ML20086G404
| ML20086G404 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 11/21/1991 |
| From: | Charnoff D, Jerome Murphy CLEVELAND ELECTRIC ILLUMINATING CO., OHIO EDISON CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, SQUIRE, SANDERS & DEMPSEY |
| To: | NRC COMMISSION (OCM) |
| References | |
| CON-#491-12368 91-644-01-A, 91-644-1-A, A, ALAB-143, ALAB-428, ALAB-560, ALAB-809, CLI-77-13, CLI-81-14, LBP-91-38, NUDOCS 9112050089 | |
| Download: ML20086G404 (46) | |
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UNITED STATES.0F AMERICA ff$hc I
NUCLEAR REGULATORY COMMISSION 91 MN 22 A9 :49 BEFORE THE NUCLEAR REGULATORY COMMISSION P'Cr;i mm 3 y nu'
!U - IE LAfluy eU IU Al&h
)
In the Matter of
)
)
OHIO EDISON COMPANY
)
Docket No. 50-440-A
)
50-346-A (Perry Nuclear Power Plant, Unit 1,
)
Facility Operating License
)
No. NPF-58)
)
(Suspension of
)
Antitrust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING
)
COMPANY
)
ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY
)
)
(Perry Nuclear Power Plant, Unit 1,
)
Facility Operating License
)
No. NPF-58)
)
(Davis-Besse Nuclear Power Station,
)
Unit 1, Facility Operating License
)
No. NPF-3)
)
)
APPLICANTS' BRIEF IN OPPOSITION TO TIE APPEAL OF THE CITY OF CLEVE-LAND, OHIO OF Tile LICENSING BOARD'S PREHEARING CONFERENCE ORDER James P. Murphy Gerald Charnoff Colleen Conry Deborah B.
Charnoff Margaret S.
Spencer SQUIRE, SANDERS & DEMPSEY 1201 Pennsylvania Avenue, N.W.
SHAW, PITTMAN, POTTS &
Washington, D.C.
20044 TROWBRIDGE (202) 626-6600 2300 N Street, N.W.
Washington, D.C.
20037 Counsel for The Cleveland Elec-(202) 663-8000 tric-Illuminating Company and The Toledo-Edison Company Counsel for Ohio Edison Company November.21, 1991-b 9112050089 911121..
PDR ADOCK 05000346 M
o i
4 TABLE OF CONTENTS' Table of-Authorities...........................................ii I.
Introduction...............................................I
)
II.
N a t u r e o f Th i s C a s e....................................... 4 III. Contrary to the Claim of Cleveland, Section 105 of the AEA Does Not Bar the NRC from Considering Applicants' License Amendment Requests........................................
9 A.
NRC's Antitrust Review Authority....................
11 B.
NRC's Licensing Authority.r......................... 21 1.
NRC is AuL.crized to Coaduut Hearings on License Amendment R*: quests..................,22 2.
License Amendment Applicants Are
" Persons," T00.................................
26 C.
Summary.............................................
29 IV.
Applicants'- License Amendment Requests are also cognizable Under Section 105 of the AEA..................
29 A.
The Significance of ALAB-560........................
30 B.
Section 105 Jurisdiction............................
33 V.
Conclusions..............................................
39
e 1
Table of Authorities CASES PAGE Bellotti v. United States Nuq1 ear ReQulatory Comm'n, 725 F.2d 1380 (D.C. Cir.
1983).........................................
27 Ft. Pierce Utilities Authority v. Nuclear ReQulatory Comm'n, 606 F.2986 (D.C. Cir.) cert, denied, 444 U.S. 842.[1979)........
13 j
d San Luis Obispo Mothers for Peace v.
N.R.C., 751 F.2d 1287 (D.C.
Cir.
1984)..............................................
24,25,26
- Sholly v. Nuclear Regulatory Comm'n, 651 F.2d 780, (D.C. Cir.
1980) (per curiam), vacated and remanded, 459 U.S.
1194, 103 S.
Ct. 1170 (1983)............................................
24,28 Union of Concerned Scientists v.
United States Nuclear Reaulatory Comm'n 735 F.2d 1437 (D.C. Cir. 1984),
cert, denied, 469 U.S.
1132 (1985)....................................................
27 United States v.
Grinnell Corp., 384 U.S.
- 563, (1966).......
5n13 CODES AND REGULATIONS 10 C.F.R. S 2.104(a)
(1988)..................................
29n 10 C.F.R. S 2.730 (1988i......................................
25 10 C.F.R. S 50.54(h)
(1988).................................
9n18 10 C.F.R. S 50.9u (1988)................................... passim 42 U.S.C. 5 2214(s)
(1988)....................................
27 o
42 U.S.C. 5 2133(a)
(1988)....................................
27 42 U.S.C.
S 2135 (1988).................................... passim 42 U.S.C.-5---2239(a)
(1988)....................................
22
-42 U.S.C.
S 3227 (1988)..................................... 9nl8 l-I i
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1 56 Fed. Req. 20057 (May 1, 1993)..............................
2n 56 Fed. Reg. 32453 (July 16, 1991)............................
2n OTHER Duke Power Co. (William B. McGuire Nuclear Station, Units 1 and m
2), ALAB-143, 6 A.E.C. 623 (1973).............................
23 Florida Power & Licht Co. (St. Lucie Plant, Unit Nos.
1, 3,
4),
ALAB-428, 6 N.R.C.
221 (1977).................................
13 Houston Lightinq & Power Co.
(Scoth Texas Project, Units 1 and 2), CL1-77-13, 5 N.R.C.
1303 (1977)...........................
13 Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1, and Davis-Besse Nuclear Power Station, Unit 1), Prehearing Conference Order (Ruling on Hearing /!ntervenor Petitions and issues / Contentions; Setting Schedule for Summary Disposition Motions and hesponses),
LBP-91-38, 34 N.R.C. ___ (Oct.
7, 1991), as modified by the Licensing Board's Ord r of November 5, 1991................ passim Philadelchia Electric Co.
(Limerick Generating Station, Units 1 and 2), ALAB-809, 21 N.R.C.
1605..................
........... 24 South Carolina Electric & Gas Co.
(Virgil C. Summer N2 clear Sta-tion Unit No.
1, CLI-81-14, 13 N.R.C.
862 (1981).......... 17n28 The Toledo Edison Co.
(Davis-Besse Nuclear Power Station, Units 1,
2 and 3), ALAB-560, 10 N.R.C.
265 (1979)...................
30 iit
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE NUCLEAR REGULATORY COMMISSION In the Matter of
)
)
OHIO EDISON COMPANY
)
Docket No. 50-440-A
)
50-346-A (Perry Nuclear Power Plant, Unit 1,
)
Facility Operating License I
No. NPF-58)
)
(Suspension of
)
Antitrust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING
)
COMPANY
)
ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY
)
)
(Perry Nuclear Power Plant, Unit 1,
)
Facility Operating License
)
No. NPF-58)
)
(Davis-Besse Nuclear Power Station,
)
Unit 1, Facility Operating License
)
No. NPF-3)
)
)
APPLICANTS' BRIEF IN OPPOSITION TO THE APPEAL OF THE CITY OF CLEVE-LAND, OHIO OF THE LICENSING BOARD'S PREHEARING CONFERENCE ORDER I.
Introduction On September 18, 1987, Ohio Edison Company ("OE") filed with the Nuclear Regulatory Commission ("NRC" or " Commission") Staff an application to amend the Perry Nuclear Power Plant license by removing the antitrust conditions appended to it insofar as they
'*/
The Cleveland Electric !11uminating Company applied to OE.
1/
Application to Amend the Perry Opera.ic.g License tc Suspena the Antitrust Conditions Insofar as They Apply to Onio Edison Ccmpany, Septencer is,.967 (hereinafter "OE s'
Application").
_1_
r
_____________.___________.________________________________________________._________.____.__m
l
.l
("CEI") and The Toledo Edison Cor.pany ("TECo") filed a parallel I
amendment application on May 2, 1988.2/' on May 1, 1991, the:NRC l
published in the Federal Register the. Staff's April-24, 1991 denial of the OE, CEI and TECo (collectively, " Applicants")
amendment requests and offered the' Applicants the opportunity for a hearing on the denial.2!
Hearing requests were filed by the Applicants on May 31, 1991.
These requests were opposed by the City of Cleveland.S/
A Licensing Board was appointed on June 13, 1991,E/ and a prehearing conference was held on September 19, 1991. -On October 7, 1991, the Licensing Board issued a prehearing conference' order, LBP-91-38, which resolved, inter alic, the City of Cleveland's challenge to the NRC's jurisdiction to hold ~a hearing on the denial of the Applicants' license 4
E/
CEI and TECo Application to Amend the Perry and Davis-Besse
-Operating Licenses to suspend.the Antitrust Conditions (May 2, 1988) (hereinafter "CEI and TEco Application").
2/
56 Fed.-Raq. 20057 (May 1, 1991) (notice of denial and opportunity-for hearing); Letter from Thomas E. Murley, Director, Office of Nuclear Reactor Regulation, NRC, to Michael D.
Lyster, Vice President, Nuclear-Perry and Donald C. Shelton, Vice President, Nuclear-Davis-Besse
- (April 24, 1991).
-d/
Opposition of City of Cleveland, Ohio to a Hearing with Respect.to the Lenial of Applications to suspend Antitrust License Conditions and Petition to Intervene in the Event Hearing-is Requested and is Granted (May 31, 1991)- (herein-zafter " Cleveland Peticion").
- 1/
-TheLBoard was reconstituted on July 8,-1991.
See 56 Fed, Rec. 32453 (July 16, 1991).
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amendment requests.6/
It is this Order that is the subject of the City of Cleveland's appeal.
Cleveland contends that the Licensing Board erred because the NRC, it alleges, has no authority to consider the Applicants' amendment requests.
In this brief, Applicants show why Cleveland is wrong.
Undoubtedly, the Commission has the express authority 9
to consider amendment requests under Section 189(a) of the Atomic Energy Act of 1954, as amended, ("AEA"), 42 U.S.C.
S 2239(a), as the Licensing Board concluded.2#
Moreover, in this specific instance, jurisdiction also lies under Section 105 of the AEA, 42 U.S.C. 5 2135, bot' because of the context in which the anti-trust conditions were imposed in the first place, and because the change in circumstances that constitutes the basis for the Appli-cants' amendment requests is the very type of circumstance that prompts agency consideration under Section 105.8/
5/
Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1, and Davis-Besse Nuclear Power Station, Unit 1), Prehearing Con-ference Order (Ruling on Hearing /Intervenor Petitions and Issues / Contentions; Setting Schedule for Summary Disposition Motions and Responses), LBP-91-38, 34 N.R.C.
(Oct.
7, 1991), as modified by the Licensing Board's order of November 5, 1991 (hereinafter "LBP-91-38").
2/
LBP-91-38, slip op. at 5-21.
E/
The Licensing Board left open the question of the extent to which Section 205 of tne AEA provides a basis for Commission review subsequent to issuance of a facility operating license.
LBPr91-38, slip op, at 21 n.
42.
Thus, contrary to the assertion of the City of Cleveland, the Board did not Footnote continued on next paae.
_3_
II.- !Lature of This case The dispute atilssue here begins with the very characteriza-tion of the case brought by the Applicants.
While, i n general,-
- one's characterization of a case is not necessarily of.particular importance, the disagreement over how this case is being charac-terized reflects the fundamental controversy at issue here.
The City of Cleveland, from its initial participation in this case continuing up to and including.its pending appeal,-has described this proceeding as "an antitrust-review under section 105(c)."E#
Cleveland of course recognizes that the Applicants' requests for relief are fashioned as license amend-ment applications.1S Nevertheless, it argues that because "(ilt cannot be disputed that the applicants are seeking antitrust
- Footnote continued from previous page.
" agree [] that Section 105c does not provide for post-OL antitrust review."
Cleveland Brief at 28, citing LBP-91-38, slip op.-at 28.
2/. - See, e.g.,
Answer of City of Cleveland, Ohio in opposition to Ohio-Edison Company's Application for Suspension of1 Perry Operating License Antitrust Conditions, Feb. 19, 1988, (hereinafter " Cleveland's Initial Answer") at 26; transcript of prehearing conference (Sept. 19, 1991) (hereinafter "Preh.. Conf. Tr.) at 123 (counsel for City _of Cleveland);-
Brief of City of Cleveland, Ohio i n support of Notice of Appeal of Prehearing Conference Order granting request for hearing,10ct. 23, 1991 (hereinafter " Cleveland Brief") at 2 n.
1.
1S/
- See, e.c~.,
Cleveland Brief at 2.
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review,"1l# and.because_ Cleveland believes such review is unavailable, it contends _that the NRC lacks jurisdiction to con--
2 sider the applications.12/
Cleveland is wrong in its description-of what this case is all about.
In fact, Cleveland's own argument belies its 4
characterization.
The crux of any antitrust review and litigation process, including the Section 105. antitrust review' proceedings that this i
agency-has conducte', is the evaluation of the relevant market-d place-and the_ competitive behavior of the parties.13/
This is i
what is. commonly understood-as the subject of inquiry when one seeks an " antitrust review."
See Houston Lightina & Power Co.
(South Texas Project, Unit Nos.-1 and 2), CL1-77-13, 5-N.R.C.
1303, 1312 (1977) (the subject of a section 105. antitrust review is " allegations of anti-competitive behavior in the commercial nuclear.pover industry").
Notwithstanding Cleveland's 11/- - Ig. at 37.
J 12/ LSimilarly, in Cleveland's Initial' Answer at 39, 40, Cleve-land stated that Applicants were "asking for the NRC to: con-duct _yet another antitrust review," and-to remove:the ant _i-trust license conditions because " changes in economic condi-tions.._._ purportedly reduce the Applicants monopoly-
-power."
As indicated below, this characterization of Appli-cants' license amendment request is patently wrong, ll/ See, e.g.,
United States v.
Grinnell Coro., 384 U.S.
- 563, 570-71 (1966) (antitrust analysis requires evaluation of
- market and firm's conduct in that market).
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characterization, this is not the subject of the pending_ license j
amendment applications.
From the inception of this case, OE has made clear that its competitive behavior is irrelevant to the consi6 ". tion of its application.14/
While the CEI and TECo application had included an additional argument that raired issues of App'.icants' conduct, the' argument was dropped at the initiation of the Licensing Board proceeding.15/
It is not just a question of whether the Appli-cants would prefer not to get into traditional antitrust issues such as competitive behavior and market dominance.
Rather, the fact is that whether or not the license amendment applications ultimat'ely are affirmed or denied, consideration of OE, CEI and TECo *s competitive behavior will not assist the decisionmaker in any way in resolving these applications.16/
In short, it is not correct to describe this proceeding as an " antitrust review" under Section 105(c).
The obvious question, then, is what is the subject of the pending license amendment applications?
Applicants have sought 14/
In its September 1987 application, OE assumed, arquendo, that its competitive behavior was unchanged from the time of the-antitrust proceeding which resulted in the imposition of the license conditions that its application seeks-to remove.
OE Application at 20.
ll/
Preh. Conf. Tr. (Sept. 19, 1991) at 167 (counsel for CEI and TEco),
15/
- See, e.g., Preh Conf. Tr. (Sept. 19, 1991-) at-16r (counse'.
for CE).
-s.
. 4 relief -- the amendaent of-their respective: licenses by-removal L
of the conditions.tnposed on their business activities -- based on the meaning and purpose of Section 105 of the AEA, In-short,
- this case is. simply a. case of statutory interpretation; the stat-utory-provision in_ question is section 105,12/
The mutual understanding of the parties as to the issue in controversy here is reflected in the parties' recent agreement on the so-called " bedrock"' legal issue.in the case.
See LBP-91-38, slip op. at 52-55.
That-issue, submitted on November 7, 1991 to-the-Licensing Board;on' behalf of all of the parties, including the City of' Cleveland,-reads as-follows:
Is the Commission without authority as a mat-ter of-law to continue the imposition or retention of antitrust license conditions Econtained in-an operating license if it finds that the actual cost of nuclear power from thellicensed nuclear power. plant is higher than-the cost of alternative sources,- all as appropriately measured and compared?
Thus, Applicants' contention is that in the actual present circumstances, in contrast to the hypothesized circumstances under which the-parties necessarily forecast before Perry and Davis-Besse were operational,-'and independent oftany traditional
" antitrust review" considerations, Section 105(c) of the AEA 11/- Indeed, as-Cleyeland observes, OE's application discusses Section 105(c) of the AEA at some length.. See Cleveland Brief at 4.
.m i...
a.
' requires-the NRC to suspend or otherwisc remove the antitrust conditions it imposed on the Applicants 15 years ago.
In its brief, notwithstanding its other characterizations,-
it is apparent that the City of Cleveland recognized Applicants' issue as follows:
the Commission's jurisdiction to impose anti-trust licensing conditions exists only if the cost of power from a nuclear plant provides the licensee with a competitive advantage over other sources of power.
Cleveland-Brief at 7.
There are a number of ways to articulate the issue in controversy here.
Cleveland's statement is one such way, and.itself illustrates how this is actually a case of statu-tory _ interpretation, not an " antitrust review."
When it argues that the NRC cannot, as a matter of law, entertain Applicants' license amendment requests, Cleveland is asserting both that the NRC lacks authority to amend the licenses it issues, and that the Commission is not permitted to interpret the meaning of its own organic statute.
As Appl cants show below, both of these contentions are-erroneous,
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ARGUMENT III._ Contrary to the Claim of Cleveland, Section 105 of the
-AEA Does Not Bar the NRC from Considering Applicants' License Amendment-nequests NRC's regulations specifically provide that licensees may apply tc amend the licenses they hold.
10 C.".R. S 50.90.
Sec-tion 50.90 states:
Whenever a holder of a license or construc-tion permit desires to amend the license or permit, application for an amendment must be filed with the Commission, as specified in 5 50.4, fully describing the changes desired, and following as far as applicable, thy form prescribed for original applications.la/
18/
Sections 103 and 183 of tha AEA, 42 U.S.C.
SS 2133, 2233 (1988), provide that NRC licenses are subject to such terms and conditions as the Commission may, by rule or regulation, prescribe to effectuate the purposes of the AEA.
One such regulation is Section 50.90.
Similarly, 10 C.F.R.
S 50.54(h), " Conditions of Licenses,"
provides (emphasis added):
The license-shall be subject to the provi-sions of the Act now or hereafter in effect and to all rules, regulations, and orders of the Commission.
The terms and conditions of the license shall be subject to amendment,.
revision, or modification, by reason of amendments of the Act or oy reason of rules, requistions, and orders issued la accordance wit! the terms of the (A]ct..
This authority is echoed in Sect. ion 187 of the AEA 42 U.S.C.
S 2237 (1988).-
_3-
H l
In. addition, Section 189(a) of_the AEA provides.for the convening of a-hearing an a-license amendment request if-a hearing is-sought;by-an " interested person."12/
L The City _of1 Cleveland does not really dispute the fact that licensees can seek-to amend their'lleenses; after all, it is-vir-tually an everyday phenomenon for the agency to receive, evaluate and.act on license amendment requests.
Rather, it is the conten-tion of the City of Cleveland that the NRC cannot entertain-the
_ particular type of license amendment for which Applicants have applied.
Thus, the. authority set forth in 10 C.F.R.
S 50.90 and Section 189(a) of the AEA -- indeed, the obligation --_of-the NRC to consider license amendment requests and to afford the opportu-nity-for a bearing to those affected by them, is, according to Cleveland,. simply inapplicable here.
-Cleveland maintains that Section 105 of the AEA the gener-ally recognized authority of_the.NRC in Section 189(a) to con-sider license amendment requests.
While nothing on the face of Section 105 in any way-supports Cleveland's crabbed interpreta-tion of Section 189(a), in Cleveland'siview, the review of 19/- Section 189(a)(1) states,-in part:
In any-proceeding under-this Act, for-the amending of any license the Com-mission shall; grant a hearing upon the request of any person whose interest _may be affected by the proceeding, and shall admit any such person as a par y to such proceeding.
'l m-i imi ii-
Applicints' post-OL license amendment requests is impermissible because section 105(c) contemplates an "antit rust review" at the const ruction pe'
("CP") phase of licenring and again at the vperating l!r.se ("0L") phase undet special circumstances.
Sef; Cleveland Brief at 10"36.
Here, again, Cleveland is wrong, both as to its understanding of NRC's regulatory framework and its analysis of the authority that is vested 'n the Commission.
NRC's Antitrust Review Authority As the Licensing Board stated in its prehearing cc-ference order, "the Commission itself does not have unlimited authority to consider and act to counter anticompetitive situations that may arise from activities otherwise subject to its regulatory supervision."
LDP-91-38, slip op. at 11-12.
Rather, the author-ity of the agency to conduct antitrust reviews -- that is, reviews of applicants and -
- ensees' competitive behavior in orda to determine whether NRC-licensed activities will cause an entitrust concern -- is a specific licensing authority, distin-guishable from tne plenary antitrust authority of other govern-mv agencies with antitrust responsibilities, such as the Fed-eral Trade Commission ("FTC").
Id.
As Applicants already made plain, our applications dc, not involve antitrust reviews, Never-theless, it is helpful to understand the statutory framework of NMC's substantive antitrust authority in order to #
_ress s
_ _ _ _ _ _ _ - _ ~._ _ _. _... _ __
Cleveland's argument, and to place in proper context Applicants' license amendment requests.
Section 105 of the AEASE# has three subsections, (a) through (c).
Subsection (a) makes clear that the NRC's antitrust jurts-diction is in addition to, and not in lieu of, the authority of other agencies, pursuant to the federal antitrust laws to regu-late trade and commerce.
Subsection (a) also makes clear that when other authorities make findings renarding violations of the federal antitrust laws, the NRC has the authority to act upon such findings by " suspend (ing), revok(ing), or tak(ing) auch r
other action as it may deem necessary with respect to any l
license" it issues.2.1/
c Subsection (b) of Section 105E2/ defines the NRC's responsi-bility to report to the Attorney General any information it may have with respect to the utilization of special nuclear material
}
or atomic energy in violation of the Federal antitrust laws or in l
a manner which restrict " free competition in private enterprise."
Subsection (c) of Section 105'provides for antitrust reviews by the NRC in connection with the licensing of nuclear facili-ties.
With the a..aistance-cf the Attorney General, the NRC is t
10/
42 U.S.C. 5 2135-(1988).
[
21/
42 U.S.C.
5 21'35(a) _ (1988): agg LBP-91-38, slip op. at-11-12.
22/
42 U.S.C. 5 2135(b) (1988).
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a required to determine whether there are " adverse antitruse aspects" to a " licensing matter", by making the following determinations whether the activities under the license would create or maintain a situation ingqq-sistent with the antitrust laws.
.El/
Subsect on (c) also specifies the actions that the NRC may take if its finding under paragraph (c)(5), above, is "in the affirmative."SS#
Specifically, the Commission is authorized "to
[
Issue or continue a license as applied for, to refuse to issue a i
license, to rescind a license or amend it, and to isoue a license
-vith such c;nditions as it deems appropriate."1E#
The application of Section 105(c) at'various stages of the
-l NRC' licensing process is the subject of two NRC cases, both of which are-relied upon by the Licensing Board in LDP-91-38.
Sag j
gop,ston_Lightino & Power to.
(South Texas-Project, Units 1'and -
2),_CL1-77-13, 5 N.R.C. 1303 (1977) (hereinafter " South Texas" or "CLI-77-13"); Elorida Power
&___ Licht Co. (St. Lucie Plant, Unit Nos. 1, 3, 4 ), ALAB-428, f N.R.C. 221 (1977) (hereinaftar "St.
L'ucie" or "ALAD-428") aff'd, Pt. Pierce Utilities Authority v t Nuclear Requiatory comm'n, 606'F.2d 986 (D.C. Cir.) cert. d?nied,-
444.U.S. 842-(1979); 'sge LBP-91-38, slip op, at 13-21. :The City 12/
Section 105(c)(5) of the AEA. 42 U.S.C.- S 2135(c)(5)-(1988).-
11/
Section 105(c)(6).of'the AEA. 42 U.S.C.
5 2135(c)(6) (1988).
11/
id.'(emphasis added).
C. F
of Cleveland asserts that "(t]hese are the seminal and binding Commission decisions on the subject."
Cleveland Brief at 11.
iadeed, these decisions are important in helping to underttand the nature and scope of the NRC's antitrust review authority.
As we vill show, this authority is carefully circumscribed; however, that circumscription does not curtail the other licensing respon-sibilities of the agency.
Sout h Texas was a case involving a dispute anong co-owners that arose after issuance of the facility cps.
In South Texas, in resolving the question of whether the OL antitrust t view pro-cess could be expedited, the Commission more broadly de
'ibed the " particularized regime" of Section 105.
As the Commission observed, it was considering "each occasion on which allegatlons of anti-competitive behavior in the commercial nuclear power industry may be raised."
CLI-77-13, 5 N.R.C. at 1312 (emphasis added).
In the St. Lucie case, the Appeal Board rejected the effort of certain petitioning municipalities to precipitate an antitrust review of the lice,ees* competitive behavior after the issuance of the facilities' operating licenses, viz., outside of the " particularized regime" established in Section 105(c).
ALAB-428, 6 N.R.C.
at 221-27
.4-
l Neither the Licensing Board nor the Applicants dispute the i
principle set forth in South Texas, and reaffirmed in St._Lucie, that."vith narrow exceptions," South Texas, supra, CLI-77-13, 5 N.D.C. at 1311, the NRC's authority to conduct antitrust reviews of allegations of anti-competitive behavior must be exercised, in
[
the first instance, at the CP stage, and a second time, at the OL i
licensing stage if there tsve been "significant changes in the l
licensee's activities or proposed activities."E5/
As the Licens-ing' Board explained quite thoroughly in the prehearing conference order in this case, there were two fundamental factors that: 1ed the Congress to establish the type of antitrust review authority specified in Section 105.
One was Congress' concern that utility
-applicants n be-faced with theHeontinuing uncertainty of having to undergo repeated antitrust reviews.
LBP-91-30, slip op, at 18, citina South Texas, supra, 5 N.R.C. at 1312-16.
The other factor was the congressional recognition of the NRC's unique role, as the bestover of nuclear power plant licenses, in impact-ing " anti-competitive influences":
Through-the licensing process, we can effec-tuate the special concern of Congress that anticompetitive influences be identified and corrected in their incipiency.
No nuclear 7
power can be generited without an NRC license and the licensing process thereby-allows us to act in a unique vay to fashion remedies.
lE/
Section 105(c)(2)-of the AEA, 42 U.S.C. S 2135(c)(2) see LBP-91-38, slip op at 13: C;eveland Brief.at 15-17: Preh.
Conf. Tr. (Sept. 19, 1991) at 144-45 (counsel for CE).
_;4
i t
South Texas, sunta, 5 N.R.c U
Jih _ ;,1,1K 9'
38, slip op, at x
18.
t Thus, South Texas ano m;. sugje made clear that NRC's author >*y to conduct an antitrust review of its applicants' and licensees' competitive behavior is, with certain exceptions, con-fined to the pre-licensing context.El#
For in the post-licensing i
context, the NRC no longer is uniquely suited to remedying i
anti-competitlise influences.
Other brcnches of government, par-ticularly the Department of Justice's Antitrust Division, the FTC and the Federal courts, provide satisfactory antitrust enforce-ment forums.
South Texas, supra, 5 N.R.C. at 1316; LBP-91-38, slip op, at 18, 4
There are, however, noted exceptions to the usual pre-licensing antitrust review process.
The Commission alluded to at least some of those exceptions in South Texas, and the Appeal Board echoed that recognition in St. Lucie.
Specifically, ll/
Cleveland mischaracterizes the Board's order-when it states that the Board " contends that the limitations of Section 105(c) on antitrust reviews do not apply because the licens-ees, by requesting the antitrust. review, thereby voluntarily valved the statutory limits on antitrust reviev," Cleveland Brief at 11, citinq LBP-91-38 at 19.
As indicated above, see n. 8, supra, the Board did not reach the questit.n of jurisdiction under Section 105.
But see-Section IV.B, i_nfra.
The point made by the Board at the page referenced by Cleveland is that in considering Applicants' requests ur. der Section 189(a) and 10 C..F.R.
S 50.90, the agency is not in any way undercutting the congressional considerations which resulted.in the " particularized regime" of Section 105.
See LBP-91-38, slip op, at 17-21.-,. ~.. - -
i a
I the Commission stated that it had the authority to conduct an antitrust reviev "in case of :
ppi2catlon for a licente amend--
- ment" where a facility is new or substantially different from the facility that previously ve; mibject to an antitrust review.
CLI-77-13, 5 N.R.C. at 1318.
An antitrust review on the basis of a license amendment also might be appropriate, the Commission noted, in connection with the transfer of control of a ?icense, id.2S /
As to whether author'ty for post-OL antitrust reviews
[
exists when there are "significant chiages," the Commission noted that any resolution of this question required consideration of i
l-the basic Section 105 framework, viz., presumably, that utility licensees should not be subject to redundant antitrust reviews and that other agencies are equally, if not better suited, to conduct antitrust enforcement proceedings.- 14 t
The Commission also pointed to the then-pending decision in r
St. Lucie, which, indeed, subsequently concluded that'a post-OL t
antitrust review was inappropriate in that case.29/
But as 28/' In the Summer case, the Commission stated that antitrust reviev.of a new co-owner is required.
South Carolina-Elec-1ric L Gas Co.
(Virgli C. Summer Nuclear Station Unit No.
1, CLI-81-14, 13 N.R.C.
862, 874 n. 47 (1981) (hereinafter
" Summer").
_2.2/
The St. Lucie decision involved a somenhat different context than the present case in that the tnree facilities in ques-tion received their construction permits as developmental reactors, pursuant to Section 104fb) of-the AEA, not as commercially-viable reactors under'Section 103.
ALAB-428, supra, 6 N.R.C. at 224.. By congressional mandate _, antitrust Footnote continued on next page.
l 1.
r i.
l-
_,..,.....-,-e..~..,,,.-,.m,-.,_.
.--,,.-,----_m..
..,em-,.-.-.m.,_.c_,,.-,,,...,.-,...-,-,.
l d
Cleveland notes in its brief, the Appeal Board in Ein_kugle rec-ognized that a post-OL antitrust review might be required where "necessary to enforce the terms of a license or ta revoke one
{
fraudulently obtained or in circumstances where a plant is sold i
or so significantly modified as to require a new license."
ALAB-429, supra, 6 N.R.C. at 226 n. 12; see Cleveland Brief at t
24.EAl Footnote continued from previous page.
t considerations were not grounds for refusing to issue con-struction permita to such facilities, in contrast to facili-ties licensed pursuant-to Section 103.
Id. at 225.
1E/ Central to the St. Lucie case was the question whether Section 186 of the AEA, the agency's license revocation l
authority, applied to antitrust matters, so that a license i
could be revoked because of conditions revealed which would warrant a refusal to grant a license on an original applica-tion.
InLthe Court of Appeals' review of that case,-the Court made plain that it was not reaching that question
. insofar as it applied to section 103 operating licenses.
With regard to section 103 operating licenses and those section 104(b) operating licenses subject to prelicensing antitrust review, we-4 do not foreclose the possibility that the Cctmission has postlicensing antitrust authority under section 186(a).
In fact, we expressly reserve judgment on that question.
Ft. Pierce Utilities-Authority v.-United Stateg, sup,La, 606 F'.2d 986, 999 n. 15 (D.C. Cir. 1979).
While the St. Lucie revocation issue is not at issue here, this-case does involve the analogous-principle of whether antitrust license conditions-can continue to be imposed after the re" elation of conditions which, had they been known at the ime of the original application, would have precluded their imposition.
- L 1
l
.,., -- n
,a._.._._.,_._.,.
In short, it cannot be' disputed that there are circumstances when post-OL antitrust reviews are appropriate.
The Contmission l
simply has not had the occasion to substantially elaborate on those circumstances beyond the references to them contained in South Texas and St. Lucia.11/
Finally, it should be noted that the City of Cleveland incorrectly asserts that section 105(c) is "a bar to antitrust 4
reviews subsequent to issuance of the OL."
Cleveland Briefost 31-32 n. 18.
It then argues that while this " limitation was sought by the' utilities for their protectic. the limitation vorks both ways," and therefore that third parties, like Cleve-land, should be protected from the-reconsideration of an earlier substantive antitrust review because of their reliance on it.
The short answer to Cleveland's argument, here, is that Applicants are neither seeking an antitrust review, nor are they seeking reconsideration-of the merits of the previous antitrust l
review process that led-to imposition of the Perry and Davis-Besse_ antitrust __ license conditions.
_Furthermore, as Cleve-land itself recognizes,-see Cleveland Brief at 24, citino St.
'.3,,l/
- I n ' t he _ Summe r dec is i_on, the Commission did address the mean-ing of "significant changes" in antitrust activities under Section 105(c)(2) of the AEA.
Once again, this analysis.
focused on the limited role of the NRC in policing allega-i tions of antitrust violations, once NRC-has concluded _a=com-
.plete antitrust-review.
Of course, this case is not such an antitrust review case.
, l l
l' m,~_.-,,,~,,4,_,___,.
-,..m
Luc _le, Eypra, 6 N.R.C. at 226 n. 12, post-OL antitrust reviews are not barred in cer*.ain types of circumstances.
-In any. event, Cleveland is wrong that the reliance of third parties, such as itself, on entitrust conditions is relevant at all here.
The significance of the legislative history, cited by the Commission in South Texas _, about utilities' reliance on the
]
CP-stage antitrust review, is that utility investors,
.a sub-jected themselves to the NRC licensing process in order to own and operate a nuclear facility, were entitled to place reliance on the terms of their own NRC licenses, absent "significant changes" or other unusual circumstances.
See Summer, supra, 13-N.R.C. at 873 ("significant changes" determination must be consistent with " Congress's expressed. intent not casually-to bur-den applicants with a-second antitrust review after an extensive antitrust review at the construction license stage.").
Thus, in South Texas, the commission pointed to the legislative statements-of Congressman Holifield, Chairman of the Joint Committee on Atomic-Energy, that an " investor of $100 million in a plant
[who] builds the plant to channel the power _into his own system of distribution, should not be put in a position.
. of double jeopardy."
CLI-77-13,-supra,-S-N.R.C. at 1315.
Third parties, such as Cleveland,~are not investors in NRC-licensed facilities and-NRC has no such obligation to them.
To the extent a third party, like Cleveland, relies on its access r
1 i
?
i
.t
i to an operating facility, it dces so at its own risk.
There is no " double jeopardy" issue here.
The most obvious illustration of this fact i s that a nuclear f acilit y can be shut down by the licensee -- an the license with its antitrust conditions termi-nated -- without regard to third parties' " dependence" on it or on such conditions.
(!ronically, Cleveland does not contend that it is dependent en the actual operation of the subject facili-tics, nor could it, since it uses the facilities' antitrust license conditions to avoid purchasing their power.
See CEI and TECo Application at 14-16; see also OE Application at 57-58.)
In summary, pursuant to Section 105 of the AEA, NRC conducts a review of its applicants' and licensees' competitive behavior at the prelicensing stage.
In certain other circumstances, an additional antitrust review may also be conducted.
H.
NRC's Licensing Authority Nothing in the " particularized regime" of Secticn 105, or in the agency's decisions, described above, which interpret Section 105, i n any way limits the agency's authority to review the meaning and intended purpose of Section 105 and to take any licensing action that might be appropriate based on that review.
Similarly, nothing in Section 105 of the AEA prevents the NRC from considering the Applicants' license amendment requests which, for their consideration and resolution, require the agency l i
l-
..,,,,... _,.. - - -,,... - _ _ _., - ~ - _,
....-...m.,.
,.,.._.,...-_----.-,....._....-....-,..~,-~,,..-.~----.m.m.,-.----,,-.mm.~---
to review and interpret Section 105.
The City of Cleveland erro-rieously relies on Section 105 to characterize this case as an
" antitrust review."
But this is not a section 105 review case, notwithstanding Cleveland's determination to call it one.
As the Licensing Board stated in its prehearing conference order, this agency, which imposed the license conditions at issue i
in the first instance, is uniquely and best situated to make a judgment about "whether the requirements it dictated now should i
be suspended or otherwise altered.
Indeed, (the NRC) seemingly is_the only entity in a position to grant applicants the relief they seek."
LBP-91-38, slip op, at 19.
1.
NRC is Authorized ra conduct llearings on License Amendment lleguests NRC's authority to conduct a hearing on a request for a license amendment is specifically set out in Section 189(a) of the AEA, which provides that "the Commission shall grant a hear-ing upon the request of any person whose interest may be affected" by "any-proceeding under (the AEA) for the granting, suspending, revoking, or amending of any license."
42 U.S.C.
5 2239(a)(1) (emphasis added); see LDP-91-38, slip op, at-5.
In addition, Section 189(a)(2)(A) explicitly authorized the Commis-sion to " issue.-
any amendment to an operating license.
." 42 U.S.C.
5 2239(a)(2)(A).
As the Licensing Board stated, it is only through a crabbed interpretation of f
~ 22-1
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.-c
-,,v
,n,
,,n.,,,,..nn~,_,,,
.-,--,n,.--
,,..--,,n,--,
Section 189(a) that Cleveland is able to conclude that the Appli-j.
cdnts' requests do not fall squarely into one of the specific licensing actions enumerated in Section 189(a)(1) as actions sub-ject to a-hearing.-
LBP-91-38, slip op, at 6, 8-9 and n. 18.
1 Simply put,_10 C.F.R. S 50.90 states that a licensee can j
apply to amend its license "whenever (it] desires."
See Section III, supra, citina 10 C.F.R. S 50.90.
There are no exceptions to i
this right.
Obviously, then, NRC is authorized to consider what-ever license amendment requests that facility licensees submit.22#
Certainly, where the request is founded on a question of statutory interpretation of the AEA, it is inconceivable that l
the NRC cannot consider it.
If license conditions are no longer valid because, for exam-pla,'theyJdo not serve their intended purposes, e.a.,
as a result of facility design changes or unanticipated results of calcula-i tions, the NRC is authorized and, indeed, one could argue that it is obilgated to modify the license.
A contrary result would require-the agency to continue to impose license conditions which make no sense.
It also would prevent the agency's imposition of sensible conditions.
Cf. Duke Power Co. (William B. McGuire Nuclear Station, Units 1 and 2), ALAB-143, 6 A.E.C. 623, 625-26 (1973); (new information must be brought to the attention of the 12/
Needless to say. this imposes no obligation on the agency-to grant every such request.
It is simply obl.igated to-con-sider the application.
-;3_
. - ~.
i t
trier of fact so that its decision accurately reflect existing facts, that is, that the decision makes sense); Philadelphia
[
gl ec t r i c _,qg.
(Limerick Generating Station, Units 1 and 2),
ALAB-909, 21 N.R.C.
1605, 1613 n. 13 (ceasoned decisionmaking i
contemplated by the Administrative Procedure Act).
r Cleveland does not, nor would it, dispute the fact that a l
license amendment would be necessary before Applicants could take i
the actions that the granting of our pending applications vould permit.
Thus, any order granting Applicants' request would
" grant the licensee (s) authority,
. to do something that (they) otherwise could not have done under the existing license authority" -- the definitive test as to whether a licensee's request for' agency action constitutes a license amendment.
Sholly v. Nuclear Reaulatory Comm'n, 651 F.2d 780, 791 (D.C. Cir.
1980) (per curiam), vacated oB other arounds, 4L9 U.S.
1194, 103 S. Ct. 1170 (1983); accord, San Luis Obispo Mothers for Peace v t Nuclear Requlatory comm'n, 751 F.2d 1287, 1313 (D.C. Cir.
1984).12#
11/ ~ Cleveland fusses over the fact that Applicants' requests were stated in the form of requests for suspension of the subject antitrust license' conditions.
Cleveland Brief at 29-30,-35-36.
Cleveland's concern,-here, is highly exagger ated.
Applicants fashioned their relief request in terms of
" suspension" of the license conditions because they recog-nl:ed the possibility, albeit remote, that scme any in the future,_ nuclear power from Perry and Davis-Besse might become competitively advantageous, requiring reinstatement of-the-subject conditions.
Applicants could not logically Footnote continued on next page.. _ _,
,.., -. -. _, _, _., _.. - _, _. _ - _.. _, -. ~., _ _ _. _..
4 To the extent that Cleveland argues that " antitrust reviews" cannot be the subject of amendment requests by licensees, as dis-uussed above, this plainly is not the case in at least some cir-cumstances.
At a minimum, then, the NRC muet be authorized to consider all 11 cense amendment requests, 1nclud1ng "an ti t rus t "
\\
requests.
If the relief requested is not appropriate, then the proper outcome is the denial of the requested amendment, not the refusal to entertain it in the first place.
Fu r t h e r.no r e, this case 14 not an " antitrust review" care, and so the premise of Cleveland's analysis is flawed.
Moreover, contrary to Cleveland's assertion, Section 189(a) of the AEA is not simply a procedural provision.
Cleveland's Brief at 36-37 Procedural provisions, such as some of the NRC's rules of practice, describe hcw a process is to be conducted, rather than afford the right to that process.
- See, e.a.,
10 C.F.R. 5 2.730 (procedure for the filing and resolution of motions).
In contrast, Section 189(a) provides the substantive right to a hearing.
See San Luis Obispo Mothers for Peace v.
Footnote continued from previous page, rule out this future possibility and, consequent ly, did not ask for removal or rescission of the antitrust license con-ditions.
But this hypothetical and unlikely eventuality does not cause the present, :antinuing imposition of the license conditions to make any more sense, or to be any more fair.
Whether the conditions are removed or suspended is not the questions the question is whether they should and can continue to be imposed, see statement of part:es' joint
" bedrock" legal issue in Sect.on ::, supra.
_=---.-_ - - -
N.R.C.,
751 F.2d 1287, 1312, 1314 (D.C. Cir. 1984), and reference thereto in Cleveland Brief at 36.
One of the enumerated circum-stances for which Section 189(a) provides a hearing is "(a]ny proceeding.
for the.
amending" of an operating license.
Not surprisingly, then, in the San Luis obisp_o case, the Court of Appeals made clear that "[ license) amendments are among those agency actions for which a hearing is explicitly guaranteed by section 189(a) 751 F.2d 1287, 1314 (emphasis in origi-nal).
Moreover, the Court stated, in no uncertain terms, "that the reference to ' amendments' in section 189(a) means all amend-ments, and not just those which effect a substantive change in a plant's status."
Id. at 1314-15 (emphasis in original).
2.
License Amendment Applicants Are
" Persons," Too Finally,-Cleveland goes so far as to argue that Applicants 1
are not entitled to be i.eard because_the applicant of a license amendment request, the licensee, is not entitled to a hearir.g under Section 189(a) of the AEA.
Cleveland Brief at 37-41.
Ignoring the fact that Section 189(a) in no way limits those
" persons affected" who may request a hearing, and the fact that NRC's regulations are premised on the understanding that licens-ees are " persons"' entitled to avail themselves of Section 189(a),
see LBP-91-38, slip op, at 7 n.
19, citing 10 C.F.R. 55 2.103(b),
2.105(d), 2.108(b) and 2.1205, Cleveland argues that licensees,..
should-have more limited hearing rights than intervening third parties, such as Cleveland.
The term " person" is defined in the AEA, a fact Cleveland entirely ignores.
Section 11(s) of the AEA states:
The term " person" means (1) any individ-ual, corporation, partnership, firm, associa-tion, trust, estate, public or private insti-tution,_ group, Government agency other than the Commission, any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and (2) any legal successor, representative, agent, or agency of the foregoing.
42 U.S.C. 5 2214(s) (1988).
In short, the definition of " person" is all-inclusive, and certainly does not exclude-licensees or applicants for license amendments.
Furthermore, under-Section 103(a) of the AEA, 42 U.S.C.
5 2133(a), the NRC authorizes the issuance _of licenses for.com-mercial nuclear power reactors to " persons."
See Tennessee Val-ley Authority.(Phipps Bend Nuclear Power Plant, Units l'and 2),
ALAB-560, 8-N.R.C.
533, 544 n. 42-(1978).
Thus,. licensees are
" persons" under the AEA.
Cleveland points to.a_ series of cases that' elaborate on when members of the public are entitled to precipitate or intervene in Section 189(a) proceedings.
Sea Cleveland Brief at - 39, citina Bellotti v.-United _ States Nuclear Requlatory comm'n,-725 F.2d 1380 (D.C. Cir. 1983); Union of concerned scientis m v. United l
i S t a t e s Nuq). eat _ Reg.g l a t o ty_Comm _' n 7 35 F. 2d 14 37 (D.C. Cir. 1984),
cert, denipA, 469 U.S. 1132 (1985); Sholly v. Nuq1 gal 3 tqu_lalory
[
Comm'n, 651 F.2d 780, (D.C. Cir. 1980) (per curiam), vacated and l
L remanded, 4 59-U.S. 1194 (1983).
Contrary to' Cleveland's assump-tion, however, the fact that none of these cases raise a question about applicants' hearing rights does not mean oppilcants have 4
none; the issue simply was not ir controversy in those cases.
In fact, however, in the dissenting opinion in Bellotti, Judge Wright disputes. tbe majority's holding _ because, he asserts, the limitations that the majority places on third parties' -hear-ing rights are dependent on the licensee (viz., the license-amendment:appilcant)-seeking a hearing.
725 F.2d at-1386.- 1rhe fact that ilcenaces are entitled to request a hearing la an i
undisputed fact; the debate in Bellotti is whether others' hear-ing rights'should hinge on whether "the licensee protests."
Ld.
f In' sum, Cleveland would read _Section 189(a) to require the NRC to provide a hearing to third parties who are secondarily affected by a dacision on a license amendment request.but, para-doxically, to deny the same hearing to the party most directly affected, the licensee.
This " interpretation" of Section 189(a) makes no sense,_and has no support in t'
language of the stat-ute, the NRC's regulations or elsewhere.
See 1.BP-91-38. slip =op.
4 at 7-8.
h,
m.
t Applicants are licensees and, as such, are entitled to request that their licenses be amended.
NRC, in turn, is autho-rized to conduct reviews of any such requests, including the pending requests of OE, CEI and TECo.
Furthermore, the agency is obligated to provide a hearing on a license acaendment request if so requested by the licenseo, which is what has occurred in this case.0/
F C.
Summary This is a case of statutory interpretation; it is not an
" antitrust review" case.
NRC's licensing responsibilities permit and, indeed, require the NRC to consider and resolve Applicants' license amendment requests, which raise a fundamental question about the meaning of the agency's statutory antitrust authori.c and responsibilities, as set forth in Section 105 of the AEA.
c IV.
Applicants' 1.icense Amendment Requests are also
,C_ognizable tfnder Section 105 of the ABA There are two reasons why Applicants' license amendment requests are cognizable under Section 105.
The first reason in that the Appeal Board explicitly held that, with respect to the i
M/
In any event, NRC alwatj<> has the authority to afford hear-ings on issues pending befcre it-if it considers it in the polic interest to do so.
H& 10 C.F.R.
's 2.10 4 ( a ) -( I n t h e casc of an application on whir 5 a hearing is. required by the Act or this -chapt er, or in whicn the Contmission f inds that a hearing is requirsd in the put;lic interest, the Secretary will 1:ssue a notice of hearing
.").
m.
l
1 very license conditions that are the subject of this case, their i
imposition was conditioned on the ;40's ability to modify them if I
i they proved onerous to the utility-licensees.
The second reason why_ Applicants' request are cognizable under Section 105 is that the basis for the amendment requests constitutes the type of l
change of circumstances that prompts agency consideration under l
Section 105, notwithstanding the fact that the amendments have l
been requested after Perry and Davis-Besse received their OLs.
A.
The Significance of ALAB-560 ALAB-560 is the decision of the Appeal Board which imposed the license conditions that are the subject of Appilcants' license amendment requests.1EI After critically evaluating the competitive. behavior of'the Applicants, the Appeal Board grappled 7
with the question of the proper remedy to impose on OE, TEco and CEI.
Before the Appeal Board was the separate proposed decision of one of its members, Mr. Shartman, who had draf ted a decision.
j f
for the entire panel to consider and then had left the NRC before the= panel's opinion had been completed.
ALAB-560, supra,
~;
10 N.R.C.
at 270 Much of Mr. Sharfman's lengthy opinion was r
adopted by.the two remaining Board members.
But in ce-tain areas, "particularly on the question of relief," the Board dif-fered from-Mr. Sharfman.
Id.
4 15/ The Toledo Edison Co.
(Davis-3 esse Nuclear Power Station.
Units 1, 2 and 3), ALAS-560. ;0 N.R.C.
265 (1979) (hereinaf-
-ter "ALAB-560"_or'" Davis-Se m ",
I n._ w,-._.
1.- - ;.. _,,,,.,
. - - - -.. ~ _
On the subject of relief, Mr. Sharfman's opinicn analyzed the remedies that had been imposed by the Licensing Board in the i
i decision under review.
Ses ALAB-560, p.upr0, 10 N.R.C.
at 385-405.
The Applicants had objected to various aspects of this relief for a number of reasons, among them that certain aspects of the proposed relief would work great hardship on them.
Ld.,
10 N.R.C.
at 390.
Mr. Sharfman found the Applicants unpersuasive In establishing that the conditions he proposed imposing on them I
would be too harsh.
However, his propo. sal to go ahead at that time and impose this relief was conditioned on his vesting the Licensing Board with continuing jurisdiction to entertain a-future request f' rom an applicant for relief from " license condi-tions (that) would cause extreme hardship."
id 10 N.R.C. at 398 ; gsg !L1So M. a t 392 ("Hcvever, should this licenne condition conf ront the app 1fcants vith a situation of extreme hardship or impossibility at some time in the future, they may petition the Licensing Board for relief from it.") (emphasis added).
The majority opinion in ALAB-560 rejected Mr. Sharfman's prmonal that it vent the Licensing Board with continuing juris-diction in the case.
But in rejecting this approach, the Appeal Board unequivocally affirmed the purpose of i t, namely, to condi-tion the imposition of the antitrust licensa conditions it then i
r I
l l
_ g,.
t r.J..,o
.,s,m g y,,.,,y.v',._e,,
,..,,,,.m,,+....,_.,r.,
.yy-,,,,-r.,,,_..,
,w._.,
,-,,e.,m%.,
considered appropriate on the ability of the agency to modify those conditions in the future if they subsequently proved to be
" inequitable":
2.
In a number of instances Mr. Sharfman would, for an indefinite period, " vest the Licensing Board with con *,inuing jurisdiction" to telleve the app 11canta fecm conditions that might prove an extreme hardship or impossible of compliance.
See, g.tg1, pp. 392 and 398, inj yl.
We agree that license condi-tions seemingly fair todatj may prove inequi-table tomorrow.
It is not necessary, how-ever, to extend the Licensing Board's juris-diction to provide for the possibility of such modifications.
Commission regulations give the Director of Nuclear Reactor Regula-tion -- who is assisted by an able antitrust staff -- authority to modify license condi-tions where necessary and provide as well as means for review of his determinations.
10 C.F.R. Sections 2.200-2.204 and Section 2.206.
Indeed, the Director has already acted to modify one of the license conditions imposed in this case (albeit not at the applicants' request).
We therefore see no occasion to continue the Licensing Board's jurisdiction over aspects of this case.
Accordingly, we do not join in the portions of Mr. Sharfman's opinion that would do so.
/
ALAB-560, 10 N.P.C.
at 294-95 (empiasil added; footnotes y
omitted).
The City of Cleveland inaccurately states that, "Nowhere i n the license conditions approved by the Licensing and Appeal Boards in Davis-Besse is there any mention that the conditions can be modified in the event circumstances change."
Cleveland Drief at 28.
Cleveland apparently did not read in context pages
-r
-- - - - -. - +
-e
. ~ - -
-294-95, quoted above,25#
As a result, Cleveland erroneously
{
faults.the Licensing Board for finding authority to conduct post-OL antitrust reviews in ALAB-560.
Cleveland Brief at 27 It is Cleveland that is in error.
The holding 12# of ALAB-560 was,-in part, that the antitrust license conditions that were being imposed were subject to subse-quent amendment.
In fact, their imposition was condilloned on the stated authority of the NRC to amend them, if theit imposi-tion later provided to be "inequitabic" to the Appilcants.
The pending requests for relief from those conditions fall squarely within this framevock.
B.
Section 105 Jurisdiction Contrary to the contention of the City of Cleveland, the Licensing Board rightfully held that the Commission had jurisdic-tion to review Applicants' license amendment requests pursuant to 15/
Cleveland also mischaracterizes the Appeal Board's reliance on sections in Part 2 of the Commission's regulations, argu-ing that the reference "merely reflects the Board's recogni-tion that a license condition can be modified to ensure that it-is not circumvented by the Applicants."
Cleveland Brief at 28.
This is plainly wrong.
The whole point of the Appeal Board's holding on the right of the Applicants to Lobtain subsequent relief was its concern that the. license conditions might prove inequitable to the Applicants in the
^
- future, 11/
See Davis-Besse,.sypra, 10 N.R.C.
at 287 (the Appeal Board's.
" ultimate factual and legal conclusions" on relief are divided into sections one and two, the second of which is the-lengthy-paragraph quoted above)..
, =. -. -
i l
10 C.F.R. S 50.90 and Section 189(a) of the AEA.
Because of this holding the Licensing Board did not reach the question of vhether this case also fell within the authority granted the agency in Section 105 of the AEA.
LBP-91-38, slip op, at 21 n.
42.
Applicants believe that jurisdiction lies with the Commis-sion under this alternative ground, as well.
AsSection III.A, supra, makes plain, there are circum-stances in which license amendment requests that raise antitrust questions under Section 105 of the AEA are cognizable.
South Texas, supra, 5 N.R.C. at 1318.
The circumstances on which the Commission already ~nas passed judgment, based on its understand-ing of the language and purpose of Section 105, include changes in facility ownership, and requests for substantial changes in a facility.
The Commission also has cautioned-that, in interpret-ing whether to consider antitrust questions when "significant changes" have occurred after an OL has been issued, the agency must be cautious to not frustrate the statutory scheme of Section 105.
See Section III.A, supra.
Keeping these considerations in mind, the heretofore unaddressed. question of whether Section 105 applies in the present circumstances can be resolved.
First, it cannot be overemphasized that the question addressed by the Commission, in its south Texas discussion of
-license amendments, was "whether antitrust review may be i i
, ~. -.
e
-initiated in case of an application for a license amendment South Texas, supra, 5 N.R.C.
at 1318; ges Section !!!.A, supra.
Thus, the Commission was grappling with the specific question of when it would entertain reconsiderations of licensees' competitive situation and behavior -- issues that the " particularized regime" of Section 105 sought, if possible, to lay to rest in pre-licensing reviews.
As Applicants have explained at length above, see Section !!, supra, the license amendment requests-here do not involve " antitrust reviews."
Thus, South Texas _is not precisely on point here.
The question remains, however, whether the subject-matter of Applicants' license amendment requests are cognizable under i
Section 105.
Further consideration of the nature of Applicants' requests suggests that Section 105 does apply.
As Applicants already have indicatedi.the specific legal question of statutory interpretation posited by Applicants' requests-is whether_the Commission is without authority, as a matter of law,_to continue the imposition or retention of anti-trust license conditions contained in an OL if it finds that the actual cost of nuclear power from the licensed nuclear power plant is higher than the cost of alternative sources.1E#
Resolu -
tion of this question vould not offend the "particularlhed ll/
See also Cleveland-Brief at (characterizing Applicants' i
argument) cited in Section' :, aspra, 35-l l
regime" of Section 105 because the competitive situation is not involved in the resolution of the question.
See Section II, suprg.
Applicants' agree with the NRC Staff that the specific argu-ment raised by our requests is a matter of first impression;39/
moreover, this issue probably was not ant ic ipat ed by the Corc. mis-sion when it made its decision in South Texas.
The critical question, however, is not whether the subject-matter of Appli-cants' requests previously was considered or addressed; rather, the question is whether the requests can be considered within the Section 105 framework.40/
Applicants' requests are based on a "significant change" that has occurred.
This is not a change in competitive behavior or circumstances; and, it is not the kind of circumstances ordi-narily considered under Section 105.
Nevertheless, it is a change in the relevant circumstances, namely, a significant dif-ference between the anticipated and the actual cost of power from tre Perry and Davis-Besse facilities, and the legal consequences of that difference.
As Applicants contend in their amendment 12/
NRC Staff's Motion for Extension of Time to File Response ;o the City of Cleveland's Notice of Appeal of Prehearing Con-ference Order Granting Request for Hearing, Nov.
1, 1991, at 2.
iS/.
Thus, Cleveland begs the question when it argues that the Commission would be creating authority it otherwise does not have.
Cleveland Brief at 25-36.
The question, instead, ;o whether Section 105 is acpl. cable. _...
applications, this significant change mandates agency consider-ation of the propriety of its continued imposition of antitrust license conditions on the Applicants.
Stated another way, Perry and Davis-Besse are "substantially different facilities," in terms of cost, then they were anticipated to be when they were licensed.
See South Texas, Eupra, 5 N.R.C.
at 1318.
Just as the NRC is without authority to continue to impose antitrust license conditions on a party that is no longer a licensee, Applicants contend that because the purpose of the subject antitrust condi-tions cannot be served when power from the facilities is not com-petitively advantageous, the Commission, under such circum-stances, would not be author.2ed to issue antitrust license con-ditions in the first place nor is it authorized to continue to impose such license conditions on OE, CEI and TECo.
See, gnq1, OE Application at 76-79.41/
Consideration of the r,gency's analysis in South Texas but-tresses Applicants' position.
In contrast to the arguments advanced by some of the parties in South Texas and again in S_L Lucie, Section 105 consideration of Applicants' license amendment requests in this case does not put the NRC into "a broad and ongoing antitrust enforcement role," nor does it require the Com-mission to continually " police" the competitive behavior or 41/
Section 105 specifically provides for the amendhent of the antitrust conditians of NPC licenses.
Section 105(c)(6) of the AEA, 42 U.S.C.
5 2135(cli6) (1988); sge Section !!!.A, 5 '4PJ 3
competitive activities of licensees throughout_the lives of operating licenses. - South Texas, supra, 5_N.R.C.
at 1309, quoted by City of Cleveland in its Brief at 13-14.
It bears repeating that Applicants' case does not rely on or in any way challenge the agency's earlier resolution of the competitive aspects of licensing Perry and Davis-Desse.
Furthermore, consideration of Applicants' case doen not
- intrude in any way on the expertise of other. traditional anti-trust forums-that are equally, if not better suited than the NRC to address and remedy-existing anticompetitive behavior.
South Texas, supra, 5 N.R.C. at 1316-17; see LBP-91-38, slip op, at 18.
Rather, here, the NRC would simply be interpreting its own organic statute.
In short, the NRC.has an important role to play in reviewing
-Applicants' requests, which raise issues of first impression about the meaning of Section 105.
Moreover, consideration of Applicants' requests pursuant to Section 105 falls within the language and interpretation of the provision's treatment of 'sig-i nificant changes" in circumstances that occur after an operating license is issued.
Agency consideration also does not offend the concurns' underlying the structure of Section 105 for agency con-sideration of allegations of anticompetitive behavior in the com-mercial nuclear power industry. See south Texas, sypra, 5 N.R.C.
i l
at 1312.
In sum, the Commission tilso should conclude that it has authority to review this case pursuant to Section 105 of the AEA.
V.
Conclusions The NRC is authorized to review Applicants' license ameno-ment requests pursuant to its licerring authority under Section 50.90 of its regulations ar., Section 189(a) of the AEA.
The Commission also has the cuthority, pursuant to Section 105 of the AEA, to consider the pending applications.
Accordingly, the City of Cleveland's appeal should be denied.
Respectfully submitted, b b n $ h D ulu u/f (
~
Gerald Charnoff U ()
g Deborah B.
Churnoff Margaret ;, Spencer SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.
Washington, D.C.
20037
/202) 662-8000 Counsel for Ohio Ediso tompany James P.
Murphy Colleen Conry SQUIRE, SANDERS & DEMPSEY
[
1201 Pennsylvania Avenue, N.W.
D.C.
20044 (202) 626-6600 Counsel for The Cleveland Ele:-
tric I.luminating Company and The Toledo Edison Company Da*ed:
November 21, 1991 33_
_-. _..~.
.~
UNITED STATES OF AMERICA 10LhukD FUCLEAR REGULATORY COMMISSION
'0" BEFORETHENUCLEARREGULATORYCOMMISSIOh cq ict y MCRiLi AF f 00Cn'tigj{j'#
il In the Matter of
)
)
- OHIO' EDISON COMPANY
)
Docket No. 50-440-A-
)
(Perry Nuclear Power Plant,
)
Unit 1)
)
CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 21st day of-November, 1991, a copy'of the foregoing Applicants' Brief in Opposition to the Appeal of the City of Cleveland, Ohio of the Licensing Board's Prehearing Conference Order was mailed 1first class, postage prepaid, to each'of the following:
Samuel-J. Chilk Secretary of the Commission U.S.. Nuclear Regulatory Commission Washington, D.C.
20555 Ivan Selin, Chairman U.S. Nuclear Regulatory Commission Washington, D.C.
205S5 Kenneth C. Rogers, Commissioner U.S.. Nuclear Regulatory Commission Washington, D.C.
20555-James R.
Curtiss, Commissioner U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Forrest J.
Remick, Commissioner U.S.LNuclear Regulatory Commission Washington, D.C.
20555 4-,,,
9 -
r r--
.e-------
+-< * - - +
~..
Charles Bechhoefer Atomic l Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555
'G.
Paul Bollwerk, III Atomic ~ Safety and Licensing Board Panel U.S.,
Nuclear Regulatory Commission Washington, D.C.
20555 Marshall E. Miller, Chairman Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 1920 South Creek Boulevard Spruce Creek Fly-In Daytona Beach, Florida 32124 Joseph Rutberg, Esq.
Sherwin E. Tuck, Esq.
Steven R. Hom, Esq.
Office of the General Counsel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Mark C.-Schechter, Esq.,
. Janet-Urban,.Esq.
Transportation, Energy and Agriculture Section Antitrust Division Department of Justice Judiciary Center Building 555 Fourth Street, N.W.
Washington, D.C.
20001 James P. Murphy, Esq.
Squire, Sanders-& Dempsey 1201 Pennsylvania Avenue, N.W.
P.O. Box 407
-Washington, D.C.
20044 June W. Weiner, Esq.,
Chief Assistant Director of Law William M. Ondrey Gruber, Esq.,
Assistant Director of Law William T.
Zigli, Esq.
Assistant Director of Law City Hall, Room-106 601 Lakeside-A/enue Cleveland, Ohio 44114 1
-~
.~
.d -
Io Reuben Goldberg, Et
- Channing C.
Strother, Jr., Esq.
- i Goldberg, Fieldman & Letham, P.C.
1100 Fifteenth Street, N.W.
Washington, D.C.
20005-
. D.-Diard MacGuineas, Esq.
Volpe,-Boskey-and Lyons 918 Sixteenth-Street, N.W.
Washington, D.C.-
20006
- David R. Straus, Esq.
Spiegel & McDiarmiu 1350 New York Avenue, N.W.
Suite 1100
. i Washington, D.C.
20005-4798 Kenneth L. Hegemann, P.E.
President American Municipal Power-Ohio, Inc.
601 Dempsey Road P.O.
Box 549 Westerville, Ohio 43081 Philip N. Overholt-Office'of Nuclear Plant Performance Office-of Nuclear Energy U.S. Department of Energy, NE-44
- Washington, D.C.-
20585 b c.2y w $u /# b o w /)
Deborah B. Charnoff C/. O.
SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.
Washington, D.C.
20037 (202) 663-8000 e
M /0214/037Dec.91-4 e
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