43].
The company's position with respect to transmission over the intertie was I think stated in the discussion by our opponents.
First of all, in the commitments as we interpret them, if there is surplus capacity available to PG&E and the intertie, that the company does not wish to use, has no use for, so if the line is going to be empty, we would interpret the commitments as requiring us to provide that the capacity to a neighboring entity that request it on an interruptable [ sic] basis. [Tr. 21453 Unlike its representations to the Court of Appeals, the above statements do not appear intended to convey the impression that the Stanislaus Commitments are but a
" blueprint" for future negotiatons. On the contrary, in PG&E's efforts to avoid a hearing into the weakness of the Commitments and its anticompetitive conduct, PG&E statements appear intended to convince the Atomic Safety and Licensing Board that the Company is bound to provide specific services and undertake certain obligations the result of which is the
cessation of its longstanding anticompetitive activities.
I,1 describing its obligations before this forum, counsel for PG&E uses definite language of commitment: "the commitments require," PG&E " agrees to transmit" and "we are required."
Such an interpretation is somewhat consistent with PG&E's interpretation of the Commitment before the PALJ at FERC, where it seeks to insulate its anticompetitive conduct from review, but is inconsistent with its interpretation before the Court of Appeals. Rather than mooting the PG&E anticompetitive activities which the Department of Justice found maintained a situation inconsistent with the antitrust laws, 1/ before the Court of Appeals PG&E contends that the 1/ In its advice letter to this Commission in the Stanislaus proceeding, the Department of Justice stated:
PG&E and the Department have reached agreement on a Statement of Commitments which the Department believes will obviate the anti-trust problems posed by PG&E's activities and which will remedy the situation inconsistent with t the anti-trust laws which we believe has existed in Northern and l
Central California.
41 Fed. Reg. 20225, 20226 (May 17, 1976) (emphasis supplied).
In that advice letter, the Department of Justice concluded that "the effectuation of the Commitments will moot the questions of anticompetitive conduct by PG&E which have come to our attention." Id.
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Commitments are but "a blueprint for future contract negotations, not a modification of existing contracts." 1/
PG&E Appeals brief at 24, Attachment A (emphasis supplied).
NCPA submits that one of PG&E's current interpretations of its obligations under the Stanislaus Commitments, that sported before the Court of Appeals, is manifestly at odds with its obligations before this Commission. Less than one month after it told the Court of 1/ On August 2, 1972, in connection with PG&E's application for a license to construct its Medocino Nuclear Project, the Department of Justice recommended, pursuant to Section 105c of the Atomic Energy Act, 42 U.S.C. 2135(c), that the NRC hold an antitrust hearing on PG&E's application. 37 Fed.
Reg. 16423, 16426 (August 12, 1972). On the basis of its review of several contracts, still extant, to which PG&E was a party, evidence of PG&E's conduct, particularly with regard to NCPA, and interviews with PG&E representatives, the Department of Justice concluded that:
PG&E's continuous course of conduct over the past 20 years has placed it in the position of absolute power to block the development of bulk power alternatives by smaller systems with which it competes.
This power constitutes a ' barrier to competition' which the smaller systems have not been able to overcome.
Id. at 16426. The Department of Justice's ultimate conclusion was that PG&E had " created a situation inconsistent with the antitrust laws." Id. PG&E subsequently withdrew its Mendocino Project license application for reasons purportedly unrelated to its competitive posture.
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Appeals that the Commitments did not obligate it to provide 1
specific services, however, PG&E offered another interpretation. On January 8, 1982, PG&E told the Presiding Administrative Law Judge in FERC Docket Nos. E-7777(II) and E-7796 that:
Many of the attacks on contract provisions l at issue here are deprived of practical significance by the availability of specific services under the Stanislaus Commitments.
PG&E FERC brief at 34, Attachment B.
Before the PALJ at FERC, PG&E asserted that the Commitments " provide transmission and coordination services generally to any utility whose principal operations are in northern and central California." PG&E FERC brief at 35, Attachment B. PG&E goes so far as to assert that the Stanislaus Commitments provide " legally binding assurance" of .
PG&E's cooperation with NCPA because "[t]he Commitments require PGandE to provide a range of transmission and other coordination services." Id. at 33 (emphasis supplied.)
Although the Stanislaus Commitments were intended to remedy l
what the Department of Justice had found to be a situation
! inconsistent with the antitrust laws (41 Fed. Reg. 20225, 20226 (May 17, 1976), PG&E now maintains that the Stanislaus i
i Commitments do not modify existing contracts, PG&E Appeals l
brief at 24, Attachment A, and do not directly affect rates or the availability of service. Id. at 26. Before the FERC, t
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however, in PG&E's effort to use the Commitments to insulate, inter alia, various anticompetitive provisions in PG&E's contract witht the Western Area Power Administration's 1/
Central Valley Project ("CVP") 2/ from review, the story is quite different. There PG&E asserts that "the Commitments ameliorate Contract 2948A's alleged restrictions on CVP's ability to deal with third parties, since CVP qualifies for service under the Commitments." PG&E FERC Contract 2948A contains numerous restrictions on PG&E's obligation to wheel CVP power to qualifying preference agencies. Under this provision, PG&E's obligation to wheel CVP power is limited to otherwise qualifying customers 3/ which are located within a geographical " wheeling area" which is substantially less than PG&E's service territory. The asserted impact of the Stanislaus Commitments on this provision is dramatic.
Whereas before the Court of Appeals PG&E contehds that the Commitments are but "a blueprint for future contract negotiations," before the FERC PG&E asserts that "the Commitments can be used to supplement Contract 2948A by l
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1/ Formerly the United States Bureau of Reclamation.
2/ Contract 14-06-200-2948A (" Contract 2948A").
3/ Other conditions of service in Article 24(a), such as the requirement that the preference agency to which PG&E is to wheel must have been in existence as of the date of the l
execution of the contract, are identical to those in the l Otter Tail Power Company contract with USBR which was struck down in Otter Tail Power Company v. United States, 410 U.S.
366 (1973).
providing CVP with transmission service outside the wheeling area specified in that contract." PG&E FERC brief at 35, Attachment B (emphasis supplied).
NCPA submits that PG&E's representations before the PALJ at FERC cannot be reconciled with its arguments to the Court of Appeals. Nor can its representations to the Court of Appeals be reconciled with what NCPA believes to be PG&E's undertakings before this Commission.
PG&E's willingness to abandon candor and l forthrightness and certainly consistency before numerous federal courts and agencies for the expediencies of the moment, however, raises a serious question. NCPA's position that the Stanislaus Commitments are an imperfect instrument for remedying the situation inconsistent with the antitrust laws which PG&E has for so long maintained is well established. As reflected in this motion, the Commitments contain ambiguous language and lacunae sufficient to permit PG&E to voice the varied interpretations reflected above and elsewhere. But perhaps the most significant failing of the Commitments is their predication upon the assumption that PG&E would in all ways relevant act in good faith in discharging its license obligations. This current episode of hide-and-seek among various federal courts and agencies calls that assumption into serious question.
NCPA believes that the attached documents reflect PG&E's ongoing efforts to avoid appropriate regulation and persist in its anticompetitive activities. As asserted in NCPA's December 4, 1981 Petition, PG&E is actively using the Stanislaus Commitments and its varied interpretations thereof to continue to frustrate the efforts of entities like NCPA to develop viable electric systems independent of and in competition with PG&E. NCPA believes PG&E's employment of the Stanislaus Commitments to such an end, as reflected in the attached documents and elsewhere, is an affront to this Commission's process.
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l CONCLUSION For the reasons stated above, NCPA respectfully requests that this Commission accept the attached documants l and consider them in conjunction with our pending Petition to Enforce and Modify License Conditions, dated December 4, 1981. In view of their seriousness, KCPA further requests this Commission's prompt attention to these matters.
Respectfully submitted, e
i W r$"C. McDiarmid w
John Michael Adr&gna 7~' N Attorneys for The Northern California Power Agency And Its Members Law office of:
Spiegel & McDiarmid 2600 Virginia Ave., N.W.
Washington, D.C. 20037 202-333-4500 3
March 10, 1982
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD
) l Pacific Gas and Electric Company ) Docket Nos. 50-275, (Diablo Canyon Nuclear Power ) 50-276 Plant, Unit 1, Unit 2 )
(Stanislaus Nuclear Project, ) Docket No. P-564-A Unit No. 1) ) ,
CERTIFICATE OF SERVICE I hereby certify that copies of the MOTION TO SUPPLEMENT " PETITION TO ENFORCE AND MODIFY LICENSE CONDITIONS" OR ALTERNATIVELY MOTION FOR LEAVE TO LODGE DOCUMENTS in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, postage prepaid, this 10th day of March, 1982.
Marshall E. Miller, Esq., Chairman Docketing and Service Station Atomic Safety and Licensing Board Office of the Secretary U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington, D.C. 20555 Seymour Wenner, Esq.
Atomic Safety and Licensing Board George Deukmsjian U.S. Nuclear Regulatory Commission Attorney General of Washington, D.C. 20555 California Deputy Attorney General of Sheldon J. Wolfe, Esq. California Atomic Safety and Licensing Board 3580 Wilshire Boulevard U.S. Nuclear Regulatory Commission Suite 600 Washington, D.C. 20555 Los Angeles, California 90010 Donald A. Kaplan, Esq. Jerome Saltzman, Chief P.O. Box 14141 Utility Finance Branch Washington, D.C. 20044 U.S. Nuclear Regulatory Commission Washington, D.C. 20555
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Phillip A. Craine, Jr., Esq.
Glen West, Esq. Morris M. Doyle, Esq.
Richard L. Meiss, Esq. William H. Armstrong, Esq.
Pacific Gas & Electric Co. Terry J. Houlihan, Esq.
P.O. Box 7442 Meredith J. Watts, Esq.
San Francisco, California 94106 Jane E. Cosgriff, Esq.
McCutchen, Doyle, Brown Clarice Turney & Enersen 3900 Main Street Three Embarcadero Center Riverside, California 92521 28th Floor San Francisco, California 94111 Joseph Rutberg, Esq.
Benjamin H. Vogler, Esq. Harold R, Denton, Director Jack R. Goldberg, Esq. Office of Nuclear Reactor N.R.C. Staff Counsel Regulation U.S. Nuclear Regulatory Commission Nuclear Regulatory Washington, D.C. 20555 Commission Room P-428 Bethesda, Maryland mA
/ John Michael Adragna //
March 10, 1982 Law offices of:
Spiegel & McDiarmid 2600 Virginia Ave., N.W.
Suite 312 Washington, D.C. 20037 202-333-4500
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