ML20090F426
| ML20090F426 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 03/31/1992 |
| From: | Goldberg R, Strother C GOLDBERG, FIELDMAN & HJELMFELT, OHIO, STATE OF |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#192-12674 91-644-01-A, 91-644-1-A, A, NUDOCS 9203110028 | |
| Download: ML20090F426 (100) | |
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UNITED STATES OF AMERICA POCMCIED NUCLEAR REGULATORY COMMISSION N Os/ DEFORE TFE ATOMIC SAFETY AND LICENSING BOARD m mn ' -9 p e :33 I 1
)
I In the Matter of ) Docket Nos. 50-440-A
) 50-346-A OHIO EDISON COMPANY )
(Perry Nuclear Power Plant, )
Unit 1, Facility Operating )
License No. NPF-58) )
)
THE CLEVELAND ELECTRIC )
ILLUMINATING COMPANY )
THE TOLEDO EDISON COMPANY )
(Perry Nuclear Power Plant, ) ASLDP No. 91-644-01-A Unit 1, Facility Operating )
License No. NPF-58) )
(Davis-Desse Nuclear Power )
Station, Unit 1, Facility )
Operating License No. NPF-3) )
)
O MOTION FOR
SUMMARY
DISPOSITION OF INTERVENOR, CITY OF CLEVELAND, OHIO, AND ANSWER IN OPPOSITION TO APPLICANTB' MOTION FOR DUMMARY DISPOSITION Danny R. Williams Reuben Goldberg Director of Law Channing D. Strother, Jr.
June W. Wiener David C. Hjelmfelt Chief Assistant Director B. Victoria Brennan of Law Goldberg, Fieldman & Letham, P.C.
William T. Eigli 1100 Fifteenth Street, N.W.
Assistant Director of Law Washington, D.C. 20005 City Hall, Room 106 Telephone (202) 463-8300 601 Lakeside Avenue Cleveland, Ohio 44115 Telephone (216) 6C4-2000 Attorneys for
\
City of cleveland, Ohio March 1992 ,
9203110028 920331 PDR ADOCK 05000346 j)I' 3 M PDR
ERE OF CONTEliTA Ea.ge~N04
~
INTRODUCTION.......................................... 2 Tile JOI NT STATEM ENT O F TH E I SS U ES . . . . . . . . . . . . . . . . . . . . . 7 BACKGROUND OF Tile ANTITRUST LICENSE CONDITIONS.......................... 7
SUMMARY
OF LICENSING AND APPEAL BOARDS' DECISIONS.......................... 11 ARGUMENT I. NEITHER THE ATOMIC ENERGY ACT NOR ITS LEGISLATIVE HISTORY SUPPORT APPLICANTS' CONTENTION THAT THE NRC'S AUTHORITY TO IMPOSE AND RETAIN ANTITRUST LICENSE CONDITIONS IS CONTINGENT ON WHETHER OR NOT NUCLEAR POWER IS RELATIVELY LOW COST...... 16 A. Applicants' Argument Is Based On A False Premise............................. 16 B. Section 105(c)............................ 22 C. The Legislative History Of
- (J Section 105(c)............... ............ 30 II. THE NRC'S PRECEDENTS AND ATTORNEY GENERAL'S ADVICE LETTERS RELIED ON BY APPLICANTS DO NOT SUPPORT APPLICANTS' POSITION.............. 33 A. The NRC Precedents Relied On By-Applicants................................ 34-
- 1. -Watorford............................. 34
- 2. Wolf Creek............................ 39
- 3. Midland.......................... .... 42
- 4. Farley 1I............................. 44:
- 5. Davis-Besse/ Perry..................... 48
- 6. Fermi................................. 52 B.. The Attorney General's Advice Letters..... 56
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TABLE OF CONTENTS (cont.) J Ellqe Noa
(~) III. APPLICANTS' ARGUMENT BASED ON Tile EQUAL
(> PROTECTION PROVISION OF Tile UNITED STATES CONSTITUTION IS NOT PROPERLY BEFORE Tile BOARD AND, IN ANY CASE, IS WITHOUT MERIT...... 62 IV. TIIE APPLICATIONS ARE BARRED BY Tile DOCTRINES OF THE LAW OF THE CASE, RES JUDICATA, COLLATERAL ESTOPPEL AND LACilES...... 64 A. Law of The case........................... 67
- B. Res Judicata-And Collateral Estoppel Bar The Applications...................... 70
- 1. The criteria of res judicata have been met and bar the applications..... 72
- 2. Collateral estoppel bars Applicants' applications.......................... 75 C. Laches Bars The Applications.............. 77 CONCLUSION............................................ 80 APPENDIX A -
Pages 75 to 77 of Alabama Power Company's Opening Brief of February 28,
/) 1982 in Alabama Power Co. v. NRC, 692 F.2d 1362 (1982), cert. denied, 464 U.S. 816 (1983), 78 L.Ed 2d 85 (1983),
affirming the NRC's decision reported in 13 NRC 1027 (1981)
APPENDIX B -
Pages 65 to 67 of' Alabama Power Company's Opening Brief of February 28, 1982 in Alabamh Power Co. v. NRG, 692 F.2d-1362 (1982), cert. denied, 464 U.S. 816 (1983), 78 L.Ed 2d 85 (1983),
affirming the NRC's decision reported in 13 NRC 1027 (1981)
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IMLJ' OF A1)Til0RITIES filS Lll%.
C_ourt Deciplops:
Alabama Power Co. v. NRC, 692-F.2d 1362 (11th Cir.
1982), cert, denied, 464 U.S. 816, 78 L.Ed 2d 85 (1983).......................................... 22,23,25,32 33-34,46,47 63 American Federation of Tobacco Growers v. Neal, 183 F.2d 869 (4th Cir. 1950)....................... 54-55,69-70 Arizona v. California, 460 U.S. 605, 75 L.Ed 2d 318 (1983)......................................... 67 Cia. Petrolera Caribe, Inc. v. Arco Carribean, Inc.,
754 F.2d 404 (1st Cir. 1985)....................... 22 Citizens and Landowners Against The Miles City /New Underwood Powerline v. Secretary, U.S. Department of Energy, 683 F.2d 1171 (8th Cir. 1982)........... 77-78,79 Costello v. United States, 365 U.S. 265, 5 L.Ed 2d 551 (1961)............................... 77 Engineers Public Service Co. v. Securities and Exchange Comm'n, 138 F.2d 936 (D.C. Cir. 1943),
dismissed as moot, 332 U.S. 788, 92 L.Ed 370 (1947)............................................. 62 Environmental Defense Fund, Inc. v. Alexander, 614 F.2d 474 (5th Cir. 1980), cert. denied, 449 U.S. 919, 66 L.Ed 2d 146 (1980).................... 77
() FTC v. Bass Brothers Enterprises, Inc., 1984-1 Trade Cas. (CCH) 166,041 (N.D. Ohio 1984).......... 18 Goodman v. McDonnell Douglas Corp., 606 F.2d 800, (8th Cir.-1979), cert, denied, 446 U.S. 913, 64 L.Ed 2d 267 (1980).............................. 78 Johnson v. Robison, 415 U.S. 361, 39 L.Ed 2d 389 (1974)......................................... 62 Lingenfelter v. Keystone Consolidated Industries, Inc., 691 F.2d 339 ( 7 th Cir . 19 8 2 ) . . . . . . . . . . . . . . . . . 7 8 Motor and Equipment Mfrs. Ass'n, Inc. v. E.P.A.,
627 F.2d 1095 (D.C. Cir.-1979), cert. denied, 446 U.S. 952, 64 L.Ed 2d 808 (1980)................ 62
, Ness Investment Corp. v. United States, 595 F.2d 585 (Ct. C1. 1979).................................
71-72 Otter' Tail Power Company v. United States, 410 U.S. 366, 35 L.Ed 2d 359 (1973)................ 10,18,25-26 Panitz v. District of Columbia, 112 F.2d 39 (D.C. Cir. 1940)................................... 62-63 Sierra Club v. Clark, 755 F.2d 608 (8th Cir. 1985)... 16,32 Simmons v. Arkansas Power & Light Co.,
655 F.2d 131 (8th Cir. 1981)....................... 64 U.S. v. Aluminum Co. of America, 148 F.2d 416 r- (2d Cir. 1945)..................................... 18 9}
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T_A.BLE OF AUTHORITIES ( eqnt_d Pane No.
Court Decisions (cont.):
U.S. v. Du pont DeNemours & Co., 351 U.S. 377, 100 L.Ed 1264 (1956)................................... 17 U.S. v. General Dynamics Corp., 341 F.Supp. 534 (N.D. Ill. 1972), aff'd, 415 U.S. 486, 39 L.Ed 2d 530 (1974)......................................... 18
-U.S. v. Grinnell Corp., 384 U.S. 563, 16 L.Ed 2d 778 (1966)................................. 17 U.S. v. Syufy Enterprises, 903 F.2d 659 (9th Cir. 1990).................................... 19 U.S. v. U.S. Smelting Refining & Min. Co., 339 U.S. 186, 94 L.Ed 750 (1949)....................... 67 U.S. Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 64 L.Ed 2d 766 (1980)............................................. 22 U.S. Steel Corp. v. Fortner Enterprises, 429 U.S.
610, 51 L.Ed 2d 80 (1977).......................... 67
-Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 55 L.Ed 2d 460 (1978)................ 64 NRC Decisions:
-Alabama Pcwer Co. (Joseph M. Farley Nuclear Plant, g
Units 1 and 2), ALAB-182, 7 AEC 210, rev'd on other grounds, CLI-74-12, 7 AEC 203 (1974)......... 68,70-71 71-72,72-73 74,76 Alabama Power Co., (Joseph M. Farley Nuclear Plant, Units-1 and 2) 5 NRC11482 (1977)................... 21 Alabama Power Co.,. (Joseph M. Farley Nuclear Plant, Units 1 and 2), ALAB-646, 13 NRC 1027 (1981)....... 21,44,45 Carolina PowerLand Light Co. (Shearon Harris Nuclear Power Plant), ALAB-837, 23 NRC 525, (1986)................................. 72 Commonwealth Edison Co. (Braidwood Nuclear Power Station,. Units 1 and 2) LBP-85-11,-21 NRC 609 (1985)............................................. 76 Consolidated Edison Co. of New York, Inc. (Indian Point, Unit Nos. 1, 2, & 3), CLI-75-8, 2 NRC 173 (1975);......................................... 71 Consumers Power Co. (Midland Plant, Units 1 and 2),
ALAB-452, 6 NRC 892 (1977)......................... 21,31,33 42-44 Consumers Power Co. (Midland Plant, Units 1 and 2),
LBP-80-21, 12 NRC 177---(1980)....................... 44 O
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16DLE OP' AUTiLOBITIES (cont.)_
Pace 110, NRC Decisions __(cont.):
Detroit Edison Co., LBP-78-13 (Enrico Fermi Atomic Power Plant, Unit No. 2), 7 NRC 583, aff'd, ALAB-475, 7 NRC 752 (1978)......................... 34,53,54 Houston ~ Lighting and Power Co. (South Texas Project, Units 1 and 2), LBP-76-41, 4 NRC 571 (1976)........ 68-69
-Houston Lighting and Power Co. (South Texas Project, Units 1 and 2), CLI 77-13, 3 NRC 1303 (1977)....... 23,78 In the Matter of Public Service Co. of New Hampshire (Seabrook Station, Units 1 and 2),
32 N.R.C. 433 (1990)............................... 68 Kansas Gas & Electric Co. (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 NRC 559 (1975)... 39-42 Louisiana Power & Light Co. (Waterford Steam Electric Generating Station, Unit 3) (Waterford 1),
CLI-73-7, 6 AEC 48 (1973).......................... 34-35,55 Louisiana Power & Light Co. (Waterford Steam Electric Generating Station, Unit 3) (Waterford II),
CLI-73-25, 6 AEC 619 (1973)........................ 33,38-39 Louisiana Power & Light Co. (Waterford Steam Electric Generuting Station, Unit 3) (Waterford),
LPB-73-46, 6 AEC 1168 (1973)....................... 36-39 The Toledo Edison Co., et al. (Davis-Besse Nuclear Power Station, Units 1, 2, and 3;-Perry Nuclear Power Plant, Units 1 and 2), LDP-77-1, 5 NRC 133
[]' _ (1977)................................ 7,8,11,12,14-15,18,19-20 24,25,33,49,51-52,69,79 i
The Toledo Edison Co., et al. (Davis-Besse Nuclear Power Station, Units 1, 2, and 3; Perry Nuclear Power Plant, Units 1 and 2), ALAB-560, 10 NRC 265 (1979).............................. 8,9,10,12,13,18
, 25,33,50,69,73,79 Statutes and Beaulations:-
Atomic Energy _Act, 42 U.S.C. SS2011, et seg. (1991)
S ect i on .10 5 ( a ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 , 2 4 , 2 5 , 2 6 S e c t i o n 10 5 ( c ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 , 2 3 , 2 4 25,26 S ec t io n 10 5 ( c ) ( 5 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,24 Sherman Act, 15 U.S.C. S2 (1991)..................... 17 10'CFR S2.743(i)(1) (1991)........................... 56 10 CFR S2.749 (e)' (1991)............................... 1 36 Ted. Reg. 17888 (1971)............................. 8,57 36 Fed. Reg. 19711 (1971)............................ 59,60
. s' Y)y i
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l TADLE 0F AllT110lLLTJ111_Iflont.1 !
Pace No.
Btatutea alid__Reguj_ali_ons (conb,).
37 Fed. Reg. 9410 (1972)............................. 61 37 Fed. Reg. 14246 (1972)............................ 60 39 Fed. Reg. 2029 (1974).............................. 9 40 Fed. Reg. 8395 (1975)............................. 10 42 Fed. Reg. 54894 (1977)............................ 53 56 Fed. Reg. 20057 (1991)............................. 5 Legislative lia_t_erf als:
Atomic Energy--Utilization for Industrial or Commercial Purposes, H.R. Rep. No. 91-1470, 91st Cong., 1st Sess (1970), 1970 USCCAN 4931........... 32 Prelicensing Antitrust Review of Nuclear Power Plants, Ilearings before the Joint Committee on Atomic Energy, Part 1, 91st Cong., 1st Sess.
(1970)............................................. 31,33 Miscellaneous:
Northeast Utilities Service Co., 58 FERC
('T
's /
$61,070 (1992)..................................... 18 16B J. Von Kalinowski, Business Organizations:
Antitruet and Trade Regulations S8.02(3) (1978).... 18 i
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UNITED STATES OF AMERICA
/- NUCLEAR REGULATORY COMMISSION l
BEFORE Ti!E ATOMIC SAFETY AND LICENSING BOARD
)
In the Matter of
) Docket Hos. 50-440-A
) 50-346-A OHIO EDISON COMPANY )
(Perry Nuclear Power Plant, )
Unit 1, Facility Operating )
License No. NPF-58) )
)
THE CLEVELAND ELECTRIC )
ILLUMINATING COMPANY )
l THE TOLEDO EDISON COMPANY )
l (Perry Nuclear Power Plant, ) ASLBP No. 91-644-01-A i Unit 1, Facility Operating )
l License No. NPF-58) )
(Davis-Besse Nuclear Power )
Station, Unit 'i, Faci]'ty )
Operating License No. NPF-3) )
)
O MOTION FOR
SUMMARY
DISPOSITION OF INTERVENOR, CITY.OF CLEVELAND, OHIO, AND ANSWER IN OPPOSITION TO APPLICANTS' MOTION FOR
SUMMARY
DISPOSITION To the Honorable, the Members of the Atomic Safety and Licensing Board:
l The City of Cleveland, Ohio (" Cleveland"), an Inter-venor-Party in this proceeding and a beneficiary of the antitrust license conditions in the Operating Licenses of the Perry and Davis-Besse nuclear electric generating units-identified in the above caption, files this motion and answer pursuant .taa section 2.749 (a) f of the- Nuclear Regulato-ry Commission's ("NRC") regulations and the Prehearing Conference Order of October 7, 1991, of the Atomic Safety
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and Licensing Board (" Board"). Cleveland, by its motion, seeks summary denial of the application filed by Ohio Edison Company ("OE") and of the joint application filed by Cleve-land Electric Illuminating Company ("CEI") and Toledo Edison Company ("TE"). Cleveland also answers in opposition the January 6, 1992 joint motion for summary disposition of these companies.
INTRODUCTION OE filed its application in September 1987. CEI and TE filed +. heir joint application in May 1988. These Appli-cants1 / are three of the five co-licensees of the two pro-jects. Two.of the co-licensees, Duquesne Light Company
(} ("Duquesne") and Pennsylvania Power Company ("Penn Power"),
a wholly-owned subsidiary of OE, have not joined in the applications.
Applicants request that the antitrust license condi-tions of the Perry and Davis-Besse Operating Licenses be suspended "until such time as there may-be a factual basis for imposing (the conditions]" (OE App. 81; CEI and TE App.
3). -Applicants assert that-the-NRC, as a matter of law, has rua authority under Section 105(c) of the Atomic Energy'Act--
("AEA") to impose' antitrust license conditions, no matter 1/ Hereinafter, OE, CEI and TE,-collectively, will be referred O- Dto as " Applicants", with an. initial capital'"A". The use, hereinafter, of " applicants", all in lower case, may or may not include " Applicants", depending upon the context.
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how egregious Applicants' v}olations of the antitrust laws may be (Prehearing Conference Transcript (" PCT") 150-51), j 1
unless the NRC finds that the actual cost of the nuclear power from the licensed units is lower than the cost of other sources of power in the relevant market, as those costs are appropriately measured and compared. Applicants contend that when the AEA was before Congress it was univer-sally anticipated that nuclear power would be low cost and that this-was the expectation with respect to the Perry and Davis-Besse units when the units were licensed. Applicants allege that the power produced by the units is presently high cost. Therefore, Applicants conclude that as a matter of law the NRC has no authority to retain the antitrust-license conditions and that they must be suspended, subject to restoration if at some future time the cost of the power generated by the projects is lower than alternate sources in the relevant market.
Cleveland opposed the applications on a number of grounds, including the ground that authority of the NRC to impose license conditions under Section 105(c) is not depen-
. dent.on the relative cost of the power from the nuclear unit but instead. is: founded upon the anticompetitive activities of the Applicants under the license--activities the NRC has determined "uould create or maintain-a situation inconsis-tent-with the antitrust laws as specified in subsection 105(a)", i.e., under the Sherman, Clayton and Federal Trade
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Commission Acts. Cleveland showed, and so shows herein, I
that the only limitation on the NRC's authority to impose antitrust license conditions is that the NRC must find that there is a nexus, a relationship, between the antitrust ,
conduct of the Applicants and the " activities under the ,
license". Section 105 (c) (5) . The Licensing and Appeal Boards in binding, long ago final and now nonappealable rulings found that there was such a nexus.
In response to a request of the NRC for the Depart-ment of Justice's ("DOJ") advice concerning Applicants' applications, the DOJ responded under date of June 13, 1990, that the AEA "does not require a finding that a plant will be ' low cost' as a predicate to imposing antitrust condi-tions" (p.-2). The DOJ advised that "the statute requires only a finding that 'the activitaes under the license will create'or maintain a situation inconsistent with the anti-trust laws'." Id. "Given the broad language of the statute-and the absence of any legislative history" supporting the Applicants' position, which legislative history the DOJ
- reviewed in its letter, the DOJ stated (p. 3), "there is no i
basis for-assuming that Congress intended to limit the NRC's ability to impose antitrust conditions upon the owner of a y nuclear power plant only~if it determined in each case that
'the specific plant involved would-be a low cost producer of O
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i
-S-power."Al The DOJ noted (id.) that the Applicants " advance no argument for the removal of the antitrust conditions other than the alleged cost of nuclear power generation confers no significant competitive advantage upon its owners." The DOJ advised that the applications are without merit and recom-mended their dismissal without hearing (pp. 3-4), because "that consideration does not negate that the licensed activ-itics 'will create or maintain a condition inconsistent with the antitrust laws'."
i On April 24, 1991, the Director of the Office of Nuclear Reactor Regulation issued a decision denying the applications.EI At the same time, a Notice of Denial of Applications for License Amendments was issued and published in the Federal Register. 56 Fed. Reg. 20057, May 1, 1991.
The Notico advised Applicants that they "may demand a hear-ing with respect to the denial" and that "any person-whose interest may be affected may file a written petition for 2/ At the application for a construction permit stage, neither the applicants therefor, or anyone-else, knows-the " actual" cost of the nuclear project or the cost of the nuclear power-to be generated.- Applicants' contention requires post opera-tion reviews with respect to every nuclear project with antitrust license conditions in the construction permit and/or operating license.
3/ Cleveland has contended and maintains that the Director's decision became the 4RC's decision under the NRC's regula-tions invoked by Applicants in filing their applications O- because there was neither sua sponte review of the decision by the:NRC nor an application by the Applicants for NRC review.
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leave to intervene." Id.
Applicants requested a hearing. Cleveland fi]ed an opposition to the request for hearing on several grounds and, alternatively, sought intervention. Other entities petitioned to intervene.
Thereafter, an Atomic safety and Licensing Board was established for the purpose of ruling on " petitions to intervene and/or requests for hearing and to preside over the proceeding in the event that a hearing is ordered."
(Notice of Establishment of Atomic Safety and Licensing Board, June 13, 1991).
At the September 19, 1991, prehearing conference the Board granted intervention to Cleveland and other entities and directed the parties to submit an agreed upon statement of the legal issue presented, which would be the subject of motions for summary disposition.AI By letter dated November 7, 1991, the_ parties sub-mitted a joint statement of issues to the Board. In accor-dance with its Prehearing Conference order the Board estab-A/ The Board'a-Prehearing Conference Order of October 7, 1991, memorialized this agreement, the grant.of and denial of petitions to intervene, and-the rejection of certain objec-tions of Cleveland to the proceeding that require dismissal of the_ applications._ Cleveland has filed an appeal to the NRC of certain of these rulings by the Board. That appeal is
_pending. Cleveland, therefore, does not discuss the objec-tions to the proceeding involved in the appeal._ Cleveland does not waive those objections which, if sustained by the
_O,l NRC, would result in dismissal of the applications without reaching the two issues set forth herein in "The Joint State-ment of The Issues."
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11shed the schedule for the filing of motions for summary disposition and ancillary submissions relating to those issues (Order of November 14, 1991) as amended on February 7, 1992).
i 3:
IHE_ JOINT STATEMENT OF THE ISSUES The issues subject to motions for summary dispo-t
, wition are the following:
E 1. Is the Commission without authority as a matter of law under Section 105 of the Atomic Energy Act to retain the antitrust license conditions contained.in an operating license if it finds that the actual cost of electricity from the licensed nuclear power plant is higher than the cost of electricity from alternative sources, all as appropriately measured and compared?
- 2. Are the Applicants' requests for suspension of
! O the antitrust license conditions barred by res judicata, or collateral estoppel, or laches, or the law of the case?
BACKGROUND OF THE ANTITRUST LICENSE CONDITIONS The proceeding which resulted in the antitrust license 1 conditions began in.1969 when CEI and TE filed a
. joint application for a license to construct and operate Davis-Besse Unit 1, a 906 megawatt nuclear. generation facil-ity. The Toledo Edison Co., et al., (Davis-Besse Nuclear LPower Station, Units 1, 2, and 3; Perry Nuclear Power Plant, L Units 1 and-2)'(" Davis-Besse/ Perry"), Docket Nos. 50-440A,.
et al., LBP-77-1, 5-NRC 133, 138 (1977). A construction
(). permit, conditioned upon antitrust review pursuant to Sec-
, tien 105(c) (8) of the AEA, was issued on March 24, 1971.
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The Attorney General advised the NRC that an antitrust hearing would be required if certain controversies between Cleveland and the CEI r e m a i n e a u n r e s,o l v r.d , noting that Cleveland's request for an interconnection was pending before the Federal Power Commission. 5 HRC at 138; The Toledo Edison Co., et al., Docket Nos. 50-440A, et al., 10 NRC 265, 275 (1979); 36 Fed. Reg. 17888, 17889 (September 4, -
1971). Cleveland filed a petition to intervene in the Davis-Besse 1 proceeding and requested an antitrust hearing.
5 NRC at 138. Cleveland alleged that CEI used its dominance and control of generation and transmission facilities anti-competitively to block Cleveland's Municipal Electric Light and Power System ("MELP"), now named Cleveland Public Power
("CPP"), from obtaining bulk power from other sources.
Cleveland sought remedial antitrust license conditions, in addition to other relief. 10 NRC at 275.
Subsequently, in March 1973, OE, CEI, TE, Penn Power and Duquesne jointly sought construction permits to build Perry Units 1 and 2. The Attorney General's-advice letter recommended an antitrust hearing, stressing-the activities of CEI which were described as engaging "in intense competi-tion" with Cleveland "at the retail distribution level" and to a lesser extent with the city of Painesville, Ohio.
Noting CEI's control of all the transmission facilities-
.() surrounding-Cleveland and Painesville, the Attorney General referred to CEI's objective "to reduce and ultimately climi-
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nate," these cities' municipal' electric systems. The advice letter reviewed the history of unsuccessful negotiations between CEI and the two cities over interconnections, wheel-
.ing, coordination and access to large scale generation, and
. described CEI's conduct in these matters as " inconsistent with the antitrust laws." 39 Fed. Reg. 2029 (January 16, 1974); 10 NRC.at 275-76. Cleveland petitioned for inter-vention and an antitrust hearing.
When the five applicants for the Perry license in August 1974 jointly requested' construction permits for Units 2 and 3 of the Davis-Besse facility, each 906 megawatt, the
- Attorney. General advice letter again recommended an anti-trust hearing, based on the refusal of these applicants to admit the municipal systems-into the CAPCOEI pool and L
their pattern of anticompetitive dealing with the smaller systems. 10 NRC at 275-76.EI In the 1975 advice letter regarding Davis-Besse l -
Units 2!and 3 the Attorney General noted that the five
! _ applicants' " refusals to wheel' power, to interconnect and to engage in coordinated operation with smaller utilities raise "CAPCO" iu an acronym for Central Area Power Coordination.
E/' Group. The members _of CAPCO are-CEI,.TE, OE, Penn Power and l -Duquesne.
1/. As the-Perry ana Davis-Besse advice letters show, it is
-anticompetitive conduct, not the cost of the nuclear power, that is the-basis of the Attorney General's recommendations
() for the antitrust hearing. The nexus lof this conduct to the activities under1the license authorizes and compels the imposition of antitrust license conditions.
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i problems which should be considered in the perspective of
' O their monopoly control of tha transmission facilities sur-rounding the smaller systems of their competitors." " Anti-trust principles", the Attorney General continued, "have evolved which place distinc'c limits upon a supplier's exer-cise of monopoly power at one level of distribution to adversely affect competition at another level", citing Otter Tail Power Co. v. United States, 410 U.S. 366, 35 L.Ed 2d 359 (1973); 40 Fed. Reg. 8395-96 (February 27, 1975).
The Attorney General stated that a Section 105(c) hearing was called for hecause "(c]onstruction and operation-of the Davis-Besse Nuclear Power Station, Units 2 and 3, and marketing of its power output would maintain such an anti-competitive situation." Cleveland also petitioned to inter- '
vene in that proceeding.
The applications for Davis-Besse 1, 2 and 3 and Perry Units 1 and 2 were consolidated for hearing ~to deter-mine whether antitrust license conditions should be imposed on the construction permits. Cleveland, the Attorney Gener-al (represented by the DOJ), and the NRC Staff were admitted' and participated as complaining parties. 10 NRC at 270.
The hearing took place over-seven months, compiling nearly 13,000 pages of transcript and over 1,300 exhibits.
In these extensive antitrust hearings, the DOJ, 1( ) Cleveland and-the NRC Staff contended'that the five appli-cants possess monopoly power in the markets they serve; that-
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they had used their control of generation and transmission lines to foreclose or destroy competition from smaller municipal electric systems; and that the award of the per-mits and licenses for the nuclear plants would maintain, if not worsen, this situation inconsistent with the antitrust laws. They asked the Licensing Board to condition the permits and licenses to prevent that occurrence.
SUMMARY
OF LICENSING AND APPEAL _EOARDS' DECISIONS In its decision issued January 6, 1977 (5 NRC 133),
the Licensing Board found that the applicants for the per-I mits and licenses deliberately acquired monopoly power in l
the relevant markets-and used that power to force municipal 1 -
electric systems to abandon independent generation of elec-
~
tric power and either go out of business entirely or become L totally dependent wholesale customers of these applicants.
The Licensing Board found the applicants guilty of a host of-antitrust violations, such as putting improper restrictions on the-resale of electricity, engaging in group boycotts, attempting to fix prices, and unilaterally refusing to deal.
The Licensing Board found, as described by the Appeal Board, that the issuance of licenses without anti-trust conditions for the Davis-Besse and Perry plants would
' create and maintain a situation inconsistent with the anti-(f trust laws. The Licensing Board, therefore, attached condi-tions to the licenses which offered wide-ranging relief to
the municipal and cooperative electric systems in the com-bined CAPCO Companies Territories ("CCCT").- 10 NRC at 300, see also, 5 NRC at 144. These antitrust conditions required the applicants to refrain from conditioning energy sales on anticompetitive terms; to make reasonable intercon-noctions; to provide wheeling services for municipal and cooperative power systems within the CAPCO territories; to make available CAPCO membership to such systems; to sell maintenance, economy and emergency energy; to share re-serves; to offer access to the nuclear plants; and not to assert CAPCO contractual arrangements to avoid compliance with the remedial conditions. 10 NRC at 287. Finally, the Licensing Board found that there is "a very substantial i
Dexus both in terms of market structure and in terms qi availability and use of power to be cenerated at the Davis-Besse and Perry nuclear stations and the situation incon-sistent with the antitrust laws which-we have-found to exist." 5 NRC at 255 (emphasis supplied). See 5 NRC at 237-43 for details of the nexus finding.
The applicants appealed the decision of the Licens-
-ing Board to the Appeal Board. In its decision issued September 6, 1979, the Appeal Board affirmed the Licensing Board's decision. 10 NRC at 256. The Appeal Board found s
() 2/ The CCCT refers to the region bounded by the outer perimeters of the service areas of the five CAPCO members. 5 NRC at l 142, n. 8.
l
1 I
I
/ that "the Licensina Board employed the correct leaal stan-dards in determining-whether licensing these plants $would 1
create a situation inconsistent with the antitrust laws'." ]
i 10 NRC at 286 (emphasis supplied). The Appeal Board af- i firmed the integral nexus between the proposed nuclear facilitics and the pernicious and pervasive anticompetitive and unlawful activities of the five applicants. The Appeal
. Board approved the antitrust license conditions prescribed by the Licensing Board with only minor modifications.
Particularly germane to the issues presently before this Board is the fact that the Appeal Board rejected a condition that a member of the Appeal Board had proposed in a draft decision, which would have limited access to coordination and wheeling service to customers purchasing nuclear power from the licensed plants or_ purchasing ownership interests
- in the plants. 10 NRC at 290-94. The Appeal Board noted (id, at 291) that this restriction would have allowed the applicants to continue their anticompetitive conduct in-connection with pooling and coordination services and to-thereby undermine the competitive position of-utilities that did not buy the nuclear power. The Appeal Board found (id.)
that the clear " message" conveyed-by Section 105 of the AEA.
was.that " Congress did not want nuclear plants authorized in circumstances that would create or maintain anticompetitive
() situations without license conditions designed to redress them". Therefore, the Appeal Board rejected (id. at 284)
- 14 -
the proposed restriction as inconsistent with the NRC's broad mandate to impose antitrust conditions if the licensed activity would create or maintain situat ions inconsistent with antitrust requirements.
Applicants contend (App. Motion 53) that the "linch-pin" of the Appeal Board's decision affirming the Licensing Board's decision was the anticipated low cost of the nuclear power to be generated by the Perry and Davis-Besse nuclear -
generating units. The decision of each Board refutes that contention. In fact (see infra, 48-52), the Appeal Board specifically rejected the Applicants' contention, which they and their co-applicants for licenses had urged upon the Appeal Board, that the NRC is without authority to impose i
antitrust license conditions under Section 105(c) of the AEA if the nuclear power is not lower in cost than other sources of power in the relevant market. The Licensing and Appeal Boards based their decisions on the Applicants' and the co-applicants' anticompetitive conduct and the nexus of such activities to the licenses. The Licensing Board stated (5 NRC'at 238):
It is the effect of the licensed activities
- measured'against particular situations which is I the predicate for Commission involvement in l
Section 105(c) licence consideration . -. . - .
The issues herein as initially perceived relat-l ed largely to the structure of the electric power industry within the CAPCO market. Domi-i f- nance of the CAPCO companies and the possibili-(_)g ty of abuse of monopoly power exacerbated by the granting of unconditional licenses which would further strengthen that dominance were
. - - , - - - . - - . ~ . . - = . - _ - . _ - - . . ._- - - - - .
I i
among the core issues. As discovery developed, O- of course, opposition parties sharpened the -
thrust of their allegations and disclosed in advance'of the. hearing that they also intended to introduce evidence of agreements in re-straint of trana, some of which constituted por sg violations of the antitrust laws.- Accord-ingly, we make findings with respect to nexus-jointly and alternatively. The Board finds nexus to exist with respect to the structured abuses and secondly with direct reference to restraints-imposed on specific outputs of the Davis-Besse and Perry plants . . . . (citation omitted)
Similarly, the Appeal Board based its affirmance of the Licensing Board's decision on the anticompetitive con-duct of the Applicants and their co-applicants and the nexus of such activities to the license.
The Applicants submitted petitions to the NRC chal-f
( longing the-Appeal Board's decision. The NRC declined to review the Appeal Board's decision, thereby adopting it as the NRC final-decision. Penn Power and Duquesne filed
-petitions for-review in the United States Court of Appeals for.the Third Circuit (Duauesne Licht Co. v. NRC, Nos. 80-
-1295-and 80-1296_(filed February 29, 1980)). These peti-tions-were subsequently-dismissed pursuant to stipulation.
l l
, 1 1
16 -
^""""
O I. NEITilER THE ATOMIC E..ERGY ACT NOR ITS LEGISLATIVE IIISTORY SUPPORT APPLICANTS' CONTENTION THAT Ti!E riRC'S AUTHORITY TO IMPOSE AND RETAIN ANTITRUST LICENSE CONDITIONS IS CONTINGENT ON WHETIIER OR NOT NUCLEAR POWER IS RELATIVELY LOW CO_SI Applicants contend that, under section 105(c) of the AEA, if the licensed facility does not produce low cust power, the NRC has no authority to impose or retain anti-trust license conditions (App. Motion 17). Applicants' motion, however, makes no meaningful effort to analyze the provisions of Section 105(c) to support Applicants' posi-tion. The reason for this failure is clear. The plain and unambiguous words of the statute itself establish that low
() cost nuclear power i? not a necessary prerequisite to the NRC's authority to impose and retain antitrust license conditions. Since the statute is plain and unambiguous there is no necessity for reference to legislative history. -
Sierra Club v. Clark, 755 F.2d 608, 615, n. 9 (8th Cir.
1985), citing Tennessee valley Authority v. Hill, 437 U.S.
153, 184, n. 2S, 57 L.Ed 2d 117, 140 (1978). Cleveland will show, also, that the legislative history of the AEA provides no support for Applicants' position.
A. Applicants' Argument Is Based On A 3 False Premise Applicants' contend that it is a fundamental truism that a licensed facility must produce low-cost power in
^ - - ' - ^ - - - ' - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
order for licensed activities to " create or maintain a situ-ation inconsistent with the antitrust laws". Applicants further contend that this truism lies at the heart of Sec-tion 105(c), and is a necessary predicate to the exercise of antitrust authority by the 101C. (App. Motion 16) (emphasis in the original).
- Applicants make no effort to establish that their
" fundamental truism" can be found in the words of Section 105(c) or in its legislative history. Applicants could not ,
find support for their proposition in the AEA be w 'se their
" fundamental truism" is demonstrably false. Tho law is quito clear that nuclear generation need not be low cost to ,
maintain a situation inconsistent with the antitrust laws. '
O Monopolization under Section 2 of the'Sherman Act has two olements: "(1) the possession of monopoly power in i
the relevant market, and (2) the willful acquisition or maintenance of-that' power as distinguished from a growth or development as a consequence of a superior product, business acumen or historic accident," U.S. v. Grinnell_cor.A , 384 b.S. 563, 570-71, 16 L.Ed 2d 778, 786 (1966). In Grinnell, the Supreme court reiterated its definition of monopoly in U.S.-V. Du Pont DeNemours & Co., 351 U.S. 377, 391, 100 L.Ed 1264,_1278 (1956), as "the power to control prices to ex-clude competition" and that the " existence of such power ordinarily may be inferred from the predominant share of the market." Gr.innell,.384 U.S. at 571. Courts have recognized
F 1a .
that control of productive capacity "'u the appropriate statistical basis for measurement of future industry compet-itive performance". l'TE.Y dann_htplhers EntnEprises, I n c2, 1984-1 Trade Caa. (CCll) 166,041 at 68,610 (ll.D. Ohio 1984);
U.S. v. General Dynoinice Corpnratipn, 341 F.Supp. 534 (N.D.
Ill. 1972), aff'd, 415 U.S. 486, 39 L.Ed 2d 530 (1974); ,
lipriltear&_L!til i t.. m J/_i c e C o . , FERC Opinion No. 364-A, 58 FERC 161,070 at 61,192 (January 29, 1992) l Applicants stipulated to their dominance of genera-tion and transmission. 5 HRC at 142 and 154; 10 NRC at 278-
- 79. - The NRC found they had monopoly power, 10 HRC at 270-
- 79. Applicants do not challenge this finding. Applicants' and their co-licenseca' control of generation within their service alaas ranged from 94% to 100% and their control of transmission ranged from 96.8% to 99.8%. 5 NRC at 153.
These measures are sufficient to demonstrate the existence of monopoly power under any standards. 1)nited States vt Miupinum Co. of _hM2rjan, 14 8 F.2d 416 (2d Cir. 1945); 16H J.
Von Kalinowski, Business Organizations: Antitrust and Trade Regulations 58.02(3) (1978); Otter Tail Power _ Company v.
Un_ited_ States, 410 U.S. 366, 35 L.Ed 2d 359 (1973). FEnC has found that control of more than 65 percent of surplus
-generating capacity would allow a utility to exercise market power in the short-term bulk power market without regard to relative cost. Northeast Utilfilas Servicf Co. , nunta. The Ninth Circuit has recently noted that high market share l
l
{
i E-.-.-,.__-__,_ _ . , . . . _ . , _ . _ , . _ _ . . . - , _ , , , _ - . , . _ . _ , . _ _._ _ _ . _ . . - - _ _ . . _ , _ _ -
l l
19 -
with barriors to entry is evidence of monc; poly power. it.fu O L_Gy31Ly_EntEDC.ima, 903 F.2d 6S9 (9th Cir. 1990). Of even i
l
-more importance is the ability to maintain market share.
Id. There is no doubt that the addition of nuclear units would maintain and even increase Applicants' monopoly power, I regardless of the cost of the output of those units.
With respect to transmission, the Licensing Board found that Applicants had designed a transmission construc- r tion program in accordance with the planned conetruction of the nuclear generating units. 5 NRC at 239. The Board found that one reason Cleveland could not build competing transmission lines was the unlikelihood of obtaining suit-able site approval from_the stato regulatory authorities for duplicative transmission facilities. 5 NRC at 173, 240.
Thus, not only did the nuclear related transmission lines add to Applicants' market share, but the very construction of these lines raised barriers to the construction of trans-mission by others. The Licensing Board also found that the generation of power from the planned nuclear units was "an extremely substantial, if not dominant, force in power production planning." 5 NRC at 240. It is no wonder then that the Licensing Board stated that (S NRC at 144):
Dominant companies whose increased dominance in ;
relevant markets is not thrust upon them but_
results from a continuing series of collective a.1d individual-actions may be said, within the
()' context of the issues in controversy, to be
-using their~ dominance to hinder or impede the ability of other electric entJtics in those.
20 -
marketn ta competo.
The situation an described above in incon-nintent with the antitruct lawn; and, where the plant (cic: planned) construction of a ceries of nuclear generating stations in undertaken in a ianhion calculated to further increase that dominance, activitien under the licenso can be said to maintain a situation inconsistent with those lawa.
Thun, NRC found that applicanta had created a situa-tion inconsintent with the antitrust laws, including re-ntricting competitorn' accoon to alternative power nupplles, and that Applicanto had then embarked on a scheme of con-atructing nubstantial additional generation and associated transminnion which, nimply by virtue of itn construction, added to Applicants' market share and nade it even more difficult for competitorn to deal with others. In these circumstances the cost of the additional power la irrelevant because the increased market power raines entry barriers whatever the cost of the additional power. Monopolist are -
insensitive to cost becauce their dominance and control of the access of othern to potential competitors with lens expensive supplieu. Just such insensitivity to costs in the essence of monopoly power. Indeed, if Applicants are suc-cessful here in restoring their wholesale monopoly, they expect to be able to cell what they claim is non-competitive nuclear power to the resale cities. They could do no only because entry barriers would prevent the renale cities from purchasing power elsewhere.
21 -
i In Q_qDEUfl9.EFlOW.Cr Ch (Hjdland Plant, Units 1 and J 2 ) , ALAD-4 52, 6 NRC 892, 1098 (1977), the Appeal Board 1 recognized that cost was not determinative when it cited with approval the argument made by the DOJ that:
If the small Michigan utilities could achieve power costs identical to thoso Applicant enjoys from the Midland Units, Midland would neverthe-l 1ess contribute in a significant manner to the maintenance of the situation in Michigan.
[T]his is all that section 105(c) requires.
(emphasis in the original).H/
similarly, in the Earley proceeding the Appeal Board I reversed the Licensing Board, which had chosen the remedy of i unit power sales because this would make nuclear power available to both the applicant and the intervenor at the same cost. Ownership access, according to the Licensing .
() Doard, would permit the intervenor to obtain nuclear power at lower cost than the applicant. Alabama Power Company, l (Joseph M. Parley Nuclear plant, Units 1 and 2) ("Farley"), i LBP-77-41, 5 NRC 1482, 1502 (1977). The Appeal Board changed the remedy to permit the intervenor to obtain nucle-ar power at lower cost than the Applicant through ownership access. IT NRC 1027 (1981). The Appeal Board found that
. denial of ownership access was anticompetitive not becau.gg
.of cost conside.ra_tions-but because the denial preserved Applicants' dominance of the wholesale and retail markets.
(I 18/ The " situation in-Michigan" was the maintenance of a situa-tion inconsistent with the antitrust laws or policy. 6 NRC at 1097.
,%wr.. -,,,.,,.-._,,,-._..-.,..,-...m.,..,_. -,,~,m.-_.,,.,m..%...-w,.,,.,. ,,,,#gw. ,. ew-w,.m.,m,,em., we-r-.. -
-,w-., - , - .,
- 22 -
Clearly, Applicant's hfundamental truium" in Ialso.
O Thuu, the very essence of Applicantu' argument is based on a false premise.
h_RRGt101 LIM Lc1 Applicants' reliance on purported legislative histo-ry ignorco established rules of statutory construction. See LfL Consyltter_Produqt_jiaLqty_Cgamission v. GTE Sylvania.
Inca, 447 U.S. 102, 64 L.Ed 2d 766 (1980). Inter pretation of a statute must 'id. at 108)--
. . . begin with the familiar canon of statuto-ry construction that the starting point for interpreting a statute is the language of the g
statute itself. Absent a c1carly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclu-cive.
Thus, in rejecting a similar atternpt by a nuclear licensee to constrict the 11RC's broad remedial authority under Section 105(c), the Eleventh Circuit held in Alallamn Pgwer_Cp. v. IUlg, 692 F.2d 1362, 1367 (1982), gert. dell.ed, 464 U.S. 816, 78 L.Ed 2d 85 (1983), that the " express lan-guage" of that section "is the primary cource of its mean- ,
ing."
Applicants also ignore the principle of statutory construction that a remedial statute's language should be interpreted generously to effectuate the broad congressional O 9eate. cia. retts2er, carabc. 1nc. v. arco carrinnan
- 1nc .
754 F.2d 404, 428 (1st Cir. 1985). That principle was
- . - . _ - - ~ . . - - - - - - - - - - - -- -
-- - - ~ -.-. - - . - - . _ - -_-.-
- 23 -
4 applied by the Eleventh Circuit in Alabama PqWer in ruling that the NRC has broad authority pursuant to Section 105(c) to impose antitrust license conditions. 692 P.2d at 1368.
Section 105(a) of the AFA leaves no room for doubt )
about the "special concern of Congress that antitrust influ-ences be identified and corrected in the incipiency" in connection with the issuance of construction permits and operating licenses. Houston Lichtinc_and Power Co2, (South !
Texas Project, Units 1 and 2), CLI 77-13 , 5 NHC 1303, 1316 (1977). Section 105(a) declares Congress' intent that
"(njothing in this Act shall relieve any person from the ,
operation of the" Sherman, Clayton and Federal Trade Com- ,
mission ("FTC") Acts, "the traditional antitrust statutes."
Id. The provision of Section 105(c) that directs the NRC to !
determine whether licensing the construction or operation of a nuclear power plant would " create or maintain a situation inconsistent with the antitrust laws" involves these tradi-tional antitrust statutes and requires the NRC to " apply l . principles developed by the Antitrust Division (of the l
DOJ), the Federal Trade Commission, and the Federal Courts to [the nuclear) industry." Id..
As we show, the antitrust principles developed by the--DOJ, the FTC and the Federal Courts do not- restrict antitrust remedial conditions in any context to situations O where, in the cese of newer niente, it 1e founa thet the electricity produced is low cost. Yet, Ipplicants argue F
et--ss-=im= - -- -- w w,--ews+,..-----+v+.w,-.- -w,-= =,.-e- tev,=,r-e-r-+-rw--ww-we-rm--- ~w* sew 1 re m v a 't--n,e M-7Fwr * ' _+-var-e-*++-W-ve-'**7- --viv*'y-
that Section 105(c) implicitly limits the exercise of the IJRC's authority to impose antitrust license conditions to altuations where nuclear power in determined to, in fact, be low cost (App. Motion 15-18).
Applicants are unable to point to anything in any subsection of Section 105 that places such a limitation on the liRC's authority. The only limitation on the liRC's authority is the requirement of Section 105(c)(5) that the liRC "shall make a finding as to whether the Detivitica_under idio lictilDR would create or maintain a situation ingar10ior innt-with the antitrust laws as pnecified in_cubsection _
105a" (caphasis supplied). Succinctly put, the only limita-tion on the llRC's authority'to impose remedial antitrust conditions is that the liRC must find that there is a noxus--
a relationship- "between the prescribet. nntitrust situation and the license activitica.H 5 liRC at 037 (emphasis sup-plied).E/ -The prescribed antitrust situation is specified in Section 105(a) and, thus, activitirs tending to create or maintain monopoly power, independent of cost, low or high, of the nuclear power, is the relovant consideration.
The critical statutory language refers to cond_uct,
- as do the antitrust laws. There is no reference to " cost".
. It is also noteworthy that the 11RC .does not have to find an 1.
actual ylplation of the antitrust laws. The liRC need only L
' O 2/ The existence of-a nexus was conclusively found in this
_ proceeding. See p. 12, nunta.
. .-~.._.m... __ . _ _ , _ _ - . _ . _ . _ _ _ . _ _ .- ._ _._._.-_,___.._,_,_.._...,.a._ . , - ,
~ - - - - - - _ . _ . . _ - .
25 -
1 l
find that the conduct under the license is potentially I "inc2Ds_iDI.ent " with the antitrust laws. AloJMDm_lLQMar3.qu
[ 692 l'. 2d at 13 68. Thus, contrary to Applicants' contention
- that the NRC authority in rostricted, the fact is that the .
NRC was given more power than the courts. In the courts, i conduct must constituto actual violations of the antitrust laws to enforce remedios.1El Not so under Section 105(c). The NRC's authority in intentionally broad.
Section 105(a) authorinen the NRC to " suspend, revoko, or take such other actions as it may doom necessary with respect to any licenso issued by the Commicsion under l the provisions of this Act" in the event "a licensoo is l- found by a court of competent jurisdiction, either in an O. . original action in that court or in any proceeding to on-force.or review the findin;; or orders of any Government agency having jurisdiction under the laws to have violated any provision" of the Sharman, Clayton and~FTC Acts, in tho conduct of the licenced activity." Under this grant of authority, if, for instanco, a licensee having a monopoly of ,
transmission faciilties refused to whool power for a munici-
-pality 1.n its service area, in a manner that violates Soc-L tion 2 of the Sharman Act (Qtter Tail Power Comnany v.
P
~
in/ The Licensing and Appeal Boards in their decisions respecting
, the. licensing of the Davis-Desso and Perry Units found that the Applicants' activities constituted violations of the antitrust laws, some of which were nar ne violations. Soo e.g., 5 NRC at 144; 10 NRC-at 319.
L i
r
.,wsn e.vm-- p.m,-.,, e. ..w+,e..,w, s,m.,-_4,49,,, m,,,,,,,v.,pp,,,,,,p ,p,,m,,[.,,- ,,w__ p p- .p y,.,-,p.m 3._, -,-m--,,,,.,,-4,,g---34-v.,7--,p-yyn,,,,,
~ _ - - ---- -
Unit &d_fitates , 410 U. S . 366, M L.Ed 2d 359 (1973)), the IJRC can suspend or revoke the license w3hput recatrLloJ1re . coat 9L thDRGlDitE D9MR.C.
This grant of authority to the 11RC emphasizes the concern of Congress about antitrust considerations in the licensing of nuclear power generation. Congress certainly did not grant the 11RC such broad authority in Section 105(a) and, literally, in the same breath restrict the liRC's au-thority under Section 105(c) as contended by Applicants. An interpretation of a statute that produces such an irrational result-cannot stand. 110t only does Applicants' statutory interpretation produce irrational results, but it requires the conclusion that Congress abandoned its intent that fundamental principles of antitrust law be applied.
In order to make its interpretation appear palat-able, Applicants assert that beneficiaries of the antitrust license conditions, such as Cleveland, will not be left unprotected against anticompetitive activities of the Appli-cants if the antitrust conditions are suspended. Applicants argue.that, despite elimination of the antitrust licenso conditions,-the DOJ, FTC, the Federal Energy Regulatory l
l- Cora.aission, the Securities and Exchange Commission, private attorneys-general and private citizens "are empowered to take action against perceived or threatened anticompetitive O ceaduct by the ine11cenes <^en. netion 22-31) . rhee, l Applicants assert that suspension of the antitruut license
.- ..,,-.-,_.-., - . . - . . . . - , - . - . - . _ . _ . - , . - . _ ..,..--..~...2-.:~.-
27 -
conditions would not relieve the Applicants of "their duties under the antitrust laws" (App. Motion 23-25).
1 Applicants' " duties under the antitrust laws" exist-ed prior to 1977, when the antitrust license conditions were 3
first imposed by the Licenr<ing Board. Applicants' " duties" ,
did not deter them-from the egregious antitrust violations exposed in the Licensing and Appeal Doard's decisions. The inadequacy of the remedies available against Applicants' ,
anticompetitive conduct in the absence of the antitrust license conditions is well-described in the decision of April 24, 1991 denying the present applications (p. 12):
Finally, there is littic to commend the Licensees' proposed suspension of their anti-trust license conditions "until such time as O there may be a factual basis for imposing them" (oE Application at 81). Such an approach to antitrust enforcement would require constant scrutiny of the competitive environment for these and other facilities, to determine-wheth-er previously imposed antitrust license condi- ,
tions should be suspended or reimposed. The past two decados have demonstrated that reli-ability factors and energy costs for power plants using any source of fuel can: vary grent-ly from year to year, as a result of such fac-tors as supply disruptions and the need to comply with-evolving statutory or regulatory developments. The-Licensecs' approach would result in unending litigation over perceived or ,
real short-term developments which are asserted to affect the appropriateness of retaining previously imposed antitrust license conditions
-- the need for which was fully litigated _many
. years before, based largely-upon-anticompeti-tive conduct of a licensee's own making. Thus, wholly ~ apart from the lack of merit in Licensecs' Aegal arguments, their suggested ap-proach to antitrust-surveillance and enforce-ment is substantially lacking.
l
Moreovel, when Congress f irst enacted the A1:A and later when it amended the A1:A to include the present provi-sions of Section 105, Federal authorities, private attor-neys-general, and private citizens were already " empowered to take action" against Applicants' anticompetitive conduct.
Congress, nevertheless, conferred authority upon the NRC to prevent antitrust conduct in connection with nuclear power projects. Notwithstanding all these alternative means of preventing antitrust violations, the Applicants' violations of the antitruct laws to the detriment of Cleveland and other Ohio municipalities were numerous and unrestrained.
If the antitrust license conditions are suspended, the Applicants will be free to return to their old antitrust ways--perhaps in a more sophisticated and subtle manner--to shut down Cleveland's and other municipalities' access to other cources of power knowing full well that there is no assurance that any of the Federal authorities will intervene or that any such intervention will be either swift or effec-tive. But for the intervention of the license conditions which compelled CEI and the co-licensees to provide wheeling services, Cleveland's municipal electric system would have been destroyed.
Why do the Applicants want to eliminate the. anti-trust conditions if they do not intend to resort to actions l
() that may violate the antitrust laws? How do Applicants i
propose to force Clevelan.1 and other municipalities in Ohio !
l
- 29 -
to buy power from the Applicants, as Ohio Edison's counsel conceded was the objective? (PCT at 159-61). These efforts to justify and make palatable Applicants' interpretation of Section 105(c) merely highlight the specious and irratio il position of the Applicants. The April 24, 1991 decision (denying the present applications) makes Applicants' motives clear (pp. 11-12): --
Nor could the Commission rely upon statements by the Licensees that their prior anticompeti-tive practices have been abandoned, on that CAPCO no-longer functions in the same manner or with the same effect as before (nigt, OE Appli-cation at 72-76; CEI/TECO Application at 22-23, 34-39). First, it is apparent that suspension of the license conditions here would permit c.
resumption of the vet activities which were found to be anticomp .tive and, as argued by various opponents of the application, would O perant a restructuring of CAPCo and of the relevant markets to the detriment of the Licon-secs' competitors. Second, this argument was previously considered and rejected in Alabama Power, where the Appeal Board determined that a license condition addressing an anticompetitive practice was required, despite the fact that i the practice was asserted to have been aban-doned at least five years prior to entry of the Board's decision ( ALAD-64 6, 13 NRC at 1107):
The fact that a transgressor has ceased its anticompetitive activity, especially when such cessation occurs after the onset of legal action, in and of itself provides no justification for dispensing with oth-erwise appropriate remedial requirements.
As the Supreme Court admonished in Halted States v. grenon_ state-Medical Society:
It is the duty of the courts to beware of efforts to defeat injunctive relief by protestations of repentance and O reform, especially when abandonment seems timed to anticipate suit, and there is a probability of resumption.
- ... _ _ . ~ ....._ _ - . - _ _ . . _ _ . _ _ _ _ _ _
i i
1, t
i >
! O C. rh m
- 1etiv e n e rv o ,tien =
} Applicants' analysis of the legislative history con-i sists of excerpts of testimony from witnesses that appeared 7
before the Joint Committee in connection with the 1970 I
amendments to Section 105 of the AEA. These excerpts refer to the nuclear facilities that might be built as "large low
. cost power facilities" (App. Motion 39, 40, 41-43, 44-45).
On the basis of these selected excerpts from wit- ,
1 nesses who were not members of Congress, nor part of or con-1 l nocted with the legislature in charge of the amendment process, Applicants conclude that it is established "beyond argument" that a prerequisite to NRC authority to impose antitrust license conditions was the " belief" that nuclear
({}
power would be low cost (App. Motion 32-45). Excerpts of
.such witnesses' testimony hardly qualifies as legislative I history, much less as convincing legislative history of the intent of Congress. In any case, such testimony by such r witnesses as to their own " belief" does not, of course, ,
translate into a statement of the intent of Congress or of any of its members.. In fact, one of tiua witnesses quoted by L .
i Applica.urs noted that hydro power to which his clients had !
L access was also "luw cost" power (App. Motion 44-45). This- .
witness' perception or " belief", as well as the purported
. beliefs of other witnesses, was belied in a report prepared for the Joint Committee by Philip Sporn, former president of f
1 u ._.._.-_ _ _ . _ . . _ .- _ _ . _ _ _ - . _ , _
a
- 31 -
L the American Electric Power Company, in which he noted that O the cost of nuclear power was rapidly rising and was rapidly losing its competitive position vis-a-vis power generated by fossil fuels. Etelicenplng AntLt.rnst upyiew of Nuclear i
Eower_ Planta, llearings before the Joint Committee on Atomic !
Energy, Part 1, 91st Cong., 1st Sess. 300 (1970). Mr. Sporn ,
also noted that in view of the increasing costs of nuclear power, the growth of nuclear power had virtually stopped.
Id. at 300-01. Thus, Congress and the industry were aware, L
at least by the time of the passage of the 1970 amendments, ;
' including Section 10S(c), that nucicar power might not be low cost power. Consequently, the selected excerpts of testimony provide no basis for Applicantu' assertion re-specting the intent of Congress in enacting the amendments.
In fact, the witnesses from the DOJ that Applicants quote, Messrs. Comogys and Donnem, focused not on the cost of nuclear power but on the fact that a nuclear facility could create or maintain an anticompetitive situation by enhancing the officiencies achieved through coordination services resulting from the purchase or sale of power from surplus generating capacity inherent in the industry. See e.g.,-Ganggrers Power Co u (Midland Plant, Units 1 and 2), 6 NRC 892,-956-57 (1977). They testified that the NRC can use
() its antitrust review authority to require coordination and other services associated with the plant.
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l l
l Of course, the "best source of legislative history" and "the most persuasive evidence of legislative intent" ,
underlying the 1970 amendments of Section 105(c) is the Joint Committeo Report. Alabama Pownr, auprn, 692 F.2d at [
1368; Sierra _ Club v. Clark, 755 F.2d 608, 615 (8th Cir.
1985). The Joint Committeo Report (Atomic Energy-Utiliza-tion for Industrial or Commercial Purnoses, H.R. Rep. No. ,
91-1470, 91st Cong., 1st Sess. (1970)), reprinted in 1970 1
USCCAN 4931 (" Joint Committee Report"), makes no reference whatsoever to cost of the power as-affecting-the authority ,
to impose the antitrust licenso conditions. The Joint Committeo Report specifically recognizes that the NRC would have to review the totality of circumstances in order to determine whether licensing of the nuclear plant "would create or maintain a situation inconsistent with the anti-t ro ; ' *<ws." Id. at 5010-12.
Congress recognized that, regardlesc of whether nueje r power was low cost, construction and operation of a nuclear plant could exacerbate anticompetitive practices.
Id. at 4994-95. A large new supply of power from a nuclear plant would increase a utility's incentive to engage in anti-competitive conduct to ensure a captive market for the power-(just as Applicants-seek to do through-this proceed--
ing). Expansion of the scope of, and the cost efficiencies i = engendered by, coordination services controlled by a nuclear utility could increase the anti-competitive harm caused by a eer- we~<*-
- w re eerv-er- - - . ,,,ew--rw--e- ,-m...,--w-m+w--w--w,,.,-e-v+e*-----ew,r--me .w-..--ryro- rw-=,--y-.,,,wr,-,e.,,wc -w,ep.------ry-r----..yc-=---g-s iv-*---+-me+n
____e____ . . - - . . . - _-
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discriminatory denial of access to theno services to custom-ers who need the coordination services to facilitato power purchases from other suppliers. Expansion of the scope of a nuclear utility's transmission facilities would increase the utility's control over wheeling services needed to procure power supplies from other suppliers. The Joint committee's decision to include in the hearings the Sporn study that showed the rapid increaso in the cost of nuclear power (Joint llearings, Part I, 91st Cong., 1st Sess. 1970, App.
13, p. 300) indicates that Congress understood that a nuclo-ar plant could " create or maintain a situation inconsistent with the antitrust laws", even if its output was not low Cost.
O II. TIIE NRC'S PRECEDENTS AND ATTORNEY GENERAL'S ADVICE LETTERS RELIED ON DY APPLICANTS DO NOT SUPPORT APPLICANTS' POSITION Applicants contend (App. Motion 45-46) that, con-trary to the current-position of the NPC Staff, a number of HRC cases disclose that "the linchpin of each and every antitrust analysis" in the decisions it cited is dthe cost factor." -Applicants cited the NRC decisions in Waterford II ,
(Louisiana Power & Light Co.), CLI-73-25, 6 AEC 619 (1973),
Midland (Consumers Power Co.), ALAB-452, 6 NRC 892-(1977),
Davis-Bosse/ Perry-(Toledo Edison Co., et al . ) , ALAB-560, 5 NRC 133 (1077); 10 NRC 265 (1979) (App. Motion 47-57); the Eleventh Circuit's opinion in Alabama Power._g_o. v. NRC, 692 6
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___ - .__.m 8
d 34 -
l F.2d 1362 (1982), cert. denied, 464 U.S. 836, 78 h.Ed 2d 85 (1983), af firming 610fama Power Company, ALAB-646 (Joseph M.
Parley Nuclear P11nt, Units 1 & 2), 13 NRC 1027 (1981) (App.
Motion 46-47); und, the Fermi case (petroit EdisSD_CR2), -
l LDP-78-13, 7 NRC 583 (1978) (App. Motion 57-63). As shown I
below, these NRC decisions disclose that the NRC recognizes that its authority to impose antitrust conditions requiring Il non-discriminatory access to coordination and other services i associated with a nucicar facility does Dnt depend on the relative cost of the nucicar power. !
i Applicants also contend (App. Motion 64), that the Attorney General in his advice letters on the Davis-Besse, Forked River, Zimmer and Susquehanna proposed nuclear units, ,
O - recognized that the NRC's authority to impose antitrust license conditions depends upon a finding that the nuclear power is low cost power in the relevant market, appropriate-ly measured and compared to other sources in that market.
Cleveland will demonstrate that this contention likewise has no merit.
5 A. The NRC Precedents _ Relied On By Applicants
- 1. Waterford The antitrust proceeding in linterford presented the NRC with its first opportunity to discuss the scope of Section 105. Waterford addressed an application for a permit by Louisiana Power and Light Company authorizing
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1 35 -
construction of a 1,065 megawatt nuclear plant. The Attor-ney General negotiated an agreement with the applicant i I
pursuant to which the applicant agreed to antitrust condi-tiens as part of the permit. The conditions insured that competing utilities had access to coordination arrangements.
According to the Attorney General, the antitrust conditions would provide " prompt relief against many of the alleged anticompetitive practices of the applicant". 6 AEC 48 (1973). Several competing utilities petitioned for permis-sion to intervene and asked the NRC to conduct an antitrust hearing.- In evaluating these petitions, the NRC analyzed ,
the scope of its antitrust review authority. The NRC said that the standard in Section 105(a) (id. at 49):
+
requires that (1) the allegations raised by petitioners describe a situation inconsistent with the antitrust laws or the policies clearly underlying these laws, and (2) the specified situation be " created" or " maintained" by "the
- activities under the license". Thus, it would be insufficient for a petitioner simply to describe a situation inconsistent with the antitrust laws, regardless of how grievous the situation might appear to be. A meaningful nexus must be established between the situation and the " activities under the license". In this connection, the relationship of the spe-cific nuclear facility to the applicant's total system power pool, e.g., size, type of owner-ship,' physical interconnection, may aced to be evaluated. Generally, " activities under the license" would not necessarily include all the applicant's generation,-transmission, and dis-tribution of electricity. On the other hand
" activities under +.he license," in'most circum-stances, would-not be limited to construction
()- and operation of the-facility to be licensed.
Careful analysis of the facts in each case is necessary, particularly in view of-the ground-F' w T1ey-mi--*-c---i'ei-ecye ed ex-r-4 p.-H--M.=-weweet-'----ar.Piw'-d6swi'r**
breaking nature of the initial decisions in this new area of the Commission's responsibili-ty.
The NRC did not even mention " cost" in the factors to be evaluated. Although the factors mentioned were not intended to be exhaustive, if as Applicants claim cost was the sino Ella D2D of the NRC's authority to impose and retain license conditions, the fact that cost was not included in the NRC's list of factors to be evaluated is curious indeed.
The NRC granted the petition which sought imposition of an antitrust condition requiring the applicant to provido non-discriminatory access to the facility. Other interve-nors sought to challenge the applicants' allegedly discrimi-natory practices regarding interconnections, wheeling and sales of power. The NRC found that the intervonors had not specified the necessary nexus, i.e., "the relationship, if any, between these practices and the " activities under the license" involved in this proceeding." Id. The NRC remand-ed the proceeding to the Licensing _ Board and gave the inter-venors the opportunity to provide the missing nexus informa-tion.
The Licensing Board granted the petitions for a hearing, and began its analysis by summarizing the inter-venors' allegations:11/
The petitions, fairly read, encompass a common i
O 11/-Louisiana Power & L(gh_t Co. ("Waterford"), LDP-73-46, 5 AEC 1168, 1169-70 (1973) (citation omitted).
- 37 -
complaint as to thL nature of the anticompeti-O tive acts alleged and the effect on the com-petitive situation alleged to flow from Appli-cant's construction of Waterford Station Unit 3 (Waterford 3), a 1,055 megawatts nuclear facil-ity. They allege a monopoly in and an attempt to monopolize the construction and ownership of large, low cott, electric generating units in Applicant's area. This alleged monopoly of generational facilities is maintained, it is further alleged, by a monopoly by Applicant of bulk power transmission facilities.
It is further alleged that petitioners' cost l disadvantage is exacerbated due to Applicant's ,
alleged refusal to enter into coordinated oper-ation agreements. In the absence of such agreements or transmission facilities that could permit petitioners to coordinato among themselves, the petitioners claim their only option is to operate as isolated power produc-ers. This results in even higher unit costo, thus increasing their competitive disadvantage and lossening incentives to compete in the production or sale of electric power.
() The Licensing Board recognized that the operation of the proposed nuclear facility would exacerbate the anticom-petitive situation by (1) encouraging the applicant to expand its anticompetitive practices to ensure markets for -
the nuclear power, and (2) expanding the scope of coordina-f tion services and, therefore, the adverse impact of the applicants' exclusionary pract. ices. The Board held that if +
petitioners for intervention proved the following allega-tions the required nexus would be established (6 AEC 1169- >
70):
(1) Applicant has or is attempting to acquire
. n a monopoly of large los cost electrical gener-U ating units in the relevant geographic market; (2) Control over the bulk power transmission
1 ;'
, - 38 -
system in the relevant geographic market is O fundamental to the creation or maintenance of such a monopoly, and Applicant has a monopoly of facilities for the transmission of bulk power and power for system coordination; (3) Applicant has or is attempting to acquire a monopoly in coordination reserve power sales; (4). Applicant alone or in combination with others attempted to hinder or prevent efforts by the petitioners to construct their own transmission systems for bulk power and coor-dinating power. This conduct of Applicant, whether legal or illegal, was intended to main-tain its monopoly positions; (5) Construction of Waterford 3 would maintain or strengthen Applicant's monopoly position by providing Applicant with the ability to serve the increasing demands of present customers and the demand of new customers while foreclosing petitioners from the ability to servo these demands; L
(]) (6) Construction of Waterford 3 would materi-ally assist Applicant in providing for its own coordination and reserve charing needs without entering into agreements with intervenors.
Thus, the Licensing Board recognized that the in-crease in market power which would accompany operation of the nuclear facility would occur renardless of whether the nuclear power was low cost because the applicant was exclud-ing its competitors from access to alternate suppliers. ,
The NRC affirmed this decision. 6 AEC 619 (1973).
In doing so, the NRC again clarified the scopn of its anti-trust review authority (id,~at 621):
In our view, the proper; scope of antitrust review turns upon the circumstances _ of each case. The relationship of the specific nuclear facility to the applicant's total system or
- power pool should be evaluated in every case.
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Donial of access to transmission systems would O be more appropriato for consideration where the systems were built in connection with a nuclear unit than where the systems solely linked non-nuclear facilities and had boon constructed long before application for an AEC license.
While the propriety of pooling arrangements anu physical interconnections would cortainly be considered in appropriato cases, such matters i in most circumstancos could not be dealt with by this Commission where no meaningful tio exists with nuclear facilities.
Significantly, nowhere in its analysis does the HRC suggest that the relativo cost of nuclear power would affect I
cither (1) the nexus betwoon the nuclear facility and the alleged discriminatory practicos regarding interconnection and other services, or (2) the importance of access to those servicon. Instead, the NRC recognized that the nood for
() non-discriminatory access to those services is indopondent of the relative cost of the nuclear power. This reasoning in Waterford undo.l lies the NRC's analysis in Kansas Gas & "
Electric Cot (Wolf Creek Generating Station, Unit No. 1)
(" Wolf Grggh"), ALAD-279, 1 NRC 559 (1975), which Applicants do not oven cito much loss discuss in this connection.
- 2. Wolf Croch Wolf creek involved an application for a permit to-construct a 1180 megawatt nuclear facility. The Attorney General-recommended-that certain conditions be-imposed on the permit and the applicant agrood. -The conditions imposed
() _throo obligations on the applicant (id, at 562-63):
First, the applicant must offer the cooperativo
the right to purchase an ownership interent O with a chare in the power generated by the Wolf Creek facility or, at the cooperative's option, to nell it a portion of that t.ower. Second, in the event of the partial or total unavailabili-ty of the cooperative's share of the Wolf Creek power, the applicant must, at the cooperative'n option, either (a) supply the cooperative with an equivalent amount of power; or (b) transmit across its lines, i.e., " wheel", that amount of power obtained by the cooperative from some other nource. Third, the cooperative may elect to have a portion of its Wolf Creek power
" wheeled out" by the applicant; i.e., transmit-ted to some third party. If the cooperative maken thin election, the applicant must " wheel in" an equivalent amount of power at the coop-erative's request. (citation omitted)
The cooperative filed a motion to intervene and re-quented an antitrust hearing. The cooperative wanted to purchaue an ownership interest in the facility pursuant to the licenne conditions recommended by the Attorney General.
(])
But the cooperative argued that this option was " illusory" absent the accean to transminaion services on applicant's transmission lines needed to purchase supplemental power from other suppliers. 1 Imc at 567.
c The applicant argued that because its refusal to wheel supplemental power was an existing policy such refusal had no " causal connection" with its proposed operation of the nuclear plant, Id.
The Appeal Board rejected the applicant's contention and affirmed the Licensing Board's grant of the petitions.
The Appeal Board noted that "the Commission's antitrust mandate extends only to anticompetitive situations inter-s P
- 41 -
twined with or exacerbated by the award of a license to construct or operate a nuclear facility." 1 HRC at 569.
The Board, however, observed (id. at 568):
The words of the statute upon which the appli-cant relics direct the Commission to consider not only whether granting a license would "cre-ate" an anticompetitive situation but also whether it would " maintain" one. Thus, to the extent the applicant's arqument sugnests that the Commission's connizance under qpction 105q is limited to anticomnetitive consecuencqn djrectiv attributable to applicant's use of the nuclear plant and its output, it makes ng Ranns. As the staff pointr out, for activities under a license to " maintain" a pre-existing situation inconsistent with the untitrust laws, some conduct of the applicant apart from its licensa activities must have been the "cause" for bringing about those anticompetitive condi-tions. Nuthing in Section 105c suggests that Congress wanted the Commission to focus-on an applicant's extra-license conduct when deter-() mining whether an anticompetitive. situation wc Id be " maintained," but to close its eyes to ti., t conduct in deciding whether such a situa-tion would be " created". Indeed, were we to accept the dichotomy inherent in the appli-cant's position, we would be at a loss to per-ceive how a licensing board should-proceed when it is-alleged -- as it is in this case -- that granting a construction ~ permit would both cre-ate and maintain an anticompetitive situation.
(citations omitted) _ (emphasis supplied)
Moreover, the Board observed that Congress contem-plated-that antitrust review should consider whether the applicant dominates transmission facilities and excludes competing utilities from the access to these facilities needed for wheeling services. Id. at 571.
Thus, Wolf Creek, too, emphasizes that the NRC's antitrust review authority encompasses any services associ-
l - 42 -
ated with a nuclear facility--including coordination and wheeling services--if the applicant's anticompetitive prac-ticeu in performing this service "is intertwined with or exacerbated by the award of a license to construct a nuclear facility." Id. at S69. The impact of such anticompetitive practice is not dependent on the relative cost of the nucle-ar power or, indeed, whether a compet '.ng utility intends to buy nuclear power.12l 2 MiQJiuld This reasoning was applied once again by the Appeal Board in its subsequent ,lecision in _C31ts31mers Powo_r_Xo_._
(Midland Plant, Unitu 1 and 2) ("Midlnnd"), ALAB-452, 6 NRC
() 892 (1977). Midland is especially instructive because, unlike ligeJigr_d and Woli Cree};, this decision addressed the merita of an antitrust review subsequent to an evidentiary hearing. In this construction permit proceeding, the Attor-ney General recommended that an antitrust hearing be con-ducted. Several competing utilities intervened and urged adoption of antitrust conditions. The Appeal Board found that the licensed facility would enhance the applicant's 12/ Although the Appeal Board found that it had the authority to grant the type of relief requested by the cooperative, it found that the cooperative had failed to (1) show why the practicos of the applicant were inconsistent with antitrust policies, and (2) describe the relief it sought. 1 NRC at O 575-76. As a result, the Board remanded gave the cooperative the opportunity to file an amended the proceeding and pleading to correct these deficiencies. Id. at 577.
l 1
~- _ - - _ _ _ - _ ,
l i
- 43 -
existing domination of generation and transmission facili-ties and, hence, exacerbate the applicant's anticompetitive '
i
) practices of excluding its competitors from access to bulk t power supplies. Specifically, the Board found that the market for-coordination services was a distinct market for antitrust analysis pursuant to Section 105. The Board noted that the applicant controlled 80 percent of generating capacity,- 85 percent of all transmission lines and 98 per-cent of lines 138 kV or higher in the relevant geographic market. 6 NRC at 1005. The Board found that the applicant used its dominant role to exclude competitors from wheeling and coordination services and power pools. Id. at 1036-44.
The Board also noted that, as a practical matter, the com-peting utilition cou3d not construct duplicative transmis- .
4 sion lines. 6 NRC at 933. The Board recognized that the applicant's anticompetitive conduct prevented its competi-tors "from turning to the most economical sources (of power) -
and making the most efficient use of basoload power." ;Id.
at 1095.
Moreover, the NRC found that these anticompetitive activities had a sufficient nexus to the proposed nuclear generating facility to justify imposition of antitrust l
license conditions-(id. at 1095):- --
Now Consumers-wishes to increase its officiency-by installing large nuclear powered generating O- units. Manifestly, this will exacerbate the anticompetitive situation.
l-
i I
I
- 44 -
To be sure, the Board did emphasize the need for -
-( nondiscriminatory access to bulk power as a way of insuring access to nuclear power. This is understandable because the intervonors were an2hing access to the nuclear power. The !
Board's emphasis, however, on the impact of the facility on the applicant's domination of generation and transmission in 4
the relevant geographic market highlighted its concern that the addition of this new power and the associated facilities !
would " exacerbate the anti-competitive situation" regardless of whether the power was low cost.11/
3 Parlov II The most recent litigated decision involving the
{} NRC's antitrust review authority, surprisingly cited by Applicants as to support for their position, confirms the Midland analysis and supports Cleveland's position. In that :
case, Alabama Power Co.,.(Joseph M. Parley Nuclear Plant, Units 1 and 2) ("Farley II"), ALAB-646, 13 NRC 1027 (1981),
the Appeal Board cited Midland and found that the coordina-tion services market and retail service markets are distinct markets for. purposes of antitrust analysis. The Appeal Board in Farlev II noted that the applicant had the dominant 12/ The Appeal Board romanded the proceeding to the Licensing Board because of the applicant's apparent willingness to sell ownership interests in the plant. 6 NRC at 1098-99. The O_ parties reached a settlement which was approved by the NRC.
Consumers Power Comnany.(Midland Plant, Units 1 and 2) ,-- LBP-80-21, 12 NRC 177 (1980).
shm generation and transmission in the relevant area
@ end oaed this domination in an anticompetitive manner to at -t el the cooroination services and retail markets service
'4minate against its competitors. Id. at 106'. 70.
7 Jarley Board recognized that the nuclear plant r .se the cost efticiencies achievable through the coo. '4 -
- ^n services market, increasing the anticompetitive impac*' ot ne applicant's discriminatory practicca. The Boat - also recognized that the new transmission facilities 5
which would accompany the nuclear plant would exacerbate the upplicant's monopoly power over transmission services.
Hence, the Parley Board ordered the applicant to provide non-discriminatory access to transmission services. Id. at 1108-10.
Moreover, the Board recognized that access to these services war not tied to the actual purchase of the nuc] ear _
power. The Board found that one of the intervenors --
5 Municipal Electric Association of Alabama ("MEUA") -- did not compete with the applicant in the retail market and, .
therefore, was not entitled to be able to purchase an owner-ship interest in the plant. 13 NRC at 1109-10. But the Board also found that, becaur,e the facility would heighten the applicant's domination of transmission facilities, this would exacerbate the existing anticompetitive practices of k the applicant regarding access to the facilities regardless of the cost advantages, if any, of nuclear power. Conse-I l
quently, the Board found that MEUA was entitled to non-discriminatory access to transmission services.
The NRC declined to exercise its discretionary review authority over the Appeal Board's decision and the decision became the final action of the NRC.
The Eleventh Circuit rejected the applicant's peti-tion for review and affirmed the NRC decision in all re -
spects. Alabama Power Co. v. URQ, 692 F.2d 1362 (11th Cir.
1982), cert. dQDied, 464 U.S. 816, 78 L.Ed 2d 85 (1983).
The court affirmed the NRC's consideration er prict anticom-petitive conduct to determine whether an unconditional license for the nuclear facility would allow the applicant to " maintain" an anticompetitive situation. Id.-at 1367-68.
O The court also affirmed the NRC's finding that the whole-sale, retail, and coordination service markets represented
-separate markets which were dominated by the applicant and that' the license would exacerbate- the anticompetitive situa-tion in each' market. 692EF.2d--at 1369. Consequently, the court found that the NRC's imposition of antitrust condi-tions ' dealing separately with (1) the ability to purchase an ownership-interest in the facility, and (2) access to the applicant's transmission facilities, was'"not an abuse of norebeyond (the NRC's)-delegated discretion."
Thus, the court specifically recognized that the cost-attractiveness of nuclear power has nothing at all to i
do with the NRC's authorityfto impose antitrust conditions i
. . - - - - . - . . . . . . - , . . - - - . - - . . . - - ~ . . , . - . ~ . . ~ . . . . .
- 47 -
to ensure non-discriminatory access to an applicant's trans-
. mission facilities to use coordination and wheeling servic-ca. Applicants' arguments simply cannot be reconciled with this applicable Eleventh Circuit decision.
Lifting a phrase out of context, Applicants argue erroneously that the Eleventh Circuit's reference to "the windfall hen) start" (692 F.2d at 1369) was a reference to "the competitive advantage associated with the anticipated low-cost of nuclear power" which " lies at the heart of farley, along with other relevant NRL cases" (App. Motion 47). The " windfall head start" appears in a paragraph which-leavce -lu) room for dispute that " windfall head start" re-fers, not to cost of nuclear power, but to the benefit of
-O the " scientific and technological nuclear know-how", com-piled by the government "over tne years from research and development which had been financed by the American public."
.692-F.2d at 1368.
The Eleventh Circuit stated-(692 F.2d at 1368-69):
In. turning-this publicly held wealth of knowl-edge and scientific progress over to private o enterprise, Congress felt that strict re-straints should be included to prevent unfair advantage for those with the greatest resourc-
- ' es. Those who had worked with the government were not to be-the unbridled beneficiaries of p the windfall head-start they would have when-l 'privatefparties were allowed into nuclear power -
L production. . The unique potential and critical-dangers of'this new resource justified tight control'to-ensure safety and prevent unfair O- monopolization.
It additional proof were neededoof Applicants'
, , . - . _ . . . . , - - - . , .- - . . ~ . ~ . . .
blatant distortion of the Eleventh Circuit's decision, we refer the Board to an excerpt from the opening brief of Alabama Power Company in that case. Appendix B. Alabama Power argued that Alabama Electric Cooperative was improper-ly granted ownership access to Alabama Power's proposed Farley nuclear generating unit because the Cooperative was constructing a conventional coal-fired generating unit of 235 megawatts with a significantly lower cost per kilowatt hour than was the estimated cost per kilowatt hour for the Parley unit. The Eleventh Circuit nevertheless sustained the NRC's award to the Cooperative of ownership access to the nuclear unit, clear confirmation that "the windfall head start" phrase does not refer to a competitive advantage associated with the anticipated low cost of nuclear power.
Thus, precedent thoroughly undercuts Applicants' argument that the sole, lawful basis for the imposition of antitrust license conditions is the assumption that nuclear power is low cost.
S. Davis-Besse/ Perry Applicants also cite the Davis-Besse/ Perry Licensing and Appeal Boards' decisions (the subject of Applicants' applications) in support of their position. Applicants point to statements in which the Licensing and Appeal Boards
[} refer to the anticipated cost of the nuclear power (App.
Motion 52-57). Applicants, however, totally mischaracterize
l the Licensing and Appeal Boards' reasons for imposing the
-antitrust licence conditions and the impact of the events cited in the opinions.
As noted in-the summary of the Boards' decisions, supra, 11-15, the Boards' concerns were not based on the as-sumption that nuclear power would be the cheapest source of baseload power. Instead, the Boards were concerned about the way in which these new nuclear units and the associated transmission-facilities would heighten the Applicants' and their co-applicants' market power and the incentive to continue their pervasive anticompetitive conduct. The Licensing Board noted "the size of the five large generating stations-involved in this license proceeding and the sub-O stantial contribution they will make to th resources of the CAPCO pool and in particular to tr.a satisfaction of its base load requirements." 5 NRC at 240. The Licensing Board recognized that, in view of the. Applicants' and the co-applicants' pervasive and coordinated anticompetitive-activ-
.ities, the addition of any new power generation would simply allow them to expand their market power to exclusively serve the increased demands of present customers and the demands of~new customers. Moreover, the Licensing Board realized that.the new generation wou'd give the Applicants even greater. incentive to prevent the CCCT utilities from pur-chasing power from alternative suppliers in order to ensure a market for the new generacion.
i The NRC's recognition that the anticipated cost of nuclear power, per ge, was not the basis for the imposition of the antitrust license conditions is reflected in the Appeal Board's decision to reject Mr. Shartman's propos-al lAl to restrict the scope of the conditions to custom-ers purchasing nuclear power or ownership interests in the plants. 10 NRC at 290-94. The Appeal Board noted that this restriction would allow the Applicants and their co-appli-cants to contjaue their anticompetitive conduct connec-tion with pooling and coordination services. Id. at 284.
The NRC was not looking at the relative cost of the nuclear power but at the competitive impact of the presence of a new and substantial baseload power generation source for the CAPCO members along with the associated new trann-mission facilities.
Likewise, the second factor reviewed by the Boards--
the impact of the construction of the transmission facili-ties associated with the plants--had nothing whatever to do with any assumptions about the relative cost of nuclear power as a source of base load power. The Licensing Board noted that the construction of extensive, high voltage transmission lines in conjunction with the nuclear plants
. would exacerbate the Applicants' and the co-applicants' 1A/ Mr. Sharfman had drafted a decision before resigning from the f]-
NRC. The remaining members of the Appeal Board, in agreement with most but not all of Mr. Sharfman's opinion, accepted as part of their opinion only selected portions of the draft.
s
__.-__..m_ - _ _ . _ _ _ _ _ _ . _ _ _ . - - . _ . _ _ _ _ _ ____ _ _ _ _ _ .. ___ _ _ _ . _ _ _
l l
l exclusionary policies regarding access to these facilities for wheeling and coordination services (5 NRC at 239):
[T]here is a direct tie between the generating station construction program and the transmis-sion program which Applicants describe as com-plementing it. As described i n CAPCO memoran-da, far more is contemplated than the mere extension of a line from the site of the pro-posed nuclear station-to the closest terminal of the Applicant in whose service area of [ sic) the plant is to be located. Applicants are engaged in substantial planning-studies and construction programs specifically intended to develop a plan for high voltage transmission at :
low cost among CAPCO members. There will be commingling, but the commingling will be on an extraordinary scale.
That Board also noted that construction of the new lines would heighten the bar?:icrs to construction of other lines by the non-CAPCo utilities (id. at 156): :
O Although access to transmission facilities is a necessary concomitant of reliable and economic energy production, small systems frequently find it infeasible to construct duplicative transmission facilities. Both economic and environmental considerations prevent such con-struction. Applicents' construction of the high voltage transmission grid _ necessitated in large part by the Davis-Besse and Perry plant additions, together with the existence of ex-cess capacity on their present systems, render the-construction of duplicative transmission
~ lines essentially impossible. (citations-omit-ted)-
At the same time,-the_ Licensing Board noted_that the new-lines-would fac'ilitate even more extensive coordination services. Id. at 239-40. Thus, the Board recognized that construction of the new lines would exacerbate the adverse competitive inpact of the Applicants' and co-applicants'
)
1
- 52 -
]
1 :
{) exclusionary policies. Id. Clearly, this concern about the impact of the construction of the new transmission lines had nothing at all to do with any assumptions about the cost of nuclear power.
4 1
] 6. Fermi-Applicants contend (App. Motion 57) that the Fermi case, supra, decided subsequent to the licensing of that nuclear plant, presented the issue whether the NRC has authority to impose antitrust license conditions when a licensed facility produces electricity that is not low cost. _
Applicants contend that the Appeal Board in that case ruled j that the NRC has no-such authority. Nothing in Fermi sup-
-( ) ports that contention.
Fermi involved an issue of whether intervention should be granted-a retail customer that sought to raise issues regarding the effect of the cost of the plant on retail _ rates. No issues of anticompetitive conduct or of d
- antitrust license conditions were involved.
Top O' Michigan Electric Cooperative (" Top O'") pur-chased power from Northern Michigan Electric Cooperative
(" Northern"). Northern acquired an-11% ownership interest in the Fermi 2 unit. The licensee, Detroit Edison Company,
. _ filed an_ application;to amend its construction-permit to add as co-owners Northern and another cooperative that had
_(}
-acquired an-8% interest. -The Attorney General's-advice
1 letter found'no antitrust problem that would require a hearing. 42 Fed. Reg. 54894 (1977). A member of the pub-lic, a retail customer of Top o', sought to intervene in the '
NRC proceeding to oppose amendment of the Fermi license.
The petitioner for intervention contended that Northern's acquisition violated the antitrust laws because the cost and expenses of Fermi-2, 11% of which Northern would be obligat-ed to incur, "may be very expensive." The Licensing Board denied intervention on the ground that the petitioner lacked standing because of no cognizable " injury in fact" related to any licensed activities which would create or maintain a situation inconsistent with the specified antitrust laws. 7 NRC at 586.
O The Appeal Board subsequently affirmed the Licensing Board's denial of intervention "on a slightly different ground". 7 NRC at 756. Applicants c..aracterize this ground
-aa finding that the NRC is without authority to impose antitrust. conditions unless'it-finds-that the cost of'the nuclear power to be generated by the licensed project is of f
lower-cost-than the cost of other sources of power in the relevant market, appropriately compared and measured.
The Appeal Board made no such-ruling and could not have because' access to the nuclear power was not at issue.
'The petitioner for' intervention was concerned about the
( impact of Northern's 11% ownership of Fermi 2 upon the retail rates-it might be required.to pty, a matter not
1
- 54 -
committed to the NRC's jurisdiction. The petition for intervention by a retail customer concerned only about impact on its retail rates did not even remotely present the Applicants' legal issue in this case and it was not ad-dressed by the Appeal Board. Indeed, the petition for intervention presented no antitrust or competitive matter either under the AEA or any of the antitrust laws.1EI Fermi has nothing whatever to with antitrust licensing conditions.
The NRC decisions demonstrate that it is conduct, not. cost, that is the focus in any inquiry under Section 105(c). Whether or not a refusal to wheel, for example, constitutes a violation of Section 2 of the Sherman Act is a
( determination as to which the relative cost of doing busi-ness of the persons engaged in competition is irrelevant.
-Monopolization through refusal to wheel is the relevant consideration. American Federation of Tobacco Growers _ya, 15/ The Appeal Board said (7 NRC at 757-58): " . . . her asserted injuries stem fron sources unrelated to the denial of access to, or competitive advantage flowing from, the use of nuclear-l power. Boiled down, Mrs. Drake's arguments amount to dissat-l 1sfaction with the cooperatives' management decision to i satisfy an expected need for more baseload power by acquiring i part of the Fermi nuclear plant. She would prefer some other course; she fears this one will raise her rates inordinately.
But the Nuclear Peyulatory Commission and its adjudicatory boards do not sit to supervise the general business decisions L of the public utili:y industry nor to seccnd-guess the judg-L p v
ment of those who do; that task is entrusted.to others.
Injuries from those causes are beyond the zone of interests that Section-105(c) of the Atomic Energy Act was designed to protect or regulate." (citation omitted) i
. ..- - ..-..-. - -. -- . ---.- - - --.-- ~ - - -- - -.-
Heal, 183 F.2d 869, 872 (4th Cir. 1950). If the refusti to
-O wheel creates or maintains a situation inconsistent with the antitrust laws, an antitrust license condition requiring wheeling may be imposed provided that there is a nexus to activities under tho. license, regardless of whether the cost of power from the licensed project is low or high cost.
Nexus does not depend on the cost of nuclear power. Nexus, in the words of the statute, depends on whether the anticompetitive situation is " created" or " maintained" by
" activities under the license."1EI.
Applicants' assertion (PCT 161-62) that antitrust conditions requiring wheeling services are within the NRC's authority only to provide delivery of the nuclear power to o the party that has been awarded access to the licensed project output is flatly contrary to binding precedents which Applicants do not even cite much less attempt to distinguish. That very argument was made by Alabama Power Company in the Parlev case on appeal to the Eleventh Cir-
-cuit. In its-brief to-the Eleventh Circuit, Alabama Power argued that "ALAB erroneously rejected APCO's contention that remedial authority under section 105c(6) does not allow ALAB to. require APCO to provide general third-party trans-mission services unconnected with Farley.for the benefit of O
ls/-'See Waterford I, supra, 6 AEC at 49.
() AEC and municipal distributors."1 I The Court rejected that argument. See supra, p. 46.
B. The Attorney General's Advice Lettqrs The Attorney General's advice 16tters relied on by Applicants provide no support for Applicants' position. In fact, the Perry Unit 1 and the Davls-Besse Units 2 and 3 _ _ .
advice lettera, directly applicable to this case and not mentioned by Applicants, show that Applicants' interpreta-tion of the initial Davis-Besse advice letter is incorrect. ,
Moreover, none of the advice lettern relied on by Applicants (App. Motion 66-67) support Applicants' proposition that the NRC's authority to impose license conditions is limited to
'C nuclear plants which produce power at lower than market cost. On the contrary, anticompetitive conduct and the wrongful exercise of monopoly power, not the cost of the
~
nuclear power, was the sine qua nod of the Attorney General's recommendation in each of the advice letters.
Applicants contend (App. Motion 66) that it is
" disingenuous" for DOJ to argue that the NRC may impose.
license conditions on the owners of nuclear plants regard-less of whether the particular plant produces low cost potcc. Applicants maintain DOJ has placed " critical reli-11/ Pages 75 to 76 of Alabama Power Company's appellate brief in 0 the Eleventh Circuit are Appendix A to this motion.
Board may take official notice of the brief which is in the The NRC's files. 10 CFR S2.74 3 (i) (1) (1991) .
ance" on the cost factor in its pact advice letter to the L
O NRC. Id.
Citing the September 3, 1971 initial advice letter on P-vis-Besse, Applicants allege (App. Motion 64) that DOJ 5 concluued that antitrust review was unnecessary because the i
plant would not offer its owners a significant cost advan-
[
tage which could be used anticompetitively. This is a gross _
distortion of DOJ's letter, which concluded as follows (36 c Fed. Pog. 17890):
P
[ The city, however, has made no formal request to the applicants for participation nor had formulated the terms of such a proposal. With-E out a concrete request, it is too early to ascertain CEI's and Toledo Edison's reaction to it, and the situation can be only a speculative factor affecting our immediate advice. The
- " (lg city has put its request for an interconnection with CEI before the FPC which has jurisdiction to resolve the issue. CEI is willinn to make 3 such an interconnection provided it is compen-sated for load transfer services rendered to the cit.v. In these circumstances we presently k are of the view that an antitrust hearing would -
not be required pursuant to the reservation contained in the Coumission's construction permit. (emphasis cupplied)
DOJ later explained, in its December 17, 1973 Perry advice letter (p. 3), that the department did not recommend an antitrust hear ag in the initial Davis-Besse letter
"[s]ince thc"' had been no formal request for participation" in the Davis-Besse facilities, "and since the Applicants appeared to be responding voluntarily and adequately to k certain allegation of anticompetitive conduct." By the time of the Perry letter, both the NRC and DOJ had been apprised
. _ -. _ .._.. _. _ . _ ._ _._ ___.. _ _ _ ._.____ _ . _ _ _. _ _ _ .__ m.m
=
that the Applicants' anticompetitive conduct was egregious and continuing. DOJ, commenting on Cleveland's futile request for coordination and participation rights from CEI, I
found that "CEI has been unwilling to make a ;ommitment in principle which we feel would be sufficient to permit Cleve-land to participate in such'a way as to maintain its present competitive posture." DOJ stated that it "can only conclude ;
that a failure by CEI to grant the requests of Painesville and Cleveland would create a situation inconsistent with the antitrust laws," and that construction and operation of Perry " appear likely to enable CEI to maintain this anticom-petitive. situation." Perry letter, pp. 7-8. The cost of the nuclear units compared to alternative sources in the O relevant market was neither relevant to, nor discussed in, the DOJ's advice letters on those applications. Thus, the basis of the Attorney General's recommendation to proceed with an antitrust hearing was CEI's anticompetitive conduct.
Similarly, the Attorney General's September 29, 1971 Forked River advice. letter focused not on cost, but upon the fundamental alteration of the market which would result from the integration-of large scale, baseload generating units into a coordintted regional network of utilities. In Forked' River, the Attorney-General noted that there are major economies-of scale in bulk power production and substantial
() _ advantages <to.be' derived'from utilities joining to share reserves and coordinate bulk power development. By reason
- 59 -
, thereof the applicant for the licenses for Forked River "has been able to acquire ownership in very large scale generat-I Ing units and co benefit from the kinds of coordination which its integration into the regional high-voltage trans-E mission network makes possible." 36 Fed. Reg. 19712 (1971).
Citing to the advice letter with respect to Consumer Power's Midland units, the Attorney Genorrl noted that
. Consumer Power's plans to meet "a substantial portion of its future generation requirements from those units cannot be viewed in isolation from the rest of its bulk power supply program", in particular, its " participation in the Michigan Pool which establishes an economic framework sufficient to support the feasibility of installing such large scale, c
O -baseload generating units." That Pool, the Attorney General noted, "together with interconnections which applicant maintains with large systems outside of Michigan," provides applicant-with: full-access.to the interconnected network of high-voltage transmission and to the economic benefits of coordination among electric utilities in bulk power produc-tion. 36 Fed. Reg. 19712 (1971).
The Attorney General stated-that the analysis in Midland ts equally valid with respect to Forked River, and required viewing the Forked. River unit as an " essential resource" toLwhich the Sherman Act antitrust principles should be applied.
These' principles, the Attorney General d
pointed out,-require "that where facilities cannot be prac-t
, , , , , . . - _ - ,- r =m - ' , - !
l-l i
- tically duplicated by would-be competitors, those in posses-sion of them (" essential resources") must allow them to be shared on fair terms", citing ottet_ Tail 1E/ and other .
cases. "In some instances," the Attorney General noted,
! " smaller utilities may have opportunities to purchase blocks t
l of generating capacity and their only rggnirement would be.
for reasonable access to wheelina richts over the.intercon-t l nected high-voltaae transmission network." (emphasis sup-I plied).- Thus, again, the cost of the nuclear unit-is not determinative of the need to provide access to the transmis-L sion network 1to reach other sources of power. Nor does application of the antitrust laws relating to " essential L
resources", i.e., the transmission facilities network, involve the cost of power from the licensed project. 36
-Fed. Reg. 19712.
l In the Zimmer advice letter of July 5, 1972 (37-Fed.
Reg. 14246), it is clear that the relative cost of Zimmer i power--was the= subject of considerable dispute between the t
( applicantsffor the Zimmer license and the municipalities seeking participation. The recommendation, however, of the Attorney General.did,not constitute-recognition of Appli-L cants' ' contention that a-necessary prerequisite to the j authority to impose antitrust license conditions was the
[ .
cost =of the nuclear unit ~vis-a-vis other sources of power in-3 O i la/ United states v. ott.pr Tail Power-co., 331 F.Supp. 54 (D.
Minn., 1971).
4-
the relevant market appropriately measured and compared.
~
The recommendation turned un the absence of anticompetitive conduct. The Applicants' interpretation of this advice letter flies in the face of the Attorney General's advice in the Perry, Davis-Besse, and Forked River letters that anti-trust conditions requiring wheeling are properly imposed even where the nuclear power is high cost, noting that the relevant considerations are access to reserve sharing, coordination and the transmission network, none of which appear to have been involved in Zimmer.
Finally, in the Susquehanna advice letter of April 28, 1972, the Attorney General recommended tnat the NRC need not conduct an antitrust hearing because the applicant was O willina to Grant UGI, a gas and electric utility, and Alle-gheny Electric Power Cooperative, ownershin participation i.D the nuclear unit god had acreed to eliminate or revise anticompetitlye provisions from its existinn wholesale nower contracts with municipal electric systems that, according to the-Attorney General, were unlawful per se violations of Section 1 of the Sherman Act.- The Attorney General noted that this access to the Susquehanna unit will provide "an l additional source of low cost power necessary for UGI and Allegheny to maintain their competitive posture in Pennsyl-vania." 37 Fed. Reg. 9410 at 9411 (1972). (emphasis sup-I) plied). Thus, an antitrust hearing was deemed unnecessary because the per ge violations of the Sherman Act had been I
- 62 -
remedied by agreement of the parties.
III. APPLICANTS' ARGUMENT BASED ON Ti!E EQUAL PROTECTION PROVISION OF TiiE UNITED STATES CONSTITUTION IS NOT PROPERLY BEFORE Tile BOARD AND, IN ANs* CASE. IS WITilOUT MEFIT Applicant's constitutional argument (App. Motion 75-85)-fails for the NRC's lack of jurisdiction to decide a constitutional question. EDnitz v. Diqtrict of Colu_mbia, 112 F.2d 39, 41-42 (D.C. Cir. 1940); Encineers Public Ser-Vice Co. v. Securities and Exchange Comm'n, 138 F.2d 936, 952 (D.C. Cir., 1943), dismissed as moot, 332 U.S. 788, 92 L.Ed 370 (1947) ; Johnson v. Robison, 415 U.S. 361, 368, 39 L.Ed 2d 389, 398 (1974); Motor and Equinment Mfrs. Ass'n..
(} Inc. v. E.P.A., 627 F.2d 1095, 1115 (D.C. Cir. 1979). In Ennita, the D.C. Circuit said (at 41-42):
It has been said that the necessities of our system require the judiciary to determine the constitutionality of Acts of the legislature.
There can be little doubt that it represents the highest exercise of judicial power, and one.
that even the judiciary is' reluctant to exer-cise. Interruption of the machinery of govern-ment necessarily attendant on this function not only cautions the judiciary but argues as well
.against its exercise by other agencies. It is this consideration for.the orderly, officient functioning of the process of government which makes it impossible to recognize in administra-tive_ officers any inherent power.to nullify legislative enactments because of personal belief that they contravene the constitution.
Thus it is held that ministorial officers can-L not question the constitutionality of the stat-l ute under which they operate. Likewise, it has 1 ) been held that an' administrative agency invest-ed with discretion has no jurisdiction to en-tortain-constitutional questions where no pro-
., y ,
, . . - .,, - y
vision has been made therefor. In respect to O taxation it is frequently stated that one need not purcue his administrative remedy where the tax is void. Here again is apparent a reluc-tance to invest non-judicial agencies with jurisdiction to rule on the validity of stat-utes.
From the above we think it clear that the as-sessor had no inherent authority to consider constitutional objection to the tax.
In any case, Applicants' argument that there is no rational basis for treating the Applicants differently from any other utility and for continuing to impose restrictive antitrust conditions not imposed on other utilities is '
without merit. Applicants' entire argument (App. Motion 75-
- 85) depends on the faulty promise that the operators of g . nuclear plants may be treated differently only if nuclear O generated power is cheaper than power from other sources.
There is a rational basis for treating utilities with nuclear generation differently. As recognized in
-h_labama Powey Co. .v. NRC, 692 F.2d 1362, 1368-69 (11th Cir.
1982),. cert. dtnied, 464 U.S. 816, 78 L.Ed 2d 85 (1983) the pro-competitive mandate in Section 105(c) directed only at utilities applying for licenses to construct and operate nuclear power facilities was based on the government's substantial investment in the development of nuclear. power coupled with the way in which a large nuclear generating unit could-enhance a dominant utility's market power. These
( ~
factors distingu'ish nuclear generating facilities from other generating. facilities. This mandate was not based on any I
1 i
l
- 64 -
(J expectation that nuclear power would necesrarily be low cost. Congress was concerned that the fruits of this re- i search, made possible by public funds, not be exploited in an anticompetitive manner. Congress, 1,1 passing the Atomic Energy Act and establishing the regulatory scheme, has acted rationally. Cf. Elmanns v. Arkansas Power & Lictht Co., 655 F.2d 131, 135 (8th Cir. 1981).
As the Supreme Court stated in Vermont Yankee Nucle-ar Power Corp. v. NEDC, 435 U.S. 519, 557-58, 55 L.Ed 2d 460, 488 (1978):
Nuclear energy may some day be a cheap, safe sourca of power or it may not. But Congress has made a choice to at least try nuclear ener-gy, establishing a reasonable review process in which courts are to play only a limited role.
O The fundamental policy questions [are) appro-priately resolved in Congress . . . .
Applicants must accept the law as it is and operate within its parameters.
Applicants' constitutional contention should be dismissed because it is not properly before the Board and-
'because the argument is devoid of merit. There being a L -known and rational basis for the regulation as mandated by_
-Congress, Applicants' argument is rendered wholly without substance and. frivolous.
IV. -THE APPLICATIONS-ARE BARRED BY THE DOCTRINES OF THE LAW OF THE CASE,-RES JUDICATA. COLLATERAL ESTOPPEL AND LACHES I
(f l Tne stipulated legal issue in the case--whether.the l' .-- - -
license conditions cannot be retained if the cost of power from the licensed plants exceeds that available from other -
sources--has already been raised, argued and determined at an earlier. stage in the proceeding.
In the joint brief submitted by the Applicants and
.their co-licensees in their appeal of the Licensing Board's decision to impose antitrust conditions as part of the construction permit, the Applicants and their co-licensees challenged the Licensing Board's finding that there was a nexus between the licensed activity and the anticompetitive situation within the meaning of Section 105(c) (5) of the Act. They argued that the requisite nexus could exist only if nuclear power was cheaper than any other type of power O (Licensee's Br. on Appeal at 127, n. 147) (citations omit-l ted):
It should be understood that such a finding is an absolute prerequisite to the Licensing Board's " structural" analysis. As Dr. Pace-testified, there first must be_made a "determi-nation of whether or not the nuclear plant u offers to its owners cost advantages of such a
[ magnitude that those excluded from access to the nuclear unit in question or to similar
_ units are at a significant competitive disad-vantage";fif that is not the case, the analysis need be carried no further.
The Applicants and their-co-licensees challenged the Licensing Board's finding that "the pronounced effect-(of nuclear generation) on the overall economics" of power
( -generation would_mean that the Applicants "will derive a competitive advantage by virtue of the_ Perry and Davis-Besse
facilities". Id. at 12 5-2 6. They pointed to various exhib-its and testimony showing that the cost advantage of nuclear power had just about disappeared (id. at 127 (citations omitted)):
We would initially observe that, what appeared to Applicants several years ago to be "the superior base load choice" may no longer be l -
nearly so attractive from an economic stand-point.
The Applicants and their co-licensees went on to note that a small coal-fired plant could generate cheaper power than the proposed nuclear facilities. Id. at 132, n. 155.
In their October 22, 1979 petitions asking the NRC to review the Appeal Board's decision, they incorpolated by (J reference the arguments in their joint brief.
In the applications here and motion, the Applicants are again asserting the same proposition: nuc)Lar power has no cost advantage and, as a result, the requisite nexus between the licensed activity and the anticompetitive situa-tion is lacking, without which the NRC lacks authority to impose antitrust conditions. Applicants do not even present this old wine in new bottles. The old wine is presented in the same old bottles that on examination cannot even be considered re-labeled.1El As Cleveland will demonstrate, 1R/ Even if.the specific issue was not litigated before (as, in i- fact, it was) the previous litigation would demonstrate that it was an issue that Applicants could and should have raised previously or be barred from raising it subsequently.
l l
t
67 -
re-litigation of this issue is foreclosed by the doctrines of the law of the case, res judicata, collateral estoppel i
and laches.
A. Law Of The Case The applications are barred by the issue-preclusion doctrine " law of the case." Unlike collateral estoppel, which precludes re-litigation of the same issue in a sepa-rate' proceeding, the " law of the case" precludes re-litiga-tion of the same issue in the same proceeding.
As the Supreme Court explained, "the doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent
() stages in the same case." Arizona v. Californ3a, 460 U.S.
605, 618, 75 L.Ed 2d 318, 333 (1983); U.S. v. U.S. Smelting Refinina & Min. Co., 339 U.S. 186, 198, 94 L.Ed, 750, 761 (1949) (" law of the case" is " based upon sound policy that -
when an issue is-once litigated and decided, that should be a
the end of the matter").
" Law of the case" can also refer to legally-signif-icant issues of fact which have already been decided by a reviewing court. In U.S. Steel Corn. v. Fortner Enterpris-21, 429 U.S. 610, 623, 51 L.Ed 2d 80, 91 (1977), an anti-trust action was divided into two stages. The first stage concerned the standards to be applied by the district court
-in passing on a-motion-for summary. judgment. The second
I stage considered the only remaining question, which con-corned economic power. Because the Court had found in the first stage of the case that a tie-in existed, it assumed in the second stage "that a tie-in existed in this case, re-quired as it is by the law of the case".
The " law of the case" doctrine applies in NRC admin-istrative proceedings. See eigt, In the Matter _of Publig -
Service Co. of New llampshire (Seabrook Station, Units 1 and 2), 32 NRC 433 (1990) (On remand, Motion for Summary Dispo-sition granted because the issue had already been decided prior to romand in a Board decision, " cited by the Commis-sion as ' reasonable' and hence continuing to be the law of this case (as it has not been overturned).").
O The present applications for " amendment" are clearly part of the same proceeding n which the conditions were originally imposed. The NRC has held that all regulatory acts in connection with a nuclear proceeding are part of the same proceeding or "cause of action" as the proceeding in which the operator of the facility originally sought autho-rization to construct and operate the facility. Alabama Eower Comneny (Joseph M. Farley Nuclear Plant, Units 1 and
- 2) ("Farley"), ALAB-182, 7 AEC 210 at 215, n. 7, rev'd on other grounds, CLI-7$, 7 AEC 203 (1974). The Licensing Board in Fouth Texas held that as a practical matter, the various stages of NRC action on an application for NRC authorization are part of the same proceeding. Houston l
....- . .-.. , . ..~......_ -...-..- - -.-. -- -.-..-.-. - -.- .-._ .,.-~.
Idahtinct and Power Co. . et al. (South Texas Project, Units 1 and 2), LDP-76-41, 4 NRC 571, 575 (1976).
The applications to suspend the antitrust license conditions were filed in Docket Hos. 50-346A and 50-440A in which the Applicants along with other co-licensees sought authorization for the construction permits and operating licenses and in which the antitrust license conditions were imposed. The Applicants are seeking to defeat the judgment regarding the antitrust issues rendered in the prior stages of this same proceeding. Applicants' argument that the NRC was without authority to impose the antitrust license condi-tions and is, therefore, without authority to retain them has already been rejected by the NRC.
'O The " law of the casa" bars re-litigatinq the legal issue of whether the NRC authority to impose or retain antitrust' licensing conditions is dependent on the cost of the power generated by the facility. Applicants argued the issue in their joint brief on appeal of the-Licensing Board's decision 1to impose the conditions. Licensees' Br.
on Appeal'at 127-32. The Licensing and-Appeal-Soards based their decisions to impose the conditions on the Applicants' and co-licensees' antitrust conduct and the nexus of such conduct to the activities under licenses. 5 NRC at 237-43; 10 NRC at 384-85. In considering the issue, the Appeal Board (10 NRC at 329)fcited American Federation of Tobacco Growers v. Neal,-183 F.2d 869, 972 (1950). That case had
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- 70 -
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a held that the reasonableness of a restraint of trade does not depend "on the rvlative cost of doing business of the persons engaged in competition." Thus, the issue has been decided at the highest level of the NRC and is final. This Board must follow the " law of the case".
B. Res Judicata And Collateral Estoppel Bar The Apolications The NRC has recognized and applied the doctrines of nog iudicata and collateral estoppel. In Alabama Power Co.,
the Appeal Board noted (7 AEC at 214) (some citations omit-ted):
As the Court of Appeals for the Fifth Circuit observed in Eninters Dist. Coun. No. 38 Etc. vt
,. Edcewood Contractina Co., 416 F.2d 1081, 1084 i (1969):
The policy considerations which underlie res judicata -- finality to litigation, prevention of needless litigation, avoid-ance of unnecessary burdens of time and expense -- are as relevant to the adininis-trative process as to tiie judicial.
And any doubt that the doctrines of res iudica-tg and collateral estoppel are r.ot strictly confined to the judicial arena has been laid totally to rest. In United States v. Utah Construction and Mini.1 Co., 384 U.S. 394, 421-22 (1966), the Supreme Court acknowledged that
[o]ccasionally courts have used language to the effect that Ies judicata principles do not apply to administrative proceed-ings, but such language is certainly too broad. When an administrative agency is acting in a judicial capacity and resolves
('} disputed issues of fact properly before it
(/ which the parties nave had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to
. ~ . - . . - .- _-~.-....- - -.. ... ---.- ._ .- ~. .-.. _
cnforce repose..
l
{ . . .
Moreover, the NRC has recognized that res jild_1.gola applies when a party seeks-to re-]itigate an issue subse-quent.to the issuance of the operating license by asking the NRR Director to modify the license. Consolidated Edison Co.
of_New York. I m (Indian Point, Unit Nos. 1, 2, & 3),
("Ind.i.a n Po i n t " ) , CLI-75-8, 2 NRC 173, 177 (1975). The NRC observed (id . ) :
Parties must be prevented from using 10 CFR ;
2.206 procedures as a vehicle for reconsidera-tion of issues previously decided, or for avoiding an existing forum in which they more logically should be presented.
Similarly, thc Applicants cannot under the guise of an " amendment", seek to re-litigate.an issue they argued and lost at an earlier stage of the proceedings. .Nor can a party escape the grasp of res fudicata and collateral estop-pel simply by concocting a new argament in the operating license proceeding regarding an issue litigated in the
-construction permit proceeding. Bes judicata applies "'not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as-to-any-other admissible matter which might have been offered for that purpose'". Farlev,'7 AEC at 212 (citation omitted) (empha-sis supplied).2EI 22/ See also H_ess Investment Corp. v. United States, 595 F.2d O: 585, 588-n. 6 (Ct. 01. 1979) ("The assertion of different legal theories in a cocond suit will not defeat application (continued...)
Collateral estoppel has the same preclusive effect regarding arguments which were actually made in the prior proceeding 11/:
[t]he analogy to the rule against splitting a single cause o action is striking. Like a cause of action, "an issue may not be . . .
split into pieces. If it has been determined in a tormer action, it is binding notwithstand-ing the parties litigant may have omitted to urge for or against it matters which, if urged, __
would have produced an opposite result." Any contention that is necessarily inconsistent with a prior adjudication of a material and litigated issue, then, is subsumed in that issue and precluded by the prior judgment's collateral estoppel effect.
- 1. The criteria of res judicata have been met and bar the applications The criteria that must be met for the application of O res judicata were enunciated in Parley, guara, 7 AEC at 212-13, as follows (citations omitted):
Hgn judicala comes into play in circumstances where (1) there has been a final adjudication -,
of the merits of a particular cause of action, claim, or demand by a tribunal of competent jurisdiction; and (2) one of the parties to that adjudication (or a person in privity with such party) subsequently seeks to advance or defeat the same cause of action, claim or de-mand in either (a) the same suit or (b) a sepa-rate suit involving the parties to the first action or their privies. [ citations omitted).
10/(... continued) cf rea iudicata . . . nor will the fact that different types cf relief are sought . . . .").
21/ Carolina Power and Light Co. (Shearon Harris Nuclear Power O Plant), A LAB-8 3 7 , 23 NRC 525, 537, n. 37 (1986), quoting 1B J. Moore, J. Lucas & T. Currier, Moore's Federal Practice
$0.443[2] at 761 (2d ed. 1984), (citations omitted)
Given those. circumstances (and subject to the qualifications tc.be discussed below), the earlier adjudication is deemed to conclude the
" parties and those in privity with them, not only as to every matter which was offered and received to suttain or defeat the claim or
~
demand, but as to any other admissible matter which might have been offered for that pur-i pose".
All of the criteria for application of res judicata have been satisfied. First, there was a final adjudication of the merits of a particular cause of action, claim or demand by a tribunal of competent jurisdiction. In the construction permit proceedings all aspects of the applica-tions for-the Davis-Besse and Perry units vere reviewed and ,
decided by the Licensing Board and the antitrust license conditions were imposed. In the operating license proceed-O ings the antitrust matters were reviewed. The NRC concluded 7 that there were no "significant changes", the only basis for an antitrust review at that-stage pursuant to Section 105(c) of_the AEA. The Applicants and the other co-licensees actively urged-the NRC to reach this conclusion and con-curred in it. See e.a., letter of Robert E. Zahler, counsel for CEI, dated March 6, 1984, to Harold R. Denton, Office of Nuclear Reactor Regulation.
On appeal, the Appeal Board affirmed the decision of-the Licensing Board in-all material respects, imposed-the c antitrust license conditions with minor modifications, and- -
added a condition obligating the Applicants and co-licensees to sell power at wholesale to Cleveland. 10 NRC at 287-90.
l l
l l
The decision of the Appeal Board became the NRC's decision,.
A petition for court review was filed but was withdrawn. ]
Thus, there was a final adjudication by a competent tribu-i nal--the NRC.
Second, the doctrine of Iqa Audicata requires that one of the parties to the adjudication (or a person in privity with such party) subsequently socks to advance or defeat the same cause of action, claim er demand in either (a)-the same suit or (b) a separate suit involving the parties to the first action or their privies. Farley, supra, 7 AEC at 212. That criterion is fulfilled here. As Cleveland demonstrated, supra at 68-69, the application for a license amendment must be considered part of the same pro-O ceeding in which the license conditions were imposed.
But, even assuming, arguend_g, _that this is a sepa-rate proceeding, the second criterion is also satisfied. As stated in the Parley case (7 AEC at 212) the criterion is satisfied if the separate suit involves "the parties to the first action or their privies". The parties in the proceed-ing that resulted in the antitrust conditions are here: the Applicants, the Staff,. Cleveland and the DOJ.
Ena-iudicata applies whether the matter was offered and-received to sustain or defeat _the claim was or could have bcen offered for that purpose. Farley, 7 AEC at 212.
v The irrefutable fact is that the issue was actually pre-sented by the Applicants and their partners in the construc-
tion permit phase of the proceeding. The basic policy underlying 1:es judicata--protection of litigants from the vexation and expense of repetitious litigation--applies with full force here.
Moreover, each event raised in OE's application as justifying suspension of the antitrust license conditions, such as the increased cost of nuclear power as a result of a =
more stringent environmental requirement, new technical regulations adopted by the NRC, adver se economic conditions, occurred well before the close of the record in the operat-ing license stage. These events could have been, and should have been raised then. However, they were not raised, and as pointed out above, at the operating license stage Appli-cants and its co-applicants for an operating license argued against any further antitrust review on the ground that no significant changes had occurred since issuance of the con-struction pernit.
- 2. Collateral estoppel bars Applicants' applications Even if the NRC were to agree witn the Board that the applications constitute a " separate" proceeding (Pre-hearing Conference Order of October 8, 1991, at 21, n. 43) apart from the antitrust proceedings in which the antitrust conditions were imposed and even if the NRC were to rule, contrary to its own precedents, that res iudicata applies only to the same cause of action, the doctrine of collateral
- . - . -.- . . . . . . - . _ . - - . . - . - . . -.. ..- ~ - - . - - - . _ . - . _ - . _ _ . .
=
estoppel bars the applications. The Appeal Board in Entlea, gunta, 7 AEC at 212-13 stated as follows:
For its part, collateral estoppel does no't re-
, -quire an identity between the two causes of ac-tion, demands or claims. It is enough that the issues of law or fact previously recejving final adjudication.are the same as those being now asserted--and that that adjudication was by a tribunal empowered to consider and decide those issues. Unlike res iudicata, however, collateral estoppel can serve to conclude only "those matters in issue or points centroverted, upon-the determination of which tb3 ' earlier) finding or verdict was rendered."
The NRC has summarized the criteria governing appli-cation-of. collateral estoppel:AAI In order to apply collateral estoppel several -
requirements must be. met: The prior tribunal must have jurisdiction to render the decision, there must have been a prior valid final judg-ment on the merits, the issue must have been actually litigated and necessary to the outcome of-the first action, and the party against whom the doctrine 1:s asserted must have been a party ,
or in privity with a party to the earlier liti-gation.
Each of-the criteria for application of the doctrine of collateral estoppel is satisfied here. First, NRC had jurisdiction to. issue the decisions which granted the con-struction permit and operating license. Second, there was a valid final judgment on the merits of the antitrust license conditions. -Third, the issue of the NRC's. authority-to impose the antitrust license conditions was actually liti-22f-Commonwealth Edison Cox (Braidwood Nuclear Power Station, Unit 1-and 2) ("Rra.idwood") , LBP-85-11, 21 NRC at 620 (1985).
gated and was necessary to the outcome in the prior proceed-ing as shown, nuDIA, pp. 65-66.
Finally, the Applicanta were parties to the con-struction permit and operating license proceeding. Thus, the criteria of collateral estoppel are met and collateral estoppel bars the applications.
C. Laches Bars The Applicati2DE Laches is an equitable doctrine that bars the late filing of a claim if a party would be prejudiced because of its actions during the interim in reliance on the right challenged by the claimant. Three independent criteria must be met before laches can be invoked as a bar. A party must
() show that there was (1) a delay by another party in assert-ing a right or clai.n, (2) the delay was not excusable, and (3) the party suffered undue prejudice as a result of the delay. Environmental Defense Fund. Inc. v. Alexander, 614 -
F.2d 474, 478 (5th Cir. 1980), cert. dEDieC. 449 U.S. 919, 66 L.Ed 2d 146 (1980). See Costello v. United States, 365 U.S. 265, 282, 5 L.Ed 2d 551, 562 (1961). The " doctrine . .
. is flexible" and "all the particular circumstances of each case must be considered, including the length of the delay, the reasons for it, its effect on the defendant, and the overall fairness of permitting the plaintiff to assert his
{} or her action." Citizens and Landowners Against The Miles City /New Underwood Powc5_Jine v. Secretary. U.S. Department
___..__.___._._...._.________._._.m..._______ _._ s l
I of PJ1e_rgy ("Underyg.gd") , 683 F.2d 1171, 1174 (8th Cir.
1982).
The NRC has recognized that the laches doctrine is applicable in an administrative proceeding. See South 19Xhg, supra, 5 NRC at 1321. When a full evidentiary hearing had been held at the permitting stage, as is the case here, laches is applied to preclude " plowing the same ground twice."
one type of prejudice which typically supports the defense of laches arises when a party makes financial com-mitments which it would not have made if the plaintiff had not delayed. Lincenfelter v. Key _ stone Consolidated Indus-tries. Inc., 691 F.2d 339, 342 (7th Cir. 1982). Numerous O types of pecuniary loss may be considered in weighing the prejudice suffered by a party as a result of the delay.
Lincenfelter, 691 F.2d at 342. Furthermore, the extent of the delay necessary to support the laches defense depends, in large part, upon the extent of the prejudice suffered by .
the defendant. Goodman v. McDonnell Doualas Corot, 606 F.2d 800, 807 (8th Cir. 1979), cert. denied, 446 U.S. 913, 64 L.Ed 2d 267 (1980).
Laches has repeatedly been found to bar a claim not r
diligently pursued by the claimant when anothe3 party-in-
_ curred-financial obligations during the delay because of a O. _ reasonable reliance on the rights challenged by 'the claim-ant. For example, laches was found to bar a challenge of
4 1
- 79 -
the construction of an electric transmission line because O--
the plaintiffs delayed three years before filing suit. The court noted that the plaintiffs could not justify the delay and that the delay prejudiced the defendant because it had constructed the transmission line at substantial expense by i the time the suit was filed. Underwood, 683 F.2d at 1175-77.
Ohio Edison did not file its application until September 18, 1987 and CEI and TE nine months later than '
that. However, each of the events cited by Applicants as the-basis for their applications, i.e., changes in regulato-ry requirements and adverse economic conditions, occurred no later_than 1977. The permit proceeding ended in 1979. On
_O January 6, 1977, after a seven-month evidentiary hearing, the Licensing Board issued the initial decision which first imposed the antitrust license conditions on Applicants' and co-licensees' construction permits.- S NRC 133 (1977). On September 6, 1979, the Appeal Board rejected Applicants' and co-licensees' 300-page appeal of the Licensing Board deci-sion and affirmed the Licensing Board's findings with minor modifications. 10 NRC 265 (1979). Nowhere do the Appli-
-cants even try to justify their delay. '
Cleveland has.made-extensive financial commitments in' reliance on the license conditions. Cleveland has-ex-pended _or has committed'to expend in excess of $65,000,000 to-construct interconnections, substations and_ transmission l
l ^
1
and distribution lines as part of a system improvement and extension program. This program is financed largely by 25-year mortgage revenue bonds. To supply its customers, Cleveland has entered into long term purchase power con-tracts with numerous alternative suppliers.
The reasonableness of Cleveland's reliance cannot be disputed. When the NRC imposed the license conditions the -
NRC was fully aware that the obvious and intended result would be exactly the type of permanent commitments Cleveland has made. The operation and survival of Cleveland's munici-pal electric system is dependent upon access to interconnec-tions, coordination service and the other protections guar-anteed by the license conditions. The very nature of the O conditions required permanent changes in the relationship between Cleveland and the Applicants. Thus, the Applicants' latn application to " suspend" the conditions, after Cleve-land's enormous financial commitment in reliance on the conditions, is egregiously inappropriate.
In view of the lengthy and unjustifiable delay in submitting the applications and the prejudice to Cleveland if the antitrust license conditiona were suspended, laches bars the applications.
991LCIdl&l914 For each and all of the foregoing reasons Cleve-land's motion should be granted, Applicants' motion should
_ _ _ _ _ . - _ . . . . . _ . _ . _ _ . . . . _ _ _ _ . . . . _ _ _ _ _ ~ _ _ . _ _ . . _ . _ . _ . _ _ _ _ _ . _ _ _ . _ . . _ _
L beidenied, and the applications should be summarily denied.
. The NRC's authority to impose and retain antitrust license conditions is not dependent on the nuclear power being low cost. The NRC's authority to impose and retain antitrust license conditio7s depends only on the antitrust activities of the Applicant for a license having a nexus to the li-cense. Further, Applicants' applications are barred by res judicata, collateral estoppel, laches, and law of the case.
Respectfully submitted,
-3 .
,&gjfA;fUOI! / &f' Opa,q l). $b 6,' NT*.
-( ) Danny R. Williams Reuben Gdidberg Director of Law Channing D. Strother, Jr.
June W. Wiener David C. Hjelmfelt
, Chief Assistant Director B. Victoria Brennan of-Law Goldberg, Fieldman & Letham, P.C.
William T. Zigli 1100 Fifteenth Street, N.W.
Assistant Director of Law Washington, D.C. 20005 City Hall, Room 106 Telephone (202) 463-8300 601 Lakeside Avenue
. Cleveland, Ohio 44115 Telephone (216) 664-2000 Att.cneys for City of Cleveland, Ohio March 1992
-.O-
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APP _ENDIX A
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.h l
! on the gionnd flut n was ~ } n o. nin pc t it n c. /d at fCn. fJu nM in hLe f asinon, an anininq nn onw.icni s shouhl noi l l
l ALAH.s nuspl.n ed ap kut becn toniul in ih.n pioi tolne knca on i onn.n in d pio l quiteinent that APU. ) - .
I.. , s no m k ning a poni t o,r ant n utuprtit n e citt < t but no .o n i i ucipal distribuioi and 1 optiactttal i c>ti n t ioin (oropentn e unent.
\PCO and croon inu I in thei unhL 1 Llu. A! W onru d no irason u kucu i hn ,
' cco ding to 1 s. thne
\ oidcinig AP(U io whee l nuohintaid3 on the hnn of thew age [nuniitipal distrib- 'n os hions in du> ah3 cia r of tuuhnp ut .un n oinpennt e uneni neration and transuus I ha a set anothn pound tot i n enal /d at tJu o 3 (taihui r," 5 N RC at 932. to pios ide explasiation ho ionied 3 }n n ladedi tnin tal in icw ol {
j . n .nonabicorw thorol). I inath, io ihr extern that R W or ;
, tecond contann no c u detrd w hrehug on the pound that it was "piv(oni}ittitis c' it weie intentionally aint
. s elsal n niall<$Jted.
. inunicipal electiu ,
gueration and transano ;
t 110910 "" This hnd, 1). A 1(eniedini Grant of General Third party Tran-inir :
hRC conditions undn i
nion Senice, i. lleyond Al.All', Anthurit3 linder <
lv, FERC, 660 F.2d 66s Section 105c(6) ns They I.ack n Meaningful Tic to l a utility to tile a gen- the l'arley I'lunt luai wheciing < onnan, ush n no,cong ,, ora accow,,ncunon d, ,c,m.a,a
- s. One justification tot autboiny under Sectioti 10;ctb) does not allow Al.Ah to i e. l ling. FERC had found qinre APCo un punide gencial thint pain nanunnuun >ci '
is in .-holesale tarif f s u c> >unonnc(ted u nh IWle) toi the hencin al M(' ,uul inu i sina ihe rnne haa nir,pa ano diatonn - n N u c .n i Om n+ mm urn konopd) pnvei. it lea' natead Inuntened- 1N]o ape ot license c ondinon n nei general wheeling tatitt - , s,,n dy hu n tosnl as a pomble tonn of i cht t $ n n o n I U 'n un ffect." 660 F "d at 6b. S posn au hinie. in diis inpcm it >>n n du- (:onuniisnin audnu ,
[ Cati ali antittjgt,,dola' it) to n3ue a brei13e wit h un h ( ondit u nn e it derna '
that a piopO5ed whOle appropilate," /d. at 10!% quottnc f rom / he l'olt.h h dt um
,.c effect without a lind a jo x ge o 397u,2
.se ' the Court rejected l
_ xw_d m m ml.n hem that "unda ihr f.u n in ihr incani t av,'
e m_m m ee,_am _ u, _ hm hmn a . . _ ,
nanen ~ m m and guaranteed loara, son .a mA.ng Iarlo Power usetu! to All 5 NRL at 1300 \lanaipu dn totiuton w eir auonted no n-mnh l_b dat not addnu t he q uot hm of labama were not paities ta inne dial authotilp shough ii did i,oir Wat t he s. ope of appro;o nor i r nn.
.ing why a teniedy simply te, dn s m t unnot iion with traintionic,o or w h< t hing is ine x tr u.ilds tied up ficiern or. if wheeling wo a with the natnic of the announpe inne onaturi" ', N R C a i 121 t.e squared with an absence nat.All pays hp scn u r tu the < . ar al bound uits on m icmedbl Giotori v Connectin.t lyhl authority. li wg 1 he authorit3 to .u i nu) not be da oned h um ihr '
purpuso ut the hgnianun it don not include the autboon is etnplu3 I
t t
ni l
70 As an admtliisttati c tiilninal, Al \ll lat h the ph hat) trinc~
- dial distiction and authoints 01 an antitr ust dist r it t t out t.. !
Wlule Al, \ll has pou rt lii 1.nluoti a it ineth 'as it dectus ap-pi opt ia t e. t etnedial puu t a tied to Bett ton lOh (5 ). l .it en se l t und.tions at e to be lasluinied ~ un the basa ut its { Al.Alh]
n t aidmgi~ undet Set tion lui t h t C l'M C fi 2135 f t )(b). It hf would be anomalous to am it that a habiht3 Imdmg t ut uni-sctibed b) the tequiteinctit of a nexus c ould suinchow suppot t
- a temedy not titcutuscribed in at least a sunilat mannet. Thus.
__ j l 'a(tisities undet the Inense' and " situation' un pose houn-daties on the scope of reinedial authouts.
]
Morcos et , the ths4 letion is not t oextensne with the $cction _
105c(5) " situation / esen it "sttuanon" ts broadly tornu ued to include APC(Js pre-custing ttansnussion gtid. In the past, the NRC had acknowledged this innitation when a said-
[ Remedying alleged] [dlenial of mess to transonst, ion sp tems would be mote apptopiiate fot consideration wheie the spiems wete built in (onnection with a nuclear unit thalt w here the systems miel) linked non nutical f aca h ues
- and had been tonsttucted lunu beloie application for an M [NRC) license. While the pthptiet) of pooling aitange.
ments attd physical intettonnecuons could (ettainly he g- I consideted in appropriate cases, stuh matters in most (it m 'b Lumstances could not be dealt with by tins Cuminisstun l whrsc no meaningf ul tic exists wsth nnlicut lcalittes.
-] In out siew, it is the e.Nistente of that tie s 'hnh a clitt-t al to anutt ust pluccedmp under the Atomit Enet e Att.
It e tis ttles relaimg to a tat tht) base no st'stantial (on-l net tion with alleged aistitompetuise plactices, there is no nt<tl for a hearing as to fnopuwd fv=ms of rcisef how
- t h em .
II'aterford fl, 6 Al:C at (Cl (etaphasis supplied). T ra nsmis-
'P sinn arrangements not dilettl) t onnected with the nucleat facil-liceme (undinoin % an iuipitment ti tesnut ture the da na utihty in-d u st r y.' 13NRCat 1099 1100. yminng pum tomumro Pva. r to , ti NRC at 1100 (f ootnote omitted) . Yet ush a resuuttorire; n jnttiwly the dort of general third party narnmawn us uu auordmg to the expa t icstimung subnuited at l' haw !! ~1 r "C 19 2 l (P.uc){Rl426j indeed.
] A 1.A 1) orda ted gential tlurd party n a mnu mo n wn urs bet a u se. alucot such a tondioun the "utuannn" ui (t otral and southiin Alabama 'n un.
g likely to lead to a Ugniinant attenuation of tlie applicanti daminant po ution? 13 NRC at 110%
i
_] i
~
77 lads the
- plenary teme- ity are thus beyond A1. Alrs remedial disuction. The general nuuf disttict t ourt. th.n d-pait) transmission savit es that Al.AB ordned im A1:C tmed as it deems ap- .
and municipal distuhuton should be snicken.m gtion 105c(5). License t basis of its (ALAlts] CONCIDION l.S.C. 2155(c)(6). It ability- finding ciicum. No final order n.. der Sn tion 10'>r has been ieviewed by the nuld somehow support Commission or the federal oiuns duting the elesen years since similar manner Thus, Section 105c was made applicable to nmleat licensing proceed-uation" impose boun, ings. In view of the critical importance of ddining the scope y, of Secuon 105c, and in new of the enon demonstiated abose.
this Court should revene the AIAll decision, tesolve the basic ensive with the Secu.on .
usues o onunnen tunsdiaion and anunuu law saised by is broadly construed to this case and diiert the Cominission forthwith to temove an)- -
n go..d. In the past, the g (onditions from APCO.s nuclear licenses under Section 105c.
Jess to transmission s>> Respectfully submitted, ,
pr consideration where bn with a nuclear unit S. Easos B At. cit., Sn.
d non nuclear facilities
~
Rontar A. Bunn t n
-ore application for an Aim net L Jotm AN ty of pooling arrange' Balch. Bingham. Un ei, ns could certainly be ch matters m most cir. Hwdmine. \Villiains R Ward
% t> 3 Commission c,00 Nonh Wth Sucet Bitmingham. Alabatua SWO3
{nuL facilitia.
? that tie which is criti- g g , g, .
he Atomic Energy Act.
hve no substantial con. U^"D .I L"%
-e practices, there is no Winthrop. Stimmn. Putaani cd forms of relief frcm L Roberts j 40 Wall Street
/ supplied). Transmis. New YmL, New YmL 10005
$ with the nuclean facil. Attorntys for Alabamn Pmen Comjsany
- 8ure the elec tric utili_t) in-h CoAuumers Pwer Co , ti .
- Estructuring is precisely the be according to the expen l!' (Pace)[Rl45}. Indeed, U"Condnion 7 of the AIAH onter (13 NRC .o 1113) grana tranunit rn-sertnes because, absent , , ,g4 gg g g%g g. g p southern Alabama ~n, un- distribution 5ptem (u " w hether o. not innin to ilns )weethnt MWA
'e apphcanCs dominant pm (oasim of only 12 of'the 16 ihuntnuun MCO senn T he omdaicen on only be devribed n oscucadung l i- ._ . - -J w-. -..
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APPENDIX _D l-I' i
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= .: e==:= COMMISSION.g .y ...;
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. gE R,y$I@fVMS@kW11RIEFiOF 92 ALABAMA 0POWEWCOMPANY. PETITIONER: 4 %
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~"4 3 hi~ Attorum for
, N ,' Alabama Pwer Company February 22.'1982
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e (oir 'eting getict.ation f
cn3 of Gioton e connninniinuaIwn Co . 662 l' 2d at 5 fac s lending fut- ?[
M 3. Au nidingly, thn tuiding ol ihr Ikut A shoubt be osn-that the inntisions do j t ui nni 4 In suin. Al. \li cued in ap}ds um an ini}nopa 'nn.;a.o to gs of c\PCON antio..n d'wu A io.ulun . nut tunhn ened ni not bothug tM i APCO's 1970 < ontiat i C " h ino.nu r at s onduc t w as not "unu+asonaW i u luuno.n 3 N"i ' an M . W ut on du- ( onioln A M i t of 1 6 , u d utt Iraft of the 4 ontta(t pic-
' i "" " "* "i " ' d "' " "' I "" ' h " d ' * "' " d I "" " "" " "I"I"'
- n a sciious iisk of pro l
ee p. 23, 3npen. In an3 n3 e.u h W du- haue < hunn and the unn of the hat tions n our ated then agierment in "' """ C t h C PL """ H $ h d " I" "' "I d ' '" L"i"" "I " """ 2 of the Shetinan Act ' /d at 92N2R ALAlt6 th nunt, thculoir,
- he in cued. -
= son t het ii Set th n lici- ,
RC were in tesponse to l'OIN.I,111
,lity, diamatired by thc faihne to innte smalln A%nniing ALAll Wa* Correct About Liability,
. contiibute to the ohi. 3 The Itcinedy It l'a hioned Was Unlaw f ul 3
. w k 4 4 -
.. h p gg a j
ginal incinbet of Sl RC + die Fatle3 Plant to Al C and granted both \l:C and uiunu n J.C suff eied aus damage -
p.d dianbunns bioad au ns to APCo's n ansmission n stem.
n pte SrRC discuuions. 13 N HC a 11 P2.It APCU wntends the>c wnditiurn Luk the
' Groton t. Con nec tten t i nec essat) evidentiat y lonndation, air cu osiu .n a inattn of
.unin ust law. Section 10.it (6) t emediall ut isdh tion onpiopn h mit 3EttCT pitrposes to mend subidin in an ettoti to stiengthen c ompetition and anticoin pet itis e. Inclo.
iniwoinu ue the Ruial Elet tnlication At t.
I have powd the iht ut Ot10iniC adiantagr at the A. No ()w rict altip or IJtiit l'ower Acet =* Nec< led vonid gain unduc bene- g 7 . g gj , .g "
ation/ and theteln de- -
1-.nutlement to Ia:In I,inni Gennoung Capm t) on in the establishment s, the failute to intInde E don not ured ou unship of unit pow n au en io du-SERC op'tations is tea- f;"I") Ph"" (" Ch"'i"'"' Al^ hi ' onrn u that the addhion ot ective as well as the na railey apacity wonhl innease A PCO's mailet donnnain c .
- d. See genen:!It Cenon! 13 W : at 1101 The usont show that own u nhout au ns ,
6 F.2d I li6 < l)( Cn. to the Failey Plant, ALC's genconing < apatity would inneaw into an agt erm. m w it h by 2005 aouly aun du lusning inded twnh du addnion ut 3 he SERC tel;ddho lo us o 400 mw of pown troin du- T<nnWur unun Bu Fat h s Plant teptesents a 20'll. innease in APC() generating capunb 9 LB and Al.All ntah-economh woulination. ALCi giowth tau in gennating opacits is thnclote projected 1
1
1 0
k Od I;' to be ten tom a that of APC(), haldis 'he kitul of esidetu e that
\ P(1 F3 inatket posit ioit wdl he sa thancetl on .u t ount ol l atles t ajut hs that Al:C is entitled to a poition I he inind teilet ts that Al C's iiul lited genciating tant on-del t onstith hon w as proje(ted to prodin e powei t heapet than APC(Fs l'alle) l!!nt 1. Gentiating t osis at l?nn 2 of Al(Es ituninglwt Plant 12% une) w eie espn ted to tange fioin 2'l91 y to UUl unik:Lwh dutitig the thne priiod ot im - 1981.
f APCOi (osts at l'a t les Unit I wete expet ted to tange lioin
} 2&53 to 29 0; milh, Lw h.t" A l C s w st ads antage tiom wn-i sentional wal lhed units duting this tinie petiod tuns litun 4 59 n; 3 34 inilh, kwh. In light of these statatics, it is appal
~
ent th.it \LC's wthpetitisc position is innpiosing. 'I hr \ l . A li tnade no 1.u tual dett'imination that an) t est adsatitage asmii v
ated with the 17atle) Platit wil1 undetmine Al'Ci t oinpetiln e position in att) t eleg ant niat ket.
i l he inoid does tiot tellett a basis tot detrimining that he I
t ause of (ost adsantages to APC() flein its use of the 12alle)
Plant that 1 C niust have jotitt ownetship a(ren as disected 3 hs .\l All in oldt to be c ompetitise with APCO.
h k 2 .4 5. 413 hlakts No hirntion of Ilue A ntit umpetilstir Cororqtarntes of joint Ownership or Unti Powerl A nen. 81 j Al.All did tiot consider the antiwmpetitise tuttsequetu'es ot 1 ioint ownci:, hip ot unit powel ac(cw in l'at ic) Platu. lint,
; .\1 O use o! 30 to 40 yeai all-ictgunetnents contratts will tote.
; close opportunit) to compete for the loads of the 4 cities and the dnttibution cooperatises whuh aic parties theteto foi the ,
t est of this t entut). Xer, e.g., APPX 297[lEll A). Gianting Al'C an entitleinent to elt(tric power at or below APCOi(ost is tantatnonnt to temositig the load that power scives from ans ponibility ol competition duiing the tenn of AEC's 30 to 40 seat wntiacts "" llespite this drastic Inatket lot e(losnte. and ionnasted with the wildetunation of APCO3 alllequitements 8*l APPXM4R8 7l ur APPX ll ll[Ril 19). Tt 28305-09[R14 26) in l i. 26222 23 (Pur) {R14-26] ser alm 'l i . 21023 26 (l alle)) {R 15 20j M C s annuutued purpow is to utili<c an entuleinent in the E arler Platit to u ne any whulcult (ustomcr acquestint sciuu trout it Ti 277o16 { R 14 -24)
4 w-- h I t
,d i
t ! $ 67 i ! !the L' of evidern e that c onn u n uune a 4u.o in m. -\l. \ B shm. no uim rin fin the ienha o, au ount of
. .uniiinnpt tiiis e i onsntuciu n inoh m t rom ute of ihne t on to a put tion. ', n .n n hitt ed gent'latillQ unit illl- Nex t, A \ ..\ jl dlil Jud i s qhislet (11 0 alll u t011} ttill ks r ( t 4 ne-(duce }xm ei ( heaper than quemts >t t uanhuatcd oju ianons el a gennanon f.u iln s Losts at Unit 2 of Al Cs l ithm toim of atiew atoonna to a tonn s entuu m F.oln and
.ected to tange hom "191 h o u losn i ompennon b( twn n A P(l i . uni A l (' m some pi o - he peiiod of 1978IW1 non of t he i dn .un mailen. As DU) told the Joim Com-
- expet ted to tange ham o u u er -
Lost aduunage fiom (ou. ' lo the nicm t ionpi tion s do han puu tii al, wot table !s u.me penod t uns hom ojijiolluf ttiin lin ilCato adn{uatels ulrd ldanth, b lt h JUle-(iese stanuin. it is appat' pue m angmenn toi n-h.duhn .uul m a all opm anng js im}nusing. The AI.AH citn ic m ). c ompetit ion is utsed in t iranng then own Sny con adsanlage awod f as iht in l'heieluie. m sui h snuanons. thn ought well I rmine AEC's unnpetitn e he pinetned hoin jonnng in the o m h .o plant undo iumideranon
. for detennining that be. lir.u ing at 4 (Donnanh I b H:onuM lh 4 <ncosatng om its use of the l'u ln "i t ""' E"I" n n on tom LB t hat sut h (oontinanon u unM diininish toinpennon? Yu du u n no nuni. anon Au RAM nership access as direc ted "C" C" nuda rd uns puiMan with APCO.
se .4 nticompetitier 11, O wner,,liip Acce== 18 linproper for Additional q) or t Pown it em.o n, Al. \ h idemitied t wo hauc irawns whs Al1 needs ownet-
' hip "" "' '" f ' I " i"" '" d "I " * ' P""" "" "" l ' ' ' I i
- i "" ' "
r"PCliti' r Co*r4"r"(" "I ihe anntimt t om a m w hich n tound to nin in tiic u ln am Ls in Fatley Plant. Fiiu. ments connacts will tore. m ol en.13 N RC at 1101. anci (2) sucugthen Ita t omprinion loads of the 4 dries and , m piit ate emet pi ne' , id. at i105 pre parties ihneto lot the As Al.AB explained: , 297[R8.ll A). Gianting in tha case. a can he expn ted that ihr addinon of l'atin f at or below APCO's cost to the appht aini generanna t apa(in will osn the usos hat power serves from any terin 01 AECi 30 to 40 in.uie t foredosure, and
* ' " 4 " "" '" ' "I ' k "" b" ' " ' "" h ^ *" " " "" # " I " I"" ' ' "
M n he n in o ne of t he 1.11 anonla i s APCO's all t eqtiiternetits !T}he dosn ihr ulanondup Lt twn n n,a unhan m th u tron! ,no
! onhnation at s nrothm]. da hu ocupcution one won tind im 9); Tr. N30iO9[R14 L'6) whoinale laadv Tr, 21023 2ii (I atley)IR 3 00] I til WII N Ln l hat he la < < nu e sin nau r.
n mgnmj u sn obra heno3 on ur u.n hen s nps om ni the niiderneni in the ruley Plun wrvu.e trotn it- Tr. Tl7til M utility held.13 NRC .,; luH n 71, but ignvo d ha omlean n ta ann unnpentin; unpan i
UNITED STATES OF AMERICA ggyg NUCLEAR REGULATORY COMMISSION usNac l BEFORE Tile -ATOMIC SAFETY AND LICENSING BO,92D-MR -9 P4 33
} ; a [,, , :nt u * '
,4ii t N 4 .
In the Matter of ) Docket Nos. 50-440-A-
). 50-346-A 01110 EDISON COMPANY )
(Perry Nuclear-Power Plant, ) Unit __1, Facility operating ) License No. NPF-58) )
) 4 Tile CLEVELAND ELECTRIC ) !
ILLUMINATING COMPANY- ) THE TOLEDO EDISON-COMPANY ) (Perry Nuclear Power. Plant, ) ASLBP No. 91-644-01-A Unit 1, Facility Operating _) License No. NPF-58) ) (Davis-Besse Nuclear Power _) Station, Unit 1, Facility ) Operating. License No. NPF-3) )
)
O CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing MOTION FOR
SUMMARY
DISPOSITION OF INTERVENOR,-CITY OF CLEVELAND, OllIO ,
-AND. ANSWER IN OPPOSITION TO APPLICANTS' MOTION-FOR
SUMMARY
DISPOSITION.has-been served upon the parties or'their attorneys on the attached Service List, this 9.th day of March, 1992, by hand delivery to those-persons located in Washington,.D.C. and'by Federal Express _to persons located in other states, i
)
} ' f' ll f i fjY IO """""" '"""* l' 1
l l UNITED STATES OF AMERICA
-NUCLEAR REGULATORY COMMISSION BEFORE Tile ATOMIC SAFETY AND LICENSING BOARD
)
In the Matter of ) Docket Nos. 50-440-A
) 50-346-A 01110 EDISON COMPANY )
(Perry Nuclear Power Plant, ) Unit 1, Facility Operating ) License No. NPP-58) )
)
THE CLEVELAND ELECTRIC ) ILLUMINATING COMPANY ) Tile TOLEDO EDISON COMPANY ) (Perry Nuclear Power Plant, ) ASLBP No. 91-644-01-A Unit 1, Facility Operating ) License No. NPF-58) ) (Davis-Besse Nuclear Power ) Station, Unit 1, Facility ) Operating License No. NPF-3) )
)'
SERVICE LIST Joseph Rutherg, Esq. Office of Commission Appellate Office of the General Counsel Adjudication U.S. . Nuclear Regulatory U.S. Nuclear Regulatory Commission . Commission Mail-Stop OWFN 15B18. Washington, D.C. 20555 Washington, D.C. 20555-Anthony J. Alexander,'Esq.- ! Janet _ Urban, Esq. Vice President and General U.S.~ Department of Justice- ' Counsel Antitrust Division Ohio Edison Company Transportation, Energy-and 76 South-Main Street Agriculture lSection- Akron, Oli 44308 Room 9816 JCB 555 4th Street, N.W. Gerald Charnoff, Esq. Washington,HD.C. .20001 Deborah B. Charnoff, Esq. Margaret S. Spencer, Esq. David--R. Straus, Esq. Shaw, Pittman, Potts & Spiegel & McDiarmid Trowbridge-
.1350 New-: York Avenue,-N.W. -
2300 N Street, N.W. Suite 1100 Washington, D.C. 20037 Washington,--D.C. 20005-4798
a
- . James P. Murphy, Esq. Mr. Philip-N. Overholt LColleen A. Conry, Esq.. Office of Nuclear Plant Squire,_ Sanders &LDempsey_ Performance 1201 Pennsylvania' Avenue,-N.W. Office of Nuclear Energy Post-Office Box-407 U.S. Department-of Energy, Washington, D.C. 20344-0407 NE-44 ,
Washington, D.C. 20585 l
-Kenneth-L. Hegemann, P.E.
President- . Steven R. Hom, Esq. , American Municipal Power-Ohio, Office of the General Counsel
'Inc. U.S. Nuclear Regulatory 601 Dempsey-Road Commission
-P.O.. Box 549 Washington, D.C. 20555 j Westerville, OH 43081 John Bentino, Esq.
Admini'strative Judge Chester, Hoffman, Wilcox & , 13 . Paul Bollwerk, III Saxbc ' , Atomic Safety and Licensing 17 S. High Street
. Board _
Columbus, OH 43215 U.S._ Nuclear Regulatory
. Commission Mail Stop EW439 Washington, D.C. 20555 Sherwin E. Turk, Esq.
~o ffice of the General Counsel
-()- U.S.-Nuclear Regulatory Commission Washington, D.C. 20555 Administrative Judge Charles Eechhoefer Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission--
Mail'Stop-EW 439 Washington, D.C. 20555-Administrative Judge Marshall E. Miller, Chairman-Atomic Safety and Licensing _ Board 1920 South Creek Blvd. Spruce Creek Fly-In Datona Beach,;FL 32124
~
D. Biard MacGuineas, 'Esq.
.Volpe, Boskey and Lyons 918 16th Street, N.W.
Suite 602 Washington, D.C. 20006 i
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