ML20055A264
| ML20055A264 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 07/14/1982 |
| From: | Vogler B NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Cutler M JUSTICE, DEPT. OF |
| References | |
| ISSUANCES-A, NUDOCS 8207160040 | |
| Download: ML20055A264 (11) | |
Text
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July 14, 1982 l
l Melanie Cutler, Chief
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Energy Section, Antitrust Division i
U.S. Department of Justice P. O. Box 14141 Washington, D.C.
20044 Re: Midland OL Antitrust Review In the Matter of CONSUMERS POWER COMPANY (Midland Plant, Units 1 and 2)
Docket Nos. 50-329A, 50_330A
Dear Ms. Cutler:
Pursuant to Section 105(c)(2) of the Atomic Energy Act, as amended, and the Commission's Rules thereunder, I am enclosing for your review and comment a draft "Opercting License Antitrust Review Finding of No Significant Change" for the captioned nuclear units. This document was prepared by the Antitrust and Economic Analysis Branch, Office of Nuclear Reactor Regulation.
If you have any questions concerning this document or the nuclear facilities in question, please give me a call.
Sincerely, Benjamin H. Vogler Deputy Antitrust Counsel
Enclosure:
As stated Distribution:
NRC Docket Files Chandler PDR Chron LPDR A.Toalston Formal Files (2)
E.Adensam pggf Cunningham/Murray D. Hood Christenbury/Scinto DESIGNATED ORIGINAL Rutberg Vogler certified By (? o e,fu e
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DATE :7//6/82
- 7/t /82 8207160040 820714 PDR ADOCK 05000329 M
MIDLAND PLANT, UNITS 1 AND 2 Operating License Antitrust Finding of No Significant Change A.
Introduction Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an Operating License application if significant changes in the licensee's activities or proposed activities have occurred since the construction permit antitrust review. Authority to make the significant change detennination was delegated to the Director, Office of Nuclear Reactor Regulation (NRR) (for reactors) and to the Director, Office of Nuclear Material Safety and Safeguards (NMSS) (for production facilities) as appropriate.
The Nuclear Regulatory Commission in a Memorandum and Order (CLI-80-28) dated June 30, 1980,1 set forth three criteria upon which to base a "significant change" determination as follows:
(1)
The change or changes must have occurred since the previous construction permit review; (2) The change or changes must be attributable to activities or proposed activities of the licensee; and 9
1 11 NRC 817, 824 (1980).
See also 13 NRC 862 (1981).
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(3) The changed situation must have antitrust implications which would likely warrant a Commission remedy.
The staff,2 has reviewed the activities and proposed activities of the applicant, Consumers Power Company, that have transpired since August 4, 1980 when construction permits CPPR 81 and CPPR 82 were amended by appending antitrust license conditions (DocketNos.50-329A,50-330A).
It is the staff's conclusion that no "significant changes" have occurred subsequent to that time.
B.
Background
Consumers Power's application for a construction permit was filed on January 13, 1969, before Section 105c of the Atomic Energy Act of 1954 was amended'to require prelicensing antitrust review.
Under Section 105c(8), the " grandfather clause," the Midland construction permits were is' sued subject to appropriate action
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as a result of the subsequent antitrust proceeding.
On December 15, 1972 Construction Permits CPPR 81 and CPPR 82 were issued, which were later amended to include ~ the antitrust conditions accepted by The Atomic Safety and Licensing Board on August 4,1980 as terminating the construction permit antitrust proceeding.
1 2
The Antitrust and Economic Analysis Branch, Division of Engineering, Office of Nuclear Reactor Regulation and the Antitrust Counsel of the Executive Legal Director in consultation with the Department of Justice.
3 The antitrust proceeding centered on the specific complaints of several cities in Michigan plus the Northern Michigan Electric Cooperative, Inc. and the Michigan Municipal Electric Association.
After a lengthy proceeding, the Atomic Safety and Licensing Appeal Board found "it reasonably probable that Consumers' activities under the Midland Licenses would maintain the present situation inconsistent with the antitrust laws."3 Subsequently, Consumers Power and the other parties negotiated proposed license conditions which were approved by the staff and the Department of Justice.
These license conditions require Consumers Power (1) to offer neighboring entities an opportunity to participate in Midland Units 1 and 2 and in all future nuclear generating units for which Consumers Power applies for a construction pemit on or before December 31,1999;(2) to interconnect and share reserves with neighboring entities and to coordinate the sale of emergency power, maintenance power and energy, and economy energy; (3) to facilitate bulk power transmission between two or more neighboring entities; (4) to sell firm bulk power under tariff provisions filed with the Federal Energy Regulatory Commission, and (5) to provide access to pooling arrangements.
3 6 NRC 892 at 1098.
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C.
Changes Since The_, Construction Permit Antitrust Review 1.
Submission of Antitrust Information in Connection with the Operating License Application On December 14, 1981 Consumers Power submitted information for
" Antitrust Review of an Operating License Application." The receipt of this information was published in the Federal Register on March 8, 1982.
The notice stated that any person who wished to have his views considered with respect to significant changes related to antitrust matters which occurred in the licensee's activities since the construction permit dntitrust review were to submit their views on or before April 5, 1982. No comments in response to the Federal Register notice were received.
In addition to the information submitted by Consumers Power the staff invited comments from the Lansing Board of Water and Light, the Michigan Public Power Agency, the Michigan South Central Power Agency, and the Municipal Cooperative Pool, c/o Wolverine Ele.ctric Cooperative, Inc. The only response was made by the Michigan Public Power Agency (MPPA), a joint municipal power supply agency which was formed subsequent to the Midland case and which responded for the itichigan South Central Power Agency.4 MPPA owns generation and transmission, and represents 15 cities and 3 villages as follows: '
4 Letter to Stephen S. Skjef, Chief, AEAB, NRC from Richard I. Gorman, General Manager, dated May 10, 1982.
5 (1) cities of Bay City, Charlevoix, Croswell, Grand Haven, Harbor Springs, Hart, Holland, Lansing, Lowell, Niles, Petoskey, Portland, St. Louis, Traverse City, Zeeland, and (2) the villages of Chelsea, Paw Paw and Sebewaing.
MPPA stated that it had several discussions with Consumers Power regarding the implementation of the Midland licence conditions.
Based upon these discussions MPPA believes that the matters raised can be resolved, and therefore, they do not request an operating license antitrust proceeding.
D.
Analysis of the Changes in The Licensees' Activities since the Construction Pennit Antitrust Review Since the construction permit antitrust review the activities of Consumers Power have revolved around the implementation of the license conditions.
These activities are discussed in the following.
1.
Access to Generation Based on recent cost analyses plus other factors, the municipal and cooperative electric systems chose not to purchase an owner-ship interest in the Midland plant. However, ten members of MPPA
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6 purchased a 4.8% undivided ownership interest in Campbell 3, a
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coal-fired unit with a capacity of 770 Mw. The Wolverine Electric Cooperative and the Northern Michigan Electric Cooperative purchased a total 1.89% undivided ownership in Campbell 3.
Some systems are also considering purchasing additional capacity from Consumers Power.
2.
Coordinated Operations Since the settlement reached in August 1980, Consumers has expanded its coordination activities with various municipal and cooperative systems including MPPA and the Michigan South Central. Power Agency which represents three cities and two villages.5 These agencies supplement the individual planning efforts of their members, and broaden the options available to the smaller systems. As a result of the Midland license conditions, coordination agreements between Consumers and these various entities are based on an equalized reserve basis rather than requiring a fixed minimum reserve 7
percentage.
Thus, these entities will not be required to maintain an unequal proportion of generation capacity.
i 5
The Michigan South Central Agenci is a joint agency created in 1979 to serve the bulk power supply requirements of the Cities of Hillsdale, Coldwater and Marshall, and the Villages of Union Cities and Clint6n.
See Enclosure 1 p. 3 of December 14, 1981 letter from Consumers Power Co. transmitting antitrust infonnation relative to Regulatory Guide 9.3.
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Negotiations between Consumers Power and the municipal and co-operative systems are continuing, regarding future transmission availabilitiy. The latter'are se'ekino increased us'e of Consumers 1
Power's transmission system as wel'ljs coordination by Consumers i
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Power with systems which are not directly interconnected with
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Consumers.
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3.
Transmission Service O
Consumers Power has filed'with the' Eederal Enersy Regulatory Com-mission unifonn. transmission servic'e tariffs v'ilich provide for 4
fina and interruptible transmission service to any electric utility located in Consumers Power's service area.
These trans-i J
mission sorvice tariffs became effective in January 1980 and remain in effect.
In addition, several entities have purchased an ownership interest in
'various 345 Kv transmission lines.
The Michigan Public Power Agency, Wolverine Electric Cooperative and Northern Michigan Electric Cooperative j have purchased ownership interest in 345 Ky transmission lines which have allowed them to have effective access to Consumers Power's Campbell 3 unit. The purchase by the Michigan South Central Power Agency of an ownership interest in a 345 transmission line will facilitate the transfer
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of bulk power requirements to and among its members including exchanges of emergency power, economy energy, and short term capacity and energy.
Bay City, a wholesale power customer of Consumers Power is negotiating to purchase sub-transmission facilities from the company.
Ownership, of these lines would make the purchase of wholesale power by Bay City more economical.
MPPA and other sytems are continuing their negotiations with Consumers Power in order to facilitate operational power supply coordination, and to facilitate its purchasing of interests in generating units owned by others.
4.
Sale of Firm Bulk Power Consumers Power provides wholesale electric service to 19 electric utilities at average system ' cost under rate "WR" as currently filed with the Federal Energy Regulatory Commission.
While nearly all of these utilities have purchased wholesale power from Consumers Power for the past several years, two cities, Hart and Hillsdale, began to receive wholesale service since August 1980.. According to MPPA, these electric systems are dependent upon wholesale power purchases from Consumers Power-to economically serve their load, and since the availability of such wholesale power is provided for
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9 under the license conditions it is taken into account in the group's system planning.
5.
Access to Pooling Arrangements Municipal and cooperative systems in Michigan are considering establishing an energy broker system to coordinate the exchange of surplus power and energy.
And while the municipal and cooperative systems state that they are seeking rights to the Detroit Edison and Consumers Power pool, Consumers Power has received no requests, for membership in any pooling arrangement in which Consumers Power is presently a party.
E.
Conclusion The activities of Consumers Power subsequent to the construction permit antitrust review have been focused on implementing the license conditions attached to the Midland construction permit.
Municipal and cooperative alectric utilities in Michigan are co-ordinating their planning and operations with Consumers Power and have purchased ownership interests in some of the company's generation and transmission facilities.
In addition, Consumers Power has filed transmission and wholesale service tariffs with the Federal Regulatory Commission providing for uniform tariffs for similar m,<
10 service to any electric utility'lo;ated in Consumers Power's service area.
Under these agreements, Consumers Power provides firm bulk power at wholesale, emergency power, economy energy, and short term capacity and energy.
Thus, the changes in the applicant's activities since the completion of the Midland construction permit antitrust review do not have any.
antitrust implications and therefore, do not require a further, formal antitrust review at the operating license stage.
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