ML20085K722
| ML20085K722 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 10/23/1991 |
| From: | Goldberg R, Strother C GOLDBERG, FIELDMAN & LETHAM, P.C., OHIO, STATE OF |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20085K715 | List: |
| References | |
| 91-644-01-A, 91-644-1-A, A, NUDOCS 9111010086 | |
| Download: ML20085K722 (52) | |
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-UNITED 8TATES=OF AMERICA I NUCLEAR REGULATORY.COMMIS8Ibk OCT 24 : PI' BEroRE TnE
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In the Matter of
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= Docket Nosf*506440-A
) 346-A
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-OHIO EDISON COMPANY.
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v l(Perry Nuclear Power Plant,
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t Unit:1, Facility Operating l
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-License No.fNPF-58);
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- 1THE~ CLEVELAND ELECTRIC--
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H ILLUMINATING COMPANY ~
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.THE TOLEDO BDISON COMPANY
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-(Perry-Nuclear 1 Power Plant,
)
ASLBP No. 91-644-01-A
= Unit 1,-Facility-Operating:
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. License No.;NPF-58)
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(Davis-Besse= Nuclear Power'
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' Station, Unit 1,. Facility--
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. Operating' License'No. NPF-3)
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BRIEF OF' CITY OF CLEVELAND, OHIO IN SUPPORT OF NOTICE OF APPEAL-OF PREHEARING-D CONFERENCE ORDER GRANTING REQUEST FOR-NEARING Danny.R. Williams Director of Law d
L
-June W. Wiener-
-1 ChiefcAssistant Director-of Law-i Willian'T.:sigli-Assistant Director of Law' I
l7 City Hall, Room 106.
=
l 601 Lakeside Avenue
)
Cleveland, Ohio 44114 R
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Telephone;(216) 664-2800 i
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,I '
Reuben Goldberg.
Channing-D. strother, Jr.
David:C..Hjelafelt.
p Goldberg, Fieldman & Letham, P.C.
1100 Fifteenth: Street, N.W.
washington, D.C.
20005 q
Telephone (202)- 463-8300 Attorneys for-City of Cleveland, Ohio October 23, 1991 9111010086 9 ] ] O2'J POR ADOCK 05000346 M
PilR l
i
IbBLE OF CONTEtLTE Eaan DESCRIPTION OF CLEVELAND..............................
2 FROCEDURAL BACKGROUND.................................
4 ARGUMENT..............................................
10 1.
THE BOARD ERRED IN RULING THAT THE ok COMMISSION HAS JURISDICTION TO CONDUCT T
AN ANTITRUST REVIEW SUBSEQUENT TO THE ISSUANCE OF AN OPERATING LICENSE................
10 A.
Under the Commission's Decisions In South Texas And Elorjda Power The Board's Ruling Is Fatally Defective.........
12 1.
The South Texas Case....................
12 2.
.The Florida Power Case..................
19 B.
The Commission's Authority To Enforce
.\\ntitrust License Conditions Pursuant To Section 105 Does Not Include The Authority To Delete Or Modify Exiating Antitrust License Conditions................
25 C.
The Licensees Cannot Confer Jurisdiction On The Commission...........................
28 II.
THE BOARD ERRED IN RELYING ON SECTION 189A OF THE AEA FOR AUTHORITY TO CONDUCT THE ANTITRUST REVIEW SOUGHT BY APPLICANTS.......
36 A.
Section 189a Is Procedural And Does Not Grant A Substantive Right To Amend The Operating License.................
36 Y
l B.
Section 189a(1) Confers Hearing Rights l
On The Public But Confers No Hearing Rights On The Applicants....................
37 CONCLUSION..
41
-i-l
TABLE OF. AUTHORITIES Ensin Court CaE2a Bellotti~v. NRC, 725 F.2d 1380 (D.C. Cir.
1983).......
39 Ft. Pierce Utilities Authority v. NRC, 606-F.2d 986 (D.C. Cir.), cert. denied, 444 7
U.S.
842 (1979).....................................
24 San Luis Obispo Mothers for Peace v. NRC 751 o
F.2d 1287 (D.C. Cir.
1984)..........................
36 Sholly v. NRC, 651 F.2d 780 (D.C. Cir. 1980)
(per curiam), vacated and remanded, 459 U.S.
1194, 103 S.Ct. 1171, 75 L.Ed.2d 423 (1983).........
39 Union of Concerned Scientists v. NRC, 735 F.2d 1437 (D.C. Cir. 1984); cert. denied, 469 U.S.
1132 (1985).........................................
39 West Chicago, Ill. v. NRC, 701 F.2d 632 (7th Cir.
1983).....................................
24 Commission Cas.gf Concurers Power Company (Midland Plant Units 1 and 2), ALAB-452, 6 NRC 892 (1977)......................
32 Davis-Besse, ALAB-560, 10 NRC 265 (1979)..............
27-28 Florida Power & Light Company (St. Lucie Plarit, Unit Nos.
1, 3,
20-21 Florida Power & Light Company (St. Lucie Plant, Unit No. 2) ALAB-420, 6 NRC 8 (1977)................
22 Florida Power & Light Company (St. Lucie Plant, Unit Nos.
1, 3,
- 4) ALAB-428, 6 NRC 221 (1977).......
11,19, 22,23, 25 Houston Lighting & Power Co.,
et al. (South Texas Project, Units 1 and 2), CLI-77-13, 5 NRC 1303 (1977)...................................
11-19 21-23, 25,33 (Vigil C.
South Carolina Electric and Gas Co.
Summer Nuclear Station, Unit 1), CLI-80-28, 11 NRC 817 (1980)...................................
16.
TA1)LU OF AUTilORITIES_(qpnthhtedl EGGC Toledo Edinon Company, et al. (Davis-Besso Nuc1 car 1lower Station, Unita 1, 2, and 3) Docket Hon. 50-346A, 50-500A, and 500-501A; The Cleveland Electric Illuminating Company, et al. (Perry Nuclear Power Plant, Unita 1 and 2) Docket Hon.
50-440A and 50-441A, 5 NRC 133 (1977)..............
33 fitAtttten f
Atomic Energy Act, S104, 42 U.S.C.
S2135 (1954).......
20,23 Atomic Energy Act, S105, 42 U.S.C.
S2135 (1954).......
2,4,5, 9-10, 12,14, 19-20, 23-24, 25,28, 31-32 Atomic Energy Act, S161, 42 U.S.C.
S2201 (1954).......
18, Atomic Energy Act, S186, 42 U.S.C.
S2236 (1954).......
18-19, 25 Atomic Energy Act, 5189, 42 U.S.C.
S2239 (1954).......
4-5, 12,24-25,29, 31-32, 37-40 Code __of FedP10) Regulation,y 10 C.F.R. 52.101 (1991)...............................
2,5 10 C.F.R.
S2.103 (1991)...............................
40 10 C.F.R.
S2.105 (1991)...............................
40 10 C.F.R.
S2,108 (1991)...............................
40 10 C.F.R.
S2.200 (1991)........
28 10 C.F.R. 52.201 (1991)...............................
26 10 C.F.R.
S2.204 (1991)...............................
27 10 C.F.R.
S2.206 (1991)...............................
20,27
'O C.F.R. f2.714 (1991)...............................
1,9, 21,38-39 10 C F.R.
S2.1205 (1991)..............................
40 16 0.F.R. S v.4 (1991)................................
24 10 C.F.R. 550.80 (1991)...............................
19 10 C.F.R.
S50.90 (1991)...............................
5,12, 24
- iii -
1 l
TADL11_91'_AUIl10lt1T1 ES fc. M inn m u.
l IMgo Miscellanngun Atomic Safety and Licensing Doad's Prohoaring Conferenco Ordor, LBP-91-38 (Oct.
7, 1991)..........
1-2,8-11,25, 20-30, 38-40 Atomic Safety and Licensing Board's Notico of 4
floaring (Oct.
8, 1991)..............................
1-2 City of Cleveland's conditional Petition to Intervono, (May 31, 1991)...........................
3 Department of Justico Lottor Opposing Applicants' Proposed Amendments to NRC Operating Licensen (June 13, 1991).....................................
5-6 Director's Lotter to Applicants Donying Amendments to Antitrust-Rentructions on operating Licensos (April 24, 1991).................
6-7 Joint Petition of Florida Cities for Leave to Intervono Out of Timo; Po';ition to Interveno; and Roquest for llearing, LPD-17-23 (Aug.
6, 1976)..............................................
20 Notice of Appeal and Appo11ato Brief of Florida Cities, LDP-77-23, (April 29, 1977).................
20 Order Modifying Antitrust License Condition, No.
3 of Davia-Boone Unit 1, Liconao No. NPF-3 and Perry Units 1 and 2, CPRP-148, CPR-149 (June 25, 1979).....................................
26 Prohoaring Conferenco Transcript (Sept. 19, 1991)....
6,31 52 Fod. Reg. 48473 (Dec. 22, 1987)....................
5 56 Fod. Rog. 20057 (May 1, 1990)......................
6 56 Fod. Reg. 28426 (June 13, 1991)....................
9 56 Fod. Reg. 29292 (June 19, 1991)....................
9 56 Fod. Reg. 51939 (Oct.
8, 1991).....................
2 4
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UNITED STATES OF AMERICA IIEFORE Tile NUCLEAR REGULATORY COMMISSION
)
In the Matter of
)
Docket Nos. 50-440-A
)
50-346-A 01110 EDISON COMPA11Y
)
(Perry Nucioar Power Plant,-
)
Unit 1, Facility Operating Licenso No.-HPF-58)
)
)
Tile CLEVELAND ELECTRIC
)
ILLUMIllATING COMPANY
)
Tile TOLEDO EDISON COMFANY
)
(Perry Nuclear Power Plant,
)
ASLDP No. 91-644-01-A Unit.1, Pacility operating
)
Licenso No. 11PP-58 )
)
(Davin-Bonso liuclear Power
)
Station, Unit 1, Facility
)
Operating Licenso No. HPF-3)
)
)
BRIEF OF CITY OF CLEVELAND, O!!IO IN SUPPORT OF 110TICE.0F APPEAL OF PREllEARING CONFERENCE ORDER GRANTING REQUEST FOR llEARING To the lionorablo, the Commissioners of
/
the Nuclear Regulatory Commionion:
Pursuant to 10 C.F.R.
S2.714n, Intervonor City of Cleveland, Ohio (" Cleveland") aubmita its brief in support of its Notico of Appeal of the Atomic Safoty and Licensing Board's
(" Board") October 7, 1991 Prohoaring Conferenco order
("Pi!C Order") (LDP-91-38) and the October 8, 1991 Notice of
-~
..~....
-2 Hearing (56 Fod. Reg. 51939).
The October 7 order and Octo-bor 8 notico grant the requests of Ohio Edison Company (" Ohio 1
Edison"), Clevoland Electric Illuminating Company ("CEI"),
and Toledo Edison Company ("TE") (collectively dapplicants")
'. ~
for a hearing concerning their applications for " suspension" as to them of cortain antitrust licensing conditions imposed in the licensos for the Perry and Davis-Besso nuclear gonor-ating plants.
The October 7 order rejects Cleveland's oppo-sition to applicants' requests for a hearing and Cleveland's challongo to the Commission's jurisdiction to considor app 11-cants' applications on the ground that the Commission has no authority to conduct the requestod antitrust review sought by applicants.1/
Those rulings are the subject of Clovoland's Notico of Appeal and of this brior.
Cleveland opposes the grant of a hearing.
DESCRIPTIO!i OF CLEVELAIJD cloveland is an Ohio municipal corporation which owne and operates Cleveland Public Power ("CPP"), an l
1/
The Doard's order refers to the proceeding as " antitrust related" (PHC Order at 1).
It is not simply " antitrust roleted."
It is an antitrust review under Section 105c.
The applicants filed their respectivo applications under Section 2.101 of the Commission's Regulations that in-plement Section 105c of the Atomic Energy Act ("AEA or Act").
In an action filed in the District of Colurbia District Court to disqualify the Commission from adjudi-cating the issue raised in its application herein and to have that function performed by the court, Ohio Edison jn its Complaint stated that it "scoks a dotormination by this Court of an antitrust issue."
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-3 electric distribution ayatom serving the electric requiro-monts of the citizens of Cleveland within cortain portions of the city limits.
CPP in in computition with CEI for the sale of electricity to residential, commercial and induntrial cuntomora in certain areas of Clovoland, in many canon on a door-to-door basis.
?
Clovoland was actively involved an an intervo-nor-party / in the antitrust review hoarings in the heroin 2
dockets that culminated in the imposition of the antitrust conditions, which the applicanto now sock to eliminato.
Cleveland la a direct and intended bonoficiary of the antitrust conditions.
Those conditions mandated accons to CEI's transmission facilitics, which electrically surround Clovoland, and those of the co-liconocos.
Those conditions covided Clovoland with access to power from ocurcon other than CEI with resulting substantial savings that have enabled Cleveland'u municipal electric operations to survivo and to continuo an a viable competitor of CEI, bringing to Cleve-land'n citizens the important bonofits of reasonably priced 4
electricity.
Removal of the conditions will have a direct, ad-vorno offect upon Cleveland and its citizona.
Soo PilC Order 2/
Cleveland's May 31,_1991 conditional petition to inter-vono, pp.
8-9, stated that it was filed out of an abun-dance of caution inasmuch no Cleveland was already a party to the dockets in which applicants filed their applications and has actively opposed the applications heretofore in the heroin dockets.
- -- -- - - - ~..
_ _ _. _ _ _ _ _ _ _. _ _ _ _ _ _. _ _ = _. - _ _ _
, ?
at 22-23.
The importance of those antitrust liconon condi-tions to Clovoland and its reliance on-the antitrust liconno conditiono at lanuo in thiu proccoding are further doacribed in this brief, infra pp. 33-36.
PROCEDURAL 11ACKGROUND On or about September 18, 1987, Ohio Edison filed an application for "aupponcion" of the antitrust conditions of i
the Perry Nucloat Power Plant operating licence "innorar ao they apply to Ohio Edison Company" and "until auch timo as there may be a factual-baals for imposing [the conditiono)."
Application at 1 and 80-81.
Ohio Edison invoked 10 C.F.R.
5S50.90 and 2.101 an authority for its application and ex-procaly requented that "the Dirng1pr__gL.luttleg Ropct or En.galatiqn amend the Perry Operating Licenso by suspending the antitrust licensing conditions insofar as they apply to OE."
(Emphaolo added.)
Ohio Edloon's application discuanen Section 105c of the AEA, 42 U.S.C.
S2135(c) at como longth, llowever, Section 189a, 42 U.S.C.
S2239, of that Act upon f
which the 130ard relion for the Commionion's and the Board's authority to conduct a post operating liconne antitruct review, 10 not montioned much 1000 rolled upon.
Nolther Ohio Edison not CEI and TE rolled on Section 189a as supporting t
this application or the Commionion's jurisdiction.
The Board has rolled on Section 189a ao supporting Comminolon jurludic-tion to conduct an antitrust review.
Clovoland in this brief
. ~. - - - ~.
pui su uis u shows that the Board's position has been unequivocally re-jected by the Commission in previous decisions.
Infra, pp.
12-25.
Notice of the application appeared at 52 Fed. Reg. 48473 (December 22, 1987).
In February and April 1988, Cleveland and other interested entities filed answers in opposition to Ohio Edison's application.
On July 5,
- 1988, Ohio Edison replied to these answers.
On or about May 2, 1988, CEI and TE filed an appli-cetion to suspend the antitrust conditions of the perry and Davis-Besse optrating licenses as to them.
CEI and TE, like Ohio Edison, expressly relied on 10 C.T.R. SS50.90 and 2.101 and expressly requested that the Director of Huclear Reactor Regulation
(" Director") amend the operating licenses by suspending the antitrust conditions.
While Section 105c of the AEA was discussed in their application, Section 189a is not even mentioned.
Cleveland and others filed comments in opposition to the application in September 1988.
On June 13, 1990, pursuant to the Director's re-quest, the Department of Justice ("DOJ") provided advice respecting the applications.
Among other things, DOJ con-cluded that the applications were " based upon a novel reading of the Atomic Energy Act and a misreading of the earlier license proceedings" in these dockets.
June 13 letter at 1.
The letter stated that:
"It is the conclusion of the Depart-ment of Justice that the legal interpretations advanced by 1
, petitionora do not support the relief requested."
Id.
DOJ noted, p.
3, note 6, thatt Docause the NRC can deny the amendment requesto solely on legal groundu.
. a long and re-source intensive hearing on,the costs and bono-fits of the subject nucioar planta in unnecon-sary.
DoJ concluded, p. 4 and noto 8, that the applica-l tions are "without merit" and recommended their dismional without any evidentiary hearing, on May 1,-1991 (56 Fod. Rog. 20057) a notice was published stating that the Commission had denied the applica-tion based upon the Staff's dociolon, arguments mado in support of the appilcationa, public comments and the views expronsed by DOJ in its June 13, 1990 lotter.2/
The Director's April 24, 1991 lottor to applicants, 2/
Applicanto expressly sought suoponolon of the antitrunt licenso conditions by the Director, who han boon dolo-gated significant authority to make licensing decisions in antitrust reviewa (soo Ohio Edison application at 3).
Under the Commisalon's regulations invoked by the app 11-cants, which woro improperly invoked inasmuch as the operating licennon have already boon issued, Staff's datormination became the dociolon of the Director and, absent DMA DDanis review by the Commission, became tho Commission's decision, subject only to timely court review.
10 C.F.R.
S2.101 (c) (3 ).
Thus, the notico properly referred to the dociaion as the Commission's decision.
Moreover, thoro was no basis for advising the applicants that they could demand a hearing and reference to a Board to dotormine whether a hearing 10 appropriato and the nature of that hearing.
A Commis-sion decision is not properly reviewable by the Board.
The Board apparently regards the decision an only a Staff decision which the Board in froo to disregard al-though Staff counnel stated at the prohoaring conference that the Staff acted on behalf of the Commionion purau-ant to dologated authority (Tr. 181).
-7 referenced in the Federal Register notico, advised applicantu of tho denial of the application, onclosing the decision which explained the baala for the denial of the applicationn.
The dociolon expropoly did not reach or addrosa Sloveland's
" argument that the commission lacks the authority to grant the roller requestod by the Licensoon", p. 13, note 18, but f
rejected an a mattor of law applicants' argument that the Commisalon's jurisdiction to impono antitrust licensing conditions exists only.if the cost of power from a nuclear plant providos the licensoo with a competitive advantage over other sources of power.
As a policy matter, the dociolon concluded, p. 12, that:
Finally, there is little to commend the Li-consoon' proposed suspension of their antitrust 11conne conditions "until auch time an there may be a factual basis for imposing them" (OE Application at 81).
Such an approach to anti-trust enforcement would require constant scru-tiny of the competitivo environment for those and other facilities, to datormino whether previously imposed antitruct licenso conditionn i
should be suspended or reimposed.
The past two decados have demonstrated that rollability factors and energy costs for power planta using any source of fuel can vary greatly from year to year, an a result of such factors as supply disruptions and the need to comply with evolv-ing statutory or regulatory developments.
The Licenseos' approach would result in unending litigation over perceived or real short-term developments which are assorted to affect the appropriatencan of retaining previously imposed antitrust licenso conditions -- the nood for which was fully litigated many years before, based 1.argely upon anticompetitivo conduct of a i
...,_ --. - _.._ - ~ _ -_ -- - -------.-..,. - ~
- _~
- licensoo's own making.12/
Thus, wholly apart from the lack of merit in Licensees' legal arguments, their suggested approach to anti-trust surveillance and enforccmont is substan-tially lacking.
12/
In addition, this approach would cause unacceptable disruptions in the sale and supply
- l of electricity -- a circumatance which would hardly be alleviated by the alternativo sug-gested by CEI/TECO, whereby their competitorn f
would be left to sock judicial relief, under the Sherman and Clayton Acts, from the Li-conscos' rennwed anticompetitivo practicos (CEI/TECO Application at 15-16).
Thc May 1 Federal Register notico, oddly, without citation to any authority, stated that applicants "may demand a hearing with respect to the denial".5/
Applicants filed requests for hearing on May 31, 1991, which included torso lists of issues for which hearing was requested and which, by implication, d11pped some issues and matters raised in the applications.
On that same date, C1cycland filed an oppoui-tion to any hearing, challenging the Commission's jurisdic-tion to consider the applications, and, in the event a hear-ing was to be held, for intervention.
Others, but not the applicants, filed petitions to intervene as described in the PHC Order, pp. 22-39.
DOJ filed its " Notice of Intent to Participate" an a matter of right pursuant to AEA Section 1/
The notice also appeared to bet the same time for peti-tions for leave to intervono by "any person whose inter-est may be affected by this proceeding" as was fixed for applicants to submit any request for a hearing.
- Thus, interventions had to be drafted and filed before inter-ested persons knew whether or not there would be turther proceedings.
-9 10Sc(S), 42 U.S.C.
S 213 S (c) ( S).
The Secretary of the Comminnion referred the re-quests for hearing and petitions for intervention to the chief Administrative Judge on June 7, 1991.
On June 13, 1991 (50 Fed. Heg. 28426), the Chlof Judge established an Atomic Safety rnd 1,1 conning 15oard to determine whether a hearing in appropriate and, if a hearing in to be hold, itu nature, and to preside over the proceedin9 in_the event tilat_a_hearinLin gniqrmb "
(1:mphania added. )
On June 19, 1991 by notice published in S6 Fed. Reg.
29292, the Board scheduled a prehearing conference (later reacheduled) at which, it ntated, "the Board will consider the various requents for a hearing discovery (in the event a hearing in authorized) and other mattern.
Various other filingn, including Cleveland's July 10, 1991, supplement to its conditional petition to inter-I Vene, submitted pursuant 10 C.F.H.
S2.714 (b) (1), were made at various times by varioun entitica prior to the prehearing conference which was held on the record on September 19, 1991.
At that confereren certain rulings were made and certain further procedurea catablished and are retlected in the Board's Prehearing Conference Order.
The Board's Order (PilC Order at 56) granted inter-vention to Cleveland, American Municipal Power-Ohio, Inc. and Alabama Electric Cooperative; denied City of Brooko Park's petition to intervene; and rejected all cf Cleveland's con-
b tontions in opposition to the hearing with the exception of Cleveland's contentions that ros judicata, collateral estor-pol and lachen barred the rollof nought.
The lloard ruled those grounds na non-jurindictional which should be submitted as part of Cleveland's motion for summary dispooltion (PilC Order at 21, note 43).
(
The Board ordered the partion to file a joint state-mont of the "bodrock" legal issac (or issuca) upon which they sock a ruling within 30 days from the date of service (Octo-bor 8) of the order and fixed a achedule for-the subminolon of motions for nummary disposition for all parties (PitC Order at 54-55).
ARGUMEliT I.
Tile BOARD ERRED IN RULIl1G TilAT Tile COMMISSIOli !!AS JURISDICTION TO CO!1 DUCT Ali AllTITRUST REVIEW SU11SEQUE11T TO Ti!E ISSUANCE OF AN OPERATI!1G LICENSE In its Prohoaring Conferenco order of October 7, 1991,N the Board confronted Cleveland's pooltion that the Commission (and consequently the Board) has no jurisdiction under the AEA to consider applicants' applications for aus-pension of the antitrust liconno conditions of the Perry and Davia-Bosco operating licenses.
Cleveland contends that antitrust reviews are authorized by Section 10Sc of that Act only in connection with an application for a construction S/
Served October 8, 1991.
-. - _ - - ~ _.. -.. - - - - -. -.. _.. -.,. - _.
11 Permit ("CP") and in connection with the application for an Operating License ("OL").
The latter review may take place only when a "significant change" has occurred since the issuance of the CP in the circumstances relied on for the imposition of the antitrust license conditions.EI For this position Cleveland relies, principally, on f
South Tegn (}]2ucton Lightina & Power Co..
et 11.
(South Texas Proiect. Units 1 and 2)), CLI-77-13, 5 NRC 1303 (1977) and Florida Pqwgr & Liabt Company (St. Lucie Plant. Uni.t Nos.
1.
3.
41, ALAB-428, 6 NRC 221 (1977).
These are the seminal and binding Commission decisions on the subject.
Although the Board concedea (PHC order at 17) that "nothing in the language of section 105 explicitly directs the Commission to exercise antitrust review authority to undertuke" the suspension or removal of previously imposed antitrust conditions, the Board ruled that the Commission nevertheless may conduct an antitrust reviou in this case after the issuance of the OL.
The Board contends that the limitations of Section 105c on antitrust reviews do not apply because the licensees, by requesting the antitrust review, thereby voluntarily waived the statutory limits on antitrust review (PHC Crder at 19).
The Board further contends that "the narrow supervisory antitrust jurisdiction accorded the ft/
The purpose of the OL review is not to delete antitrust 11conse conditions but rather to determine whether ad-ditional antitrust licenso conditions should be added.
See E9Ath_ Texan, infra.
e
- 12 C7mmission under Section 105c cannot be considered to circum-scribe the Commission's more general authority, as reflected in AEA Section 189a and 10 C.F.R. 550.90 to amend a facility license at the request of the licensee."
id.
Cleveland shows, infra, that the Board's efforts to avoid and distinguish @AltlL_ Texan and the Board's reliance on Section 189a and Section 50.90 of the Commission's regula-tions are of no avail.
A.
Urider the Commission's Decisions In Egil_tll_ Texas And Florida Powcr The I} pard's Rulillg la Fa_ tally DnfAqilye 1.
The Egnth Texan Cabe The Ennth Texan case stemmed from an application for construction permits jointly filed by Houston Lighting &
Power Company
(" Houston"), Central Power and Light Company
(" Central") and the Cities of San Antonio and Austin, Texas.
The Attorney General reviewed the application for the permit and advised that un antitrust hearing was unnecessary.
5 NRC at 1305.
No person submitted a petition to intervene or a request for a hearing on the antitruat aspects of the pro-posed project.
Hence, no antitrust hearing was conducted, The construction permits were issued in late 1975.
In 1976, Central established for the first time an interconnection between its distribution facilities and those of certain out-of-stato utilities.
Houston responded by breaking off interconnections between its distribution system
13 and the systems of certain other utilities, including Cen-tral.
These actions led to a flurry of judicial and adminis-trative actions in which both Central and llouston challenged the actions of the other in various judicial and administra-tive forums.
Pertinent here is Central's filing before the Com-i mission of a petition seeking intervention and an antitrust hearing.
Central argued that flouston's termination of inter-connection was a supervening development which warrantert the imposition of antitrust conditions.
The petition was ad-dressed, in turn, by the Licensing Board, the Appeal Board and the Commission.
By that point, all parties agreed that an antitrust hearing should be held at th? earliest opportu-nity but differed as to the appropriate procedure for con-ducting the hearing.1/
The Commission began its analysis by noting that this ostensibly procedural dispute raised "significant is-sues" concerning the Commission antitrust review authority:
resolution of this dispute requires a defini-tion of the scope of our responsibility in en-forcing the antitrust laws and the policies underlying them in relation to the enforcement responsibilities of other agencies, particular-ly the Department of Justice.
Some of the parties' arguments would assign to us a broad and ongoing antitrust enforcement role; they envision that we would have a continuing polic-ing responsibility over the activities of li-consees throughout the lives of operating li-2/
The position of each of the parties and the NRC staff is described in the decisior..
5 NRC at 1307-08.
I
- 14 cennon.
An we shall n'iow, we boliqvo that the congroan envisioned a narrower role for this agency, with the responsibility for initiating antitrust review focused at t he two-atop li-conning proconu.
5 NHC at 1309.
The Commission firnt examined the logislativo hinto-ry of the 1970 amendments to the Act which catablished pro-licensing antitrunt review purnuant to Section 105.
The Comminulon found that Congreno dellborately limited antitruut review to the construction permit proceeding and, in a more narrow fashion, to t!a operating licanoo proceeding.
The Comminolon noted that "(cloncern with the competitivo appocto of licensing in the nucicar area goon back to the original leginlation enacted in 1946."
id. at 1313.
The 1946 Act provided for anticipatory, antitrunt review in the licensing context coupled with referrals to the Attornoy General.
The Act was rewritten in 1954 and a two-atago licensing procono for privately own(d reactoro was not up.
But antitrust review applied only upon a demonstration of the
" practical value" of the facilities for industrial or commer-cial uno.
The comminnion never made a " practical value" finding.
In the 1970 amendmento, Congrena renponded by finding that nuclear power has commercial value, thereby climinating the need for a Commlosion finding of " practical value".
The Comminolon noted that the legislativo hintory of the 1970 amendmento indicated that antitrust review was to take place only in limited circumstancen.
The comminnion 1
l
. _ _. _ _. _... _ _ _ _ _. _ ~
_ _.____ _.. _ _ _ _ __ _ _ __ quoted a statomont by the Chairman of the Joint Committoo on Atomic Energy in which he noted that the Committoo "soon no senso" in plenary antitrust review as part of both the con-struction permit and operating liconne procondings.
Id. at i
1316.
The Chairman noted that plenary antitrust review would bo inequitable to a utility which had invested immenso sums in a nuclear facility on the basis of the construction par-mit.
Ilonco, ho stated, limiting antitruct ruview to the prolicensing stage was necessary to encourage investment in nuclear facilition.
Id.
The Joint Committeo also noted that prolicensing antitrust review was advantageous because the utility would have "a timo-related incentivo to expedito tho entire process and to comply with reasonable antitrust safeguards before any competition is damaged."El The Commission noted that there is a much narrower antitrust review in connection with an application for an operating license for a commercial facility.
Section 105c(2) of the Act, 42 U.S.C.
S2135(c)(2), states that the antitrust review proceduros applicable to an operating licenso applica-tion apply only if:
the Commission datorminos such review is advis-able on the ground that significant changes in the licensco's activities or-proposed activi-ties have occurred subsequent to the previous E/
Id. at 1314, quoting statomont of Charlos A. Robinson, Jr., Staf f Counsel to the General Manager, National Rural Cooperative Association.
- 16 review by the Attorney General and the Commis-sion under this subsection in connection with the construction parmit for the facility.
"Significant changos" are changes which "(1) have occurred since the previous antitrust review of tho'licensoo, (2: aro reasonably attributable to the licenson, and (3) have anti-trust implications that would likely warrant somo NRC remo-dy".II The Commission found that Congress, by sotting up this two-stop review process, intended to limit antitrust review to this process, id. at 1312 Wo find the specificity and completonoss of Section 105 striking.
The section is compro-hensive; it addroscos each occasion on which allegations of anticompetitive behavior in the commercial nuclear power industry may be raised, and providos a procedure to be followed in nach instanco.
The Act links Commission antitrust review with the licensing procons, demanding a thorough antitrust review at the stago cf applier.tlon for the construction per-mit and allowing a narrower second review at the operating licenso stage, if such a review is doomed advisable.on the basis that signifi-cant changes havo occurred in the licensees activities.
The cicar implication of the "sig-nificant chango" language is that the holder of a construction permit is not subject to a soc-ond antitrust review at the operating licenso stago unless "significant changes" in the pro-posed project with antitrust implications have t
~
occurred in the interim.
(Footnoto omitted.)
l The Commission went on to noto, id. at 1314:
2/
Ennth Carolina Electric and Gas Co. (Virgil C. Summor l
Nuclear Station, Unit 1), CLI 530-28, 11 NRC 817, 824 (1980).
Note that the purpose of the antitrust review at the r*porating licenso etage is to add -- not doloto
-- antitrust conditions.
. But even among those who argued in favor of prolicenso review, no evidence amorges that anything more than licenso connected review was considered.
Thoro is no hint in the logisla-I tive history that anyone -- advocate or foe of prolicensing review ~~ anticipated anything more.
Indood, the reasons underlying support for the bill as enacted indicate the importanco
- l of antigjoatory review to its advocates.
(Em-phasis in original.)
i The Commission summarized its findings, id. at 1317:
In summary then, we conclude that Congress had no intention of giving this Commissian authori-ty which could put utilities under a continuing risk of antitrust review.
llad Congress agrood with the proposition that this Commission should have broad antitrust policing powers indopondent of licensing, the statuto that emerged from thost discussions would have looked quito different.
Little attention would have boon paid to defining a two-stop review procons.
The terminology of all participants in the drafting process would not have boon focused so directly on "prolicensing" review.
The Commission also observed that the limits on the Commission's authority in the one instance in which post-licensing review of antitrust matters is permitted also reflected the desire by Congress to proscribo such review in all other circumstances.
Section 105a of the AEA permits the Commission to modify antitrust conditions if a court finds that the licensco has violated any of the federal antitrust 1 awn "in the conduct of the licensed activity."1EI Refer-ring to this language, the Commission noted, id.:
if a broad, ongoing polico power in the anti-10/
lloro, again, observe that the Commission action contem-plated is the addition, not deletion, of conditions consistent with the court's findings.
_ _ _ _ _ trust area had boon annumod, the language in 105(a) authorizing the Commisalon to act with respect to liconnes already lonued, in light of the antitrunt findings of courta would have boon, if not superfluous, certainly redundant.
ThitSommission also reignted_th2_Argilmont tilat D9.C11911tLQL_.thg_AEA otfler.thfin_Eent1931_1M_tQttid_ui*eq_tito.
ConttalDDlon tgenera1 antitntat t>olico _ pgynrg_itLtilo nuclnr industry" which would iunt11y.. reonen11x _lleanning_ntenned-ingo.
Idi Again, the Commission noted that the carefully circumscribed and detailed antitrust review procons not forth in Section 105 alono was intended to govern the antitrust review procoou.
Honco, other noctions of the AEA which deal in a general way with the Commionion'a authority -- auch an Section 161, 42 U.S.C.
S2201, and Section 186, 42 U.S.C.
52236 -- do not govern this procono.
Ed.
The Comminnion found that in the special circum-stances at issue in Routh Texan, antitrust review nr1Qt_t.Q the filing _nf_.the operatingSMDRg application would not conflict with the policios underlying Section 105 of the Act.
The Commission noted that all of the partion favored an antitrust review.
The NRC then stated, id. at 1318:
if antitrunt ruview in found nocoonary in the period betwoon innuance of a construction per-mit and application for an operating licenso, we can fashion remedios to expedito the review.
This necessary flexibility can allow un to resolve antitrust allegations in a timely fash-lon, without unduly delaying the licensing procono.
The Commission recognized that, due to the special
.~
. ~
19 circumstancon in the procooding, it did not nood to addroun whether antitruct review would be warranted in certain other circumstancos, id.:
Thuu, we nood not and do not decide whether antitrust review may be initiated in cano of an i
application for a 11conuo amendment which would result in a "now or substantially different facility," or whero an application for transfer i
of control of a liconao han boon mado, or whero "nignificant changen" occur after an operating 11conuo la inuuod.
We noto, however, that the report of the Joint committoo explicitly refers to our authority to conduct a review of the first situation, II.R. Rep. No. 91-1470, 91st Cong. 2d Sosa., 3 U.S. Codo Cong, and Adm.
News, 4981, 5010 (1970).
Authority in the uncond situation, not explicitly referred to in the statute or its history, could be drawn an an impilcation from our regulations.
10 CPR 550.80(b).
The third oltuation prononto the lanuos pending in the Florida ___ Pownr_and_Ligitt procooding, n. 1 migra, which wo do not have beforo un and nood not tenolve to decido thin caso.
Wo go no further than to conclude that Section 186 can have at boat limited applica-tion, in light of the "significant changos" rostriction of Section 105(c) (2) and its rela-tion to the ovs al: acheme of Section 105.
An shown below, the Elorld u gger caso reinforcon the finding in Egnth_IRXmi that antitrust review can only occur in the context of a conutruction permit or oporating licenso pro-conding.
Moreover, Elprida liowsr clarifica that thin statu-tory bar on antitruct revioW applica even-if there are nig-nificant changes in circumstanceo subsequent to the liconno i
procoodinga.
2.
The flgridn_EQWer Case The l'19r.l.da_Eomr. proceeding involved the St. Lucie I
~,,,
o,,--...-
,r s-
-->---e-=~
v
~.-s-+D.
Plant, Units 1 and 2 and Turkey Point Plant, Units 3 and 4 in Docket No. 50-335A, at al.
In that proceeding, numerous municipal electric power utilities ("citics") sought to intervene 31 months late in a proceeding and petitioned-for
(
an ar.?itrust hearing.
The Commission had already issued operating licenson in the proceeding for three of the four f
plants at issu, pursuant to Section 104 (b) of the AEA:
St.
Lucio Plant, Unit 1 and Turkey Point Plant, Units 3 and 4.
For casu of reference, these are referred to as the Turkey Point plants.
No requests for an antitrust hearing had been filed during the construction permit proceeding.
The cition pointed to an array of allegedly anticom-petitivo practicos of tl.a applicants subsequent to the issu-ance of the operating licenses.
LBP-77-23, 5 NRC at 798.
These activities included refusal to (1) enter into an inte-grated power pool, (2) soll wholesale power, and (3) whcol power.11/
Among the sections cited by the cities as a ba-l sis for their request for relief were Section 105 of the AEA and Section 2.206 of the NRC's regulations.1AI The Licensing Board rejected the petition.
LDP -
23, 5 NRC 789 (1977).
The Board pointed to the Appeal 11/
Soo " Joint Potition Of Florida Citics For Leavo To Intervene out Of Timo; Petition To Intervene; And Re-p quest For llearing", pp. 49-85 (Aug.
6, 1976).
I 12/
See " Notice of Appeal and Appellato brief of Florida Cities", pp. 11-12 (April 29, 1977).
l:
1
4
! Board's decision in South TcKan (then pending before the commission) in which it round that neither the Licensing nor
-the Appeal Board has the " authority to reopen a tarminated construction permit proceeding by ordering a hearing on a supervening antitrust question."
5 NRC at 731.
The Board l
noted that this finding applied with full force to the cities' joint petition despite the allegations of anticom-petitive activities subsequent to the issuance of the operat-ing license.
1d.
"Therefore," stated the Board, "the Joint Petition must be and is dismissed."
Id.
The Licensing Board found that this name reasoning indicated that there was no jurisdictional bar to establish-ment of an antitrust hearing in connection with the remaining plant:
St. Lucie Plant, unit No.
2.
The Board noted that the construction permit proceeding regarding that plant was still pending before the Licensing Board.
The Board went on to find that the cities had satisfied the standards governing interventions in-Section 2.714 of the commission's regula-tions by showing that (1) they had a sufficient interest in the proceeding due to concerns about alleged anticompetitive conduct by the applicants, and (2) they had good cause to file late because (1) the cities and applicants had agreed to allow the construction permit to issue subject to certain conditions insuring that the cities had access to, or at least the opportunity to purchase access to, the nuclear capacity, (ii) the applicants had failed to meet these com-
i mitments, and (iii) the fossil fuel shortage which began in 1973 exacerbated the impact of the applicants' monopoly of nuclear power.
The Appeal Board affirmed the Licensing Board's decision garding the Turkey Point plants, on one hand, and the St. Lucie Plant No.
2, on the other, in two separate i
decisions.
Florida Power and_ Licht Company, 6 HRC 8 (1977)
(St. Lucie No. 2); Florida Power and Llaht Comnany, 6 NRC 221 (1977) (Turkey Point).
Most significant here is the Appeal Board's decision affirming the denial of the petition seeking post-operating license antitrust review of Turkey Point.
The Appeal Board ~d.ed that t*9 commission had decided not to review the Board's finding in South Texas that it could not order an antitrust hearing "'in the absence of a pending construction permit or operating license proceeding.'"
Id.
at 223.13I Hence, the Appeal Board agreed with the Licensing Board that South Texas was fully applicable and precluded the Licensing Board from directing a hearing on antitrust issues despite the allegations of anticompetitive acts by the licensee subsequent to the issuance of the oper-ating-licenses.
However, the Appeal Board noted that the commission had, subsequent to the Licensing Board, directed the Appeal Board to consider a related issue:
whether the commission 12/
The Commission decision was issued on March 31, 1977 and was not reported.
Id. at 223.
- 23 Director could address the antitrust issues raised by the petitioners.
The Appeal Board first noted that tno Turkey Point units received construction permits prior to the 1970 amendmonts to the Act requiring prolicensing antitrust re-view.
Id. at 224.
The Board observed that Congress, in enacting the 1970 amendmento, decided to exclude from anti-trust review under Section 105c plants, such as Turkey Point, which had received construction permits under Section 104(b) before 1970.
- 14. at 224-225.
Directly portinent here in the alternative justifi-cation given by the Appeal Board for its decision.
The Board pointed to the Commis sion's finding in Eg1Lth Texqn, 5 NRC 1303, that post-operating licenso antitrust review is pro-cluded by the AEA and found that this reasoning applied even whero significant changes had occurred 1S/*
In its own South Texan dociolon, the commission recently considered at longth the extent of its authority to hold antitrust hearings.
The preciso issuo in that caso involved when an antitrust proccoding undet Section 105(c) may be ordered after a construu~lon permit has boon issued but before the necessary additional licenso to commence operations has boon grant-od.
The Commission _did not confino its South Texas opinion to that relativolv narrow angs-lion; instead it_phgne_to adde 2ss the broad spectrum of _ NRC antitrust rosnongibilities.
In so doing, it manifested the judgment in no uncertain terms that the NRC's supervisory antitrust jurisdiction over a nuclear reactor licenso does not extend over the full 40-year l
11/
6 NRC at 226.
l l
l
. - =. - -.
- 24 term of the operating license but endo et its inception.12/
(Emphasis supplied.)
12/
Except perhaps as necessary to enforce the terms of a license or to revoke one fraudulent-ly obtained, or in circumstances where a plant is sold or so significantly. modified as to require a new license.
Soo CLI-77-13, supra, 5
.l NRC at 1318.
The Commission declined to review the Appeal Board's deci-i sion.
The cities submitted a petition for review in the D.C.
Circuit.
The court affirmed the Commission's decision.
Ett Rierce Utilities Authority v. HRC, 636 P.2d 986 (D.C. Cir.),
ggrt. denied, 444 U.S. 842 (1979).
These decisions of the Commission completely under-mine the Board's effort in the instant case to find authority for post OL antitrust review in whan the Board describes as the "more general authority, as reflected in Section 189a and 10 C.F.R. 550.90,1E/ to amend a facility license at the 11/
We are baffled by the Board's reliance on Section 50.90 of the Commission's regulations an authority to conduct post OL issuance antitrust review.
To begin with a regulation does not generate statutory authority.
Only the Congress can create statutory authority for the Commission.
}{c st Ch icano I l l. v. U _. S. f{uglqnr Requl_a-4' tory Comm'n., 701 F.2d 632, 641 (7th Cir. 1983) ("Our inquiry cannot end with a finding that the NRC acts-in conformance with its regulations, for we must determine whether those ragulations as interpreted violate the governing statue.")
A regulation that is valid imple-monts existing statutory authority.
Section 50.90 of the regulations does no more than advise that a holder of a license or construction permit who desires to seek an amendment must describe the changes desired in the form prescribed for original applications and must be submitted in the manner specified in Section 50.4 of the regulations.
There is nothing in the regulation that remotely provides substantive authority such as appears in section 105c of the AEA.
. ~ ~. - _ request of the licensco" (PHC Order at 17).
As the Commis-sion stated in South Texan, Section 105 alone was intended to govern the antitrus review process.
The Commission held that other sections of the AEA which deal in a general way
.l with. the Commission's authority such as Section 161, 42 U.S.C. 52201,15/ and Section 186, 42 U.S.C.
S2236, do not govern the process (5 NRC at 1317).
So, here, the Board's reliance on the general authority of Section 189a is effec-tively and flatly rejected by the Commission's decision in South Texas, and, indeed, in Florida Power.
B.
The Commission's Authority To Enforce Antitrust License Conditions Pursuant To Section 105 Does Not Include The Authority To Delete or Modify Existing Antitrust Licence Conditions The Board's suggestion that the Commission authority to police the antitrust license conditions under Section 105c "provides a basis for our juricdiction here" (PHC Order at 21, note 42), was also rejected in South Texas, supra, pp.
17-18 and E12rida Power, p. 23-24.
Obviously the Commission 11/
Section 161c confers authority on the Commission to
" hold such.
. hearings as the Commission may deem necessary or proper [to) assist it in exurcising any authority provided in this Act, or in the administration of this Act, or any regulations or orders issued there-t under" (emphasis supplied).
General authority to hold hearings does not confer subject matter authority, such as the right to impose antitrust conditions.
The sec-l tion. confers no more than procedural authority.
The authority to hold a hearing on a particular subject matter must be found in a section of the AEA that sub-mits that subject matter to the commission's jurisdic-tion.
This is true also as to Section 186.
I
- 26 has authority to enforce compliance with the antitrust condi-tiona it has imposed and to make auch modifications of the conditions as are necessary to force compliance.
1 In fact, that very situation wan presented with respect to antitrust conditions the applicants would elimi-nate.
On January 24, 1978, Cleveland asked the Comminnion to t
take enforcement action pursuant to Section 2.201, et al. of its regulations against CEI for violationn of antitrust Licence Condition No.
3, which required CEI and its co-]i-connees to provide wheeling for entitico in the service areas of the co-liccnoces.
The Acting Director of the Commission'n Office of Nuclear Reactor Regulation responded by issuing a Notice of Violation to CSI pursuant to Section 2.201 of the Comminolon's regulations.
In the Notice, the Director re-viewed CEI's January 27 transminaion achedule filed with the Federal Energy Regulatory Comminaion ("FEPC") and CEI's response to a staff questionnaire concerning Cleveland's motion and stated that "it appears that CEI han not complied with antitrust licence Condition No. 3 of the cubject licenne "11/
and construction permits
'[
Cleveland, CEI and the NRC Staff met in an unsuc-cenaful attempt to address the concerns raised by Cleveland's filing.
On June 25, 1979, the Director found that CEI had 12/
The Notice is reproduced in Appendix A of the June 25
" Order Modifying Antitrust Licenne Condition No. 3 of D a v i a - B e s s e ti l t 1, License No. NPF-3 and Perry Unita 1 and 2, CPPR-148, CPPR-149" (unreported).
l not complied with license Condition No. 3 (mimeo at 6):
CEI has approached its responsibility to file a wheeling schedule for the City as if it had not been required as a condition of its operating license and two construction permits to comply with Antitrust License Condition No.
3.
The Director noted that an April 27, 1979 initial decision by a FERC administrative law judge ("ALJ") addressing CEI's transmissio-sea dule " deals effectively with most items c't by thu :.RC Staff to be in violation of Antitrust Li-4 cense Condition No.
3" (mimeo. at 4).
With respect to the mattero not resolved by FERC, the Director ordered CEI to file an amendment to its transmission tariff to ensure com-pliance with the antitrust license condition.
Consistent with these findings, the Director exercised his authority pursuant to Section 2.204 of the NRC's regulations and modi-fled license Condition No. 3 to add language requiring CEI to file a revised t amission schedule reflecting the changes ordered by the NRC and FERC.
Tha Board's effort to find support for authority to conduct post OL antitrust reviews in the Appeal Board's decision in Ravis-Besse, ALAB-560, 10 NRC at 294-295, has no merit.
The Board contends that the Appeal Board suggested that a licensee may seek relief from an antitrust condition in its license by filing a petition pursuant to 10 C.F.R.
SP.106 requesting the Commission's Staff to institute an enforcement ty,ne "show cause" hearing (PHC Order at 20, note 41, 2nd Paragraph).
l
- 28 Nowhere in the license conditions approved by the Licensing and Appeal Boards in Q. avis-Besen is there any
' mention that the conditions can be modified in the event circumstances change.
The Appeal Board simply says that the NRC Director has the " authority [ pursuant to Section 2.200, nt neg. of the NRC's regulations) to modify license condi-tions where necessary."
Those sections of the Regulations authorize the Director "to Tc>dify, suspend or revoke a 11-conse or to take other act;on for alleged violation of any provision of the Act or this chapter or the conditions of the license" (emphasis suppliedi.
Thus, the Board's citation to the Director's enforcement order of June 25, 1979 merely reflects the Board's recognition that a license condition can be modified to ensure that it is not circumvented by the Applicants.
It is clear that the Appeal Board was net sug-gesting that the antitrust conditions could be suspended in the circumstances here.
C.
The Licennees Cannot Confer Jurisdiction on The Commission
=
The Board agrees that Section 105c does not provide for pest-OL antitrust review (Plic Order at 17).
The Board alleges that the purpose of limiting antitrust review to pre-licensing proceedings was to free utilities from the continu-ing uncertainty of having to undergo antitrust review.
Thu r.,
l_
Congress limited NRC antitrust jurisdiction to the CP and Oh stages.
The Board then rationalizes that if the utility in
- 29 willing to voluntarily submit to continuing supervisory antitrust jurisdiction, the jurisdictional limits created by Congress should not be applied (PHC Order at 19).
This is plainly erroneous.
Where the Congress has limited the Com-mission's ancitrust jurisdiction, the parties cannot by their own acts enlarge it.
The Commission's antitrust jurisdiction i
can only be created by Congress not by the licensees.
The Board is not clear as to what new antitrust supervisory jurisdiction applicants have conferred on the Commission.
Does the Commission now, courtesy of the appli-cants, have authority in a subsequent proceeding under Sec-tion 189a invoked by another interested party to impose new more stringent license conditions?
Or is the jurisdiction limited to the relief requested by applicants?
Can the license conditions only be ratcheted down or can they be ratcheted up as well?
Is the jurisdiction purpr-tedly creat-ed by the applicants good for this day and train only or does it extend for the life of the underlying license?
Presum-ably, it must extend for the entire 40 year life of the operating license, inasmuch as applicants' proposed relief is
'[
that the antitrust license conditions be suspended until such time as it is determined that the cost of nuclear power has become competitively advantageous.
Of necesrity, the sort of jurisdiction purportedly created by applicants requires the Commission to undertake an i
ongoing supervisory role.
No one can predict when the cost l
l l
_ _ - - _ _ _ _ _ _ _ - - _ _ _ _ _ _ _ _ _ _ _. advantage of nuclear generatio1 vis-a-vis other forms of generation will swing one way or the other.
Much of the necessary cost data will be in the unique possession of the applicants.
Without periodic reporting requirements no one, aside from applicants, will know when the cost advantage has shifted.
Of necessity, the Commission will becomo embroiled e
in the arcano intricacies of ut.lity cost allocation in quasi-ratemaking proceedinga, if the antitrust conditions are suspended and then a nuclear power cost advantage occurs, are the original license conditions reinstated, or, as a part of the Commission's newly found antitrust supervisory powers, is a full proceeding held to determine which conditions if any should be reinstated?
The Board tries to buttress its finding that appli-cants can confer jurisdiction by saying that the Commission "is in the best position to make a judgment about whether the requirements it dictated now should be suspended or otherwise altered" (PilC Order at 19).
It may be true that if the Com-mission cannot change the license cenuitions, no one can.
~
But that does not make the Commission the most effective post-license antitrust arbiter.
The reason the Commission was given the limited antitrust jurisdiction it possesses was that it is uniquely situated to prevent probable anticompeti-tive effects in their incioiency.
The Commission may desire jurisdiction to amend the license conditions.
And, as Staff counsel observed at the
i prehearing conference, as a matter of policy the Comr.iselon might believe it to be desirable to be vested with cor.cinuing antitrust supervisory powers.1EI But, in fact, it does la/
Turning to jurisdictional issues raised by Cleveland, J
Staff counsel candidly stated that:
" Staff until now ducked entirely the jurisdictional issue."
(Tr. 175).
His comments on jurisdiction, he said, "are of a prelim-inary nature."
(Tr. 176).
He acknowledned that Section
=
105 "provides a very limited iurisdiction for the Com-mission to look at antitrust issues."
(Tr. 176).
He conceded that Section 105 contemplates a look at anti-
-trust isrues in the first instance when the license anolication is firut presented as it was 14 years ano and subsecuently at the OL licensino state.
(Tr. 176).
He conceded the present oosture is different from either of these two situations.
(Tr. 176).
He stated:
"I have to say in my personal opinion. I don't see that the Act specifically affords the Commission iurisdiction to look at antitrust issues at this time."
(Tr. 176)
(Emphasis supplied).
"However," he went on to say, "there seems to be a problem with that conclusion, because as a matter of policy, the Commission should be entitled to review conditions embodied in its own li-conses at any time.
I don't have statutory authority for that, but it seems the right outcome as a matter of policy, and I would submit that the authority to do that would come from Section 189 of the Act whereby the Commission han authority to commence a proceeding for the amendment or suspension or revocation of a license or any part thereof (Tr. 176-177) (emphasis supplied).
Staff counsel goes on to acknowledge that South Texas and "Statesville" cases "suggest the antitrust review really should be more limited" and that the reference to
" policing *' in South Texag, relied on by Judge Bech-hoefer, refers to enforcement of existing license condi-tions (Tr. 177).
He stated there is "a bit of an anoma-l ly if we say the Commission has the right to decrease the application of previously imposed conditions but not to expand the scope of those previously imposed.
It's not a perfect outcome, and I'm not satisfied with the outcome."
(Tr. 178).
Cleveland observes that there is much authority that regulatory commission would desire to have "as a matter of policy", but if the statute does not provide it, as this one does not provide it, the regulatory body's recourse is to the legislature.
Section 189a is of no help to the Commission.
Section (continued...)
I
.~
- not have such authority.
As the Appeals Board observed in Consumers Power Company (Midland Plant Units 1 and 2) ALAB-452, 6 NRC 892, 912 (1977):
"Like Section 5 of the FTC Act, Section 105(c) was also designed by Congress to ' nip in the bud any incipient antitrust situation,' albeit via the NRC prelicensing review process."
(Citation oritted.)
- Moreover, any findings are to be based on "reasonabln probability of contravention of the antitrust laws or the policies clearly underlying these laws".
Id., citing Joint Committee Report 14-15.
Clearly, in enacting Section 105c, which was predi-cated on incipiency and probabilities, Congress understood that an anticompetitive situation that was probabic or incip-iont might not in fact come to fruition.
Nonetheless, Con-gross did not provide for continuing Commission antitrust supervision to provide relief to licensees if those probabil-ities did not in fact occur.
Had Congress intended to pro-vide for such continuing antitrust supervision it could have done so in Section 10Sc.
Moreover, the Board igncres the other side of the coin, the impact on the beneficiaries of the antitrust li-conse conditions.
The policy concerns underlying the deci-1R/(... continued) 189a cannot be construed witnout taking into account other provisions of the AEA.
The other provisions, as Staff counsel admits, are a bar to antitrust reviews subsequent to issuance of the OL.
The limitation was sought by the utilities for their protection, but the limitation works both ways.
, sion by Congress in the 1970 amendments to limit antitrust review to the CP and OL proceedings are directly applicabic here.
As noted, above, the Commission in reviewing the legislative history of the 1970 amendments-in Eggib Texas observed that Congress recognized that strict limits on the frequency of antitrust reviews were needed to ensure that utilities could rely on Commission licensing decisions.
5 NRC at 1314-16.
The Commission cited statenients by the Chairman of the Joint Committee on Atomic Energy and others during the Congressional hearings opposing an unlimited reopening of antitrust review in the operating license pro-cooding.
Id1 These same concerna apply with equal force to pro-tect the competitive positions of beneficiaries of the li-cense conditions.
In the situation here, the relief sought by the applicants -- elimination of the license condition re-straints as to them -- would have the sort of disruptive impact which Congress acted to prevent by limiting antitrust review to the construction permit and operating license
~
proceeding.
Prior to the imposition of the antitrust license conditions, Cleveland's Municipal Power System ("CPP") faced extinction due to the anticompetitive activities of CEI, in particular, and its sister members of Central Area Power Coordination Group ("CAPCO").
See Toledo Edison Company, et al. 5 NRC 133, 165-76 (1977).
CPP was dependent entirely on power purchased from CEI for its continued existence.
CPP
~
- 34
~had a single interconnection with CEI, and the ability to purchase only firm and emergency power Dcon CEI.
Imposition of the license conditions provided CPP access to transmission and coordination services-and a vari-t ety of wholesale purchase power sources.
Because of the license conditions, CPP has been able to add a second and third interconnection and plans to add a fourth.
CPP has also been able to diversify its power supply, and take advan-tage of the variety of surplus power available as short-term, limited term, energy and even " dump" power.
These arrange-ments provides CPP and, in turn, its customers with substan-tial reductions in costs from what would have been paid to CEI without such competition.
CPP's first firm power purchase from an alternative supplier began in 1980 as a direct result of the license conditions and involved a purchase from Power Authority of the State of New York ("PASNY") of inexpensive hydroelectric power.
CPP had applied for and received an allocation of PASNY energy in the late 1970's, but CPP could not take advantage of this cheap power source until CEI was forced by the license conditions to transinit the power to CPP.
As the PASNY Power Bargaining Agent for the State of Ohio, CPP has represented the entire State and has fulf.111ed its responsibility to facilitate making PASNY Niagara Power available for transmission to municipally-owned electric systems throughout the State.
CPP could not have obtained
.=- low cost Niagara Preference Power for the 75 municipal elec-tric systems in Ohio receiving the power without the ability to have the power actually transmitted from New York to each municipal syscem through the transmission facilities of Ohio Edison and CEI.
Indcod, all but two of the 75 recipient municipal systems receive the power by naving it transmitted at some point over the systems of Ohio Edison and CEI.
The license conditions have permitted CPP to diver-sify its supply sources to procure the cheapest power avail-able.
For examplo, during CPP's peak months of July and August, 1987, when it provided its customers approximately 70 million kwh of energy, CPP purchased power from ten different sources:
Dayton Power and Light Company, PASNY, Ohio Power, Big Rivers, CEI, American Electric Power Company ("AEP"), TE, Duquesne, Michigan Electric Coordinated Systems and PENELEC.
CPP also purchased power from Ohio Edison, Ontario Hydro and Buckeye during the past eight years.
Moreover, even if the license conditions were sus-ponded and later reimposed, CPP and other utilities in the service areas of the co-licensees would still not be able to
~
rely on the services available pursuant to the license condi-tions in planning its power supply.1EI CPP could not as-sume that the service available pursuant to the antitrust 12/
As noted, Ohio Edison argues that antitrust conditions can be suspended and reimnosed by the Commission at any time.
l I
- 36 license conditions would continue to be available.
There-fore, CPP's ability to make advantageous purchase power arrangements with other power suppliers, and thus its ability to compete with CEI, would be impaired.
As noted, Congress, s'
in enacting the 1970 amendments, intended to prevent thf.t sort of continuing uncertainty regarding the conditions governing a nuclear facility.
II.
Tile BOARD ERRED IN RELYING ON SECTION 189A OF Tile AEA FOR AUTilORITY TO CONDUCT Tile ANTITRUST REVIEW SOUGitT BY APPLICANTS A.
Section 189a Is Procedural And Does Not Grant A Substantive Right To Amend The Operatino License The right to a hearing under Section 189a(1) exists only if the proceeding is for one of the categories enumerat-ed in that section.
San Luis Obispo Mottwrs for Peace v.1 HRC, 751 F.2d 1287, 1312, 1314 (D.C. Cir. 1984).
Section 189a'provides hearing rights "in any proceeding under this AEA, for the granting, suspending, revoking, or amending" an
-operating license.
However, this section does not prescribe
- }
the circumstances under which a license may be granted, suspended, revoked, or amended.
Unless there exists substan-tive authority outside Section 189a for the requested amend-ment, Section 189a is not applicable.
That Section 189a does not create substantive jurir. diction has been recognized by the Commission in 10 C.F.R. Part 2 App. A III(a) (1) in which it is said "the granting of a petition for leave to intervene
- 37 does not operate to enlarge the issues.
with respect to matters beyond the jurisdiction of the Commission."
If Section 189a itself provided substantive jurisdiction, there would be no need for the foregoing language, i
Thus, it is plain on the face of Section 189a(1) that it confers no substantive authority on the Commission in lieu of or in addition to the substantive authority of Sec-tion 105c.
It cannot be disputed that the applicants are seeking antitrust review.
It is equally clear that the Board intends to undertake antitrust review, in some fashion, under the perceived authority of Section 189a.
(PilC Order at 19).
Since Section 189a(1) provides no substantive right to an amendment, and such an amendment is barred by Section 105c, the Board lacks jurisdiction to determine the applications.
B.
Section 189a(1) Confers licaring Rightu On The Public But Confers No ficaring Rights on The Annligants Section 189a(1), 42 U.S.C.
S2239 (a) (1), provides, in portinent part:
In any proceeding under this Act, for the granting, suspending, revoking, or amending of any license or construction permit, or applica-tion to transfer control, and in any proccoding for the issuance or modification of rulec and regulations dealing with the activities of licensees, and in any proceeding for the pay-ment of compensation, an award of royalties under sections 153, 157, 186c, or 188, the Commission shall grant a hearing upon the re-quest of any person whose interest may be at-f ccted by the proceeding, and_shell.it mit any d
such person as a party to such_proceediDE.
(Emphasic supplied.)
38 The Board has ruled that Section 189a(1) confers on the applicants the right to demand a hearing (PHC Order 7-8).
The Board's ruling rests on two reasons.
One, that an appli-cant / licensee "is a person" within the acaning of the AEA and l
has an " interest" that "may be affected" within the meaning of section 189a.
(PHC Order at 7-8).
Two, the Board asserts that "as a long standing matter of statutory construction, the Commission considers an applicant / licensee to be an
' interested person' within the meaning of section 189a in instances in which its request for licensing action is de-nied."
(FHC Order at 7).
In concentrating on " person" and " interest" that may be affected, the Board has ignored the crucial provision, that "any such person shall be admitted as a party to the proceeding."
Clearly, a proceeding is already in existence for a person to have the opportunity to request a hearing.
Such proceeding is in existence as the result of an applica-tion filed by the applicant / licensee.
The applicant / licensee is already a party to the proceeding by reason of that app 11-cation.
Indeed, the applicant /licensae under the Commis-
]
sion's regulations is not required to file a petition to intervene nor to specify its interest.
But to become a party to the proceeding any other person whose interest may be affected must file a petition to intervene under 10 C.F.R.
S2.714 of the Commission's regulations to attain party sta-tus.
The petition must set forth with particularity the
39 -
~
interest of the petitioner in the proceeding, how that inter-est may be affected by the results of the proceeding, includ-ing the reasons why the petitioner should be permitted to intervene, with particular reference to the f actors omtuerat-ed in paragraph (d)(1) of Sec' lon 2.714.
There is also a requirement for submitting a list of contentions prior t
- he holding of a preliminary conference that are accepted by the Board as issues in the proceeding.
In brief, Congress in Section 189a(1) provided public participation for the public's protection as the majority and dissenting opiniors agreed in I}_ellgtti v.
United S t a t eDJL491Pdir_lLgillD_t9I.y_.ConM ' ut, 725 F.2d 1380, 1383, 1386 (D.C. Cir. 1983).
See also, EDion of CQDgprned Scigntinty v.
U.S.
Nuclear Itegulatory CoJp3'L, 735 F.2d 1437, 1446 (D.C.
Cir. 1984), gpa t denied., 469 U.S.
1132 (1985); Ehgljy v.
HRC, 651 F.2d 780, 791 (D.C. Cir. 1980) (per curiam), vacated and romanded, 459 U.S.
1194, 103 S.Ct. 1171, 75 L.Ed.2d 423 i
(1983).
The Board, for the reasons given by the appli-cants / licensees, finds the litlign of Concerned Sci _qntintn case inapposite (PHC Order at 8, note 16).
The reason the appli-mt; ts/ licensees gave was that the case did not involve appli-u..t/ licensees but involved the public seeking participation.
In fact, none of the judicial cases found involving Section 189a involved an applicant / licensee.
Each case involved the public seeking participation.
This fact reinforces, rather
- _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ - _ _ - _ _ _ -. than detracts from, Cleveland's interpretation of Section 189a(1).
With respect to the Board's second reason -- that Cleveland's interpretation is contradicted by a.long standing
[
Commission construction -- Cleveland has examined the notices published in the Federal Register for each of the 4
Commission's regulations cited by the Board (p;Ic Order at 7, 10 C.F.R.
SS 2.103(b), 2.105(d), 2.108 ( b) and note 14) 2.1205.
aly one of the orders is their express reference to Section 189a(1) as authority for the regulation.
In that one, the notice states that Sectior.189(a) (1) includes appli-cants.
None of the notices adopting the regulations state that the Commission was confre *nd with the inter' n
Cleveland presents.
Nori case found in which a
Commission faced the challenge Cleveland presents.
Even if the Board's statement that the commission has long regarded Section 189a(1) as referring to applicants as well as the public is accepted, Cleveland submits respect-fully that the Jommisalon's interpretation is in error and should be ra-visited.
Does it make sense that a section that assures applicants for a construction permit that the appli-cation therefor will not be disposed of without a hearing also requires the applicants for a construction permit to tequest a hearing?
Cleveland submits that that does not make sc:ac.
But what does make sence is that Congress was con-corned that the public whose interest may be affected have a
41
~
right to a hoaring and have a rolo in the procona.
The lloard affcrded the applicants an o,,portunity to bootstrap a right to hearing by characterizing the applicanto na persona whono interont may be affected by tho very procooding.that the applicanto thousolven had initiated.
Thin reading of Section t
189a is not nupportable.
CONCLUSION WlIEltEFoltE, for each and overy one of the rear.onn
- nubmittod in this brief in support of the Notice of Appeal,
Clovoland'n appeal abould be granted, the reference to the 9
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- 42 tioard should be revoked arid the applicatio.a should be dio-minned.
Hoopectfully cubmitted, Danny R.
Williamo s'
Dicoctor of Law
~
June W. Wiener Chief Annintant Director of Law William T.
Zigli Annintant Director of Law City llall, Itoom 106 601 Lakeside Avenue Cleveland, Ohio 44114 Telephone (216) 664-2800 n
1 f f-
'f _
41-i j
ca ohhip -
9 Ileuben Goldberg Channing D.
Strother, Jr.
David C.
Iljelmfelt Goldberg, Fieldman & Lotham, P.C.
1100 Fifteenth Street, N.W.
Washington, D.C.
20005 Telephone (202) 463-8300 Attorneyn for City of Cleveland, Ohio October 23, 1991 m_
~
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
)
In the Matter of
)
Docket Hos. 50-440-A
)
50-346-A 011I0 EDISON COMPANY
)
(Perry Nuclear Power Plant,
)
Unit 1, Facility Operating
)
License No. NPF-58)
)
)
Tile CLEVELAND ELECTRIC
)
ILLUMINATING COMPANY
)
Ti!E TOLEDO EDISON COMPANY
)
(Perry Nuclear Power Plant,
)
ASLBP No. 91-644-01-A Unit 1, Facility Operating
)
Licenso No. NPF-58
)
(Davis-Besso Nuclear Power
)
Station, Unit 1, Facility
)
Operating License No. NPF-3)
)
_)
CERTIFICATE OF SERVICE I hereby cortify that copies. of the foregoing "NO-TICE OF APPEAL" and "BRIEF OF CITY OF CLEVELAND IN SUPPORT OF NOTICE OF APPEAL OF PR811 EARING CONFERENCE ORDER GRANTING REQUEST FOR llEARING" have been served upon the parties or their attorneys on the attached Service List, this 23rd day of October, 1991, by deposit in Washington, D.C.
in the United States Mail, first class, postage prepaid.
l ChanningLb. Slbother, Jr.V'
trl 7
,.h r b UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION _,
g 7,4 pj g l
)
in the Matter of
)
Docket Nos. 50-440-A
)
50-346-A OHIO EDISON COMPANY
)
(Perry Nuclear Power Plant,
)
Unit 1, Facility Operating
)
,(
License No. NPF-58)
)
e
)
Tile CLEVELAND ELECTRIC
)
ILLUMINATING COMPANY
)
Tl!E TOLEDO EDISON COMPANY
)
(Perry. Nuclear Power Plant,
)
ASLDP No. 91-644-01-A Unit 1, Facility Operating
)
License _No.
)
(Davis-Besse_ Nuclear Power
)
Station, Unit 1, Facility
)
Operating License No. NPF-3)
)
)
SERVICE LIST Joseph Rutberg, Esq.
Justin T.
Rogers, Jr.
Office of the General Counsel President U.S. Nuclear Regulatory Ohio Edison Company Commission 76 South-Main Street Mail Stop OWFN 15B18 Akron, 011 44309 Washington, D.C.
20555 Gerald Charnoff, Esq.
Janet Urban, Esq.
Deborah B. Charnoff, Esq.
U.S. Department of Justice Margaret S.
Spencer, Esq.
Antitrust Divisjon Shaw, Pittman, Potts &
Transportation, Energy and Trowbridge a-Agriculture Section 2300 N Street, N.W.
Room 9816 JCB Washington,- D.C.
20037 555 4th Street, N.W.
Ur,hington, D.C.
20001 James P.
Murphy, Esq.
Colleen A. Conry, Esq.
Dav2d R._Straus, Esq.
Squire, Sanders & Dempsey Spiegel & McDiarmid 1201 Pennsylvania Avenue, N.W.
l 13S0 New York Avenue, N.W.
Post Office Box 407 Suite 1100 Washington, D.C.
20044-0407 Washington, D.C.
20005-4798
-2 Office of Commission Appellate Eenneth L. liegemann, P. E.
Adjudication President U.S.
Nuclear Regulatory American Municipal Power-Ohio, Commission Inc.
Washington, D.C.
20555 601 Dempsey Road-P.O.
Box 549 i
Administrative Judge Westerville, Oil 43081 G.
paul Bollwerk, Ill
{
Atomic Safety and Licensing Steven R.
Ilom, Esq.
Board Office of the General Counsel U.S.
Nuclear Reguletory U.S.
Nuclear Regulatory Commission Commission Mail Stop EW439 Washington, D.C.
20555 Washington, D.C.
20555 John Bentine, Esq.
Sherwin E. Turk, Esq.
Chester, lloffman, Wilcox &
Office of the General Counsel Saxbe U.S.
Nuclear Regulatory 17 S.
liigh Street Commission Columbus, Oli 43215 Washington, D.C.
20555 l
Administrative Judge Charles Bechhoefer Atomic Safety and Licensing Board U S.
Nuclear Regulatory Commission Mail Stop EW 439 Washington, D.C.
20555 Administrative Judge Marshall E. Miller, Chairman Atomic Safety and Licensing Board 1920 South Creek Blvd.
Spruce Creek Fly-In Datona Beach, FL 32124 tw D.
Biard MacGuineas, Esq.
Volpe, Boskey and Lyons
,3 918 16th Street, N.W.
Suite 602 Washington, D.C.
20006 Mr. - Philip N.
Overholt Office of Nuclear Plant Performance Office of Nuclear Energy U.S.
Department of Energy, NE-44 Washington, D.C.
20585
_