ML20059C995
| ML20059C995 | |
| Person / Time | |
|---|---|
| Site: | Perry  |
| Issue date: | 08/27/1990 |
| From: | Straus D SPIEGEL & MCDIARMID |
| To: | Murley T NRC |
| References | |
| A, NUDOCS 9009060038 | |
| Download: ML20059C995 (7) | |
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August 27, 1990 2?
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m Dr. Thomas E. Murley R
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Director Ei y
Office of Nuclear Power Regulation 2
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United States Nuclear Regulatory i
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U1 Re Ohio Edison letter concerning Application to buspend Nuclear License Conditions (Perry Unit No. 1, NRC Docket No. 50-440A)
Dear Dr. Murley This letter is written on behalf of American Municipal Power-Ohio, Inc. (AMP-Ohio) in response to Ohio Edison Company's July 24, 1990 letter presenting what we hope is its last gasp effort to convince the Commission to overturn law, tradition and con.non sent.e by " suspending" the antitrust license conditions which have he.lped create a competitive environment in Ohio's electric utility industry.
AMP-Ohio has already filed extensive comments (as did others) demonstrating the legal, factual and epitable infirmities in Ohio Edison's position.
Apart from an affidavit from Mr. Joe D. Pace -- described by Ohio Edison as an " expert in utility antitrust matters" -- Ohio Edison presents nothing new, and AMP-Ohio will neither repeat nor even summarize its earlier contentions.
We would take this opportunity, however, to comment on Ohio Edison's attempt to create a mini evidentiary hearing with As to that affidavit AMP-Ohio has the filing of the affidavit.
First, we note that Dr. Pace testifled in the two comments.
proceedings leading to the establishment of the antitrust 00136 9009060038 900827 T
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Dr. Thomas E. Murley August 27, 1990 Page 2 conditions, opposing them on behalf of the Applicants.
The Licensing Board rejected his theories.
5 NRC 133 at 164-65.
Second, as to Ohio Edison's characterization of Dr. Pace as a utility antitrust " expert," AMP-Ohio submits that an examination of Dr. Pace's years of experience shows that he might better be described as a utility F.ntitrust apologist.
For example, in a recent hearing at tne Federal Energy Regulatory Commission examining the proposer 1 merger of Southern California Edison Company and. San Diego Gar & Electric Company, Dr. Pace testified on behalf of the appl. cants to the effect that the merger would not present competitive problems.
In so doing, he demonstrated the risk of relyirg upon his views.
During cross-examination by an attorney for municipal electric systems concerned with the competitive implications of the proposed merger, Dr. Pace testified in a span of three transcript pages (attached), that throughout all of his experience he had never identified transmission as a separate product market,ity, never never identified any essential facility of an electric util found significant retail competition in the utility industry and, finally, never " identified any situation involving the electric utility industry where (he) concluded that there was an antitrust problem which should be remedied."
Quite clearly, while AMP-Ohio believes that Dr. Pace is out of touch with (or refuses to concede the existence of)iews reality, it should be beyond legitimate dispute that his v are out of touch with the views of this Commission, as expressed i
in its antitrust license condition rulings.
As stated earlier, we respectfully refer the Commission to our earlier filings which address and refute Ohio Edison's contentions.
We would add here two short matters.
First, AMP-Ohio points out that the pending revisions to the clean Air Act, which will undoubtedly cause significant increases in the cost of fossil fuel electric generation, as well as the recent events in the Middle East, demonstrate the validity of AMP-Ohio's previously expressed views that a " snapshot" of relative energy costs provides no basis for tinkering with license conditions affecting relationships in an industry characterized by and dependent upon very long-term commitments l
and relationships.
Second, in an effort to bring the Commission up to date on Ohio Edison's conttSuing history of ignoring the license conditions, AMP-Ohio reports that on July 13, 1990, a three-member arbitration panel ruled (2-0, but without dissent even from Ohio Edison's non-neutral arbitrator) that Ohio Edison had breached a 1983 contract with AMP-Ohio by unreasonably withholding its consent to the addition of second delivery points for two AMP-Ohio member communities.
Such refusal and contract m
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Dr. Thomas E. Murley August 27, 1990 Page 3 breach, a fortiori, represent non-compliance with License Condition 2, which requires interconnection on reasonable terms.
Unfortunately, Ohio Edison's breached contractual commitment to be reasonable has expired, so that the remaining nineteen AMP-Ohio members connected to its transmission system.are dependent upon the license condition and may not seek relief under the contract.
We urge the Commission to deny Ohio Edison's request.
Respectfully submitted, M
Of Counsel:
Straus John Bentine, Esq.
Attorney for American Municipal i
Bell & Bentine Power-Ohio,-Inc.
33 South Grant Avenue Columbus, Ohio 43215-3927 cc: Attached Service List DRS:bf i
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A Try again, please.
2 Q
How about now?
3 A
Yes.
4 Q
Dr. Pace, how many cases have you participated h
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in involving application of antitrust principles in the 1
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electric utility incuntry?
7 A
Quite a number.
8 li Q
More than 10?
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A I believe so.
i 10 Q
More than 207 11 A
I don't know.' You would probably count them up 12 from the professional background sketch that I included 13 with my testimony.
14 Q
So many that you have lost track, though; right?
15 A
I try to shut them out of my mind.
16 l
Q In any of those cases, have you ever identified l
17 the transmission as a separate product market?
l 18 A
I don't believe so.
19 Q
Have you ever identified a situation where lack 3
l 20 of transmission access created an antitrust concern or 21 problem?
l 22 A
I don't believe so.
L L
23 Q
Mave you ever identified an essential facility i
I 24 I in any case involving the electric utility industry?
I don't believe so..I have had testimony that 25 A
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Q But you never concluded that a particular 4 L facility constituted an essential facility in the context l
0 5
j of a case you were involved in.
l 6
j A
I don't believe so.
1 7
Q Have you ever identified retail competition in 8
the electric utility industry that you considered 9
economically significant?
10 A
I'm not sure about that.
In general, I have 11 found it not to be significant, but there may have been i
12 some exceptions.
13 Q
Do you recall the context of any of those 14 exceptions?
15 A
I recall that in one proceeding there was 16 substantial prospect of customers who were already located 17 l
to directly switch back and forth among suppliers, and I
18 I
that was some years back.
I don't recall how I analysed 19 that or how significant it was.
20 (Discussion off the record.)
21 BY MS. BLAIR:
l 22 Q
The situation that you just described where 23 customers might switch back and forth, would you consider 24 i
retail competition significant in any situation where 25 customers could change from one supplier to another?
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1 A
No, not necessarily.
2 Q
What other criteria would you look at?
3' A
The number and significance of such customers.
4 Q
Significance in terms of level of sales?
5 A
I would think in terms of electricity purchases 6l or revenues, some measure of that sort.
Probably also I 8
7 would want to consider whether the utilities involved were l
8 'i free to set different terms and conditions in order to h
9I engage in that competition.
i 10 l Q
Have you ever identified any situation involving I
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the electric utility industry,where you concluded that f
12 there was an antitrust problem that should be remedied?
A I don't believe so.
13 j 14 Q
Let me ask you to look at Exhibit 233, which is 15 l your direct testimony at page 6, and specifically lines 1 i
16 l
to 3.
There you discuss the objectives of merger i
17 analysis.
In addition to the factors you mention, would 1
18 j it be appropriate to consider whether a merger would 19 i
increase opportunities to exercise existing market power?
20 A
I would think that that would come under 21 significantly increase market power.
22 Q
Would it be appropriate to consider whether a i
23 i
merger would increase the incentives or motivation to 24 exercise existing market power?
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A I suppose the usual concentration is on market 25j s
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9 4
t SERVICE LIST Stephen Charnoff, Esq.
Gregg D. Ottinger, Esq.
Shaw, Pittman, Potts &
Duncan, Allen and Talmadge Trowbridge 1575 Eye Street, N.W.
2300 N Street, N.W.
Washington, D.C.
20005 Third Floor Washington, D.C.
20037 James P. Murphy, Esq.
Squire, Sanders & Dempsey Anthony Alexander, Esq.
1201 Pennsylvania Ave N.W.
Office of General Counsel P.O. Box 407 Ohio Edison Company Washington, D.C.
20044 76 South Main Street Akron, Ohio 44308 Victor F. Greenslade, Jr.
General Counsel Janet Urban, Esq.
Centerior Energy Corporation United States Department 6200 Oak Tree Boulevard of Justice Independence, Ohio 44101 Antitrust Division Room 9816 JCB 555 4th Street, N.W.
Washington, D.C.
20001 Reuben Goldberg, Esq.
Goldberg, Fieldman &
- Letham, P.C.
1100 Fifteenth St NW Suite 200 Washington, D.C.
20036 June W. Wiener, Esq.
City Hall, Room 106 601 Lakeside Avenue Cleveland, Ohio 44114 Joseph Rutberg, Esq.
Office of the General Counsel Nuclear Regulatory Commission 1717 H Street, N.W.
10th Floor Washington, D.C.
20555 Mr. Nelson E. Summit City Manager 222 N. Main Street Clyde, Ohio 43410
.