ML20090E562
| ML20090E562 | |
| Person / Time | |
|---|---|
| Site: | Farley  |
| Issue date: | 07/18/1984 |
| From: | Boskey B, Macguineas D ALABAMA ELECTRIC COOPERATIVE, INC., VOLPE, BOSKEY & LYONS |
| To: | NRC COMMISSION (OCM) |
| References | |
| A, NUDOCS 8407190509 | |
| Download: ML20090E562 (15) | |
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i UNITED STATES OF AMERICA DXvDD L"I'. ; c NUCLEAR REGULATORY COMMISSION ,
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'84 J118 PS:08 i Before the Commission l l
r In the Matter of )
IdABAMA POWER COMPANY ) Docket Nos. 50-348A l (Joseph M. Farley ) and 50-364A: }
Plant, Units 1 and 2) ) OL Nos. NPF-2 and NPF-8 l
l ALABAMA ELECTRIC COOPERATIVE, INC.'S RESPONSE URGING REJECTION OF ALABAMA POWER COMPANY'S PETITION FOR A DECLARATORY ORDER This response is filed by Alabama Electric Cooperative, Itc. (AEC) pursuant to the Commission's order of July 9, l~f 8 4 . In that order the Commission noted (1) that on June 29, 1784 AEC had filed a petition and request under 10 CFR S2.206 with the Director of the Commission's Of fice of Inspection a:d Enf orcement, to enforce an antitrust license condition is Alabama Power Company's (APCo) operating licenses for tbe Joseph M. Parley Nuclear Plant, and (2) that four days late r , on July 3, 1984 APCo filed a petition for a declaratory l
1 order allegedly to clarify its obligation under the license ,
l condition . The Commission's order requested AEC and any other '
I interested parties to file with the Commission by July 20, I 1984 their views on the choice of procedure.
AEC regards the choice as clear. For a variety of reasons, I the Commission should reject APCo's self-styled petition for a declaratory order and should direct that the enforcement h
8407190509 840718 PDR ADOCK 05000348 M PDR
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l l proceeding initiated by AEC's formal request shall move ahead
, with the maximum practicable speed.
. ,3 APCo has lodged with the Commissioners and with the 4
Commission's staff a petition of a type which is clearly no,t provided for in the Commission's regulations and which is not even contemplated by the Commission's regulations.
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As the matter appears to AEC, the obvious purposes of APCo's l petition and of APCo'r intensive ex parte lobbying b ! for l its acceptance are: (1) to prolong further -- and, indeed, l
for as long as possible -- APCo's three-year long refusal to comply with the NRC Antitrust License Condition requiring
, APCo to grant AEC ownership access to the Farley Nuclear j Units; and (2) to sidetrack the enforcement proceeding which, four days prior to the lodging of APCo's petition, was initiated i
i by the filing of AEC's formal request for enforcement of the Antitrust License Condition. APCo's petition requests the Commission to suspend the pending 10 CFR 52.206 enforcement proceeding and to substitute therefor an uncharted type of proceeding of Rube.Goldbergian complexity and stages, and j of undetermined legality which would plainly be open to question.
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Looked at objectively, it appears that APCo is seeking to
- invent a procedure which will circumvent or evade or put i
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1/ See Memorandum For Files,'From Nunzio J. Palladino, regarding Meeting [on June 26, 1984] With Representatives of Alabama Power Company (" Chairman's Memorandum",).
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off into the indefinite future the whole subject of penalties and other remedies wnich might otherwise have concrete, present impact as a result of APCO's continuing violation of Antitrust License Condition Mo. 2. In other words, APCo is seeking to sidestep the prescribed procedure governing license enforce-ment in order to find a haven for continued penalty-free non-compliance with its responsibilities as a licensee.
Background
The hist,ory of APCo's long-lasting refusal (now extend-ing well over a decade) to grant AEC ownership access to the Farley Nuclear Units on reasonable terms and APCo's steadfast refusal to comply with the Antitrust License Condition No. 2 since the Condition became effective on August 10, 1981, is summarized in ALAB-646, 13 NRC 1027 at 1081-1086, 1102-1108 (1981), and in 'EC's June 29, 1984, request to the Director, Office of Inspection and Enforcement, for enforcement of the License Condition.
At a meeting on June 20, 1984, between representatives of AEC and AFCo, the long intransigence of APCo remained unbroken, and it was made clear to APCo that AEC would have to take steps in the near future to seek assistLnce from the NRC Enforcement Office with respect to APCo's continu-ing insistence on positions in conflict with APCo's obligations under the governing License Condition. The next day, counsel e
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for APCo, Robert A. Buettner, ! telephoned'AEC's Montgomery, !
Alabama counsel, J. Theodore Jackson, and inquired further j regarding AEC's intentions to seek NRC assistance as to APCo's 4" compliance with the License Condition, and specifically as j
i to'the contemplated timing of any such remedial relief AEC
. was considering seeking. The message obviously got through 1- to APCo, since at the ex parte meeting which APCo representa-tives had with Chairman Palladino on June 26, they told the I
Chairman (p.,1, 12 of the Chairman's Memorandum) that "AEC t f informed Alabama Power that AEC is-contemplating an enforce-ment petition and may file a paper with the NRC this week."
f At the June 20 meeting, the parties scheduled the next
! negotiating session for July 9, 1984. However, after service i of AEC's request for enforcement, APCo on July 2, 1984, can-celled the scheduled meeting, thereby unilaterally precluding
- any further voluntary negotiations leading to APCo's compliance.
4 On June 26, 1984,-APCo counsel and other representatives met with Chairman Palladino, after previously meeting with i
- other Commissioners.and NRC personnel, in an ex parte effort.
t by APCo to persuade the NRC' officials that the AEC/APCo j inability _to achieve an agreement for AEC's purchase of an ownership interest' in the Farley Units was in essence due
- to " differences of interpretation of the license condition"
-(Chairman's Memorandum, supra) --
rather than being due l
l to APCo's.tefusal to negotiate in good faith and to comply l-i 2/ ~ Identified as Robert A. Brettner in the Chairman's Memorandum, supra.
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with the terms of the License condition. The APCo representatives attempted to persuade the Commission to accept a novel pre-emptive procedure invented by APCo. It was a procedure well I designed to ensure that no sense of imminence in the form 4
of penalties or remedies would overhang APCo and hence that APCo's non-compliance might be continued and prolonged without the threat of any immediate adverse impact on APCo.
As already stated, on June 29, 1984, AEC filed its peti-tion and requ'est for enforcemmit of the Antitrust License Condition, and on July 3, 1984, APCo lodged its " Petition for a Declaratory Order". Thea APCo filed a follow-up letter dated July 5, 1984, seeking to suspend any action on AEC's request for enforcement in a further ef fort to delay and prolong compliance. Also on July 5, 1984, counsel for APCo wrote the NRC Commissioners is an apparent effort to persuade the Commission to refuse to furnish to AEC counsel copies 4 of notes or memoranda or transcripts made, or being made, of any of the elt parte meetings which APCo representatives had initiated and had held with NRC Commissioners and person-nel, which materials AEC counsel had requested by letter of July 2, 1984.5/
J/ The f act that' APCo is so eager to persuade the Commis-sioners ' not to make such disclosures to AEC regarding APCo's ex parte ef forts underscores the reasons why, in the interests
. of fairness, such disclosures ought to be made. AEC reserves the right to file supplemental views af ter receiving f rom the Commission the information requested in our letter of July 2, 1984.
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APCo's Petition Is Without Merit And Should Be Dismissed Forthwith APCo's petition for a declaratory order is simply an e- " attempt to impede and delay the NRC Staff and Commission c in considering and taking effective action on AEC's earlier-filed request for enforcement action with respect to APCo's three-year long refusal to undertake good faith compliance with the Antitrust License Condition imposed on APCo as a result of its anticompetitive activities " condemned by Section 105c [of the Atomic Energy Act} and the antitrust laws referred to therein." ALAB-646, 13 NRC at 1086. After the lengthy statutory NRC antitrust review, the Appeal BoardS!
(13 NRC at 1084 and 1085) determined, inter alia:
- "Mr. Farley's last statement is even more revealing when considered in the context of the 1969 statement in which the policy of the com-pany is expressed as being ' unalterably opposed 4/ In the Matter of Alabama Power Comoany, ALAB-646, 13 NRC 1027 (1981), Commission review denied, 14 NRC 795 (1981),
i affirmed Alabama Power Co. v. Nuclear Regulatory Com'n, 692 F.2d 1362 (11th Cir. 1982), rehearing and rehearing en banc denied 698 F.2d 1238 (1983), certiorari denied ,
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104 S.Ct. 72 (1983). -
APCo's numerous requests for stay of the effectiveness of this ownership access License Condition were denied suc-cessively by the Commission (14 NRC 795, October 22, 1981),
by the Eleventh Circuit (orders issued January 20, 1982, and March 4, 1983), and by Justice Powell acting as Circuit Justice (order issued April 6, 1983). Thus, at all times since August 10, 1981, APCo has had an affirmative obligation to comply with Antitrust License Condition No. 2.
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to sharing in the ownership of the plant with AEC or with any one or more of the cooperatives.'
Viewed in that light, it becomes clear that the company had a position: to resist to the last selling an ownership share of the plant to AEC (footnotes omitted]." * * *
"we have no hesitancy in concluding that the applicant's actions in denying AEC a joint ownership share in Farley constituted anti-competitive behavior. The evidence leaves no doubt in our minds that the actions of the applicant in this regard were deliberately directed toward avoiding sharing in the ownership of the plant. . . .
APCo's latest effort, to delay and sidetrack action on AEC's enforcement request, is yet another phase of the same on-going policy and practice of anticompetitive behavior-condemned in the Appeal Board's findings quoted above.
The Commission has a prescribed regular and normal pro-cedure (10 CFR Part 2, Subpart B, 552.200-2.206) for compelling licensee adherence to the licensee's legal obligations under the Act and under outstanding licenses. It is a well estab-lished procedure which rests firmly on a base set forth in the statute and the regulations. APCo is urging that this procedure be set aside and bypassed, and that instead the Commission should improvise with an undelineated, untested, complicated procedure whien in all probability would tie up the issue of APCo's non-compliance in a procedural quagmire of predictably lengthy duration.
APCo concedes that there is nothing in the Commission's regulations authorizing APCo's proposed " declaratory" ruling H~
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proceeding. See covering letter from Harold F. Reis to the Cem. mission, dated July 3, 1984. APCo also has recognized that its proposed procedure is so questionable that it would V' have to undergo " review to determine whether or not it is legal."
Chairman's Memorandum, supra, at p. 2. Indeed, that review of the legality of APCo's proposed procedure, itself, is likely to become a full-blown adversarial proceeding with the potential for consuming much time that could otherwise more usefully be devoted to moving ahead expeditiously with the enforcement proceeding. This is particularly likely here where APCo has engaged in what appears to have been a massive ex parte lobbying effort on behalf of the adoption of its invented procedure. Thus, the conclusion seems justified that APCo's real intent -- in contrast to its pious protestations -- is to delay for as long as possible any definitive resolution of APCo's non-compliance with APCo's license obligations.
APCo (Petition, p. 6) cites Kansas Gas and Electric Company (Wolf Creek I) CLI-77-1, 5 NRC 1 (1977), as precedent for APCo's proposed declaratory order procedure. However, that Memorandum and Order, which came up to the Commission through the Appeal Board, is of no help to APCo's position.
It dealt with the' resolution of a legal issue regarding the scope of NRC regulatory authority under a regulation which had been issued by the Commission itself, 5 NRC at 2, 3, 4 and 6. In APCo's case here, on the other hand, there is 4
need to determine the factual matters of whether APCo (1) has refused to " offer to sell to AEC an undivided ,
i ownership interest in Units 1 and 2 of the Farley ;
4 Nuclear Plant" (13 NRC at 1112);
r (2) has insisted on pricing, terms and conditions which will " deprive AEC of its normal financing advantages in connection with the power it would obtain from j the Farley plant" (13 NRC at 1105); ,
(3) has rejected an allocation basis for AEC percentage share that is " pegged to the load [5/] of AEC's on-system and off-system members . . . [maphasis added]"
(13 NRC at 1108) -- not the load of AEC alone as claimed in APCo's Petition (p. 12);
(4) Das refused to convey an interest in the amount
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of land required to be conveyed by the Rural Elec-trification Administration (REA) for loan guarantee I i
t (5/) " LOAD The amount of electric power delivered or f required at any specified point or points on a system. Load originates primarily at the power l consuming equipment of the customers. See DEMAND." '
" DEMAND The rate at which electric' energy is de-livered to or by a system, part of a sytem, or a piece of equipment expressed kilowatts, kilo-voltamperes or other suitable unit at a given '
instant or averaged over any designated period of time. The primary source of " Demand" is the power-consuming equipment of the customers. See LOAD."
Edison 21ectric Institute, Statistical Committee, Glossary of Electric Utility Terms, at 49 and 24 (EEI, reprinted 8/83).
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purposes, i.e., the land "necessary for the operation l-of the units including the land surrounding intake structures";5/
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(5) has demanded a second trust security interest in AEC's entire generation and transmission system l
[ while requiring that all capital and operating payments for AEC's share of the Farley facility l
be made in advance; and (6) has insisted on numerous other terms and conditions
-- including price -- some of which are described in AEC's request for enforcement, so burdensome, onerous, unreasonable, and so beyond normal industry practice (as evidenced by the multitude of joint I
ownership agreements for, nuclear units on file with the Commission) as to manifest, beyond a rea-sonable doubt, bad faith on the part of APCo in its years of negotiations with AEC. .
Here the facts, as documented by APCo's own written statements I of its positions, conclusively evidence continuing violations of the Condition of its licenses. These violations clearly warrant l the application of 10 CFR Part 2, Subpart B - "the usual proce-dure", as noted by the Commission in its July- 10, 1984 order. The present case is remote from Kansas Gas, supra, where legal and 6/ Letter from Charles R. Lowman to Jesse S. Vogtle, October 31, 1983.
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jurisdictional matters were at issue and the only question was whether they were best resolved by licensing boards familiar with the background of the matter or by an opinion of the General Counsel, whose office would ultimately have to advise the Commission in the exercise of its review functions after the licensing hearings. 5 NRC at 4-5.
l APCo's strong desire to avoid a Section 2.206 proceeding
! manifests its hope that APCo can evade the potential imposition of remedial measures at the foot of the proceeding. The potential of those remedial measures is in fact the only
. inducement which can be expected to persuade APCo to. abandon l its continuing policy of refusing to comply with its Antitrust License Condition. Accordingly, quite understandably, APCo is enthusiastic about substituting an informal non-adjudicatory procedure of questionable legal validity for the Commission's prescribed enforcement procedure.
The track record of APCo in this proceeding (which long antedates the incumbencies of the present members of this commis-sion) makes clear what a keen propensity APCo has shown for protracting the litigation and for putting off into the indefi-nite future the sale to AEC of a pro rata interest in the Farley Nuclear Plant. At least since 1971, APCo has known l fully of AEC's desire to have ownership participation, but APCo adamantly refused AEC such access. In June 1972 the Commission noticed the antitrust review for hearing; after extensive prehearing stages, including the disposition of
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- lengthy motions made by APCo, the evidentiary hearing began in December 1974. After over 160 days of formal evidentiary i
hearings, many of them attributable to APCo's long-drawn-out
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examination of witnesses, the Licensing Board rendered a dechion in April 1977 (5 NRC 804).
This decision found an extea;sive history of anticompetitive conduct by APCo directed at EEC, and found that issuance of an unconditional license
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i wouhl create or maintain a situation inconsistent with the ,
antitrust laws . This was followed by a further hearing and by a Licensing Board decision in June 1977 on remedy (5 NRC 1482). Primarily as a result of the APCo litigation strategy, there had by then been amassed an evidentiary record of nearly 27,300 pages of transcript plus hundreds of exhibits; this is the record that went on to the Appeal Board, with the
- resulting Appeal Board decision issued on June 30, 1981 (13 NRC 1027) which became the final action of the Commission.
Although APCo never obtained a stay and hence Antitrust License
- Condition No. 2 has been binding on APCo since August 10,
! 1981 (see note 4, supra), APCo's protracted litigation against the License Condition was carried on until the Supreme Court denied APCo's petition for certiorari in October 1983.
What APCo now is seeking is a means of staving off the Ccmuission's prescribed enf orcement procedure while APCo 2
institutes a new phase of litigation which will involve a coltateral attack on the already-adjudicated Antitrust Lic'ense CcnWition No. 2 in the guise of " interpretative" quibbling.
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. i; The whole record of APCo's litigatory habits in this proceed-ing should alert the Commission to the fact that expeditious-ness is not APCo's objective; that the novel and untested type of procedure which APCo has now proposed and has so avidly promoted in its ex parte sessions with Commissioners would open up possibilities for extensive litigation delays, and all the while the enforcement proceeding, which is the only realistic way of bringing about compliance by APCo, would be stayed. In order words, as APCo would have it, successive proceedings would take the place of a straightforward enforce-ment proceeding. ..
The threat by APCo that " enforcement action could entail 5-10 years of fighting" (see Chairman's Memorandum, supra, at p. 1) should be recognized for what it is -- another in the long series of efforts by APCo to stonewall AEC.2! The Commission has measures at hand to prevent APCo from making good any such threat. .
We do urge that in the enforcement proceeding the Commis-sion should take effective steps to achieve a prompt resolution of the issue of APCo's non-compliance. For example, the 20-day response periods provided for in 10 CFR SS2.201(a) t 2/
us APCo's threat of ten more years of litigation brings back to the sentence at the end (pp. 10-11) of AEC's enforce-ment petition: "In the absence of enforcement action by the Commission, there is a high probability that, because of the course APCo is pursuing, the Farley Units will serve '
out their useful operational life before some reasonable agreement can be arrived at with APCo."
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- Q and 2.02(a)(2) could be reduced, at least in the absence of objection from the parties. The great bulk of the documents evidencing the AEC/APCo negotiations have already been sub-mitted as attachments to AEC's request for enforcement and APCo's Petition; any remaining correspondence could be sub-mitted in a few days time. Since that correspondence consti-tutes the principal record of the parties' negotiations, a stipulated record should be readily achieveable. That, coupled with an abbreviated briefing schedule, should enable a prompt resolution of the matter, provided all parties proceed in good faith. ,, ,
CONCLUSION For the reasons summarized in this response, the APCo petition for a declaratory order should be denied and the Commission should take steps to achieve a prompt resolutio'n of the issues as to APCo's non-compliance which have been presented by AEC's petition for enforcement. .
Respectfully submitted, BENNETT BOSKEY s2 - - 23 D. BIARD MACGUINEAS VOLPE, BOSKEY and LYONS ,
918 - 16th Street, N.W. !
Washington, D.C. 20006 ;
Tele: (202) 737-6580 '
I Attorneys for Alabama l July 18, 1984 Electric Coopera'tive, Inc.
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+ j[q_ CERTIF E OF SERVICE e'
It is hereby certified that se;vice has been made by mail-ing or delivering copies of Alabama Electric Cooperative, Inc.'s Response'Drging Rejection Of Alabar.a PoNer Company's Petition
- For A Delcaratory Order to the following on the 18th day of i . July, 1934.
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, . D. BIARD MACGUINEAS 1
. Nunzio J. Palladino \ Herzel H. E. Plaine, Esquire 1
y Chairman i General Counsel U.S. Nuclear Regulatory s' , U.S. Nuclear Regulatory
} Commission Commission Washington, D.C. 20555
's s
Washington, D.C. 20555 x
, \ s Frederick M. Bernthsl ys u Guy H. Cunningham, III, Esquire i Comissioner '
", Office of Executive Legal U.S. Nuclear Regulatory Director
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. Commission s . U.S. Nuclear Regulatory Washington, D.C. I Commission i
20553} . ,
Washington, D.C. 20555 Cames K. Asselstine \ \
s CommissionerN '
Joseph Rutberg, Esquire U'.F. Nuclear Regulatory Office of.. Executive Legal Commissian '
Director Washingten, D.C. 20555 U.S. Nuclear Regulatory Commission
, , ' Thomas M. ' 3ha r't s '
Washington, D.C. 20555 ccmmissioner' '
U.S. Nuclear Regulatory Martin'G. Malsch, Esquire
, Commission Office of General Counsel Washington, D.C. 20555' U.S. Nuclear Regulatory
/
Commission Lando W. Zech' s ~ Washington, D.C. 20555 Commissioner 1 U.S. Nuclear' Regulatory Michael B. Blume, Esquire
, Commission' Office of General Counsel x Mashington, D.C. 20555 U.S. Nuclear Regulatory st i
Commission Docke' ting and Se'vfce r Section Washington, D.C. 20555
- Office of the;Eecretary
't U.S. Nuclear Rehulatory Harold F. Reis, Esquire s \' Commission J. A. Bouknight, Jr., Esquire Washington, R.'. 20555> Newman & Holtzinger, P.C.
s N , 1025 Connecticut Avenue, N.W.
i Dr. Richard C.'DeYoung Washington, D.C. 20036 n '
- t Director Office of Inspection and Joseph M. Farley, President Enf.orcement \ Alabama Power Company U.S. Nuclear Regulatory 600 North 18th Street Commission '
P.O. Box 2641 Wasnington,4D.C ,20355 Birmingham, Alabama 35291 V'.
William JI. Dir!:i:s s Robert A. Buettner, Esquire
, Executive Dire 2ctor for Balch, Bingham, Baker, Ward, 2
Operatipr.s\ 1: Smith, Bowman & Thagard
'IU.S. Nuclear Rcgulatory P.O. Box 306
. Commissioh t '
Birmingham, Alabama 35201 Wash!,;tgton , " D.C. ,2 0555
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