ML20086U537
| ML20086U537 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 01/06/1992 |
| From: | Charnoff D, Jerome Murphy CLEVELAND ELECTRIC ILLUMINATING CO., OHIO EDISON CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, SQUIRE, SANDERS & DEMPSEY, TOLEDO EDISON CO. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#192-12477 91-644-01-A, 91-644-1-A, A, NUDOCS 9201080086 | |
| Download: ML20086U537 (100) | |
Text
. / 2'/ 77
. i r i ', i i -
gWr1 e . p 1./ 6 UNITED STATES OF AMEltlCA N M ~# ~
4 NUCLEAR REGULATOPY COtoi!SSION DEFORE Tile ATOMIC SAFETY AND LICENSING !! Nib i >' ;, ,
9 _________.____.-_____.___._.
)
In the Matter of )
)
01110 EDISON COMPANY ) Docket No. 50-440-A 3 (Perry Nuclt 'r Power Plant, Unit
) 50-346-A 1, )
Facility Op *ating License )
No. NPF-58) ) (Suspension of TIIB CLEVELAND ELECTRIC ILLUMINATING
) Antitrust Conditions)
)
COMPANY 3
) ASL:!P No . 91-644-01-A Ti!E TOLEDO EDISON COMPANY )
)
(Perry Nuclear Power Plant, Unit 1, )
Facility Operating License )
No, NPF-58) )
(Davis-Besse Nuclear Power Station, )
g Unit 1, Facility Operating License )
No. NPF-3) )
)
APPLICANTS' MOT 1ON FOR
SUMMARY
DISPOSITION D
James P. Murphy Gerald Charnoff Colleen Conry Deborah B. Charnoff Margaret S. Spencer SQUIRE, SANDERS & DEMPSEY Mark A. Singley D 1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044 SHAW, PITTMAN, POTTS &
(202) 626-6600 TROWDRIDGE 2300 N Street, N.W.
Counsel for The Cleveland Elec- Washington, D.C. 20037 tric Illuminating Company and (202) 663-8000 D The Toledo Edison Company Counsel for Ohio Edison Company January 6, 1992 9201000006 920106 Q g DR noOcx OsOOgg6 p9
IO-i TABLE OF CONTENTS
()
Pooe
!. Introduction............................................... 1 F
() A. History of-Proceeding................................ 2
- 1. The Parties..................................... 2 !
- 2. Nature of the Case.............................. 4 O B. Statement of Issues and Nature of Relief Sought in Original Applications...................... 5 1 . Position of Parties on the Applications......... 5 :
- 2. Findings of NRC Staff........................... 7 C. Statement of Issues and Nature of Relief i Sought in this Motion................................ 8 II. Summary =of Argument...................................... 12
() !!!. Argument................................................. 15 A. In Contrast to the Plenary Authority of Other Federal Bodies, NRC's Antitrust Autho;'ity is Spec i f ic and Limi ted. . . . . . . . . . . . . . . . . . . 16 0- 1. NRC's Role in Antitrust Matters is -
Limited........................................ 18 t
- 2. Section-105 does'not Diminish the Antitrust Responsibilities of Other -
Federcl Authorities; nor Does It Limit 0: Private Enforcement of the Antitrust Laws..........,.......e........................ 23-3.- Federal Authorities Other Than the NRC Enforce the Antitrust Laws..................... 27 ,.
O B. NRC's Antitrust Authority is Specifically Limited to Enauring that the Actual Operation of NRC-Licensed Facilities Does Not Contribute to or Cause Adverse Antitrust Consequences........................................ 32 0
_i.
O l E
lE 1
C. In Order for a Facility's Operation to i
" Create or Maintain a Situation Inconsistent with the Antitrust Laws," the Facilit Must Produce Low-Cost Power...............y............... 34 O
- 1. The Legislative llistory of Section 105(c) Establishes that the Congrest.
Decided to Vest the NRC with Antitrust Authority Decause of the Commonly-!! eld Understanding that the Nuclear O Facilit ies the NRC Licenses Would Produce Low-Cost Electricity................... 35 2 NRC's Own Interptetat ion of Section 105(c) Confirms that It Was the Anticipated Low Cost of Nuclear Power O which Would Provide to Facility Licensees a Competitive Advantage Requiring Agency Intervention.................. 47 D. If a Licensed Facility Does Not. Produce Low Cost Power, It Cannot Contribute to or Cause O Adverse Antitrust Consequences...................... 59 E. There are No Factors Independent of Low Cost that Invoke NRC's Section 105(c) Authority.......... 69 F. If Section 105(c) Does Not Require that the O NRC Suspend the Antitrust License Conditions Imposed on Applicants When the Cost of Perry and Davis-Besse Power is Not Competitively Advantageous, then the Statute as Applied Denies Applicants Equal Protection Under the Law................................................. 77 0
- 1. To Satisfy Equal Protection, Section 105(c) Must be Rationally Related to a Legitimate Government Objective................ 78
- 2. The Present State of Facts Must be Used O to Evaluate Section 105(c) Under the Rational Basis Standard........................ 81
- 3. Analogous Case Authority Indicates that Continued Imposition of the Antitrust i Conditions Denies the Applicants Equal O Protection..................................... 8?
i IV. Conclusion............................................... 88 Appendix A Sectinn 105 of the Atomic Energy Act, l
42 U s.C. 5 2135 0
-ii-lO
l O
O Tall!M OF AUTilORITIES L
CASES: Pagejsl O Abie State Bank v u_eaver, w 282 U.S. 765 (1931).................................................... 80, 63 Alabama Power Co t (Joseph M. Farley Nuclear Plant, Units 1 & 2), ALAB-646, 13 N.R.C. 1027 (1981), aff'd, 692 F.2d 1362 (11th Cir.
O 1982), geII. denied, 464 U.S. 816 (1983)................... passim Bank._o! New York v. Hoyt, 617 F. Supp. 1304 (D.R.I. 1985)................................................. 35 Browder v. Tip_ ton, 630 F.2d 1149 (6th Cir.
O 1980)......................................................... 35 Buckley v. Valeo, 424 U.S. 1 (1976)........................... 75 Garolene Prods, v. United States _, 323 U.S. 10 (1944)...................... ................................. 81 O
Chastleton Corp. v. Sinclair, 264 U.S. 543 (1924)........................................................ 79 ghesapeake & Ohio Ry. Co. v._ United States, 571 F.2d 1190 (D.C. Cir. 1977)................................ 34 O
Cities of Anaheim v. FFRC, 1 941 F.2d 1234 (D.C. Cir. 1991).......................................... 28, 29 City of Cleburne v u Cleburne Livino Ctr., 473 U.S. 432 (1985)............................................... 76 O
City of Cleveland v. C_leveland Elec. Illumi-natino_CA , 734 F.2d 1157 (6th Cir.), cf r.t_ .
denied, 469 U.S. 884 (1984)................................... 30 City of Pittsburo v. FPC, 237 F.2d 741 (D.C.
O Cir. 1956).................................................... 27 City of Vernon v. FERC, 845 F.2d 1042 (D.C.
Cir. 1988).................................................... 28 O
-iii-O
O I Eagr(s)
Consume _rs Powe_r_C.oa, (Midland Plant, Units 1 O & 2), ALAD-452, 6 N.R.C. 892 (1977)........................ passim Conway_ Core 2 v. FPC, 510 F.2d 1264 (D.C. Cir.
1975), aff'd, 426 U.S. 271 (1976)............................. 27 Detroit Edison Co., (Enrico Fermi Atomic O Power Plant, Unit No. 2), LBP-78-13, 7 N.R.C.
583, aff'd, ALAB-475, 7 N.R.C. 752 (1978).................. passim
.Fo r t _ P_i e r c e U t i l2 Auth. v, United State;., 606 F.2d 986 (D.C. Cir.), cert, denied, 444 U.S.
842 (1979).................................................... 23 O
FPC v. Conway___ Corp., 426 U.S. 271 (1976).................. 28, 29 FTC v. Cement Inst., 333 U.S. 683 (1948)...................... 26 Gallagher v. Evans, 536 F.2d 899 (10th Cir.
O 1976)..................................................... 83, 84 Gav(tt v.__ Alexander, 477 F. Supp. 1035 (D.D.C. 1979)......................................... 77, 78, 79 G_u_1f States Utils; Co& v.__FPC, 411 U.S. 747 O (1973)........................................................ 27 Houston Lightinq_&_ Power CO2 (South Texas Prcject, Units 1 and 2), CLI-77-13, 5 N.R.C.
1303 (1977)................................................... 59 O in re_ Sandoz Pharma _ceutical_ Corp 2, FTC File -
No. 901-0124, 56 Fed. Reg. 30,577 (1991)...................... 26 Kansas __Qas & Elec_,__Co._ (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 N.R.C. 559 (1975)................................................ 21, 22, 57 Leary v. United Stater, 395 U.S. 6 (1969)..................... 35 Louisiana Power & Light Co z (Waterford Steam Electric Generating Station, Unit 3 .' ,
CLI-73-7, 6 A.E.C. 48 (1973).................................. 19 Louisiana _ Power & Liqht Co x (Waterford Steam Electric Generating Station, Unit 3),
CLI-73-25, 6 A.E.C. 619 (1973)............................. passim O
-iv-O
f I
()
_P_aae(s.) !
Hilnot Co. v 2 Arkansas _Sta.le_BL t J , 388 F. ,
C) Supp. 901 (E.D. Ark. 1975).................................... 82 i Milnot Co.__v._Rachardson, 350 F. Supp. 221 :
(N.D. 111. 1972?.............................................. 80 ;
Nashv i l lg, _ Chat t anooga _ L_St_. Louis Ry. v. '
- () - Walters, 294 U.S. 405 (1935).......................... 79, 83, 84 j NLRB v. Fruit & Vecetable Packers, 377 U.S. i 58 (1964)..................................................... 35
New England Power _Co. v._FERC, 571 F.2G 1213 !
O 1;.C. Cir. 1977).............................................. 28 Ohio Edison _Co. (Perry Nuclear Power Plant, l Unit 1, and Davis-Desse Nuclear Power Sta-
' tion,-Unit 1), LBP-91-38 (Oct. 7, 1991).................... passim
- O obio_ Edison Cot (Perry Nuclear Power Plant, f Unit 1), CLI-91-15 (Nov. 20, 1991), amended ;
by Order (Nov. 21, 1991)....................................... 2
_0tter Tall Power __Co. v. United glates, 410 i U.S. 366 (1973)........................................... 26, 30
'O Pubile Serv t_Comm'n v. FERC, 589 T.2d 542
( D . C . C f r . 19 7 8 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7 State v.- A.ib___BayJess Mkts., Inc., 86 Ariz.
193, 342 P.2d 1088=(1959)..................................... 82 ;
- O Etrehlow v. dansas State Bd., 232 Kan. 589, 659 P.2d 785 (1983)...........- .............................. 82 Toledo _ Edison Co. (Davis-Besse Nuclear Power Station, Units 1, 2& 3), LHP-77-3, 5 N.R.C.
13 133 (1977), aff_'d as modifled, ALAB-560, 10 L N.R.C. 265 (1979).......................................... passim-Town'of Concord v. Bostan_ Edison Co2, 915 F.2d 17 (1st Cir. 1990), cert, , denied, 111 S. ,
Ct. 1337 (1991)............................................... 30 lo;
.Un'ited States v. Carolene Prods2 , 304 U.S.
144 (1938).................................................... 81 United States v. Cooper Corp., 312 U.S._600 (1941)........................................................ 35 0: '
-v- 1 l'
'O-
, l l
(3 l
E.asidal t/nityd StJtes v. Iggey's, Inc., 371 U.S. 38
-(3 11962)........................................................26 Vance v. BradleY, 440 U.S. 93 (1979).......................... 75 Wessinoer v t_ Southern Rv. C_q1, 470 F. Supp.
930 (D.S.C 1979)..................................... 83, 84, 85 O-CONSTITUTION:
U.S. Const. a m e n d . 1/ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 , 7 5 , 7 7
, o
- () U.S. Const. amend. X1V........................................ 75
]
STATVT.ORY MATERIALS:
I i
Civilian Marksmanship Act, IO U.S.C.- '
43 5-430G(a)(5).............................................. 77, 79- ;
Sherman Act,-15 U.S.C. 55 1 el seg.................... 26, 29, 30
'Clayton Act, 15 U.S.C. 5 18............................... 26, 29 ,
- () . Federal Trade Commission Act, 15 U.S.C. S 45.................. 26 ;
Public Utility- }{olding Company Act of 1935, 15 U.S.C. S 79................................................ 29 Natural-Gas Act, 15 U.S.C. S 717.............................. 27
- O- >
15 U.S.C. 5 1311-1314......................................... 25 .
Federal Power Act (FPA), 16 U.S.C. SS 791-828............. 27, 28 2 8 U . S . C . S 51 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5 >
, 0 Atomic Energy Act (AEA). 42 U.S.C. S 2135.................. passim 42 U.'s.C. 5 7112(12).......................................... 29 4 0 --- ,n_Ecut AT1oNS :
10 C.F.R. 5.2.714a(a).............. .......................... 10 10 C.F.R. 5 2.749 (1991)......... ......................1-
,l O-i -vi-l l-
! [.
i l
13 ;
i Pace (s) 10 C.F.R. S 50............................................. 9, 65 36 Fed. Reg. 17,888 (1971).................................... 64 l 36 Fed. Reg. 19,711 (1971).................................... 66 37 Fed. Reg. 9410 (1972)...................................... 66 i
- 0-37 Fed. Reg. 14,247 (1972).................................... 65 l LEGISLATIVE MATERIALSt O' 116 Cong. Rec. 34,309 (1970).............................. 24, 25 116.Cong. Rec. 34,316 (1970).................................. 25 116 Cong. Rec. 39,619_(1970).................................. 24 33 Atomic Enerav -- Utilization for industrial or Commercial Purposes, H.R. Rep. No. 147D, !'
91st Cong., 1st Sess. (1970), reprinted in
.1970 U.S.C.C.A.N. 4981.................................... 25, 36 ,
Preligensino Antitrust Review of Nuclear A) Powerplants, Hearinas Before_the Joint Com-mittee on Atomic _Eneray, Part 1, 91st Cong., i ist Sess. (1970)........................................... passim ,
Prelicensina Antitrust Review of Nuclear Powerplants. Hearinas Bef ore - the Joint Com-
.O mittee on ALogic Enercy. Part 2, 91st Cong.,
2d Sess. (1970)...........................................44, 45 0
20 - -
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b UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 9
BEFORE THE ATOMIC SAFETY AND LICENSING DCARD
)
@ In the Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440-A
) 50-346-A (Perry Nuclear Power Plant, Unit 1, )
Facility Operating License )
S No. NPF-58) ) (Suspension of
) Antitrust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING )
COMPANY ) ASLBP No. 91-644-01-A TIIE TOLEDO EDISON COMPANY )
)
G (Perry Nuclear Power Plant, Unit 1, )
Facility Operating License )
No. NPF-58) )
(Davis-Besse Nuclear Power Station, i Unit 1, Facility Operating License )
No. NPF-3) )
} )
APPLICANTS' HOTION FOR
SUMMARY
DISPOSITION
) I. Introduction -
Pursuant to the Atomic Safety and Licensing Board's October 7, 1991 Prehearing Conference Orderl and 10 C.F.R.
B 5 2.749 (1991), Ohio Edison Company ("OE"), The Cleveland Elec-tric Illuminating Company ("CEI") and The Toledo Edison Company D
1/ See Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1, and Davis-Besse Nuclear Power Station, Unit 1), Prehearing Con-D ference Order (Ruling on Hearing /Intervenor Petitions and Issues / Contentions; Setting Schedule for Summary Disposition Footnote continued on next page.
D
l
("TE") (referred to collectively as " Applicants") hereby request
() that the Licensing Board grant this Motion for Summary Disposi-tion. Specifically, Applicants request that the Board answer the following " bedrock" legal issue in the affirmative
- O
!s the commission without authority as a mat-L ter of-law under Section 105 of the Atomic Energy Act to retain the antitrust license L conditions contained in an operating license i
if it finds that the actual cost of electric-
-() ity from the licensed nuclear power plant is higher than the cost of electricity from alternative sources, all as appropriately measured and compared??/
q) A. History of Proceedina.
1
- 1. The Parties. I C) OE is~a public utility company and one of four co-owners of '
the Perry Nuclear Power Plant (" Perry"). CEI and TE are wholly ,
P i
ovt.ed subsidiaries of Centerior Energy Corporation, a public
() utility holding company. CEI and TE_are_co-owners of-the Davis-t p Footnote continued from. previous page. :
'O Motions and Responses), LBP-91-38 (Oct. 7, 1991), as modi -
fled by the Licensing Board's Order-of November-5, 1991 (hereinafter "LBP-91-38").
2/ See Letter from R. Goldberg and C. Strother, counsel- for the '
. O '; City of Cleveland, to-Administrative Judges M.-Hiller, C.-Bechhoefer, and G. Bollverk (Nov, 7, 1991) forwarding the r parties' bedrock _ legal' issue. -See also Ohio Edison Co.
L _( Perry Nuclear Power Plant, Unit 1), CLI-91-15 (Nov. 20, 1
1991), amended-by order (Nov. 21, 1991) at 3 n.3-(acknowl-i.
edging agreement as to legal issue available for summary g disposition) (hereinafter "CLI-91-)S").
L
-2 i
! O --
u ._m . . _ . _ _ _ _ _ _ . . _ . _ . _ _ _ . _ _ _ _ . _ _ . _ . - . _ = _ _ . .
'O l
l Besse Nuclear Power Station and, together with OE, Pennsylvania O P wer Company and Duquesne Light company, are joint owners of Perry.2# Additional parties to this proceeding include the NRC Staff (" Staff"), the United States Department of Juctice ("DOJ"),
g the City of Cleveland (" Cleveland"), American Municipal Power-Ohio, Inc. (* AMP-Ohio") and Alabama Electric Cooperotive
("AEC").
O Cleveland is a municipal corporation which owns and operates Cleveland Public Power, an electric distribution system that serves portions of the Cleveland metropolitan area and along with O
CE1 sells electricity in that area. AMP-Ohio is a non-profit corporation operated on a cooperative basis for tne purposes, among others, of generating, purchasing, acquiring, transmitting, O
and selling electric power and resources to, and promoting the interests of, its seventy-five Ohio municipal electric utility members. AEC is the beneficiary of the antitrust license condi-O tions appended to Alabama Power's Joseph M. Farley Nuclear Power faci 1ity.E#
0 3/ Neither Pennsylvania Power Company nor Duquesne Light Com-pany joins the Applicants in this action.
1/ LDP-91-38, slip op, at 56.
E/ In exercising its discretionary powers, the Board granted AEC's petition for intervention, but limited AEC's partici-pation in various respects not relevant to this Motion. See o LBP-91-38, slip op at 36.
O
1 13 l
}
- 2. Eatyre of the Cas_e1 (
OE initiated this proceeding over four years ago, seeking i t
suspension of the eleven antitrust-license conditions appended to '
the Pe 'y operating license.5# On May 2, 1988, CEI and TE also .
'(3 request..d suspension of the conditions appended to the Perry and ;
Davis-Besse operating licenses.2/ Among the antitrust conditions !
t contained in the Perry and Davis-Besse licenses is the require-()
ment that theiovners of the facilities permit other entities to i have access to the power produce 6 by the plants.E/ Since the issuance of the license conditions, no such requests for access O have been made.
i The NRC orig lMally imposed the antitrust license conditions (y at issue here pursuant to Section 105(c) of the Atomic Energy Act (the " Atomic Energy Act," "Act" or "AEA"), as amended, 42 U.S.C.
5 2135(c).EI As a preregulsite to the imposition of such
- O f/ gge Application to Amend the Perry Operating License to Sun-pend the Antitrust Conditions Insofar as They Apply to OE (Sept. 18, 1987) ("OE Application"),
-g 2/ See Application to Amend the Perry and Davis-Besse Operating Licenses to Suspend the Antitrust conditions (May 2, 1988) '
("CE!/TE Application"). -
E/ Egg.OE Application at Attachment 1.( Antitrust Conditions),
Condition 9 at 1-4 t 2/ ' The specific license conditions at issue were imposed by a Licensing Board order issued Jan. 6, 1977, as affirmed and .
r modified by an order of the Appeal Board issued Sept. 6, 1979. See Toledo Edison Co. (Davis-Besse Nuclear Power
- g- Footnote continued on next page.. .
4 lO:
E_ . . . . _ . . _-___.---_-~__a- -------
'O i
conditions, Section 105(c) requires th'e NRC to determine whether o activities under a license " create or maintain a situation incon-sistent with the antitrust laws." O'
-B. Statement of Issues and Nature of Relief g Souaht in oricinal ADD 1ip tions. i
]
- 1. Position of Partles on the Applications.
In their original Applications to suspend the antitrust-O'
-license conditions appended to the Perry and Davis-Besse operat-ing licenses, the Applicants argued that the legislative history of.Section~105(c) of the Atomic Energy Act, the record of the O
proceedings imposing the license conditions, and judicial and
. administrative-applications of Section 105(c) indicated that the j universally anticipated economic superiority of nuclear power i O
plants generally, and the Perry and Davis-Besse plants specif1-cally, war the necessary predicate for the imposition of anti- '
trust license conditions by the NRC. !- Applicants then showed -!
that this anticipated-cost advantage never materialized.U /
Because this necessary predicate-for imposing the antitrust
?
0-Footnote continued from previous page.
Station, tJnits 1, 2 and 3), LBP-77-1, 5 N.R.C. 133 (1977) I (hereinafter "LBP-77-1"), aff'd as modified, ALAB-560, 10 '
N.R.C. 265.(1979) (hereinafter "ALAB-560").
.M/ Section 105 is reprinted in full in Appendix A.-
11./ OE Application at 4-47; CEI/TE Application at 4-10.
.M/ OE' Application at 53-79;-CEI/TE Appli ation at 9-10 and .
'O 23-39.
.r, O
O :
i license conditions never occurred, Applicants argued, suspension !
0 of those antitrust license conditions was required.12' f
)
The City of Cleveland and AMP-Ohio, both of whom admittedly utilize the Perry and Davis-Desse antitrust license conditions to 0
avoid purchasing power from those facilities, opposed the ;
Applications.1S/ .
O In July,1988, the NRC Staff sought advice from the DOJ regarding the-Applications. In a very brief statement, the DOJ opined that, as-a matter of law, changes in the cost of operating ;
'O nuclear plants do not negate a finding that construction and operation of a nuclear plant " create or aaintain a situation O'
12/ OE Application at 79; CEI/TE Applicatica at 9-10. In addi-
~O tion, CEI and TE origin 611y argued that because the competi-tive environment in which CEI and TE operate had substan-tially and materially changed, the antitrust license condi-tions must be removed. CEI/TE Application at 17-39.- CEI and TE have dropped this argument. _Prehearing Conference Transcript (hereinafter "Preh. Conf. Tr.") (Sept. 19, 1991)
- g at 166-67-(counsel for CEI/TE).
ld/. See, e.o. , Answer of Cleveland in Opposition to OE's - Appli-cation for Suspension of Perry Operating License Antitrust Conditions (Feb. 19,-1988) (" Cleveland Answer to OE"); Com-ments of-Cleveland in Opposition to Application for Suspen-J3 sion of-Operating-License Antitrust Conditions (Se 1988) (" Cleveland Comments on CE!/TE Application")pt.113, ; Answer lD of AMP-Ohio in Opposition to OE's Application for Suspension of Antitrust Conditions (Apr. 6, 1988) (" AMP-Ohio Answer to OE"); Answer of AMP-Ohio in Opposition to CEI and TE Appli-cation for Suspension of Antitrust Conditions (July 13,
[0- 1988) (" AMP-Ohio Answer to CEI/TE").
6-L
,O
=..a..= . .- - . - - - .- - . - 2 :. . . - - _ - - . . - - . -
)
inconsistent with the antitrust lawn." N The DOJ Advice Letter p did not address the analysis contained in the Applicants' detailed license amendment Applications. In response to the DOJ Advice Letter, OE pointed out that the legislative history of p Section 105(c), prudent economic reasoning, and in fact the DOJ's own past practice supported suspension of the antitrust license conditions.1E D
- 2. Findings of NRC Staff.
The NRC Staff denied the Applications.12 In its summary D denial, the Staff concurr-3 vith the DOJ's views and rejected the Applicants' argument th:.t "unless acceas to the nuclear plant provides significant economic advantage, the NRC cannot make the D predicate finding essential to imposition of antitrust 1E/ Letter from Mark Schechter, DOJ, to T. Murkey (sic), Direc-g tor, Office of Nuclear Reactor Regulation, NRC (June 13, 1990) ("DOJ Advice Letter"). ,
15/ Letter from G. Charncff, counsel for 05, to T. Murley (July 24, 1990). See also Letter from D. Strauss, counsel for >
AMP-Ohio, to T. Murley (Aug. 27, 1990), and Letter from e R. Goldberg, counsel for the City of Cleveland (Aug. 31, 1990) (responding to OE's July 24, 1930 letter),
12/ Letter from T. Hurley to M. Lyster, CEI, and D. Shelton, TE (Apr. 24, 1991) (transmitting NRC Staff Evaluation of Appli- 4 cations for License Amend 3nents te Suspend the Antitrust g License Conditions) and Notice of Denial of Applications for '
Amendments to Facility Operating Licenses and Opportunity for Hearing (Apr. 24, 1991) (collectively "NRC Staff Denial"). See also Notice of Denial of Applications for Amendments to Facility Operating Licenses and Opportunity for Hearing, 56 Fed. Reg. 20,057 (May 1, 1991) (" Notice of g Denial").
O
conditions."18! -
The Staff declined to address much of the legis-
) lative history on which the Applicants relied,19/ and rejected -
the Applicants' assertion that NRC precedent coniirmed that the Commission's ant it rust determinations depend in the first D instance upon a cost h n a l ys i s . 8' 0 / It concluded that " cost was not a determinative factor in the prior proceeding," and that
" wholly apart irom any consideration of cost, the Conur,iss ion D would be remiss in licensing these plants without imposing condi-tions designed to ensure that such licensing would not enable the
' icensees to ntintain the pre-exist ing ant icompet it ive y situation."2Y 4e
(.. Statement of Issues and Nature of Relief
$2unkt in this Hotion 1 _
D Pursuant to the Notice of Denia1, OE, CEI and TE requested a hearing en their Applications.22' This request was opposed by the City of Cleveland."3/ A Prehearing Conference was held on S
1E/ NRC Staff Denial at 4 (quoting DOJ Advice Letter at 2).
19/ hl. at 6-8.
D 2.0 / id_ . at 8.
M/ ld, at 10, 11.
22 / Specifically, Applicants requested review of three issues:
O (1) Do the Perry and Davis-Besse Nuclear Power Plants afford (Applicants) a competitive advantage when their actual costs are such that they do not provide a lower average cost of bulk Footnote continued on next page.
1 O ,
i September 19, 1991, and the Licensing Board issued an Order,
). LDP-91-30, on October 7, 1991 (as modified on November 5, 1991). '
Among other rulings, LDP-91-38 granted the parties' request for a
) Pootnote continued from previous page.
j power supply than woul6'aon-nuclear generation '
operations LApplicants) could have exercised in j the same time frame (age 10 C.F.R. Part 50, App. "
L, SS 11.11 and 11.32)7
) I (2) . If the Perry and Davis-Besse Nuclear ,
Power. Plants do not afford (Applicants) a competi- .
tive advantage, can their ownership share of those plants " create-or maintain a situation inconsis-tent with the antitrust laws" (Section 105(c)(5) y of the Atomic Energy Act, as amended) such that r the NRC-is authorized to impose or retain license l conditions?
l
-(3) If the Perry and Davis-Besse Nuclear i Power Plants do not afford (Applicants) a lower average cost of bulk power supply than vould
)
non-nuclear generation options they could have exercised in the same time f rame, does impositica or retention of license conditions under Section, i 105(c) of the Atomic Energy Act, as amended, deny '
(Applicants) equal-protection and due process !
) under the Fifi.h Amendment of the U.S. i constitution? L See Request for a Hearing with Respect to the Denial of the Applicat*7n to Amend the Perry and Davis-Desse Operating ,
Licenses to Suspend the Antitrust Conditions Insofar as They
) Apply to CEI and TE (May 31, 1991) ("CE!/TE Request for i Hearang") at 1-2; Request for a Hearing with Respect to the ;
-Denial of the Application to Amend the Perry Operating '
License to Suspend the Antitrust Conditions insofar as They Apply-to OE (May 31, 1991)-("0E Request for Hearing") at 1-2. i
)
OE sought a hearing on two additional issues, which ques-tioned whether NRC Staf f and DOJ communications with Senator ;
Howard M. Metzenbaum and his staff compromised the' Staff's and DOJ's independence in their review of the Applications.
) Footnote continued on next page. '
h
O bifurcated proceeding in which a so-called " bedrock" legal issue, f O to be agreed upon by the parties, vould be addressed first, and i then, if appropriat e, an evidentiary hearing would follow.24/ As -
f the Licensing Board explained in LBP-91-38, if the Board answers O the " bedrock" legal issue in the affirmative - " accept [ing) the I Appilcants' legal position that facility costs are the linchpin j for the antitrust license conditions at issue" -- the Board will !
() _ conduct an evidentiary hearing to determine whether the Perry and {t Davis-Besse facility costs are, in fact, higher so as to warrant ;
Q ..
0 Footnote continued from previous page.
Egg OE Request for Hearing, Issues 4 and S at 2-3 The Licensing Board admitted these two contentions as to the NRC ,
C) staff, gas LBp-91-38, slip op.-at150. The Commission, how- !
ever, has suspended review of the two congressional taint issues pending resolution of the bedrock legal issue. See CLI-91-15. OE's request for reconsideration of the suspen- i sion of these issues is pending.-
() 12/ See City of Cleveland's opposition to a Hearing and Petition to Intervene in the Event Hearing is Requested and is l Granted (May 31, 1991).
11/ See LBP-91-38, slip op, at 56 (summarizing the Board's Pre-hearing Conference rulings). Egg also Letter from J. Murphy '
'(3 - to Judges M. Miller, C. Bechhoefer, and G. Bo11werk (July 25,'1991) and Letter from G. Charnoff to Judges M. Miller, .
C. Bechhoefer, and G. Bo11werk (July 25, 1991) (proposing bifurcation of proceeding).
Pursuant to 10 C.F.R. 5 2.714a(a), Cleveland has appealed '
O the Prehearing Conference Order on four grounds, focusing
-primarily on theHCommission's-authority to hear this case.
See Brief of City of Cleveland, Ohio in Support of Notice of Appeal of Prehearing Conference Order Granting Request for Hearing (Oct. 23, 1991). That appeal currently is pending, but should not delay a resolution of this Motion for Summary 0 Disposition. -
lOu
O nullification of the antitrust license conditions.25/ In con-() trast, if the Board rules against the Applicants on_that determi-
-native legal issue, "this proceeding would be concluded at this I
level."25/ On November 7, 1991, on behalf of all of the parties, t
O. counsel for cleveland submitted a statement of the bedrock legal ;
issue to the Licensing Board.22/ l
-i in this Motion for Summary Disposition, Applicants establish ;
'O that-facility costs are determinative of the NRC's authority to I impose antitrust license conditions. Accordingly, Applicants' Motion for Summary Disposition of the bedrock legal issue should O
be granted, and this case should proceed to an evidentiary hear- ,
ing to determine whether the actual costs of electricity from i O lE/ LBP-91-38, slip op, at 53.
25/ id. at 53-54. ]
22/ Lee n.2, supra. The parties also agreed that the following ;
O issue was ripe for a Motion for summary Disposition:
Are the Applicants' requests for susaension of the antitrust license conditions aarred by res judicata-,'or collateral estoppel, or ;
laches, or the law of the case?
iO-See also CLI-91-15.
Because the substantive doctrines underlying this second legal issue are essentially affirmative defenses designed to prevent the NRC's consideration of the bedrock legal issue,
.Ol and because Applicants do not know whether the intervenors vill proceed with +.his issue, the Applicants do not address these defenses at this-time. Rather, Applicants will address the second legal issue if and when the intervenors choose to argue it. Applicants simply note that.they'do not in any way intend to valve their right to oppose the second
() legal issue if it is argued by another party. -
4 0-
O Perry and Davis-Besse are higher than the cost of electricity O from niternative' sources, a as appropriately measured and I compared.
I
!!. n FummarY of_ALQ1um.fnt i
'O !
I This case it, about the scope of NRC's antitrust authority under Section'105(c) of the Atomic Energy Act. Applicants con-
- Q tend that NRC's_ antitrust authority does not extend to situations where a-licensed nuclear facility produces high-cost electricity.
Section 305(c) is.not a grant of plenary authority over l
- O 1 antitrust matters. Other federal authorities do have broad anti-trust jurisdiction that is unaffected by NRC's particular anti- f trust role. In contrast, NBC's antitrust authority under the Act O
is specific and limited. NRC is authorized to place antitrust i conditions on_its licensees where necessary to remedy situations in which the operation of a licensed nuclear facility would "cre-f ate or maintain a situation inconsistent with the antitrust laws." conversely, if the operation of a licensed nuclear power plant does not cause that result, NRC:has no jurisdiction over ;
the competitive conduct of a facility licensee.
It is Applicants' contention that a licensed facility does O- not and cannot create or maintain a situation in' consistent with the antitrust laws if it is a producer of high-cost electricity.
Several considerations contribute to this conclusion.
- O L
- O u J._.=._ __ _ _. _ _ . _ . _ _ . . . _
'O i First, it is apparent from the legislative history of
- <3 Section 105(c) that this statutory provision was enacted to ,
t i
ensure-that the NRC could counteract the anticipated anticompeti-tive impact of low-cost nuclear facilities, operation of which it l
- O licensed. There is no doubt that Congress and, particularly, the Joint Committee on Atomic Energy, i t t, key members, and the most ,
prominent advocates of the new legislation, including senior ;
q)- staff of DOJ and the Commission, expected nuclear-powered-facili- ,
ties to produce substantial. quantities of-electricity at a low
~
cost. The competitive advantage of access to this low-cost power Cy was the concern, and the only concern, that section losic) was enacted to remedy.
The pivotal importance cf the anticipated low cost of O
nuclear energy is also reflected in NRC case law. The competi-tive advantage of low-cost electricity from an NRC-licensed facility was the necessary predicate for NRC's exercise offits -
'O Section 105(c) _ authority. In fact, in considering whether to entertain a request for relief under Section 105(c), the Appeal Board has held that the burdens of-high-cost nuclear power are
'O beyond the NRC's antitrust jurisdiction. .Similarly, in DOJ anti-
- trust advice letters to the NRC, the DOJ made clear that_in the -
absence of a significant cost advantage, a nuclear facility O should not be subject to NRC-imposed antitrust conditions, s
- 0
!O E i 2 .-__ _. __ _1_._ __2 . . _ _ _ _ _ , _ . _ _ _ _ . , _ . . - . . _ _ . _ . , , _ , . , _ .
. _ _ .. _ ._ _ _ . _ _ _ _ ._ _ _ . - _ . _ _ - _ _ . _ .m ... . _ ._. _ . _ _ _ -
.O l.
While the NRC Staff contends that factors other than cost i O independently invoke agency authority under Section 105(c), care-1 ful consideration of these factors establishes that the necessary predicate to their significance in NRC antitrust analysis is the
.O expectation that the nuclear facility in question produces '
low-cost electricity. In short, the factors other than cost on i
which the NRC Staff's conclusions depend have no significance r O under Section 105(c) independent of cost.
Finally, Applicants she,v that the interpretation of .
Section 105(c). advocated by the NRC Staff and the DOJ vould apply '
that statute so as to deny Applicants equal protection under the ,
law and thereby render the statute unconstitutional. Notwith-1 standing the-lenient standard for implicating economic regula-O
. tions under the equal protection clause, the Gu ernment's statu-e tory interpretation does not withstand scrutiny because there is no rational basis for distinguishing the unaffected from those adversely affected by Section 105(c).
In summary, the Commission is without authority, as a matter
.O. of law, under section 105 of the Atomic. Energy Act, to retain the antitrust lleense conditions contained in an operating license if the actual cost of electricity from a licensed nuclear power
- o. plant is higher than the cost of electricity from alternative sources, all as appropriately measured and compared.
.O
- O
_ _ _ _ _ . _ _ __ _ . . . ~ . _ _ _ _ _ _ . _ _
~O 111. Aroument
'O If the Actual Cost of Electricity from a Licensed Nuclear Power Plant is liigher than the Cost of Electricity f rom Alternative Sources, All as Appropriately Heasured and Com-pared, the Commission is Without Authority, As a Matter of Law, Under Section 105 of the AEA, to Retain the Antitrust O License Conditions Contained _in an operatina License. -
The 1970 amendment of the Atomic Energy Act, which substan-tially revised section 105(c), 42 U.S.C. $ 2135(c), vested the O
NRC with the authority to impose license conditions and to regu-
-late its licensees because of considerations other than the ,
health, safety and environmental matters that traditionally form
- O the basis for NRC's regulatory authority. Under Section 105(c),
antitrust considerations could also provide the basis f or agency action.2E' O-The issue raised-by the pending Applications, and stated as a matter of law in this Motion, is the definition of-the circum-O stances under which the NRC is authorized to exercise its Section -
105(c). authority. As Applicants vill show, it is beyond dispute that the agency's antitrust authority is not a plenary power, in O
28/ As.the Appeal Board stated in the Epriey case, "By amending
.the Atomic Energy Act in 1970, Congress gave this Comnission added duties to fulfill in connection with its licensing of
- OL' nuclear power plants. Since that time, it has had to con-sider, in addition to safety and environmental matters, the antitrust ramifications of its licensing actions." Alabama Power Co. (Joseph-M. Farley Nuclear Plant, Units 1 and 2),
ALAB-646, 13 N.R.C. 1027, 1035 (1981) (hereinafter "ALAB-646" or "Ferley"), aff'd, 692 F.2d 1362 (11th Cir.
'O. 1982), cert. denied,-464 U.S. 816 (1983).
O L _ . _ . . . _ . , _ _ _ ._ _ _- .. - . - - - - - - - - - ---~
10 contrast to the authority vested in other federal nuthorities.
O Rather, NRC was given antitrust authority under Section 105(c) in order to achieve a specific and particular congressional purpose.
That purpose is to ensure that the actual operation of NRC-O licensed facilities does not contribute to or cause adverse anti-trust consequences. Applicants further contend that if a licensed facility dues not produce low-cost power as contemplated O by Section 105(c), its actual operations cannot contribute tu or cause adverse antitrust ramifications. Applicants respectfully submit that it is a fundamental tr. ism that a licensed facility O must pr duce low-cost power in order for lices. sed activities tc
" create or maintain a situation inconsistent with the antitrust laws," and that this truism, which lies at the heart of O Section 105(c), is a necessary predicate to the exercise of anti-trust authority by the NRC.
A. In Contrast to the Plenary Authority of O Other Federal Bodies, MC's Antitrust Authority is specific and Limited.
Perhaps the only point that all parties to this proceeding O agree upon is that Congress carved out for the NRC a limited role in reviewing the antitrust implications of operation of a nuclear power plant. The parties, however, disagree as to the exact nature of those limitations, The language of Section 105(c)
O establishes that Congress authorized the NRC to impose antitrust license conditions only when the activities under the license 0
O
b would " create or maintain a situation inconsistent with the anti-3 trust laws." A close evaluation of the " particularized regime" of Section 105(c) further illustrates that unless the actual operation of a nuclear-powered facility provides a licensee with e a competitive advantage, the NRC has no statutory basis for con-tinuing to impose antitrust conditions on a licensee.
In express recognition of the NRC's limited antitrust role, O
and without disturbing the NRC's previous findings as to their competitive behavior,2S/ Applicants are asking the NRC to deter-mine that, as a threshold matter, there is no statutory basis for 3
continuing the antitrust conditions where the high cost of nuclear power obviates any competitive advantage perceived to arise from ownership of these nuclear plants. Where, as here, e
the unforeseeably high cost of nuclear power not only eliminates any competitive advantage afforded to the plant owners, but actu-ally places them at a competitive disadvantage,3S# there is no O
legitimate basis under Section 105(c) f or the perpetuaticn of ~
O 12/ Importantly, Applicants do not seek a plenary antitrust review of their competitive behavior since the license con-ditions were imposed. To the contrary, for purposes of their Applications and this Motion, eacn of the Applicants has accepted the NRC's prior determination concerning its coinpet itive behavior.
JO/ For example, as OE explained in its Application, the deter-mination of AMP-Ohio to use the license conditions to avoid using Perry power has forced OE to provide power to AMP-Ohio at rates which effectively cause OE's retail customers to subsidize the power purchased by AMP-Ohio. See OE Applica-g tion at 56-58.
(
O
6 antitrust conditions. In these circumstances, the NRC has both the legal authority and the obligation to suspend the aatitrust conditions.
1
- 1. MRC's Rele in ..at i t rust Matters is Limited.
.?
The NRC has repeatedly affirmed that its jurisdiction over antit rust matters is not a general, broad or " plenary" power.
J Rather, it is specific and limited. Thus, in tne Licensing Board decision that led to the imposition of the license conditions at issue here, the Board stated:
~
The NRC is not charged with the responsibil-ity of the general enforcement or administra-tion of the antitrust laws. Its particular interest is focused not upon a r'$ :latory mandate to investigate all market activities D of Applicants but only to consider the effect of granting a nuclear license on the competi-tive environment in which Applicants operate.11/
j NRC has re, y reiterated this theme. For as the Appeal Board has stated, _ecause the Commission's antitrust jurisdiction "is not plenary," its " writ to enforce the antitrust laws does D not run to the electric industry generally. Neither does it reach all actions by utilit i es that generate electricity with auclear-powered facilities."32/ -
%)
11/ LBP-77-1, 5 N.R.C. at 237 (emphasis added).
12/ The Detroit Edison Co. (Enrico Fermi Power Plant, Unit No. 2), ALAB-475, 7 N.R.C. 752, 756 (1978) (hereinafter
'O "ALAB-475" or " Fermi").
o
LO-In two'1973 Waterford decisions ~,22/ the first decisions
- g_ issued by the agency under amended Section 105(c), the Commission
' articulated the so-called " nexus" standard which required that i
NRC exercise its antitrust jurisdiction only if activities under ;
i O- an NaC license vould contribute to creating or ma'.ntaining an anticompetitive situation.
In Waterford II, the Commission made clear that the NRC had C) the means at its disposal, through Section 105, to achieve a spe-cific purpose ensuring broad " access to power produced by nuclear' facilities."SSI In this way, NRC would ensure that the O va?uable commodity of nuclear povar would be shared. The Commis-sion made-the further point, however, that this was the only pur-pose for which-NRC was given antitrust authority.EE# Because O-32/ Louisiana Power & Licht Co. (Waterford Steam Electric Gener-ating. Station, Unit 3), CLI-73-25, 6 A.E.C. 619 (1973)
(hereinafter "Waterford II"); see also Louisiana Power G
,O Licht Co. (Waterford Steam Electric Generating Station, uni t 3 ) , "CLI-7 3-7, 6 A.E.C. 48 (1973) (hereinafter " Water-ford I"),
11/ 'Waterford !!,-6 A.E.C. at 620, q)- lE/ This conclusion reiterated the views expressed by the Com-mission to the-Joint Committee on Arnr' Energy at the time the 1970 amendments.to Section 105(c, vare proposed. In particular, the-Commission responded as.follows to the-Joint Committee's question:
9 Question: The Department of Justice has expressed the view that supply transactions are- within the purview of presenc Section 10Sc. of the Atomic Energy Act of 1954. In other words, the department is apparently of
.g Footnote continued on next page.
- 0-
- O NRC's role is expressly-limited to that purpose, its authority g necessarily is limited to remedying situations which that purpose serves:
At the same time, however, we must emphasize O that the specific standard which Congress required for antitrust reviews -- "whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws as specified in subsection O
Footnote continued from previous page.
the view that the Comnission is authorized to wield its prelicensing antitrust review authority to reach antitrust problem areas 9 outside the scope of the specific activities which would be licensed, i.e., construction and operation of a facility. Does the Com-mission agree with this position of the Justice Department ? Please elaborate.
g (Answer:] As se understand the views of the Department of Justice with respect to supply transactions which are within the purview of present section 105c. of the Act, the Depart-ment is referring to supply contracts which are incident to the particular activity.
O Mr. C megys [ Deputy Asst. Atty. Gen. of the Antitrust Div. of DOJ} testified at page 7:
" Broader concerns with the structure and methods of competition in supply markets, not clearly and directly related to the project to be licensed, might be better dealt with by O- means other than the licensing procedures."
(Italic added.) Accordingly, we do not anticipate that the prelicensing antitrust review authority would be used to reach gen-eral antitrust problems in the nuclear supply industry beyond the scope of the specific 9 activities for which an application for a license has been made to~the Commission.
Prelicensing Antitrust Review of Nuclear Powerplants. Hear-ings Sefore the Joint Commitfee on Atomic Energy, Part I, 91st Cong., 1st Sess. 97 (1970) (hereinafter " Joint Commit-g tee I") (emphasis added).
l O-I l'
3 105a" -- has inherent boundaries. It does not authorize an unlimited inquiry into all 3 alleged anticompetitive practices in the utility incustry. The statute involves licensed activities, and not the electric utility industry as a whole. If Congress had intended to enact a broad remedy against all anticompetitive practices throughout the D electric utility industry, it would have been anomalous to assign review responsibility to the Atomic Energy Commission, whose regula-tory jurisdiction is limited to nuclear facilities. It is the status and role of these facilities which lie at the h< art of 3 antitrust proceedings under the Atamic Energy Act.25/
In its 1975 Wolf Creek decision,E2# the Appeal Board reiter-D ated the Waterford II standard that "{ilf activities relating to a facility have no substantial connection with alleged anticom-petitive practices, there is no need for a hearing,"EE# i.e., NRC e has no authority to remedy the situation. At issue in Wolf Creek was the definition of the " activities under the license" that fell within the scope of Section 105(c). A local cooperative e that had intervened in the proceeding argued that the applicant's alleged refusal to wheel supplemental power to it would prevent the cooperative from acquiring an interest in Wolf Creek, thus e falling squarely within the nuclear " access" standard articulated by the Appeal Board in Waterford II.
3 25/ Waterford II, 6 A.E.C. at 620 (emphasis in original).
ll/ Kansas Gas & Electric Co. (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 N.R.C. 559 (1975) (hereinafter
" Wolf Creek" or "ALAB-279").
@ lE/ Id. at 566, (citing Waterford II, 6 A.E.C. at 621).
9
O The Appeal Board in Wolf Creek held that the anticompetitive 0- activity alleged by the cooperative fell within the scope of Section 105(c). While the described conduct was "not traceable immediately and directly to operacions of the licensed nuclear O facility itself," it was apparent "that such conduct might enhance [the applicant's) ability to use nuclear-generated power to the disadvantage of competitors."3S# Focusing on the ur.ique o and limited role of the NRC in regulating antitrust matters, the Appeal Board stated:
(A]s the Commission's antitrust responsibili-O ties are linked to license applications, the Commission's antitrust mandate extends only to anticompetitive situations intertwined with or exacerbated by the award of a license to construct or operate a nuclear facility.10/-
O On the other hand, if an anticompetitive situation is not inter-twined with or exacerbated by a facility's operation, NRC need o not scrutinize the applicant's business activities. "[A]11eged anticompetitive practices -- however serious -- which have no substantial connection with the nuclear facility, are beyond the
- o. scope of antitrust review under the Atomic Energy Act."S1!
O 29/- Id. at 568.
.10/ Id. at 569 (emphasis added).
_O AA/ Waterford II, 6 A.E.C. at 621.
'O L
)
O i i
l
- 2. Section 105 dces not Diminish the Antitrust Responsibilities of Other 33 Federal-Authorities;-nor Does It Limit-Private Enforcement of the Antitrust Laws. ,
The statutory language and legislative history of Section '
O 105 clearly indicate that the NRC's involvement in the economic. '
regulation of nuclear power-was not intended to, nor did it,
- alter theLrole.--of the numerous other federa'l authorities or of
" private attorneys general" charged with enforcing the antitrust laws.
q)1 First, Section 105(a) of the Act expressly provides that
"[n]othing' contained in this chapter shall relieve any person from-the' operation of [the antitrust laws]."12 Second, the leg-g' -
islative history of Section 105 clarifies any ambiguity in the statutory language regarding its impactlon the universe of anti-Etrust' review. In summarizing-the contents of the 1970 legisla-
- 01 1 tion, 4h'e Chairman-of.the-Joint Committee on Atomic Energy, Con-gressman'Holifield,. explained-the relationship between_Section 105 and the existing antitrust laws:
'O I must emphasize, and'it must-be. borne in
-mind, that this whole antitrust feature of the Atomic Energy Commission's licensing pro-cedure vill be completely separate and apart -
from the application of the antitrust' laws -
,O -
J2/ Section 105(a)Lof the Act, 42 U.S.C. .5 2135(a)'(1988). See also-Fort Pierce Util. Auth. v. United States, 606 F.2d 986,
-1001 (D.C. Cir.) ("Section 105(a) . . . provides that noth-ing1in-[the] Act preempts the normal operation of the anti-o trust---laws . . . ."), cert, denied, 444 U.S. 842 (1979).
0 l
O l
l now on the statute books. The antitrust
' lows, and the authorities and responsibili-O ties of the Attorney General and others by virtue of these laws or in connection there-with, and the implementation of these laws, remain completely unaffected by the antitrust review dealt with in section 6 of the bill.
The antitrust laws referred to in subsection O 105(a) of the Atomic Energy Act are not qual-ified, limited, extended or interfered with in any way whatsoever.13I Similarly, the Vice Chairman of the Joint Committee on Atomic Energy, Senator Pastore, emphasized the preservation of the antitrust powers previously conferred upon other agencies and privatt parties:
O I want to stress in the clearest possible way that subsection 105c. in no way extends, revises, impairs, modifies, or impinges on the antitrust laws of our statute books, or o prevents or limits their full application.
The authorities and responsibilities of the
. Attorney General and others by virtue of our antitrust laws remain completely uninterfered with and unaffected by the review functions dealt with in section 105c.ii/
O _
The ranking minority member of tha Joint Committee, Congressman Hosmer, also agreed that the NRC's antitrust review O
O 13/ 116 Cong. Rec. 34,309 (1970) (comments of Congressman Holifield) (emphasis added).
O 11/ 116 Cong. Rec. 39,619 (1970) (comments of Sen. Pastore).
O
y ]
b responsibility "in n'o-way extends, impairs, amends, or affects 0 - any of the antitrust laws or prevents their application."E*'
Thus, a determination to suspend antitrust license condi-tions because Perry and Davis-Besse do not afford Applicants a competitive ~ advantage would not relieve Applicants of their duties under the " antitrust laws now on the statute books." E !
- O 3. Federal Authorities Other Than the NRC Enforce the Antitrust Laws.
The federal antitrust laws are enforced principally.by the O Department of Justice ("DOJ")b and the Federal Trade Commission
("FTC").N! Two primary antitrust enforcement tools of the DOJ 0- M / ~116 Cong. Rec. 34,316 (1970) (comments of Congressman Hosmer). See also 116 Cong. Rec. 34,316 (1970) (statement by-Congressman Holifield); Atomic Eneray -
Uti1ization for Industrial or Commercial Purposes,-H.R. Rep. No. 1470,-91st Cong.,-1st Sess. (1970), reprinted in-1970 U.S.C.C.A.N. 4981
. (hereinafter " Joint Committee Report"); Joint Committee I at O 70-(statement by Joseph F. Hennessey).-
M /- SeeLComments of Congressman Holifield, 116 Cong. Rec. 34,309 (1970).
4 U .As the agency' responsible for "the conduct of litigation in 10_- ..which the United States, an. agency,-or officer thereof is a party, or is interested," the DOJ, under-the direction of
,; the Attorney General, exercises-plenary jurisdiction over b antitrust actions. See 28 U.S.C. S 516 (DOJ-responsible for
[ representing. interests of the United States in litigation);
! 15 U.S.C.-SS 1311-14 (describing DOJ's broad responsibili-O- . ties-and powers in civil antitrust actions).
M/ Congress vested the FTC with the fellowing broad remedial powers:
L O ..- Footnote continued on next page.
lO l
^
i
' 1 f) I 4
f :and the FTC-are the Sherman Act SE and the Clayton Act.EE In X)' particular,-under the-Sherman Act the DOJ and the FTC nave exer- 1
~cised.theift authority to-challenge tying arrangements,E1/ refus-
- f. als to wheel power,32/ and-refusals to enter into power-supply I
- 0: -agreements,53/ conduct which lies at the heart of-ihe proscrip-r l tions contained-in the antitrust conditions imposed by the NRC on 4
I. -the. Applicants. Because of their antitrust expertise and sub-
!O, stantial resources devoted to antitrust enforcement, tne DOJ and
! l l-l Footnote-continued from. previous page. _
R3 1 i The [FTC) is empowered and directed to pre- '
F vent persons, partnerships, or' corpora-tions . . . from using unfair methods of com-l"- petition in.or affecting commerce and. unfair
, orideceptive acts or practices in or uffect-
- Q ing commerce.
FTCLAct,.-S 5(a)(2), 15 U.S.C. 5 45. The FTC may also use t
- its authority under the FTC Act to challenge conduct that l -violates the Sherman Act. See, e.a.,-FTC v. Cement Inst.,
333 U.S. 683 (1948).
l lO .49/1 Section 1 of-the Sherman Act prohibits certain contracts, i combinations'and conspiracies "in restraint of trade."
-15.U.S.C. 5 1. Section-2 of the Sherman Act prohibits monopolizing, or attempting to monopolize, any part of trade. -15 U.S.C. S 2.
- o:
5jd Section.7fof the'Clayton Act prohibits acquisitions the a _effect of which is."substantially-to lessen competition, or to tend.to create a monopoly." 15 U.S.C.7 5-18.
f El/ e.q,,' United States v. Loev's, Inc., 371 U.S. 38.
See, (1962 T; in re Sandoz pharmaceutical Corp. , FTC. File
-Q No. 901-0124, 56 Fed.. Reg. 30,577 (1991) (proposed FTC con-sent decree prohibiting tying arrangement).
12/ ~ Otter Tail Power Co. v. United States, 410 U.S. 366 (1973). i O E2/ -lbl. l O !
OL the FTC can effectively'and efficiently enforce the antitrust 13 laws applicable to the Applicants, without regard to the contin-ued imposition of NRC's antitrust license conditions.
Moreover, other agencies also are required to give their own {
201 independent consideration to competitive factors in their decisiens. b The Federal Energy Regulatory Commission ("FERC"),
previously'the Federal Power Commission'("FPC"), enforces anti-0-
trust-concerns under various sections of the Federal Power Act
("FPA").E5! For example, "
[ilt is well settled that [FERC) must take into account the effects of its programs on competition as well as on production."E5! Thus, FERC is required to indepen-dently consider competitive f actors in its decisions,E2! and the concurrent jurisdiction of other agencies over certain antitrust O-E4/ -Public-Serv. Comm'n v.' FERC, 589 F.2d 542, 557-58 (D.C. Cir.
1978).
O El/ 16 U.S.C. SS 791-828.
55/ :Public Serv. Comm'n, 589 F.2dgat 557 (involving review of potential anticompetitive.effect of leasing agreement under
' Natural Gas Act, 15 U.S.C. 55 717c, 717f, 717r(b)). See
- () also Gulf States Utils. Co. v. FPC, 411 U.S. 747, 758-59 (1973) (as general rule FPC must consider anticompetitive effects of a utility's security offering under Section 204 of-_the FPA, 16 U.S.C. S 824c); Conway= Corp. v. PPC, 510 F.2d
-1264 (D.C. Cir. 1975), aff'd, 426 U.S. 271, 281 (1976) (FPC has obligation to prevent maintenance of any " unreasonable,
'O : unduly discriminatory" rates under Section 206 of the FPA);
City of'Pittsburgh'v. FPC, 237 F.2d 741, 7541(D.C. Cir.
11956)-(FPC "cannot ignore" antitrust factors in evaluating certificates under Section 7 of the Natural Gas Act, 15' U.S.C. .S 717f).
() E1/ 'Public Serv. Comm'n, 589 F.2d at 558.
O
.. _. y -.p.
4 concerns does not relieve FERC of its antitrust duty to reviev 4D rates for these same concerns.
FERC is responsible specifically for taking into account the antitrust impact of the wholesale electric power rates that it
'O monitors.58/ Similarly, FERC must consider the anticompetitive effects of rates under several other sections of the FPA.EO Section 205(a)ES# requires that public utilities' wholesale rates I
be "just and reasonable." Section 205(b)El# forbids public util-ities from maintaining any " unreasonable difference" in rates with respect to any sale within FERC's jurisdiction.5 ! Section O
20663/ authorizes FERC to order a refund of any wholesale rate that is determined upon a hearing to be " unduly discriminatory."
Furthermore, FERC may remedy undue price discrimination traceable O
to the wholesale rate and if a rate, though just and reasonable in its own right, will have anticompetitive effects vis-a-vis 9
58/ 16 U.S.C. 5 824. PERC's jurisdiction for reviewing whole-sale power rates applies to nuclear power plants as well as to coal-fired plants. See New England Power Co. v. FERC, 571 F.2d 1213 (D.C. Cir. 1977).
m 59/ See Cities of Anaheim v. FERC, 941 F.2d 1234, 1237-38 (D.C.
Cir. 1991) (citing FPC v. Conway Corp., 426 U.S. 271, 277 (1976)).
EE/ 16 U.S.C. S 824d(a).
D El/ 16 U.S.C. S 824d(b).
E2/ See City of Verntq v. FFRC, 315 F.2d 1042, 1047-49 (D.C.
Cir. 1988) (remanding action to FERC for review of antitrust concerns in accordance with Section 205(b) of the FPA).
O f3/ 16 U.S.C. S 824e.
O
O retail rates, the agency may adjust it downward to the lower O range of the zone df reasonableness.bS/
Tne Departm(nt of Energy (" DOE") and the Securities and Exchcnge Commission ("SEC") also have authority to review certain 0
antitrust implications of electric utility dealings. In fact, one of DOE's enumerated dut.ss is "to foster and assure competi-tion among parties engaged in the supply of energy and fuels . . . ."EE# The SEC is expressly authorized to review acquisitions of electric utility securities or assets and to reject an application for acquisition if it finds that "such O
acquisition will tend towards interlocking relations or the con-centration of control of public-utility con.panies, of a kind or to an extent detrimental to the public interest or the interest O
of investors or consumers."EE#
Furthermore, among the most effective enforcers of the anti-
, trust laws are private citizens and organizations acting in their _
role as " private attorneys general." The Clayton Act provides that, "any person who shall be injured . . . by reason of any-g thing forbidden in the antitrust laws,"E2/ may bring an action to Ei/ See Cities of Anaheim, 941 F.2d at 1238 (citing Convav, supra, 426 U.S. at 278-79).
15/ See 42 U.S.C. 5 7112(12).
E$/ See Public Utility Ho. ding Company Act of 1935, 5 10(b)(1),
15 U.S.C. 5 79j(b)(1).
g 52/ 15 U.S.C. 5 15.
U
):
recover treble damages for---.such. injury.N / Utilities have no
); blanket immunity from the antitrust-laws, including suits brought by private parties.E#
Thus, suspension of-the antitrust conditions assuredly does not.mean-that Cleveland and other' municipalities vill be left
-unprotected.= Rather, notwithstanding the absence of the NRC imposed antitrust license conditions, numerous other federal
_ authorities, as well as the private parties oppos!ng the removal of the license-restrictions-imposed on the Applicants, are empow-ered to take action against perceived or threatened anticompeti-
)-..
tive_-conduct by the Applicants. Suspending the antitrust condi-tions means.only that, in the future, Ohio municipalities will i
not be able to rely upon them as they.have, to avoid-sharing in
)
the Applicants' nuclear energy supply investment.
.l 6.3/- See,-e.o., Town of Concord ~v. Boston Edison Co_, 915 F.2d 17.-
-(1stiCir. 1990),: cert, denied, 111-S. Ct. 1337 (1991)
(action of municipal.electr_icity distributors against " fully y integrated investor-owned utility, which transmitted elec-tricity to municipal distributors, alleging that utility '
engaged in price' squeeze'in. violation of (Section 2 of the]
Sherman Act," 15-U.S.C. 5 2);-City of Cleveland v. Cleveland-Elec. Illuminatina Co., 734 F.2d-1157 (6th Cir.),-cert, denied, 469 U.S. 884 (1984) (al_leging monopolization and
)- attempt'to monopolize the electric power market.in Cleveland
-and-surrounding service areas _in violation of Section 2-o.
the.Sherman Act).
$9/ Town of' Concord, supra, 915 F.2d at 21 (citing, among other
-cases, Otter Tail-Power-Co. v. United States, 410 U.S. 366,
) -372-75 (1973)).
- O l
l B. NRC's Antitrust Authority is Specifically Limited to Ensuring that the Actual Operation O f NRC-Licensed Facilities Does Not Contribute to or Cause Adverse Antitrust Consecuences.
Sa" tion 105 of the Atomic Energy Act, 42 U.S.C. S 2135, has O three subsections, (a) through (c).1E# As indicated above, sub-section (a) makes clear that the NRC's antitrust juris_iction is in addition to, and not in lieu of, the authority of other agen-O cies to regulate trade and commerce pursuant to the federal anti-trust laws. Subsection (a) also makes clear that when other authorities make findings regarding violations of the federal O antitrust laws, the NRC has the authority to act upon such find-ings by " suspend [ing], revok[ing), or tak[ing] such other action as it may deem necessary with respect to any license" it C) issues.71/ -
Subsection (b) of Section 10512# defines the NRC's responsi-bility to report to the Attorney General any information it may O
have with respect to the utilization of special nuclear material or atomic energy in violation of the federal antitrust laws or in a manner which restricts " free competition in private O .
enterprise."
O 20/ See Appendix A, infra, 11/ 42 U.S.C. 5 2135(a); see LBP-91-38, slip op, at 11-12.
C) 12/ 42 U.S.C. 5 2135(b).
O
. -. . .~ . -. ... - - . . . . -
- 01 4
It is-subsection (c) of Section 105 that is pivotal to this
'O case. Section 105(c) provides for antitrust . reviews by the NRC
- in connection with the: licensing of nuclear facilities. With the assistance of the Attorney General, the NRC is required to deter-LO ; mine whether there are " adverse antitrust aspects" to a "licens-ing matter," by making the following determination:
whether the activities under the license O vould create or maintain a situation incon-sistent with the antitrust laws . . . .22/
Subsection (c) also specifies the actions that the NRC may take
.o. if its finding under paragraph (c)(5), above, is "in the affirmative."2A .Specifically, the Commission is authorized "to issue or continue a license as applied for, to refuse to issue a .
(y license, .to rescind a license or amend it, and to issue a license with such conditions as it deems appropriate."25 Thus, NRC's . ant itrust regniction of its licensees is condi-
'O tioned on a finding that the " activities" over which NRC has an interest, which center on the operation of nuclear power plants, i
L
" create or maintain a situation inconsistent with the antitrust O
laws." If the NRC cannot make an af firmative finding on this
( issue, pursuant to the specific language of Section 105(c), NRC p.
lQ:
22/ 42 U.S.C. 5 2135(c)(5),
11/ 42 U.S.C. 5 2135(c)(6).
O- 2E/ id-l 1 l
0-
0-is not authorized to impose antitrust conditions on the facility O licensee.
C. _In Order for a Facility's Operation to " Create or Maintain a Situation Inconsistent with the Antitrust Laws," the Facility Must Produce O Low-Cost Power.
There are several means by which Applicants will show that a facility cannot " create or maintain a situation inconsistent with
' 0.
the antitrust-laws" if it does not produce relatively low-cost power. The first consideration is whether those who drafted and promulgated Section 105(c) intended this result. Pelated to this .
O question is whether the agency's application of Section 105(c) echoes this fundamental premise, i.e...that the existence of anticompetitive consequences that Section 105(c) was designed to O-forestall is predicated on nuclear power being a low-cost source of electricity.
.O .Furthermore, as a separate matter, Applicants will show that relative cost -is the only essential variable in nuclear power
-plant operations in determining "whether the activities under the O .licer.se would create or maintain a situation inconsistent with the antitrust laws." This is because other identifiable factors 1
simply are tantamount to cost, are wholly dependent upon cost, or
- (3 : are not-licensed " activities" on which NRC's exercise of particu-larized antitrust authority is based.
O.
l-lO
)
- 1. The Legislative History of Section 105(c) 5 Establishes that the Congress Decided to vest the NRC with Antitrust Authority Because of the Commonly-Held Understanding that the Nuclear Facilities the NRC Licenses Would Produce Low-Cost Electricity, g Like all legislation, Section 105(c) was the end-product of a deliberative process in the Congress. Like all legislation, that process took place as a result of concerns that were identi-5 fied to, and by, members of the Congress who ultimately concluded that additional legislation was needed to remedy those concerns.
It is apparent from the legislative history of Section 105(c) 3 that the genesis of the congressional grant of antitrust author-ity to the NRC was the concern about the competitive advantages of low-cost nuclear power.76/ -
D 15/ In the DOJ Advice Letter and, particularly, in the NRC Staff j Denial of Applicants' license amendment requests, the Gcv-l ernment makes short shrift of the legislative history of Section 105. DOJ Advice Letter at 2-3; NRC Staff Denial at 5-8. But the Government's facile treatment of lecislative history is inappropriate, and even at odds with its own case citations on the proper use of such materials. See NRC Staff Denial at 5 and n.8.
Applicants do not dispute the " basic tenet of statutory con-() struction" to which the NRC Staff efers, that "the express l
l language of a statute is the primary cource of its meaning."
Id. (citing Alabama Power Co. v. NRC, 692 F.2d 1362, 1367 (11th Cir. 1982), cert. denied, 464 U.S. 816 (1983)). But the word " primary" does not mean " exclusive," and it is equally well-established that where a statute does not pro-
) vide a conclusive source of understanding, resort to other indicia of legislative intent is appropriate. See, e.g.,
Chesagecke & Ohio RV. Co. v._ United States, 571 F.2d 1190, 1194 (D.C. Cir. 1977), cited in NRC Staff Denial at 5 n.8
("(T]he ' plain meaning rule' is or.ly a primary source of g Footnote continued on next page.
O
O Both the NRC Staff and the Department of Justice make much c of the absence of discuasion in the Report of the Joint Committee on Atomic Energy of the importance of cost in a Section 105(c) i analysis. See NRC Staff Denial at 6; DOJ Advice Letter at 3.
O The fact is that a review of the Joint Committee Report estab-P lishes that the Report does not address in any detail the basis for the changes it recommended to Section 105(c), the pivotal O provision at issue here. Other than confirming that the standard set forth in Section 105(c) refers to the " reasonable probability of contravention of the antitrust laws or the policies clearly C) underlying these laws," the Joint Committee Report does not address what it means when it refers to " antitrust considerations O
Footnote continued from previous page, understanding, not conclusive, and it must yield on occasion to an intention otherwise discerned in terms of equity, leg-islative history, or other sources,").
O While statements made before the legislature by opponents of a subsequently enacted bill typically are given little weight by subsequent reviewers of a statute, see NLRB v.
Fruit & Vegetable Packers, 377 U.S. 58, 66 (1964), other legislative materials may be, and frequently are, consulted O by the courts to determine statutory intent. This includes statements made by the managers or sponsors of a particular bill, see, e.g., Browder v. Tipton, 630 F.2d 1149 '6th Cir.
1980), statements made by other members of Congress, see, e.g., Bank of New York v. Hoyt, 617 F. Supp. 1304 (D.R.I.
1985), and statements made by outside parties in briefs or O in testimony presented to the legislature, see, e.g., Leary
- v. United States, 395 U.S. 6, 21-23 (1969).
Furthermore, the policy that induced the enactment of a spe-cific law is another source appropriate for use in determin-ing the design of the legislation. United States v. Cooper O Corp., 312 U.S. 600, 605 (1941).
O
O in relation to the strengthening of free competition in free O enterprise . . . ." E While Applicants agree with the Government that the Joint Committee Report should be the starting point of an analysis of legislative history, Applicants disagree with the Government's blinding itself to the other legislative materials on the 1970 amendments to the Act. See n.76, aupra, These substantial mate-rials, which in no way conflict with the very brief treatment of Section 105(c) in the Joint Committee Report, are irtformative and compelling. In particular, it is emphatically clear from a review of the discussions among the key congressional figures who sat on the Joint Committee, and in the presentations to that Com-mittee by the most prominent advocates of the new legislation, that the identified concern motivating the new Section 105(c) legislation was the tremendous competitive advantage that was associated with nuclear power because it was anticipated to be a substantial source of low-cost electricity.
For example, in a colloquy among Joint Committee Chairman O Holifield, Congressmen Hosmer, and then-AEC General Counsel Hennessey, the Joint Committee explored the relationship between the low cost of nuclear power and its competitive value. First, 9
22/ See Atomic Energy - Utilitation for Industrial cr Commercial Purposes, H.R. Rep. No. 1470, 91st Cong., 1st Sess. (1970),
reprinted in 1970 U.S.C.C.A.N. 4981, 4994-95 (" Joint O Committee IIe~ port")
G
)
the lov cost of nuclear power was identified by the AEC General y Counsel as the critical factor mandat ing a need f or an ant i t rust provision in the Atomic Energy Act: "The problem centers on the very large plants that do provide the most economical source of g energy, whether they be nuclear fuel or fossil fuel, and an opportunity for the small publicly owned utilities to have access to that newly availabic cheap source of power. "?Sl D
Moreover, contrary to the novel position now voiced by the DOJ and the NRC Staff,79/ general monopolistic or other anticom-petitive tendencies of the nuclear industry were expressly D
rejected as in any way motivating the proposed legislation. Sec-tion 105(c) was not designed to address these " plenary" antitrust matters. As Mr. Hennessey made plain in that regard, there was D
absolutely no basis for distinguishing nuclear power from coal-fired power (both of which, as previously discussed, are subject to the federal, plenary antitrust authority of other fed-eral government bodies): "I see no distinction betvaen the types of fuel so far as the antitrust implications are concerned
. . . . I don't think that a plausible basis for distinguishina D
g lE/ Prelicensing Antitrust Review of Nuclear Powerplants, Hear-inas Before the Joint Committee on Atomic Energy, Part 1, 91st Cong., 1st Sess, 1 (1970) (hereinafter " Joint Committee I") at 75 (emphasis added).
19/ See Preh. Conf. Tr. (Sept. 19, 1991) at 170-171 (counsel for D DOJ), 173-74 (counsel for NRC Staff).
9
between nuclear and fossil fuel plants exists in the present 3 state of the nuclear industry."EE/
Rather, the critical and only basis art iculated f or NHC's l ., authority to impose antitrust conditions on nuclear facilities was the anticompetitive consequences of access to low-cost nuclear power:
i
'j CHAIRMAN HOLIFIELD. It is your opinion, then, that a sma'.1 cooperative or municipal-ity that wanted to participate in a large nuclear plant output would have to establish that not on the basis of the Government con-tribution to the development of this new J source of electricity, but on the basis of l the antitrust laws which apply generally.
MR. HENNESSEY. That is right, on the basis that the operation of the plant as proposed would have an effect on him that would be in
,j t
restraint of trade, would have anticompeti-tive conseguences on him, that it would put l him at a disadvantage as against people who have the power from the plant in providir.g service to their customers 81/
~
Similarly, in the statements made to the Joint Committee by representatives of the DOJ and the United States Office of Sci-ence and Technology ("0ST"), the stated fact behind the perceived need to enact Section 105(c) was the low cost and consequent
~
ES/ Joint Committee I at 75-76; s_ee also n.35, suora (statement by the Commission to the Joint Committee that Section 105 would not be used to reach " general antitrust problems in the nuclear supply industry").
7 El/ Joint Committee I at 77 (emphasis added).
O
O competitive advantage of nuclear power, and.the resulting impor-()~ tance of er suring that these facilities be accessible to non-licensees.
As the Deputy Assistant Attorney General of the Antitrust Division of DOJ, Walter B. Comegys, stated in his testimony before the Joint Committee
'O We have not wished to take the position that shere competitive policies require that smaller firms have access to a large low-cost power facility the access must always be fur-nished by ownership share in the new plant.
Nor have we wished to assert that it will em
always-be acceptable to have contracts for the-sale.of power from the plant.
. .. .. . [However), [wle do think that ade-quate access implies'the same opportunity to receive ?ow-cost power for the same uses as 9 those who have the unique low-cost facilit E2l The recognition of cost and, specifically, low cost, as the O linchpin of Section 105(c) analysis was reiterated by DOJ in the-following written response to a question posed by the Joint Committee:
O Wo uld you- enlarge on the situations Mr. Comegys referred to (p.10) where sale of power by the generating utility at its aver-age cost might impose O competitive disadvan-tage on the buying company?
O g . . . . If Utility A had access to the low-cost block of additional capacity f roni a
! nuclear joint-venture project and neighboring l
0 E2/ Joint Committee I at 128 (emphasis added).
l l
O
1 e---
.O :-
Utility B were excluded from participating in the project, A might well enjoy a decisive
() advantage in competing to attract a lar industrial user to its service area.E2/ge Of course, this antitrust scenario requires as its predicate that
() access exists to low-cost nuclear power.ES!
Similarly, the Director of the Energy Policy Staff of OST, S. David Freeman, in his presentation before the Joint Committee, O
described the problem as the low cost of nuclear power and the need to ensure the fair and reasonable access to it:
lO (N)uclear power is vital to meeting the nation's electric energy needs in the coming decades. Its growth vill be due primarily to the fact that' it offers low-cost power to utilities . . . .
O Since nuclear plants come only in large sizes, it is particularly important that pre-construction anti-trust review be implemented to assure that smaller utilities are not fro-zen out of the generation end of the power business. I do not suggest that every small
- g utility should be in the generating business, but I do suggest that the question of fair
- and reasonable access to the benefits of low-cost power is not universally satisfied by
,! wholesale purchases, especially if the whole-saler is competing with the small utility at O- _ retail.al/
El/ Joint Committee I at 146 (emphasis added).
E4/ While DOJ complains now that "[a] ' low cost' standard is
'O
- inherently elusive," see DOJ Advice Letter at 3 n.6, the fact i.s that DOJ used this terminology-with alacrity in both its testimony before the Joint Committee and when advising-the NRC on individual NRC license applications. -See Section III.D, infra (discussion of DOJ advice letters).
9 E5/ Joint Committee I at 106 (emphasis added).
O
O Also noteworthy is the testimony of the Director of Policy g, Planning in the Antitrust Division of DOJ, Roland W. Donnem. Mr.
Donnem's conclusions were founded on the recognition that because nuclear facilities would produce low-cost power, access to such
() plants might prove competitively decisive. Mr. Donnem conse-quently urged the Congress to enact legislation in which the NRC, with DOJ, vould make the threshold determination whether these g low-cost nuclear facilities in fact proved competitively advanta-geous. If " access to this low-cost power" was determined to be decisive, more equitable access then could be required.
O With regard to the establishment of a large-scale nuclear power plant, it is necessary to first determine the extent to which such plants might afford the participants therein decisive competitive advantage over their
() competitors. The economies of scale associ-ated with such large plants are truly sub-stantial, and access to this low-cost power may well be decisive in any competitive race l between electric power companies. Access may well be required for the continued operation
- g' of a given company or sector of the industry.ES/
The obvious inference to be drawn from Mr. Donnem's testi-ig_ mony is that if nuclear facilities became high-cost, the thresh-E old or "first" determination required by Section 105(c) would l 1ead to the conclusion that participants in the plant were not g competitively advantaged and, consequently, there would be no g ES/ Joint Committee I at 9 (emphasis added).
- O
need or statutory basis to impose antitrust license conditions on D the facilities, l
Mr. Donnem vent on to explain to the Joint Committee the i DOJ's concern, which focused on "the decisive competitive advan-tage" that participants in the nuclear facility could have over those excluded:
D Thus, once established, these huge plants represent an unusual and necessary source for electric power. It is important to determine beforehand whether competitors of those plan-ning to participate in the creation of such a plant also have the reasonable opportunity
,[) themselves, either separately or in combina-tion, to create a similar facility for gener-l-
ation of low-cost power.E1/
I i
l O
In those instances where there 12 no reasonable opportunity i,"
l competitors to establish a competing facility, "the new low-cost facility would probably create a decisive competitive advantage for the participants over those excluded, and exclusion, there-2) fore, should not be permitted. '88/ -
O I
I l.
i I
O El/ Joint Committee I at 9 (emphasis added).
6 EE/ Id. (emphasis added).
0.
.Mr. Donnem was,of the opinion that nuclear power plants "may
()L well provide most of the power growth in the country."EE! In view of the " competitive advantage" that these facilities were expected to confer, Mr. Donnem's conclusion is not surprising:
0--
Thus, the conclusion that all sectors of the electric utility industry should have ade-quate access-to low-cost power is, 1 think, compelled by the policy of the antitrust
_ . laws.22/
O The pivotal importance of nuclear power's low cost was also i
emphasized by William C. Wise, counsel for the Mid-West Electric I l
O_ Consumers Association, Inc., a regional service organization 1
-l, L2/ Id.
'O 2E/ Id. at 10'(emphasis added). In commenting on "the. question of what constitutes fair access," Mr. Donnem stated that "two basic. principles" should be observed:
First, the small and municipally owned compa-
- O nies must be afforded _the same opportunity to receive the. low-cost power for-the same uses as the large participating-systems . . ..
Second,;it may_well be necessary in some cir-cumstances to make explicit allowance for the competitive advantage conferred on munici-pally _ owned companies by virtue of their tax lO exempt status. Failure to make such allow-
- ance might confer an unfair competitive
! advantage on municipally owned companies who l
are permitted to_ participate, and thus hamper competition and perhaps discourage the very
=0.~
creation of large-scale generating facilities.
Id. In short, it clearly was not the intent of the propo-l nents of the new legislation that Section 105(c) be used to confer an unfair competitive advantage on competitors of lO- facility owners.
1 O
L
()
composed;of approximately 250 systems of rural electric coa era-() tives and municipally owned electric systems in the nine sta:es comprising the Missouri Basin.El# Mr. Wise first summarized testimony he had given before the Joint Committee in 1968 that O was also material to the legislation proposed in 1970:
At that time we expressed the opinion that if our member cooperatives and municipal elec-tric systems are not given the opportunity to
'() obtain the necessary share of the low-cost power and energy to be generated by the large nuclear plants, they will be forced out of business and absorbed by the investor-owned electric utilities before the end of this century, We still feel that our members
'O shall undergo that fate if the low-cost nuclear power is not made available to them,22/
Turning to the history of his organization and the systems
-O comprising it, Mr. Wise explained how access to low-cost power l had consistently been the critical factor in ensuring its mem-bers' ability to compete:
!O Many of our systems could not get started in business until the low-cost Federal power, generated at the large dams on the Missouri Rivar, became available after World War II.
The full output of those dams is now being lO used, and equally cheap power now is avail-l able only form (sic]'the huge units ~which l
' modern technology has recently made available, i
'e 91/ Prelicensing Antitrust Review oi Nuclear Powerplants, Hear-l inas Before the Joint Committee on Atomic Enerava Part 2, 91st Cong., 2d Sess 461 (1970) (hereinafter " Joint Commit-tee II").
.O- 22/ Joint Committee II at 462 (emphasis added).
iO
O Thus, the absolute necessity of the small electric utility systems having the opportu-O nity to get a shara of the relatively very low-cost nuclear power and energy is readily apparent.El/
In summary, the leaislative history of Section 105(c) leaves O
no doubt that the only reason why nuclear powered plants, in con-trast to other sources of electricity, required prelicensing antitrust reviews by the NRC vas the expectation that these O
facilities would provide substantial sources of low-cost elec-tricity. Nuclear pover's extraordi[ary promise was its cost advantage. It was this cost advantage and no other that NRC was 9
authorized to counteract through its Section 105(c) antitrust authority, g 2. NRC's Own Interpretation of Section 105(c)
Confirms that It Was the Anticipated Low Cost of Nuclear Power which Would Provide to Facility Licensees a Competitive Advantage Requiring Agency Intervention.
O There are a number of NRC cases that apply Section 105(c),
and it is not the Applicants' purpose here to review them all.
What is apparent, however, from consideration of some of these '
O decisions, is that, contrary to the current position of the NRC Staff, the need for the NRC to impose license conditions on nuclear facilities results not primarily, but exclusively from l 9
the expectation that nuclear power would be low in cost, and g 21/ Id. (emphasis added).
9
!O therefore that #.
' ws to that_ power would be economically Q beneficial.
In opposition to the pending Applications, the NRC Staff j argued that cost need not e ve. ii be a factor for the NRC to impose antitrust license conditions on its licenseet.. U #- But this con-c3usion is flatly at odds with the NRC-decisions on which the NRC Stati relies. NRC's antitrust review cases focus on (i) whether O
the market conditions at issue in a particular case are anticom-petitive, and (ii) the oppropriate NRC-irnposed remedies to coun-L terbalance the anticipated impact on the marketplace of a pro-
'O posed nucient poter plant. In both of these instances, however,
~
the necessary pedicate of the ana. lysis is the anticipated low i
cost and the associated competitive advantage that will come from
'O ownership of a proposed nuclear fac;11ty, in short, contrary to the NRC Staf f's assertion, the Commission's antit rust analysis :
has-never been " wholly apart from any consideration of cost." l NRC Staff Denial at 10.. To the contrary, the cost factor is the linchpin of each and every antitrust analysis.
'O' The NRC.Staf f places sub.:tantial reliance on the Driev decision by the Eleventh Circuit Court of Appeals. E Yet the i Court of Appeals stated in D rley that the purpose of Section 105
- O M/ NRC Staff.Jenial at 8.
M / 1labama Power Co. v. NRC, 692 F.2d 1362, 1368-69 (lith Cir.
O 1982), cert. denied, 464 U.S. 816 (1983).
,0 ,
l i
vas to ensure that licensees were not "the unbridled beneticia-O ries of t he windf all head s' art " they voeld obtain from access to j nuclear power."96/ -
To what doen the "windiall beau start" refer, in that case. if not the competitive advantage associated with 1 O the anticipated low-cost of nuclear power? How would a licensee be such an " unbridled beneficiary" if it received no " windfall,"
_i . e t, a cost advantage 7 It is this critical pretnice which lies O at the heart of E{Lrh.y, aleng with ot her relevant NRC cases.
In Waterford 11, the Appeal Board recognized that the agen-cy's Section 10$(c) antitrust review authority was based on the
-O Congressional purpose of ensuringh t at " access to nuclear facili-ties be as videspread as possible" so that the nuclear industry, which " originated as a Government monopoly . . . not be perm.tted O
to develop into a private monopoly via the AEC licensing process . . . . " o,7 '- linpl i c i t in paterford is the value of access to nuclear powers there is no reason why access to nuclear power O
vould have to be as videspread ac possible if nuclear power were high cost, and thus not competitively valuable.
9 Midland was the firs' fu21-fledged antitrust decision on the merits subject to Appeal Board review.98/ The licensing board 0 1E/ Id. at 1369.
21/ Waterford II, 6 A.E.C. at 620, 18/ Consumers PoweraCo. (Midland Plant, Units 1 and 2),
ALAB-452, 6 N.R.C. 892 (1977) (hereinafter " Midland" or O "ALAB-452").
G
had retniered a decision in f avor of the applicant, Consumers Power company, and the complaining parties appealed. They main-toined that ant icompet itive acts by Consumers " blocked their l
access to cheoper sources of po.ter." and resulted in Conr.umers' D retaining "the cost advantages of the nuclear facility . . . ,
thus enhancing its monopolistic dominance over ;he available sources of ( 'eaper power."99/
D The Appeal Board reversed and remanded the case, finding it reasonably probable that Consumers' activities under the Midland licenses would maintain the present situation inconsistent with 8
the antitrust laws.100/ The Appeal Board concluded that Consum-ers had monopolized the relevant markets Ior coordination ser-vices, and wholescle and retail electric power. Given this situ-D ation, Consumers' installation of large nuclear-powered generat-ing units "(m]anifestly . . . will exacerbate the anticompetitive situation."101/ The Appeal Board emphasized:
9 (O]ne of the reasons for (Congress') amending section 105c to its present form was the desire to prevent the foreclosing of the advantagas of nuclear power to all but the very largest electric utilities. But unless ve step in, that is precisely what will hap-pen in this case: Consumers will have successfully used its monopoly power to retain the benefit of nuclear powered base-Joad generation for itself, to the P
l l
93 / _Id. at 90'.
100/ M. at 1098, h
$ 101/ M. at 1095.
l i G
i l
D disadvantage competitors. LEI o(/ lts " land-locked" smaller D
l 1The Appeal Board concurred with DOJ that "[t)he Midland i
ynito (vould) operate almost full-time, and (vere) expected to
- ). pr~ ide the cheapest available power."1S2/ It also found that l bene,.eLof the Midland plants, the applicant would be able to
"' integrate low-cost nuclear generation with its system,'"
() _
thereby reducing its average cost, sdille "' denying its competi-tors the same advantage . . . .'"104/
l Thus, Consumers' past anticompetitive conduct was of signif- .
O ,
l icance to the Appeal Board because it was expected to be exacer-3 bated by' Consumers' access to the los-cost Midland units. The -
anticipated cost " advantages" of the Midland plants were at the Of heart of the Appeal Board's analysis.
.In an effort to address ALAB-452, the NRC Staff contends t
O. that "in Midland, the Appeal Board focused upon an existing ant! =
. competitive situation in reaching its conclusions; and it indi-cated that the mere addition of.significant generating capacity
'O to a utility's system, where that utility has acted in an anti- !
competitive manner, vould support the imposition of appropriate t
.O 102/ id. (emphasis added).
s L l103/ yd,.at 1096 n.722-(citing DOJ's Opening Brief on Appeal at 142).
(O .104/Ild, at 1098 (citing DOJ's Reply Brief on Appeal at 124).
f ice J ._
)
t
/
antitrust license conditions." Here, the NRC Staff is in B error.
ALAB-452 is a very lengthy decision, but the point made by the NRC Staff, vith which Applicants disagree, relies exclusively B
on a small but cri t ical sec'. ion of that decision, the Appeal Board's discussion of nexus contained in ALAD-452, 6 N.R.C. at 1094-1098. Applicants urge the Board to review those five pages; B
Applicants believe that it is the following two conclusions which can fairly be drawn from them: (1) the Appeal Board concluded and placed critical reliance on the fact that the Midland units, 8
specifically, and nuclear power geaeration generally, would ulti-mately be "the most economical available form of baseload power;"1EE! and (2) " fair access to efficient, dependable and D
cconomical baseload generation is at the heart of the competitive situation" over which NRC has antitrust authority.107/
e The Staff entirely misses the critical distinction made by the Appeal Board in Midland. It is not the " mere addition of significant generating capacity"108/ that was important to the e Appeal Board, but the addition of "Jow-cost nuclear generation" g 105/ NRC Staff Denial at 8.
106/ ALAB-452, 6 N.R.C. at 1096 n.722.
107/ Jd. at 1095 (emphasis added).
g 108/ NRC Staff Denial at 8.
O
O to its system.109/ In response to a utility argument, the Appeal
- 0. Board recognized that the licensed activities need only maintain (not necessarily create) a situation inconsistent with the anti-trust laws. Thus, after making an grqueyd.g assumption about the O facts of that case, the Appeal Board concluded, in effect, that while there may be equivalent-vays to evaluate the cost of dif-ferent forms of access to nuclear power, as-long as that power is O low in cost, control of it is competitively valuable, and NRc's authority a t ,ald be exercised. This discussion by the Appeal Board only buttresses-the two conclusions already drawn, and o emphasizes the fact that NRC's role in antitrust matters is pred-icated on the anticipated low cost of nuclear power.
Finally, the NRC Staff also argues that in Midland, the lack O
of alternatives is "another factor which supports the imposition of antitrust conditions apart from considerations of cost."AIS/
This conclusion is also flawed. For the significance of " alter-O natives" in Midland, as in other NRC analyses, is the ability of competitors of licensees to have access to baseload generation that is as " efficient, dependable and economical," as the pro-posed-nuclear facilities were expected to be.III# If the nuclear facilities are not economical but, in fact, produce high-cost O
1S2/ ALAB-452 at 1098 (citing DOJ Reply Brief on Appeal at 124)
(emphasis added).
i 11S/ NRC Staff Denial at 8 n.12.
O Ill' ALAB-452, 6 N.R.C. at 1095 (emphasis added).
O L
O electricity, there vould be no connideration given by the NRC to O whether a licensee's competitors have access to or ownership in similarly uneconomical power plants. Fre section !!!.E, in!n .
The Entr_y r case,N in which the antitrust conditions at 0
issue here vere imposed, also relies as a foundation for its analysis on the anticipated competitive advantage associated with -
the low-cost units that the Applicants proposed to operate.
O In describing the CAPCO 3 coordinated planning and trans-mission system, the Appeal Board observed that CAPCO "permitt:
"PP l i"""t" t t"k" "0"""t"9" O ' '"' " "I"" I 8C"l"' (1'# ' ' t build larger plants capalle of' generating power at lower cost)."II4#- The_etfeet of the CAPCO arrangement was "to allow
.O applicants t increase the reliability of their electric power ;
systems while lowering the costs of operating them." M Unques-
~
tionably, the value_of -- and hence, the competitive threat posed
'O DY ~~ th" Pl""""0 "" I" " Pl""t"' I""I'dI"9 #"#"Y ""d U""I"'
112/.ALAB-560, 10 N.R.C. 265 (1979);_LBP-77-1, 5 N.R.C. 133 (1977); see n 9, Eupra.
O Ml/ CAPCO stands for Center Area Power Coordination Group, a power pool of public utilities, including CE, CEI and TE.
ALAB-560, 10 N.R.C. at 273.
114/ ALAB-560,.10 N.R.C. at 274 (emphasis added).
O 115/ g.
+
.115/ As indicated.in license condition 9, the antitrust condi-tions at issue here were to apply to the five nuclear power O Footnote continued on next page.
~52-O
. - - - _ ~ . _ , - - . - . . = . - - . - . - - . - . - - - - - - - . - - -
i O
t Besse, was their use as low-cost sources of power. This fact !
l l() essentially was assumed by the Appeal Board. For example, in ;
summarizing the Licensing Board's findings, the Appeal Board stated:
0-Given applicants' one-system planning and i F
coordinated oaerations, (the Licensing Board found that) t1e unconditional addition of :
five large nuclear power plants advantageous :
for "baseload" (low operating cost) genera-
'<) tion-would increase the CAPCO system's bulk ;
i power generating capacity by nearly a third. '
This would exacerbate the existing anticom-petitiv'a situation, making it even more dif-ficult for +he isolated public power systems to continue g applicants.1gocompetewiththe 7/ t i
In short, the linchpin of the Appeal Board's determination !
i i
that NHC could impose competitive restraints on the Applicants
- O was that the nuclear plants in question would be competitively advantageous since nuclear power would be cheap. As DOJ observed, "It-is undisputed (in this proceeding) that the power
- O available from the subject nuclear units is expect =d to be the s.heapest base load power available to serve new and growing hD' Footnote continued from previous page.
O
, plants originally planned. See OE Application, Attachment 1 L
(Antitrust. Conditions). Except for Perry Unit 1 and :
Davis-Besse Unit 1, the remaining planned CAPCO nuclear units have not been completed.
lp 117/ ALAB-560, 10 N.R.C. at 281.
I i
lt ?
L
!O-2_. u. . . _ __ ..__ n_ L a_... ._ _ -- 1: .;______._._._._- - _ , _ . _ .
O loads."11M# Because of this fact, and onig because of this fact, O the " specific and (in the overall context of the electric power industry) relatively limited activities" that Nhc authorized would contribute to situnt ions incc>nsistent with the antitrust
- Q 1aws .IIN The PerII Licensing Board's decision also is replete with findings concerning the pivotal presumption that NRC intervention
'O into the competitive conduct of its licensees was warranted because of the low cost of nuclear power. In the Preamble to LBP-77-1, the Licensing Board explained that the competitive !
O activities of licensees becomes of "LLatutory concern" to the NRC only when the benefits of the power generated from proposed nuclear stations will have a substantial (presumably adverse)
O
. impact on the delivery and sale of electric energy in the rele- :
vant' market.120/ Noting the large quantity of additional genera-tion contemplated by CAPCO, with the addition of five large O
nuclear units totalling 4,500 megawatts, the Licensing Board stated:-
- g Applicants-are of the opinion that these units-will produce economies of scale and will provide for long term generation costs well under average system costs which could
'be obtained either compared to the cost of
)
118/ DOJ Appeal Brief in Perry at 179 (citations to record omitted).
119/ ALAB-560, 10 N.R.C. at 284.
(). 110/ LBP-77-1, 5 N.R.C. at 141.
i l
O l
1- ._. _. _ ____ _ _____.____________ _ _ _ _ _ _ _ _ .
=O !
operating their present generating equipment '
or in comparison to new generation relying l O upon fossil fueled units. Thus, the opera-tion of the Davis-Besse and Perry stations t will have a substantial effect upon both the !
CCCT area.lLp/ supply and 1 e cost of electricity within the 12_1/ M. at 143 (emphasis added). (CCCT stands for Combined CAPCO Company Territories, id, at 142.) .
There were a number of economic studies relied on by the !
Licensing Board in-its findings on the low cost of Perry. A
~g 1973 CAPCO Planning Committee Report calculated that total .
annual costs from 1982 through 1986 would be reduced by over
$500 million by pursuing a nuclear, rather than a coal unit program. CAPCO, Dase Load Generatina Capacity Reautrements Followinc_ Perry 2, 1981-84, Plannina Committce Report No. 5 (June 14, 1973) ("CAPCO Planning Rpt."), at 21; see
~g -lap-77-1, 5 N.R.C. at 155 n.30. The present worth of the
- savings in annual costs from 1981 to 1995_ achieved by using nuclear power was calculated to be in excess of two and a '
quarter billion dollars. M.
Other studies, prepared or introduced in evidence by the NRC g- Staff and DOJ, supported the Licensing Board's conclusion
-that nuclear power was anticipated to be the lowest-cost i source of'new power for OE. In both the Draft Environmental Statement (" DES") and the Final Environmental Statement
("FES") for the proposed Perry: Nuclear Power Plant, the NRC had made a' cost comparison "between the Applicant's proposed
- g nuclear plcnt and coal-fired and oil-fired plants of the same size and the same cooling-system." Atomic Energy Comm'n, Draft Environmental Statement Related To The Pro-posed Perry Nuclear Power Plant. Units 1 and 2 (Nov. 1973);
Atomic Energy Comm'n, Final Environmental Statement Pelated To Tne Proposed Perry Nuclear Power Plant, UnL ts 1 a, 2_
O (Apr. 1974). (The NRC Statf only. compared Perry to al-fired and coal-fired plants because-it had concluded that ,
other energy sources -- natural gas, liquefled natural gas, methanol, gas turbines,. combined-cycle turbines, hydroelec-L tric, solar, fusion, magnetohydrodynamics, geothermal, and purchaser -of power:from-other utilities _- were not viable
'O.
alternatives. Perry FES at 9-5 to 9-11.) The FES had con-cluded that on a total annualized b' asis, the Perry facility wa expected-to be-$46.8 million cheaper-than the least expensive coal-fired facility of the same size and $113.2 1
-million cheaper than an oil-fired facility of the same size..
O Additional _ consistent data and testimony al.so was_ presented.
i
O In the Licensing Board's view, because of the perceived ben-O efits from the proposed nuclear plants, the competitive conduct of the Applicants, in all of its potential forms, was subject to NRC scrutiny. Conversely, if the subject facilities did not pro- l fj vide " low cost base load power,"J2J/ vith associated " benefits of economies of scale," N the Applicants' conduct, however anti-conpetitive, would not be of interest to the NRC.
O The NRC is not charged with the responsibil-ity of the general enforcement or administra-tion of the antitrust laws. Its particular ;
interest is focused not upon a regulatory mandate to investigate all market activities O of Applicants but only to consider the ef f ect of granting a nuclear license on the competi-tive environment in which Applicants operate.124/
.O in sum, it is difficult to understand how the NRC Staff can maintain that cost need not even be a factor in NRC's antitrust analyses,125/ vhen NRC's case lav not only consistently focuses O on the cost factor, but relies on it as the raison d'etre for imposing license conditions on nuclear plant owners. In the absence of the " cost advantages of the nuclear facility,"126/ any O anticompetitive situations that might exist are not "intertvined 122/ LBP-77-1, 5 N.R.C. at 155.
O 123/ 16, 124/ IJ. at 237 (emphasis added); see Section III.A.1, supra.
125/ NRC Staff Denial at 8.
O 126/ ALAB-452, 6 N.R.C. at 900.
O
O ,
with or exacerbated by the award of a license."127/ In such cir-13 cumstances, NRC is not authorized to impose antitrust remedies pursuant to Section 105(c).
D. If_a Licensed Facility Does Not Produce l
() Low Cost Power, It cannot Contribute to i
or Cause Adverse Antil_ rust Conqequen_qLit. ~
The Appeni Board previously addressed the issue now pending 13- -before this Board, namely, whether the NRC has antitrust author-ity when a licensed facility produces high-cost electricity. The straightforward answer by the Appeal Board was that NRC has no [
13f such authority. I 1
The-Fermi case llE/ involved the denial of intervention sta- ,
tus to an individual petitioner. The cetitioner, Ms. Drake, was 13 ~
a member and ratepayer of Top O'Hichigan Electric Cooperative, Inc. (" Top 0"), a distribution cooperative that purchased power from Northern ~ Michigan Electric Cooperative, Inc.-(" Northern
.O-
-Michigan"), a utility that recently had become an eleven percent co-owner of Fermi-2. In a proceeding to amend the facility license to add Northern Michigan and another cooperative as co-owners of Permi-2, Ms. Drake submitted an intervention j) 127/ ALAB-279,-1 N.R.C. at 569; see Section I!!.A.1 on the NRC's limited antitrust authority.
128/ Detroit Edison Co. ('Enrico Fermi Atomic Power Plant, Unit No. 2), LBP-78-13, 7 N.R.C.-583 (hereinafter "LBP-78-13"),
aff'd, ALAB-475, 7 N.R.C. 752 (1978) (hereinafter
!O- 'ALAB-475"). '
- O l
r O '
i petition opposing the license amendment on antitrust grounds. :
2 0 specitically, Ms. Drake argued that the contract between top o !
and Northern Michigan " violates the antitrust laws" because the !
contract required Top O to purchase all of its power from North-iO ern Michigan and, in turn, Northern Michigan's contract with
-Detroit Edison committed Northern Michigan to pay c hven percent of the costs and expenses of Fermi-/, " which may be very
.O- expensive. 129/ ,
t The Licensing-Board resolved the case on the basis of stand-ing and, specifically, the lack of a cognizable " injury in fact" !
'O before the NRC, given the indirect causal connection between the activities under the license and any purported rate increase to Ms. Drake. E Nevertheless, in so doing, it recognized that [
O
" access to a nuclear facility is usually sought by smaller utili- .
ties such as Northern Michigan at a lower cost than most other P
sources of bulk power," and that "
the acquisition (as opposed to 6
the denial) of such access to nuclear facilities does not even purport to involve antitrust considerations. 131/ Thus, the Board concluded that Ms. Drake's complaint was really "an attack
- o.
on the business judgment" of Northern Michigan "in buying an OL
- 129/ LBP-78-13, l N.R.C. at 586, 5B9.
130/ M. at 589. ;
!O 131/ M. at 590, i l
l
'O
- y*~t'u"4w**yW 5gawy"*-
- g V -t-P-g4-t-hm-+4-wem e ge~atr*-t'T--999-*f-
- S ownership interest in the Fermi-2 facility," a subject not within p the NhC's purviev.132/ -
In ALAD-475, the Appeal Board affirmed the Licensing Board's rejection of Ms. Drake's intervention petition. In so doing, however, it chose to rest its decision on a slightly different j ground than the holding of the Licensing Board, while still con-curring with the Licensing Board that petitioner Drake lacked s t a nd i ng .13 3 /
The Appeal Board's decision not to consider Ms. Drake's antitrust allegations was based on the specific and limited antitrust authority vested in the Commission, the corre-4 sponding zone of interests that fall within Section 105(c) of the AEA, and those interests over which NRC has no jurisdiction.
, In its decision, the Appeal Board first described the NRC's antitrust jurisdiction:
Petitioner seeks to invoke the Commission's 3 antitrust jurisdiction. That jurisdiction is not plenary, hovever; the Commission's writ to enforce the antitrust laws does not run to the electric industry generally. Neither does it reach all actions by utilities that generate electricity with nuclear powered g facilities.134/
, 112/ Id. at 589, I
[) 133/ ALAB-475, 7 N.R C. at 756.
134/ Jd, at 756 (citino Houston Light _i__nq an_d Power Co. (South Texas Project, Units 1 and 2), CL!-77-13, 5 N.R.C. 1303, at 1312, n.8, 1316 (1977)). See generally discussion of NRC's limited antitrust authority and the so-called " nexus" stan-4, dard in Section III.A.1, s u p,r a .
0
O If NRC's ahtitrust jurisdiction does not reach all actions
() by nuclear facility licensees, then logically there must be a
-basis for distinguishing those situations i n whlen NRC's anti-
- trust jurisdiction does apply from those situations where a O nuclear facility iteensee's actions are not subject to NRC's antitrust authority. In clarifying this dividing line, the Appeal Board focused on the purpose of Section 105(c), namely to O ensure access to that valuable commodity, nuclear-generated i electricity:
Congress authorized this Commission to condi-i C> tion nuclear power plant licenses on anti-trust grounds only where necessary to insure i that the activities so licensed would neither create or msintain situations inconsistent t with the antitrust laws. The reason for the grant, as the commission has explained, was l
- (3 - "a basic Congressional concern over access to ;
power produced by nuclear facilities," !
aecause the industry was nurtured by public funds and the legislature was anxious that ;
nuclear power "not bc permitted to develop into a private monopoly via the [NRC) licens-O ing process." Put another way, the preserva-tion and encouracement of competition in the electric power industry-through " fair access ,
to nuclear power" is the principal motivating consideration unde in AtomicEnergyAct._{jy/gSection105cof-the D
- O 1
- O-1 135/ ALAB-475, 7 N.R.C. at 756-57 (citing Section 105(c) of the-
- AEA, as-amended, 42 U.S.C. 5 2135(c); Waterford 11, 6 A.E.C. ;
'O_ - at 620; junt Midland, 6 N.R.C. at 1100). ;
1
- O
-, .me,, - -,--,r--ew,v1- , - , , , - -m., ,-r,w,,,,-sw-ew,.m.- .--nn.,-m.ss...,, ,.n,.,,.,,,n_, e,m. _ w.,, ry we-v.,me-+,,mem,-
O Having set forth the purpose of Section 105(c), the Appeal O Board then explained why its antitrust jurisdiction did not encompass the claim of the petitioner, Ms. Drakes Mrs. Drake's interest is not of this stripe;
'O indeed her concerns are quite the opposite.
As she sees it, Detroit Edison (assertedly in conjunction with another large investor-owned Michigan public utility) has not sought to keep nuclear power away from her cooperative.
She alleges, rather, that in violation of the g antitrust laws, those private utilities used their " monopoly powers . . . to force Ithe cooperatives) into buying [part of the Termi nuclear plant) because DE and CP could not finance it any other way. This is the crux of petitiongr 6/
- s argument" (emphasis in g original).1 Thus, while the NRC has extensive authority to remedy situa-tions where access is needed to the vo;uable comodity of O low-cost nuclear power, see, e_.A , statement of Deputy Assistant Attorney General of the Antitrust Division of DOJ in Section III.C.1,.pupra, its antitrust jurisdiction does not encompass the O regulation of antitrust matters which do not flow from this nec-essary predicate.137/ As the Appeal Board stated:
136/ ALAB-475, 7 N.R.C. at 757 (footnote omitted).
137/ The Appeal Boa d also rejected Ms. Drake's reliance on the l-I Midlanc! antitrust decision, ALAB-4 52, 6 N.R.C. 692 (1977).
l In that case, the issue was the unwillingness of the utility t sell t the e peratives a share of the nuclear facility.
O Thus, "[i]t was failure to provide a reasonable access to nucicar power which entitled the cooperatives to invoke the Commissioner's . . . jurisdiction." ALAB-475, 7 N.R.C. at -
757 n.15 (emphasis in original). As the Appeal Board Footnote continued on next page.
O t
O.
l 4
Mrs. Drake may or may not be correct in her allegations; for puri.>oses of her petition and O the appeal we must accept them, uut doing so cuts against her. They place beyond dispute that her asserted injurien stem irom sources unrelated to the denial of accena to, or com-pet 1L1ve advantage flowing from, the une of nuclear power.llt!/
O Noting that Ms. Drake was dissatisiied with t he utility man-agement decision to acquire part of Fermi-2 because this course, O "she fears (,) . . . will raise her electrical rate inordinately,"
the Appeal Board concluded that such business decisions are not within the purview of the NRC; for injuries irom such causes "are o beyond the zone of interests that Section 105(c) of the Atomic Energy Act was designed to protect or regulate."139/
O Footnote continued from previous page, o stated, "[t]o read Midland as supporting Mrs. Drake's peti-tion is to stand that decision on its head." Id. (citing 6 N.R.C. at 1094-98 (Part VIII, " Nexus")).
It is ironic, indeed, that the NRC Staff, in its Denial, also has endeavored to stand Midland on its head by arguing o that anticompetitive situations are within the scope of NRC's authority without regard to whether a licensed facil-ity provides low-cost power. See NRC Staff Denial at 8. In fact, the Appeal Board's description in Fermi of the analyt-ical framework of Midland rests on the very same pages in the Midland decision on which the NRC Staff relies and to
!O' which Applicants earlier referred this Licensing Board. See ALA2-452, 6 N.R.C. at 1094-98 (part VIII, " Nexus");Section III.C.2, supra.
138/ ALAB-475, 7 N.R.C. at 757 O -l 19/ Id. at 757-58, 1
l
' (3 ' l The fermi case is not a case involving a requent to remove
-() antitrust license conditions, but i t is no less on point here.
In Fermi, the Appeal Board considered the limits of NRC's Section 105(c) authority. Echoing the cautionary statements made in ear-
' Ci iter declaior.s and in the legislative history of Section 105(c), -
the Appeal Board held that the antitrust ramifications of
- high-cost nuclear power -- the concern of the petitioner in l
- () Fermi _ -- simply are not within the scope of Section 105(c)
- ,
injuries from such causes "are beyond the zone of interests that Section 105(c) of the Atomic Energy Act was designed to protect g; or regulate."
Ferm.l'makes clear that Section 105(c) does not encompass antitrust " injuries" ostensibly caused by high-cost nuclear power O
plants; in short, contrary to the position of the NRC Staff, low-cost nuclear power is a necessary predicate to NRC's antitrust jurisdiction. Similarly, American public Power Association's
'O argument in opposition to the'pending Applications _that lifting '
license conditions when nuclear power is expensive would " force"-
public power systems "to purchase high-cost nuclear power,")40/
O --
places beyond dispute _that the injuries of concern in this case 1 stem from. sources unrelated to NRC's antitrust authority. As the 1
L Appeal Board held in; Fermi, the antitrust ramifications of access-lO--
1 i
140/ Response of American Public Power Association to Requests for Comments by the Nuclear Regulatory. Commission (July 15, O 1988) at 14.
O ggy-ry v w ' y m e> e-w-*--v m yvww e y p y -ym e ng c y 'yg w e my-g
- g g yv y*-== M & y- yy te-MN v W w W W m*'W t* vvW W e yig-*w -- euv e' wj
O to high-cost nuclear power are not within the scope of Section
() 105(c).
The limitation on NRC's antitrust authority that was articu-lated in the Ernnj case is also reflected in several antitrust O
advice letters written by DOJ to the NHC Staff. It is apparent from a review of these letters that in DoJ's analyses, the cost issue was the sine qua non of Section 105(c).
O In its initial advice letter on Davis-Besse, DOJ concluded that there was no basis for an antitrust review proceeding in o that case because the nucleat facility in question vould not give to its owners a "significant cost advantage" which could be used anticompetitively.
O (B]ased on data submitted to us by Toledo Edison and CEI, it appears that the estimated costs of producing power at the Davin-Desse plant will be about the same as the app 11-cant's average system costs and higher than O the estimated production costs of at least one of the similar sized fosall fuel plants being constructed by CAPCO members. Davis-Besse, therefore, vill apparently not give Toledo Edison or CEI a significant cost advantage which could then be used to impose O' a price squeeze on wholesale customers.3*l/
Similarly, DOJ's advice letter concerning the Zimmer nuclear i
plant indicated that an antitrust review proceeding would not be O
appropriate unless.the municipalities who sought such a O- 141/ 36 Fed. Reg. 17,888, 17,890 (1971) (emphasis added).
. O'
proceeding were able to make a prima facie showing that it would O be more economical to purchase delivered unit power from Zimmer than it would be to purchase interconnection power from the util-ities owning that plant.
O The critical question . . . is whether the Zimmer unit should be regarded as . . . an
" essential resources" (sic) -- that is(,)
whether, as a matter of factual analysis, the municipal systems seeking access to it have o > reasonably comparable alternative for meeting their bulk power requirements.ll2/
DOJ's position in the early Davis-Desse and Zimmer proceed-o ings is echoed in other advice letters in which the cost factor led DOJ to conclude that antitrust remedies were necessary, either by conducting an NRC antitrust review proceeding or, in o some cases, by prior contractual agreements with the facility licensees. In the Forked River case, for example, DOJ observed:
The factor which, over the long run, would seem most likely to impair the functioning of
<o that competition (referencing "the degree of competition which has existed between appli-cant and tne smaller systems" in the region) would be the inability of the smaller O
142/ 37 Fed. Reg. 14,247, 14,248 (1972). The critical importance of cost in DOJ analyses is not surprising. Appendix L of 10 C.F.R. Part 50, "Information Requested by the Attorney Gen-eral for Antitrust Review (for) Facility License Applica-tions," which was prepared by the NRC in conjunction with o DoJ, requires facility applicants to disclose specific cost information, including "the most recent average cost of bulk power supply experienced by applicant," see Section 11.11 of I 10 C.F.R. Part 50, App. L, and "the most recent estimated cost of applicant's bulk power supply expansion program of which the subject unit is a part . . .;" gre id. at Section o II.12.
.O
C) !
utilitles to obtain access to bulk power aup-plies which are prlced competitively with O those available to applicant.LL}/
Similarly, in its 1972 Susqueharno advice letter, DoJ con-cluded that "(alecess to the Susquehanna Units will provide an j O
additional source of low cost power necessery f or UGI and Allegheny (two privately owned utilities that competed with the nuclear facility owners] to maintain their competitive posture in {
Pennsylvania."11S#
In short, it is disingenuous for DOJ now to argue, as it i o does in its advice letter in this case, that "there is no basis for assuming that Congress intended to limit the NRC's ability to impose antitrust conditions upon the owner of a nuclear power ,
O plant only if it determined in each case that the specific plant !
involved would be a low-cost producer of power." DOJ Advice Let-ter at 3. DOJ's own practices defy its new-found theory. In :
O enforcing Section 105(c), DOJ placed critical reliance on the cost factor, finding no need for antitrust license conditions when it did not anticipate that the nuclear facilities in O
lil/ 36 Fed. Reg. 19,711, 19,712 (1971) (emphasis added). ,
144/ 37 Fed. Reg. 9410, 9411 (1972) (emphasis added). In DOJ's advice letter on Susquehanna, DOJ recorded the position of O the rival electric cooperative association in the region that "its members can ae competitive for new retail load growth only by obtaining low-cost bulk power supply through ownersh!p participation in several large generating units being constructed in its region." All three of these units were nuclear facilities. Fee 37 Fed. Reg. at 9411 (emphasis O added).
O.
- ,. _ _ _ _ _ . _ . . _ _ _ . . . ..- - - -- - ~~----- --
)
question vould produce low-cost power. Conversely, DOJ either
) required a Section 105(c) proceeding or required prior contrac-tual commitments from the applicants when it anticipated that a nuclear facility would be a source of low-cos' power. In all of these circumstances, the sine cuta non of DoJ's analyses was the cost of nuclear power.
In summary, the issue of law on which this Motion is based presents the very same question resolved in Fermi: Whether the NRC's antitrust authority applies when a nuclear facility pro-duces high-cost power. The answer to this question was unequivo-cal in Fermit Because NRC has no antitrust jurisdiction over high-cost nuclear facilities, it has no statutory basis in such circumstances to continue to impose antitrust license conditions that are founded on the agency's Section 105(c) outhority. Just as NRC had no jurisdiction over petitioner Drake's claims, so, too, it has no authority to continue to impose antitrust condi-tions on licensees whose facilities produce high-cost power.
For, contrary to the position of the NRC Staff,145/ the "licens-in;" ,f a nuclear facility cannot enable a licensee to " maintain the pr -existing anticompetitive situation . . . wholly apart from any consideration of cost." Moreover, notwithstanding DOJ's cufrent posture, this reasonable limitation on NRC's antitrust p 145/ NRC stoff Denial at 10.
O.
authority is reflected in various DOJ advice letters to the NRC, O in which cost was the sine gua non of DOJ's' antitrust analyror..
E. There are No Factors Independent of 1,0v Cost
.that invoke NRC's Sect ion 105(cLAuthor_ity._
CF :
In its Denial of Applicants' license amendment requests, the NRC Staff argues that "even where the cost of nuclear power can be shown to be more expensive than other forms of power," other O~
bases exist for the imposition of antitrust license conditions.146/ According to the Staff, these other " conditions might include, without limitation, the lack of any reasonable i 0- -
alternative sources of power, the cost of building alternative transmission facilities, or the need for coordination ;
services."1$2! The NRC Staff provides little explanation of why O
the NRC would have jurisdiction over the " conditions" it identi-fies if the licensed facility in question produced high-cost power, and Applicants believe any such :onclusion would be incon-0-
sistent with the NRC's treatment of these matters in its anti-i trust review cases, as well as logically unjustifiable.
-() The lack of-available alternatives was the factor in the 4
-Fermi case which ledi the petitioner to seek antitrust review of a change _in the. facility's ownership. In that case, petitioner LO- Drake maintained that her utility's dependence on_ energy _from a 146/ id, at 6 n.9. .
O: 147/Id.
?
O. -
O
- utility that owned a percentage of Fermi-2 constituted an anti-13 truct viointion, the consequence of which veuld be expensive power costs for Mrs. Drake. As the Licensing Board in that case observed, mandatory access to a nuclear facility "does not even 1 O purport to involve antitrust considerations . . . . 148/ This I conclusion was resoundingly reinforced by the Appeal Board in that case.. Assuming that Mrs. Drake was correct, and that Fermi i
() 2 would produce high-cost power, "plaev(d) beyond dispute that her asserted injuries stem f rom sourues unrelated to the denial i of access to, or competitive aavant age flowing f rom, the use of
.(3 nuclear power.,,149/
In short, the issue of avellability of alternative sources .
of power is only meaningful it. NRC antitrust analysis once it is -
"O-established that a nuclear facility produces low-cost electric-ity, thereby constituting a competitively advantageous commodity.
If competitors of HRC licensees are then denied access to the i
'O low-cost nuclear plant, one consideration that is analyzed in antitrust review proceedings is whether the competitors instead have access to reasonable alternatives which would allow them to '
.0; compete effectively with the nuclear facility licensees. Thus, the_ Midland decision, on which the NRC Staff relies in its Denial,-turned-on the. perceived inability-of the licensee's -
- o-148/ LBP-78-13, 7 N'R.C _at 590.
- O 149/ ALAB-475, 7 N.R.C. at 757.
i a
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1 o I
)
competitors to compete effectively with the licensee without
- O being provided access to the Midland nuclear f acilities: !
The advantage accruing to Applicant from its I ability-to integrate low-cost-nuclear genera-tion vlth its system is manifest. Its aver-
{
O age cost is reduced and to the extent Appli-cant is able to do this while denying its competitors the same advantage, its cc3 peti-tive posi g vis-a-vis these systems improves.
l As Applicants already have-pointed out, s,ee Section III.C.2, supra, it certainly is not of interest to the NRC that competi- I tors of an NRC licensee have access to alternative facilities '
'O '
that produce power that-is as costly as a high-cost nuclear :
facility. In short, the " reasonable alternatives" analysis nec-essarily begins with the assumption that the proposed nuclear
-O fac111ty will produce low-cost power. -
Similarly,-the cost of building alternative transmission-
=O .f acilitles is- a f actor in NRC antitrust proceedings only af ter it a has been estialished that access to a-nuclear facility would be competitively advantageous. If access is being denied by way of 1
.O -an'NRC licensee's_ transmission facilitles, one relevant consider-p ation is the availability'of_other means of access.
Thus, in the Farlev. decision on which the NRC Staff telles, -
-O l- the Appeal Board stated, "It is evident that (the competing L
l 150/ ALAB-452, 6 N.R.C. at 1098 (quoting from DOJ's heply Brief '
'O on Appeal at 124).
L j :Ot
- i. ~ , - - - . _ - _ . . - . _ . - - - - _ _ - . _ _ -. -_- _
ra N/
cooperative) needs access to the applicant's transmission rystem O to make effective use of its share of the output from l Farley."151/ Furthermore, "to utilire fully its share of the i
l power from Farley," and thus not be " hinder (ed in) its ability to O compete effective 4y against the applicant," the Appeal Board con-l cluded that the cooperative required broad access to the licens-ee's transmission services. This was the Appeal Board's O means of counterbalancing the extraordinary competitive value 1 l
i which the nuclear facilities were anticipated to bestow on their owners, n"
Undoubtedly, however, the availability of transmission facilities, whether those of the licensee or alternative facili-ties, is important in NRC antitrust analyses only because access O
to the nuclear facility is competitively advantageous, and there-i l
fore providing " equivalent access" to all competitors is the agency's means of remedying the nituation or, as the Appeal Board 6
in Farley stated, " strengthen (ing) free competition in private enterprise." 53/
O conversely, if access to transmission facilities indepen-dently invoked Section 105(c) authority without regard to the competitive value of the nuclear facility, then transmission
'O lil/ ALAB-646, 13 N.R.C. at 1108.
152/ Id. at 1109.
o Lh1/ Id.
'O
O-4
- facilities of non-licensees analytically should also fall within O .NRC's authority -- a result that la pininly incorrect. In short, transmission facilities are not " licensed activities" under Sec-tion 105(c) unless they are part of a system that contains a com-
'O. petitively advantageous low-cost nuclear facility. ;
Finally, the NRC Staff suggests that "the need for coordina-tion services" is a factor in NHC antitrust analysis independent >
of cost which constitutes a basis for the imposition of antitrust
-license conditions.I W Here again, in falling to address in any depth-the issue that it presents, the Staff reaches an erroneous O conclusion.
Specifically, the NRC Staff again rellen on the Parley case O in its contention that " wholly apart from cost considerations,"
the existence of coordination services 155/ from which a licens- f I
ee's competitors are excluded, con.stitutes an anticompetitive O issue of concern to the NRC. 56/ -But the discussion of coordina- ,
tion ~ services in Farle_y, as well as in the tibiland antitrust LO i
i 154/ NRC Staff Denial at 6 n.9.
V .
155/- In Parley,-the Appeal Board defined the " coordination ser-O vices" market as a separate market ir. which " utilities buy, sell and exchange surplus bulk power and associated services to improve the officiency and reliability of their opera-tions." 23 N.R.C. at 1051.
156/ NRC Staff Denial at 8-9 (citing ALAB-646, 13 N.R.C. at 1047, O. 1052-57, 1070).
l 1
'O
o review proceeding,E' vas part of the s ubs t ant ; a l review by the o Appeal Board of the relevant markets at issue in the case, and the historical competitive behavior of the licensees in those markets. All of that analysis was highly relevant to the ques-O tion whether the licensees vould, by virtue of the addition of a low-cost nuclear facility to it.s power base, be able to " create or maintain a situation inconsistent with the antitrust laws,"
o the fundamental inquiry of Section 105(c). E / None of the dis-cussion of coordination services would have any relevance, how-ever, if the addition of the nuclear facilities at issue to the o elevant markets constituted a competitive disadvantage to the licensee. While the " coordination services" at issue in those cases vould still exist, and might well pose an antitrust issue o of concern to other government authorities, see Section III.A.3, s u ttr_a , they would not be of interest to the NRC, because the lic-ensee's high-cost " licensed activities" would reduce the licens-O ee's competitive advantage, if any, o 1.51/ See ALAB-452, 6 N.R.C. at 949-77.
158/ As the Appeal Board stated in Lalle_y, "a meaningful assess-ment of the issue before us i.e., whether i ssuance of a license f or construction and operation of a nuclear power plant would create or maintain a situation inconsistent with o the antitrust laws -- cannot be made without first consider-ing the current and past activities of the license appli-cant." ALAB-646, 13 N.R.C. at 1044 (emphasis in original).
And the " antitrust analysis of the applicant's conduct must . . . be undertaken . . . against the background struc-ture of the relevant marP.et." Id. at 1046 (citing Mid2and, n o ALAB-452, 6 N.R.C. at 912-13).
O
O Thus, in ParieY, the Appeal Board concluded that the appli-O cant had a dominant position in the relevant markets, had behaved anticompetitively, and, most significantly, had refused to share owner. chip-in the Farley plant. 9!
its responsibility to remedy
.() r.' is set of circumstances, however, was inea.ricably tied to the catue of the Farley plant, and the need to grant the applicant's
. competition access to that facility:
O In this case, it can be expected that the addition'of Farley to the applicant's gener-ating capecity will over the years increase applicant's existing market dominance . . . .
No les; than a proportionate sharing of the
'() ownership [of the Parley plant cant and its competitor) vill by the appli-suffice to accommodate the objectives of strengthening free competition in private enter-prise . . . .lfS/
O in short, the-NRC Statt is correct that in the analysis of coordination services, "the cost of power generation alone may be of less importance than the exclusion of competitors."161/ But
'O-this observation is r.u'-'ly beside the point, the question is L whether the coordin qio: ervices market is meaningful at all in l-L NRC antitrust analysis if the nuclear facility at issue does not
!O l produce low-cost pcVer which, in turn, would enhance the licens-ee's market position. The answer to this question is that lO 1.
159/ ALAS-646, 13 N.R.C. at 1103, 160/ Id. at 1105-06.
- () 161/ NRC Staff Densal at 9.
s_.
neither the coordination services market nor any other market is Q independently significant under Section 105(c) in the absence of a low-cost nuclear facility.
F.- If Section 105(c) Does Not Require that the Q NRC Suspend the Antitrust License Conditions imposed on Applicants When the Cost of Perry and Davis-Besse Power is Not Competitively Advantageous, then the Statute as Applied Denies Applicants Equal Protection Under the ,
Law.
.: 0 The daa process clauF^ of the Fifth Amendment requires the federaa government to observe the principles of equal protection, Jj as imposed on the states under the Fourteenth Amendment. To i
!sfy the requirement of equal protection, Section 105(c) of
- .d itomic Energy Act must be rationally related to a legitimate O 90 - nment objective. If Section lo5(c) does not require-that tc+ .iRC suspend the antitrust Jicense conditions imposed on
- Applicants-when .he cost of Perry and Davis-Besse power is not
.g : competitively advantageous,-then the statute as applied denies Applicants equal protection under-the law.
l "enonstrated above, the imposition of antitrust condi-
.O-tio., er Section 105(c) was premised upon an assumption that l
nuclear power would--be lower in cost than other substantial sources of-electricity. However, if the cost of Perry and-0-
Davis-Besse power is not' competitively advantageous when compared.
l 162/ Vance v. Bradley, 440 U.S. 93, 95 n.1 (1979); Bucklev v.
33 Valeo, 424 U.S. 1, 93 (1976)..
1 10
iO 1
with other available sources of power (such as coal and oil),
O there is no rational basis for continuing to treat the Applicants diff(rently from any other uti.ity, and for continuing to impose restrictive antitrust conditions not imposed on other utilities.
O Accordingly, in such circumstances, the Applicants are denied equel protection by the continued imposition of NRC's antitrust conditions.163/
O
- 1. To Satisfy Equal Protection, Section 105(c)
Must be Rationally Related to a Legitimate Government Obiective.
C) Equal protection analysis contains three classes of review, depending on the right or classification at issue.164/ Actions affecting fundamental rights or suspect classifications are O reviewed under the " strict scrutiny" standard. LIE / certain other classifications (e.g., gender and legitimacy) are reviewed under an intermediate standard of review.166/ All other classifica-O tions, including those contained in most economic regulations and 163/ Once again, it is important to note that the Applicants are o asking for equal treatment under the antitrust laws with all other utilities, not for removal of all antitrust review of their activities. Even if the NRC's antitrust conditions are suspended, the Applicants vill remain subject to the jurisdiction of other federal antitrust authorities, includ-ing the DOJ. See Section III.A.2, supra.
O 164/ See, ie g , city of. cleburne v. Cleburne Livinq ctr., 473 U.S. 432, 439-442 (1985), and cases cited therein.
165/ Id. at 440.
o 166/ Id. at 440-41.
O
O the classification drawn by Section 105(c) in the present case, O are reviewed under the rational basis standard, which requires the challenged statute or conduct to be rationally related to a legitimate government objective.167/ Although this standard of O review admittedly is lenient, there are limits to permissible government behavior under this standard.
For example, a statute was found to violate equal protection O
under the rational basis standard in Gavett v. Alexander, 477 F. Supp. 1035 (D.D.C. 1979). In Gavett, the plaintiff brought an equal protection challenge to a statute (10 U.S.C. S 4308(a)(5))
O which required membership in the National Rifle Association
("NRA") in order to participate in a reduced cost gun purchase program contained in the Civilian Marksmanship Act. The Act was O
passed in the early 1900's and allowed citizens meeting certain qualifications to purchase firearms from the government at cost.
The plaintiff met all statutory requirements other than NRA mem-O bership, and objected to this condition.
The court held that the statute violated the equal protec-O tion requiremente of the Fifth Amendment. Recoqnizing that there might be some arguable basis to continue such a program, the court nonetheless found there was no relationship between the o underlying purpose of the statute and the means chosen to achieve that purpose. Even uncer the rational basis standard, the court o 167/ Id. at 440.
O
10 l
l found that the statute violated the Constitution's equal protec-
@ tion guarantees.
(The statute's classification criterion) is not a rational means of promoting its pro-fess.' objective, an improvement in marksman-O ship ills of individuals of military age.
In th. respect, the statute is both overin;1usive (for it includes among poten-tial purchasers of rifles all members of the NRA, irrespective of age or marksmanship) and underinclusive (because it does not permit o persons to purchase rifles who are highly qualified marksmen but do not wish to join the NRA because they disagree with its philosophy).168/
O The court concluded, "(i]n short, there is no rational basis for the statute and it is invalid even under the less rigid test for determining constitutionality."169/
O The overinclusive/underinclusive infirmities present in Gavett also exist in the present case. The imposition of anti-trust conditions under Section 105(c) is overinclusive, since it O
applies to utilities enjoying no cost advantages from nuclear power, the underlying principle of the statute. The conditions are also underinclusive,.hecause they are imposed only on nuclear O
utilities, and not on other types of electrical generating plants the operation of which might " create or maintain a condition inconsistent with the antitrust laws." Thus, the continued O
168/ 477 F. Supp at 1049.
O 169/ Id.
O
.i l
Cl imposition is equally irrational'as the NRA membership conditions (1 -struck down in Gavett.
- 2. The Present State of Facts Must be Used to Evaluate Section 105(c) Under the Rational Basis Standard.
O The imposition of antitrust conditions suffers an additional infirmity beyond that'in Gavett, where the court at least
- O accepted that there may be some (minimal) vitality in the under-lying purpose of the Civilian Marksmanship Act. Here, the pro- !
fessed rationale for the imposition of antitrust conditions under
- O' Section 105(c), to prevent exploitation of cheap nuclear power, has not developed. The Supreme Court has recognized that circum-stances may change so dramatically from the original basis for a o; statute or action so as to render the statute irrational and thus violative of equal protection.
In Nashville, Chattanooca & St. Louis RV, v. Walters, 294 LO U.S. 405 (1935), the-Court stated that "{a) statute valid when enacted may become' invalid by change in the-conditions to which it is applied."1 0/ 'This position was also echoed in Chastleton r)
Corp. v. Sinclair, 264 U.S. 543 (1924), where the Court noted
-that "{al law depending upon the existence of an emergency or L other certain state of-facts to uphold it may cease to operate if-O the emergency ceases or the facts change even though valid when lO; 170/ 294 U.S. at-415.-
O
, ... . . ... - - - -. -... - - - - - - ~.. - - -- ~. - - --- - -- .
O; lz i
passed "171/ In Able State Bank v.. Weaver, 282 U.S. 765 (1931)-
() _ the Court stated.that "a police regulation, although valid when ;
l made, may become, by reason of later events, arbitrary and con-t fiscatory in operation."172/ Thus the Court repeatedly has rec-CF . ognized that changes in circumstances and factual developments may cause statutes _and regulations, valid when enacted, to vio-late equal protection gusrantees.
C) -
- 3. Analogous Case Authority Indicates that l 1
Continued Imposition of the Antitrust conditions Denies the Applicants Equal Protection.
Using the changed circumstances standards established by the Supreme Court, lower courts have held that statutes and govern-ment-actions violate equal protection in situations paralleling
'O the continued imposition of antitrust conditions on the Ippli-cants...For example, in Milnot Co. v. Richardson, '50 F. Supp.
221 (N.D. Ill. 1972), the court was faced with the continued pro-hibition of the interstate shipment of filled _ milk products.1 3/
! The-Supreme Court had twice held that Filled Milk Act constitu-I l
tional, based on-two of the statute's rationales: -(i) that O'
filled milk lacked certain nutritional qualities of whole milk, 43s - 171/ 264 U.S. at 547-48.
172/ 282 U.S. at 772.
-173/ Filled milk or'"Milnot" is a product made by removing the butterfat from whole milk and adding to it other fats or
- () oils, i
iO
w JO:-
-including certain vitamins, and (ii) that filled milk might be Q7 passed off to consumers as whole milk.1 4#
l After reviewing the continuing development of dairy substi-
- tutes since the original legislation was passed in the 1920's, 4
the District Court concluded that the continued application-of-the. Filled Milk Act was irrational, and denied the plaintiff
. equal protection under the law. Advances in technology now made g.
_possible the inclusion of vitamins in filled. milk, remedying one 4 purported deficiency of filled milk. Morcover, the court recog-nized-that new scientific literature indicated that milk fat may
!O-have harmful effects. Furthermore, a number of new products, such as non-dairy coffee creamers, had been introduced that were not technically'" filled milk" products yet were quite similar.
- o :.
'The Court noted that the " constitutionality of a statute predicated upon the existence of a particular state of facts may
- O be~ challenged ~by showing to the court that those facts have ceased?to exist."1 5/ The Court stated:
)
[T]his circumstance seems simply to lend sup-
- <3
- port tolthe conclusion that an act which pro-duces suchLincongruous results regarding-
> -interstate shipment alone is devoid of-ratio-lt nality. The-poss'ibility of confusion,-or passing off, in the marketplace, which.justi-L.
?fied the statute in 1944, can no longer-be lOL 174/jUnited States v. Carolene Prods., 304 U.S. 144 (1938), and Carolene Prods, v. United States, 323 U.S. 18.(1944).
I Q .175/ 350 F.-Supp. at 224.
Lo
~
F 3: ,
used ratloaally prevent as shipment 2nterstate a constitutional prog /
of Milnot.1,6 to.
Q-
, The situation in Milnot is analogous to the continued impo-I
'sition of antitrust conditions on the Applicants. The Filled
\
I O- Milk Act was premised on the underlying assumption that filled l milk __was inferior to_whole milk, and could be hazardous to con-sumers. Section 105(c) was premised on the underlying assumption C) that nuclear power would be so low in cost to advantage unfairly those utilities-operating nuclear plants. In each case, the pas-r sage of time has revealed that the underlying rationale for the 0: . statute either did not exist or no-longer exists. Much as it was irrational to-treat filled milk differently from functionally identical imitation milk products, it is likewise irrational to
() treat utilities operating high-cost nuclear plants differently from any other operator of electrical generating plants. Without the low cost of_ power at the heart-of the imposition of the anti-O. _ trust conditions, the' antitrust conditions bear no rational rela-tionship-to any government end.
- O 176/: Id. at 225. Other courts reviewing the constitutionality of state filled milk acts have reached similar conclusions, and have invalidated such acts as violative of equal protection.
See,-e.o., Strehlow v. Kansas State Bd., 232 Kan.-589, 659
- OL .P.2d 785 (1983) (striking down Kansas filled milk act on equal protection grounds, among others); Ftate v. A.J.
Bayless Mkts., Inc., 86 Ariz. 193, 342 P.2d 1088 (1959)
(striking down Arizona filled milk act on equal protection
! grounds);-Milnot v. Arkansas State Bd., 388 F. Supp. 901 i
(E.D. Ark. 1975) (striking down Arkansas Filled Milk Act on 0 -equal protection-grounds).
I ,o
- O Other courts have similarly recognized that changed circum-
- <3 stances may cause a statute to violate the principles of caual protection.- For example, in Gallacher v 2 Evans, 536 F.?d 899
-(10th Cir. 1976), the Tenth Circuit struck down a filing fee-O imposed on cendidates for various elective offites. In a previ-ous court action, the imposition of a filing fee on candidates for the United States Senate had been declared unconstitutional.
() Candidates for other offices brought an equal protecticn chal-lenge, since they were now treated differently from candidetes for the Senate. The Court of Appeals rejected the government's
.<3 defense of the :.atute:
[The government] would have us enforce a law as to several classes of persons when that law had been declared unconstitutional as
'j) applied to another class of persons. This discriminatory treatment would deny the plaintiffs equal protection of the laws ig
- violation of +.he Fourteenth Amendment.177'
-O The Court strted that a " valid statute may become avalid by-
-change in conditions to which it applies."178/
Similarly, in Wessinger v. Southern Rv Co., 470 F. Supp.
O 930 (D.S.C.1979) , the District Court rejected the continued validity of a South Carolina statute that imposed on a railroad a
- 0- -
-1.7.2/ 536 F.2d at 902.
178/ Id., finding support-for its holding in the Nashville, Chat-tanaoca T St. Louis Rv. and Able State Bank cases cited g above.
.O
,_ . _ _ _ _ . _ . _ _ _ . _ _ _ _ ~ _ . _ _ . . _ . . _ . . . . _
1 O
higher contributory negligence standard than that imposed on
() truckers. The statute required a railroad to prove gross negli-gence by the' plaintif f bef ore it could assert a contributory neg-ligence def ense to a grade crossing accident,- while t'ruckers O could interpose a contributory negligence defense upon a showing of simple negligence.
The District Court in Wessinaer found that the statute O.
should be evaluated under present-standards (citing Nashville.
Chattanooga & St, Louis and Gallacher), and then reviewed the
. history of the statute and the evolution of transportation. The .
Q:
statute had been passed in the 1880's to protect automobiles from collisions with trains. However, during the intervening ninety years, trucking had become a major competitor of railroads. The
'Or Court noted that trucks often carry hazardous materials, which
-also: pose;a safety hazard-to the traveling public.
- () ~Having reviewed this evidence, the Court stated that "it seems clear-that any difference in classification as to.both lia-bilities and defenses -between railroads and others, such as users c :of /the highways, .can no longer withstand constitutional challenge' under the. equal protection clause."I 9! The Court further stated l
"the dayJis long' passed for treating violations of safety stat-j] utes by a railroad ~any differently from violations by a trucker i
CF '179/ 470 F. Supp, at 933.
0-
or autdnobile driver, and as such, [the challenged statute) is O invalid under the equal protection clause."180/
The Court.'s reasoning in Wessinger applies with equal force to the present case. To continue to treat owners of relatively 0
high-cost nuclear plants differently from owners of other elec-trical' generating plants is not justifiable, where the purported
. _ _ advantage of nuclear power has not materialized. Much as there 4
~is no longer anything unique about the hazards posed to automo-biles by railroads, there is nothing unique about the competitive advantages of nuclear power that should_cause it to be treated O'
any differently under-the antitrust laws.
In summary, the continued imposition of antitrust conditions
.O .on the Applicants is not rationally related to the underlying purpose of Section 105(c). The statute was designed to prevent the exploitation of low-cost nuclear power. If that cost advan-O tage does not exist, then no rational basis exists to treat the-Applicants differently from utilities operating other forms of electrical genera-ing plants. The Applicants should simply be
!O subject to-the same antitrust laws as any other utility. To con-tinue to impose restrictive antitrust conditions denies the Applicants equal protection of the laws..
.O O 180/ y, lO
O IV. Conclusion e ,
Because the Commission is without authority, as a matter of {
1aw, under Section 105 of the Atomic Energy Act, to retain the antitrust license conditions contained in the Perry and Davis- l Besse operating licenses if the 4ctual cost of electricity from these facilities is higher than the cost of electricity from J
alternative sources, Applicants respectfully request that the Licensing Board grant Applicants' Motion for Summary Disposition.
Respectfully submitted,
, James P. Murphy s.AnA 0 N%w(b Gerald Charnoff Colleen Conry C/ ()
Deborah B. Charnoff Margaret S. Spencer SQUIRE, SANDERS & DEMPSEY Mark A. Singley 3201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044 SHAW, PITTMAN, POTTS &
(202) 626-6600 TROWBRIDGE 2300 N Street, N.W.
Counsel for The Cleveland Washington, D.C. 20037 Electric Illuminating Company (202) 663-8000 and The Toledo Edison Company Counsel for Ohio Edison Company D
Dated: January 6, 1992 J
M /0214/100CBC.91 O
J D APPENDIX A 42 U.S.C. S 2135 I!!35 TITLE 42-TITE PUELIC III. ALT 11 AND W11 FARE Page 496 O
S S
9 9 2135. Antitrust prom 6cna governing licennes (a) Violations of antitrust laws Nothing contained in this chapter shall re-S lieve any person from the opert. tion of the fol-lowing Acts, as amended, "An Act to protect trade and commerce against unlawful restraints an6 monopolies" approved July second, eight-een hundred and ninety; sections seventy three to seventy seven, inclusive, of an Act ertitled "An Act to reduce taxation, to provide revenue for the Government, and for other purposes"
$ approved August twenty seven, eighteen hun-dred and ninety four: "An Act to supNement esisting laws agamst unlawful restratnts s.nd monopolier, and for other purposes" approved October !L! teen, nineteen hundred and four.
teen; and "An Act to create a Federal Trade Commtmaion, to defined its powers and duties,
$ and fot other purposes" approved Eeptember twenty six, nineteen hitndred and fo'Jteen. In the event a licensee is found by a court of com-petent jurisdiction, either in an original action in that court or in a proceeding to enforce or review the findings or orders of any Govern-rnent agency having jurtsdiction under the laws cited above, to have violated any of the provi-
$ sions of such laws in the conduct of the 11 censed activity, the Comminaton may suspend, revoke, or take such other action as it may deem necessary with respect to any license issued by the Commisalon under the provialons of this chapter.
(b) Reports to Attorney General The Commisalon shall report promptly to the G Attorney Gai.eral any information it may have with respect to any utilization of special nucle-ar matertal of atomic energy which appears to violate or to tend toward the violation of any of the foregoing Acts, or to restrtet free competi-tion in private enterprise.
O
O Page 497 TTTLE 42-THE PUBfJC HEALTH AND %TJJAftE 12135 sel Transmissbne to Attorney Generti of copies of li. ceedings in connection with such subject
-O tem.e a,,iwauon.: ,onia.uon of sorice f.cior, matter. and snail mare a finding as to whether considered; estepuons the activities under the license would create or (1) The Cornmission thsU promptly transmit maintain a situation inconsistent m1th the Entl.
to the Attorney General a copy of ray liceae trust laws as specified in subsection (a) of this arptiration pronded for in paran wh (2) of section.
ttus subsection. and a copy of any writteri re. (6) In the event the Cornmtulon's finding quest provided for in paragraph (3) of this sub. under paragraph (6) is in the aff.rmativt, the section: and the Attornty General shall, within Commission shall also consider, in determining O a reasonsbie time but in no event to exceed 180 whether the !! cense should be issued or contin.
days af ter receiving a copy of such application ued, such other f actors. including the need for or uTitten reluest, render such ady'ce to the power in the affected a,rea, as the Commtu;on Cornmission as he determines to be appropriate in its judgment deems necessary to protect the in regard to the finding to be made by the Com. pubile interest. On the basts of its findings, the rolaston pursuant to paragraph (5) of this sub. Commission shall have the authority to issue or section. Such adytce shall include an explanato- contin'te a License as applied lor, to refuse to Q, ty statement as to the reasons c.r basis therefor, issue a license, to rescind a license et amend it.
(2) Paragraph (1) of this subsection shall and to lasue a license with such conditions as it apply to an application for a license to con- deems appropriate.
struct or operate a utthzation or production f a. (7) The Commar. ton, w1th the approval of the ethty under section 2133 of this title: Provided. Attorney General, may except from any of the hoicever, That paragraph (1) sball not apply to requirements of this subsection such classes <c an appilcation for a hcense to operate a uttilza- types of Ucenses na the Cornmtulon may deter.
tion or production facility for which a construe. mine would not significantly affect the appil.
(j tion perTr.it was issued under section 2133 of cant's activities under the antitrust laws as this title unless the Commission determines specified in subsection (s) of this section.
such review is advisable on the ground that sig' (8) With respect to any application for a con.
nificant changes in the licensee's activities or struction ps.mit on file at the time of enmet-proposed activities have occurred subsequent to the previous review by the Attorney C.neral ment into law of this tubsection, which permit and the Cornmluton under this subsectic,n in would be for issuance under section 2133 of thia connection with the construction permit for the title, and with respect to any application for an facility. operating license in connection with which a Q (3) With respect to any Commission permit uTt; ten request for sn antitrust revtew is made for the construction of a utilization or produc. as provided for in paragraph (3), the Comnus.
tion facility issued pursuant to subsection (b) of sion, afte consultation with the Attorney Gen-section 2134 of this title prior to December 19, etal may, upon determination that such action 1970, any person who intervened or who sought is tecessary in the public interest to avoid un-by timely written mtice to the Commtulon to necessary delay, estat11sh by rule or order peri-intervene in the construction permit proceeding ods for Commission notification and receipt of for the facility to obtain a determination of addee di!!ering from those set forth above and p)-- antitrust considerations or to advance a jutts- may issue a construction permit or operating 11 dictional basis for such determination shall cense in advance of consideration of and find.
nave the right, t'pon a aTitten request to the ings with tespect to the matters covered in this Commtulon, to obtain an antitmet rettew subsection: Provided That any constructica under this section of the appilcation for an op- permit or operating license so issued shall con.
ersting license. Such written request shtll be tain such conditions s.s the Commission deems made within 25 days after the date of initial appropriate to sasure tt.at any subsequent find.
CammiJaion publication in the Federal Restster ings and orders of the Commf== ton with respect n" of notice of the filing of an application for an to such matters will be given full force and operating license for the facility or December 'II'CI' 19,1970. whichever is later. (Aug.1,1946, ch. 724. I 105, as added Aug. 30, (4) Upon the request of the Attorne: Gener- 1954, ch.1073, i 1, 68 Stat. 938, and amended al, the Commission shall furnish or cause to be Aug. 26,1964. Pub. L 88-489, i 14. 78 Stat. 606; i
furnished such information as the Attorney Dec.19,1970, Pub. L 91-560, t 6,84 Stat.1473.)
l General determines to be appropriate for the advice called for in paragraph (1) of this sub- Rartasucts ut Turr
'O- section.
(5) Prornptly upon receipt of the Attorney The act to protect trade and commerce saatnst un.
General's adetce, the Commission shall publish subsec. lawful reettsints and monopolies, referred to in (at, is act July 3. Is90. ch. 847, 26 Stat. 200. as the advice in the Federal Register, Where the amended. ILnown as the sherman Act, which la classt.
Attorney General advtses that there may be ad. fled to sections 1 to 1 of Title 15. Commerce and verse antitrust aspects and recommends that Trade. For complete classificauon of this Act to the there be a hearing, the Attorney General or his code, see short Title note set out under secuan 1 of i designee may participate as a party in the pro. Tttle 18 and Tables.
lq cee<11ngi thereafter held by the Commiuton on Sections seuntr4hm W unntFspen. inclua1M. Sf IU such licensmg matter in connection with the an act enuued "An Act to Mduce taxauon. to DMde
, sublect matter of his advice. The Commiuton revenue for the Government, and for other purposes ,
l shall give due consideration to the advice re- referred to in autmee. tal. are sections 13 to 77 of act Aus. 27.1sH. ch. 349. 2s stat. sto. as amended. known CetVed from the Attorney General and to such as the Wilson Tartif Act. Sections 13 to To enacted see-evidence as may be provided during the pro- uon a to 11 of Tiue 16. Section 77 was not hf*1 to 1
0
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Page 498 l 8 2tM TITLE 42-THE PUBLIC HEALTH AND WEl#ARE -
the Code. For complete claastitcation of this Act to the
)' Code, see Short Title note set out under section 8 of
. Ttue il and Tables. ,
An Act to supplement esisting laws mattnst unlaw.
ful restronta and monopobes. and for other purposes".
approved CK'tober 8',fteen, nmeteen hundred and four .
teen. referred to in subeec. tal, is act Oct. 18.1914, ch. -
323, 38 Stat.130 as amended. known as the Clayton
- Act. n'htch is classified generally to sections it.18,14 -
to 19,20. 21. and 22 to 21 of Title 16, and sections 62
)'=
r s,nd $3 of Title 29. Laoor. For auther octatis and com.
plete classifloation of this Act to the Code, see Refer.
ences in Test note set out under secuan 12 of Title !$ ,
and T6bles.
The act to create a Federal Trade Commission. to ,
- define its powere nne duties and for other purposes. -
~
referred to in sueeoc. (al,is net Sept. 26,1914. ch. 311.
30 Stat. TIT. as a nended, known as the Federal Trade
- Commassten Act which is classified generally to sub- i
}- thapter I (l 41 et seg,1 of chapter 2 of Title 16. For complete clamatitettaen of this Act to the Code, see sec.
- tion 68 of Title 16 and Tables. -
PaJon Paovisions Provtstons simdar to this section were contained in section It0Ttc) of this title pner to the seneral amend-ment and renumberms of met Aug.1.1946 by act Aug.
30,1964, ch.1973. 64 Stat. 921.
Aassweesarrs 1970-8ubsec. tch Pub. 1.91-840 doetsunted emisting
- provisions as pars. (1). (21. (4). and 161 and amended such provisions by extendtns the time for the Atter-ney General to give adnee from 90 to ISO days and .
prended for rev'ow of licenses once granted under sec.
tion 2133 of this uue, and when the Attorney General -
recommends that there be a nearms, authorised the y~ Ca=== ton to hold heartnsa and permit the Attorney General to appear as a party and to make a flading as .
to whether the acuvities under the laconse would be inconsistent with the neutrust laws, and in par. (St.
provnded for a review of the permit issued under sec-tion 2134(b) of this utie, and added pers.16) te (SL '
1964-8ubesc. Ist Pub. 1.84-449 struct out ", (n.
ciudmg the provtstons which vest title to all special nuclear maternal in the United States." befort "shall "
pr.-
reheve any person '. .
Tuamposa oe PUwcTsons -
Por transfer of certain funedons from the Nuclear Regulatory C==m to the Chairman thereof, see --
Reorg. Plan No.1 of 1940,46 F.R. 40641. 94 stat. seas.-
set out as a note under esecon 8441 of this utle.
The Atosuc Energy Coeumaston Ues abolished and all functions under subase. (c) of this accuan wers
)- _ transferred to. and vested eactusivsly in the Nucleat Regulatory r =m and almanar funcuens under subseca. (al and (b) of this section were transferred to -
- and vested jotauy in the Nuclear Regulatory Comme ston and the Adunanistraler of the Energy Research and Development u=*=*='suon by sections $414 and
,5441 of this Mue. The Eners/ Research and Develop-ment Admannettsuon was terminated and funettons
. vested by law in the Aduunistrator thereof were trans-
)2- ferrvd to the Secretary of Energy tunless otherwise spectfacally provided) by sections 7151(al sad 7293 of this title. .
Sacrios Rsrumaan to ts Orum SacTrowe This section is referred to in sections 218% 2201 of ,
i this utle,
O-00LP:L100 USHRC UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION g2 Jg1 -7 P 3 :47 O>
[
~
BEFORE THS ATOMIC SAFETY AND LICENSING "hr
)
O- 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-OlvA THE TOLEDO EDISON COMPANY- )
)
0 (Perry Nuclear Power Plant, Unit 1, )
Facility Operating License )
No. NPF-58) )
(Davis-Besse Nuclear Power Station, )
Unit 1, Facility Operatir.g License )
No. NPF-3) )
O )
o CERTIFICATE OF SERVICE -
I HEREBY CERTIFY that on this 6th day of January, 1992, a copy o of the foregoing Applicants' Motion for Summary Disposition was served by Federal Express on each of the following:
Samuel J. Chilk
' (3 - Secretary of the Commission U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 l
Charles Bechhoefer
'O Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 4350 East West Highway, 4th Floor
'Bethesda, Maryland 20814 i
l 10-
!O
Y G. Paul Bollverk, III Atomic Safety and Licensing Board Panel j U.S. Nuclear Regulatory Commission '
4350 East West Highway, 4th Floor Bethesda, Maryland 20814 l
Marshall E. Miller, Chairman Atomic Safety and-Licensing Board Panel y U.S. Nuclear Regulatory Commission i
1920 South Creek Boulevard Spruce Creek Fly-In Daytona Beach, Florida 32124 Joseph Rutberg, Esq.
Sherwin E. Turk, Esq.
)'
Steven R. Hom, Esq.
Office of the General Counsel U.S. Nuclear Regulatory Commission 11556 Rockville Pike Rockville, Maryland 20852 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 June W. Weiner, Esq.,
y Chief Assistant Director of Law William M. Ondrey Gruber, Esq.,
Assistant Director of Law William T. Zigli, Esq.
Assistant D: rector of Law City Hall, Room 106
) 601 Lakeside Avenue Cleveland, Ohio 44114 Reuben Goldberg,-Esq.
Channing D. Strother, Jr., Esq.
Goldberg, Fieldman & Letham, P.C.
)~L 1100 Fifteenth Street, N.W.
Washi.sgton, D.C. 20005 D. Biard MacGuineas, Esq.
Volpe, Boskey and Lyons 918 Sixteenth Street, N.W.
p Washington, D.C. 20006 -
):
. . .. .. . ... - - . . _ - - _ . . .. ~. ,. . .
O.
Phi 11p N.-Overholt Office of Nuclear Plant Performance O. Office of Nuclear Energy U.S. Department of Energy, NE-44 19901 Germantown Road, Room E-478 '
Germantown, Maryland 20585 l
Kenneth L. Hegemann, P.E.
O' President American Municipal Power-Ohio, Inc.
601 Dempsey Road P.O. Box 549 .
l Westerville, Ohio 43081 g- David R. Straus, Esq.
Spiegel & McDiarmid 1350 New York Avenue, N.W.
Suite 1100 Washington, D.C. 20005-4798 O l O.eAun d DutMtbY VV
- O SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.
Washington, D.C. 20037 (202) 663-8000 O 0214/1000BC.91
.o.
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