ML20090F477
| ML20090F477 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 03/09/1992 |
| From: | Strauss S AMERICAN MUNICIPAL POWER-OHIO, INC., SPIEGEL & MCDIARMID |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#192-12673 91-644-01-A, 91-644-1-A, A, NUDOCS 9203110062 | |
| Download: ML20090F477 (44) | |
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'92 (gp _g p3 30 UNITED STATES OF AMERICA BEFORE THE NUCLEAR REGULATORY COMMISSION 4
BEFORE THE ATOMIC SAFETY AND LICENSING BOARD
~
)
In the Matter of
)
)
OHIO EDISON COMPANY
)
Docket No. 50-440-A
)
Docket No. 50-346-A (Perry Nuclear Power Plant, Unit 1
)
Facility Operating Licence
)
No. NPF-58)
)
(Suspension of
)
Antitrust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING
)
COMPANY
)
ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY
)
)
(Pern Nuclear Power Plant, Unit 1,
)
Facility Operating License
)
No. NPF-58)
)
(Davis-Besse Nuclear Power Station,
)
Unit 1, Facility Operating License
)
No. NPF-3)
)
)
BRIEF OF AMERICAN MUNICIPAL POWER-OHIO, INC.
IN OPPOSITION TO APPLICANTS' MOTION FOR
SUMMARY
DISPOSITION AND CROSS-MOTION FOR
SUMMARY
DISPOSITION David R. Straus Scott H.
Strauss Of Counsel:
Attornays for American Municipal John Bentino, Esq.
Powe r-bilio, Inc.
Chester, Hoffman, Willcox and Saxbe Spiegel & McDiarmid 17 South High Street 1350 New York Avenue, N.W.
Columbus, Ohio 43215 Suite 1100 614-221-4000 Washington, D.C.
20005 202-879-4000 March 9, 1992 l
l 9203110062 920309 PDR ADOCK 03000346 93 M
PDR p$
e Q
h Table of Contents Table of Contents 1
Table of Authorities 11 Background..............................................
2 Summary of Position.....................................
4 Argument 7
I.
NEITHER SECTION 105(C) NOR ITS LEGISLATIVE HISTORY SUPPORTS APPLICANTS' REQUESTED RESTRICTION UPON THE NRC'S AUTHORITY TO IMPOSE OR CONTINUE ANTITRUST CONDITIONS 7
II.
THE NRC STAFF'S INTERPRETATION OF SECTION 105(C)
IS CONSISTENT WITH :8TAFF'S RECENT EXPLANATION OF THE SCOPE OF NRC ANTITRUST REVIEW 14 III. APPLICANTS' POST-LICENSE CONDUCT DEMONSTRATES THE NEED FOR CONTINUED VIGOROUS ENFORCEMENT, NOT SUSPENSION, OF THE LICENSE CONDITIONS 18 III. ACCEPTANCE OF APPLICANTS' POSITION WOULD RENDER THE NRC'S SECTION 105(C) CONDITIONING-AUTHORITY MEANINGLESS 22
.IV.
APPLICANTS' POSITION SilOULD DE REJECTED BECAUSE ACCEPTANCE WOULD CREATE A SITUATION WHICH WOULD BE IMPOSSIBLE TO ADMINISTER........................
_25 V.-
-APPLICANTS' MERITLESS EQUAL PROTECTION ARGUMENT SHOULD IM: REJECTED.................................
26 CONCLUSION'..............................................
32 _
. ~
TABLE OF AUTHORITIES Pace Court Cases Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir.
1979)...........................
12, 13 Alabama Power Co. v. NRC, 692 F.2d 1362 (11th Cir. 1982),
cert. denied, 464 U.S.
816 (1983).......................
8, 9,
18 Allied Stores of Ohio v. Bowers, 358 U.S.
522 (1959).....................................
28 District of Columbia v. Orleans, 406 F.2d 957 (D.C. Cir.
1968)........................................
13 Federal Power Commission v. Texagg, 417 U.S.
380-(1974)..................................
10, 11 FTC v.
Manaaer, Retail-Credit Co.
Miami Br. Off.,
515 F.2d 988 (D.C. Cir.
1975)...........................
23 Gavett v. Alexander, 477 F.Supp. 1035 (D.D.C.
1979)..........................
28, 29 Massachusetts Board of Retirement v. Murcia, 427 U.S.
307 (1976).....................................
27 Metronolitan Transoortation Authority v. FERC, 796 F.2d 584 (2nd Cir.
1986)............................
11 Milnot Comoany v. Richardson, 350 F.Supp. 221 (S.D. Ill.
1972)........................
31 National-Bank of Elizabeth. New Jersev v. Smith, 591 F.2d 223 (3rd Cir.
1979)............................
23 NRDC v. Train, 568 F.2d 1369 (D.C. Cir.
1977)..........................
11, 12.
m,
o Table of Authorities (Continued)
EaEQ Office of Consumers' Council v.
- FERC, 655 F.2d 1132 (D.C. Cir.
1980)..........................
13 Pacific Gas & Electric v. State Enerav Resourcea Consoryation & Development Commission, 461 U.S.
190 (1983).....................................
29 Schweiker v. Wilson, 450 U.S.
221 (1981).....................................
27 Sutton v.
U.S.,
819 F.2d 1289 (5th Cir.
1987)...........................
23 U.S.
Railroad Retirement Board v.
- Fritz, 449 U.S.
166 (1980).....................................
26, 28 U.S.
v.
American Truckina Associations, 310 U.S.
53%
(1940).....................................
23 Wessincer v.
Southern Railway Coa, 470 F.Supp 930 (D.S.C.
1979)...........................
31 Administrative caseg Ilouston Lichtina & Power Co.
(South Texas Unit Nos. 1 and 2),
5 NRC 1303 (1977).......................................
24 Ohio Edison Co.,
43 FERC i 61,316 (1988)....................
20 Toledo Edison Co (Davis-Besse Nuclear Power Station, Units x
1, 2 and 3), ALAB-560, 10 NRC 265 (1979), aff'c LBP-77-1, 5 NRC 133 (1977)..............................
2, 19 Statutes and Reaulations Atomic Energy Act 42 U.S.C.
5 213 5 ( c ) ( 5 )..................................
8, 30 42 U.S.C.
5 2011(b).....................................
29 42 U.S.C.
5 2135(c).....................................
4 Niagara Redevelopment Act, 16 U.S.C.
5 836 et sea...........
11
- 111 -
l.
~
Table of Authorities (Continued)
Page Miscellaneous Atomic Enerav - Utilization fqr Industrial or Commercial
- Purnoses, H.R.
Rep. No. 1470, 91st Cong., 1st Sess.
(1970), r_eorinted in 1970 U.S.C.C.A.N.
- 4981, 4994-95.... 9 Laurence H.
Tribo, American Constitutional Law 1442-43 (Second Edition 1988)...................................
28, 30 l
iv -
UNITED STATES OF AMERICA BEFORE THE NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD
)
In the Matter of
)
)
OHIO EDIBON COMPANY
)
Docket No. 50-440-A
)
Docket No. 50-346-A (Perry Nuclear Power Plant, Unit 1
)
Facility Operating License
)
No. NPF-58)
)
(Suspension of
)
Antitrust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING
)
COMPANY
)
ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY
)
)
(Perg Nuclear Power Plant, Unit 1,
)
Facility Operating License
)
No. NPF-58)
)
(Davis-Besse Nuclear Power Station,
)
Unit 1, Facility Operating License
)
Fo. NPF-3)
)
)
BRIEF Cf AMERICAN MUNICIPAL POWER-OHIO, INC.
IN OPPOSITION TO APPLICANTS' MOfION FOR
SUMMARY
DISPOSITION AND CROFr5 MOTION FOR
SUMMARY
DISPOSITION Pursuant to the Atomic Safety and Licensing Board's
("ASLB" or " Board") November 14, 1991 Order setting a schedule for the filing of summary disposition motions and responses thereto, American Municipal Power-Ohio, Inc.
(" AMP-Ohio") 1/
hereby responds in opposition to the January 6, 1992 motion for summary disposition (" Motion") filed on behalf of Ohio Edison Company, The Cleveland Electric Illuminating Company and The 1/ AMP-Ohio was granted intervention as a party in the proceeding by the ASLB's October 7, 1991 order.
-2 Toledo Edison Company (collectively, " Applicants").
AMP-Ohio asks that the ASLB:_
(1) reject Applicants' request that the Board answer in the affirmative the " bedrock" legal issue; 1/
(2) answer the " bedrock" legal issue in the negative; and (3) terminate this proceeding.
Background
Applicants' January 6, 1992 motion is the latest chapter in their continuing effort to avoid the antitrust conditions imposed by the Nuclear Regulatory Commission ("NRC") in 1979 upon the Perry and Davis-Besse nuclear power station licenses. 2/
Applicants have previously failed to convince the NRC Staff, the Director of the Office of Nuclear Reactor Regulation, and the Department of Justice that Congress intended for nuclear power plant antitrust license conditions to come and go from moment-to-moment, depending upon the relative price of nuclear power vis-a-vis alternatives.
The reason Applicants have thus far been 2/ As stated in Applicants' motion, the bedrock issue is the following:
Is the Commission without aathority 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 d,
electricity from the licensed nuclear power plant is higher than the cost of electricity from alternative sources, all as appropriately measured and compared?
Brief at 2 (footnota omitted).
2/ Igledo Edison Co. (Davis-Besse Nuclear Power Station, Units 1, 2 drd 3), ALAB-560, 10 NP.C 265 (1979), aff'a LBP-77-1, 5 NRC 133 (1977).
. -. - -. - - - _.. ~
unsuccessful is that their argument in wrong, whether considered from the perspectives of statutory analysis, legislative history analysis, regulatory analysis, or common sense.-
While lengthy, Applicants' latest brief adds nothing new.
Applicants' position is no more valid now than when it was first advanced.
As has been the case in previous phases of this proceeding, AMP-Ohio understands that the city of Cleveland, Ohio
(" Cleveland") will also be filing in opposition to Applicants' motion.
AMP-Ohio will try not to replicate Cleveland's effort (though there will be some overlap, as both responses are being filed on the same day), but will instead elaborate on our joint position in a few areas, including the specific impact of the requested relief on AMP-Ohio and the urgent need for continuation of the antitrust conditions.
Indeed, as recounted infra, there appears to be as much (if not more) reason today than there was in 1979 to impose stringent antitrust conditions upon the Applicants. af fiummary of Position Putting aside for a moment arguments over statutory analysis, legislative history and the equal protection clause of A/ AMP-Ohio's failure to duplicate Cleveland's efforts should be understood as AMP-Ohio's recognition that redundancy is counterproductive and not as a reflection of minimal interest in the outcome of this proceeding.
Just the opposite is the case, for AMP-Ohio is desperately concerned that the license conditions imposed on the Applicants remain in effect.
Indeed, AMP-Ohio fears that if those license conditions are suspended, the great strides made since the late 1970s to reverse the ill effects of the Applicants' anticompetitive conduct (found and described at length in the earlier decisions in this docket) will be reversed.
-4 the U.S.
Constitution, there is a simple reason why Applicants' motion must be denied:
their position makes no sense.
In order to operate effectively, utilitt s -- whether licensees or customers'-- must make long-term generation and power supply planning decisions.
For example, in deciding to a build a particular generating facility, a utility makes a determination that the plant will be economic (vis-a-vis alternatives) over the course of its commercial life, if not for every moment the plant is in commercial-service.
Such decisions are directly affected by the ability of a customer or a licensee to rely upon the existence (or absence) of conditions contained in a nuclear power plant license.
Applicants nonetheless argue that Congress was so ignorant about the realities of the electric industry that it enacted legislation requiring the NRC to eliminate antitrust license conditions if at any point during the life of the licensed nuclear facility the costs of its power and energy dip below that of alternative resources.
The basis for thic contention is the claim that Section 105(c) of the Atomic Energy Act, 42 U.S.C.
5 2135(c), allows the NRC to impose antitrust conditions upon nuclear plant licensees 2nlY where there is a cost advantage to the nuclear power and energy generated at the licensed facility as compared with alternatives.
Thus, even if the NRC has, as it does here, unchallenged-evidence that the licensee has been and continues to be engaged in anticompetitive conduct, the Commission is (in the Applicants' view) powerless to
continue antitrust conditions where the licensee's nuclear power is not " low cost."
If Congress truly intended to limit the NRC's antitrust authority in a way which could have such disruptive, anticompetitive and long-term effects on utilities and their planning processes, the Applicants should be able to cite to specific statutory language or portions of legislative history evidencing such a desire (or even expectation) on the part of Congress.
The Applicants have presented no such evidence.
If Congress intended that the NRC be required to switch license conditions on or off with each rise or fall in nuclear power costs (and there will surely be relative cost increases and decreases over the course of a 40-year license), one would expect the Applicants to be able to demonstrate that the language of Section 105(c) requires the NRC to review and evaluate relative generation costs, or at least to consult with th^ Federal Energy Regulatory Commission ("FERC") or other federal agencies regarding the costs of alternative resources.
No such demonstration has been attempted, because no supporting evidence exists.
To the contrary, there is much evidence that Congress did not' intend that the NRC be_available to monitor electric power and energy costs over several decades,_and to suspend or reimpose conditions as the economics of the utility industry change.
As-will be explained in the sections which follow:
1.
While Congress-(like others) may have expected that nuclear power would be low cost relative to other options,
-Section 105 does not-impose as a condition precedent upon NRC action the obligation to determine, as an initial or continuing matter, that the licensed nuclear plant is producing low-cost power.
Applicants' motion is in reality an impermisrible request for an administrative modification of the statute.
The Atomic Energy Act may be modified only by Congress, not the NRC.
2.
The NRC Staff's interpretation of Section 105 (supported by the Department of Justice), under which the Commission can l
continue antitrust conditions whether or not nuclear power j.
remains a relatively low cost option, is consistent with prior and current administrative interpretation of the law.
3.
The earlier NRC decisions explaining the bases for the l
conditions which Applicants now seek to evade demonstrate why the imposition of antitrust conditions cannot depend solely upon cost considerations.
4.
Applicants do not challenge the continuing validity of earlier findings of anticompetitive conduct on their part.
Indeed, a review of Applicants' conduct in recent years vis-a-vis AMP-Ohio demonstrates the need for continued enforcement, not abandonment, of the conditions.
l S.
LAcceptance of Applicants' position would render the
(
WRC's antitrust _ conditioning authority meaningless and defeat the pro-competition purpose of the statute.
If the conditions can be-suspended (and presumably reimposed) based on current.(and changing) power costs, the conditions will.have no practical l
value to customers-and may well be detrimental to licensees.
l l
I
.~
l 7
9 Argument I.
NEITHER SECTION 105(C) NOR ITS LEGISLATIVE HISTORY SUPPORTS APPLICANTS' REQUESTED RESTRICTION UPON THE NRC#S AUTHORITY TO IMPOSE OR CONTINUE ANTITRUST CONDITIONS While an evaluation of Section 105(c) must, of course, begin with the statute itself, 5/ Applicants state at the outset (Motion at 5) that their interpretation is not based on the statutory language.
Thus, Applicants argue the " universally anticipated economic superiority of nuclear power plants generally... was the necessary predicate for the imposition of antitrust license conditions," basing this contention on "the legislative history of Section 105(c) the record of the proceedings imposing the license conditions, and judicial and administrative applications of Section 105(c)
Id.
It is easy to see why the Applicants are uninterested in the language of Section 105(c).
Section 105(c) plainly does not require a finding that a nuclear plant produce relatively " low cost" power during every moment of commercial operation as a continuing prerequisite for the imposition and continuation of antitrust conditions.
The statute states that to require license conditions the NRC must make a " finding as to whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws
" 42 U.S.C.
5/ Applicants allege agreement with the principle that statutory construction begins with the lanauage of the statute (Motion-at 34 n.76), but then ignore the point, claimir,9 that statutory understanding. y a " primary" but not language is onl
" exclusive" source of I
. _. _. _ _ _.. ~. _. - _. _ _
-8 9 2135 (c) (5).
In the event the NRC makes a " finding... in the affirmative (,)" it has the authority to " issue a license with such conditions as it deems appropriate."
Section 105 (c) (6),
42 U.S.C. $ 2135(c)(6).
As explained by the Antitrust Division of the Department of Justice (in its June 13, 1990 letter to Dr. Thomas Murley) and subsequently endorsed by Dr. Murley, the NRC's Director of the office of Nuclear Reactor Regulation (in his April 24, 1991 letter rejecting Applicants' position):
This broad standard (in Section 105(c))
invests the NRC with the responsibility to determine, on a case by case basis, whether ownership of a particular plant by a particular utility system is likely to have anticompetitive effects of the type the antitrust laws are intended to remedy.
The statute directs the NRC not only to look forward to determine if any-anticompetitive situation could arise, but also to look at the past to see if 'an anticompetitive climate exists and to see if the applicant has acted in an anticompetitive manner.' A/
A/
Alabama Power Co. v.
NRC, 692 F.2d 1362, 1367-68 (11th Cir. 1982), cert. denied, 464 U.S. 816 (1983).
DOJ Letter at 2-3, cuoted in NRC Staff's April 24,.1991 Evaluation of Applicants' Position ("NRC Staf f Evaluat ion"), at 4.
Nor does Applicants' lengthy analysis of legislati, history (Motion at 35-47) demonstrate the correctness of their position, for at most this presentation shows that Congress expected that nuclear power would be significantly less expensive
~...
. -.._.~ - -.
. ~.
-9 than alternatives. H/
Even if this assumption is correct, more is needed before the Applicants can leap from a congressional expectation to the conclusion (Motion at 33) that a nuclear plant
"[m)ust (p)roduce (1)ow-[c]ost (p)ower" in order to create a situation inconsistent with the antitrust laws.
As explained by both the NRC Staff and the DOJ, Congress did not make demonstration of the cost superiority of nuclear power a prerequisite for the NRC's exercise of its conditioning authority.
NRC Staff Evaluation at 87 DOJ Letter at 2.
Indeed, Applicants point out that Joint Committee Report, the acknowledged "best source of legislative history" for the 1970 amendments to the Atomic Energy Act (including Section 105(c)) 1/ "does not address what it means when it refers to
' antitrust considerations in relation to the strengthening of free competition in free enterprise....'" H/
Similarly, the DOJ noted that the " Joint Committee Report, in discussing the language that was enacted, does not suggest that anticompetitive effects must be traceable to a finding that the nuclear plant will be low cost.
In fact, cost is not mentioned at all...."
DOJ Letter at i.
The failure of Congress to specify, in either the statute or the Joint Committee Report, the factual 1/ See e.o.,
Motion at 45, where Applicants twice refer to Congress' " expectation" that nuclear power would be low in cost.
2/ Alabama Power Co. v.
NRC, 692 F.2d 1362, 1368 (11th Cir.
1982), cert. denied, 464 U.S. 816 (1983).
H/ Motion at 35-36, auctino Atomic Enerav - Utilization for Industrial nI_pommercial Purnoses, H.R.
Rep. No. 1470, 91st Cong., 1st-Sess. (1970), reprinted in 1970 U.S.C.C.A.N.
- 4981, 4994-95.
10 -
prerequisites for antitrust conditions makes it impossible to conclude, as Applicants do, that " relative cost is the only smAmntial variable in nuclear power plant operations in determining 'whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws.'" (Motion at 33, emphasis in original).
Instead, it makes more likely the conclusion that Section 105(c) " invests the NRC" with the broader responsibility to determine "whether ownership of a particular plant... is likely to have anticompetitive effects of the type the antitrust laws are intended to remedy."
DOJ Letter at 2, footnote omitted.
In essence, the Applicants are contending that a modification of the Section 105 standard for the imposition of conditions is needed on the ground that Congress' 1970 assessment of the economics of the nuclear power industry is no longer accurate.
Applicants' request that an administrative agency amend a federal statute because times have changed must be rejected.
Not surprisingly, the federal courts h.sve long been unwilling to allow federal agencies to exercise Congress' authority to modify statutory language to reflect alleged changes in circumstances.
In Federal Power Commission v. Texaco, 417 U.S.
- 380, 394-96 (1974), the Supreme Court explained that federal agency efforts to legislate in response to changing times were prohibited, holding that the FPC could not rely on current market prices to determine "just and reasonable" rates under the Natural Gas Act.
Noting that it had been " persuasively argued" that the
competitive structure of the natural gas industry had changed since the passage of the Natural Gas Act, the Court nevertheless declined the invitation "to overturn congressional assumptions embedded into the framework of regulation established by the Act."
Id. at 400.
The Court concluded that "[t]his is a proper task for the legislature where the public interest may be considered from the multifaceted points of view of the representational process."
Id.
Similarly, in Metropolitan Transportation Authority 3.
FERC, 796 F.2d 584, 593 (2nd Cir. 1986), the MTA argued to the court that because " yardstick competition," the economic theory underlying the Niagara Redevelopment Act, 16 U.S.C.
S 836 et sea.
(a statute passed in the late 1950's), "makes little sense in today's energy market," the FERC (or the court) should be free to ignore restrictions imposed under the law.
The court rejected this argument, stating that assuming arauendg the current invalidity of the economic premise for the law,
"'it is not for FERC or ourselves to second-guess (Congress') basi.,
determination.'"
Id., auctina Power Authority of the Statq_gi New York v.
FERC, 743 F.2d 93 105 (2nd Cir. 1984).
The rule that administrative agencies cannot modify statutory provisions has been tested and upheld.on numerous occasions, particularly in the context of environmental regulation.
In NRDC v. Train, 568 F.2d 1369 (D.C. Cir. 1977),
- for example, the D.C.
Circuit rejected the EPA's assertion that the Agency had statutory authority to exempt certain categories of point sources from the permit requirements of Section 402.
4
,.m, y
m
~
- ~ > - -
The court found EPA's arguments concerning its discretion to act and 7.Jministrative infeasibility under the Clean Water Act
(" CWA") unpersuasive.
Id. at 1374-75.
Purther, the D.C.
Circuit acknowledged that it could not validate ERA's assumptions about the purpose of the CWA, but rather that " assumptions embedded in the framework of regulation (s)" could be overturned only by Congress, 14. at 1377 (citing _ Federal Pever Commission v. Texaco, supra).
Two years later, in Alabama Power Co. v.
- Costle, 636 F.2d 323 (D.C. Cir. 1979), the D.C.
Circuit revisited and thoroughly explored this issue.
The court held that the EPA had abused its administrative authority "by promulgat[ing) a blanket exemption frca statutory requirements for certain stationary sources that emit less than 50 tons of any air pollutant per year."
Id. at,358.
Thus, the. rule as enunciated by the D.C.
Circuit is that " categorical exemptions from the clear commands of a regulatory statute, though sometimes permitted are not favored."
Id.
The court in Alabama Power noted that the rule against administrative exemptions "is strict but not absolute" and addressed two exceptions to the rule.
First, the court acknowledged that administrative necessity might constitute a basis for administrative action based on implied authority not explicitly established in the statute.
Id. 2/
Second, the court 2/ The court stated that such " streamlined agency approaches or procedures" are often acceptable when such measures are necessary to allow the agency to carry out "the mission assigned to it-by Congress."
Id.
l 1
13 stated that categorical exemptions may be allowed where the substance of the exemption deals with dg minimis circumstances. 10/
obviously, neither exception applies here and, in any event, neither exception permits an agency to depart from the language of the statute.
Rather, agencies may in appropriate circumstances invoke these exceptions as a tool to implement the legislative scheme envisioned by Congress.
Egg Alabama Power Cg2, 636 F.2d at 358-61.
Just as an administrative agency cannot modify statutory provisions in light of changed circumstances, neither can an agency support such action as a method to further public policy objectives underlying a particular statute.
In Office of Consumers' Council v.
FERC, 655 F.2d 1132 (D.C. Cir. 1980), the D.C.
Circuit held that FERC had exceeded its statutory authority when, due in part to the perceived slowness of congress, FERC granted a certificate of public convenience and necessity and approved certain financing arrangements for a coal gasification plant.
Id. at 1151.
The court stated (at 1152) that it:
is not for an administrative agency however to preempt congressional action or fill in where it believes some federal action is needed.
It goes without saying that appropriate respect for legislative authority requires regulatory agencies to refrain from the temptation to j
stretch their-jurisdiction to decide questions i
19/ Citina District of Columbia v. Orleans, 406 F.2d 957 (D.C.
l Cir. 1968) (stating that the "de minimis" doctrine "was developed to prevent trivial items from draining the time of coarts").
The l
court in Alabama Power further stated that whether a ratter will l
be construed as e minimis depends upon the particular factors, l
but that a de minimis situation does not present the ability "to depart from the statute, but rather a tool to be used in implementing the legislative design."
Alabama Power Co.,
636 F.2d at 360.
1
- 14 of competing public priorities whose resolution properly lies with Congress.
L For these reasons, Applicants' attempt to obtain administrative modification of the Atomic Energy Act should be rejected.
II.
THE NRC STAFF'S INTERPRETATION OF SECTION 105(C)
IS CONSISTENT WITH STAFF'S RECENT EXPLANATION OF THE SCOPE OF NRC ANTITRUST REVIEW Applicants challenge (Motion at 46) the NRC Staff's finding-(Evaluation at 8) that the NRC's antitrust determinations need not rest in every instance exclusively upon cost considerations, claiming it is " flatly.at odds" with decisions cited by Staff.
.This challenge collapses when considered in light of the instant case.
As explained by Staff (and as will undoubtedly be detailed by Cleveland), "the licensees concede that cost was not an issue" in the 1979 licensing conditions pluce' ding.
NRC Staff Evaluation at 10 & n.14.
Instead, the e
Perry and Davis-Besse licensing proceedings properly focused on the Applicants' ponduct vis-a-vis the policies underlying the antitrust laws.
Notwithstanding the Staff's finding (accompanied by citation to Ohio Edison's original application), the Applicants argue (Motion at 53) that the " linchpin of the Appeal Board's determination that the NRC could impose competitive restraints on the Applicants was that the nuclear power plants in question would be competitively advantageous since nuclear power would be cheap."
An analysis of the decision does not support the Applicant's claim.
Most importantly, the conduct examined by the l.
l l
l
15 NRC and the conditions adopted as a result of that conduct go well beyond simply ensuring access to low cost nuclear power.
As explained by the NRC Staff:
the remedies fashioned in the Perry / Davis-Besse proceeding demonstrate that the Boards' primary concern was with market structure and the Applicants' pre-existing anticompetitive practices.
These remedies largely focused, not on making the plants' nuclear power available to competitors (although, to be sure, this option was made available co competitors should they choose to use it), but upon ensuring that competitors would have access to transmission lines, coordination services, other sources of power, and CAPCO
[ Central Area Power Coordination Group) memNirship and privileges on terms no less favorable than those which were available to CAPCO members (10 NRC at 296-99).
- Thus, regardless of whether the nuclear plants proved able to provide direct cost advantages to their owners, the license conditions served to ensure that the Applicants would be unable to use their coordination planning, their existing and planned transmission lines, or their existing and planned generating capacity
-- including the increased baseload capacity afforded by these plants -- in furtherance of their anticompetitive practices.
NRC Staff Evaluation at 10-11, foctnote omitted.
Similarly, Applicants argue that the Department of Justice failed initially to request initiation of an antitrust review concerning David-Besse "because the nuclear facility in auestion did not give to its owners a 'significant cost advantage' which could be used anticompetitively."
(Motion at 64,-auotina 36 Fed. Reg. 17888 (September 4, 1971)).
This contention is not accurate.
In fact, the Department of Justico made clear in the quoted letter that it was the conduct of the Applicants, not the anticipated economics of the facility, which
would be determinative of the need for an antitrust review.
Indood, in explaining the "Illikely competitive effects of grantina the annlicatLQD" (36 Fed. Reg. at 17889, emphasis in original), the DOJ states that access to low-cost nuclear power is not the touchstone for Section 105(c) review:
our investigation reveals that the city of cleveland's municipal electric system is the only competing municipal utility which has expressed an interest in obtaining an ownership share of the Davis-Bosse plant.
En sLg_,not, however._r_qq3rd the presence or absence of such,J;ggy193.s as _sLqtprminative, of our antitrust inuufrv.
CEI and Tolodo Edison, through their wumborship in the CAPCO pool and their interconnections with adjacent major utilities, have obtained... the benefits of coordination and the resulting low-cost power....
The municipally owned electric utilities, on the other hand, have no transmission network and cannot benefit without some measure of access'to applicant's transmission network and to coordination with applicants.
Thus_yAJ;hink_ _ it__is necessary to analyze lhe actions of Toledo Edison and CEI toward these munictoal rystems te determine whetd1pr thev hqve %_umpled to nrevent th2 municipal systems from obiginino nuch accenc.
36 Fed. Reg. at 17889-90 (emphasis added).
It was on the basis of an analysis of the Applicants' actions, undertaken notwithstanding data showing that the construction of Davis-Bess 0 would "not give Toledo Edison or CCI a significant cost advantage," that the DOJ concluded initially that there would be no need for an antitrust hearing.
36 Fed.
Reg. at 17890.
Applicants' effort to argue the contrary should be rejected.
Finally, Staff's interpretationlof the Commission's authority is consistent vjth a recent NRC analysis of tho.
4
- 17 Commission's antitrust conditioning authority with respect to the Seabrook Nuclear Power Station, a facility the output of which can hardly considered relatively " low cost."
NRC antitrust review of the Seabrook license was triggered by the change in Seabrook ownership which would result from the proposed corporate combination of Northeast Utilities and Public Service Company of New Hampshire. 11/
The Staff's August 1991 " Recommendation," signed by the Director of the Office of Nuclear Reactor Regulation on 5
February 9, 1992, succinctly describes the process through which the NRC assesses antitrust issues and considers the imposition of conditions:
All applicants for an NRC license undergo an extensive antitrust review at the construction permit (CP) stage and a review at the operating license (OL) stage.
The CP review is an in depth analysis q1_the acolicant's competitive activiting conducted by the D0J in conjunction with the staff.
The competitive analysis associated with the OL stage of review is conducted by the staff, in consultation with the Department, and is fpcused on sianificant chances in the applicant's activities since the completion of the CP antitrust review (or any subsequent review).
In each of these reviewa, both the staff and the Department concentrate on tha apolicant's activities and deterpine whether thg_qp'olicant's conduct or ellRDiles in fthel applicant's conduct creates or maintains a sitnation inconsistent with__the aAt_itr_un
- lawa, 11/ It can be fairly stated that if " low cost" power and energy Ware a condition precedent to the imposition of antitrust conditions, the recent Seabrook antitruet review would have been totally unnecessary.
18 -
NRC Staff Recommendation at 6 (emphasis added).
Thus, at all stages of review the focus in deciding on the need for antitrust conditions is the " applicant's conduct" and "activites," not sololy (or even generally) the relative cost of the nuclear power and energy produced at the licensee's facility. 12/
III.
APPLICANTS' POST-LICENSE CONDUCT DEMONSTRATES THE NEED FOR CONTINUED VIGOROUS ENFORCEMENT, NOT SUSPENSION, OF THE LICENSE CONDITIONS Remarkably, Applicants state (Motion at 17) that they do not " disturb () the NRC's previous findings as to their competitive behavior (,)" contending that "[t]o the contrary, for purposes of their Applications and this Motion, each of the Applicants has accepted the NRC's prior determination concerning its competitive behavior" (M7 tion at 17 & n.29).
The NRC Staff feared that in light of this admission:
a suspension of (the at.titrust) conditions would invite a reintroduction of many of the very practices which were found to be ant 1 competitive during the extensive litigation which resulted in the conditions' imposition, and might lead ultimately to a lessening of competition.
NRC Staff Evaluation ct 11.
Applicants make no secret of their future anticompetitive plans, stating that suspension of the conditions means that " Ohio municipalities will not be able to rely on them 12/ Similarly, the court in Alabama Power Co. v.
NRC, 692 F.2d at 1367 (emphasis added), notes that Section 105(c) requires the NRC to "take a careful look at the present -- and the past -- to see if an anticompetitive climate exists and to coe if the aonlicant has acted in an anticompetitive manner."
- 19 as they have, to avoid sharing in the Applicants' nuclear energy supply investment."
(Motion at 30). 12/
Nonetheless, Applicants advise municipalities (and this Board) not to worry, devoting several pages (Motion at 23-30) to a recitation of the various antitrust laws under which, if necessary, they can be sued.
AMP-Ohio shares the NRC Staff's concern that absent the conditions, it will be necessary to seek legal relief.
- Indeed, Ohio Edison's actions vis-a-vis AMP-Ohio since the imposition of the conditions show that Ohio Edison, even with the stringent conditions, cannot be trusted to behave in accordance with the antitrust-laws or the license conditions now in effect. 13/
For example, in flagrant violation of both License Condition No. 10 and a separate contractual requirement, Ohio Edison in 1988 filed with the FERC a schedule for service to AMP-Ohio providing for only full-requirements service, to take effect upon the expiration of a five-year contract that AMP-Ohio and Ohio Edison had entered into in 1983.
Ohio Edicon refused to offer the option of partial-requirements service, contending that the contract left to Ohio Edison the choice of offering full-or partial-requirements service.
Primarily on the basis of Ohio Edison's contrary representations in conjunction with its 11/ This statement means, of course, that the Applicants will use their transmission monopolies to force AMP-Ohio and its members to purchase power from the Applicants, while denying the publicly-owned utilities access to the Applicants' competitors.
11/ Tho'NRC showed great prescience in stating at the time the conditions were imposed that "[wje think that the applicants should not be taken at their word."
Toledo Edison Co.,
10 NRC at 3C6
original filing of the 1983 contract with the FERC, that agency granted AMP-Ohio's request for summary rejection of Ohio Edison's 1988 full-requirements rate filing and ordered the Company to file schedules providing for partial-requirements service.
Ohio Edison Co.,
43 FERC 1 61,316 (1988).
Fortunately for AMP-Ohio, Ohio Edison's conduct in this instance was in breach of a contract on file with the FERC as well as the antitrust license conditions, and summary relief was therefore available from FERC.
Nevertheless, Ohio Edison's action demonstrates its cavalier disregard for the license conditions.
Indeed, when AMP-Ohio was advised in late 1987 that Ohio Edison intended to file a full-requirements-only tariff, counsel for AMP-Ohio by letter dated December 1, 1987 warned counsel for Ohio Edison that doing so would violate the NRC license conditions.
That warning (see Appendix A hereto) detailed AMP-Ohio's ir.terpretation of the contract but continued that, in any event, the license conditions required Ohio Edison to offer partial requirements service and that AMP-Ohio formally requested that Ohio Edison do so.
The warning and request were ignored.
Another of Ohio Edison's violations of both the Perry antitrust conditions and the 1983 contract between AMP Ohio and Ohio Edison involved the question of the entitlement of two municipal systems to multiple delivery points.
The contract provided that, by mutual agreement which could not be unreasonably withheld, AMP-Ohio could obtain additional delivery points.
In early 1987, AMP-Ohio made a formal request to Ohio
Edison for installation of second delivery points to serve the municipal electric systems of AMP-Ohio members Cufahoga Falls and Hudson, Ohio.
This request was flatly refused by Ohio Edison, which declined even to discuss the possible technical arrangements.
As in the case of its rejected FERC filing, Ohio Edison sought to avoid its clear obligation by advocatirig a completely untenable interpretation of the 1983 contract.
Once again its position was roundly rejected, but this time only after AMP-Ohio bore the expenso and delay of a contested arbitration proceeding.
At the conclusion of that proceeding, the arbitrators found that Ohio Edison had breached its contract with AMP-Ohio, rejecting Ohio Edison's absurd claim that the availability of " additional delivery points" was limited to single delivery points at theoretical new municipal systems, rather than multiple delivery points at existing systems.
The utter lack of basis for Ohio Edison's position in that case is demonstrated by its inability to obtain the vote of even Ohio Edison's own party-appointed arbitrator; the arbitrators voted 2-0 in favor of AMP-Ohio, with one not voting.
Given that Ohio Edison does not challenge the 1979 NRC findings of anticompetitive conduct and, as explained here, continues to violate the antitrust conditions imposed by the NRC, it is particularly unseemly of the Applicants even to suggest that those conditions now be suspended.
As Chairman Miller correctly commented during a colloquy with counsel for Ohio Edison at the September 19, 1991 prehearing conference:
l
- 22 CRAIRMAN MILLER:
... Clearly the City of Cleveland ein quito properly raiso (questions as to whether applicants have acted anticompetitively).
If you were trying on behalf of your client to get rid of all of the antitrust conditions, why would they not be perfectly entitled to say the conditions not only are the same as when those things became the law of the case, but they're worso.
Why wouldn't, in fairness, they be entitled to creato such an issus?
MB. CHARNorrt Because regardless of what they proved -- they could prove that we were the worre competitors in the United Statoo.
It would make no difference.
CRAIRMAN MILLER:
That's interesting.
Do you mean this Board would be disposed, even despite such a chowing as you've hypothesized, the Board would say, well, yes, but you're nico people and we'll throw out all theso nasty conditions?
That doesn't make senso; does it?
Tr. 150-151.
It truly "doesn't make senco" to suspend the conditions where Ohio Ediaon has shown little or no respect for them, and it does not "make sense" to suppoco that Congress crafted a statutory schemo under which nuclear plant owners could rid themselves of antitrust 1.icense conditions while continuing to violate them.
III.
ACCEPTANCE OF APPLICANTS' POSITION WOULD RENDER THE NRC'S SECTION 105(C) CONDITIONING AUTHORITY MEANINGLESS It is black letter law both that a statute must be interpreted so as not to be meaningless, and that a law should 4
not be read as inconsistent with the purpose for which it was adopted.
E.S. v. American Truck 1Dg_ Associations, 310 U.S.
- 534,
- 23 543-44 (1940). 11/
If it is concluded that the antitrust conditions imposed under a nuclear power plant licenso can bo "susp r. sed" whensvor the cost of nuclear power and onorgy dips below the prico of alternativos (and presumably resumed whenever the cost goes back up), the 1979 antitrust conditions will have been rondorod offectively usoloss.
A utility cannot engage in the type of long term power supply planning nooded to ensuro rollable son-lco unless the conditions governing access to supply options are stable.
If the access conditions can be suspended at any timo (and for unknown periods of time, if not permanently) then the conditions cannot be relied upon.
The problems inhoront in the Applicants' position cut both ways.
Not only will customers be at great risk if access conditions (for examplo) can be suspended at any time, but licensons may face potential financing and planning problems if conditional obligations can be turned off and reactivated with the novoment of the prico of nuclear power vis-a-vis alternatives.
During the hearings on the 1970 amendments to the E
Atomic Energy Act (which included sectiUn 105(c)), Joint Committoo Chairman Holifield touched on this issue as part of a discussion of the difficulties in authorizing multiple antitrust reviews:
I think if you hold over the head of any investor of $10G million in a plant, lot us say, the fact that he builds the plant to channel the power into his own system of 15/ Egg glag Sutton v.
U. S., 819 F.2d 1289, 3295 (5th Cir. 1987);
National Bank of Elizabeth. New Jorsov v. Smith, 591 F.2d 223, 231 (3rd Cir. 1979); and EIg_y. Mannaer. Rotail Credit Co..
Minmi Br. Off., 515 F.2d 988, 995 (D.C. Cir. 1975).
4
) !
distribution, ion from that plant to another
-at that point he should be awaro of any divers source.
11 0 should not be put in the position, it seems to me, of double joonardy in that he is given the construction permit to procood Without antitrust review and then suddenly 6 years later,ished he is faced with anor 7 years later, whenever his plant is fin intervonor or a legal situation which he had
~
to go again through the process of antitrust review.
Suddenly, they are faced with a diversion, lot us say, of 25 or 30 or 40 porcent of their power into another system.
lioarings on Prolicenso Antitrust Hoview of Nuclear Power Plants Before the Joint Committoo on Atomic Energy, 91st Cong., 2d Sess.
(1970) at 37-38, gueted LD llouston Lightina & Power Co. (South Texas Unit Nos. I and 2), 5 NRC 1303, 1315 (1977).
By the same token, even the Applicants sro constrained to admit that the goal of Section 105(c) antitrust review is to ensure compacition betwoon nucicar licensoos and others. Motion at 34 ("the genesis of the congrossional grant of antitrust authority to too NRC was the concern about the competitivo advantages of low-cost nuclear power").
A datormination that the antitrust conditions can be lifted at any moment would mean that they could not be relied upon to improve the competitivo environment, thereby defeating Congress' goal.- The law should not be so interpreted.
m.
e
-,,, -. _... ~. -
IV.
APPLICANTS' POSITION SHOULD DE REJECTED BECAUSE ACCEPTANCE WOULD CREATE A SITUATION WHICH WOULD BE IMpOSSIDLE TO ADMINISTER If the Applicants' legal position is adopted, the NRC will (as noted in the "bodrock" issuo statement) take on the task of " appropriately measur(ing) and compar(ing)" alternativo sources of electric power, and will have to use the results of those comparisons to decide whether antitrust condition suspension (and resumption) is in order.
As has been previously explained, there is no evidence that Congress intended the NRC to take on this responsibility, which would be formidable.
The NRC Staff correctly notes that energy costs for power plants using any source nf fuel can vary greatly from year to year (The Applicants' approach would result is unending litigation) over perceived real or short-term developments which are asserted to affect the appropriatenoas of retaining previously imposed antitrust conditions NRC Staff Evaluation at 12.
The problems inherent in administering such a scheme can be enormous.
In any cost comparison proceeding, potentially relevant issues would includes (1) identification of the " costs" which ghould be included in coDductina a comoarison; for example, should toe environmental costa (and benefits) of nuclear power be included, along with the same costs and benefits of other energy producing technologios?
(2) accountina for the impeAt_of__ statutory chances which have an effect on Dower coqts; for example, how should the 1990 Clean Air Act Amendments of 1990, which significantly raise the future cost of producing coal-fired power and energy, be considered?
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0 (3) accountino for unforseen events; for should the conditions be subject to examplo resumptlon in the event that there is a coal strike? and (4) gaterminina the market which should be examined in assessina relative costs; for example, what is the market for alternativos to nuclear power produced at the licensed facilities?
Overall, Applicants are asking the NRC to assume broad oversight of the costs of both nuclear and non-nuclear energy sources.
If Congress intended that the NRC exerciso, as part of its section 105(c) antitrust responsibility, l ong-te rm,
i potentially continual oversight of relativo resource costs, then there should be at least como indication in either the statutory language or the logislative history to such offect.
The Applicants have pointed to nothing in either the law or the legislativo history which shows that Congress wanted the NRC to be on call to monitor alternative resource costs over the soveral decados in which the Perry and Davis-Bosse plants will be in f
commercial service.
V.
APPLICANTS' MERITLESS EQUAL PROTECTION ARGUMENT SHOULD BE REJECTED Applicants assert that if Section 105 does not require suspension of the antitrust conditions when the prico of nuclear power is not "(c]ompetitively priced," then the statuto au applied denies Applicants' equal protection of the law. (Motion at 75-86). 15/
Applicants' argument should be rejected because 11/ Applicants stato process clause *requir(Motion at 75) that the fifth amendment due es the federal government to observe the (FOOTNOTE CONTTMUED ON NEXT PAGE)
m.___._._._
l.
Section 105(c) moot.s the applicablo equal protection standard in that it is rationtally related to the achievement of a legitimato government ob,d,oct.ivo.
Section 105 (and the Atomic Energy Act generally) was passed in pakt to strengthen competition.
The imposition of t.ntitrust conditions, even where nuclear power is not " low cost," is rationally related to the achiovement of that goal becauso, as explained by the NRC in the licensing decisions in this proc 9eding, conp**uction of the Perry and Davis-Bosso units without conditio!
dod vo anabled tbo Applicants to broaden their existing ( r,'4 uce.it;ve practicos.
NRC Staff r
Evaluation at 10-11.
The Applicants corroc'.lv c:: plain that f or equal protection purposes, Section 105(c) nood only moet the
" admittedly... lonient" standard of being moroly rationally related to a legitimato government objectivo.
Motion at 77.
Ecc l
Schwolker v. Wilson, 450 U.S.
221, 230, 234-35 (1981).
The Suprnme Court noted that the rational talationship test employs a "rolatively tatexed standard," and that in such a review the legislation at issue is presumed to be valid, tiassachilag.t_tn Board of Retiremont v. Murgia, 427 U.S.
307, 314 (1976).
The Court has also emphasized the limitations on its own ability to 4
substitute its judgment for that of Congress:
'It is not within'our authority to determino whethor the Congressional judgment expressed (F00THOTE CONTINUED FROM PRECEDING PAGE) principica of equal protection...."
Although the fifth
-amundment does not contain an equal protection clauso similar to that found in the fourteenth amendment, the due process clause itself doos provido equivalent protections.
U.S. Railroad Retirement Board v.
Fritz, 449 U.S.
166, 173 n.8 (1980).
4 r.,
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in that Section is sound or equitable, or whether it comports well or ill with the purposes of the Act The answer to such inquiries must como from Congress, not from the courts.'
U2Eg_ Railroad Rotirement BQDrd v. Fritz, 449 U.S. at 175-76, quoting Flemmina v. Nestor, 363 U.S.
603, 611 (1960).
In fact, a court will deny an equal protection challengo even where congress has not actually articulated its legitimato objectivo, but where the court can imagine a legitimate objective. 11/
Professor Tribe has commented that rational relationship review generally amounts to a presumption of constitutionality.
Laurence H.
Tribe, hastican constitutional Law 1442-43 (Second Edition 1988).
In support of the proposition that "there are limits to permissible behavior under (the rational relationship) standard,"
Applicants cito (Motion at 77) Gavott v. Alexander, 477 F.Supp.
1035 (D.D.C. 1979).
The focus of the court's attention in Gavott was not the rational relationship test, because the claim was advanced (and the court found) that the statuto ac issue (a portion of the civilian Marksmanship Act) infringed upon first amendment rights.
Id. at 1045.
While the court overturned the law on equal protection grounds, it did so using the strict scrutiny standard, a far tougher test than the rational relationship standard applicable here.
Id. at 1049.
As an aside, the court briefly noted that the statute would also have failed the more relaxed rational relationship test, commenting that the "Dopartment of Justice conceded the unconstitutionality 12/ A1 Lied _ Stores of Ohio v. Bowers, 358 U.S.
522, 529-30 (1959);
U.S Ra:.1 road Rgtirement Board, 449 U.S.
at 179.
- 29 of the law under this standard."
Id. at 1049 & n.36.
By t
contrast, in this caso the Dopartment wt Justico has rejected Applicants' challongo to section 105(c).
Gavett does not justify overturning Section 105(c).
The Atomic Energy Act articulates a specific, legitimato government objectivo, and Section 105(c) is rationally related to attaining that objective.
The Atomic Energy Act of 1954 was enacted to open up the use of nuclear energy to the privato sector and to regulate that use; until that point, the United States government had maintained a monopoly over the uso, control, and ownership of nuclear technology. Eqn e.a., Pacific can & Electric v. state Enerav Resources Conservation & Develonment Commission, 461 U.S.
190, 206-207 (1983).
The Congressional decision to allow privato entities to benefit from the government's prior development of nuclear power carried wit' it the following explicit declaration:
the development, uso, and control of atomic energy shall be directed so as to promoto world peace, improve the general welfare, increase the standard of living, and stronathen free comnetition in orivato enterDrise.
42 U.S.C.
5 2011(b), emphasis added.
Handating that the NRC conduct an antitrust review is undeniably rationally related to the achievement of that undeniably legitimatc goal.
The changed circumstances that Applicants claim justify their equal protection challongo (that the costs of nuclear power are higher than Congress expected them to bo) do not affect either the goal of the statute -- to allow use of nuclear energy where it would strengthen free enterprino -- or the rational
30 -
relationship of Section 105(c) to the goal.
Applicants wrongly argue that "the professed rationale for the imponition of antitrust conditions under Section 105(c), to prevent the exploitation of choap nuclear power, han not developed." (Motion at 79). IR/
The statuto was not designed to protect nololy
(
against " exploitation of cheap nuclear power," but to ensure that "activition under (an NRC) licenno would (noti croato or maintain a situation inconsistent with the antitrust laws."
42 U.S.C.
5 2135(c) (5).
Even if nuclear power is not " low cont" relativo to other options on a given day in the courno of soveral decados, there is no question that -- as was found in the liconning decirions here -- plant construction can have significant, adverse anticoapotitivo conocquencoa. 13/
Thorofore, irrespectivo of cost considerations, antitrust reviewn and the imposition of conditions are still nooded if the ntatutory goal of froo competition in accordance with the antitrust laws is to be achieved. 22/
if/ Ef.2 Motion at 85, whero Applicants state that Section 105 "was designed to prev?nt the exploitation of low-cost nuclear (c) power."
12/ Indood, notwithstanding the conditionr, Ohio Edison has continued to act in an anticompetitivo menn9?, gu;In at Part III.
Moreover, Applicants do not contest the NRC's carlier findings of anticompetitivo behavior on their part.
Motion at 17 n.29.
22/ Applicants cito (Motion at 79-81, 84) throo Supremo court casos for the proposition that changed circumstances can lead a court to overt-n statutes on equal protection grounds.
Interestingly, those casos come from the 1920s and early 1930s --
the 1422hDfI cra, in which courts employed a voraion of the rational relationship test that was significantly strictor than today's version. Een Tribe, EMnIn, 567-86.
By contrast, in the " filled milk" casos cited by Applicants, there was a direct link betwoon a change in circumstances and the inability to achiavo a statutory objectivo.
In those cases, the changen in technology and nutrition directly negated the underlying purpose of the statute, which was to provent confusion betwoon milk and filled milk in the marketplace, and the court specifically noted that the dangor of such confusion had passed.
Milnot comoany v. Richard 89D, 350 P.Supp. 221, 225 (S.D. Ill. 1972).
Indood, numerous other products that woro virtually indistinguishable from the prohibited--filled milk were being marketed.
Id.
The inequity of this situation, and because the statuto "provido(d) no rational means for the achievement of any announced objectivo of the Act,"
led the court to overturn the statute on equal protection grounds. 14 Similarly, the statute in Messinger v. Southern Railway C21, 470 F.Supp 930 (D.S.C. 1979), had boon promised on the offect on safety of the traffic conditions and automobile and railroad technology of the 1920s.
Those conditions had not only changed but=had also negated the safety benefits of the statuto, and left railroads subject to an irrational inequity.
Egg id. at 932-33.
Hero, however, the statuto specifically states that congrossional intent is to allow development and use of nuclear energy so as to enhanco competition, and to ensure that activities under the licenso will not present a situation inconsistent with the antitrust laws.
Unless Applicants are A
4.
successful in demonstrating that thoro can be no inconsistr.ncy with the antitrust laws in the absence of a cost advantago -- a point AMP-Ohio (along with the NRC Staff, the Director of the Offico of Nuclear Roactor Regulation, and the Department of Justico) believo is directly refuted by the licensing decisions in this proceeding -- then Applicants' equal protection challengo must fall. 21/
l CONCLUSION WilEREFORE, for the foregoing reasons AMP-Ohio respectfully roquests that the-ASLB (1) reject Applicants' i
J' 21/ Of course, it is possible that the relatively high cost of Applic. nts' nuclear power might change their ability or propensity to act in anticompetitive ways.
Applicants do not, however, contend that their potential for anticompetitive behavior has changed.
Instead, they simply seem to be complaining that nuclear power is not encouraging them to restrict competition in the way they had thought it would.
I
~
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l
- 33 request that the Board answer in the affirmative the " bedrock" legal issues (2) answer the " bedrock" legal issue in the negative; and (3) terminate this proceeding.
j Respectfully submitted, OM. Oh-David R. Straus Scott H. Strauss Of Counsels Attorneys for American Municipal John Bentine, Esq.
Power-Ohio, Inc.
Chester, Hoffman, Willcox and Saxbe Spiegel & McDiarmid 17 South High Street 1350 New York Avenue, N.W.
Columbus, Ohio 43215 Suite 1100 614-221-4000 Washington, D.C.
20005 202-879-4000 March 9, 1992
9 I
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y, December 1, 1987 mtNa ettsNton Thomas A. Kayuha, Esqa Ohio Edison Company 76 South Main Street Akron, Ohio 44308 Re Filing of Partial Requirements Taritt
Dear Tom:
This is to tollow up on our telephone conversation of last week in which you confirmed my concern that Ohio Edison reads Article'III, Section 3.2, of the 1983 settlement agreement with WCOE as retaining for Ohio Edison the option of refusing partial requirements service after the expiration of the currently ef fective Energy Supply Agreement.
I told you on the phone that I was extremely disappointed with that strained reading of the settlement ag reement, and you advised me that the Company's reading is consistent with Jim Wilson's recollections of the negotiations leading :o the settlement agreement.
I have now reviewoo my notes, correspondence, etc. from 1983, which confirm the obvious and fair reading of the settlement language, and I suggest that Ohio Edison officials do the same.
The settlement agreement provides as.follows:
En the event that agreement has not been reached by January 1, 1988 with respect to continuation of service to WCOE on and after October 1,1988 Ohio Edison shall file in January, 1988 a rate schedule or rate schedules by which full or partial l
l
Thomcs A. Koyuho, Esq.
Doccmber 1, 1987 Page 2 requirements service may be obtained by WCOE or by AMP-Ohio on behalf of some or all of the WCOE members subsequent to September 30, 1988.
Simply placing this language in historical perspective leads to the inexorable conclusion that the choice of partial or full requirements service shall be made by WCOE or AMP-Ohio, not by Ohio Edison.
You will recall that prior to the commencement of service under the Energy Supply Agreement, the WCOE group had succeeded in obtaining partial requirements and wheeling service f rom Ohio Edison and were, in fact, supplying a portion of their load from other sources.
It is inconceivable that WCOE would have permitted Ohio Edison to terminate partial requirement service and reimpose full requirements servics upon the expiration of the Energy Supply Agreement, for that would have been a step backward that the WCOE group continually insisted they would never allow to occur.
In fact, Section 3.2 was inserted in the settlement agreement specifically to assure that the WCOE members would have available to them either partial or full requirements service (at their option) after 1988 and to avoid a negotiating hammer in Ohio Edison's hands as the Energy Supply Agreement neared its termination point.
My notes and correspondence duri.g the period leading up to the signing of the settlement agreement confirm the obvious.
See, for example, my August 16, 1983 letter to Mike Gribler which makes clear the mutual understanding that Ohio Edison would have on file a partial requirements rate available to the Cities and that the Company would also agree to of fer full requirements service to any municipality which so elected.
My correspondence to the WCOE members during this period continuously assured them that partial requirements service would be available upon the expiration of the Energy Supply Agreement, if that Agreement could not be extended.
In our phone conversation, I believe you virtually agreed with me that the language of the settlement agreement and its historical context would f airly lead to this conclusion but that you were persuaded to the contrary by Jim Wilson's recollections.
Like you, I place a great deal of weight on what Jim Wilson says, because I believe that he is an honorable man who would state fairly his recollections.
Fortunately, my notes of negotiating sessions may clarify this situation.
During the negotiations, we requested that Chio Edison do what Toledo Edison had agreed to do, which is to file contemporaneous 1y with the settlement agreement a partial requirements tariff pursuant to which Cities could obtain service in the event that the Energy Supply Agreement terminated without extension.
My notes of our settlement meeting on August 23, 1983, reflect Jim Wilson's opposition to having a partial requirements rate on file that early, to which I responded 4
a- -, - -
Thonca A. Koyuho, E0g.
D]ccabar 1 1aa' Page 3 (again, according to my notes) that we could agree with Ohio Edison's not filing a partial requirements rate contemporaneously with the Energy Supply Agreement as long as it agreed to tile a partial requirements tariff near the end of the Energy Supply Agreement's term.
I submit that Jim's recollection concerning a partial requirements tariff may be confusing his opposition to a 1983 partial requirements filing with more generalized opposition to any partial requirements tarif f filing.
If necessary, and as appropriate, I can produce copies of contemporaneous notes and memoranda to clients which are fully consistent with our view that each time the word "or" is used in
~
Section 3.2 of the Settlement Agreement the choice belongs to the customers, not Ohio Edison.
I would ask that you examine contemporaneous notes and memoranda in the Company's files to cee if they in feet support your contrary view.
Finally, and perhapu fortunately, this entire dispute is probably academic in any event in light of the presently-effective NRC license condition requiring Ohio Edison to offer
'either full or partial requirements service to any entity in the CCCT, at the customer's option.
This letter will confirm my oral request on behalf of AMP-Ohio and WCOE that Ohio Edison make available partial retrairements service commencing October 1, 1988, in the event that the parties are unable to agree to an extension of the Energy Supply Agreebent and that Ohio Edison make such filing with the PERC by the end of January,1988, at the same time as it files whatever tariff or tariffs it believes must be filed pursuant to the settlement agreement.
It is my hope, and the hope of the WCOE and AMP-Ohio officials, that all of this discussion is prophylactic and that future power supply arrangements between Ohio Edison and AMP-Ohio, on behalf of WCOE, can be extended by contract rather than by unilaterY4tfJtiled and perhaps litigated tarif f s.
Surely, our energies during the next two months should be devoted to reaching an agreement governing future power supply matters rather than to a dispute over the meaning of the 1983 settlement agreement.
Y a truly, aac Da.
R.
Straus cc: WCOE Executive Committee Ken liegemann John Bentine, Esq.
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- r t a l-U '.tM UNITED STATES OF AMERICA m2 E -9 P 3
- 56 NUCLEAR REGULATORY COMMISCION BEFORE TE ATOMIC SAFETY AND LICEllSING ILQ6nQ' o.
, tr. o In the Matter of OHIO EDISON COMPANY Docket No. 50-440-A ) Docket No. 50-346-A (Perry Nuclear Power Plant, Unit 1 ) Facility Operating License ) No. NPF-58) ) (Suspension of ) Antitrust Conditions) THE CLEVELAND ELECTRIC ILLUMINATING ) COMPANY ) ASLDP No. 91-644-01-A THE TOLEDO EDISON COMPANY ) ) (Perry Nuclear Power Plant, Unit 1, ) Facility Operating License ) No. NPF-58) ) (Davis-Besse Nuclear Power Station, ) Unit 1, Facility Operating License ) No. NPF-3) ) ) CERTIFICATE OF SERVICE 1 hereby certify that on this 9th day of March, 1992, copies of the foregoing Brief of American Municipal Power-Ohio, Inc. in Opposition to Applicant's Motion for Summary Dispostion and Cross-Motion for Summary Disposition were served upon each of the following by first-class mail: Marshall E. Miller, Esq. Charles Bechhoefer, Esq. l Chairman Administrative Judge l 1920 South Creek Boulevard Atomic Safety and Licensing i Spruce Creek Fly-In Board Daytona Beach, FL 32124 U.S. Nuclear Regulatory Comm. Washington, D.C. 20555 l
s . G. Paul Dollwork, III Craig S. Millor Administrative Judge Juno W. Weiner Atomic Safety and Licensing William H. Ondrey Gruber Board City llall, Room 106 U.S. Nuclear Regulatory Comm. 601 Lakoside Avenue Washington, D.C. 20555 Cleveland, Ohio 44115 Joseph Rutberg, Esq. Reuben Goldborg, Esq. Shorwin D. Turk, Esq. Channing D. Strother, Jr., Esq. Offico of the General Counsel Goldborg, Fieldman & Latham U.S. Nuclear Regulatory Comm. 1100 Fifteenth Street, N.W. Washington, D.C. 20555 Washington, D.C. 20005 Mark C. Schochter, Esq. Gerald Charnoff, Esq. Janet Urban, Esq. Shaw, Pittman, Potts & Antitrust Division Trowbridge Department of Justico 2300 N Stroot, N.W. Judiciary Conter Building Washington, D.C. 20037 555 Fourth Stroot, N.W. Washington, D.C. 20001 Philip N. Overholt U.S. Department of Energy James P. Murphy, Er.q. HE-44 Squire, Sanders & Dempsey Washington, D.C. 20585 1201 Pennsylvania Avenue, N.W. P.O. Box 407 Gregg D. Ottinger, Esq. Washington, D.C. 20044 Duncan & Allen 1575 Eye Street, N.W. D. Biard MacGuineas, Esq. Suite 300 Volpo, Boskoy and Lyons Washington, D.C. 20005 918 Sixtoonth Stroot, N.W. Washington, D.C. 20006 dDm e Scott }C Strauss Spiegel & McDiarmid 1350 How York Avenue, N.W. Suito 1100 Washington, D.C. 20005-4798 4 .___.____.______.-.__-__________._.__._________m_}}