ML20073B069
| ML20073B069 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/10/1991 |
| From: | Blain J TAUNTON MUNICIPAL LIGHTING PLANT |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9104240002 | |
| Download: ML20073B069 (2) | |
Text
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TntLP Taunton MunicipalLighting Rant Serving A Poohc Power Communaty April 10, 1991 U.S. Nuclear Regulatory Commission Washin, ton, D. C.
20555 Attention:
Chief, Policy Development and Technical Branch Office of Nuclear Reactor Regulation RE: Public Service Company of New Hampshire; Tranafer of l
Ownership Interest and Transfer of Management, Docket No. 50-443; Federal Register Notices of February 28 and March 6, 1991
Dear Commission:
Taunton Municipal Lighting Plant ("Taunton"), a Joint Owner of Seabrook and a Massachusetts Municipal Light Department, hereby submits its comments relating to the antitrust issues raised by the proposed transfer of the license for the operation of the Seabrook Station, as described in the Commission's notices published February 28, 1991 at 56 Fed. Reg. 8373-75 and March 6, 1991 at 56 Fed. R_eg. 9372-74, 9384.
Taunton adopts and incorporates herein the comments submitted by the Massachusetts Municipal Wholesale Electric Company C 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%), Taunton is not a signatory to the July 19, 1990 Agreement.
PostOthee Box 870 g
Taunton, Massachusetts 02780 0670 Q
% phone:508-824 5844 Fax: 508-823-6931(Main Ofhce) y ftf08-822 3782(Cleary-Flooo StatioM
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_2 For the reasons set forth in FDfWEC's comments, the Commission must act to prevent Northeast Utilities from maintaining a situation inconsistent with the policies of the antitrust laws.
At a minimum, the Commission should condition approval of the license transfer to require appropriate amendment of the Joint Ownership Agreement and to prohibit North Atlantic Energy.
Corporation, North Atlantic Energy Services Corporation and their affiliates from freeing themselves from liability-for misconduct.
Very truly yours, h
- MUNICIPAL LIGHT COMMISSION.
OF.1THE-TY OF TAUNTON y
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Pag cc Ted C. Feigenbaum John F. Opeka Thomas T. Martin George L. Iverson Victor Nerses Noel Dudley 1
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U.3. Fuclear RequiStory canission I *C "*I,*E*a7."".*5*.
Washington, D.C. 20555 ATTENTION:
Chief, Policy Development and Technical Branch office of Nuclear Reactor Regulation Re DAblic Service Co. of New Hampshires Transfer of ownership Intereste and Transfer of Management, DCket No. 50-443; Federal Register Notices of Feb. Nary 28 and March 6, 1991 Dear Commission The Massachusetts Municipal Wholesale Electric company
("MMWEC"), a joint owner of Seabrook and a Massachusetts joint action electric power agency, hereby submits its comments relating to the antitrust issues raised by the proposed transfer of the license for the operation of the Seabrook Station, as described in the Commission 8s noticae published February 28, 1991 at SS Ead. Rag. 8373-75 and on March 6, 1991 at 56 ZAd. Eng.
9372-74, 9384.
The transfers sought in this case are essociated with Northeast Utilities' ("NU") proposed acquisition of Public Servica Company of New Hampshire ("PSNM").
The Nuclear Regulatory Commission (" Commission") has declared that it will
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2-consider the FERC proceeding concerning this preposed acquisition "to the maximum extent possible."
The Administrative Law Judge
(*AIJ') in the TERC proceeding has already determined that the competitive structure of the New England electric utility industry would be changed as a result of the merger and the accompanying license transfer.
Northeast Utilitiam servien connanv (RE: Public Service Company of New Eaapehire), 53 FERC para. 63,020 at p. 65,215 (1990).
Such a change clearly constitutes a greater than de minimis license modification varranting further antitrust review.
rh. cir..e.,.e the ostie. oc nuclear maawter segulation (the " Director") should find that significant changes in the licensee's activities and proposed activities, inconsi ts ent with the policies of the antitrust laws, have occurred'after the Atterney General's Advice Letter on seabrook issued December 4, 1973.
333 south camline timetrie and ttam c= ny, (Virgil C.
Summer Nuclear Station,.tTnit No. 1), 13 NRC 462, 064, n.3 (setting forth criteria for a finding of significant changes).
Conditions imposed on the merger by the TERC AL7 vill not resolve adequately antitrust issues for purposes of the-t Atomic Energy Act.
FERC's standard of review requires only that l
the applicant show that the merger is compatible with the public interest.
Utah Power & T3erht ca. (Opinion No. 318), 45 FERC
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para. 61,095 at p. 61,278-279 and 61, 299 (1988).
Anticompetitive acquisitions are permitted under this standard.
Pierida power & Licht cm., 8 FERC part. 61,121 at 61,457 (1979).
However, the Atomic Energy Act requires the NRC to guard against an acquisition creating or maintaining a situation es=cenew a eesammam e a gig z.
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-3 inconsistent with the policies of antitrust laws, irrespective of any compelling public interest.
42 U.S.C. 12135.
The Commission must independently evaluate the anticompetitive situation and impose appropriate conditions beyond those imposed by FERC. -The NRC staff has already recognised that conditions additional to those imposed by the TERC AIJ are required by the Atoalc Energy Act.
In this regard, the NRC statf conditioned the proposed transfer to prohibit North Atlantic Energy service Corporation
(" NAE 8Co*) from marketing or brokering Seabrook power.
NU's acquisition of pSNN's share of Seabrook is intertwined with and would exacercate the antiocapetitive situation, already found to exist by the FIRC AL.T.
NU currently controls a substantial percentage of New England's power supply i
and surplus generating capacity.
The merger will further extend NU's control over the surplus generating capacity in New England, because NU will gain control of, intar alia, PSNN's 35.64 ahare of seabrook capacity.
Ama 53 Trac at p. 65,215.
The rest of New England in nr will be capacity deficient.
Zu addition, Lhe merger will expand and in some ways perfect NU's control.over transmission and therefore its ability to control or stymie other New England utilities' access to pcwor supply alternatives.
Thus, there is an important nexus between the seabrook nuclear licensa and the antiocanatitive situation sufficient to warrant independent NRC action.
carpare waname aam and nastrie e-anv, 1 NRC 559, 569 (1975) ; cannu=m power "-My, 6 NRC 892, 917 (1977).
As to Seahrock specifically, the FERC AIJ's i
l consideration was limited to synergies of NU's takeover of PSNH.
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4 The FERC AL7 did not address the anti-competitive aspects of NU's management and operation of Joabrook.
This issue should be addressed in the commission's review of the requested license transfers.
NU has used its marXat power to insulate and exculpate itaalf from liability associated with its acquisition of PSNH's Seabrook interest and its takeover as Managing Agent to operate Seabrook.
Unlike PSNH, which owned and operated Seabrook as part of its overall utility operatione, NU proposes to sever both the ownership function and management function of Beabrook from each other and from its acquisition of PSNH's non-Beabrook assets.
It proposes to amend facilities license-No. NPF-86 to pezzit:
i (1) ownerabip of PSNH's Seabrook interest by a subsidiary, North s
Atlantic Energy Corporation (NAECO) with no assets other than the 2
former PSNH Seabrook interests and (2) management of Seabrook i
l through the newly created NAESco, a subsidiary with no assets at all.
NU's anticompetitive market power is demonstrated by the i
July 19, 1990 Agreement which, among other things, provides for NAESCO to take over as Managing Agent to operate Seabrook.
See i
Exhibit 1 to the application.
NU won support for the July 19, 1990 Agreement from other joint owners, United IllPainating i
Company (*VI") and New England Power Comparv,'NEP*), by entering into settlement agreements, which provide UI and NEP with special transmission benefits in exchange for Ui and NEP acquiescence 1 NU's acquisition of PSHH.
1 The July 19, 1990 Agreenent estcMyates NAESCO and its affiliates from liability for breach of the Joint ownership
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Agreement and related agreements except for their Villful misconduct.
The exculpatory clause purportedly would not only free NAESCO and its affiliates from harm done directly to MMWEC but also from responsibility for third party claims by others against MMWEC for any hara related to Seabrook.
MMWEC cannot insure any reckless or negligent conduct of the Managing Agent or its affiliates.
When MMWEC has objected to the exculpatory clausa contained in the various agreements presented to the joint owners for approval, NU hee repeatedly responded that the clause was agreed to in the July 19, 1990 Agreement.
Yet MMMEC and
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certain other joint owners (whose seabrook ownership shares total approximately 304) are not signatories to the July 19, 1990 4
Agreement.
l Undoubtedly, the Joint ownership Agreement is the seminal document governing seabrook.
The July 19, 1990 Agreement is predicated on the provision in the Joint ownership Agreeeent permitting a change in Managing Agent based on a vote of at least l
51% of the ownership sharea, which NU has been able to austar j
through sett2saents with UI and NEP.- Amendment of the Joint l
ownership Agreement requires an affirmative vote of joint owners owning at least 80% of the ownership shares, a percentage NU has i
been unable to achieve.. NU has neverthelese proceeded to-install NAESCO 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 from each other and utilized its market power to insulate itself, those' functions and its other affiliates from any liability, except liability laposed by willfu1~ misconduct.
NU does not seek to e9
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execute this plan through the Joint Ownership Agreement.
- Rather, NU relies on the July 19, 1990 Agreement which was entared into by other Seabrook joint owners which settled their anti +
competitive complaints in the FERC case.
MMWEC contends that the unrestricted transfer of the license, as proposed by NU, merely l
furthers this anticompetitive scheme.
The Commission must act to prevent NU from maintaining a situation inconsistent with the policies of the antitrust laws.
At a minimum the Commission should condition approval of the l
licanza transfer to require appropriate amendment of the Joint ownership Agreement and to prohibit H ECO, NAESCO and th*ir affiliates from freeing themselves from liability for misconduct.
Sincerely, 0% /
Alan J. AcI. K A Scott H. Strause David E. Pomper SPIEGEL & McDIARMID 1350 New York Avenue, N.W.
Suite 1100 Washington, D.C. 20005 (202) 879-4000 VII N O f. M 4s'@,4 ad<
Nicholas J. Scobbo, Jr.,
Robert Granger FERRITER, SCOBBO, SIKORA, CARUSO & RODOPHELE One Milk Street Boston, MA 02109 Attachments April 1, 1991 cc2 Mr. Ted C. Feigenbaum New Hampshire Yankee Seabrook Station Route 1, Lafayette Road P.O.
Box 300 Seabrook, New Hampshire 03874
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Mr. John F. Opeka Northeast Uti.ities Service company P.O. Box 270 Eartford, Connecticut 06141 Mr. Thomas T. Martin Regional Administrator United States Nuclear Regulatory Commission Region I 478 Allendale Road King of Prussia, Pennsylvania 19406 Mr. George L. Iverson, Director office of Emergency Management State office Park South 107 Pleasant Street concord, New Hampshire 03301 Mr. Victor Norses Senior Project Manager Project Directorate I-3 Divleien of Reactur Projects U.S. Nuclear Regulatory Cosmaission Washington, D.C.
20585 Mr. Noel Dudley NRC Senior Resident Inspector P.O. Box 1149 Seabrook, New Haapahire 03874 l
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