ML20062F264
| ML20062F264 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 11/15/1978 |
| From: | Hart R, Hjelmfelt D, Schulman J CLEVELAND, OH, FT. COLLINS, CA |
| To: | |
| References | |
| NUDOCS 7812150279 | |
| Download: ML20062F264 (11) | |
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C ' I.4 UNITED STATES OF AMERICA I
NUCLEAR REGULATORY COMMISSION t
BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD i
4 In the Matter of
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The Toledo Edison Company
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Docket Nos.
50-346A-The Cleveland Electric Illuminating
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50-500A Company
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50-501A-(Davis-Besse Nuclear Power Station,
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Units 1, 2 and 3)
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The Cleveland Electric Illuminating
)
i Company, et al.
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Docket Nos.
50-440A (Perry Nuclear Power Plant
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50-441A j
Units 1 and 2)
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i REPLY OF THE CITY OF CLEVELAND TO APPLICANTS' COMMENTS ON l
OHIO HOUSE BILL No. 577 l
a By letter of October 13, 1978 Applicants requested the
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Appeal Board to take judicial notice of Ohio House Bill No. 577.
By its order of October 20, 1978, the' Appeal Board requested i
Applicants to advise it by November 3, 1978:
(1) whether the bill had been enact.d into law; and (2) whst relevance the enact ant has to th* issues before the Appeal Board in this appeal.
Other parties were given until November 20, 1978, 7812150 277 f
to comment upon Applicants' November 3 filing.
City of Cleveland (City) submits the following comments.
First, the statute makes no change in the existing competitive relationships between municipalitics and investor-owned or consumer-owned electric utilities.
This is clear from a reading of the statute, and City does not understand Applicants to contend otherwise (Applicants' comments p.
.5 ).
Rather Applicants rehash their arguments relating to limitations on the ability of wholesale or partial requirements municipal customers, to sell " surplus" energy outside of the municipal boundaries.
Their arguments were rejected by the Licensing Board and have been fully briefed snd argued on Appeal.
City will not repeat its arguments; suffice it to say City does not agree with Applicants.
S e c o n.1, the statute has no application to sales for resale or sales in the regional power exchange narket (House Bill No. 577, Section 4 9 3 3. 81'( F) ).
Third, the only effect of the statute is to reverse the long standing Ohio policy of no certificated retail market areas for investor-owned and consumer-owned electric utilities.'
Such utilities will, after July 1, 1979, have state certified retail sale areas.
Applicants argue that the statute formalizes the policy behind the "90-day disconnect provision" which had established defacto exclusive service areas (Applicants' comments
- p. 6).
In fact, the new legislation differs-in many respects.
The "90-day disconnect provision" did not prevent an existing
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-3 customer.from changing electric suppliers haless the existing supplier objected.
Moreover,-the "90-day disconnect provision"
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did not preclude competition for new retail customers, although it did.sciffle franchise competition which'is specifically preserved by House. Bill No. 577.
With this understanding of-House Bill No. 577, City will turn to Applicants' discussion of the relevance of'the statute to these proceedings.
l Territorial Agreements l
l Applicants first assign relevance to the Licensing Board's findings that Applicants entered into territorial l
agreements dividing among themselves various retail markets, (Applicants' comments p. 7).
Here again, it is well co keep.
in mind that the statute has no relevance to territorial limitations imposed by contract upon Applicants' municipal wholesale customers.
Nor doe,s the statute have any relevance to the territorial agreements between Applicants insofaras they apply to wholesale sales (IDFF 113).
The only relevance then is to territorial agreements dividing retail markets between investor-owned or consumer-owned utilities.
The statute does not purport to ratify.or make legal pre-existing retail market divisions.
Nor does the statute authorize or require that any utility extract an agreement establishing service territories as a condition of the sale,
or exchange of electric energy, or the grant, or sale of
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_4 bulk power services.
Accordingly, there is no conflict between the statute and License condition 1.
a.
Importantly, the statute specifically preserves the opportunity for franchise competition in the retail' market.'
The final sentence of Section 4933.83(A) states:
In the event that'a municipal corporation refuses to grant a franchise or contract for electric service within its boundaries no an electric supplier whose certified territory is include'd within the munici-pality, any other electric supplier may serve the municipal corporation under a franchise or contract with-the municipal corporation.
It can not be argued that the policy of the State of Ohio is that there should be no retail competition of a franchise nature in light of enactment,of House Bill No. 577.
Quite the contrary is true.
The Supreme Court held that franchise competition was protected by the antitrust laws in Otter Tail Power v.
United States, 410 v.
366, as did the Appeal Board in its decision in Consumers Power Company (Midland Plant Units 1 and 2) ALAB-452 (Slip Op.
p.
180-183).
The territorial agreements, which Applicants argue, are somehow validated by House Bill No. 577 precluded the very franchise competition which the. State of Ohio seeks to have continue.
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l The Licensing Board found " insufficient. evidence that.
the territorial allocation agreements have been terminated" I
and that "the effects of such agreements continue" (IDFF 114).
House Bill No. 577 does nothing to remove.those effects on 1.
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franchise competition, The Buckeye Agreement i
I Applicants argue that repeal of_the 90-day. disconnect statute, by House Bill No. 577, removes any restriction on f
sales of wholesale power under the Buckeye Agreement and thus eliminates antitrust concern.
Applicants' thesis is that the Buckeye Agreement merely incorporated by reference Section 4905.26.1 Revised Code of Ohio, and repeal of the Section renders the incorporation by reference meaningless, (Applicants' Comments
- p. 8-9).
l In fact, the actual language of the Buckeye Agreement does more than merely incorporate by reference Section 1
4905.26.1.
The agreement st&tes (NRC 188.p. 3):
...there shall not be included in the Buckeye Power Requirement any quantity of electric
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power and/or energy furnished to any consumer when the furnishing of power and/or energy to such consumer by a Buckeye Member is proscribed by the law of the State of Ohio reflected in Section 4905.26.1, Revised Code of Ohio, 'as-said i
i Section is in effect at the date of this agreement.
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. It is unde rs tood and agreed that the term
" consumer",as used in said Section 4905.26.1, applies to any customer of a power and/or energy supplier wh. ether served at wholesale or at retail.
(emphasis supplied)
Under the express terms of the Buckeye Agreement, repeal of Section 4905.26.1 does not eliminate the r.estriction in the Agreement.
Moreover, it is clear that the parties to the Agreement did more than mersly incorporate Section 4905.26.1; they expanded its scope to apply to wholesale customers.
The Buckeye Agreement remains anticompetitive in that it restricts wholesale competition, and it restricts retail competition of a franchise nature, contrary to the antitrust laws, and the policy of the State of Ohio.
House Bill No. 577 Supports The Licensing Board's Retail Market Analysis Applicants renew their argument that the Appeal Board
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must respond to the policy issues raised by the limited nature of competition in the electric utility industry in Ohio and Pennsylvania (Applicants' comments p.
10-13).
House Bill No. 577 has absolutely no impact on the situation in Pennsylvania.
Within Ohio, House Bill No. 577 does not impact upon the types of retail competition of most concern to the Licensing Board, i.e.,
franchise competition and competition between municipal electric
systems and Applicants.
Even within'the limited area of direct retail competition among investor-owned and consumer-owned utilities, the actual impact of House Bill No. 577 may be slight.
The Licensing Board' observed-(IDFF 114, 5 NRC
- p. 194-195):
It requires no analysis, it is axiomatic,-
that, with this factor in the industry, territorial and customer allocation agree-ments cause rigidity in the market.
The longer they are in force, the less they are needed.
As Ohio Edison expanded its transmission and distribution lines under unlawful protection from' competition, it irreversibly carved out for itself strong competitive advantages tending to exclude entry into its market by outsiders.
There is nothing in House Bill No. 577 which requires a reaccessment of the manner in which the Licensing Board applied the antitrust laws to the electric utility industry in Ohio.
Conclusion City does not object'to the consideration of House. Bill No. 577 by the Appeal Board.
Enactment of the bill by the Ohio legislature clearly demonstraces that'the Licensing Board was correct in its findings with regard to the retail market.
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The State of Ohio has expressed its policy that franchise competition should remain free and unfettered.
It is entirely appropriate that the antitrust laws be applied to strike down private agreements which would restrain franchise competition.
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Respectfully submitted
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David C.
Hj elmf elt.
j Suite 830 300 West Oak Fort Collins, Colorado 80521-Jack M.
Schulman, Esq.
Director of Law Robert D.. Hart, Esq.
i First Assistant Director of Law-i Department of Law City of Cleveland noom 106.-City Hall Cleveland, Ohio 44114 3
Reuben Goldberg, Esq.
Coldberg, Fieldman & Letham, P.C.
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Suite 650
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1700 Pennsylvania Ave.
N.W.
D.C.
20006 Counsel For The City of Cleveland
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board f
In the Matter of
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THE TOLEDO EDISON COMPANY and
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THE CLEVELAND ELECTRIC ILLUMINATING
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Docket No. 50-346A COMPANY
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(Davis-Besse Nuclear Power Station,
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Unit 1)
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THE CLEVELAND ELECTRIC ILLUMINATING
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Docket Nos.'50-440A (Perry Nuclear Power Plant,
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50-441A Units 1 and 2)
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l THE TOLEDO EDISON COMPANY. ET AL.-
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(Davis-Besse Nuclear Power Station,
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Docket Nos. 50-500A Units 2 and 3)
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50-501A l
j-CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing " Reply of the City of Cleveland to Appl,1 cants' Comments on Ohio House Bill No. 5 7 7" were served upon each of the persons listed-on the attached Service List by mailing copies, postage prepaid.
all on this 15th day of November, 1978.
I s
By:
M/bl[
sw[
2 David C.
Hjef felt Counsel for City of Cleveland, Ohio 1
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SERVICE LIST.
Alan S.
Rosenthal, Esquire Ivan W.
Smith, Esquire Chairman, Atomic Safety and Atomic Safety and Licensing Board Licensing Appeal Board U.S.
Nuclear Regulatory Commission U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Washington, D.C.
20555 John M.
Frysiak, Esquire Jerome E.
Sharfman, Esquire Atomic Safety and Licensing Board Atomic Safety and Licensing U.S.
Nuclear Regulatory Commission q
Appeal Board Washington, D.C.
20555 j
U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Atomic Safety and Licensing Board Panel Richard S.
Salzman, Esquire U.S.
Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.C.
20555 Appeal Board U.S.
Nuclear Regulatory Commission Docketing & Service Section Washington, D.C.
20555 Office of the Secretary U.S.
Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.C.
20006 Appeal Board Panel U.S.
Nuclear Regulatory Commission Joseph Rutberg, Esquire Washington, D.C.
20555 Benjamin H.
Vogler, Esquire l
Roy P.
- Lessy, Jr.,
Esquire.
Donald L.
Flexner, Esquire Office of the Executive Legal Director Melvin G.
Berger, Esquire U.S.
Nuclear Regulatory Commission Janet R.
Urban. Esquire Washington, D.C.
20555 Antitrust Division U.S.
Department of Justice Terence H.
Benbow. Esquire P.O.
Box 481
, Steven A.
Berger, Esquire l
Washington, D.C.
20044 Steven B.
Peri. Esquire Winthrop, Stimson, Putnam & Roberts Wm. Bradford Reynolds 40 Wall Street Shaw, Pittman, Potts & Trowbridge New York, New York 10005 1800 M Street, N.W.
Washington, D.C.
20036 Walter T.
Wardzinski, Esquire General Attorney Jack M.
Schulman, Esquire Duquesne Light Company Director of Law 435 Sixth Avenue Robert D.
Hart, Esquire Pittsburgh, Pennsylvania 15219 First Assistant Director of Law City of Cleveland David McNeil Olds. Esquire 213 City Hall Reed Smith Shaw & McClay Cleveland, Ohio 44114 Union Trust Building Box 2009 Frank R.
Clokey, Esquire Pittsburgh, Pennsylvania 15230 Special Assistant Attorney General Room 219 Joseph A.
- Rieser, Jr.,
Esquire Towne House Apartments Reed Smith Shaw & McClay Harrisburg, Pennsylvania 17105 Sulce 900 1150 Connecticut Avenuu Washington, D.C.
20036
Donald li. Hauser, Esquire James R.
Edgerly. Esquire Victor F.
Greenslade, Jr.,
Esquire Secretary and Ceneral Counsel William J.
Kerner. Esquire Pennsylvania Power. Company The Cleveland Electric One East Washington Street Illuminawing Company New Castic, Pennsylvanta 16103 55 Public Square Cleveland, Ohio 44101 John Lansdale, Esquire Cox, Langford & Brown Michael M.
Briley, Esquire 21 Dupont Circle, N.W.
Paul M.
Smart, Esquire Washington, D.C.
20036 Fuller. Henry, Hodge & Snyder P.O.
Box 2088 Alan P.
Buchmann, Esquire Toledo, Ohio 43603 Squire, Sanders & Dempsey 1800 Union Commerce Building Russell J.
Spetrino, Esquire Cleveland, Ohio 44115 Thomas A.
Kayuha. Esquire Ohio Edison Company Edward A.
Matto, Esquire 76 South Main S treet Richard M.
Firestone, Esquire Akron, Ohio 44308 Karen H.
Adkins, Esquire Antitrust Section-Christopher R.
Schraff, Esquire 30 East Broad Street, 15th Floor.
Assistant Attorney General Environmental Law Section 361 East Broad Street, 8th Floor Columbus, Ohio 43215 I
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