ML20070U789
| ML20070U789 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/04/1991 |
| From: | Huehmer H HUDSON, MA |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9104100002 | |
| Download: ML20070U789 (2) | |
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U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Attn:
Chief, Policy Development and Technical Bra :h Of fice of Nuclear Reactor Regulation Re:
Public Service Company of New Hampshire; Transfer of Ownership Interest and 2ransfer of Management, Docket No.
50-443; Federal Register Notices of February 28 and March 6,
1991
Dear Commission:
Hudson Light and Power Department (" Hudson") a Joint Owner of Seabrook and a Massachusetts Muniqipal Light Department, hereby cubmite its comments relating *to the antitrust issues raised by the proposed treasfer of the license for'the operation of the Seabrook Station, as described in the Commission's notices published February _28, 1991 at 56 Fed. Rec. 8373-75 and March 6, 1991 at 56 fed. Rec. 9372-74, 9384.
Hudson adopts and incorporates herein the comments submitted by the Massachusetts Municipal Wholesale Electric Company ("MMWEC")
on April 1, 1991' pursuant to the above referenced notices.
A copy of MMWEC's comments is attached hereto.
Like MMWEC and certain other Joint Owners (whose Seabrook shares total approximately 30%), Hudson is not a signatory to the July 19, 1990 Agreement.
Q0 91041C0002 910404 PDR ADOCK 05000443 l
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i U.S. Nuclear Regulatory Commission April 4, 1991 For the reasons set forth in MMWEC's comments, the Commission must act to prevent ortheast Utilities from maintaining a situction incoa~'_ cent with the policies of the antitrust laws.
At a minimur, the Commission should condition approval of the license transfer to require appropriate amendment of the Joint j
Ownersbip Agreement and to prohibit North Atlantic Energy j
Corportation, North Atlantic Energy Services Corporation and their affiliates from freeing themselves from liability for misconduct, i
Sincerely,
) r2 ff.fjY.'i $.ai f H'.
HUEHMER Manager HH/mak l
cc:
Ted-C. Feigenbaum John F.
Opeka Thomas T.
Martin George L.
Iverson Victor Herses Noel Dudley j
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Washington, D.C. 20$55 ATIENTION:
chief, Policy Development JL.% Technical Branch office of Nuclear Reactor Regulation Rat Pumlic service Co.-of New Hampshirer Transfer of ownership Intersata and Transfer of Management, Docket No. 50-443; Tederal Register Noticac of Fabruary 28 and March 6, 1991
Dear Commission:
The Massachusetts Municipal Wholesale Electric company
("MMWEc"), a joint ownar of seabrook and a Massachusetts : Joint m ion electric power agancy, haraby submits its comments
+ relating to ths antitrust issues raised by the proposed transfer ofthelicensefortheoperaE.innofthesembrookStation,as asseribad in the Commissiends notices published rebruary 28, 1991 at $6 Egd. Eng. 8373-75 and on March 6,1991 at 56. Zed. Eng.
9372-74, 9384.
The transfers sought in this case are associated with Northeast Utilities * ("NU") proposs.1 acquisition of Publio Service company of New Hampshire (*PSNH").
The Naclear Regulatory commission (" commission") has declared that it vill MT h,Eg. gyp;tN ~'
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consider the FEAC proceeding concerning this proposed acquisition "to the maximum extent possible."
The Administrative Law Judge
(#AIJ') in the FR'RC proceeding has already determined that the j
competitive structure.cf the How England electri1 utility induWtry would be phenged as a result of the merger and the accompanying license transfer., Northeast uti11etam service Company (RIt Public Service Company of New Hampshire), 53 FERC para._ 63,020 at p. 65,215 (Z).
Such a chango M urly constitutes a greater than de minis 11 license modification varranting further antitrust rev.la.
- m. etwees.e,a sh e ef eie. er wusa.ac Remotor segulation (the " Director") shocid find that significant changes in the licensee's activities and proposed activittee, inconsistant with the policies of the entitrust laws, have occuM after the-i 1-Atterney General's Advice Lattar en seabrook leaued-December 4, 1973.
$ag gputh can miina flantrie am3 can emany, (Vir,,1 C.
Summer Nucisht 8tstion, Unit No.1),- 13 NRC 442, 864, n.3 (setting forth criteria for a finding' of aignitf. cant changes).
Conditions imposed on 1!he merger by the FERC AIJ Will not restive alequately antitrust-issues for purposes of the Atomic Insegy Act.
FERC's staMard of revi6w requires only that the applicant show that the merger is compatible with the public interest.
Utd Power s rAsht co- (Opinion No. 318), 45 FERC para. 61,095 at p. 61,278-379 and 61, 299 (1986).
Anticompetitive acquisitions are permitted under this standard.
Pierida pnwar & f.taht ca,,' 8 PEmC part. 61,221 at 61,457 (1979).
However, the Atomic Energy Act requires the NRC to guard against an acquisition creating or maintaining a situation
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inconsistent with the polioles of antitrust laws, irrespective of
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any compelling public interest.
42 U.S.C. 12135.
The commission must independantly evaluate the anticompetitive situation and impose appropri.a conditions beyond those imposed by FFRC.
The NRC Ptaff has already recognized that conditions additional to those imposed by the T u c AIJ are required by tbs Atomic Enargy Act.
In this regard, the NRC staff conditioned the propoemd transfer to prohibit North Atlantic 2nergy service corporation
("NAEsco") from marketing or brokering seabrook power.
NU's acquisition of PSHH's share of Baabrook is intertwined with and would exacarbate tae anticompetitive situation, already found to exist by the Fu c AIJ.
NU currently controls a substantial percentage af New England's power suppAy and surplus cur. orating capacity.
The merger will further extend NU's control over the surplus generating caps. city in New nglanc, because NU will gain ocntrol of,.intar AM4, PSNN's 35.64 share of 56abrook capacity.
143 53 FERC at p. 46,215.
The rest of New England ia nr will be capacity doricient
- n addition, t.hw merger vill expand and in some vi,ys perreat NU's control over transmission and therefore its ability to control or stymie sther New England utilities' access to power supply alternatives.
Tuus, there is an impertant nexue between the seabrook nuclear license and the anticompetitive situation sufficient to warrant independant NRC action.
ce~nare reams can and 21aatrie coengg,
1 NRC $$9, 569 (1975); ceMaumarm Fat,er emnanv, 6 NRC 892, 917 (1977).
As to seahrock specifically, the FRC AIJ'm consideration vns limited to synergies of NU'e tkkoover of PSNN.
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~4-The FERC A!J did net address the anti-ccmpetitive aspects of NU's I
sanagement and operatien of Seabrook.
Thi: issue should be i
addressoa in the commission 3a review of the requested licanse transfers.
NU has used its markat power to insulate and exculpate itsmit from liability associated with its acquisition of P8NH's Benbrook intarast and its takeover as Managing Agent to operate Seabrook.
Unlike PSNH. which owned and operated Saabrook as part of its overall utility operations, NU preposas to sever both the ownarahip function and managemant function of seabrock frot anoh other and frcm its acquisition of PSNN's non-Seabrook assets.
It proposes to amend facilities 11cansa No NPF-S6 to permits (1) ownerabip of P5NN's Seabrook internet by a subsidisry, North Atlantic Energy. Corporatien (Narco) wi,th no assets other than the former PSNE Estbrook intarasts and (2) management of Seabrook through the newly created NAE 8co, a subsidiary with no assets at all.
NU's anticcupatitive tarke't power is dar.cnetrated by the July 19, 1990 Agreement which, among ethat things, provides for NAESCO to take over as Managing Ngent to operane Seabrook.
Sea Exhibit 1 to the application.
NU won support for the July 19, 1990 Agreement from other joint ownars, United Illuminating Company (*U%*) and New England Power Company (*NEP*), by antering into settlement agreements, which provide U and NEP with special transmission benefits in exchange for U* sad NEP ac @ie:cance in NU's acquisition of P8NE.
The July 19, 1990 Agramment exculpates NAESCC and its at:111ates frc:a 1.iab111ty for breach of tua Joint ownarship 4
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, Agreement anc related agreementa except for their villful aiscenduct.
The exculpatory clause purportedly would not only free NArsco and its affiliates from harm done directly to NNEC but also from responsibility for thirc party claims by others against MMWIC for any hart related to Seabrook.
HN RC cannot i
insure any reckless or negligent conduct of the Managing Agent 'or its affiliates.
Een HNWEc has cbjected to the exculpatory clause contained in the various agreements presented to the joint owners for approval, NU has repeatedly responded that the clause was agreed to in the July 19, 1990 Agreement.
Yet 10$fRC and cartain other joint owners (whose seabr @ : ownership'shas,es total appcximately 30%) are not signatorise to the July 19, 1990 Agreement.
' Undoubtedly, the Joint Ownership Agreement la the sesinal document governing seabrook.
The July 19, 1990 Agreement is predicated on the' provision in the Joint ownership Agreement '
-paraitting a change in Managing Agent based on a vote of at least
$14 of the ownership shares, which NU has been able to mustar through sittlements with L'I and NtP.
Ansadacnt of the Joint-ownership Agreement requires an affirmative vote of joint ownere owningatledettotofthe.ohnership. shares,apercentageNUhas been unable t, e n eve.
.5 has neverthelese proceeded to install NAESCC as Managing Agent (including this application to the NRC).
NU is' executing a plan whereby it has separated the Seabrook management function and the ownership function fras each othsr and utilized its market power to insulate itself, those' functione azd its other affiliates from any-liability, except liability imposed by willful misconauct.
NU does not seek to
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S!NiDY:1NILKST, BOSTON
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execute this plan through the Joint Ovnership Agreement.
- Rather, NU relies en the July 19, 1990 Agreement which was entered into by othat seabrook joint owners which settled their anti-ocapetitive complaints in the FERC oase.
NNWEC contands that the unrestricted transfer of the license, as proposed by NU, merely ij furthers this anticompatitive schase.
The Commission must act to prevent NU from maintaining a situation inconsistent vihh the policies of the antitrust laws.
At a minimum the cognaission abould condition approval of the liconaa transfer to require appropriata amendmant of the Joint ownership Agressent and to prohibit NAEco, NAESCO and their affiliates from trating themselves from liability for misconduct.
Sincerely, dAe /
Alan J. Ro k [ M Scott H. Strauss David E. Pomper SPIEGEL & NoDIARKto 1350 New YorX Avenue, N.W.
Suita 1100 Washington, D.C. 20005 (202) 879-4000 HACAo4rAf. M % A,wt Nicholas J. Scobbo, Jr.,
-. Robert Granger TERRITER, SCctBO, 5IKORA, CARfJSC & JtCDCPHELE one Milk Street Bos. ton, MA 02109 Attachments April 1, 1991 cc: Mr. Ted C. Falcanbaum New Rantahlre fankee Saabrook station l
Route 1, Lafayette Road P.O. Bor 300 seabrock, New Rampshire 03874 t
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