ML20094P351
| ML20094P351 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/06/1992 |
| From: | Green D CONNECTICUT LIGHT & POWER CO. (SUBS. OF NORTHEAST, NEWMAN & HOLTZINGER, PUBLIC SERVICE CO. OF NEW HAMPSHIRE |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9204080055 | |
| Download: ML20094P351 (11) | |
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- ' 7 NEwxAw & HOLTZINOEn. P.C.
4615 L STREET. N.W.
W AS HIN GTON. O.C. 20036 5650 2029B54600
~ balas G. Creen D1UCT DIAL rJHans (202) 9534632 TELECOPina (202) 472 0501 April 6, 1992 e
U.S. Nuclear Regulatory Commission Washington, D'.C.
_20555 Attn Director, Office of Nuclear Reactor Regulation Re Public Service Company of New Hampshire Docket No.-50-443 Dear. Commissions-The Connecticut _ Light & Power Company ("CL&P") and Public Service Company of New Hampshire ("PSNH") (collectively
" Applicants") hereby respond to the reply _ filed in this matter by
.the City of-Holyoke Gas Electric Department ("HGEE") on April 1, 1992.
HG&E's reply rehashes the same stale arguments previously.
-rejected byfthe: Director (and by_the FERC, the SEC, and the United States Department of Justice).
HG&E's latest redundant filing serves only to underscore that the Director's February 19, qg 1991."no significant changes" finding la correct and should be reaffirmed.
I.
The Director's Finding That Duplicative NRC Antitrust Proceedings Are Unwarranted Reflects An-Appropriate Analysis And Does Not Merely "nafar" to the Fran 1
Once again, rather than address the Director's finding or the supporting analysis contained in the Staff Recommendation, GUf 92040e0055 920406 nh x
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U.S. Nuclear Regulatory Commission April 6, 1992 Page 2 HG&E's argument consists largely of mischaracterizing the Commission's responsibilities under Section 105c(5) of the Atomic Energy Act ("AEA").
HG&E begins by invoking a truism not in disputes it says that the Commission does not know whether the FERC conditions are adequate "without examining those conditions and the anticompetitive situation that they are intended to mitigate."
HG&E Reply at 2.
Having made this unexceptionable observation, however, HG&E leaps to the illogical conclusion that such an examination cannot be performed unless the Commission conducts a full-blown antitrust proceeding.
As Applicants pointed out in their initial response, the Commission rejected this notion over a decade ago because it offends both the wording and intendment of Section 105c(5): -"[W]e do not believe Congress intended that we conduct a proceeding to ascertain whether to have a proceeding."
South Carolina Electric & Gas co. and South Carolina public Service Authority, (Virgil C. Summer Nuclear
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Station, Unit No. 1), 13 NRC 862, 873 (1981).
The proper criterion for making a "significant changes" determination under Section 105c(5) is whether "the changes have antitrust implications that would be likely to warrant Commission remedy."
Id. at 872.
To make this determination, the Director need not conduct a full-blown antitrust hearing.
He need only take a "sufficiently hard look" to make a judgment whether the j
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U.S. Nuclear Regulatory Commission April 6, 1992 Page 3 outcome of a full-blown NRC antitrust review would require a significant " alteration or adjustment" of existing conditions.
South Carolina Electric & Gas Co. and South carolina Public S,ervice Authority, (Virgil C. Summer Nuclear Station, Unit No.
1), 11 NRC 817, 835 (1980).
The Director's finding and the Staff Recommendation show that the requisite hard look was taken more than amply by the Commission here.
Een Staff Recommendation at 13-14,20-24c 33-40.
Contrary to HG&E's assertions (HG&E Reply at 3), the NRC Staff Recommendation did not merely " defer" to the FERC.
Rather it addressed the allegations of HG&E in light of the FERC's factual findings and its remedial conditions to determine whether A
competitive issues were adequately addressed.
For example, as the Director's finding states, the Staff's analysis " considered the structure of the electric utility industry in New England and the adjacent areas" in order to assess the competitive implications of the merger.
57 Fed. Reg. at 6049 (Feb. 19, 1992).
In focusing on the post-merger competitive situation, the Staff Recommendation reviewed the findings of the FERC ALJ regarding the ownership of key transmission corridors and the dynamics of bulk power competition (Staff Recommendation at 21-24), and also considered the further analysis of these issues set forth in the FERC's decisien on exceptions.
Id ct 24.
Not only l
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9 U.S. Nuclear Rugulatory Commission April 6,-1992 Page 4 l-were the perceived potential competitive problems of the merger addressed, the Staff also considered the remedial conditions adopted by the FERC.
Id _at 22-24, 41-43._
Based on this-examination, the Staff Recommendation-concluded
[T]he actions being taken by-the FERC will adequately address concerns regarding the anticompetitive effects of NU's post-merger market power such-that the change'in ownership.
. will not have implications that warrant _ a Comnission remedy.
Iu at 42-43.
In sum,.the' Director's "no significant changes"
-finding ombodies precisely the sort of examination and analysis the AEA contemplates.
Grasping for some basis on which to justify duplicative
-proceedings, HG&E suggests-that the Director's finding is.
defective because it somehow fails to apply the_ substantive
" standard" ingrained in the AEA, and because it does not explicitly refer to'the Clayton-Act or the Department of Justice Merger Guidelines.- HG&E Reply at 2-3.
These contentions y
transparently lack substance.
The validity of a "no significant changes" finding does not depend on whether particular
~~ guidelines," " standards," or other talismanic words are incantud in a decision.
The statute simply requires that a-ressonable assessment be made.
For example, the Department of Justice not only has cleared this merger three separate times under its Hart-Scott review, it explicitly advised the NRC that it perceived "no
NzwxAw & HoLTzmona. P.C.
U.S. Nuclear Regulatory Commission April 6, 1992 Page 5 significant changes" and no basis for en NRC antitrust review of this merger.
HG&E apparently now would have the Commission believe that because it did not specifically mention them, the Department of Justice did not take into account its own merger guidelines.
Nor did the NRC Staff ignore its own obligations and merely " assume" that antitrust standards were catisfied," as HG&E alleges.
HG&E Reply at 2.
Although Holyoke asserts that the Director and Staff failed to analyze the FERC's conditions in the c,nte"+. af the AEA standard (HGEE Reply at 2), as shown above, the Staff performed a conscientious evaluation of the overall competition issues and HG&E's specific contentions.
The standard applicable to Commission antitrust assessments is whether there exists a " reasonable probability" that the antitrust laws or policies will be contravened; this has been termed an
" incipiency" standard, i.e., a criterion intended to forestall future anticompetitive conduct that otherwise would probably occur.
E.g., Consumers Power company, (Midland Plant Units 1 and 2), ALAB-452, 6 NRC 892, 926 (1977).
Though the Staff Recommendation and Director's finding do not intone the specific words " reasonable probability," the Staff's analysis looked toward the future and evaluated the FERC conditions to determine whethar they adequately nip in the bud potential anticompetitive
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I Navnw & Hotiztwoma P.C, U.S. Nuclear Regulatory Commission April 6, 1992 Page 6 effects of " post merger market power."
Staff Recommendation at 43, and passim.
Thus, fairly read, the Staff's Recommendation demonstrably embodies an " incipiency" or a " reasonable probability
- standard.
Employing this standard the Staff Recommendation reviewed the compotitive issues and properly concluded that the FERC conditions are adequate. 1/
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II.
There Is No Reason For The Commission To Enmesh Itself In an AnalyAim Of Merger Benefits Not content with arguing that the Commission must undertake a duplicative antitrust review hearing, HG&E next argues that the Commission must duplicate PERC's analysis of the merger benefits flowing from Applicants' nuclear operations.
1/
This was hardly a surprising conclusion given the comprehensive scope of the FERC's analysis and the nature of the competitive problem perceived to be portended by an unconditioned merger.
A key part of the analysis conducted by the FERC concerned the status Of competition in New England over the long term, i.e., " reasonably probable" future effects.
The FERC found that absent the merged company's control over transmission, " buyers could reach and rely on new generating resources, which would then provide buyers with alternatives to purchasing from the merged company."
FERC thus concluded-that: "[t]he merged company's enhanced control over key transmission corridors is the root of the merger's incremental anticompetitive ef fects "
Northeast Utilities Service Co., Opinion No. 364, 56 FERC i 61,269, at 62e007 (1991).
FERC ren.edied this perceived competitive problem by imposing far-reaching transmission conditions.
In short, this merger va's perceived to create a transmission ~ access problem absent conditions -- a problem that has now been addressed comprehensively by the federal agency having expertise over electric transmission issues.
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U.S. Nuclear Regulatory Commission April 6, 1992 Page 7 HG&E ceserts that the FERC's conditions *0nly mitigate" and do not alleviate the competitive impact of the merger, and that therefore the Commission must assay whether any remaining impact is outweighed by the merger benefits.
HG&E Reply at 5.
The short answer is that HG&E's premise is wrong.
The FERC did not leave some anticompetitive impact only partly assuaged. 2/ The FERC made this crystal clear in its decision on rehearing while explaining its conditions regarding transmission pricing:
We believe that these pricing goals are fully consistent with our statutory responsibility Ap oncure that NU's transmission commitments, as modified b.y this commission. fully mitigate the increased market power of the merged company.
Northnaat Utilitier Service Co.,
Opinion No. 364-A, 58 FERC 5 61,070, at 61,208 (1992) (emphasis added); man also 56 FERC at 62,014.
FERC's remedial conditions art thus designed to prevent the merged company from exercising any enhanced market power in the future.
HG&E's effort to substitute semantics for substance fails.
Any way one looks at this matter, the same conclusion always presents itself: there is no plausible reason for thin 2/
Even if this were not the case, HG&E's failure to identify any competitive problem warranting an NkC remedy wou]d be fatal to its request for NRC antitrust proceedings.
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NawxAn & HoLinworm. EC.
U.S. Nuclear Regulatory Commission April 6, 1992-Page B Commission to-undertake a duplicative antitrust review proceeding.
III. HG6E Adds Nothing New Megarding NAESCo's
-Contractual Arrangspents HG&E also picks up the argument abandoned by MMWEC and cavils about the exculpatory clause in the Management Agent Operating-Agreement.
HG&E raises nothing new.
It falls to address, much less overcome, the Staff's finding that these concerns have.nothing to do with competition.
And it ignores the fact that the Staff has already obtained NAESCO's acquiescence in a license condition divorcing itself from the marketing or brokering of power or energy produced by Seabrook.
Staff 1-L Recommendation at 34.
IV.-
HG&E's Request For Clarification Is Without
-gerit Finally, the Director should reject HG&E's so-called i
request for " clarification."
HG&E asks the Director to " clarify" that-the' license transfer is conditioned upon compliance with current and future conditions that might be imposed by other agencies or upon judicial review.
HG&E Reply at 6.
This request makes no sense.
To the extent HG&E's request asks the Commission to acknowledge that Other agencies can enforce their own conditics:, it is superfluous.
Plainly, if other agencies with jurisdLction over the merger impose conditions, those conditions l..
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April 6, 1992
'Page 9 will be effective as provided by law.
To the extent HG&E's request invites the Commission to assert its own authority to enforce other agencies' conditions, it is presumptuous and without basis.
The NRC has never tried to police conditions imposed by other agencies, nor does any warrant exist for doing so.
CONCLUSION The NRC's issuance of the license amendments sought by Applicants now stands on the critical path to final realization of this major bankruptcy reorganization.
This process has involved nearly a hundred parties, including virtually every electric utility in New England, numerous municipalities and electric cooperatives, six States, and various state and federal regulatory authorities.
Any delay occasioned by needless l-duplicative NRC proceedings would adversely impact this delicately balanced bankruptcy reorganization and harm the interests of an entire region.
HG&E now stands alone before this Commission among all of the interests affected by the outcome of this matter in urging this unthinkable and unwarranted result.
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. Applicants respectfu ly ask that the Commission reject HG&E's 1
meritless contentions and issue the requested license amendments as soon as possible.
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Naw>ux & Hos.rztworn, EC.
U.S. Nuclear Regulatory Commission April 6, 1992 Page 10 Respectfully submitted,
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. bfh !bu ftM Douglas G. Green David L. Schwartz NEWMAN & HOLTZINGER, P.C.
1615 L Street, N.W.
Suite 1000 Washington, D.C.
20036 (202) 955-6600 C. Duane Blinn Gerald Garfiela Day, Berry & Howard CityPlace Hartford, Connecticut 06103 (203) 275-0100 Attorneys for THE CONNECTICUT LIGHT AND POWER COMPANY and PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE cc:
Mr. Anthony T. Gody Chief, Policy Development and Technical Support Branch Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Cor. mission Joseph Rutberg, Esq.
Deputy Assistant General Counsel U.S. Nuclear Regulatory Commission Mr. Thomas T. Martin Regional Ad.ministrator U.S. Nuclear Regulatory Commission Region I
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i U.S. Nuclear Regulatory Commission April 6, 1992 Page 11 Senior Project Manager Project Directorate I-3 Division of Reactor Projects U.S. Nuclear Regulatory Commission Mr Noel Dudley NRC Senior Resident Inspector Seabrook, New Hampshire 03874 Mr. George L.
Iverson, Director I
Office of Emergency Management Concord, New Hampshire 03301 Document Control Desk U.S. Nuclear Regulatory Commission David J. Bardin, Esq.
Steven R. Miles, Esq.
Arent, Fox, Kintner, Plotkin & Kahn Robert C. McDiarmid, Esq.
Daniel I. Davidson, Esq.
Spiegel & McDiarmid Alan J. Roth, Esq.
Scott H. Strauss, Esq.
Spiegel & McDiarmid Mr. H. Huehmer, Manager Light and Power Department Town of Hudson, Massachusetts Mr. Joseph M. Blain, General Manager l
Taunton Municipal Lighting Plant
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