ML20096A628
| ML20096A628 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry, Comanche Peak  |
| Issue date: | 05/07/1992 |
| From: | Charnoff D, Jerome Murphy CLEVELAND ELECTRIC ILLUMINATING CO., OHIO EDISON CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, SQUIRE, SANDERS & DEMPSEY, TOLEDO EDISON CO. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#292-12898 91-644-01-A, 91-644-1-A, A, ALAB-182, ALAB-279, ALAB-452, ALAB-475, ALAB-575, ALAB-646, ALAB-837, CLI-73-07, CLI-73-7, CLI-75-08, CLI-75-8, CLI-77-13, LBP-77-20, LBP-77-24, LBP-79-27, LBP-86-10, NUDOCS 9205110159 | |
| Download: ML20096A628 (145) | |
Text
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In the Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440-A
) 50-346-A (Perry Nuclear Power Plant, Unit 1, )
Facility Operating License ) No. NPF-58) ) (Suspencio" of
) Ant i* rust Conditions)
THE CLEVELAND ELECTRIC ILLUMINATING ) COMPANY ) ASLBP No. 31-644-01-A THE TOLEDO EDISON COMPANY )
)
~; (Perry Nuclear Power Plant, Unit 1, ) Facility Operating License ) No. NPF-58) ) (Davis-Berse Nuclear Power Station, ) Unit 1, Facility Operating License ) No. NPF-3) )
)
APPLICANTS' R CLY TO OPPOSITION CROSS-MOTIONS FOR S'UMMARf DISPOSITION AND RESPONSES TO APPLICANTS' MOTION FOR
SUMMARY
DISPOSITION 3 James P. Murphy Gerald Charnoff Colleen Conry Deborah B. Charnoff Mark A. Singley e, SQUIRE, SANDERS & DEMPSEY 1201 Pennsylvania Avenue, N.W. SHAW, PITTMAN, POTTS & Washington, D.C. 20044 TROWBRIDGE (202) 626-6600 2300 N Street, N.W. Washington, D.C. 20037 Counsel for The Cleveland (202) 663-8000 ., Electric Illuminating Company and The Toledo Edison Company Counsel for Ohio Edison Company May 7, 1992 O 0 9205110159 920507 j DR ADOCK05000{h ) $L) 6
A w TABLE OF CONTENTS -l i I ()f Pace I. INTRODUCTION &.$UMMARY.......................... ......... 1 j
}
.I I . ..ARGUMEN4.................................................. 4 Ot A. The Fundamental Legal Issue In This Case, Largely Left-Unaddressed By The
-Opposition, Is The Meaning Of.The Condi-tional Language That Triggers An Anti-trust Reviev Under Section 105(c) Of The i
Act'................................................-.. 4 l
'0: . .
l
- l. Issues of Competitive Behavior.................. 9 j 1
- 2. The Farley Theory.............................. 13
- 3. Issues of' General Antitrust Law................ 19 ,
O ' B. -Applicants' Competitive Position Cannot Be Er.hanced, And Hence A " Situation" Cannot Be " Created" Or " Maintained," By A High-Cost Facility................................ 29 ' 10, C. The Legislative History And Adjudicatory ) Applications Of-Section 105(c) Provide Compelling E'tidence That Low Cost Is A
. Threshold Requirement For Agency Action Under Section 105(c), Notwithstanding-The Opposition's. Effort To. Minimize This O Evidence............................................ 39
- 1. -Legislative Hi= tory............................. 40
- a. Use of legislative history................ 40 O b. Contents of= legislative history.................................. .41
- c. -The "prhetical value"; context of the legislative history................ 57 l(3 2.- Cases Applying Section 105(c).................. 62 D. The Opposition's Red Herring Arguments Are-Beside The Point................................ 70
- 1. The Impact of Removing the License
.:0~ Conditions..................................... 71
-i-O' d
A): \ i l Page l l
- 2. The Opposition's Inapplicable Legal
.()l Claims......................................... 74 l
E. ,The Opposition's Attempts To Refute ! Applicants' equal Protection Argument i Are Unavailir. ....................................81-
~ '7 C 1. The Faulty Invalidation Argument............... 81 1
- 2. The Absence of a Rational Basis................ 83
- 3. Applicants' Legal' Authority-Is Persuasive..................................... 87 O.
F. The Doctrines Of Collateral Estoppel, Res-Judicata, Lav Of The Case, and Laches Do Not Preclude Review of the
" Bedrock" Legal Issue................................90 .3 ( 1. The Doctrines of Collateral Estop-pel and Res Judicata Do Not Apply.............. 92 a._ The earlier-" nexus" arguments............. 93
_ _ b. The_ exception of changed "Cl circumstances............................. 99
- 2. The Lav of the Case Doctrine Does Not Apply..................................... 105
- 3. The Equitable Doctrine of Laches
'O J Does'Not. Apply................................ 108 m
III. CONCLUSION.............................................. 111 .0:..
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TABLE OF AUTHORITIES CASFS:- Page l Alabama Power Co., (Joseph M. Farley C. -Nuclear Plant, Units 1 & 2), LBP-77-24, 5 - N.R.C._804 (1977), modified, ALAB-646, 13 N.R.C. 1027 (1981), aff'd, 692 F.2d 1362 (llth Cir.1982) , . cert . denied, 464 U.S.
.816 (1983)......................................_........... passim .O.-
Alabama Power Co. (Joseph M. Parley Nuclear
' Plant , . Units 1 - & . :2 ) , ALAB-182,-7 A.E.C. 210
-(1974), remanded on other1 grounds, CLI-74-12,:7_A.E.C. 203 (1974)............ 92, 100, 103, 104, 107-
'O'-
- Benn:tti v. Tucket 827 F.2d 63 (7th Cir.
1987).................................................... ... 109
. Carolina Power & Light Co- (Shearon Harris Nuclear : Power Plant), ALAB-837, 23 N.R.C.
525 (1986);........'........................................ 92, 99 W h"' Cities of Statesvi-lle v. AEC, 441 F.2d_962-(D.C. Cir. 1969)................................. ............ 61
-Consolidate'd Edison Co. of New York u Inc.
(Indian Point, Unit Nos. 1, 2& 3), o .CLI-75-8,-2 N.R.C. 177 (1975)...........................
... 99 Consumers Power-Co. (Midland Plant, Units 1 l&.2), ALAB-452, 6.N.R.'C.-892 (1977)................... 65, 66,_69 Detroit Edison Co. (Enrico Fermi-Atomic
- Q; Power. Plant, Unit No. 2), LBP-78-13, 7 N.R.C.-'583,_aff'd, ALAB-475, 7 N.R.C. 752 (1978)..................................................... passim Duke-Power'Co. (William B. McGuire Nuclear
' Station,-Units 1 & 2), LBP-77-20, 5 N.R.C.
(y 680-(1977)................................................... 100 East New-York Savings Bank v. Hahn, 326 U.S. 230 (1945)............................................... 89
.EEOC v. Vucitech, 842 F.2d 936 (7th Cir.
'OL 1988)........................................................109
-iii- .O
0 1 Pace I1 Engineers Public Service Co. v. SEC, 138 F.2d.936z(D.C. Cir.-1943), vacated, 332 U.S. 788 (1947)'............................................... 82 1 l
-Ft. Pierce Utils. Auth, v. United States, j 606 F.2d 986 (D.C. Cir.), cert. denied, 444
- O' -
'U.S. 842-(1979)............................................... 59 Gallacher v. Evans, 536 F.2d 899 (10th Cir.
1976)......................................................... 89
- General Public Utilities Nuclear Corp.
(Three Mile Island. Nuclear Station, Unit 1),_LBP-86-10, 23 N.R.C. 283 (1986)..................... 100 Houston-Lichtino & Power Co. (South Texas Project,: Units 1.& 2), LBP-79-27, 10 N.R.C. g 563 (1979), aff'd, ALAB-575,'ll N.R.C. 14
-(1980)........................................................ 92
' Houston Lightina-& Power Co. (South Texas Project,-Units 71 & 2), CLI-77-13, 5 N.R.C.
13031(1977)............................................... 46, 61 s O Je'fferson-Parish Hosp. Dist. No. 2 v. Hyde, 446-U.S. 2.(1984)............................................. 31 Kansas-Gas &-Electric Co. (Wolf Creek Gen-erating Station, Unit No. 1), ALAB-279, 1 N.R.C.J558'(1975).................................... 66, 68, 69 g): Louisiana-Power & Licht Co. (Waterford Steam Electric Generating Station, Unit 3), CLI-73-7', 6'A.E.C. 48--(1973).............................. 66, 68 g' -Louisiana PoverE&-Licht Co.-(Waterford L Steam Electric Generating Station),
=LBP-73-46, 6-A.E.C. 1168 (1973)....................... 65, 67, 68 o Massachusetts Bd. v.1Mure,ia,-427 U.S. 307 (1976)........................................................ 87 O~
- i. 'Milnot v.-Richardson, ""O F. Supp. 221 l (S.D. Ill. 1972).............................................. 86 H
' Nashville, Chattanooga & St. Louis Ry. v. ! Walter _s,_294 U.S. 405 (1935).................................. 89 l0.
-i<-
lO;
u
/~)
u Paae
;9 NessDinv. Corp. v. United States, 595 F.2d 585-(Ct.-C1.-1979)............................................ 99 Northeast Utils. Serv. Co , Opinion No.
364-A, 58 FERC 1 61,070 (Jan. 29, 1992)............... 24, 25, 26 O' Northern Pacific Ry. v. United States, 356 U.S. 1-(1958)................................................. 31 Ohio: Edison-Co. (Perry Nuclear Power Plant, Unit 1), LBP-91-38, 34 N.R.C. 229.(1991)..................... 106 Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1), CLI-91-15, 34 N.R.C. 269, amended
-lur Order (Nov. 21, : 19 91 ) . . . . . . . . . . . . . . . . . . . . .................. 2
' Otter Tail Power Co. v. United States, 410 0; U.S. 366 (1973)............................................... 26 Panitz v. District of Columbia, 112 F.2d 39 (D.C. Cir. 1940).............................................. 82 Philadelphia Elec. Co 2 (Limerick Generating 6
Station, Units 1 & 2), LBP-82-43A, 15 N.R.C. 1423 (1982)........................................... 102 Powell v. Zuckert, 366 F.2d 634 (D.C. Cir.
-1966)........................................................ 109
~
c) Public Serv. Co. of-Indiana, Inc. (Marble Hill Nuclear, Generating Station, Units 1 & 2), ALAB-493, 8 N.R.C. 253 (1978)....................... 105, 107
- Publ i c -' Serv . Co. of Nev' Hampshire (Seabrook Station,_ Units 1 & 2), ALAB-349, 4 N.R.C.
Lof 235-(1976)................................................... 100 Public Serv. Co. of New Hampshire (Seabrook Station,DUnits 1 & 2), LBP-89-3,_29 N.R.C. 51,-aff'd, ALAB-915, 29 N.R.C. 427 (2989).................... 105 in:
" Toledo Edison Co. (Davis-Besse Nuclear
-Power Station, Units 1, 2 & 3; Perry .
Nuclear Power Plant, Units 1 & 2),
.LBP-77-1, 5 N.R.C. 133 (1977), aff'd as modified,-ALAB-560, 10 N.R.C. 265 (1979)................... passim
?O
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- O-
I l
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i i l Page i ('y . United States Dept.-of Energy (Clinch River Breeder. Reactor. Plant), CLI-82-23, 16 N.R.C. 412 (1952)........................................ 92, 100 United' States v. Grinnell Corp., 384 U.S. (y 563 (1966).................................................... 23 Van Boura v. Nitze,_388 F.2d 557 (D.C. Cir, 1967)............................. .......................... 108 Vermont Yankee Nuclear Power Corp. (Vermont O' Yankee Nuclear Power Station), LBP-87-17, 25 N.R.C. 838 (1987), aff'd on this issue and modified on other_orounds, ALAB-869, 26 N.R.C. 13 (1987)..................................... 96, 97, 107 Wessinger v. Southern Ry., 470 F. Supp.-930 .g (D.S.C. 1979)............................................. 88, 89 STATUTORY-MATERIALS:.
-Sherman Act, 15 U.S.C. 5 1............................. 20, 23, 31
'O-Clayton Act, 15 U.S.C. S 14............................... 20, 31 Atomic Energy Act of 1954, Pub. L. No. 83-703 S 102, 68 Stat. 919, 936 (1954), as amended,-42 U.S.C. S-2135.................................. passim ...O - LEGISLATIVE MATERIALS: Report-of the Joint Committee on Atomic
'Enercy:- Amending the Atomic Enercy-Act of
.O 1954, as Amended. to Eliminate the Require-ment for a-Finding of-Practical Value, to-Provide for Prelicensing Antitrust Reviev
.of Production and Utilization Facilities 2 and to Effectuate Certain Other Purposes Pertainina'to Nuclear Facilities, H.R. No, t)< :1470, 91st Cong., 2d Sess. 9 (1970),
reprinted in 1970.U.S.C.C.A.N. 4981....... 40,-41, 42, 43, 58,:61 [Hearinos Before 'mhe ' Joint Committee on
' Atomic Energy on Participation by Small Electrical Utilities in Nuclear Power, 90th
- () Cong., 2d Sess. 261 (1968)................................. 59, 6C
-vi-
-0.
)
I)h l l 2
-i Pace
~Q Prelicensino Antitrust Review of Nuclear Powerplants,-Hearinos-Before the-Joint Committee on Atomic Eneray. Part 1, 91st Cong., 1st Sess. 1:(1970)................. 43, 45, 46, 55,-58, 61 rs Prelicensino Antitrust Review of Nuclear i ~ Powerplants, Hearinos Before the Joint Committee on Atomic EnerQy, Part 2, 91st Cong., 2d Sess. 461 (1970)................................. passim i n" REGULATIONS: 1 0 oC . F . R . ' P a r t - 5 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 0 29 Fed. Reg. 221 (1966)....................................... 60 10 31 Fed.; Reg. 221 (1966)................................... 55, 58 31 Fed.- Reg. 16 , 7 3 2 - ( 19 6 6 ) -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 0 36 Fed. Reg.- 17,888 (1971).................................... 35 (3 --
- 36' Fed. Reg. 19,711 (1971).................................... 35 37 Fed. Reg.-- 9 , 410 ( 19 7 2 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5 37 Fed L' Reg. 14,247 (1972).................................... 35 oO !
~ 52 Fed.: Reg. 41,288 J1987).................................... 80 53 Fed._ Reg. 35,996 (1988).................................... 81 0- -OTHER AUTHORITIES: An Analysis of-Nuclear Powerplant Operations Costs, Energy-Information Administration, Office.of Coal, Nuclear, Electric and Alternate Fuels, DOE /EIA-0511
- () (releasedLMarchE15, 1988).................................... 101 Annual Report to Conoress of the Atomic Eneroy Commission-for 1970-(Jan. 1971)........................ 60
~
Black's Law Dictionary (6th ed. 1990)..................... 10, 92 !O g-L -vii-0'
0 Page ry ' 2 Kenneth C. Davis, Administrative Law
-Treatise (2d ed. 1979 & Supp. 1989).......................... 100 Cleveland Plain Dealer, Apr.' 12',-1992........................ 109 D nald C. Cook Nuclear Plant, Units 1 & 2, Oc Final' Environmental Statement (1973)........................... 56 San Onofre. Nuclear Generating Station,
' Units 2-&'3, Final Environmental Statement-(March 1973) ................................................. 51 P
^#
San Onofre Nuclear Generating Station, Units 2 & 3, Applicants' Environmental Report, Construction Permit Stage _(July 1970)......................................................... 51 o
.O. %f.
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~= UNITED STATES OF AMERICA
' NUCLEAR REGULATORY COMMISSION Oj +-BEFORE THE ATOMIC SAFETY.AND"LICENSTNG BOARD
'l x -
)
@ 'In the Matter =of )
.)
. OHIO EDISONLCOMPANY- ') Docket No. 50-440-A T ). 50-346-A
' (Perry N.uclear Power Plant, Unit 1, ') .
Facility Operating-License ) 0- -No. NPF-58) ) ( Suspe ns i o_n-- o f
) Antitrust Conditions)
'THE CLEVELAND-ELECTRIC ILLUMINATING
)
lCOMPANYL ) ASLBP No. 91-644-01-A
- THE: TOLEDO. EDISON COMPANY )
)
(Perry Nuclear.PowerLPlant, Unit O' 1., ) Facility'OperatingELicense
) .-
No.-NPF-58) )- (Davis-Besse' Nuclear Power Sietion, ) l Unit 1,-Facility Operating Licerse
~
)
-No.-NPF-3) ~)
JO ; .__ ) . APPLICANTS'--REPLY TO OPPOSITION. CROSS-MOTIONS
-FOR
SUMMARY
DISPOSITION AND RESPONSES-TO APPLICANTS' 'HOTTON L FM
SUMMARY
DISPOSITION 01 I '. INTRODUCTION &
SUMMARY
l O -- F - .
.OniJan 3ry 6, 1992,7 Ohio: Edison Company ' ("OE") ,- The Cleve-
' land' Electric.. Illuminating _ Company ("CEI") and The Toledo Edison Company: _(^ TECo") (collectivaly, " Applicants") filed a Motion for
< O- : ,
- Summary Disposition,(" Applicants' Motion') on the bedrock legal u
I !O' - m y a y_+.p y -4 na
- __- M _m-++ .= 9, n -
~
1 i 1 O issue.in this case.1/ Opposing responses to that Motion, in some cases combined with cross-motions for summary disposition, were O: filed on_ March 9_, 1992 by the Staff of the Nuclear Regulatory Commission _("NRC Staff"),2 the Department of Justice ("DOJ"),E the City of Cleveland (" Cleveland"),S# American Municipal Power-Chio, Inc. (" AMP-O"),E! and Alabama Electric Cooperative (" Alabama")5 (collectively, the " Opposition"). This Reply addresses the arguments raised by the opposition in their Marcn 9 Oy filings. In this Reply, Applicants focus on the legal issue in con-O: troversy in this case and, in so doing, put to rest the miscella-neous and largely diversionary claims made by the Opposition. .O 1/ See Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1), CLI-91-15, 34 N.R.C. 269, amended by Order (Nov. 21, 1991) at-3-n.3. 40 2/ NRC Staff's Answer in Opposition to Applicant's Motion for , Summary Disposition and NRC Staff's Cross-Motion for Summary Disposition, March 9, 1992 ("NRC Staff Answer"). L 1/ Response of the Department of Justice to Applicant's Motion for Summary Disposition, March 9, 1992-("DOJ Response"). N3 1/ . Motion for Summary Disposition of Intervenor, City of Cleve-land, Ohio, and Answer in Opposition to Applicants' Motion for Summary Disposition, March 9, 1992 (" Cleveland Answer").
-l/ Brief of American Municipal Power-Ohio, Inc. in Opposition 13 to Applicants Motion for Summary Disposition and Cross-L Motion for Summary bisposition, March 9, 1992 (" AMP-O Brief").
H . 5/ JAlabama. Electric Cooperative's Combined Cross-Motion for
-Summary Disposition and Response to Applicants' Motion for d3 Summary Disposition, March 9, 1992 (" Alabama Response").
i l 0
'O Specifically, Applicants' Reply is divided into the following six propositions: O (1) This case is about the meaning of section 105(c) of the Atomic Energy Act of 2954, as amended ("the o Act"), 42 U s.c. s 2135(c), and specifically, whether " activities under a license" can " create or maintain a situation inconsistent with the o antitrust laws"2/ when a licensed facili*y does not produce low-cost power. The Opposition's the-ories of the case do not focus with precision on O the language of section 105(c) and thus do not address this fundamental legal issue. (2) Notwithstanding the Opposition's claims, Appli-O cants' competitive position -- to the extent it is favorable -- has not been, and cannot be, "cre-ated" or " maintained" by a high-cost power plant. O - (3) Notwithstanding the Opposition's claims, relative cost was a determinative factor in the enactment O: and application of section 105(c). (4) Many of the Opp,sition's arguments are red herring assertions and alarmist claims about the factual O and legal consequences of granting the relief O 1/ 42 U.S.C. 5 2135(c)(5). O
(j
' Applicants seek. These arguments are factually-wrong and legally' inapposite.
O-._
-(5) The Opposition's interpretation of Section l'05(c) is unconstitutional; in contrast, Applicants' C) interpretation is not.
(6) Cleveland is incorrect about the application to this case of the doctrines of res judicata, col-O lateral estoppel, law af the case, and laches. II. ARGUMENT lO'- The Fundamental-Legal Issue In This Case, Largely
~
A. i Left Unaddressed By The opposition, Is The Meaning Of_The Conditional La..guage That' Triggers An 10 Antitrust Review Under Section 105(c) Of The Act l' It is ironic, indeed, that the NRC Staff asserts that Appli-O -cants' Motion fails to address the language in Section 105(c) of
)
'the Act that triggers NRC's antitrust review authority,E/ for it is the specific, conditional language of-Section 105(c) on_which
- O Applicants' Hotion is founded. Indeed, Applicants' Motion is l
[0 - l, E/ NRC Staff Answer at 7. In fact, there is a virtual chorus
-among the Opposition on this point. See AMP-O Brief at 7
("the Applicants are uninterested in the language of Section 105(c)"); Cleveland Answer at 16 (" Applicants' motion, how-ever, makes no meaningful effort to analyze the provisions O of Section 105(c) to support Applicants' position.") lO
h O
' devoted to an analysis of Section (c).E# Applicants will not repeat.the detailed analysis of Section 105(c) contained in their i O
Motion.- Nevertheless, what-cannot be overemphastzed is the cen-l
- trality to this case of-the meaning and purpose of Section '
\
'105(c)'s-conditional "whether" clause, i.e., "whether the activi-0-
ties-under a license would create or maintain a situation incon-sistent with the antitrust laws." O The Opposition not only argues wrongly that Applicants do not address the statute, but they also mistakenly assert that the statute is. clear on its face, and that it is not about cost.1S' O 2/ See Applicants' Motion at 31-33 (description of Section 105 and the " particularized regime" specified in subsections (a), (b), and (c)); id at 15-30 (description of NRC's lim-ited and unique antitrust authority under-Section 105(c) in .O : contrast.to the plenary antitrust authority vested in other Federal agencies, as well as in private attorneys general); id. at 34-45 (description of legislative history leading to adoption of conditional language set forth in Section 105(c)); id. at 45-57 (description of case law's treatment of'particular nature:of NRC's authority under.Section ,L O -105(c)); id. at 33,E57-75 (analysis of specific circum-stances excluded by Section 105(c)'s conditional language, i.e., circumstances when licensed activities.do not-create or maintain a situation inconsistent with the antitrust 16vs);-see also id at 77-88 (the-NRC Staff and DOJ advocate an' interpretation of Section lC5(c) that denies equal pro-0: tection under the law). lE/- Cleveland Answer at 16 ("the statute is plain and unambigu-ous");-NRC Staff Answer at 7 ("the clear statutory language does.not require a finding of low cost electricity as a con-dition precedent to the Commission's antitrust authority."); .O: - DoJ Response at 9-10 l"Despite the clear language of the Act, Applicants ask this Licensing Scard to read into the Act a. condition precedent . . . ."); AMP-0.Brief at 7 ("Sec-tion 105(c) plainly does not require a finding that a
. nuclear plant produce relatively ' low cost' power. . . . ");
T) Footnote continued on next page. o.-
0- , The Opposition is fixated on the fact that the word "rtst" is not in Section_105(c). But this is hardly +.he determinative test, r"v for under.that principle, the due process clause of the Constitu-tion'is not about fairness. Moreover, it is no more than self-serving and certainly not self-evident that the conditional lan-O guage of Section 105(c) is clear on its face. The only reason why 'the Opposition taakes such a claim is because they do not want the Board to seriously examine the legislative history and the O adjudicatory applications of the conditional language of Section 105(c); for, as Applicants showed in their McLion and reemphasize in this Reply,11/ these indicia of the meaning of Section 105(c) lend enormous support to Applicants' position. Before focusing on these well-established interpretive tools for undetstanding a statutory provision, however, it is helpful to address the pre- + O-l cise, semantic issues presented by Section 105(c), as well as the l. theories of the case that are presented by the Opposition in lieu of Applicants' cost theory. Three points of semantics deser'e iO particular mention at the outset: (1) The inclusion in Section 105(c) of the word 10 "whether" indicates that activities under a f Footnote continued from previous page. () Alabama Response at 8 ("The ' express language of the statute' offers no Fupport to Applicants' claim that the economics of power from thei/ nuclear facilities must be determined in order to make an affirmative Section 105(c)(5) finding.") T) 11/ See Section II.C, infra.
!O
i 0; license sometimes prompt NRC's antitrust remedial authority . a:td somet imes they do not. If this were CJ not the case, . 9ect ion 105(c) would not include the word "whether"; instead, all activities under a license would prompt the imposition of antitrust
.0-conditions, and the NRC would not be required to determine "whetner" they do.
()J (2) The specific activities under a license that prompt the imposition of antitrust conditions by i the NRC (in contrast to the remedial authority of OL other agencies charged with antitrust'responsibil-L ities under the Federal antitrust laws,12/) - are those activities that " create or maintain a situa-
.O - -tion inconsistent with the antitrust laws." Con-versely, those activities under'a license that do not " create or maintain. . . " simply do not-trig-
- () - ger NRC's antitrust authority.
(3) Once the specific' language of Section 105(c)'s I_. -conditional standard of review is evaluated, the
- O-only remaining issue is whether a high-cost f ac il-ity1can " create or maintain . . . Logic dictates that it cannot, for the incremental impact on the lO
( marketplace of a.less competitive product than is L l !O l_2/ See Applicants' Motion at 25-31.
!O
O c',herwise sva11able necessarily cannot enhance the l"' product owner's competitive position in that mar- ~ 041 - ket. As discussed in more detail in Section 11.9, infra, the efforts by the opposition notwithstand-ing, the only conerent and logical interpretation O-ot' Section 105(c) i s the Applicants' interpretation.12# O-In their effort to rebut Applicants' analysis of Section 105(c), the opposition expends considerable energy (and paper) on , formulating a theory of the case; however, these theories simply LO do not adequately explain the meaning of Section 105(c)'s condi-tional antitrust standard. The Opposition's theories tall into three categories (1) the competitive behavior theory; (2) the JO
- scope n' NRC's review and remedial authority under Section 105(c)
(the'Ei y) theory; and (3) theories based-on monopoly and other general aatitrust principles.
- O 1
r .O 13/ Moreover, as Applicants' Motion made clear, this conclusion-(31 also follows from.the history of Section 105(c)'s promulga-L tion and use,'for neither the-legislators who adopted Sec-L - tion 105(c), nor the proponents of the-p;ovision that was l~ adopted, nor the subsequent interpreters of Section 105(c) intended NRC to exercise its antitrust remedial authority in the absence of-a low-cost facility. See Applicants' Motion 0 - at 34-57 3-0: w -%'4i' -#.*ev a-*w,. , gu e.----- y gp-e ae p,- y-g-yyrr+gs.., s -er.p-ays,.-wwu.--wsh!e w '1 r a g*em -wi r r = m--wew-erm w w v 1r 4-v t'-T--" @
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- 1. Issues of Comp 1titive Behavior 0- The general thesis advanced by all of the Opposition par- l ties, but addressed in most detail by Cleveland, is thqt the critically important consideration in Section 105(c) analysis is O the competitisu behavior of licensees and not "the relative cost !
of the power from the nuclear unit."U ' While Cleveland acknovi-edges, in passing, that there must be "a nexus, a relationship, I O between the antitrust conduct of the Applicants and the 'sctivi- > ties under the license'",E# Clevelaad pays short shrift both to
.this critical requirement and to the centrality of cost in satis-O. tying this requirement. '
rocusing instead on issues of competitive behavior, Cleveland spends considerable time reviewing the record in the Davis-Besse/ Perry antitrust proceeding. Of particular interest to Cleveland is the dominant position of the licensees in the 1970's-in Ohio with respect to the sale of electricity.E# Cleveland also reviews-the NRC's concerns and findings in that proceeding with respect to the use by the licensees of their mar-ket dominance. E M/ Cleveland answer at 3. M/ g. at 4 (quoting 42 U.S.C. F 7'35(c)(5)). M/ M. at 8-15..
- l. M/ M. at B-15.- Even Cleveland's focus here -- on Applicants' l . allegedly blocking Cleveland's access to bulk power -- is a O- rootnote continued on naxt page.
L - O.
l l 0 i Applicants do not disagree with Cleveland that a detailed analysis was conducted during the NRC's Davis-Besse/ Perry anti-trust proceeding of Applicants' market oosition. In fact, Appil-cants made this point in their Motion.M# Furthermore, as to how Applicants used the's market position in the 1970's to compete in the marketplace, Applicants have no dispute with Cleveland that considerable-focus was placed on this question in the Davis- - P Besse/ Perry antitrust proceeding. As Cleveland knows, for the purposes of argument, Applicants have chosen to accept those , findings in this case.U #
'O Footnote continued from previous page.
.O tacit recognition by Cleveland, perhaps without l' appreci-ating the fact, that at the time it was initially .icensed, Perry vas important to Cleveland, as well as to the Appli-cants, because of its expected provision of low-cost bulk power. Neither Cleveland nor the Applicants would have btd any motivation to have access to the plant, to bleek others -
.O from it, or even to be bothered by being blocked from access to it, if it had been anticipated that Perry would not pro-vide low-cost bulk power.
M/ Appilcants' Motion at 46. O. - U/ See Applicants' Motion-at 17 n.29; OE Application at 28. L Applicants' arguendo assumption about its past competitive L benavlor does not equate with a statement of agreement or i disagreement by Applicants with the earlier record on this l- subject. See Black's Law Di gionary (6th ed. 1990).at 107 Applicants' position simply is-that, for purposes of argu-lO: mant, they take the record as it is found. Compare AMP-O Brie: et 30 n.19. Applicants also submit that_ allegations about their.present competitive conduct are not material to ' resolving the pending-Motion; however, because of their l offensive and distractina nature, Applicants have summarily addressed these' allegations in this Rt. ply. See Section 0 II.D.1, infra. - O
0 l In short, the substantial discussion by cleveland of compet- l iLive behavior, including its importance in determining NRC's l remedial action in the Davis-Besse/ Perry antitrust proceeding (as vell as in ' d4 NRC cases), i s not the issue here. O This does not mean, however, that Applicants agree with the legal significance Cleveland places on this information. Cleve-land's analysis simply is becide the point. For it is not until () the nuclear facility being licensed is determined to be of com-petitive value that the general position and conduct in cbe mar-ketplace of the facility 's owners becomes relevant under Section 0 105(c). In-the Davis-Besse/Perr*j case, as well as in the other
- proceedings where NRC imposed antitrust remedies, the " activities under the license," namely the construction and operation of_the O nuclear power plant, were expected by all parties to be competi-tively advantageous and, consequently, the specific " activities" to be " license [d)" could affirmatively contribute to the competi-MDL tive position-of the owners in the marketplace.EE/ In the 2A/ Counsel 'or the City of Cleveland, who represented the Municipal Electric Utility Association of Alabama ("MEUA")
0; in the Parley case b1 fore the Atomic Energy Commission , ("AEC"), see n.21, infra, effectively argued this very point in 1972. In its brief, MEUA stated: t-The net effect of the activities of the Applicant . . . is to exclude everyone else
- 13 - from the possibility of using any means to secure the benefits of nuclear-fueled elec-tric generation other than the means being e attempted by the Applicant's wholesale cus-tomers in this proceeding.
O Footnote continued on next page.
;O y ,um q
O i instant proceeding, however, where the reality did not meet the expectation, the opposition falls to confront or address the O starting point for Section 105(c) analysis, which is the neces-sary predicate for the imposition of antitrust remedies by the NRC. And yet it is this very factor -- the high cost cf the j O Davis-Besse and Perry nuclear plants -- which make it logically \ impossible for the " activities under the license (s)" to " create l 1 or maintain a situation inconsistent witn the antitrust laws". I
'O l
)
Another way to evaluate Cleveland's thesis that competitive
. behavior. is the linchpin of Section 105(c) analysis is to con-
- () sider how-this-thesis fits with the unique language of Section 105(c). Under Clevelaad's theory, Section 105(c) would invoke NRC's antitrust authority when the " licensee's activities" gener-O ally, not its " activities under the license" specifically, create or maintain a situation inconsistent with the antitrust laws.
-But this is not what Section 105(c) says. Instead, its focus is 0L very precise and, not surprisingly, ts vantage point is the Footnote continued from previous page.
- O What the Association and its members seek in this proceeding is not, as Applicant appears to maintain, an order directing the cessation of antitrust activities, but,
- (3 ' rather, an oppcrtunity to obtain participa-
-tion in the nuclear units for which the ;
L Applicant seeks AEC-license. L L Answering Brief of MEUA before the AEC on Jurisdiction of L Atomic Energy Commission and Scope of Prelicense Antitrust O' Review (Nov. 9, 1972) at 8. l l l L
O subject of unique interest to the NRC, namely, the impact of the activities to be licensed by the NRC on the competitive environ-O ment in which the licensed facility will operate. If Cleveland'c thesis is correct, the " activities under the license" would be irrelevant and Section 105(c)*s conditional standard would be O meaningless.
- 2. The Farley Theqry O
Alabama's theory of the case, repeated with lesser ettphasis by DOJ, tho NRC Staff and Cleveland, is that the bedrock legal O issue in this case was raised by Alabama Power Company in the Farley antitrust proceeding and was rejected by the Appeal Board and the Eleventh Circuit Court of Appeals.E1 Alabama either o does not understand the issue raised by Applicants, or is trying to fit a square peg into a round hole. i In fact, Farley effect.vely illustrates both the centrality O of the cost advantage of nuclear power to NRC's antitrust man-date, and the fact that the market analysis that takes place in a section 105(c) analysis is only meaningful and relevant once it O O 11/ Alabama Response at 7-12; DOJ Response at 8 n.10; NRC Staff , Answer at 16, 19-22; Cleveland Answer at 21, 44-48; see Ala-bama Pover Co. (Joseph M. Farley Nuclear Plant, Units 1 & ' 2), ALAB-646, 13 N.R.C. 1027 (1981), a.f'd, 692 F.2d 1362 O (llth Cir. 1982), cert, denied, 464 U.S. 816 (1983), O
.- O 4 4 is established that a nuclear facility produces low-cost electricity.22 , Alabama contends (along with DOJ and Cleveland) that Appli-
- cants are asking this Boa-d to "focu(s] narrowly on the nuclear O- plant," an argument that was " rejected in Alabama Power by the Court of Appeals."12# Alabana is wrong; i ts characterization of the issue in controversy in this case, as well as the issues in
'O controversy in rarley, is imprecise :and erroneously obscures the- i I meaning of Section 105(c). i The Parley case, on which Alabama relies, resolves two legal , O ' issues'that arise in Section 105(c) analyses; however, neither of these issues is presented in this proceeding. The first issue addressed by,the Appeal Board and the Eleventh Circuit Cour of
~ Appeals-in Farle.y,was the proper scope of inquiry under Section .
105(c) in~ assessing the competitive environment in which the facility owners operate,21# viz., "the scope of (NRC's) inquiry
- _O=
and. form of its_ analysis of the economic structure in_the rele-vant power markets and the past conduct ofEAlabama Power."25! As the-_ Court of Appeals observed, the word " create" in Section 12/ -See Applicants' Motion at 16-47, 70-75. 23/ Alabama Pesponse at 8-9; seg also.DOJ Response at 8 n.10 ' Oc ("the NRC is not limited to examining the operations of the
~
nuclear. plant in isolation from the other activities of the licensee");' Cleveland Answer at 44-48. - 21/ ALAB-646, 13 N.R.C. at 1042-44; 692 F.2d at 1367-68.
,0 11/ 692 F.2d at>1367 r
-O v.,- -,-r-. ..--,,,,r.-,---., -, . , .-e .--,,y , ,,.._,,m. ..ro ,,,,.n m-.v., +,, , . ,, -
i O ; 105(c) " directs the NRC to look forward to see if ar anticompetitive situation could arise."2_6/ In contrast, the word O
" maintain" requires "a careful look at the present -- and the past -- to see if an anticompetitive climate exists," if the applicant has acted anticompetitively and, therefore, to deter-mine "whether there is a ' situation' to maintain, and whether issuing this license will maintain it.*U l .O As Appilcants already have made clear,E ' Applicants fully appreciate the broad-scope inquiry of the competitive environment and the appilcant's conduct in it that is required as part of a .O Section 105(c) analysis. However, the Ea.riev scope-of-inquiry holding resolves a different Section 105(c) issue than the one at issue here. The bedrock legal issue in this case focuses on O whether there is a requirement under Section 105tc) that precedes and is independent from the agency's consideration of the compet-itive environment, i.e., that the nuclear facility produce low-O. cost power and, therefore, be capable of creating or maintaining a situation inconsistent with the-antitrust laws. Such a requirement exists if the language of Section 105(c), providing O that "the activities under the license . . . create or main-tain . . . ,
is to have any meaning. Thus, while the word "cre-ate" involves a look forward, and the word " maintain" requires i O UI Q. U/ M. at 1367-68 (emphasis added). O 2a/' See Section II.A.1, suora. LO-
- () -
l l looking back and forward, it is Applicants' contention that none l of these looks are necessary or appropriate in the absence of a
~O low-cost nuclear facility. l The second issue resolved in Earley is similarly distinct I O from the pending bedrock legal issue. That issue was the scope of remedial authority vested in the NRC by section 105(c).12' In particular, the Court found appropriate the Appeal Board's impo-O sition of conditions granting the applicant's competitors the right to an ownership interest in the Farley facility and provid- ;
ing'for access to the applicant's transmission facilities.12# > l- . O Once again, Applicants fully appreciate the broad-scope remedial authority of the NRC to " find a remedy to address its antitrust concerns."21/ But this authority, which is exercised after find-O ings about the competitive environment are made, has nothing to do with whether the NRC must first establish that a facility's operation is lov cost and therefore vill either create or main- ,0 tain a " situation." W L 1 22/ 692 F.2d at 1367, 1369-70. 'O 12/ id. at 1370. 21/ Id. at'1369. 12/ Cleveland argues tliat the farley applicant's objection to 0- the remedy of Parivy ownership access was an argument which establishes that cost is not pivotal in a Section 105(c) , analysis. Cleveland Answer at 47-48. . Cleveland has jumbled i the facts and lav. (3 ' Footnote continued on next page. O
O In short, Applicants believe that the only rational inter-pretation of Section 105(c) requires the NRC to engage in a three-step process: (1) determining whether a nuclear facility will " create or maintain"; (2) determining whether there is a
" situation" that will be created or maintained by the facility; ~O Footnote continued from previous page.
First, the applicant's argument i n Ea r_ ley to which Cleveland () refers related exclusively to the scope of NRC's remedial authority under Section 105(c) -- a different issue than that presented by this case. Second, the point of the Appeal Board in farley, in reject-ing the argument to which Cleveland refers, was that the O competitive value of ownership of Farley (18.9 mills per Kwh) exceeded the competitive value of unit power from the facility (26.2 mills per Kwh). Sgg ALAB-646, 13 N.R.C. 1027, 1104 n.?48. Becdure of this fact, access to unit power-was deemed an insufficient remedy to offset the anticompetitive situation "ound to exist. Instead, owner- 'o ship of the nuclear plant was required. Id. at 1103-06. This conclusion was affirmed by the Court of Appeals. 692 F.2d at 1369. Cleveland relies on the applicant's unsuccessful argument in its appellate brief in the Court that Alabama Elect.ric Coop-() erative was building a' low-cost, coal-fueled plant (23.94 - 25.71 mills /kwh) and therefore-that the evidentiary record did not support the remedy imposed by the-Appeal Board. See Cleveland Answer at 48 and Appendix B (citing Brief of Peti-tiener Alabama Power Company (Feb. 22, 1982) in the Court of Appeals). But this argument failed to convince the Court of .O Appeals that the NRC's remedy was unjustified, which was not surprising in light of the competitive value (18.9 mills per , Kwh) to Alabama Electric Cooperative of ownership in the Parley facility. In short,' contrary to Cleveland's assertion, the discussion O to which Cleveland refers does not suggest that "'the wind-fall head start' phrase does not refer to a competitive advantage associated with the anticipated-low cost of nuclear power." Cleveland Answer at 48. To the contrary, the value of a nuclear plant was that it provided low-cost bulk pover; accordingly, ownership of it was required in
- O Farley.
O
_l ' O. ; and (3) determining the proper remedy to address such a "situa-tion." Farley focused on steps (2) and (3) in a Section 105(c) O analysis. It did not focus on step (1), vbich is the subject of ' this proceeding.22/ () The Opposition is wrong in its assessment that Farley is , dispositive here.1$# For both the language of the Court about the value possessed by owners of nuclear power plants - "the O unbridled beneficiaries of the windf all head start 21/ -- and the facts of the lov cost of the Farley facility1$! -- as reflected ll/ As Applicants' Motion makes plain, there was substantial ' -() dicta in Farley which supports Appilcants' understanding of the-critical importance of the step (1) analysis. -Appli-cants' Motion at 46-47, 70-75. But the oppor,ition focuses on the other-two legal issues that were. resolved in Parley, and confuses them with the bedrock legal issue tnat the
- O Board must resolve in this case.
11/ Cleveland is not only wrong on that issue, but it misrepre-sents-the Court's decision in Parley when it says "the court *
- specifically recognized that the cost attractiveness of nuclear power.has nothing at all to do with the NRC's
- 0. authority to impose antitrust conditions. . . . " 'leveland Answer at 46-47 The Court did-no such thing.- In Jact, not >
only did it not "specifically recogniz(e)"-this point, but if one can draw any-inference from Fprley, it clearly would be to the contrary. O 11/ 692 F.2d at 1369;-see Applicants' Hotion at 46-47. 25/ In the 1977 Licensing Board decision on Parley, LBP-77-24,.5- , N.R.C. 804, 960 (1977), modified, ALAB-646, 13 N.R.C. 1027 (1981), aff'd, 692 F.2d 1362 (11th Cir. 1982), cert, denied, 464 U.S. 816 (1983), the Board observed: O The i7 sues of nexus and' access to nuclear facilities, which are interrelated, must be viewed in-the context of the electric utility , i industry in the real world todey. The nation > O. Footnote continued-on next page. l lO L L ' .- _. --_ n. .. ,
O by the competition's desire to both buy an ownership share in it and to have access to power produced by it -- are wholly incon-sistent with Cleveland's description of tne case. Thus, it is Cleveland, not Applicants, who provide a " blatant distortion" of the Court's de:irion in Farley. O
- 3. Issues of General Antitrust Law
- O The NRC Staff argues that the relative low cost of a nuclear power plant is not a necessary predicate to the NRC's exercise of its antitrust authority under section 105(c) because "[t]he Footnote continued from previous page.
O is in the midst of a profound and continuing energy crisis, with the cost and availability of all fuels the subject of serious concern. Oil and natural gas appear to be of declining significance for the generation of electric-ity, and hydroelectric capacity is now quite O limited. coal and nuclear power appear to be the chief sources of present and future energy requirements. Of these, nuclear power is still less expensive than coal, although its costs too continue to rise sharply, O' * *
- These (the Farley) nuclear units represent an important new source of energy, at a time when the traditional sources of fuel for future use may well be unavailable or prohib- -
O- itively expensive . . . . We rind that the exclusion of (Alabama Electric Cooperative) from the Farley nuclear facilities probably would create a decisive competitive advantage to Applicant. O 12/ cleveland Answer at 48. O
O general body of antitrust lav lends no support to this I proposition."18# T!.e Staf f then reviews the analysis applied by the courts in various monopoli:ation and tying cases under the Sherman and Clayton Acts,39/ and concludes that, since these cases did not turn upon a finding of low cost, neither does Sec-tion 105(c). The problem with the NRC Staff's argument is that it is O wholly inapposite to the issue pending here. A Section 105(c) antitrust review does re'.y on general prin-ciples of antitrust 1.av to assess market conditions and competi-O tive behavior and, in that regard, the Federal antitrust laws are applied by the NRC (and DOJ) in reaching determinations under Section 105(c).SSl But this does not mean, as the NRC Staff sug-O geste r that a Section 105(c) analysis is the same thlT1 as an analysis under the general antitrust laws. O In NRC's antitrust analysis, the critical inquiry is the incremental competitive impact of a auclear facility on its O 18/ NRC Staff Answer at 8. 22/ Id. at 8-12. iS/ The NRC Staff correctly refers to Section 105(c)(5), in 3 which reference is made to DOJ's advice as to " adverse anti-O trust aspects" of a licensing matter. NRC Staff Answer at 7 However, the Staff's reliance on Section 105(a) is mis-placed. See id. That provision does not concern the use of the gene.nl antitrust laws by the NRC; rather, it makes clear thoc the plenary authority of other agencies under the Federal antitrust laws is unaffected by NRC's Section 105 O authority. See Applicants' Motion at 23-25. O
O owners' (and their competitors') market position. The recessary predicate to NRC's evaluation of the market conditions in a par-ticular applicant's service area is the understanding that owner ship of the nuclear power plant to be licensed will enhance the . owner's competitive position in that market. If NRC then finds ,g-that the facility owner's market position and past or prospective conduct are such that the addition of the facility is likely to affirmatively contribute to the owner's competitive position, it is authorized to broadly remedy that circumstance in whatever fashion will avert the anticompetitive consequences of concern. On the other hand, if ownership of the facility will detract from 0 the market position of the owner, a Section 105(c) remedy is unnecessary and improper. O In contrast, the Federal antitrust laws are neither limited to nor uniquely concerned with the impact of one asset of a com-petitor on the marketplace. Federal antitrust laws usually con-O cern themselves with the market position and behavior of industry competitors generally. Moreover, as to those antitrust cases that concern themselves with the acquisition of a particular O asset, that asset iu only of interest if it enhances its owners' market position or its ability to engage in anticompetitive con-duct. Certainly, if it detracts from its owners' competitive O position, it presents no issue under the Federai antitrust laws. The NRC Staff misses the point when it argues that there are adverse antitrust findings ua' r the general antitrust laws that O
O do not depend upon tne cost of a product.II' That's because the purpose of the analysis under the Federal antitrust laws is not O the same as the purpose _for which the NRC involves itself in antitrust matters. c)' Cleveland also advocates a general antitrust law thesis, j Cleveland conter.ds that monopolization, which includes "the power to control prices to exclude competition," and the " control of b productive capacity," is not dependent on cost.12/ Cleveland then asserts, "There is no doubt that the addition of nuclear units vould maintain and even increase Applicants' monopoly O power, regardless of the cost of the output of those units."Il# But like the Staff, Cleveland is focused on a subsidiary issue when it looks to questions of market dominance. This issue is
- O subsidiary because ile it becomes of great interest to the NRC under Section 105(c) once it is established that the nuclear facility is competitively advantageous, it is not sufficient, 2D-11/ Similarly, the NRC Staff again misses the point when it con-tends that at least one circuit court found cost to be insufficient to show monopoly or market power. NRC Staff
.( ): Answer at 9 (citing. Town of Concord, Mass v. Boston Edison Co., 915 F.2d 17, 30 (1st Cir. 1990), cert. denied, 111 S. Ct. 1337 (1991)). Contrary to the NRC Staff's suggestion here, Applicants are not saying that low cost is sufficient to establish monopolization or market power under Section 105(c).- But under Section 105(c), the low cost-of a new-O- -facility is_a necessary threshold determination that must be established before.there is any relevance to NRC's assess-ment of market power and its use ( e , q ._ , monopolization). 12/ See Cleveland Ansver at 17-22. O 12/ Id. at 17-18, 19. O b- m -. v r -n-g-w+- m- --t r41" = - - y
- N T**
C1 ; i alone, to prompt the_ agency's authority under Section 105(c). For if dominance, per se, triggered NRC's remedial authority O under Section 105(c), che construction and operation of an addi-tional nuclear facility would be irrelevant because virtually all license applicants are dominant in their service territories. if O this were the case, the consideration of " activities under a license" would be similarly irrelevant. In short, Cleveland's ' interpretatian of Section 105(c), like the Staff's, makes mean-0 ingless the_ language of the statute.44f - Monopolization analysis may well focus on the control and
- () not the cost of generation available in a marketplace because the central issue in such cases often is the degree of dominance by a competitor. In such analyses, however, the value of a particular o new asset is not being challenged. For example, in united States
- v. Grinnell coro., 384 U.S.
. 563 (1966), cited by Cleveland,EE#
vhich concerned the burglary and fire protection industry and, O particularly, the accredited central station service business, the issues were the definition of the relevant market for pur-poses of estabitshing monopolization under Section 2 of the O- Sherman Act and the degree of dominance of the defendants in that market. There was no dispute over the assumption.in the case
-that dominance in the. relevant market was competitively
- (3 ~ advantageous.
11/ See Section II.A.1, supra. O 11/ Cleveland Answer at 17. O-
O Interestingly, Cleveland re:.ies upon a decision recently issued by the Federal Energy Regulatory Commission ("FERC") to O support the proposition that the relative cost of generating capacity is irrelevant to the ability to monopolize.15# But the I Northeast Utilities case, on which Cleveland relies, is a useful O ' illustration of a type of analysis more analogous to that neces-sary under Section 105(c) than the type of analysis advocated by Cleveland. Unlike many antitrust cases, which involve a O broad-scale assessment of conditions in a particular marketplace, Northeast Utilities involved FERC's assessment of the effect on competition in the marketplace of a particular merger -- that of O two public utility companies, Public Service Company of New Hamp-shire and Northeast Utilities. "To determine the merger's effect on' competition, the Commission compared the premerger competitive O situation with the competitive situation that would result from an unconditioned merger."12# Without such a comparison, FERC would have been unable to determine "any anticompetitive effects O of the merger."SE# The Northeast Utilities before-and-after analysis is analo-f0 gous to the analytical approach Applicants are advocating in the present case, i.e., that it is the competitive impact on the O-d5/ Northeast Utils. Serv. Co., Opinion No. 364-A, 58 FERC 1-61,070 at 61,192 (Jan. 29, 1992), 12/ 58 FERC at 61,189. O 11/ Id. at 61,190. O
-- . . - _. . -- . _ - . - . . - . .~ - - - -O status quo ante of a particular event -- the construction and operation of the nuclear facility -- that , NRC's concern under section 105(c). Similarly, in Northeast Uti1itles, FERC vas interested in the competitive impact of a utility merger. In that case, FERC found that the merger vould increase the merged company's dominance and corresponding market power in the short-term bulk power market, as well as reduce competition in trans-mission by eliminating one company from the business of ovnership (and hence control) over transmission access.O # The issue for FERC vas the control of established assets and whether the change in control caused by the merger would lessen competition in the marketplace.
Under Section 105(c) of the Act, the issue is analogous but 01 somewhat diffevent, namely, whether the creation and use at a new asset will adversely affeet competition in the marketplace. Not surprisingly, in the FERC .tuation, the value of the assets in O question -- transmission and generation -- were not in cor.t roversy;EI the question instead was whether the change in l control over those valuable assets vould be competittvely detri-
- O mental. In a section 105(c) case, of course, the issue is the competitive impact of an additfor,!.1 asset. It is Applicants' contention that this asset, the nuclear power plant, tas no
- o I
M/ J_d at 61;192.
--. -M/ There was a question of fact over the value of strategic
! O_ transmission corridors. see M. at 61,194. lO
i LO competitive value unless it is low cost relative to alternative sources of electricity. O In summary, the Northeast Utilities case is useful, analo-gously, to a section 105(c) case because both involve the impact O of a particular change in a particular market, novever, the nature of the change is very different in the two situations and, I hence, the compet1.tive analysis necessarily focuses on different .() factors. Neither-of these situations, however, fits the Cleve-land general antitruct framework, vbare market conditions are < examined broadly without regard to the impact of a particular .() event on them. Finally, Applicants cannot help but observe that the NRC Staff and Cleveland's emphasis on the activities of DOJ and PERC O . in the arena of competition in the electric utility industry doc- , uments the fact that many agencies have responsibility for evalu-ating and taking remedial action with respect to perceived .O anticompetitive situations in this-industry. Whether the need is found for wheeling,El# other transmission services,EE# or access to power,E2/ utility competitors, like Cleveland and AMP-0 in this case, have many protectors who jealously guard their rights. 'O 11/ See otter Tail power Co. v. United States, 410 U.S. 366 (1973), cited by-Cleveland and the NRC Staff. Cleveland Answer at'18; NRC Staff Answer at 11 n.16. E2/ See Northeast Utils., 58 FERC at 61,203-04. O 11/ See id. at 61,194 (short-term bulk po'.er market). O
O As Applicants described in detail in their Motion, and notwith-standing the effort by the Opposition to suggest to the contrary, O the proper exercise by the NRC of its particularized Section 105(c) authority, which would result in the suspension of the licer.se conditions at issuc here, will not leave Applicants free to somehow gouge their competition, even if there were any basis
-- which there emphatically is not -- for assuming Applicants would be so inclined.ES#
O l' O In summary, the theories of the case advanced by the NRC Staff, Cleveland, DOJ, and Alabama place substantial reliance on arguments that simply do not meet the issue in this proceeding. Cl . Applicants do not disagree with the Opposition that NRC's anti- ' trust reviews often address issues of competitive conduct in detail and that the scope of activities that NRC is authorized to review under Section-105(c) encompasses competitive activities independent of the " activities-under the license." This was the holding of the Eleventh. Circuit in Farley.EE# But this broad-scope analysis by NRC only takes place after Section 105(c)'s
-threshold determination is made that the nuclear facility in O.
11/ See Section II.D.1, infra (discussion of-sensational accusa-tions-of AMP-O regarding Applicants' conduct); see also Sec-tion II.B, infra (discussion of DOJ accusation about Appli-cants' alleged " incentive").
- O- 11/ 692 F.2d at 1367-68.
10'
. . _ - . _ - , ~ -. - . - - - . - . . - . _ - . -..- _
O question is economically advantageous. Furthermore, Applicants fully appreciate the fact that certain cases under the Federal
-O antitrust laws do not necessarily turn on the issue of cost. But none of these observatioris are at all inconsistent with or even relevant to the fact of the unique nature of NRC's antitrust man-o date, which is not to look at competition or monopolization gen-erally in the marketplace, but to assess and, if necessary, to remedy, the impact of the introduction of a particular facility O
on the " situation." Ironically, Alabama Electric Cooperative referred to this g- very mandate, and the centrality of nuclear power's low cost to it, in its appellate brief in the Farley case: EE [I]n 1970 Congress designated the Commission o as the primary agency to insure through its licensing process that the economic advan-tages of base load nuclear power are not used to create or perpetuate anticompetitive situ-ations in the production and sale of electric power. . . . The NRC's mission is then sig-
- O nificantly different from that of other regu-latory agencies which are concerned merely with taking into account antitrust consider-l ations in arriving at determinations of rea-l sonableness or the public interest . . . .
Thus, Congress has directed the Commission to
.O undertake specific and unique antitrust L responsibilities with respect to the use of nuclear power in the electric power industry.
O EE/ Brief for Intervenor Alabama Electric Cooperative, Inc. (11th Cir. May 10, 1982) at 17-18 (emphasis added; footnote I O and citation omitted). tO I
O
- Cleveland, too, acknowledges this very principle in its Answer wher. It states (quoting the Licensing Board in the Davis-lO l
Besse/ Perry proceeding): "It is the effect of the licensed activities measured against particular situations which ia the predicate for Commission involvement in Section 105(c) license O consideration . . . ."El# of course, Applicants' position is that if it is not necessary to remedy the impact of a particular facility on the " situation," NRC is not authorized to impose O antitrust remedies on the particular licensees. B. Applicants' Competitive Position Cannot Be O Enhanced, And Hence A " Situation" Cannot Be
" Created" Or " Maintained," By A Hich-Cost Facility The NRC Staff, DOJ and the City of Cleveland contend that O the acquisition of a high-cost facility can enhance its owners' competitive position in the marketplace. This assertion defies logic.
O The language of Section 105(c) requires the creation or maintenance of a situation inconsistent with the antitrust laws, and it requires that the activities under the license create or maintain that situation. If these requirements are not met, NRC's antitrust remedial authority is not authorized. O E2/ Clevel$nd Answer at 14 (citing Toledo Edison Co. (Davis-Besse Nuclear Power Station, Units 1, 2& 3; Perry Nuclear Power Plant, Units 1 & 2), LBP-77-1, 5 N.R.C. 133, 238 O (1977) (" Davis-Besse/ Perry")). O
_. . - - - - _ _ . . . _ _ . ~ _ . - _ _ - _ . . . . _ . _ . _ . _ _ _ _ - _ _ _ . . _ . . _ . - -_ _ O-Thus, in order to meet the criteria of Section 105(c), a nuclear facility either must itself create an anticompetitive O situation, or it must in some affirmative way contribute to the maintenance of an anticompetitive situation. If its existence cannot contribute to an anticompetitive situation, it necessarily cannot "mair'ain" one. If a nuclear facility is high cost, it l certainly does not create an anticompetitive situation, nor does it contribute in any way to the maintenance of such a situation. O To the contrary, a high-cost facility would lessen its owners' l competitive position in the market, both because the facility's expense vould make its owners' costs greater than the expenses of its competitors and because there would be less demand for the facility's product than for lower-cost electricity from other facilities. Accordingly, such a nuclear facility would not ,o prompt agency action under Section 105(c).EE/ The NRC Staff's effort to make cost an immaterial (albeit () relevantEE#) issue in Section 105(c) analysis is done by EE/. AMP-O asserts that cost is-not pivotal but that, instead,
~
(3 - "Section.105(c) ' invests'the NRC' with the broader responsi-bility to determine 'whether ownership of a particular plant
.. . is likely to have anticompetitive effects of the type o the antitrust laws are intended to remedy.'" AMP-O Brief at 10,.(citing DOJ advice letter.at 2 (footnote omitted)).
AMP-O's characterization of the-case is remarkably lacking 13- in insight.- The question that. AMP-O ducks and that is posed by tee bedrock legal issue in this case is whether it is
.possible-for "a particular plant . . . to have anticompetitive effects" if it is a relatively high-cost y plant.
k) 53/ See NRC Staff Answer at 9-11.
- (O.
l i O analogizing NRC cases to so-called tying arrangements under Sec-tion 1 of the Sherman Act, 15 U.S.C. 51, and Section 3 of the Cl-Clayton Act, 15 U.S.C. 5 14.60/ - Noting that the central inquiry i in a tying case is " economic power," the Staff argues that because a cost. advantage is not the only means of acquiring eco-nomic power, a '.icensee can have economic power from a nuclear power plant "without regard to the cost of that product."EI j O A closer look-at the NRC Staff's own analysis discloses the fallacy in the Staff's positlGn. According to the Staff, eco-nomic power can be derived from three different sourcest legal
- O distinctiveness (e.o., patented products), physical distinctive-ness'(e.o.,. land), and economic distinctiveness "from having a I cost.-advantage in producing the product."$2/ Assuming this sim-Of plified analysis is true,El/ electricity from a particular C. EE/ In a' tying arrangement, a producer seeks to extend its mar-
, ket power by requiring.the purchase of a product (the " tied product") with the purchase of a product in which the pro-ducer has' market power-(the " tying project"). Northern
. Pacific Ry. v. United States, 356 U.S. 1, 5-6 (1958). !
Although often decided under Section 1 of the Sherman Act 0: and Section 3 of the Clayton Act, the focus of tying cases is on the producer's economic power in the tying product market. See Jefferson Parish HosL. Dist. No. 2 v. Hyde, 446 U.S. 2 (1984). Thus tying cases are analytically similar to-general' monopolization cases decided under Section 2 of the ,' Sherman Act, which, as discussed above, are inapposite in 13 analyzing Section 105(c). 1
$_1/ NRC Staff Answer at 11.
E2/' id. at 10. -O gl/ See NRC Staff Answer at 9-11. i-IO
O generating facility is neither legally nor physically distinct from electricity from another. O Electricity is a fungible product. The on1; distinction among different producers of electricity is the cost advantage of O one method of production over another. After all, no one cares whether their lights are working because their electricity comes from a coal plant or from a nuclear plant. But a consumer does O care if his cost of e.lectricity is higher than his neighbor's. To state this proposition another way, large quantities of high-cost bulk power do not provide to their owner any " economic O power" because no one wants high-cost bulk power.ES/ This fact is illustrated in this case by the absence of any requests by Cleveland, AMP-O or others to obtain access to Perry or O Davis-Besse. It also is vividly illustrated by the concerted effort by these parties to use the NRC's antitrust license O - 51/ The NRC Staff's description of the inherent value of " bulk power or baseload generating capacity" c so ignores the fact that if bulk power was the value of concern to Congress in
% amending Section 105(c). it simply would have mandated license conditions for every nuclear plant, since essen-tially all nuclear plants are base-loaded. NRC Staff Answer at 10. This simply is not what Section 105(c) requires.
Thus, as Applicants already have emphasized, it is not sur-O prising that the legislative history of Section 105(c) focuses on " low-cost bulk power" from NRC-licensed facili-ties. See Applicants' Motion at 35-47. It is only the nuclear plant (which inherently produces baseload power) that also produces low-cost power with which Congress was concerned and, accordingly, that Section 105(c) was designed O to address. O
O-conditions.to avoid using power from these facilities -- a fact the Opposition does not deny. I C) ; Thus, aven-if it were true that Applicants were the only parties positioned to " acquire ()" or "h(o]1d" Davis-Besse and 30- Perry,EE this condition vould not give Applicants any " economic
.pover. "
Consequently, contrary to the 'tc Staff, Applicants have no " power in the product to engage in anticompetitive 0.- behavior."SE/ j DOJ endeavors to analytically avoid the centrality of cost to a Section 105(c) analysis by arguing that, "If the increased !O ' cost of nuclear power has lessened Applicants' competit've abil-ity," -- a critical admission, of sorts, by DOJ --
"their incen-tive.to handicap their rivals may.now be tien greater than it was :
- originally."E2/ In short, NRC should continue to impose license conditions'on the Applicants because, in DOJ's view, Applicants now have's greater incentive to-act anticompetitively than they would have had.if their nuclear' facilities produced low-cost power.68/ -
DOJ's pejorative allegations about Applicants have no t
.. basisrin fact'and are wholly _self-serving. But beyond'their lack 0-of-foundation, the analytical argument advanced by DOJ makes no O 11/" NPC Staff. Answer at 10. ]
L DE6/ .,Id. J at 11. 67/ DOJ Rnsponse at 17'n.22. L (3 EE/ _I_d. , l lOE
. -_2 _ ._ m . _ _ . _ . . . _ . _ . _ _ _ _ _ . _ . _ _ . _ . _ ._. - . _ - , .- -
O sense. DOJ's argument leads to the conclusion that gertral an*.i-trust law would impose remedies on the most economically disad-O vantaged competitor; after all, in DOJ's view, i t is the competi-
-l tive underdog who has the greatest incentive to misbehave. The fact is that Applicants' incentive, or lack thereof, is not rele- i -O vant, any more than the incentive of disadvantaged competitors is relevant in traditional antitrust law. The real issue in general antitrust analysis.that is relevant to DOJ's theory is the issue ! .O-contained in DOJ's admission -- the ability or inability of a company to compete. In the context of Section 105(c}, the issue ;
is even more specific: whethct the " activities under the ' license" enhance a licensee's ability to c,mpete. When that I ability.is reduced rather than enhanced, as DOJ appears to , acknowledge is the case here, there is no statutory easis for the
- O imposition of antitrust license conditions on a licensee.
j The NRC Staf f, DOJ and the City .of Cleveland also endev'or
- O to distinguish away two notable indicia in the government's prior applieltions of Section 105(c) .that a high-cost nuclear facility is outside the scope of NRC's antitrust purview because it
-C' reduces, rather'than enhances, a ut'ility's ability to compete. These are the Fermi decision,$E/ discussed by the NRC Staff and rQ . 52/ Detroit Edison Co.'(Enrico Fermi Atomic Power Plant, Unit L No.-2),.LBP-78-13, 7 N.R.C. 583, aff'd, ALAB-475, 7 N.R.C. O 752-(1978).: t (O: R. 4 . ,- -. ,, i i . _ m , . . .........m., . . . . .#. ,..-..,4 ,,...._,e ,, . . . . - . - ..y .,..._... ...y_m..,
Cleveland,UI and certain DOJ advice letters,U/ discussed by DOJ .
-and Cleveland.E/
. _O l Applicants' Motion reviews the decisions of the Licensing Board and the Appeal Board in Fermi, and Applicants will not O repeat that discussion here.H/ In summary, in that case, the Licensing Board observed and the Appeal Board held that the use of anticompetitive acts to force a utility's competitor into & 0- sharing the high costs of a nuclear facility, in contrast to denying a competitor access to a low-cost plant, is not a cogni-zable interest under Section 105(c).
- O The NRC Staff
- :?vs that " Fermi provides no precedent with
' respect-to the bedrock issue here."U/ Cleveland shares this viev.E/ The NRC Staff cites two reasons for this conclusion.
10 First,.that "there was no analysis of the cost of electricity from the yet to be constructed nuclear plant in the decisions," and.that, consequently, the reference to "' costs and expenses of Fermi 2' . . . may have.been nothing more than a reference to 1 3/ NRC. Staff. Answer at 26-27; Cleveland Answer'at 52-54. 3/ Davis-Besse advice letter, 36 Fed. Reg. 17,888 (1971); Zimmer~ advice letter, 37 Fed. Reg. 14,247 (1972); Forked River advice letter, 36 Fed. Reg. 19,711-(1971); Susquehanna advice letter,.37 Fed. Reg. 9,410 (1972). 01 H/ DoJ Response at 16 n.21; cleveland Answer at 56-62. M/' See Applicants' Motion at 57-64. L M/ NRC Staff Answer at 27. 3/ Cleveland Answer at'52. l o l O'
O construction costs."16/ Second, the Staff maintains that "the Fermi case factually has nothing to do with competi lon between O utilities or the use of licensed activities to create or maintain an anticompetitive situation."77/ - Cleveland echoes this secona thesis.78/- The analysis by the NRC Staff and Cleveland utterly O fails scrutiny. As to the cost oi electricity, the Staff is misguided on two O counts. First, the issue raised by the petitioner in Fermi was the cost burden from itt utility's obligation to purchase Fermi-2 power.- 79 / Contrary to the NRC Staff's hypothesis about construc-O tion costs, ptechases of power always reflect both construction and operating costs; moreover, it is impossible to purchase power s from a facility that is not operating. Furthermore, as to the O absence of analysis in the decisions of Fermi-2's costs, the Appeal Board made cleac that, in ruling on the petitioner's alle-gations, "for purposes of her petition and this appeal we must O accept them."8S/ In short, there was no need for any discussion - of the factual allegation of high cost (in fact, such discussion O M/ g. II/ Id. 11/ - "Indeed, the petition for interventica presented no anti-trust or competitive matter either under the AEA or any of O the antitrust laws." Cleveland Answer at 54. 12/ LBP-78-13, 7 N.R.C. at 586, 589; see Applicants' Motion at 57-58. ES/ ALAB-475, 7 N.R.C. at 757 (citation omitted); see Appli-O cants' Motion at 61-62. O
1 0 would have been inappropriate) because, for purposes of ruling on the adequacy of the petition and the Licensing Board's rejection O of it, the Appeal Board was required to accept petitioner's alle-gation as factually correct -- just as this Board necesearily will do in ruling on the bedrock legal issue in this case. O-Furthermore, as to the NRC Staff and Cleveland assertiva that Fermi has nothing to do with competition or its use ur der O Section 105(c), the Opposition is misguided here, as well. On the question of competition, they are in error, for the Fermi petitioner's claim was that certain " private utilities used their O ' monopoly powers . . . to force [the cooperatives) into buying (part of the Fermi nuclear plant].'"El# In short, petitioner in fact did allege the anticompetitive use of market power. As to O the use to which that market power was put, however, the Opposi-tion's comment that Fermi did not ra:se a Section 105(c) claim is exactly Applicants' (and the Fermi Appeal Board's) point: 0 because the alleged anticompetitive activity was taking place in order to require petitioner and others to participate in a high-cost facility, rather than to deny access to a low-cost one, O petitioner's injuries were "beyond the zone of interests that O , E1/ ALAB-475, 7 N.R.C. at 757 (citation omitted); see Appli-cants' Motion at $1. Cleveland says " access to the nuclear power was not at issue." Cleveland Answer at 53. Cleveland is wrong. The entire issue was required access to a high-O cost nuclear power plant. O
O: Section 105(c) of the' Atomic Energy Act was designed to protect or' regulate."E2! , l} In summary, the effort by the NRC Staff and Cleveland to
-distinguish Fermi is analytically flawed. In fact the Appeal
- O' Board held in Fermi that the consequences of a high-cost nuclear facility are outside the scope of NRC's authority under Section 105(c) notwithstanding alleged anticompetitive acts by t:,e f acil-
.0- " s-owners.
Finally, as to the.DOJ advice-letters to which Applicants. red in their-Motion,EEI notwithstanding DOJ and Cleveland's stestations,ES# in two of the instances to which Applicants referred, DOJ's analysis in its advice letters was that a Section
'105(c) proceeding would be' unnecessary because the nuclear facil-ities in question -- Davis-Besse 1 and Zimmer -- were not then anticipated to be low cost relative to the available alterna-tives. -Furthermore,-as Applicants' Motion states, while the out-O come of the. Forked River and Susquehanna advice letters was dif-ferent because of1the anticipated lov cost of those facilities,
- 0-critical reliance-vas placed by DOJ in those cases on the cost p factor.
~
lO: L Ed/ . ALAB-4 75, 7 N.R.C. at 757-58; see Applicants' Motion at 60-64.
'E2/ Applicants' . Motion at-64-67.
O HA/. DOJ Response at 16 n.21; Cleveland Answer at 56-62. lO
O In conclusion, the Opposition fails in its effort to analyze away the cost factor by reference to tying arrangements under the n Federal antitrust laws, and Applicants' so-called " incentive" to behave improperly. And notwithstanding substantial efforts to do so, the Opposition also cannot distinguish away the Fermi case O and those DOJ advice letters that previously addressed the issue now pending before this Board. The ineluctable conclusion from a review of all of this analysis is that the NRC has no antitrust O authority when a licensed facility produces high-cost electricity. O C. The Legislative History And Adjudicatory Applications Of Section 105(c) Provide Com-pelling Evidence That Low Cost Is A Threshold Requirement For Agency Action Under Section 105(c), Notwithstanding The Opposition's O Effort To Minimize This evidence There is a collective roar from the Opposition to the effect that Applicants' Motion does not present a fair-handed picture of O-either the legislative history of Section 105(c) or the cases that have applied Section 105(c)'s conditional standard.EE Nothing is further from the truth; in fact, it is the Opposi-O tion's descripti^n and treatment of the legislative history and applicable case law that is unreasonable, o a E5/ See NRC Staff Answer at 14-18 (legislative history) and 18-29 (case law); DOJ Response at 10-15 (legislative his-tory) and 16-17 (case law); Cleveland Answer at 16-33 (leg-islative history) and 34-56 (NRC cases); AMP-O Brief at 8-10 (legislative history); and Alabama Response at 12-14 (legis-O lative history). 9
0
- 1. Legit itive History O a. Use of legislative history Not surprisingly, the Opposition would like the Licensing Board to ignore the substantial treatment of cost in the legisla-O.
tive history of Section 105(c).EE# Accordingly, the Opposition and, particularly, the NRC Staff and DOJ, endeavors to convince the Board to do so by arguing first, that the meaning of Section -
' O^
105(c) is clear on its faceE2 and that, consequently, the Board should not look at l eg i s '. tive history; and second, that because the report of the 1970 legislation issued by the Joint Committee s O on Atomic Energy EE does not use the word " cost," cost is not of importance, and therefore it is unnecessary for the Board to delve any further into the legislative history.EE# Applicants already have addressed the Opposition's claims that the meaning of Section 105(c) is so self-evident that it O would ta inappropriate to resort to well-established meaas of - EE/ See Applicants' Motion at 34-45. O al/ See NRC Staff Answer at 5-6, 14-15; see also cleveland Answer at 16. EE/ See, Report of the Joint Committee on Atomic Energy: Amend-ing the Atomic Energy Act cf 1954, as Amended, to Eliminate the Recuirement for a Finding of Practical Value, to Provide O for Prelicensing Antitrust Review of Production and Utiliza-tion Facilities, and to Effectuate Certain Other Purcoses Pertaining to Nuclear Facilities, H.R. No. 1470, 91st Cong., 2d Sess. 9 (1970), reorinted in 1970 U.S.C.C.A.N. 4981 (" Joint Committee Report"). O 19/ See NRC Staff Answer at 14-15; DOJ Response at 10-12.
~40- 1 O
. .~ . - - - - . - .- . - - - . ,
LOL , l 1 better understanding it.90/ ;In summary, notwithstanding the l Opposition's--claim:to the contrary, and recognizing that'the word
- " cost"-is not in-Section 105(c), the meaning of the conditional '
language of Section 105(c) is not " express"..E/ Furthermore, to the extent the meaning of the whether" phrase of Section 105(c) can be discerned from semantically parsing the specific words contained in it, those words on their face. require.a threshold
-showing that'the "acti'vities under a license" in some way " create -O or maintain." N # Logically, such a showing is not possible in the absence of a low-cost facility.93/ In short, for the Opposi-tion to rely on the absence of the word " cost" in Section 105(c) is not only superficial, it defies the " plain meaning" of the statute, given a reasonable effort to discern it.
10
- b. Contents of legislative history As to the legislative history of Section 105(c), Applicants' OL Motion'addrensed the Joint Committee Rtport, and the Opposition's F
interpretation _of its so-called " silence" on the issue of cost.E ! Several points bear emphasis here.- First, lO L N/i See Section'II.A, suora; see also discussion of proper use l_ .of legislative. history set forth in Applicants' Motion at 34 l n . 76. - OL lE / - ooJ Resp:anse at 7 (quoting Farle2, 692 F.2d at 1373). N/ See Section II.A, supra.
-E/ See-Section'II.B, suora.
lO- 14./ Applicants' Motion at 36
!O' -
O
.notwithstanding the Opposition's effort to aggrandize the Joint Committee Report,95/ and without challenging in ary way the prop-O osition that this document should be the starting point for anal-ysis of the legislative history of the 1970 amendments to the Act, the plain fact of the matter is that the Joint Committee Report is not an analytical document. Applicants urge the Board
_ to review that Report, which is attached hereto as Appendix 1. From its review, the Board will see that the Report is a brief __ document summarizing the 1970 anendments to e.he Act. It treats very briefly the section of the Act at issue here,96/ focusing - - exclusively on the fact that Section 105's standard for imposing O.
. antitrust remedies does not require actual violations of the 4 antitrust laws. Certainly, the standard of reasonable probabil-ity of contravention of the antitrust laws is not the only issue O
_; in a Section 105(c) analysis; yet this is the implication of the 2 Opposition's position when it argues that one can reasonably con-clude from the Joint Committee Report that low-cost power is not a necessary prerequisite before the " activities under the license," referenced in passing in the Joint Committee Report, 3 are capable of being " inconsistent with any of the antitrust _O laws."97/-- This argument is particularly unconvincing where, as O 25/ See DOJ Response at 10 ("a Report that explained its delib-erations and its interpretation of the legislat;^n"). 25/ See Applicants' Motion at 35-36, 22/ Joint Committee Report at 13-15, 28-31; see also DOJ O Response at 11-12. y , O
m .O? here, it-is motivated by the self-serving purpose of directing the Board's attention away from the substantial consideration of the proposed statutory amendments contained in two volumes of legislative history,9M and-particularly, the pivotal importance placed on cost in-that history. The low cost of nuclear power probably was not specifically included in the Joint Committee Report because, unlike the one .O- observation _about s'ection 105(c) that was made in the Report, it
-vas not a controversial issue at the time the 1970 amendments
' vere adopted.. It was-generally accepted that nuclear power would O be the most economic and, hence, attractive energy source of the future. -In_short, it is not at all surprising that the summary Joint Committee Report does not address t'le importance of cost in O c_section 105(c) analysis.
When the Opposition finally turns its attention to the mate-u rials in the-legislative history that address the purpose and , ,0 intended scope of Section 105(c) and, in so doing, discuss cost, they seek to minimize, if not impugn, the testimony of the most authoritative and objective witnesses who appeared before the m e-Committee in support of the proposed legislation. For example, the NRC Staff asserts that "the Applicants have only
- O W See-Prelicer. sing Antitrust Review of Nuclear Powerplants, L Hearings Before the Joint Committee on Atomic Eneroy, Part l_,'91st Cong., 1st Sess. 1 (1970) (" Joint Committee I") at L 75; Prelicensins 1.ntitrust Review of Nuclear Powerplants, l' Hearings Bef ore the Joint- Committee on Atomic Erieroy, Part O.- 2, 91st Cong.,_2d Sess. 461 (1970) (" Joint Committee II").
l
-43_-
l' 'O.
O' succeeded in. finding a'few statements by various witnesses, not
-legislators, in-which views were expressed to the effect that ~O' access to ' low cost' electricity-may give some a competitive advantage'over others without such access."ES/ Describing these statements as a "few selective quotations,"100/ the NRC Staff
.ON .. . then argues that, contrary to Applicants' representations, there ' was a " diversity of opinion presented to the Joint Committee relat'ing to' cost."101/ .O The facts. belie the characterizations of the Opposition about the testimony before the Joint Committee. First, it is not
- () a reasonable. portrayal of the dialogue among the witnesses and
-the members of the Joint Committee to suggest that the witnesses focused on low cost but the legislators did not.102/ Sy its
$) nature,'the testimony presented to the Committee tended to be from witnesses to-Committee legislators. However, as Applicants' Motion-reflects,103/ dialogue between these two groups of partic-LOj ipants addressed the7 issue of cost, end there was consistent E E
._ 32/ NRC Staff Answer at 15.(citing Applicants' Motion at 36-44).
lO-E 100/ NRC: Staff _ Answer at 15; see also id. at 16 ("a few selected statements of: witnesses"); Cleveland-Answer at 30 (" selected-L excerpts from witnesses who were not members of Congress"); b Alabama Response at-12 (" highly selected quotations of is witnesses"). ~O;
-101/-Id. at 16.
102/.Id.'at 15. 103/ Applicants' Motion at 36-40 _(dialogue among witnesses and ,O' l CommitteeJmembers). lO
r O concurrence among the participants in these dialogues as to the cer.trality of "the newly available cheap source of power"104/ g the need for adoption of Section 105(c).105/ Second, to describe Applicants' recitation of 'ae relevant 13 legislative history as a "few selective quotations" is inaccu-rate. The discussion of the legislative history contained in Applicants' Motion includes primarily the views expressed on this O issue by every Federal government witness who testified before [ the Committee and addressed the subject. To be specific, during the first session of hearings convened by the Joint committee, O five government witnesses testified: the General Ccunsel and the Chairman of the Atomic Energy Commission (Hennessey and Ramey), the Assistant Secretary for Water Quality and Research for the O Department of the Interior (Klein), the Acting Assistant Attorney General of the Antitrust Division of DOJ (Comegys), and the Director, Energy Policy Staff, Office of Science and Technology O (Freeman).106/ Applicants' description of the legislative - 104/ Joint Committee I at 75 (AEC teaeral Counsel Hennessey). 105/ Throughout the legislative history, most of the statements made are made by witnesses, not Committee members. But even in the legislators' questions there are references to low-cost nuclear power. See, e.o., Joint Committee II at 407 (question from Representrve Hosmer to a utility wit- - O ness regarding "your nice new, cheap nuclear plant."); see also Joint Committee I at 5 (statement by Senator Aiken con-cerning need to ensure that "the practices of democracy as well as the health of our people" are not put "on the altar of uncontrolled economic desire."). O 106/ See Joint Contmittee I at (III). l O
. . .. - .~ . . . . - - . . . ~.
- Of history relies on the testimony of all of these witnesses with the exception of the. testimony of the Assistant Secrctary for
- O Water-Quality, whose testimony did not concern the pending anti-trust legislation but, rather,-addressed environmental quality issues also under consideration.107/ Applicants also referred to
.O. - -
a speech delivered-by the' Director of Policy of the Antitrust Division of DOJ (Donnem) that was inserted into the record in anticipation of the testimony-that=vas to follow by the represen-tative from DOJ,108/ and follow-up correspondence after the wit-nesses testifled between the Committee and DOJ.109/ 10: In short, in assessing the intended purpose and "particular-ized regime"110/ of Section 105(c) set forth in the legislative history, Applicants relied on the testimony of the witnesses who,
- 0_ . presumably, were both the most expert in the field and the most objective advocates of~the public interest. These witnesses also were unequivocal advocates of the proposed legislation -- a nec-10 essary' criteria for reliance upon them in assessing legislative history.111/ -Ironically, these were the witnesses from the very agencies (NRC'and DOJ) who now belittle the testimonyt
- O-107/ See-Joint Committee I at 55-66.
[_ 108/.See ~id. at 6-12.
- O
- . .
109/.See id. at 142-49. 110/ Houston Lighting & Power Co. (South Texas Project, Units 1 & l t 2 .' , CLI-77-13, 5 N.R.C.. 1303, 1309 (1977) (" South Texas"). - O 111/ See Applicants' Motion at 34 n.76. O' l-l
O a In addition, after reviewing the statements made by the gov-ernment witnesr.en, Applicants also cited the testimony in support of the legislation given during the second session of hearings by counsel to the Mid-West Electric Consumers Association, Inc. (Wise).11?/ -- Ubviously, Applicants relied on this testimony O because it reflected the viewpoint of the rural electric coopera-tives and municipally owned electric systems, _i__ . e . , those enci-ties, like Cleveland and AMP-0, who were the intended beneficia- - ries of the legislation. Not only does the NRC Staff belittle the testimony of its O own expert witnesses and the testimony of the primary beneficia-ries of the proposed legislation, but it criticizes Applicants for their exclusion of the testimony of witnesses who were not O happy with the legislation as proposed. In particular, the NRC Staff chastises Applicants for "ignor(ing] the other views of the remaining nineteen or so witnesses who appeared before the Joint O Committee." M / Applicants in fact did not cite to the testimony during the O second session of hearings given primarily by witnesses from the nuclear utility industry.114 In addition, Applicants did not O 112/ see Joint Committee II at 461-74 (cited in Applicants' Motion at 43-45). 113/ NRC Staff Answer at 15 n.22. O 114/ See Jcint Committee II at (III) (index to testimony, refer-encing thirteen nuclear utility executives). O
& 2 J c X is e d- u 4 Si .4- w4-- J--A4 4 5 -4 *+ h et,iL-* -
.Q:
^
- refer to_the-tertimony of four consumer and municipality wit-
_ - . nesses, one labor union representative and two witnesses from the 0:- - small, publicly-owned utility sector. But this testimony need not have been cited in order to provide to the Board a fair and accurate description of the legislative record on which the O
- edopted legislation was-based. As to the nuclear industry wit-nesses, had Applicants relied upon them, the Opposition surely would-have dismissed their testimony as wholly self-ser/ing; for these vers witnesses from companies, like the Applicants, who already had committed to and, in some' cases, vere operating nuclear-powered facilities. Second, it would have been inappro-priate-to rely _on these witnesses because they were not advocai.es of the legislation, primarily because of the industry's serious
-concern about_the-delay _in the licensing process that-it antici-O-
pated from passage of the_ legislation.115/ l This is'not to say, however, that the nuclear industry wit-O- nesses did not consider nuclear power to be cost-advantageous over_other-available alternatives. As the executive representing
.O' L 115/. gee, -
e.a., testimony of the Chairman of the Board, Common-wealth Edison Co. (Ward), Joint Committee II at 382-393
. (cited _by DOJ in DOJ Response at 14);-testimony lon behalf.of
- O the Edison Electric Institute by the'Vice President, Finance
, and General Counsel-of~ Duke Power Co. (Horn), Joint Commit-L tee:-II7at 320-45; testimeny of the Chairman of the Board of l Directors and Presider.t of Carolina Power & Light Co. L (Harris), Joint Committee II at 489-507; testimony of the l President of' Consumers Power Co. (Campbell), Joint Committee O II at'513-522.
'O:
l .
l lC the Edison Electric Institute ("EEI") testified, 16/ EEI opposed the legislation primarily because of its concern about delay and O the increase in facility costs that such delays would cause. In addition, however, EEI testified against the antitrust require-ment in the proposal, because it would permit the sale of power O to one or more customers "from the utility's newest, most eco-nomic plant" without rega-d to the sharing of costs from a utili-ty's older, higher-cost plants.11 # In contrast, with respect to _ O new fossil-fueled plants, "vith the current coal shortage . . . their operating costs are likely to be higher than systemwide costs."II Ir. short, EEI acknowledged and, in fact, considered O the legislation unreasonable with respect to, new .Zow-cost nuclear facilities. O similarly, shearon Harris, the Chairman of the Board of Directors and President of Carolina Power & Light Company, testi-fied tnat his company obf e-d to the antitrust provisions of the O proposed legislation because they "would unnecessarily delay the - completion of essential nuclear-generating plants."119/ But in describing the purpose of the legislation, Mr. Harris observed O that "the so-called antitrust issues relate to accessibility of O 116/ see n.lls, supra. 117/ Joint Committee II at 324-25. 118/ Id. at 325. O 119/ Joint Committee II at 491, 495-98. l 1 0
O power supply and the cost of that power. This is really what you are talking about."1 O-
-The issue was put quite succinctly by the Chairman of the Board of Northeast Utilities, Sherman R. Knapp:1 I O
I recognize that one concern which underlies all of these bills is that of access of smaller utility sys-tems to the benefits of nuclear technology. Before expressing to you my concerns on the proposed bills,1227 I should define for you the Northeast Utili-O ties position on the access <; ablem. In 1966, Northeast Utilities issued a policy statement defining for each of its own municipal whole-sale c'istomers in Connecticut and Massachusetts a basis on which each of these customers would be entitled to O share directly in the cost experience of the new large generating units, nuclear and non-nuciear, that the Northeast Utilities system is installing. . . . Representative HOSMER. That is pretty generous. O- Senator AIKEN. Unthinkable. (laughter.] In short, it is absurd for the opposition to suggest 123/ that Applicants have somehow distorted the legislative history in 120/ M. at 500. It was Mr. Harris' recommendation that such matters be left to the responsibility of the Federal Power . O Commission, and that the AEC not be given overlapping responsibilities in this area. M. at 500-01, 121/ M. at 394-95. 122/ Mr. Knapp's major concerns were: (1) that the AEC should O not have responsibility for antitrust matters; (2) that antitrust matters should not be permitted to delay the licensing process; and (3) that the standard for AEC action should be actual or prospective violations of the antitrust laws. M. at 397-99. O 123/ see n.100, supra. O
i %} ! their reliance primarily on the government witnesses who testi-l fled on-behalf of it.124/ LO _124/ DOJ argues that the testimony of e:cecutives f rom two nuclear
- O utility companies,. Commonwealth Edison Company and Southern California Edison Company, somehow rebuts the testimony of the myriad other witnesses who describe nuclear's attraction as its provision of low-cost bulk power. DOJ Response at 14-15. This is-incorrect. In fact, in the context of whether he would-advocate a Section 105(c)-type rule for 10' fossil plants, which he did not, J. Harris ward, the Chair-man of the Board of Commonwealth Edison, did comment that there were pros and cons to investments in each mode of gen-eration, with'the economics of scale in nuclear generation
.being "semewhat (but not uniquely)-greater;" and nuclear fuel generally being cheaper. Joint Committee II at 391;
- O see DoJ Response at 14. Mr. ward also observed that the experience of-his company with its first nuclear facility, Dresden 1,-" convinced us of the promise of nuclear-power and led us to make a larger nuclear commitment than any other investor-owned utility in the nation." Joint Committee II at 382.- None of these observations suggest in any way that LO' ~
Mr. Ward considered nuclear's attractiveness and value to be something other than its provision of low-cost bulk power. As to the testimony of William R. Gould, the Senior Vice President of California Edison, the reason why nuclear poser . - was the base load power of choice for this company was O because it was the most economic option available. See Joint Committee II at 436.- The absence of fossil-fueled
-facilities as viable alternatives because of environmental i considerations does not make nuclear plants less advanta-r geous-from a cost perspective. In fact, the Final Environ-
+ mental Statement-(FES) for the San Onofre-facilities, to 3)! which-Mr..Gould refers in his testimony, compares the costs and benefits of the proposed nuclear plants and hypothetical fossil-fueled-plants._ Calculated on the basis 1978 present worth'(million dollars), the NRC Staff concludes that the nuclear plants would be cheaper ($1393.1 vs. $2098). See Final Environmental Statement related to the proposed San il -Onofre Nuclear. Generating Station Units 2 and 3 (March 1973) at Table-13.1; see also Aoolicants' Environmental Reoort, Construction Permit Stage, San Onofre Nuclear Generating Station, Units 2 and 3 (July 1970) at 8.1-6 ("the installa-tion of-San Onofre Units 2 and 3 is economically and envi-
.ronmentally preferable"). In short, DOJ is wrong about Mr.
[O . Gould's pe mpective, as well. . i'O
- O-Aireviewlof the other testimony in the legislative record, including the' testimony of the--labor union, consumer, municipal-ity and'small, publicly-owned utility witnesses, is fully consis-tent, and shows that these witnesses also understood that the purpose of the Section 105(c) legislation was to provide access to nuclear power, which would be relatively low cost compared'to viable alternatives 125/
)3 Moreover, if_the NRC Staff really wanted to present a com-plete picture of_the balance.of the legislative history of the 1970 amendments to Section 405(c), at least with respect to its
- O treatment of the issue of cost, as it suggests it does, it would have. acknowledged the written question _from the Committee and
-lengthy. response.thereto from the General Manager of the American-O-
125/ The vitness from the AFL-CIO (Taylor), for example,-testi-fied that "all' utilities, regardless of ownership should share in the benefit of nuclear power generation," including A; x -
"being able to purchase-power at the same prices which the *
> private utilities pay,'and a fair' share of pooling opera-tions," i.e., "have the legal right to obtain an equitable
-power supply at;a fair price." Joint Committee II at 544.
Thus, this~vitness also considered the value of the proposed legislatlon to.be its ability to make accessible the cost
=a dvantage of nuclear-powered facilities. Similarly,_the
.O. testimony of the Staff Counsel to the General Manager, National Rural Electric Cooperative Association (Robinson) also focused on the economic - 'i.e1, cost -- advantage of_ nuclear power: If nuclear energy is going to be the princi- -[3 _ ple' source of generation.-in the future, as it appears to be for either economic reasons or reasons of the_need to prevent air pollution,
. - . then we want to be able to participate l in it to whatever small degree we can.
OL Joint. committee II at 429. o l 0 js
.O Public Power Association ("APPA")-(Radin), which represented 1,400 local and, for the most part, small publicly-owned electric utilities in 48 states, Puerto Rico, Guam and the Virgin Islands. In that exchange, the APPA identified the relative cost of bulk power as the factor providing a " decisive competitive advantage" O_ to a utility over its competitors.126/ 126/ C) . Question 1. The Justice Department indicated that as part of -the antitrust review it will be necessary to determine the extent to which a large scale nuclear plant affords its participants a " decisive competitive advantage" over their competitors. (Part 1, p. 9) 'O (a) . In your experience, is there such direct com-petition between utilities, as either wholesalers or retailers of electricity, that a variation in the cost of their product could result in a " decisive competi-tive advantage" in the usual sense? O (b) W'uld o a competition advantage result from one new plant or from a total system, including back-up capacity? Answer: (a) '. . . (C]ompetition complements regula-O~ tory activity in providing service that meets the pub-lic-needs. . . . (s]uch competition can and should be encouraged here in.the consumer's best interest.' The Federal Pover Commission's 1964 " National Power Survey" showed generation accounts for 51%, O transmission for 10%, and distribution for 39% of the total delivered cost of power; the relative cost of each of these functions was based on a composite
. national average for all segments of the industry.
These figures indicate the significant role which the cost of bulk power supply . . . plays in inter-utility AD competition . . . . Competitive impacts of availability of a low-cost source of bulk power supply are documented in a study by the Tennessee Valley Authority . . . . O Footnote continued on next page. O
in ?' I In short, notwithstanding the Opposition's assertions to the contrary, the balance of the legislative history that addresses o" the purpose and meaning of Section 105(c), which requires the NRC to remedy antitrust concerns in certain, specified " situations," is fully in accord with the most weighty legislative history, to O which Applicants' Motion rcfers. While the opposition places substantial reliance on a report O prepared by Philip Sporn, then retired President of American Footnote continued from previous page. O Additional evidence of the competitive character of the cost of bulk power supply is found in the activ-ities of private power companies in seeking to prevent access by local public power systems to the most eco-nomic. sources . . . . O In summary, it is our experience that the cost of bulk power supply affects the competitive situation and can involve a " decisive competitive advantage. " . . . (b) . . . In obtaining their bulk power O supply, individuc1 utilities normally canvass the - alternatives available to them. It may be determined that wholesale purchases from another utility, self generation, or a combination o[f] both, represents the most economic source. However, analysis may also reveal that a utility -- acting for itself or in con-O cert with others -- can rea'ize significant savings by participating in a large unit, or a series of units, the output of which will be shared with necessary reserves and transmission supplied or purchased by par-ticipants. While the cost of reserves and transmission must be factored into the analysis, it is clear that in O many situations a definite competitive advantage may flow from a solution of this kind. See Joint Committee Report II at 346, 358-60 (quoting speech by Henry Ginhorn at SEC proceedings involving the proposed merger of New England Electric System, Eastern Utilities O Associates and Boston Edison Company) (emphasis added). O
O-Electric Power Company, about the costs of nuclear power,127/ this reliance is misplaced. Mr. Sporn's report is included at n the end-of the first session of hearings on the proposed legisla-tion; however, it does not address or even mention the pending legislation.1 # In fact, Mr. Sporn did not testify before the O Joint Committee on the subject of the legislation, nor does there appear to be reference in the hearing record to the appended report by Mr. Sporn. Rather, the report is a think piece on the _ state of the entire electric utility industry.129/ Furthermore, a review of Mr. Sporn's report establishes the g following: (1) Mr. Sporn was concerned about the rising cost of the nuclear and fossil-fueled industries, which " hopefully . . . will be arrested soon"1 0/; (2) Mr. Sporn nevertheless believed g that, primarily because of environmental concerns, "within a very short time -- say 50 years -- we will be heading into an all-O 127/ See NRC Staff Answer at 16; DOJ Response at 13-14; Cleveland . Answer at 30-31. 128/ See Joint Committee I at 300-311. While Mr. Sporn's report is appended to hearings convened in November, 1969, it encompasses-developments in nuclear power economics through O . December, 1969. Thus, it obviously was not prepared to present at those hearings. 129/ .Apparently, Mr. Sporn produced such reports from time to time, because reference is made by the AEC to a Sporn report with essentially the same title covering an earlier O timeframe in connection with AEC's 1966 determination "to await a reliable estimate of the economics" of nuclear power - before making a " practical value" determination. 31 Fed. Reg. 221, 223 n.3 (1966); see generally Section II.C.1.c, infra. g 130/ Joint Comraittee II at 304. O
_ , _ . . . _ .-~ 101 nuclear-energy economy"131/; and (3) the purpose of Mr. Sporn's report was to advocate that the Joint Committee and the AEC take
'O responsibility for leading the country towarus improved decisionmaking in planning, research and other aspects of energy utilization.
O~ While Mr. Sporn's report does not present the glowing pic-ture of the economics of nuclear power that is found repeatedly 0 throughout the legislative history of the 1970 amendments to Sec-tion 105,132/ his report certainly does not contradict the fact that the purpose of Section 105(c)'s antitrust review was to 0; ensure access to nuclear plants, which were considered by the O'
~131/ id._at 309, The anticipated dominance of nuclear energy in the utility industry is reflected elsewhere in the legisla-tiveihistory. See e.o., appended statement by Senator Philip A. Hart,_ Joint Committee II at 559 ("I should think O- that one of the most important-problems will be the terms of
-access for small utility systems to these new, low-cost energy. sources. These plants vill provide much of the power growth in this country in the foreseeable future, so the problem assumes great importance.").
LOL 132/ It is interesting.to note that in the 1973. Final Environment Statement for the operation of the Donald C. Cook Nuclear Plant, Units 1 and 2, built by Mr. Sporn's former company, American Electric Power Company, the proposed nuclear facil-Ities were estimated by the AEC in 1973 to be substantially less costly than the cost of postulated coal-fired and air-CF fired alternatives; specifically, the comparison yielded
. S85. 5 versus :$173.7 and S234.7 million for the " annualized equivalent during operation of life-of-plant cost." While the anticipated. construction cost of the nuclear plants were higher ($620, versus S474 and $337 million), the annual operating cost of the nuclear plants was anticipated to be
,lO substantially-lower ($242, versus $447 and $949 million).
~O;
'O proponents (and opponents) of the legislation to be sources of low-cost bulk power vis-a-vis the available alternatives.133/ O In summary, Applicants' Motion provides an accurate picture of the contents and tenor of the legislative history of Section O 105(c) with respect to the issue of cost. Thet picture reflects the centrality of low cost to Section 105(c) determinations. Moreover, one might ask, if it was not the prospective low-cost O advantage of nuclear power, what was it that led Congress to authorize the imposition of antitrust remedies as a part of the nuclear licensing process? The Opposition provides no answer to O this question.
- c. The " practical value" context of I the legislative history O
In addition to misrepresenting the contents of the testimony before the Joint Committee on Section 105(c), the Opposition's O position is painfully inconsistent with the entire context of the 1970 amendments to the Act. O 133/ DOJ incorrectly concludes, " Based on the information before it, Congress correctly could have concluded that the power generated by nuclear units would not necessarily be lower cost than that generated by fossil units." DOJ Response at 15 (emphasis added). Of course, Congress did not reach this O conclusion. Moreover, the question Applicants now pose is whether, in such circumstances, the high-cost nuclear facil-ity could " create or maintain" a " situation". In any event. for Congress to have reached the conclusion 00J now pro-motes, it would have had to wholly disregarded the views of all of the witnesses who testified on this subject before O the Joint Committee, including the DOJ witnesses. O
'Ot In providing for the Section 105(c) antitrust review pro-
-cess, Congress also eliminated the " practical value" finding O
that, until 1970, had been required before the Act's then-exist-ing antitrust provision came into play.134/ The requirement that a finding of practical value be made before facilities would be licensed under'Section 103 of-the Act and subject to antitrust reviews was based principally upon (1) an anticipated scarcity of and consequent need to ration nuclear materials, and (2) the desire to designate the point at which a facility type would no longer be eligible for government assistance. The former ratio-nale quickly became moot as the anticipated scarcity never mate-O rialized.- The latter rationale also became moot because the sec-ond generation of reacters was not receiving financial assistance from the government.135/
- O Prior to the 1970 amendments, nuclear plants had been
-licensed as "research and development" facilities under Section Oi 104 of the Act. The antitrust provision of the Act.did not apply to-Section 104 licenses and, thus, facilities licensed before 1970 were not subjected to antitrust reviews. Before that anti-10- . trust provision became applicable, the Act required the NRC to determine that nuclear plants were commercially viable, i.e.,
~O. 134/ See n.88 supra, with title to Joint Committee Report encom-passing the " Finding of Practical Value" and the provision of a "Prelicensing Antitrust Review." 135/ See 31 Fed. Reg. 221, 223 (1966) (proposed AEC rule on prac- .-.O tical value); see also Joint Committee I at 41.
- O
O that, pursuant to the statutory language, they had " practical value."136/ Critics of the AEC alleged that it dragged its feet O in making the practical value determination to avoid the anti-trust review provisions of the Act. O By 1970, the statutory requirement for a finding of practi-cal value had been overtaken by events. Numerous facilities licensed as research and development reactors were being con-O structed and going into commercial nuclear power plants. In short, the reality was that by 1970, the technology and economics of nuclear power appeared to be sufficiently developed that rea-O sonably accurate predictions about costs could be made.137/ Accordingly, the statutory requirement for an agency :inding of practical value was eliminated, and the commercial licensing pro-O- cess, with its associated antitrust review, was initiated.138' O 136/ The Atomic Energy Act of 1954, Pub. L. No. 83-703, 5 102, 68 - Stat.-919,-936-937 (1954). 137/ Letter from AEC Chairman Glenn J. Seaborg to Joint Committee chairman Holifield (Aug. 29, 1966), reprinted in Hearings Before the Joint Committee on Atomic Energy on Participation O by Small Electrical Utilities in Nuclear Power, 90th Cong. 2d sess. 261, 271 (1968) ("1968 Hearings") (there was no longer a need for a mechanism that would serve to designate the point at which a facility type has reached the commer-cial stage). O 138/ Ft. Pierce Utils. Auth. v. United States, 606 F.2d 966, 989 (D.C. Cir.), cert, denied, 444 U.S. 842 (1979); see also id. at 993 ("The 1970 amendments were, in effect, a congressional finding of ' practical value,' requiring the Commission thereafter to issue ' commercial' licenses under section 103, rather than 'research and development' licenses O under section 104(b)."). O
__~ 01 l It is ironic, indeed, that the_NRC Staff, as well as others in the: Opposition, endeavor to rewrite history such that cost was O'
-not an integral part of the 1970 amendments. For the concept of practical.value, in the words of the General Counsel of the AEC, required the following findings:139/
O-(1) the_ technical feasibility of the reactor concept and its-basic technical characteristics had been
-adequately demonstrated and
() (2) there had been sufficient demonstration of the cost 'cf construction and operation of the type of nuclear power plant ~ as to provide a sound basis, with reasonable extrapolation, for a reliable estimate of the economic competitiveness of power produced in this type of plant with power that
- 0. would be produced in a comparable conventional-power plant that would be constructed at the same time and place.
The understanding that " practical value" meant commercial viability permeates the AEC's record on'this issue,140/ as well asJ the legislative history.141/ l _g- ~ 139/ Memorandum to-the Commissioners from AEC General Counsel
-Joseph F. Hennessey :(Feb._12, 1964) at' 8 on the subject of the-finding of' practical value under Section 102_of the Act, 1968 Hearings 261, 265'(emphasis added); accord, letter from Chairman Glenn J. Seaborg to Senator'Pastore, Chairman, O~ Joint Committee on Atomic Energy (May 15, 1964) at 2.
140/ See (Second) Memorandum to the Commissioners from General l -_ Counsel Hennessey (Feb. 12,. 1964) on the subject of the l finding of practical value under Section.102 of the Act, at 6,-1968 Hearings at 259;' proposed rulemakings on the finding . O _- of' practical value, 29 Fed. Reg. 221 (1966) (proposed rule); L 31 Fed. Reg. 116,732, 16~,733'(1966); Annual Report to Con-cress of the Atomic Eneroy Commission for 1970 (Jan.-1971), j at 6.n.14-("A practical value rule making proceeding initi-ated by the AEC by notice of June 26, 1970 was terminated by O Footnote continued on next page. 10' u
43L 1 Having established that nuclear facilities were sufficiently commercially viable, the cost question that remained for consid-3 eration on a case-by-case basis, and that appears repeatedly throughoutHthe legislative history of Section 105(c),142/ vas the issue ~ posed by Section 105(c); namely, is a particular facility OL not only commercially viable, but so competitively advantagaous that its const: action and operation would create or maintain a situation inconsistent with the entitrust laws? If this-latter finding was made, the agency was authorized by Section 105(c) to remedy the anticompetitive impact of the licensed facility. On the other-hand, if a licensed facility would not be competitively 'O~ advantageous, it would-not " create or maintain . . . , and reme-i
' dial action by the Commission would be unauthorized.
- O Footnote. continued from previous page.
notice-published on December 29. On two past occasions, tne Commission has~ considered the matter, and-concluded each time that a finding.coulo not be made on the basis ef cost j)l information limited to_the prototype and noncompetitive k nuclear power reactors then in operation. (See pp. 17-18,
' Annual Report to Congress for 1965' and p.-433, ' Annual t
L Report to Congress for 1966').").
.lll/ See, e.o. , Joint -Coneittee Report at 9; Joint Committee I at
- (31 15c(Senator Aiken)'; id. at 25 (AEC Chairman Ramey); see also South Texas, CLI-77-13, 5 N.R.C. at 1313'(1977) (citing 116 i Cong.1 Rec. H9,447-(daily ed. Sept. 30, 1970)) ("[i]n 1970 Congress found nuclear power to have acquired-' commercial value,and amended the Act to remove the ' anachronism' requiring an AEC finding of commercial value"); Cities of
' O :' ~
Statesville v. AEC,'441 F.2d 962,-970, 975 (D.C. Cir. 1969)
~(en banc)-(practical value determination requires demonstra-i -- tion of commercial utility;" (t]hese. atonic power plants are not like radio stations of proven technical and commercial
.").
feasibility. . . 142/ See Section II.C.1.b; Applicants' Motion at 34-45. LO. l ry-
10 L O 2. . Cases Aoplyina Section 105(c) The NRC Staff and Cleveland also argue that case law does O not support Applicants' understanding of Section-105(c).lil/ Applicants will not repeat in this Reply their detailed discus-sion of the cases that apply Section 105(c), and the reliance of O' those cases on the low cost of a nuclear facility as the neces-sary prerequisite fcc the imposition of antitrust conditions on NRC licensees. 44# The cases summarized by Applicants in their O Motion speak for themselves and, as Applicants' citations to them make clear, rely on the cost factor to establish the necessary requirement that the introduction of the licensed activities into O the marketplace will " create or maintain a situation inconsistent with the antitrust laws." 4 # In this Reply, Applicants turn to the Opposition's efforts to minimize and, in some cases, distort O the language and meaning of the cases that address Section " 105(c). Most of the NRC Staff's rebuttal can be reduced to two prop-ositions, neither of which is material to this case: (1) that NRC's antitrust cases express signi.icant concerns over O-143/ NRC Staff Answer at 18-29; Cleveland Answer at 33-56. 144/ S,ee Applicants' Motion at 45-57. O 145/ NRC staff Answer at 25. O
O anttcompetitive practices and remedies, and not just cost or nuclear facility access;146/ and (2) that these cases did not O hold that low cost is a jurisdictional prerequisite to agency action under Section 105(c).14 # Applicants do not contest either of these propositions; at the same time, neither proposi-O tion is significant.148/ As Applicants indicated in their Motion, 49# and discussed O in Section II.A.1, supra, the substantial discussion in NRC cases of issues of competitive behavior are a reflection of the fact that these issues were factually complicated and highly con-O tested. In contrast, there was no controversy over the determi-nation that the proposed facility in question would produce low cosc power that wnuld enhance the applicant's competitive posi-O tion in the marketplace. Notwithstanding its uncontroversial 146/ NRC Staff Answer at 19-23 (discussion of Midland and Davis-Besse/ Perry antitrust proceedings). 147/ Id. at 24-25, 28-29. 148/ AMP-O piggybacks on , arguments advocated by the NRC Staff. See AMP-O Br' t at 11-18. AMP-O's exposition adds nothing to the releve c analysis here. For example, AMP-O O cites to the NRC Staff Evaluation rejecting Applicants' license amendment requests for the erroneous proposition that "the licensees concede that cost was not an issue in the 1979 licensing conditions proceeding." AMP-O Brief at 14 (citing NRC Staff Evaluation at 10 & n.14). Moreover, AMP-O's reference to the Davis-Besse DOJ advice letter con-O tradicts AMP-O's theory of the case; for in the very passage quoted at length by AMP-0, emphasis is placed by DOJ on the critical importance of " access" to " low-cost power" from the CAPCO nuclear facilities. See AMP-O Brief at 16 (citing 36 Fed. Reg. 17,888, at 17,889-90). O 149/ Applicants' Motion at 46, ; O
l
.O I
nature, however, this expectation of low cost and, hence, compet- i itive advantage, was a r.ecessary prerequisite to consideration of O market conditions and, given those conditions, the remedies to be authorized to offset the anticompetitive advantage that the nuclear facility was anticipated to provide. O As to the absence of a holding that cost is a jurisdictional prerequisite, Applicants fully recognize that Lermi is the only O case that explicitly addresses this issue.1EE# But that should occasion no surprise. All of the cited cases involved construc-tion permit applications, submitted at a time when the universal M) expectation was that the proposed facilities would be economi- , cally preferable to any other available alternative. No appli-cant would have proceeded if it did not hold this expectation. () Very little, if any, discussion was required as to low cost until nov, when the economic reality is at odds with the expectation. In short, Intil now, there has been nt, challenge to the low-cost () f!ndings that were the predicate for NRC's remedial action under Section 105(c). The NRC Staff's argument suggests that the absence of an explicit holding on this issue in the antitrust Cl proceedings that took place under Section 105(c) constitutes a holding to the contrary, i.e., that the low cost of a facility is e p O 150/ See Applicants' Motion at 57-64; Section .I.8, supra.
-6t-O
l l 9 not a threshold requirement under Section 105(c).151/ Obviously, this is r.o'. the case, the questiun simply was not addressed in those cases.152/ Clevelars. also argues that NRC is authorized to impose anti-O trust conditions on licensees without regard to +he relative cost of the nuclear facility.113./ To a significant extent, Clevelaad relies on the same argument that the NRC Staff unsuccessfully O advances, !.e., that because issues of competi tive behavior were litigated extensively in these proceedings, the Section 105(c) remedies that were imposed did not require the prerequisite find-O ing of low cost as a starting point for the analysis leading up to them.154/ As is the case with the NRC Staff analysis, the 0 151/ See, e.o., NRC Staff Answer at 24 ("the Board (in Consumers Power Co. (Midland Plant, Uni ts 1 & 2), ALAB-452, 6 N.R.C. 892 (1977) (" Midland")] df> -t hold that it would have no jurisdiction to impose a* ttcat license conditions without a material finding of 'l<- =,t'"). O 152/ Thus Applicants agree t:.a. in Midland, there were found to be " advantages to nuclear power other than cost." NRC Staff Answer at 25. " Dependability" and " efficiency" were two such advantages identified by the Appeal Board. See id, at 24-25. The question before this Board, however, is whether
" advantages" like dependability and efficiency are, in fact, O competitively advantageous in the abs 9nce of the cost advan-tage. Both logic and the conjunctive language of Midland to which the NRC Staff refers (" efficient, dependable and eco-nomic baseload generation") suggest that tney are not. See Midland, ALAB-452, 6 N.R.C. at 1095 (emphesis added).
O 153/ Cleveland Answer at 34. 154/ See, e.a., Cleveland Answer at 38 ("Thus, the Licensing Board (in Louisiana _PougI,& Light Co. (Waterford Steam Elec-tric Generating Station) LBP-73-46, 6 A.E.C. 1163 (1973) n V rootnote continued on next page. O
O position of Cleveland is both illogical and inconsistent with the analysis contained in the decisions at issue.1EE' In addition, O however, Cleveland takes improper liberties with the language of the cases, as evidenced by the very citations to which it refers. O For example, Cleveland asserts that in the Waterford I case,156/ "[t}he NRC did not even mention ' cost' in the factors to be evaluated."1 However, the very point of the quotation O from vnich Cleveland draws this conclusion is that 'it would be insufficient for o petitioner simply to describe a situation inconsistent with the antitrust laws, regardless of now grievous O the situation might appear to be. A meaningful nexus must be established between the situation and the ' activities under the O Footnote continued from previous page. O ("Waterford II")) recognized that the increase in market power that would accompany operation of the nuclear facility would occur regardless of whether the nuclear power was low cost because the applicant was excluding its competitors from sqcess to alternate suppliers."); see also 14. at 39, 42, 44, 45, 49 (parallel analysis by C1cveland of Kansas Gas O and electric Co., (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 N.R.C. 558 (1975) (" Wolf Creek"), Midland, Farley and Dayis-Besse/ Perry decisions); id. at 54 ("[t]he NRC decisions demonstrate that it is conduct, not cost, that is the focus in any inquiry under Section 10S(c).") But see text at nn.156-167, infra. O 155/ See Applicants' Motion at 45-57. 156/ Louisiana Power & Light Co. (Waterford Steam Electric Gener-ating Station, Unit 3), CLI-73-7, 6 A.E.C. 48 (1973). O 157/ Cleveland Answer at 36. O I -- - - - - - - - - - - - - _ - - - - - - - - _ _ __
i license.,,J58/ Cleveland seems to be saying that because the word " cost" vas not used in this paragraph, cast is not at issue. O But the issue here is whether any such nexus can be established if the activities under the license involve the operation of a conipet itively high-cost plant. In any event, when Cleveland O endeavors to flesh out this language by reference to the Waterford II Licensing Board order, it disproves its own asser-tion. Specifically, Cleveland cites the following statements, O (whien focus entirely on cost!) by the Licensing Doard, in which it summarizes the intervenor's allegation and iti own determina-tion that an adequate relationship had been established by the O intervenor between the " situation" and the " activities under the license":159/ O . "They at.lege a monopoly in and an attempt to monopolize the construction and ownership of large, low cost electric generat.ing units in Applicant's area";
. " petitioners cost disadvantage is exacerbated due O to Applicant's alleged refusal to enter into coor-dina'ed o;aration agreements";
. "This results in even higher unit costs, thus increasing their competitive disadvantage. . . .
O Surely Cleveland appreciates the fact that the Waterford facility was anticipated to be one of these large, low-cost O 158/ Cleveland Answer at 35 (citing Waterford I, CLI-73-7, 6 A.E.C. at 49). 159/ Cleveland Answer at 36-37 (citing Wpterford II, LBP-73-46, O 6 A.E.C. at 1169-70) (emphasis added)). O
O electric generating units to which the Board was referring. This appr9clation is evidenced by the reprehensible omission by Cleve- .O land of the following portion (and only that portion) of the Board's statement: 60/
'O According to petitioners, the direct offect of uncondi-tional approval of the Waterford 3 license would be to further and substantially widen the disparity in power production costs. Waterford would make available to Applicant 1,065 mW of comparatively low cost electric power. Petitioners complain that recent rises in fos-O s11 fuel costs will further enhance the cost differen-tial between p ver they produce and power produced at Waterford 3.
Thus, the Waterford II Board clearly did not recognize or O believe, as Cleveland avers, that "the increase in market power i which would JEJompany operation of the nuclear facility would occur resaldless of whether the nuclear power was low cost."161/ To the contrary, the low cost of Waterford 3 was the necessary predicate for the Board's determination that it was authorized to consider the need for the imposition of Section 105(c) remedies. Cleveland's arguments about other NRC antitrust cases fail for the same analytical reason as does its treatment of the O Waterford set of cases. For example, Cleveland mistakenly argues that the Appeal Board decision in Wolf Creek supports its 0: 160/ LBP-73-46, 6 A.E.C. at 1169 (emphasis added); comoare Cleve-land Answer at 36-37. I O 151/ Cleveland Answer at 38.
,0 L
O thesis.1E2 In fact, in the lengthy quotation on which Cleveland
.elles,1E)/ the Appeal Boerd was explaining the need tc evaluate O
the prior existing anticompetitive conditions in order to deter-mine whether operation of the Wolf Creek facilities -- to which the local cooperat!ve was being denied access -- vould " maintain" those conditions.164/ But before any anticompetitive situation could be " intertwined with or exacerbated by the award of a license," the activities under the license had to be such that _ O the licensee could "use nuclear-generated power to the disadvan-tage of competitors."165/ This could not be raalized if the nuclear-generated power was high cost. O Similarly, Midland involved the integration of "the cheapest available power, low cost nuclear generation, within the appli-o cant's system and the denial of access to that generation to the applicant's competitors.166/ In Davis-Besse/ Perry, "it (vas) undisputed that the power available from the subject nuclear O - 162/ Cleveland Answer at 39-42. O 163/ See Cleveland Answer at 41. 164/ See Wolf Creek, ALAB-279, 1 N.R.C. at 568. Contrary to Cleveland's pejorative remark, Applicants did not ignore Wolf Creek. See Cleveland Answer at 39; but see Applicants' Motion at 21-22. O 165/ ALAB-279, 1 N.R.C. at 568-69. 166/ ALAB-452, 6 N.R.C. at 1096 n.772 (citing DOJ's Opening Brief on Appeal at 142), 1093 (citing DnJ's Reply Brief on Appeal at 124); see Applicants' Motion at 47-52; comparc Clevela;.d O Ansver at 42-44. 0 l l
-- m O
units is expected to be the cheapest base load power available tc serve new and growing loads."167/ O in short, Cleveland distorts the record in the NRC antitrust proceedings on which it relies in order to justify its mistaken O theory that low cost is not a pivotal, threshold determination in Section 105(c) analyses. The NRC Staff does not take the liber-ties with the record that Cleveland dces; but it duckr. both the O language about cos* contained in these cases and the meaning that reasonably can be derived from this language. The analyses of both parties is incorrect. O D. The Opposition's Red Herring Arguments Are Beside The PoinL_ O In a raft of sundry charges, the Opposition attacks Appli-cants' Motion. These charges, which can be characterized as " red herrings" in that they seek to divert attention away from the O real issue in this case when, in fact, they raise neither mate-rial nor correct allegations, concern (1) misrepresentations about the impact of NRC's removing the antitrust license condi-O tions it now imposes on Applicants; and (2) efforts to racast Applicants' case in legal contexts that are inapplicable. ) O 167/ DOJ Appeal Brief in Davis-Besse/Derry at 179 (citations to record omitted); see Applicants' Motion at 52-56; compare O Cleveland Answer at 48-52. O i
O.
- 1. The_1mpact of_ Removing the Li_ cense Conditions
,0 i In an effort to alarm the Licensing Board about the conse-quences of granting Applicants' Motion, a number of representa- , , () tions are made by AMP-0 68/ about the impact of removing the license conditions currently imposed on the Applicants. antitr; ' These representations do not provide an accurate picture of the O situ'ation that can be anticipated to exist if Applicants' Motion 4 is granted. The Opposition's effort to digress from the legal , question at issue to issues of fact (as ell as fantasy) is
'O irrelevant to the resolution of this case; nevert.heless, in view of the considerable effort made by AMP-O to sensationalize and distort the factual context of the pending issue of law, Appli-
-O cants summarily address this digression here. AMP-O says that it " fears that if those license conditions
'are suspended, the great strides made since the late.1970's'to reverse the ill. effects of the Applicants' anticompetitive conduct . . . will be reversed."169/ To the extent AMP-O hon-estly has such fears, they are irrational, for they have no foun-dation_in reality.-
- 0 -
1 68/_ AMP-0 Brief at 3 n.4 5, 18-22,-30 n.19. See also discus-sion by Applicants of DOJ's bizarre assertions about Appli-cants' " incentive to handicap their rivals." Cection II.8, supra. ~ 'O 169/LAMP-O Br'lef at 3 n.4. O'
._ ._ _ _ _ _ . _ _ _ - - ._ ___.___ _ . _ _ ~ ,
10 The reality is that Applicants' obligation to provide for the electric energy requirements of their municipal customers O and, specifically, for OE to provide for the electric energy requirements of AMP-O on behalf of its customers, is sat forth in detailed tariffs or rate schedules that have been approved and O are on file with FERC. As AMP-0 well knows, one of these rate schedules requires OE to provide wheeling services to AMP-0.170/ This requirement is wholly independent of Applicants' obligations O under the NRC license conditions. Thus, regardless of OE's intent, a subject Applicents will O address momentarily, as AMP-o well knows, OE could not engage in the conduct AMP-O represents will inevitably occur with the removal of the antitrust license conditions. For even if OE O sought to modify its tariff obligations with the nefarious intent described by AMP-0, the burden vould rest squarely on OE to jus-tif y to FERC a proposed tarif f modification.12-- O t In short, contrary to the inference AMP-O vould have the Board draw, even in the absence of the NRC's license conditions, Applicants cannot unilaterally change its service requirements to
~
O 170/ " Rate Schedule for Transmission Service," OE's Wholesale Tariff (on file with FERC). 171/ FERC's responsibility to take it. o account the antitrust impact of the wholesale electric power rates that it moni-O tors is summarily described in Applicants' Motion at 27-29. 1 O
O AMP-O or the municipalities it Larves and, specifically, OE can-not deny wheeling services to AMP-0, as AMP-O suggests.1 O As to AMP-O's imaginative description of the contract dis-putes it has had with OE,1 ! and its self-serving, obnoxious O conclusion that because of these disputes, OE "cannot be trusted to behave in accordance with the antitrust laws,"1 4# contrary to AMP-O's suggestion, just because OE does not agree with AMP-O's O interpretation of a contract does not mean that OE's intent is improper. Mind-boggling as it might seem to AMP-0, OE has obli-gations to others besides AMP-0, such as its retail customers and O its investors, and the interests of these parties is not always ' consistant with AMP-O's stated self-interest. F eral facts should be quite evident, however: (1) AMP-O was successful in O its pursuit of its contract interpretations, suggesting every 172/ On a related point, DOJ is inconsistent when it argues, on O the one hand, about Applicants' alleged anticompetitive incentive, while at the same time maintaining that the authority of other agencies is irrelevant. DOJ heuponse at 17-18. To the extent DOJ has a legitimate argument about Applicants' incentive, which it does not, see Secticn II.8, supra, the responsibility of other agencies in this subject O- area is very relevant. Applicants rehdily recognize that the antitrust authority of other agencies is not determina-tive of the scope of authority vested in the NRC. But appreciation of the plenary authority over antitrust matters vested in other agencies and the federal courtF does Clarify (1) the qualified nature of NRC's authority under Section O 105(c), and (2) the context in which Applicants would func-tion without the continued imposition of the conditions at issue here. 173/ See AMP-O Brief at 18-22. O 174/ Id. at 19. O
h o ability to protect its perceived interests without reliance on
.the NRC,1 5/ and (2) AMP-O is not the oppressed player in the utility industry in Ohio that it would have the Board believe.
- In summary, AMP-O's alarmist assertions about the conse-L g quences of removing the antitrust license conditions do not square with-the facts. Even if Applicants had the intent ascribed to them'by AMP-0, which available evidence contradicts, '
.g. Applicants' competitive behavior is now an'd will continue to be closely monitored and regulated by FERC. In addition, of course, as Applicants described in their Motion,I DI there are cultiple
,o avenues of relief available to AMP-O if Applicants were to behave in a manner inconsistent with the antitrust laws.177/ This is : not the purpose of the NRC's in,volvement in antitrust issues. 13. l 2. The Opposition's Inapplicable Lecal claims
.Thers are four diversionary assertions'by the Opposition O-t h a t r e c a s t: Applicants' case, and the legal question presented by it, in legal terms and contexts that simply do not apply.
-O: p ' 175/ Agp,O's comment about OE's' inability to' gain the support.of 97 its own-arbitrator is ridiculous. See AMP-O Brief at 21. There obviously was no need'for this individual to vote when the swingEvote agreedLvith=the-arbitrator picked by AMP-0. L 176/ Applicants' Motion at 25-30. !O- 121/ see AMP-O Brief at' 19'. 1 0- i
~...--..-..-L-.---.-.--- .. -- .-_-- . . - - . - . . . - -
10 l l DOJ argues that the issue before this Board is one of reme-dial discretion;178/ that the NRC has broad remedial authority under Section 105(c);179# and that this NRC authority is not lost "because of changed circumstances subsequent to the issuance of remedial orders."180/ DOJ's legal framework is incorrect. O The issue pending before this Board is neither an issue of remedies nor a matter of agency discretion. Rather, the bedrock o issue in this case raises a question of the meaning of a statu-tory provision and the authority vested in the NRC by that provi-sion. In particular, Applicants are raising the question of ' o whether Congress intended Sectie 105(c) to be used to enforce cntitrust conditions when the nuclear facilities to which those cor - tions are attached provides no cost advantage to its owners. O Contrary to DOJ's assertion, Applicants are not arguing that NRC has " lost" its legal authority because of changed circum-stances. The scope of NRC's authority in this area has remained 0 - unchanged. Rather, it is Applicants' posicion that, because of the unanticipated high cost of these facilities, once that high cost was evident, NRC did not have the authority to impose these O O 178/ DOJ Response at 2. 179/ Id. et 6. O 180/ Id. at 6-7 O
O license conditions on Applicants.1 I! Thus, Applicants under-stand that as long as the facilities were expected to be low Tl
~
the impcsition of remedies under Section 106(c) analysis of 1 cost, l l the " situation" was appropriate. However, NRC's Section 103(c) n authority -- as is the case with all exercises of authority -- is not unbounded. In this conter.t, Applicants believe the estab-lished (as opposed to the anticipated) facts do not and never would have supported the exercise of that authority. O r In a similar argument, AMP-0 mischaracterizes Applicants' position as a request for an administrative modification of a C) statute.182/ AMP-O is wrong. It is Applicants' contention that Section 10S(c) as written and properly applied cannot authorize antitrust license conditions in the present situation, i.e., when O Applicants' facilities produce relatively high cost power. Thus, contrary to AMP-O's argument, Applicants are not asking this O 181/ DOJ asserts that the only consideration is whether a "situa-tion inconsistent" is created or maintained by the activi-ties under the license "at the time the antitrust 'ditions are imposed." DOJ Response at 8. This cannot bt e: the O conditions were imposed on Perry before the nucle. .acility was operational. 182/ AMP-0 Brief at 6, 10-14. All of the cases cited by AMP-0 concern situations where an agency s ught to ignore or mod-ify provisions of a statute, action that Applicants cer-O tainl,y are not seeking in this case. See id. at 10-14 (cit-ing FPC v. Texaco, 417 U.S. 380, 394-96 (1974); Metropolitan Transp. Auth, v. FERC, 796 F.2d 584, 593 2d Cir. 1986), cert, denied, 479 U.S. 1085 (1987); NRDC v. Costle, 568 F.2d 1369 (D.C. Cir. 1977); Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979); office of Consumers' Council v. FERC, O 655 F.2d 1132 (D.C. Cir. 1980)). O
O Board to modify the Act, or in any way to go beyond its vested authority. 'O AMP-O and the MRC Staff also alarmingly contend that Appli-cants' interpretation of Section 105(c) would make that provision o meaningless because it would impose t least the risk that lic-ensee antitrast conditions could be changed "at any time."183/ -- In a doomsday scenario appeal, AMP-O and the NRC Staff then O assert that this vould cause financing and planning problems for AMP-O and others, unending litigation, and administrative nightmares.184/ This threat is entirely manufactured. For in O the real world, the circumstances that led to Applicants' posi-tion are that the actual costs of Perry and Davis-Besse never b comported with the anticipated cost of these facilities. Thus, O contrary to the NRC Staff's remark, Applicants' request for license amendments has nothing to do with " fluctuations in the (relative) cost of electricity."183/ O ~ Furthermore, with the conpletion of the construction phase i.e., there are now fixed sunk costs for construction (includ-ing experience as to needed capital additions) -- and actual O experience with ope r ating costs for these facilities, it is unreasonable (unfortunately) to contend that there is any real O 181/ AMP-0 Brief at 4-5, 22-24; NRC Staff Answer at 8 n.12, 13 n.19, 17-18 and nn.26-27, 184/ AMP-O Brief at 25-26; NRC Staff Answer at 18 n.27. C) 185/ NRC Staff Ansv(r at 8 n.12.
~77-M
O
" risk" that these facilities will ever be low-cost, as they were anticipated to be.186/
O In short, there is no basis in fact for the Opposition's concern that "the Commission's jurisdiction with respect to anti-o trust conditions could come and go over the life of a license."lB7/ And with respect to the extremely remote possibil-ity that circumstances could change dramatically and for the bet-o ter with respect to the relative cost of nuclear power, it is far from aberrational for the NRC to have to change license require-ments by the suspension or reimposition of a requirement because o of wholly unanticipated circumstances. In fact, this very remote possibility is precisely why Applicants sought suspension, rather than revocation of the subject license conditions. This also o explains the position of the Appeal Board in the Davis-Besse/ Perry antitrust proceeding with respect to the possibility that the license conditions might have to be changed if they proved o inequitable to Applicants in the future. In short, it is AMP-O and the NRC Staff's far-fetched sce-nario that is meaningless, not Applicants' understanding of O 186/ Similarly, if Applicants are correct, as they intend to show during Phase 2 of this proceeding, that the cost of their nuclear facilities should be compared to tne cost of contem-O poraneously built fossil plants, this comparison also is relatively fixed, with the only variable being changes in the cost of operation. 187/ NRC Staff Answer at 8 n.12; see. also AMP-O Brief at 23. o 188/ ALAB-560, 10 N.R.C. at 294. O
l 10 Section 105(e). Accordingly, the litany of unpleasant conse-quences which AMP-O and the NRC Staff describe do not follow from 0 the reality of electric utility economics. Finally, the NRC Staff asserts that Applicants' understand-O ing of the purpose of Section 105(c) is wrong because there is no reliable way to quantify actual costs before a plant is operational.189/ The NRC Stait's assertion is no more than a e, challenge to the Congressional finding of prat tical value;190/ for the specific purpose and meaning of that finding was that the technology and economics of nuclear plants was now sufficiently O developed that reasonably accurate predictions about costs could be made. In light of this finding, an analysis of the antici-pated costs of each facility and the competitive consequences of O those costs became both possible and, hence, a requirement under Section 105(c). Moreover, as the NRC Staff recognizes, before plant opera-O tion, Section 105(c) analyses appropriately rely on before-the-fact, predictive assessments of actual costs.191# This is what was deemed fecsible with the determination of " practical value." O However, just because this estimation process is feasible does not mean it will prove to be correct. When reality is at marked 0-189/ NRC Staff Answer at 12-13. 190/ See Section II.C.l.c, , supra. () 191/ See NRC Staff Answer at 13 n.20.
-79'-
O
i 10 l l l variance with earlier expectations, the NRC must conform its license requirements to reality. O Staff's objection to Applicants' analysis on the basis of the alleged impossibility of predetermining actual costs also O flies in the face of the NRC's practice. NRC's own regulations require the submittal by applicants of cost information in con-nection with the Staff's review under Section 105(c).192/ This O information is used by the NRC in its evaluation. Thus, since the passage of the 1970 amendments, NRC has issued cost determi-nations which, while predictive in nature, are intended to be o tu ficiently reliable to be accurate. When such estimates turn out co be inaccurate such that NRC is imposing requirements that oake no sense, it is authorized and, indeed, under Section p 105(c), 4' is obliged, to remove those requirements. Certainly, in its application of its safety requirements, the NRC routinely acts in this manner, whether through the issuance of innumerable o amendments of specific technical license requirements that prove - to be inappilcable, or the amendment of generic requirements that prove to be unnecessary and even counterproductive.193 O ___ 192/ 10 C.F.R. Part 50, App.L, SS 11.11 and 11.12; see Appli-cants' Motion at 65 n.142. 193/ See Modification of General Design Criterion 4 Requirements O for Protection Against Dynamic Effects of Postulated Pipe Ruptures, 52 Fed. Reg. 41,288 (1987) (a regulatory amendment which allowed the removal of specified saf ety requireinents that research, " coupled with operating experience," indi-cated not only were not necessary, but could negatively 0 Footnote continued on next page. O
O E. The opposition's Attempts To Refute Applicants' Eg_ual Protection Arqument Are Unavai, ling O The Opposition has raised three arguments in opposition to the Applicants' assertion that continued imposition of the license conditions vould deny the Applicants equal protection under the law.194/ The Opposition's arguments are unavailing; they distort the Applicants' argument, and fail either to articu-late a rational basis for the current imposition of license con-O ditions under Section 105(c) or to distinguish the legal author-ity on which Applicants' equal protection argument is based. O 1. The Faulty Invalidation Argument Cleveland and the NRC Staff characterize the Applicants' equal protection argument as a request for the NRC to declare O section 105(c) unconstitutional, which they state is beyond the power of an administrative agency.195/ However, Cleveland and O Footnote continued from previous page. O impact safety); see also 53 Fed. Reg. 35,996 (1988) (revi-sions to acceptance criteria for emergency core cooling sys-tems because former calculation m thod subsequently shown to be overly conservative, " unnecessarily" restricting the operation of some nuclear reactors, "resulting in increased O costs of electricity generation"). It is this same type of accommodation to the facts as we now know them that Appli-cants seek in this case. 194/ See NRC Staff Answer at 13 n.20. O 195/ See Cleveland Answer at 62; NRC Staff Answer at 29. O '
O the NRC Staff have mischaracterized the Applicants' position, which addresses the statute "as applied".196/ O Contrary to the Cleveland and NRC Staff assertions, it is Applicants' position that the interpretation of Section 105(c) o advocated by the Opposition, which would permit the continued application of license conditions under the present circum-stances, would deny Applicants equal protection. In contrast, o adoption of Applicants' theory of the case, which could result in the suspension of the license conditions, depending on the out-come of Phase 2 of this case, would avoid the constitutional vio-o lation Applicants' address. In short, Applicants are not asking the NRC to declare Section 105(c) unconstitutional; to the con-trary, Applicants are requesting a constitutional interpretation o of section 105(c). Thus, the legal authority cited by the City of Cleveland is not on point. For example, in Panttz v. District of Columbia, O 112 F.2d 39 (D.C. Cir. 1940), the court simply noted that a tax ' assessor did not have the power to rule on constitutional objec-tions to the underlying tax statute. Similarly, in Enqineers O Public Service Co. v. SEC, 138 F.2d 936 (D.C. Cir. 1943), vacated, 332 U.S. 788 (1947), the court stated that an adminis-trative agency cannot pass upon the constitutionality of the act O which it administers. In each of these instances, the agency was o 196/ Applicants' Motion at 75. O
O asked to rule on the constitutionality of an underlying statute. In contrast, the Applicants are not challenging the constitution- 2 ality of the underlying statute. Rather, Applicants are chal-lenging the faulty interpretation of that statute that the Oppo-sition advocates. O
- 2. The Absence of a Rational Basis I
Each of the Opposition, except for DOJ, has attempted to assert a " rational basis" for Section 105(c) that would overcome Applicants' constitutional argument.197/ However, this basis -- ostensibly separate from the cost factor -- does not withstand
'O' the most superficial inspection as a " rational" basis.
The Opposition's identified rational basis behind Section g 10S(c) is the government's desire to prevent nuclear operators from benefiting from the government's enormous investment in nuclear technology. The government did not want this technology o to give those nuclear operators cooperating with the government a
" windfall head start" and use nuclear power to disadvantage rivals.198/
v 197/ Cleveland Answer at 63; see also NRC Staff Answer at 30-31; AMP-O Brief at 29; Alabama Response at 15. 196/ Id. The NRC Staff repeats this argument in its description O of the legislative history of Section 105(c), asserting ' "that Congress was long concerned with preventing those with the greatest resources from having an unfair advantage over their competitors once government-developed and funded sci-entific and technological nuclear know-how was turned over 1 O Footnote continued on next page. l l O v
O The problem with the Opposition's " rational basis" is that it is simply substituting buzz vords for the unmistakable mean-0- ings intended by them. For technology, p_er gg, has no inherent value; witness a technological lemon, such as the Edsel. The . focus on the benefit of nuclear technology in the legislative O history of Section 105 was simply anotaer way of expressing a concern about the competitive advantage, in the form of lower ; costs, that vould be given by the government to nuclear power O plant licensees; for licensees would, in effect, be subsidized by the government's prior nuclear technology expenditures. In short, notwithstanding the Opposition's effort at distinguishing
-O-technology per se from its value to society, the " windfall head start" of nuclear technology was strictly an economic headstart, as nuclear power plant licensees' competitive position was O-expected to be enhanced vis-a-vis owners of competing sources of electric power, including oil and coal.199/
O Footnote continued from previous page.
~
to private enterprise." NRC Staff Answer at 16-17. But what does this really amount to, if not access to low-cost power? 0-199/ Agp.0 and Cleveland each summarily offer an additional rational basis argument. AMP-O argues that-Applicants are seeking to overturn Section 105(c) and that that section is
" rationally related" to the " undeniably legitimate goal" of
" strengthening free competiticn in private enterprise."
.(1 AMP-O Brief at 29-30. AMP-0 is wrong on several counts. First, Applicants are not seeking to overturn Section 105(c); rather, Applicants seek a rational interpretation of Section 105(c). Secondly, a rational interpretation of Sec-tion 105(c) does promote free competition in private O Footnote continued on.next page. O.
- . . - . - - . . _ - ~ . -. .- - . .- - - - _ -
O Moreover, the NRC Staff is incorrect when it asserts that
" nuclear plants are distinguishable from other types" because of .O the government's technological investment in nuclear technology and know-how.200/ - The fact is that the federal government has invested enormous research and " taxpayer funds"201/ in many -
"O energy technologies, e.c., to develop " clean" coal, to improve coal mine safety, to make wind power viable. The distinction between these_ investments and the government's investment in nuclear technology is-the enormous economic and competitive advantage that Congress-and others anticipated from the operation , (and therefore, necessarily, from the government's licensing) of nuclear power plants. Furthermore, as Applicants noted in their Motion, one must
.O' evaluate the rationality of a statute, or an interpretation of a statute, under'the present circumstances rather than the circum-stances. existing at the time the statute was enacted. As courts
^O Footnote continued from previous page, enterprise, An irrational' interpretation of Section 105(c),
- O .such as AMP-o's, which places antitrust conditions on less
. competitive private enterprises, does not.
Cleveland offers the adiitional argument that a rational basis for its interpretation of Section_105(c) is the abil-ity of a large nuclear plant to enhance.its owners' domi-
- (} nance in the market. Cleveland Answer at 63. This asser-tion is illogical unless the plant is a low-cost facility. ,
-See Section II.B,.suora, 230/ NRC Staff Answer-at 30 n.40.
g 201/ Id. L l'. lO l i.
- , , ~ - ~ , - . . - . , - . , . , ,s,,.,.~,. - - - - , . . , . , , - , . . . _ , , - - , - . , . . , - , . , - , - . . , ~ . _ . , - , - , . . . , - . , _ . , , . , - . ~ -
l l have noted, the " constitutionality of a statute predicat.ed upon the existence of a particular state of facts may be challenged by
!O showing to the court that those facts have ceased to exist."
Milnot v. Richardson, 350 F. ?upp. 221, 224 (S.D. 111. 1972) (citing Chastleton Corp. v. Sinclair_, 264 U.S. _ 543 (1924)). O Analogously, an interpretation of a statute resting upon a par-ticular set of facts may become irrational if those facts cease to exist. O Unfortunately, nuclear technology has not provided the expected windfall. This is because, and only because, the costs O of nuclear power are far higher than was anticipated when Section 105(c) was enacted. Thus, the goverr. ment's investment in the development of nuclear technology has proved to be irrelevant in O the competitive arena. The Opposition argument accordingly fails; for there is no inherent value in technology if it pro-duces no economic benefit.202/ In short, the government support O of nuclear technology is not a rational basis for the continued 202/ Thus, the opposition's citation to the Court of Appeals' O decision in Parle.y, see n.21, is not helpful to them. For the reference in Farle.y to the " publicly held wealth of knowledge and scientific progress," 692 F.2d at 1368, that was being made available to private utilities is simply a short-hand way of articulating the economic value of that information. It is a statement recognizing that nuclear g O . power has certain cost advantages. Because that information of itself provides no economic benefit, if the cost of nuclear power is higher than competing means of generating electricity, as Applicants contend, the " wealth of knowl-edge" made available to public utilities is of no competi-tive value, and provides no rational basis for continued O application of conditions imposed to offset that value. ( O
LO imposition of antitrust conditions when nuclear plants produce relatively h;gh cost power. ! l O[
- 3. Apot 'It s ' Li qa1 Authority is Persuasive The opposition seeks to discredit Applicants' equal protec-O-
tion argument by citing cases elaborating on the " rational basis" standard of equal protection analysis, such as M_assachusetts Bd._
- v. Murcia, 427 U.S. 307 (1976), and Schweiker v. Wilson.- 450 U.S.-
-O l 221 (1981).203/ But Applicants already recognize that the ratio-nal basis standard, which applies here, is the most lenient stan-dard in equal protection analysis.204/ Thus, these cases simply
'O underscore the parties' agreement that a statute or interpreta-tion must have an underlying rational basis. e
- O The opposition also tries to persuade the Board that Appli-cants' legal authority.is somehow distinguishable. For example, AMP-O attempts to divert attention from the " filled mi.." cases g -_ cited by Applicants by the assertion that they involve a " direct link" between a change in circumstances and the inability to
-achieve a statutory objective. E # Yet, just such a direct link
- 0. is: precisely'what exists in.the present case. As Applicants have shown, E I Section 105(c) is directly linked to the expected cost
.Q ; 203/ See AMP-O Brief at 27.
204/ see Applicants' Motion at 77 2_M/ AMF-O-Brief at-31..
- Oi 206/ J_d. at 30-
;O -
l l C) i i advantage of nuclear power. Much as changed circumstances sev- I ered the direct link between the ban on filled milk and the orig-O inal, underlying health considerations, a similar severing has : occurred here between the anticipated costs at the time the license conditions were imposed and the actual costs, today, of 0 the Davis-Besse and Perry nuclear power plants. similarly, AMP-O attempts to distinguish Wessinoer v. South-O ern Rv., 470 r. supp. 930 (o.s.c. 1979), (invalidating a presump-tion of' negligence against railroads involved in grade crossing accidents) by stating that advances in technology negated the \ Cr benefits of the ' statute, and "lef t railroads subject to an irra-tional inequity."207/ Once again, just such an irrational ineq-uity exists in the present case, if the NRC were to interpret o section 105(c) such that nuclear power plants are subject to unjustifiable conditions to which other electrical generating , plants are not. O AMP-0 further attempts to distinguish-the " changed circum-stances" authority cited by the Applicants by suggesting that it is "Lochner era" precedent that employed a stricter " rational basis" standard.208/ This assertion is erroneous. The cases cited'by Applicants have never been overruled, and in fact are
.citad by modern-day courts striking down statutes lacking a 0
101/ Id. at 31. 'O- 208/ jd. at 30 n.20.
- 0-
(3 i i
" rational basis." Thus, the'1979 and 1976 courts in Wessinger '
and Gallagher v. Evans, 536 F.2d 899 (10th Cir. 1976) cite Nash-0- ville, Chattanqoqa & St. Louis Ry. v. Walters, 294 U.S. 405 (1935) (a "Lochner-era" case) in striking down the rativay and election laws at issue. .O I Alabama cites East _Nav York Savinas Bank v. Hahn, 326 U.S. l
-230 (1945),-as allowing a statute to have some " rat.onal basis" ;
C)' even where circumstances have changed. Yet this case is irrele-vant here. Alabama acknowledges that the case was decided prima-rily under-the Contract Clause.209/ Moreover, Alabama fails to Of mention the particular-legislative actions which prompted the $ court's holding in that-case. Specifically,.in Hahn, the court refused to strike down a statute authorizing a. moratorium on O mortgage foreclosures, noting that the legislation was the sub - ject of " frequent reconsideration, intensive study of the conse-quences of what has been done, readjustment to changing condi-O tions, and_ safeguarding __the_ future on the basis of responsible forecasts."210/ Nothing remotely resembling such legislative study.has taken' place in_the'present= case. Congress has neither
$3 : continuously.re-evaluated Section 105(c), nor readjusted the
, statute to account for_ changing circumstances. Thus, Hann pro-vides-no basis whatsoever for.the rationality of the continued " O- . imposition of license conditions . - 209/ Alabama' Response'at 20 n.19. Q: 210/ 326 U.S. at 234-35. 89 - O
l In summary, the Appl $sants' contention that continued impo- l sition of the license conditions is not rationally related to the
'O underlying purpose of Section 105(c) remains valid. The oppost-tion's purported " rational basis" -- the ge ernment's investment in nuclear technology -- is illusory, since technology of itself has no value-if it produces no economic benefit. The Opposition cannot distinguish the Applicants' legal authority demonstrating l that changed circumstances can affict the constitutionality of a 'O statute, as applied. In short, interpreting Section 105(c) as !
allowing the continued imposition of license conditions in the absence of a low-cost nuclear facility would deny Applicants
- O equal' protection under the law.
F. The Doctrines Of Collateral Istoppel, Res t J3 Judicata, Law Of_The Case, and Laches Do Not P,reclude Review of the " Bedrock" Legal issue Cleveland and Alabama argue that this proceeding is improper () because the issues either vere or should have been raised by_ Applicants in the original antitrust proceeding in which the license conditions at issue here were imposed.211/ Cleveland and 'O. Alabama are wrong. The previously litigated issues, character-ized by-Cleveland as the " nexus" issues, differ significantly from the pending " bedrock" legal. issue. In addition, the facts
'O- have substantially changed, Applicants have not unreasonably 211/ Cleveland Answer at 62-80; Alabama Response at 5-6. This
'OL argument is not raised by the NRC Staff, DOJ or AMP-0. 9 . r
- n_. ,.._.u___-__,~ _
1 O Edelayed and ':he Opposition has not been prejudiced in an) way by the initiation of this proceeding in 1987. O Moreover, in raising the defenses of collateral estoppel, res judicata and law of the case, Cleveland asserts a legal posi-O ti n that, if accepted, effectively vould preclude all clsims for license amendments or suspensions. The essence of Cleveland's argument is that because the relative costs of generating nuclear y and non-nuclear power were addressed in the perry and Davis-Besse ! construction permit and operating license proceedings more than fifteen years ago, Applicants are barred today from litigating g the stipulated legal issue, "whether the license conditions can-notEbe retained if the cost of power from the licensed plants , exceeds that available from other sources."212/ Cleveland's g' crabbed interpretation of res judicata, collateral estoppel and law of the case effectively would preclude all requests for license amendments. Every license amendment application seeks > CF relief from, e- a change to, some requirement _ imposed upon the licensee during earlier NRC proceedings. Cleveland's unreason-able interpretation of these proceedings directly contradicts the 9 extensive regulatory scheme expressly providing for such license , amendment requests.
}
t t
'212/ See Cleveland Answer at 64-65.
6: _ _ ~ . . . _ . -
0 1 The Doctrines of Collateral Estoppel and Res Judicaca Do Not Apply t Collateral estoppel precludes relitigation of the same issue resolved previously in the same or in a separate proceeding.213/ The issue must have been material and relevant to the disposition 4 of the first action, so that its resolution was necessary to the outcome of the earlier proceeding.214/ Res judicata precludes relitigation of a cause of action that was or could have been _
'O raised in a prior proceeding.215/ --
" Generally, res judicata pre-cludes parties, or their successors in interest, from bringing l . again to a court the same cause of action as one previously determined on the merits."216/
Cleveland argues that the befrock legal issue was previously
-'O 2itigated and therefore cannot be raised now. Alabama argues that "this radical contention" should have been raised in the d
-g 213/ See Alabama Power Co. (Joseph M. Farley Nuclear Plant, Units -
10 2), ALAB-18^. 7 A.2.C. 210, 212-13 (1974), remanded on other groundri, JLI-74-12, 7 A.E.C. 203 (1974). All/ See parolina Power & L i ch,!; Co . (Shearon Harris Nuclear Power Plant), ALAB-837, 23 N.R.C. 525, 536 (1936) ("Shearon O Harris"); Houston McL btiac & Power Co_ . (South Texas Project, A { Units 1 1 2), LBP-79-27, 10 N.R.C. 563, 565 (1979), aff'd, ALAB-575. Ell N.R.C. 14 (1980) (" South Texas"). 215/ 'Cause of act ion" is defined in Black's Law Dictionarv (6th ed. 1990) at 221 as "The fact or facts which give a person a O right to judicial redress or relief against.another. The
-- legal effect of an occurrence in terms of redress to a party g, to the occurrence. . . ."
-5 216/ U n i t ed S t a t es D ep.t . of Enerov (Clinch River Breeder Reactor l Plant), CLI-82-23, 16 N.R.C. 412, 420 (1982) (" Clinch
.O River"); South Texas, LBP-79-27, 10 N.R.C. at 565-66.
1 l ,1 I 1
-O
O'
-0 prior antitrust proceeding.217/ Neither of these contentions is correct.
O.
- a. The earlier " nexus" arguments O
In the original antitrust proceeding in this docket, Appli-cants consistently advocated a narrower interpretation of the so-called " nexus" requirements thei _ her the Licensing Board or, -- subsequently, the Arneal 3oaro apted in the case.218/ The Applicants' nexus argument was advanced in two contexts, as it was in the Parlev case, discussed previ usly: O (1) Applicants argued that any anticompetitive impact of the pro-posed CAPCO nuclear facilities *.ias already offset by the avail-ability of wholesale power purchases from the proposed nuclear , O ' facilities to that the " licensed activities" would not " create or maintain a sitaation incoasistent with the antitrust laws," i.e., the requisite " nexus" was missing between the activities 0 - and the situation; and (2) Applicants maintained that any relief O 217/ Cleveland Answer at 71-75; Alabama Response . 5, 218/ gee Applicants' Joint Brief before the Atomic Safety and Licensing Bocrd in Support of Their Proposed Findings of Fact and Conclusions of Law, Aug. 30, 1976, at 674-97; Applicants' Appeal Brief in Support of Their Individual and CL Common Exceptions to the Initial Decision, Apr. 14, 1977, (" Applicants' Appeal Brief") at 124-37 (Section III.
" Nexus"); and at 294-97 (Section V.C " Relief: Failure to t Design Relief that Does hot Exceed the Jurisdictional Authority of the Commission").
O 219/ See Section-II.A.2, supra. 1
lO-
'~
that might be proposed had to be confineo to participation in and operating arrangements of the_ proposed nuclear facilities.220/ These so-called nexus arguments are completely different from the bedrock legal issue in this case.221/ .
.O The determinative bedrock legal issue underlying Applicants' pending license amendment requests is whether the NRC is autho-rized under Section-105(c) of the Act to retain antitrust license ?D - conditions if it f'inds tb- the actual cost of electricity from the licensed facility is higher than the cost of electricity from alternative sources.222/ Applicants assert in this proceeding C1 that the Davis-Besse and Perry operating licenses cannot provide them with a competitive advantage and, accordingly, fall outside
-Q: 220/ The Applicants' nexus arguments were summarily described by the Appeal-Board in ALAB-560, 10 N.R.C. at 384 (footnotes omitted): Two of the arguments made by applicants in C- their challenge to the Licensing Board's findings on the issue of nexus-are (1) _that only the applicants' latest offer for nuclear access,-and-_not prior _anticompetitive prac-tices of the. applicants, has any relevance-to
" activities'under the license" because only 33' it will reflect the " activities under the license" which must.be the subject of the Commission's f.inding under-Section 105c(5) of the Atomic Energy Act (42 U.S.C. 5 2135c(5))
and (2) that (the remedy of]_ third party wheeling.has no connection with " activities 13 under the license." 221/ See Section II.A.2, suora, for a detailed discussion of the difference between the two Farley nexus issues, on-the one hand, and'the bedrock legal issue, on the'other. J) '222/ See n.1, suora. I-
- O'
O the scope of Section 105(c), because they actually generate power at relatively higher costs. In contrast, the nexus arguments in O the prior proceeding were not based on, nor did they cha!1enge, the proposition that the CAPCO nuclear plr7ts were expected to be competitively advantageous.223/. O O 223/ Cleveland pejoratively distorts Applicants' Appeal Brief and Applicants' argument generally, when it argues to the con-trary, viz., the bedrock legal issue is "old wine . . . pre-sented in the same old bottles." Cleveland Ansver at 66 (footnote omitted). O In the pages of Applicants' Appeal Brief to which Cleveland refers, Applicants focused on the importance the Licensing Board placed on the facilities being competitively advanta-geous, see Applicants' Appeal Brief at 125-27, and their view that this economic or cost advantage was a necessary prerecuisite to the Board's nexos analysis. See Cleveland O Answer at 65 (citing Applicants' Appeal Brief at 127 n.147). While this principle is equally valid today and, in frct, is central to Applicants' theory of the case, the legal argu-ment advanced by Applicants in 1977 is totally different from the bedrock legal issue raised for the first time now. for while Applicants " observe (d]" that the nuclear units 0 vere no longer as economically attractive as they were con- a sidered to be several years earlier, see id. at 66 (emphasis added, citing Applicants' Appeal Brief at 127), the legal significance of this fact was that whatever advantageous economies there were -- and there still were such economies
-- they would be shared by the municipal electric systems O because they were wholesale customers of Applicants.
Thus, the previously raised issue was whether wholesale power purchases were sufficient, without the opportunity for ovnership or unit power purchases, to offset the competitive advantage of the proposed nuclear facilities. No legal or O factual issue was raised as to the existence of such a com-petitive advantage. To the contrary, Applicants did not challenge the fact that the nuclear facilities were expected to be economically advantageous. In short, the bedrock legal issue was not raised, considered O or resolved by the prior litigation.
E i IN Moreover, as to facts litigated in the 1970's, Applicants do not disagree with Cleveland that the anticipated costs of Perry ~g-' and Davis-Besse were identified during the prior proceeding, as were comparative costs of other facilities. In fact, Applicants summarized in.their' Motion much of this factual testimony and the O factual and legal findings made by the Licensing and Appeal Boards from it.224/ For example, DOJ observed in its brief to the Appeal Board that, "The marketing of power from the subject- .O nuclear units will enable Applicants to lower their average cost of power. It is undisputed that the power available from the subject nuclear units is expected to be the cheapest base load power available to' serve neu and growing loads."225/ But again, the purpose of this testimony was to emphasize the competitive value of the nuclear plant and the need for broad-scope remedies ~O ' beyond the effer of wholesale power purchases. ~ It was not to affirm, rebut or in any way address the bedrock legal issue in thisicase, or the facts as they have actually materialized. O
-To the extent the distinction betvaen the prior and the present litigation'istnot obvious, perhaps the discussion of res O Judicata in Vermont-Yankee vill clarify the matter further.226/
224/ See-Applicants' Motion at 52-56. O"' 225/ DOJ Appeal Brief at 179'(citations to record omitted). _226/ See Vermont Yankee Nuclear Power Coro. (Vermont Yankee Nuclear Power Station), LBP-87-17, 25 N.R.C. 838, 847-51 _( 1987), aff'd on t'is issue and modified on other grounds,
- OL ALAB-86S, 26 N.R.C. 13 (1987)-.
O
s 'O In }1ermont Yankee the licensee sought to amend its operating license in 1987 to expand the spent fuel pool. An intervenor O raised the issue of the effect at the proposed amendment on the facility's system for maintaining the temperature of the spent fuel pool water. The licensee alleged that the claim was barred O by res judicata because the intervenor could have raised the issue in a 1977 proceeding on an application to amend the operat-ing license to increase storage capacity of the same spent fuel pool.227/ The Licensing Board ruled that res judicata did not apply. Because the system in 1977 was considered only for
" backup purposes" and for " full core off-load,"228/ the Licensing O
Board found that the second (1987) amendment application involved evaluation of the system for uses other than those considered in the 1977 amendment request. In short the second application pre-O sented "a question that [vas) different in degree, (if not in kind) from the 1977 issue."229/ Thus, the Board found the inter-venor had not had "a fair chance to challenge the proposed rou-0 - tine (yearly) use" in the prior proceeding.230/ - - - In the present case, the question is different in degree and O kind, while nuclear costs were discussed in the 1970's proceed-ing, the issues of law to which these facts were applied vere O 227/ Id. at 849.
- 228/ Id. at 848 (citation omi'.ted).
229/ Id. at 849 (emphasis added). o 230/ Id. at 849-es0. O
O completely different from the issue Applicants now raise. Thus, there is a difference in the kind of question at i' ue. Further-O i more, in the prior proceeding, Applicants' and the other parties' arguments (necessarily) were based on anticipated and not actual costs. Indeed, Applicants could not have argued, in the hypo-O thetical, that if nuclear power were high cost relative to non-nuclear power, the NRC lacked the jurisdiction to impose the antitrust license conditions. Moreover, Applicants could noi 0 F have anticipated and did not anticipate the degree of change in cost from that anticipated to that actually realized. The i essence of the current factual issue is that history has proven O in fact that the costs of nuclear power from Perry and Davis-Besse are higher than from alternative sources. This issue was 4 not and could not have been litigated in 1977, except by a prcphet. The previous nexus arguments and the current " bedrock" legal 4 o issue are clearly different. Applicants did not -- and could not - raise the pending legal issue in the prior proceeding, More-over, the issue was neither r' solved in that case, nor necessary O to the case's resolution. Applicants also do not seek to
" avoid [] an existing forum" in filing their amendment Applications. To the contrary, this is the only forum avail-O. abie for amendment cr saspension of the antitrust license 231/ .See Cleveland Answer at 71 (quoting Consolidated Edison Co.,
of New York, Inc,(Indian Point, Unit Nos. 1, 2& 3), G- CLI-75-8, 2 N.R.C. 177 (1975) (" Indian Point")). 1 0
l jo cond i t ions . 2 3 2 Similarly, Applicants do not " assert (} . . . difterent legal theories in a second suit" in an attempt to of'_r O arguments which could have been raised in previous proceedings.233/ The arguments were not and could not have been made because tne events had not yet occurred. O
- b. The exception af changed circumstances O Without rega.d to the issues litigated in the prior anti-trust proceeding, tha dramatic increase in the actual cost of nuclear power from that anticipated at the time the subject O facili:les vere licensed, constitutes changed circumstances com-pelling consideration of Applicants' pending amendment requests.
For "vhere circumstances have changed from when issues were for-O merly litigated, either es to the context of law, the burden of 232/ In contrast to the present scenario, the Indian Point lic- s O ensee asserted that 3 t should not be forced simultaneously - to argue its case in "two separate forums." Indian Point, CLI-75-8, 2 N.R.C. at 177. All parties agreed that "the subjects raised warrant (ed] hearing in an adjudicatory pro-ceeding." The only real issue was which of the two forums was appropriate tor 'the hearing. Id. O. 233/ See Cleveland Answer at 71 n.20 (citing Farley, ALAB-182, 7 A.E.C. at 212); Ness Inv. Corp. v. United St6tes, 595 F.2d 585, 588 n.6 (Ct. C1. 1979). The Ness court precluded ! claims under.res judicata because "the factual and legal questions relating to the alleged breach which plaintiffs 0: present to this court are identical to those considered by the Board." Ness, 585 F.2d at 588-89 a.6 (emphasis added). See also Shearon Harris, ALAB-837, 23 N.R.C. at 537-538 (the Licensing Board found "no showing of significantly changed circumstances" where intervenors presented merely a more specific version of their previous contention). That O clearly is not the situation in this proceeding. O
iO proof . . ., or as to the facts material to the dispute," or where there are overriding considerations of public policy, such O as where an agency is " feeling its way into an undeveloped fron-tier of law and policy," the doctrints of collateral estcppel and res judicata do not apply.234/ --- O The dramatic increase in the cost of generating nuclear power relative to the cost of generating non-nuclear power con-O stitutes a "significantly changed circumstance."235/ The spe- -- cific changed circumstances include significant increases in () 234/ Duke Power Co._ (William B. McGuire Nuclear Station, Units 1
& 7), LBP-77-20, 5 N.R.C. 680, 681 (1977); Farley, ALAB-182, 7 .s.E.C. at 215 (citiqq 2 Kenneth C. Davis, Administrative LLs Treatise 566 (2d ed. 1979 & Supp. 1989)); see also Ala-bama Power Co. (Joseph M. Farley Nuclear Plant, Units 1 &
2), CLI-74-12, 7 A.E.C. 203, 203-04 (1974) (recognizing the O changed circumstances /public interest; exc ption to the doc-trines of collateral estoppel and res judicata); General Public Utilities Nuclear Corp. (Three Mile Island Nuclear Station, Un.t 1), LBP-86-10, 23 N.R.C. 283, 286 (1986) (collateral estoppel inapplicable where there has been a material change in factual or legal circumstances or there 0 exists a special public interest factor in the case); Public L Serv. Co. of New Hampshire (Seabrook Station, Units 1 & 2), ALAB-349, 4 N.R.C. 235, 246 (1976) (res judicata does not bar the litigation of matters which only "become available" , after the original proceeding); Clinch River, CLI-82-23, 16 N.R.C. at 420 (material changes in fact or law have operated O to preclude the res judicata effect of a decision; balanced against the policy considerations underlying res judicata are the "need for flexibility to implement new policy initi-atives and the possibility of a more accurate decision through further proceedings"). O 235/ All parties to this action have agreed to determine whether nuclear power costs are in fact greater than alternative power costs only if Applicants first succeed on the bedrock legal issue. Thus only a brief review of the relative cost analysis presented in the Applications is necessary at this time to establish a genuine issue as to a material fact -- O the applicability of the changed circumstances exception.
-100-O
O capital investment costs attributable primarily to 'ederal regu-latory initiatives, legislative initiatives, and high inflation, n'
'~
as well as comparable increases in nonfuel operating costs. In their Applications, OE and CEI/TECo approached the issue of cost somewhat differently, but with the same outcome: a very signifi-cant change in the cost of nuclear power from that anticipated when Davis-Besse and Perry were initially licensed. 5! O. Cleveland argues that certain things that altimately caused the increased nuclear costs - "more stringent environmental requirement (s], new technical regulations adopted by the NRC, g_ adverse economic conditions" -- either occurred or were forecast prior to the clost of the record in the operating license O 236/ In its Application, OE compared the 30-year levelized cost (including capital, O&M, and fuel) for a nuclear plant as anticipated in 1976 with the actual 1987 30-year levelized cost for Perry. This comparison ($27 versus $184 per MWh) o indicated a 580% change between the anticipated and the actual cost. See OE Application at 69-71. In their Application to amend the Davis-Besse and Perry , licenses, CEI and TECo refer to cost trend data compiled by the Department of Energy. See CEI/TECo Application at 24-29 ()
~ (citing An Analysis of h*uclear Power Plant Oparating Costs, Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels, DOE /EIA-0511 (released Mar.
15, 1988)-(hereinafter, " DOE Report")). The DOE's compilation of cost trend data shows that, between 1974 and 1984, routine operating and maintenance ("O&M") expenses o increased by an a/erage of 12 percent per year. Similarly, "postoperational capital costs" increased at an average , l annual rate of 17 percent over the ten years preceding the ; filing of the Applicatior.s. Finally, the DOE Report finds i that total non-fuel operating costs (including both O&M costs and capital additions) nearly quadrup2ed between 1974 'o and 1984.
-101-
'O l
C: stage.237/ This argument, even if true, proves nothing; for the f% actual incrense in costs resulting from these events were not ascertainable until years later, and the increased costs turned out_to be devast'ating to the economics of Davis-Besse and Perry relative to non-nuclear generation. Applicants are entitled to O present proof of those resulting increased costs in the second phase of this proceeding.238/ g In the operating license proceeding in Limerick, the Licensing Board re-examined environmental costs considered during the con-struction permit proceeding that were associated with the method of O cooling. That Board explained, " environmental costs ascertalnable only as the -plan gained greater concreteness alter the construction permit was issued have not been considered. . . . It is appropri- , O ate that they are considered now . . . .
"239# Similarly, in this case, neither the bedrock legal issue nor the facts which prompt Applicants' license amendment requests were ripe for review during O the ea" lier proceeding. For in that case, there vus no challenge
.to the finding that the proposed facilities were_ competitively advantag;ous. As it must, Cleveland acknowledges that the
-O 237/ Cleveland Answer at 75. Cleveland fails, of course, to acknowledge tha' many of the more stringent and costly regu-latory requirements followed the 1979 Three Mile Island 0: accident. 238/ Sea Philadalchia Elec. Co. (Limerick Generating Station, Units 1 & 1), LBP-82-43A, 15 N.R.C. 1423, 1461 (1982) (" Limerick"), i O- 239/ Limerick, LBP-82-43A, 15 N.R.C. at 1462 (emphasis added).
-102-O
04 6
' Applications'are " based.on events (occurring] subsequent to the construction permit proceeding."240/ Obviously, neither Applicants 9 :.'
nor any1of.the other parties could have-quantified the impact of 4 these changes before.the: facilities were operational. O Cleveland's reliance on Farley in its attempt to invoke res judicata and collateral estoppel is misplaced.241_/ Farley addresses only the issue of "whether, in the absence of a partic-
- () ^ ularized allegation baE material supervening developments or some other special. circumstance," a participant in-the litigation of an issue, considered and decided in the construction permit pro-(j ' .ceeding is entitled to raise the identical issue in an operating
- license proceeding involving the same reactor.242/ Indeed,-
Parley supports Applicants' position. It expressly provides that O "a subsequent modification of the significant facts or a change or. development in the controlling legal principles may make [the original) determination obsolete or erroneous, at least for 30: future purposes."243/ Moreover, this very point was made by the 240/-See Cleveland l Answer to OE Application at 65. < O:' 241/ See Cleveland Answer atS68-77. 242/EFarley, ALAB-182, 7 A.E.C. at 212 (emphasis added). 243/ ld. at 213 (quoting commissioner v. Sunnen, 333 U.S. 591,
.O: 599-600l(1948)). In Farley, the Appeal Board also observed that even'the relitigation of issues, which is not involved
-here, may.be more appropriate in-NRC 1-icensing cases than in other administrative-adjudications:
- O.
Footnote continued on next page. 1
-103-
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- - T
l lO_ Appeal Board in the Davis-Besse/ Perry proceeding when it recog-nized that the license conditions might have to be changed in the future if they proved inequitable to Applicants.244/ O Applicants have not previously raised the bedrock legal issue in thil case, nor could the have done so; for the facts . O-which gave rise to the issue pending before this Board did not exist at that time. In any event, because the factual circum-stances have radically changed, the doctrinen of collateral O estoppel and res judicata do not apply. O # 0 a O Footnote continued from previous page. [T]here_is perhaps more room in the sphere of reactor licensing than in many of the other araas of administrative adjudication for i reexamination of a specific issue on the O basis at, as to that issue, developments in the te.hnology have worked a material change in circumstances. , Id. at 215 (emphasis in original). () 244/ ALAB-560, 10 N.R.C. at 294.
-104- i O'
O
- 2. The Law of the Case Doctrine Does Not Apply O
The " law of the case" doctrine " precludes re-litigation of the same issue in the same proceeding."245/ Tne Licensing Board in this proceeding already has determined that the Applicants' O license amendment equests involve a separate proceeding from the previous construction permit and operating license proceedings. Accordingly, the " law of the case" doctrine, as defined by Cleve- _ O land, has no preclusive effect here. Chairman Miller summarized the Board's view that the Appli-O cations present a new proceeding: We do not deem this to be a continuation of any prior proceeding. We are aware, of course, of the prior proceedings, both O licensing, operating license, as well as con-
, struction permit, and the antitrust proce-du :s set up by Congress in 105(c) and so forth. No problem with that.
We deem this however, to be a new pro-o ceeding with a different number and pursuant - to the directions given to us, the Licensing Board, as well as the authority by the Com-
=
mission, as evidenced by the notice. So in that respect, we do not regard O this as being a continuation.246/ e Z Judge Bechhoefer concurred in Judge Miller's conclusion: O 245/ Cleveland Answer at 67 (emphasis added); see generally Pub-1 lic Serv. Co. of Indiana, Inc. (Marble Hill Nuclear Generat-ing Station, Units 1 & 2), ALAB-493, 8 N.R.C. 253, 259 (1978) (" Marble Hill"). c) 246/ preh. Conf. Tr. (Sept. 19, 1991) at 14 (emphasis added).
-105-0
lO 1 l j I think, as-Judge Miller pointed out, this is clearly a separate proceeding. The Comnission doesn't continue these proceed-o ings. It's like a construction permit or an operating license. They all have the same docket number, but the croceedin ered a different proceeding.247/g is consid-() _ Moreover, in their Prehearing Conference Order, the Board clearly established "the law of the case" on this issue: In presenting . . . arguments (regarding res O judicata, collateral estoppel, law of the case and laches], however, Cleveland should
. recognize that, notwithstanding a similar docket designation, this proceeding is sepa-rate and apart from the earlier Commission antitrust proceedings regarding Davis-resse O and Perry that resulted in the license condi-tions now at issue.248/
The Board's order is consistent with past Commission deter-O minations. For example, in Public Serv. Co. of New Hampshire (Seabrook Station, Units 1 & 2), LBP-89-3, 29 N.R.C. 51, 53 n.t _ (1989) aff'd, ALAB-915, 29 N.R.C. 427 (1989), the Licensing Board O- determined that "the construction permit and operating license - phasea of an application are considered separa*' proceedings."249/ Moreover, as a procedural matter, the O 247/ Id. at 17 248/ Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1), LBP-91-38, 34 N.R.C. 229, 244 ri.43 (1991) (preh. conf. O order). 249/ Cleveland misrepresents an earlier statement by the Appeal Board in Parley as a determination that "all regulatory acts in connection with a nuclear proceeding are part of the same O Footr.ote Continued en next page.
-106-O
O:, Commission has always distinguished between proceedings after an operating license is issued and the operating licensing pr,ceed-O ing:itself.250/- Moreover, .the Appeal Board has_ recognized: LO [T]he doctrine of the law of the case is not
.an ironclad rule; its application [is] a mat-ter of discretion. Where a court is con-vinced that-its declared law is wrong and would work an-injus '. c e , it retains-the power O: to apply-a different rule of law in the interests of settling the case before it cor-rectly. Surely 1an administrative tribunal has comparable flexibility.251/
Cleveland has failed to account for the discretionary nature-13 ' of the. application of the " law of the case." If Applicants are correct that- the Cor. mission-lacks the authority to retain anti-trust license conditions where the cost of nuclear power is -O - highe-c than alternative sources, then the Commission's interest
- OL -Footnote continued from previous page, proceeding or-'cause of action' as the proceedinq > <hich the operator of the facility _ originally sought catharization to' construct and operate the facility." See Cleveland'-
Answer at 60:(citing Farley, ALAB-182, 7 A.E.C. at'215).
' Cl The' passage in Farley upon.which~ Cleveland relies states that while there may be a sufficient basis for treating an operating license proceeding;as involving.the same cause of action as the construction' permit proceeding, there is "no need for a definitive decision on that question here. "
Fa rley, ALAB-18 2, 7 A. E.C. at 215 n.7-(emphasis added). O;
- '250/ see, e,q,,. Vermont Yankee, supra (distinction made between two operating license amendment proceedings involving the same. facility).
'O j 251/ Marble Hill, ALAB-493, 8 N.R.C. at 260 (footnote omitted).
-107-
.0-
3
'in " settling the case before it correctly" should signal rejec-tion of the application of the " law of the case." Thus Cleve-O land's " law of the case" defense is meritless, particularly in light of the fact that this proceeding is not the same as the prior Davis-Besse/ Perry antitrust proceeding.
O
- 3. The Equitable Doctrine of Laches Does Not Apply O.
Cleveland also raises the equitable doctrine of lachs s*^ bar NRC's consideration of.this case. However, Cle" ..a 'r , failed to;show (i) unreasonable delay on c he pa r t c > A _, : S c 4, 3
- c.
and-(ii) undue prejudice to Cleveland, the two necte x'rt lir .its cf a laches-claim. (1, First, in order for laches to apply, Applicants must have delayed unreasonably in requesting relief from the antitrust
~
license conditions. There was no such delay ir. this case. The
- O Nac did not issue.the full-power operating license for Perry until the Fall of 1986. Judicial review of that license was not '
complete until Spring 1987. Perry was not placed into commercial
- 13) operation until November 1987. Thus, OE's filing in-September,
'1987'and the CEI/TECo filing in May, 1988 certainly do not 43 252/ See Cleveland Answer at 77-80.
-253/ See,-e g , Van Bouro v. Nitze, 388 F.2df557, 565 (D.C. Cir.
-1967) .( quoting Powell v. Zuckert, 366 F.2d 634, 636 (D.C.
Cir. 1966) (to establish the defense of laches "the evidence must-show both that the delay was unreasonable and that-it
- O prejudiced the defendant.")
-108-g-
O constitute unreasonable delay. In fact, it was absolutely neces-sary for Applicants to wait until Perry went into full production O to file the amendment requests in order to have evidence c actual cost data. Had Applicants filed before Perry went fully on line, no doubt Cleveland would have objected to the use of such estimates. Moreover, Cleveland fails to establish that it suffered $' g? O prejudice as a result of the alleged delay.254/ Cleveland has ( W not alleged any difficulty in producing witnesses due to the pas- E sage of time. Cleveland complains about its detrimental reliance O on the conditions and the unfairness that would result from their removal.255/ Cleveland fails to bring to the Board's attention the independent agreement it and other municipal systems in Ohio O have with CEI and TECo to continue the conditions in effect with-out regard to their imposition by the NRC.256/ O 254/ See EEOC v. Vucitech, 842 F.2d 936, 942 (7th Cir. 1988) (laches is usually invoked in situations where delay in O prosecuting claim has made clair, harder to defend against because death of witnesses or other developments); Bennett
- v. Tucker, 827 F.2d 63, 69 (7th Cir. 1987) (defendant must establish "more than just inconvenience" to prove laches);
Powell v. Zuckert, supra, 366 F.2d at 638 (prejudice nor-mally contemplated in applying laches " stems from such fac-O tors as loss of evidence and unavailability of witnesses, which diminish a defendant's chances of success"'. 255/ See Cleveland Answer at 79-80 (describing alleged acts taken in reliance on license conditions). O 256/ See Cleveland Plain Dealer, Apr. 12, 1992, at lA.
-109-O
O Finally, whatever actions Cleveland took in reliance on the license conditions, it did so with full knowledge that these con-O- ditions could be terminated or suspended for a variety of rea-sons. For example, the NRC may have refused to grant the Perry and Davis-Besse operating licenses resulting in termination of O the appended license conditions. The licenses might also be ter-I minated for a variety of other reasons. Furthermore, the d "~2 unequivocal Appeal Board language regarding the possibi.lity of _ g; modification of the license conditions if they proved to be ineq- % uitable to Applicants 257/ put all parties on notice in 1979 of \ > the possibility that the Perry and Davis-Besse antitrust license O conditions could change. O In summary, the bedrock legal issue and the factual inquiry related to it are issues that have not been resolsred before and O - are ripe for review. Notwithstanding Cleveland and Alabama's claims to th9 contrary, the doctrines of collateral estoppel, res judicata, law of the case, and laches do not apply. O. O o 257/ ALAB-560, 10 N.R.C. at 294.
-110-l O 1
lO III. CONCLUSION l O For the reasons set forth in Applicants' Motion and reempha-sized in this Reply, Applicants respectfully maintain that the Commission is without authority as a matter of law under Section 0 105 of the Act to retain the antitrust license conditions con-tained in an operating license if it finds that the actual cost of electricity from the licensed nuclear power plant is higher O than the cost of electricity from alternative sources, all as O appropriately measured and compared. Notwithstanding substantial effort by the Opposition to divert attention away from the bed-O rock legal issue, the purpose of this phase of the proceeding is to resolve this issue of law. Applicants respectfully request that the issue be resolved in their favor and that the parties O proceed to Phase Two of this proceeding, designed to address the factual issue of cost. O Respectfully submitted, - 1AWyaks0 4Lakd James P. Murphy Gerald Charnoff o Colleen Conry Deborah B. Charnoff Mark A. Singley SQUIRE, SANDERS & DEMPSEY 1201 Pennsylvania Avenue, N.W. SHAW, PITTMAN, POTTS & Washington, D.C. 20044 TROWBRIDGE (202) 626-6600 2300 N Street, N.W. O Washington, D.C. 20037 Counsel for The Cleveland (202) 663-8000 Electric Illuminating Company and The Toledo Edison Company Counsel for Ohio Edisor. Company Dated: May 7, 1992 0
-111-1 0 1
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. Errter
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Cossonens -
! IIOUSE OF HEI'!!ESENTATIVES
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AMENDf MC Tlik ATOMIC ENElte1Y ACT OF 6%4,' AM AMENilEID,
. TO FLIMIN.JE Tif f0 HFX2tilitEMENT Icetti 4 blNis1Nei epF PRAC.
TICAl. VALliE TED PHOVIDIC Ftfit l'lt t.t lCf.:Nxt N41 A NTi l'kitMT - kEVIEW 4)F PkODt!CTistN AND IfTal.8Z ATietN FArli.tritM, Ants ;
' 'IU EFFECTilATE C6HTAIN tlTalEtt 8'48H8't8H63 YEltTAINING TO Nt'OI.FAR FACILITIEN .
f. 14acreasses 24.1970 .-4'amianisteel se the thm.mblufe e.f !bwa Wluele tBewer en the state of the iIselene asul ordereel to ter pariswe=d . M r. Ilountam, - from . Ilie Joint C.unaniirce. ..n A s..mic Energy, mulmiittr.1 the following
. R E P O R'I' ITe amungsmay 18 ft.18e879)
Tha Joint Committee ori As unnic Encegy. having cand.lereal II R. IMl79, an original emnnaitten Inll to anwsal flee As..mic Encrgy A.:t of 1954, as amer =bs), anel for other gmr and recommend that the bdi da g.aws. gan:es, regn.rt favocal.ly alwevem SUWW ARY OF Ibu,- II.R.18679 would ameral the Atmnic Energy Art of 1954,' as amendeel, to accomedi h the f.JIowing g.rinri =1 amrin -w l.' Abolid tke eoncept ofefoding e] practical swine (see. 3 ef the idi).-
- The bill wotshi amend acetion 102 of ti.c Atornic Eserrpy Art wl.iri -
now rquires that the Ataenic Energy d'onnesimines forms en.he "a finding are writing tient any type of estilkstaan or pr.ilurtirn farihty .
. hr.s been su4iriently develogerd to be of gerersical value for isutustrial:
air commercial purjumes"lefore the C.msn.isdene sumy iwer lirruva for such type of facilsty giursuant to martians 103 of elc art, the nectinae concerned with "canmercial'* licenws. Under the bill, utilization or ler =l.orti..n ferdisin for rmamercial or industrini purgmen w.ml.1 im unhjert to 1un4ng an.lcr creion Itt.t. and su. ficuling f " practical valo. " want.1 1.c treguired. Two esrep. twen= tu such bren4ng ural.r wrtion lett ..ml.11,c prows.lat f r and these ern later drirrit d in elas reg..rt.
- 2. t.%rify the procedure f.or pr< fore.*s;n s sLntatrust verion. Iawe. 6 4 IAr 6 ti)._ gb t.ett wout.1 clarify amt res aw ttw prc=ent ac4t of ..h,.vai. .
tI): t
, _ . -~ . - '
______ u T
O .O .O O O O O 2 3 It6r, ..f t h. A tomi. Eiwrgy A. rel &r b. antierme review of apph-raison
- for Al9 ' !wcasing ..f utduati..n ..r pr. hs tson inrihtied for in the deurminati.m b nulustrial e.t commer s.d gasrie there has rust yet hevn'y the (bmmi+i.m. in Decemla r 196 "that n .fliru nt elesoonst rate..n ..f it.e co-t of run-
;t
.1athoro:e resrustr.an of el.ncophrern in lAr runny..sitoon ..f estorette wtfety struction and operation of hg<he wa .r, inie lcar h tric pla n t
- 1..
e n f.aJ tirenn.ug !wer.In tur. In u/ tar 6dh. Thr I.ill u.mid ameml the warranL snaking a statutory timhng that any t vge. of sm *. Im sl ts. irst #ntem e of subw. ti..n 19 6 a. u hi. h n ..v re.tuir. s it.at of the t hree have been salliciently levelope.1 to he of prae su al vnhw =ssion the member,. of any atomic .ish.ty and lu ensing I. oar.1 t w o membern meaning of nertion 102," the Joint i hmemetee reque ted the A Et %
"st. H be tre lmacelly epinhfied" an.1 the third "whall ha quahfied in view on the contimse.1 nee.1 for the statuhery requirement for *m h the emulars of a.immistrative bling . 'Ibe (%mmin.ica rephe.1 that the principal I. mars un.h rlying tnti w.mid permit ino su,end.cr*topromdmg* havc *%rh"archnical The ames or dment in the other quali- the " practical value" prove.smi* of ti c 1954 art ha.1 receded in neg-tirations as the Conumwann derms mficance and that it was considering pmp. rung legislation to clami.into appropriate in the swoes to he decided"; the third meinher wmikl, as in the present text of this ner. the " practical value" roorept from the statute '
tion, I.c .mc "quahlied in the conduct of adeninistrative tiroceedin ." In 1907, during the first meanion of the 90th (%ngrran, Senatern
, 4. Require tAs fl.>crrnment to inter inte an arrangement witA tAs a- Aiken and Kennedy, of New Wrk. intr = lure.I a 1.ill (S. 25M, 90th h*mul t'ouncil on fladistaan l'rotection and Afraturrments for a cont- Coma. Omag, first new,1967) whi.h wouhl 1. ave enlarged nulatantially the perArner^iv and raritinuing; ree tre of &asic reselsation protection standards,
- ion'a juriadictiore aver the licensing of reartnrw S. 2564 and an arrangement W.stA tar National Academy of Srirnersfor o row wouhb .mong other things, have required rmmideration in the brena~
FtrArnsite onof coestinating rer.irw of tat Siol ' egerts of radiation on ing prorsn of the impact of a proper i nuricar plant on the most enan and tat sculogy (arr.11 of tat &ill). I p'he Inil wmild sulmtitute efficient development of gewer renimrrwe in the particular region; and the brientific efforix of thene rminent luulies le the functioris premently it would have barred the imuanre of a nuclear psant facest ee untens the required of the Federal Hadiation Council pursuant to sulmertion (%mminaion found that the applicant had granted to mil interested 274h. of the Atomic Energy Act, utihties an opportunity in participate "to a fair arul reasonable"
- 5. Reafkrm vstA greater clarity tat in'entuin of (Ar Joint Cornmitter, extent in the ownership of the propone:1 fardity.
and in lAr opinion */ tar cornmitter tar intention of tar Congress, under. S. 2564 was the subject of caten*ive hearings before the Joint Omn-fying a preersion af tat 1*riente OuwtersAip of Special Nuclear Afateriale mittee in 1968.* Following theme hearings the Commiwion proiweied Art, rnacard inte law = as !*pidic law 88-4&9 on Augies* '6, !O64 tem 8 legislation (S. 3960, 90th Consc, mennni s, can., 19M) and ed.htmnal of ihr 6dl).- The hill wouhl rhaoge nevera words in auhacetion tot v. bdis were intrawlured by seven,hers nf s he Joisit (bmmittee (S. 3M51, of the Atomic Energy Act to ernpha ize the underlying intention as II. lL 15469, 90th Cong , nerond ac<in , l94M) wherh wous I hsve ehnt. eWidenred by the legislative history, and as currectly descerned by the insied the prement statutory requiron-nt for a finding of " practical (banptroller General of the linited Statra in the G AO "Regmrt to value" as a rondation of comnierrial brensing. Ileraume of the need the Joint 4 %m nittee on Atumic Energy" of July 17,1970, captioned for further commerit hf interested Governenent agenrien and for "itesiew of Prognmed Revisionn to th- I'rica arul Crit #ria for tiranium aAlitional hearings em legislative action was taken on these bills ljnrichment Servien" Although the General Arrounting FHfire que whila the 90th t bn indicated that om+grena was i.e semion, however, the Joint Committee tmns the legahay of a progamed implementation 1,y the AEC of sub- 1eration of the "pr ctiest value" quetion woubt acetion 161 v; of the Atomic Energy Art, on the ground that it doca he a matter for its attentson in the neat (kngrc=s. not appear tre be comistent During the first seeion of the 91 t (Lngree, Several legislativo with the intentions of the (bngren* in enarting the etstute, the rummittee is concerned that the Ar:C has measuren were intreabsted roncerning prehrensmg review of nuclear not deeted; ihe committee rermnmaide that the origmal h-gislative smwcrplanin; S. 2 2 maa intrmlured on January 15, 1969, by S nator intent le reiurated and the worahng of the statute buttreerd in Ander=m, for himself and Snator Aiken; 11.1L M2x9 was entro.l., red augmrt of ein intended purimac. on March 5,1969, by Hepresen.ative flohfiehl, for him4cif arnt I he hill is compriwed of three neparate parta, although the threa Reprmentative Price; Il IL 9G47 was intro, lure.1 on March 2',1969, parts all relate to Isernel smtlear facilities The first part, d.wmined by Heprementative ilolifield, by requent (II.R. 9647, and the identical t.elow un.lcr the hea. ling "l' art I," roven items I,2 and 3 almve and companion hill, S IM3, intrmiared by Snator l'n4 tore on A pr. IM, embraces nertions I through 7 and nertioets 9 and to of the 1,ill. l' art 1969, are the AEC hill 4; and S. 7768 as intrmluted on August 4, 11 pertainn to item 4 almvc and v.ertion I t of the bitt. l' art 111 pertaint 1969, by Senator Tydings to item 5 above and roertion 8 of ihn hill. S. 2 2, II.R. 82M9, ami II R4 9647 wouhl eliminate from the Atomic Energ Act of 1954 the requirement that a fin hng of the " practical vehne of a t ype of utihzatum or pro.hution ferdity 1,e made before l'wr I 12meLam a IhsToar nuch type of larility may he liten,c,l by the AEC as "commerrial,"
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p ?) (). O Q Q O O U Q Q v % 8 o in de Jgning, lutihlityg, an.I uperating more than a acore of were received. This escrrige rulminated in the Commicion*a eleter-nynmw rearte it H now evalent that grrafer private par. minathm, date.1 Decernher 29,19r4, to de< !me so malic a acrtion lar2 twspetton m pmer sh vrlopment need not bring wills it at- firuling on the ground that omrlear powerplant operating especieswe semiant hazards to the beslais aml safety of the American up to that tiene was limiteel to mmell+ rate Ine sis t ee* that were tunt p.vgde. Morrener, the atomir-rearter art has already reached comnunically rmnpetitim the Commewmm atnied: itse point w! cre stonur emer at rires i e 9 trarsty e ernved from rossventuma fuelss a,rmnpetities on the honzoti, wills While certain ecemomic evaluations governin the award i sonany gh riot wsthire our imnelisto reach. * {
- of contrarla for scaled-up planta smt involving overament amnistance provide strong imlication that economic com-
/esprea4 knologira. proldcans re'nain to oc nolved beforn petitiveness will be achieve.I, we leawe alcrided to exer-ise oaer alarme P wcr, a,t rumt.etitive prices, is a reality.
a r ear in tN that contniued Govermucnt researris an(f discretion to await a rehalite entiPate of the econmnk1s based t esclopmeett, using Governenent Itands 4dl be mdaspensabl upon a demonstradion of the terhrmh y arul plant per-to e apeedy and renolute attack on theme problems. It as 8 formanm Pending th rompich of wel planta and the equa ly clear to us, Imwever, that the goal of stomic power information to be obtained from their operatson, and in light at umpetsrive pnres will be reached more quickly if pnvat* of the legislative history, the Commicion has determined entapnne, unmg pnvate funda, as now encouraged to lay
- that there han not yet been auflicient demonstration of the er larger role in the, development of storme power an as cost of nmatruction amt operati.m of li ht water, nuclear crimtted under caisting legislatsori. In particular, we do not plants to warrant snaking a statutory fimfmg that any type
*lieve that any developmental program canied out, solely of such facilities have been aufliciently developed to be of sender governenental air. pres, reo matter how efficient at may practical value within the meaning of ecction 102 of the he, can enbstitute for the con? cuitsng and other iracentavea of Atomic Energy Act of 1954, as amemled.
free and competitive enterprise. * *
- On October 18, 1966, following another rulemaking petition an.1
. . . . . , , Comminniem nm-ideratiem, the Commieion again eletermine.l that
,In summa:L Statadory provisions which were in harmonF a certion 102 firuling of ** practical value" mIwmkl not be made, aml with the state of atomic development in 1946 are no longer that auch a fi.uling should await a reliable estimate of the applie al,la nmshtent u nth the realities of atomic energy in 1954. Lepe- economics the emclearbanedterhm ub.on a demomtration y involved. of on Iterently, plant performaswe June 26, 1970, an.1 the lation not resp.mive ta the needs and pr -h!cma of today can Commivii m publishe.fm poticein the Fe.lcral Itegi4er (35 F It. losr,m serve only to deny our Nathm, and hke-mind *I natione as well, the true pronu,nn of stem ic c*ergy-Imth in aggmenting that it would spin nimider the matter of a limling of " practical ami that it was aceking puldir comment.
the total military strength of she free world, r nd m meressmg value'm"erordance in with chapter lo of the 1954 art, became there has
, opportimitees for beneficent eaues of the atom-smt yet been a finding of practical value no license for a emricar power-Among the major revisium effected by the Atom - 'nergy Act of plant or other imclear tvility has been inne 1 1954 arn tiu=c in chapter 10 of ti.e 1954 act omrerned with " Atomic Energy licennes." .f ate, the comtruction an.1 ofe.eration of p.wce.
vdian nurlear plants have Ix,rn licemed uru r *ulmartion loth. which provides for a!! re,under acetion in chapter In, the concept of "practirst value," utihred in the 1946 the licenaing of "utilitati.m ami products m faritatica invoient in atI, was retained m anh,.tance (ace.102); Imwver, it was converted the comiurt of rencarch ami develonnent activitica len ling to tim to the form of "a finding i6: writing" to be made by the Comminaism demor.stration of the practient value of euch facilitiee for innhestrial or whenever it nonchaded "that any type of utilitatmn or pimlurtion commercial purpaars." facility has been suffidently developed to 1.c of practical value for The high degree of practicalinterest amt the controversies that have indetrial or cornmercial purpnes." Only subsequent to such a finding rentered on the difference between tweming a emclear powerplant nmid the Commini.m. in armrdance wi:h the pn.wisi ms of chapter go, under section 103 aml umler auhgectine 104 b. are enentially due to
-sm "comnweira!** lircuses for Ibe sypn of utilizatima or production enebnection 105 c. in shapter 10 of the 1954 act. As finally compried, far 3ity covered by its limling of practical velue (acc.103). siter comiderable discusion and debate by the ft3d Congree which To date, tha Omnmi% ion hss noi made an afiirmative fimling of ps:med the 1954 art, the text of subsection 105 c. Imrn only some nrectical vahee, although it has carefully considered the matter on resemblance to the provisi~m of sub*ceti.m 7(c) of the 69% act in two separato occasi.ma. On July 10,19E4, tha f'ommhai.m published regard to antitrust ronsiderations. The Commimion's caprem authority a notico in the fe.leral lleg,hter 49 F.It 9458) that it had inmler in autmertion 7(r) to refuse to inne a tweme or to estahlbli comfitiom comiderati4m the matter of a pemible finding nf practscal value with in onler to prevent antitrmt situatiom wa. mute t into dead .ihmce, re guvt to mune typ or typ s of hght water tmol-ar gmwerplsntet. It The general antitrust theme un s re tateel simply in terms of adsire re pie Led pubhc comrnenta, and then rondescled an estemive ride from the Attorney General. The nature amt . cop of the advnt were making pnn mhng in the course of which over 100 written commente demeribed in a hn.a4hrmh rimu e of inenart import. Sute.erti.m 105 c.
reads am followr
O O O O O O O O O O O 10 gy a W... .mve r t he t bminiwinn pr 9 .w, to i,ne any lireer e As a result .J my studv I rea he.1 th .lci.brrate emu he ion to any -rs..n umb r wou.n an3. it shadl notify the Att .rnny d.at di anos .ic c5. rgy I.ili 64 a n eritor.ou, measure. To bc General of sto- protio,e.1 hren4e an 1 elm pe op. 4rd tea ms ment sure it h non perfc. t No hall of ~n h rumenitu.tr :an f.e ron.htiony ti.creof careg.t sm h law s or typc4 of leren"- perfer t. as ifw ( o munsson, with the approval of the A t torney It is of intere=t to ru.se that the hi!! whwh tim &nate pawd on General, may .letermine woubt m.t dynificantly after t th, lu ensce'n artivitic4 nmler the antitrm.: law
- as e.ga,e:Ged in July 27.1954, wnf aisw.I the folh>.ing servon of sub.w. tn.n los M
...Inertmn ins a. Witt.m a ress.mable shoc, iri vue event .c c. W l.ciae ver el.e ('.ininiiwi..n 1.r.qw **c's t.* i4%.se mie y lere se*e eu ecd 90 days af ter rerching m h n..tification, the Attorney 14. any perwm uniler 4cetion 110, it shall tu.tify the Attorney General whall m lvise the ( *.mmus.sh n whether, inefer sa he General ef the propowel literse and the proposed enme an.:
rare .leterrutuc, llaa progamt lwen.c wouhl tesul to create or rosuhtions thereof, careg.t sm h rint.eg or typc4 of lirefvtea. rnainte m a sitt:stions snron istent with the antitris*t laws. see the Connenissi..se, with the approval of the A t tars.cy stul Merb a.lsire shall he jushhshe41 in the Fe.lcral Itegister. Ocncral may eleterminc = wil.I su.t significantly affert the i lip.n the reque et of the Attorney (leswral, the Commicion heensce's activitars umler the antitrust in s e3 rpecified in i shall furnish 4 r cause to be fornhhnt swula information an autriertion 105 a. Within a reawnable time, in no event to the Attorney Ucseral .letermis.es ta be epproprintm or n*cs- excewi ninety . leys after rc.civing <m b notification. 41.*
*ary to enable him tu give the advice talked for I,y thi* Attorney General whall a.1me the O.mmami.m a hether, in o-her tion- f ar as he ran determine, the propncel IsrctNe **mld temI to Svrral of t he g. resent meani ers of the emnmittee nerved on this 1.ml rrente or ruaintain a situath.n tun.nsistent with the antitru=t 16 years a I***. O d'. A*""O O'"'* "dN"" N# ^ ""N* "#
h.1ily dcI.o atnl. .lurmg amt hnet:ythe gerkulami a rystalbzed when the es:arted ley1954 artn.o ma conceptunhze[ she ibngre 'seuias de finnar v nuld ruart er nish.tsia a u"" nation wun-
'I . rer.dle. Ihas of these mcml.cr. havc m t dinm ed in regar.1 S. Ibe 'i ret v.id tar entitrunt lauw. Arn tAs (%m.nisi.m s4mIf nat es..trement an.1 formulation of the pro -ipal features of rhag tcr to seul 58"' "' A Ii"* ""I N "M " " "I'1""" N of "Hwr m j..r featur. 4 of the 1954 art. The detailed review by t he l'rreident tA4r tar tsemanncenar af suri f a/"#i"'
p asarntial in (Ar nunmis tee saidf of t he to i.n he of lecidative hia.tury heari, on the remm.m definer and necurtty, and tac f ading in puhArd in Atomic Enregy Art of 1954 has wrtr.1 to conbrm thdr rn o crthm, t4, Federal Reguter, lig -m the re.gucwt of t he A t torney
- o rii a, io w,i t he . iuae n.mmiitre in ,a ,c,ie. ..f ihe ah,J Uen rel. the n=nm-m shall fa-'a h "r t 'a fara-ha kgr.mmt eventa ished auch anformation as the Attorney encra b.""*l deternmws in fim full perspe. tive that a mature I arkn arsl I..ok can smw pro- (" I'" "!4 '" i "' '"C""""Y' '" enable h.m to give t he advn e rabj*for by tb nutm% @ahm d.W ,s vs.ic, at iv dn eous that al.e As..msr Dwrgy Art of 1954 failn) to antiri_
giale the ram t romse of the futarc devch.pnwns an.1 ue of risslian The italicizeel senteore ha.1 heen progned by &nator llumphrey. nmicar p.mer and to .levise m perfert hernsmg nyatrm Al o. as a ron- aml his amemiment to the text ha.1 h.+n wpp.rted I,y Nnato-ryoenre of a he many donhts ami conces ns in the ( bngress, the enacted lih kenteopce, the vice ci. airman of ahe Jr. int 4 bmmittec and ia rh rge hdl, imluding a hapter 10. rontainal a n.pnh.r of compromi*a prnvi- of the bill or. the thw.r ni the &nate. The cuplanatory rolhaguy m, athe whms, noine of them in the form of relatively s ague or ambigumsa Senate on July 24,1954 in regard in thu amemiment riently irnbratca l languagi . At that tiene a lie ling ll'uf g.ractical value ahd the a{gJacabihty that the wordg " tend to" were purenely omitte.1 an.1 e hat the phrase of nuNertion 105 c. were matters for the di. tant future, ano the wisole ";ncornistent with the ar titrust laws" w an intende.1 in be the e.gmva-gerojertal picture of things to a-ome varsed conswhleraldy degendity .a sent nf actual thdatson of the antitrust law *. sndivi.lunt imaginateoru, preferenn s and ansieticA Yihen the Senate Tha Sonste ver.4 son .m July 27,1954 racepture 1 in Soma es tent pa nrd the atomic energy hill (II.IL 9757 after sul stituting far guap the festure in einbee:ti m 105 e of tha 11 m*a and knate bdh a* of S. 3699) on July 27, 1954 Senator Ervin who voted for the 1,i.1, nrigin dly rep irtei .mt l>v tha Joint Omenittee -hir h smcifically made m >.intement whh h imindeel the following reinarks: would hsve placed an nbhgathwi on she (bmmi+iori not to iwme m
* *
- M urh ..f the dehaze in the knate everemphw.izal br*n,e of the Attorney Gen.ral or the Federal Trade Connmicion t he power esta, em of the fall This is true because emperts in believed that the propned lererne =m.bl ternt en trente or maintam
- he atomic rocrgy fich! > tate that it will he 12 years or more * *it"*L'on inconetent with the antitrust lama amt if. thereaf ter, the t.rfore it will bc r.omm:iraHy feasil,le to prodare p.wer 1 y Federal Trada Commiwi>m w fouwt umler the n.awc law governing at..mh cncrgy f..r general uses in any uh tanti<.! .guentstuw '".titrmt mattem and tha imi+firthm of tha 1 ederaf e m.fe Com-As a . ..ar.e.pwm c, t hose wim have o cermphassec.1 the nu.4*n Thn provicon went on to -taic that all partie4 to the 1,ederal pou rs n p. . b of t he u.at ter arc m..c.hnt hke the man w ho Trada Gnunnwor. heanno rould app *al the Federal 1 rade d '.un-mt hni la, fsionJ, to = ,9 4. bit ' ,.t. w In 6:e he made the "'i"ionN detenninstion in Se rnuru rabbit gum ' to ate h the rabbit Whatcs on tha pruvWoua of the anonic ennsw inh 4 nenhnne.1 m
. . a . . the t '.mgrew in ta A ugust 1%i. flhunately, af ter two . onfe rerH'at
_ . _ _ reports, the Su st, ami the llome agreed on the verw.we whh h was
. a .n a .. u o. . u . . . .a o e ,w. %, e,. . .
l
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O O O O O O O O O 12 13 sgrw.I into law by the l'rcs lent on August 30. 1954. The llome' Senate committee of remierence eteletc l inmi aufrectmn 105 c. the F.. M,,h ipin h - mui m .din . I, i dm **Widy nominM 6 enrhuls anM6n M. ,,4.aj phw m sentence nele.1 by tlm llumphrey anwndowns. In the accompanying statement by the hf anagers on tim l' art of the llouw the deleteon was I"*!' "'" d# "I"'" . c'n"w,'r"! N"' """ I" " ' " " ' 8 "" explained as follo*s: that nmt a h n Tom".".I en ba s e s u.la te.1 t io ant! t wo lawsm?n si.eOm c.uulin t ..f tir lirevese.1 artsvetin t hat "the t ....sviis-aoes In remnecthm with the iunence of licenws for utilization may *n-remi, rew.ke .er take sm h at her action as it may lccm nerc*- and , production farahtics, the llouse Idll provided certam nary mieli re pert to any firenw ione.i by al.c Commis.d.m un.lcr the rnparements with respect to the antitrust laws (sec.105). provisions of this Art." Am<mg these we the re.guirrment that the Commission obtain the advice of the Attorney General before issuing any n. ramnP4E. REAMONa Pm Faur. men WnmuTioM such license. The Senate amerelment rectuirco that the Com- i mission follow the advice of f a Attorney Geneal untens the f. Fmdiep of pnartical value l' I* resident made a fimling that the imuance of such a lionse The emwept of a "Fimling of I'rartical Valne" (acc.102), plauaiinte was essential in the emnmon defense and security and the
' in 1954 when tran.mmte.1 in.m the cauti.m* appruarh of mulrection limling was published in the Federal It+.gister. This amend- 7th) of the 1946 art has twen overt.sn by .1-velogunents It is m.w I ment m effect made the advice of t.he Attorney General a ~
an archaic symimi of what may once have hren a g.=ul idea. Clearly decision binding sqion the Commismien and the applicant it i, m., ,witi.cr g.rnctical nor of value. Unf re mately, nn.ler the without hearing. The ennference substitute delete the par- pre,ent law it is also a forini.lable roadblo. k h. "rmmnercial" (*ec. tion of the provision added by the Senate arnendment which MB) licen*ing of nuricar gmcrplants an.1 other imhsstrielly or rom-required that the a.lvice of the Attorney General be followed, mercially mcful nmlear facilitic+ The l'ammiwi n has rrrently legun Imt requires that the advice of the Attorney General be once again the rumlwrwmm exe-rrise of attemptine to surmmmt this {*uldished in tl.c Federal ifegister. huntle to wthm im brensing, a ul a go.-l .lcal of time an.1 empen,e Thou h the langu aml sumisible effort of sohnertion 105 c. of the will le cousmne 1 in the full encruti.m of the n.immi<trative pror.w. Atomic bnergy Art 954 were Imrn unclear, it ran scarcely be sain entan61. Win n it en.14 the Gemme+bm may or may says make an aftes a fell review of the history of the 1954 art that tLe text of sub. affirmative fin.fing with r. q= rt to a pc or tytu-. of farsht v, and it am si m 105 c. was inadvertently or I.sphazelly created. Itather, it acem* prmlent to acume that th. Om..oswi.m%Icterminathm -w hat-was the dehhcrate prmlurt of a wy de8;berative legi*lative procass. em it tums mit t.y le -udi set off asmaher rmn=1 of rm.troserwy In any event, the mer.hanism of subsection 105 c.-however the 11 the Commies.m makc* a fimhng of "prarteral value/* = ri.m.
~
rourta nouhl i e inclinal to emistrue it-was intendal to lie dormant legal prolelem< woutil pn. hat,1v rome into play. Thew roul.1 inrlmic until swsken.w! into activity by a fimling of practical vahte by the auch mat terg as the ras.vered>dity of *nhaceti m 104 h licenace to .cc-Commimo.m followed by the prnt"ned issuance of a "rnmmercial" ti'm im firene, ami, of cot rw . the interpretation ami effert of the licemn for the tyge of nuclear tarihty coveral by the fimling. Unlike prnsion, of r sheertion 105 r The armmpanying delays ami espew the sheping princers of the fakytale, aho by defmithm was not only could I.e enaremely oneront It met tw Imrne in mind thet the licenaing beautiful but alw en.lurable on e live-happily-ever-afterward basia, the prorem eg aircady hemg catemic.i aml *orely atrame.1 the*e daya, ami awakening inta activity of anbacetivm 105 c., as r<esently constituted, r**tly .lelaJa are tiemg experience.l. .hac to the smi.len irnpart of the woul.1 probably mainly re.sult in uncertainty, expennige elelays, and Natiemal isnsironmental I%licy Art of 1969 (l'uhlic I,aw 93 - 190) and extended litigation. Subsceti<.n 105 c. in chapter 10 of the 1954 ect the Water Quality improvement Art of 1970 (I*ubhc I,aw 91 ~224); micils to be alarifi.wl aml revisal. time far, the attempted implementation of these arts seems to he Chapter 10, which this cemmittee strongly believen ab.ml.1 he creating more delays due in legal questi.m. of interpretation and clari6ed amt improval, cimtsins in the first two subnectums of section impicmentation than in envinmmental con,i.lerati.m4 as awh. 105 provisions which the committee does not jerogume to amenJ. All of the witncmes at the emnmittee's hearing, ami all the selvire Sulmee tion 105 h. contains the broad-bret. re pairemant that the the committee has receiveil on this nuhject, from within ami emte.ile Commimion prmnptly re;n.rt to the Attorney General "any infaima. of the Govern.nent, favor removal of the concept of " practical value" tion it may have with reapert to any utilization of special nmlear from the Atomic Energy Art of 1954. The committee han emicavored material or atomic energy which appears he violate or to tem! towant to proceed reywm* illy with !cgislation to scromphsh this ohjee tive the violation of any of" the antitret laws "or to retricteel free com. in a mensibic manner, petition inn private ,cnterprisc," This requiregnen* is separa*e . and f OfdrdMisetc/ p edc @ y kerno b naf h trn n (Its!enri front suo%rritori 105 c. and, In the judgment of the rumma,llee, as ln tle committee's judgment, no acuwd.lc lyislatiem to rermare the thw,la th ummi general ortins.t.ght runrept to an.1 haic apractical. ver wide'Ibmouth funneltofor mformatsim assure of that. the gg,4 ,, ,hm ial" heig umW wie W MI hd w Attorney Geocral a as fully mforma a* preihte. clarify ed miw tha mit provi<iom of *ub.actime tosc. The hdi IWh mm Wh d.e wiu re mM and cmphritty incrita
- t he O.mmiwon% antimrit y amt re,p.msabihty in relati m to a.lvire frmn Ilm Attorewy Omwral.' Tim s larified stamlant
= a,. . o. o. . .
g o' o e o o o o o O O 14 15 mmt ole seri6cd pre = nluns ase rea mal.le ami wm kal.le. Tiw bdi . The committee is well awara of tim phra,c4 "may I,c" smi " tend to" ami t he emplanation in el.i, setert .shimhl a a..ne a full umlerstamiing en the t'laytt m Art, amt of the nw ning they have bren given ley of the stamfar.1 amt of ele proem entadnl. A Jamih,1 resiew of ele mtue ed de. won. 4 the N.ptcine t 'ourt seul dm *di of ( kn.gn-w sww uninertion loSc. is containeel en tie 1ime by eartion arr mnt namely. reammable girnhainlity The n omminee h very Jeht.ct-in this argert. ately - also rim,en the tour' 4t.nw of reavm ble pre.balaisty f..r el.c Of c.mrw, the cannsuittee is inton arly aware flint nr mrul flw sad ject starulard ta he cmcei.lcre.1 toy tlw Commis.i.m umler the regimj of parlhensing review arnt tie provisions of sulmertiosa liGr., hover mulmeetion 10$ c. of the in!! opinions ami emot hms ranging inmi mw est reme to t he other pole. At The mun.itten dhi swet d.esie it a.lvi, ide t.. enten.1 tlic f ansn.l.ri mw est ermity is the view that no prrhrensing antia nuit review sm either of the conside stions to be t ken into .croemt 1.y the Cmomis. son mvemary or advisable and that sie tirwt ino unlucthms of section 105 heymu)M*" "'tuntum n ahtferentd m anut,nnt, law remccrrel with violation of the antitrmt laws and the beforenation I* *3 in sc~pe,t to A ME !*=azul the pohries ricarly umictlyin des el..pumntal w hich sie Conunimi m is of.liged to rel=>rt to the Attorney Genersi reenm han Govnunn nt fm n h are catensi wly devoto.1 to the are alu Ily adeepeato to deal with antitrurit ron idcratisma. Addition- '"""*"I* **I 'I""I"3"*'"I "'t"' 'd "'" note energy an.1 t he t ?om mis-ally.t!wre are thom who gmint out that it is unrrassmahle aml unwise "E*' has de .luty not only to .-sr to it t!.. ihe fund 4 nra employed to to inflict on the construct sms or ogerarkm of nuclear g=>werplants and hnt a.hant.g m rcMan to de *pn ihr st.tutory enawsons involvnl Ihe A EU licensing prnress any ai . irust revicw mechanism that is '"' I. "" I" *"" N"I "I II" K"*T *I "h"" * " ' # '""Kd""' "8' I""" """-
- m. rr.piired in nmmwtion with of vr tyfes of gene *ating facilities. 3 """'"' H P" * " '" ?"'"8 '" # " ""'""" "I '3 "*'I"i K "" h " rnteria At tle opga.ite pole is the view ti.at the licensteig prorran almuhl le towant this obnove. wi=+e da agen* of 0.c ne tiday b { .rne 1 7 enunent, d.e3 not unu.unt to un intoin idy s.nns amt unfair u e.1 met ondy to nip in the bud any incipient entstrms situation but -die
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also to further auch rompetitive gatura,outside of the ambit of the a
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prm isimus and ev.tablishni gw.licies of the antitrust laws, as the G m mi e. ion might consider brielicial to the free enterprise system The
.foint Committee dews m.t fawar, anal the hill dme not satisfy, either P"*'8b
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...s i, I n r..m r., i d..n s., , . . . t .,, m, ,w. . l. .. l. d... . . .,,,,,.., , . m e, e'llw cmumittee is reconnnending the enactment of prehrenning '"
s icar provisions m hich-as in t he proposed Atmusc Energy Art of t954 1.e liew kn be, insupin rtable . r nowiw. t he namnit tee cont.1 not so that tiu .loint i mnnottw ongmally reported out, and as in m the ede. tivdy rwt i.i r..ntent of i brensu.g maner The . .mm.it t ee serwhm of sule <ti.m lir.c. that the $,cn=tc pa red me .luly 27, IM4~ rer..gnim dent incre is i.o t = e lcar b..meArv he w n mw do m,t stop at alw point of t'e Attonwy General's advice. Imt go on la considerati..us free enterprise an.d isimee relati.m ern tob,eudie Marngdennw
. ..n, peste sm 1. ..hpdw ..I fm o n,b.ed%n in
.h$rrdw the role of the (cannammn with rwgat to potential antitrust mm mit ua t ions-other than the antitrust lawe or undrelymg untitrust ga.in y, the t'mn-mismumn wdl have ti enen ise .hs.retion and judgment.
The legislation propmed ley the committee provides for a fimling 1.y the Commi sion "as to ulwiler the arti.ities timler the Iscrnse woulJ # MM'E'"'/** M"")"Prrfisc sa (Ac rempondm,. ,y atomic safety create or maintaita a situatioti inconsistent with (le antitrust laws as and fernstop buds q.<-ified in aulesertion lo5a." The esmrept of wrtainty of corfraren (Inder the resent provisions ..f subwrtion 191= of tim Atanic ison of t he antitrust la me or the policies rh arly un.lcrlymg dwme laws Energy Art o 1954 two of the shree awmtwr ..f en atmnic .nfety is m. intended to be implicit in thim estamlard; nor is nere remihihty and hcensmg hoant umst "he (c hniemity p .htic.t"; the thir.1 mem-of inconsistency. It is intemled Ihat the fimling he ham *1 us. reammable f.er must "l.e quehfeed m the rond wt ..f dminntrative prm ecaing,. ~ pndeshility of rant raventhm of the mntit runt lam m or tlw gebrien clearly U d.e pannmon W to am,nW 3.otruu.I anharust situati.:n* .* underlying flese la u s It is intendal that.in effect.the Commimion will part of sta hrensing prortas. as pentically t.r..ude.1 for in the Inll. it conchule ut.cther. in its jmignwnt,it is reasonately pn.hable that the wiu tw necawary as a prmetwat metter aL.t alw a
- unmiwion he anthnr-activities under the hcen* nould, wtwn the brenw is immed or there. hed to have,Mu,wn h e qwrte*
after, he inconsistent with any of the antienne lame or th- pnlicies the own s protw.4ni rn neuon 's the ho.nl. 4 i, .lcsirable in relation to w md.1 penm t two of the three ricarly umferlying slu u: laws. enender,s .J tlye ,ho.nl to I.s vc "s -h terhm. ni or oth< r <p..hficneinns It is imp.rtant to emu that On antitrust lawa witi.in the ambit of .y "e r nunua d"' ' """ ' " i da i'8"I " l *nbsection 105 c. of the hill are all the las a egwrifeed in nulmusrtion '"' "f..P'"P"d", nn du h u'"lnlee v t ha t w oul'"1 . o vIw pr ide.1 ios a. The.c imlude the statutory provisions pertaining to the b# N " " " " """""*"#'"' " ' ' I"' "
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- I reae,mi T,mac c..se.ni,.hm. wi,ich me,mahy .re ,et iacnorma m entitrust law. Accordingly, ti.e for.as for the Commach.n's fbuling wn!!
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The n.mmittee es for rummple, mylude ron.nler iion of the admoniinm in secta}m 5 o ,,,,,,,,, ga, ,g,,,, ,, [wrgt *,;g, a nd will g urgr t he C.m mw.on g to n..ke every the Fnteral 't ra.le a ommewm.n Art, as an.emled, that linfmar =ec:m.n 105.
.nr s hml4 of rompetiti..n in rommerrc, and unfair anni deceptive se ts ho.rd ..r 1. wof .h the 4.. Iddfi fully be AM but npohtum,1v. ('tcdart .mag a separate m rununerre, are de. lared un!
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gryh. Un .nd u.) of s.d.m noo m The . ..m.mt tre ant a ep t r that all the (mu ihm, . onternplated by thew p .inge.ph, wont.l b . .e n.sl _ _ . . a r .
O O O- 0 3 v O O 17 out lefore tk redinLgical I.calth enJ ufety review and deverininstion g.cuen.s is nmyarted al.=L tk rnt * ?aren-ing pr..redare is not t %wnw. w rnw Um.se n he o ms. fearther catendal in time by ream.as ce the added antitrm.t review Joeairfownerre e .m A mew Enstmus, h .im. Itis > Amp.a. l d '. .tlerr& W, um Itoss Huamar 11. Fvwn, l'a mi 11 Asaraman. Federal !.%lustum 4 % acd, Frderal Ofer Residsmg M 7, ilesA.nyrm.. O r. lausst.arovs liset.Av Dzan bla_ Caesmusm on Jesmerv 2M. 897st yon 1.=1.-. mes1.
, In 1 inm o.359, the Ate.snic Energy Act -41954 was ansedal by ti.e odd.f- write t .%nator h! adic. <bannen a sk N6.m.mittec n Air srtion 274 midri rensmud the enterests of the States m ment Water Ibih.thm. of the I%I,5w W ek, a w.m.:ree, rel.tive to the graceful usca of atomic energy meal providal fcr programs of
- te tam.my J Dr. Gdman asel Dr T.m Jm 1.cfo.c si.. nben.nettee.
cgwra. ten beturcen the States and h Commsseson. Sul-wethm 274h 4!n on Jan ry 24 IL7e Dr. Jot.n G fm n.r eed .. a =s<nem. statutorily established a " Federal Hadentim Council, canamatmg of before h J.dct 4%m nasce .= A6 n Fnergy m st.e romr.e .,f she. the Secretary of IIcalth. Education, and W Jfere, th Chaarinsa of o., mince % ker' ir* ** h enter : i rac. e,J pr dme e ct 4cir the At=nic neergy Commisanon. the Secretary of Defense, the More- p .cc, and 6. premnied =r-2.e., swe tary of C;mte, the Secretary of 14bor. er their and tien t h e th-c.) .Jamid be an ana 6:e een yg,,,3 g,3,,,,,, y mf. h nrcJm s I tionc u..A such other member.s as shall I apporated by the P est, "th* g wo,,g g,,4,g,,, g,, ,,,9, g, ,, ,,,,,, ,,, g Council was required to amault u,un " qualified scientists and ess.erta gmp.dath.a at larre Dr. G4mw% =rts ce omscro.1 s e ,asse.l n pie sa re listiam matters. i l e esu.eens w ha a.c Is sed &c. e @.w.,e s eld, la em h maal of Scieneca, the thermen nc uding of thethNation Pre.id=1 nt Cummittee of the Natmnal Academy en Radiatma ahat th materi.1 = a- i.eme fwnahns . m m ee,.ily .. : .e F, der 1 Protwthm and kicamurrmenta, end qualdied esgwrts" sn Ser fields, g,a,, ,;,, a w,,,3 g,,, ,,,,,, , g ,,g,,,4,,,3 g,,,, y ,,, g,, ,,, ,, s,,,,,, g g ,4,, , g,,, ,, , w;,,,, armi to a.!rs=r the Pre ident "wish rmeet to radis&m matters. .4 the FHt' I .e rer Jern tly or enduretly aff icting 1.ealth, sac (edmg g midance for all Fed- ,,,,ym. nwn.tal I : eral ageswacs en the fornialstaan of redistm.a standards - . . ,, g ,9 p,,,,,,,, y ,4, . ,,, g_ , 9el.e t o.tned an.lcoake g ,, ,.
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in r.o.mme w!mg the incLs.mm af this feature in section 274, the es of & J.une t %.. :,e Ataenir Energy, I e6r.mghly 1.rhese in ik .dsr.l.ehty f . ( il-(b m.ntts, nmmederr.1 that therel+7 hash radiatwn protects.n gusdea would k arriv.*l at purnuant sa leagh ernentific tandard,, sem that a scale review Afy 1.eks e, e e m siv eM hv sk vam* f Dr G fn a l_ runtionie.g, nm g.< busive reverw geruren t y the Couned a vuld keep W Tae A no.n. it I.m eened s n., M h afn on e .6 % l st nia.r mgl.ly al.re.at ..f all gwrtment ursentsi'e n antarmation and alert 4 FHi" rc~g=ce.46htie= main a she 27th. f & A s m Energy so any nent to reve its redsatkm pruteethm gmJem. Tlee (bemit*.ee Act of 8954 e, .meewle-l. -L ! I ene d s6ro ch g.cen ler sessen. s IwlwvM tiet the (%umal abould functs.m as a statatory body be- take mJeant.ge +.f fartaal emi me.nmet lly esidet.si.e v . level p-l r.nw of its imgw.rtant reymialsli:ies, re.her than nim enta bly =n N d.t e, dat . ,. lee, r e..mm.e .n .,6 l l. 3. a of the esecutive bran <h whh h it had theretofore bees.. gdy as an arm <d nmm. Ian ml ead every 5 ye.im Flit . hinalede.l.le r s
,g,m.ms, fotbwing ch : .e, .nd ev.hms . .w. J 3,ni. sic l
l Cesmusm . Garum" h ma abi.kl nevre an rembric gen, cal conselem e in 8.e me,s nst , l of FHi"a perf rment of et. .eatut..ry du s.,,, ., = cil n, t hefj. T1.e Federai :!r' ati n (biamil rum.c 'n! radiatkm protection Federal agenom arid ti.e geldar el . tl be .nn eni by a rueJelmet l gmd.m. nad tbse spaiden have 1-en followed by the AEC emi ether J we ald eng.wt th.t ml rnw.. 4 r hain g<o.,, an g,michor, Government : . _ Based on Il the informasion avsalable to this * *II I" ***I"rd * """r.imm1 .ish al.c l gh-se pr.we.l r I I i comedtice, e the ado farmished to this cemmittee by out. l
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AEC's radiasm erutw&.n stamleM. are vahd and approrrie:e inmi """**"'"'t""***"*""W"""'M radiokysral laealt an.1 teafet ate ndgn5tets. "" "E * "TI "* **T ' " ' "N*'T """ **I N" llowever, the rom.mitee as nome to ag I'"*""I. rnembers of the FeJerel Mediatun Counr)rerinte the fect that h are res!!y 1. occupied h""4 7""" with th gwincipal activities of seeir rmpective departroents and 8 ," " I I * ' " n ". ' 1* *""* = agencien, .nd with duties im.wa.est by member ldp on utleer emn. FHC% rrply w.o. t & rhe th.. a s.4 m rmtsee*, to desote their continuing attentam ta tb Taewthm. of Se e yee ..fc.A. ruhl. One,uil en enviskmni by th cms mitte =l ces it renanmemMI the inyrogrem . TI e erwirm h.- .gy rre.si, om 3,s.L.g, = a, iem bshm in el.e art .4 dr.ertion 27th in n r.59 a r nwnouuce firmly 1 4erves he ik s==.e 6 r m e ,,.61.,1. :b On klar.h 20,1970 elm (h rwan of alw Joint (%mmassee wrote Federal Ha.beion I hm=41.n.I a.. s.Jos.e , f r ti.e 3-rr-ne are e f male =<t== 274 le 416 At..mer Enrigy A. t e.c. , J. e.r.,31 rr.pwrem.ne. the f..!bu se g lettre to the Falera: H Jintam Co.nn 1.
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O- O O O O O O O O O O N 21 f *r.-nW. Tha t I.rfore tlw C.m.mim m estabb,l.e. am h ic he.1 "st.e prop..wst crit. ein shall I.e ..l.m.e te.I f u s he Jomt t '..m e nicria, alw gang.o ni 4 eisenn .Jeall le whmes tol to the J.m.t omt N- awl a pen. I ..f 41.la w sha!! . lay-r loir 4 '..orte- *o-** t %nmit tre, en:8 m gets.at ..f fort y-fis c .la u J.all clap
- wlut.- s m * *
- m.!r~. s he J..mt t '..enn.ee t. .u bs . rs. .lu s .n n. * . .-* ".r
- a" ^ ' t.-
t *.mgirw h m sens.m ins . ..nyn.t oog s he for a y fire .19
- time ron.ht s..ns ..I * * * % h 4 % .la s prn. ! - Il e.r.e - l m.e.a-- m l.nll le eu In. Int tim . lay in wlm h nther flunw W not in prwe m.ml.I l.ance ti.e pp. r .J *
- t ** * ' " r *dk"** I"" n so
.= v.em 1 creer of a.!p.ornowni f..r umre ihan ihree elayal $N 70 l*r..t**.r.1 i8vt.-a'e'
- p* *. e a d I.m .l *3 6 e=Idt"'I * "'"** af r
..nle.e Ilm Joint Committer la re a.Inti.m in wntang waives m.t muirnt ley ule r. ti..n it.t t.. h. -..l.e.et e. l s.. t he Jomt t ' m .
tim r.m.htiem* nf. or all or any portsm .f. a.wh forty-five4f ay miurcI.4 rc.ne.. g eri.nl- Tlw amen.l.m-ne t I he rns.< m sensa.-col 1., t I.e t '..mm v.m = =.il.I Purwant to the rreguirement of thes anhaertion, prenew.I critena 8 I" f.e wparan e m oe k fr.nw
= rre ml.mitMI ley the C..mrm+d.m ist Jeme LM.G. erni following es- 'b"".E" me J emt rer I'"* I"'
ery".,*mt=se I A EI' ton e' a sI.n he+. .hars.c hi k a.. . .hne in e l.e A Et , ten 4ve learings by ti.e rummittn. were meio " "" N I"' ""*'* ' I 'I' ***I " " *'"'" * * ' " " " 196r. Am.mg other thine, tlie.a. rnteria met b.tcel an hawa vth the Deermkr 23 for the '4 b ** 'et f.<d."m H.""a.ncudmn.:*P"" so d b3" c '" " ' ".*.*ut n ea , e {o- nr = l.a + for prire to le e-harp,I f..r the enric hment arrvirem arul =pecificel a retimg 3"" *8' """I*I ""'t .4 d.< follon ent. g rire *f $30 ger neparative work unit; the crolmg price =as mm le mulo in rengnithm of the c..mmern=I nature ..f the primary Jert to eeralsti.m for gewer aml Int =>r casta. enerhet ta le ==vve.l. an.1 of tie fart tbt the emting fanhti-g
= cre enettwwt pdmanly for n. . me. rial market.
Cauwe m atCuwue m A ECs . isrge f r ce.drbing arrvsees =n!! I- est=I.teshe.l at the. level rettee.ateel to 1.c qms alent 3 Ihe e berge for parat ewe On N vemt.cr lo. I<.m9. the Prestent aanmmcc.I that he ha.I a4e.1 week g,,rf.,rn-nl in . ramum ,nrg1. ment fanht no a,._ the, AE(
- to e.gerate its .hifee*hm plants as a arparate organizatumal aegne.l. constrwte.l. an.1.qeestr.I primarily t.. me. t twm-entasy estidu ti.e AEC "in a manner whirli apsc.arhes more timely a mrrriel me,gets, .c.mg .1,I.4 . rate, freturn o commerv ial enterpri<r " The WI.ite I hne,e reica$e atated that the inre,tment. an.l eg.pr.y.eistebmtv reena. Frlcratr rp rate o..m.r,I..r l*restent*m ..lcrism w as " based un hi* lelief that the Federal Omvern- income ta c,, stat, an.l h.c,I saw, a I in,nrance .lcc m I l , ment *n ragam sh.hty for uranium ennchment a= the owner +perator of by the C4nnmew nm to 1.e appr..pnate f..r a pnvote an.l.e-trs=I the Natim** ..nly ems huwnt f ohtic, eventua!Iy alwmbl Is. cewle.I " ,,,rictgng ,n t,rpr;,r i le fu~l.er . tate.1 that the Predient m.ml.I not acek leghletion at thh pp ,,33 rer;,, prrio,g aig, th, charro I.., ,*rnldne i
tinw ;a authurbe *alc of the facihtie to pnvate in.hrstry. ar,..c,* .m the ha<e4 of te i nialatc.4 g.r.nertiom ..f tlw r -e ..f The chairumn at the J.dnt Committee is*ue.1 a *tatement tlw name ,pa,ative work pr.= hen .I in a n-w enrn t.me v.lant an.1 41
.Inv in re gamse to alw rricaw from alie White timew IserlsA lin hh n.mment. were the followsng remark : th, n,t of un,wy in t!r pn. ate -.,t..r nfth. .r.m.m.y A-a re.v 't af .mrh revie* *. A Fa
- mil mab any ap..r.q.ri te Hefore the ('.mgrcan mani I even rem 4?ct taking such a rewhern* m t he chary.* for earn hn.g ere m an r. lance i
major utep, there isn't the shg stlest .hmht in my memt that at with (the forrp eng Imss- lo.s a sehen el.c lumt al anets ..f t he unishi want tu gmt any weath 3.rnga.-al urpler a mirsusrupe its restengt prwe .J Lill tjus rwalata.m for the ...st of ga n re aml or.lcr to amure the comterthm of the gml.he interest. Int = 4 I w avet in amure enterc%tc.I sneml.crs of tha 3.esbhc that any PulJw hearir.g.= were helil I ti.e J.Ent t '..mm:4 tea. o.s Junc I r. Significant proga.=ed thenges ise wreccJdp of the plants will me.d 17,1970, in renabler tle A J ' m.I.mit tal of amen ir.1 creterna eln he the whgert of f. ell, complete, an.1 compreiwmire J. int Jane 16. te tirrumy w as reccomi from the f..!h n.g wit ne--* Umnmittee pubbe lwarings to enn4!cr all of tie factorw m- e,mm, n,f wirfrklg J,am,,. s.dml 1.cfore ehe lyhlative branch approveg .lhapprove=. (hnmadae.-r James T Itarwy or m. hfic* may *m le prnes==Is C..m nias.re 'U c J. V p m it w as ricar then, a= it es m.w. that the transfer of the gaae.m. Jmeph F. He esw y Gnwest C.mn*1
.hfTn4m g.* ants tu prirate on ncrship rammt f.e legally effecte.1 wittwmt J.Jm P. Abha.lcs.a. Contr.dler an enablme statute. The. Preaident has not sa yet pn.g=v.ed any '
On June 17 erpre rntativeg of the Gneral Arnmntmc (sffire Icghlatu se to arruenpfble has anterede.1 purger.e. ap enred armi peuve.le I preinniseary = ww. en .br ==isent a peru of t he On Jnsee i I,197tt, if.e t %nmivem animent ted in the Joint Cr.mmetter A J ? snhmetIal_ a smyar rd amen.iment in the cmhting enteria for prirmg enriel.mg Tlww re rewninesweg were: crve.e, and a imq .~rd sn. reev in Ihe prire ler neparitisc mark umt, Dean K * *nm flwr, A-sestime Dn.vt..r. t hd Dh v. inn i A Fs
- The pr.. pose.1 mmre lment ta ll.c rritens m e nahmittal pur uant to Amho the re.pdrcment in entr.crth.n ist , that lefore the Comme .n Denert F Stant.m. =nceru rv sn letor est abhshes . ntrna in. lu.hne reve*..ns to crites;n theretofore estal.- Thoma* P M.4 *orme. k. s.q.n m..ry a hter n a.,. s . r. o e .
r l
o o O o o o o o o O O U T Als....n .fuls t e., au nr. ntn c L ing - kid I.y the n.ms.it tre t.....sc s r-a no.m3 h..m s k Al.t * .m the . lawir.! a-g., b vf the Gavernmc t ret fartor4 in ok rritnm t.v cm:4..sme- an averarms-en tno r =- . . ne ',In, f.i .- ~ f.4 nr.murn e m u lie..o.: t.. l.- g.gJ ,hle f., t k 4*. coo.gnewi..r '+ . ns ce m P*^ P* h h- [
.1,.. g..u.I. 3 y eI""..I. . .i . e !..r 4'"".cl.
. ib w e d .- - .J th .ul.sw I-ai nn~ ur pi s..acol .n t he Joms t *.m..mt su g.nl.hri.s w.n t
S'in -nhrn t ..nly to cu .l.s w. G.e s i . .- - .4 . l... e ,
- g . . , o.1 8.r-4 rumb,1 "lisaam .i l%u hua nt 1% .ing t'nt. win ll.nemgs Jme Isi les estalJa-long' efw prev t he A E8
- gJann..I t neihr. = ..+twrn - t an.1 3 7, it#7a " ThL pe m t tw. < *nt m4 he rmmner4t . 4 m ementer .4 fa. tot t geovide for ndi 4..f .. gras,. an.1 c-temase, In rer rd t.. vic-esphi s.In=ls mal u.nymnw- m tiw me lcar n=!.esery; the ewmnestre ( %nndwnm% gJan ll.c G AE D, en a 1%6 r. g.n t 8.. sk Jome ( *.m.ons ta .
hu stni the esprc-+ne .4 i men s 13 in cre-sted peng.le ami mgam- engemed the ver, that'
'"!*'l."e I tritnia that flee .tmum . .
..n ha.: a.lopt.wt in December 19tir., * *
- the genve4..n= 1.sving an effret on a riving aff.wJ =
aml n he. h hai.. Lyn in n,c duce he 1 l= en e arefully reviewed by tlw ,,,, ,,gge h ,,h gor ,n ,,,nnr ,,,r , g,,,r ,n ,,4 ,,p,,,_ 4.c wral An o.mtbeg Ofke arni by 4tw Joent Ce-mmitter twfore they tam, the Government's .mt .4 formJune corn f. ment we,c estal.lbl.nt
- Tiw tritena arrnrately imp cmented tb fumla- i sm * *
- gi o ,c.I re.hng
- berge 9 ,g,,, c t=4wve el.as th,e,,,,,,pn go,,,,,,,,,
mental e mw. pt agy.are:d eluring the 1%t 8. earings ' 3.rcenhag the g
,yy ,, , ,,
i e*=s enuma sule las of sul.,re skeet tGI v. m..d during sl.c 1966 learner * , ,,,,,g ,4 pri..r 4,. al.c c tsh!hhment .4 tlw criteria. aml ele = ril.nl in the Jmnt Falb*ing further *t ly se=1.mymt atson., ik A Et ? ann.mewe.1.m ( *mnmittec% res=.rt an..enpanying 14 I"risate Oanersing Ae t* Tlir. S *8*ml.re t 't. 1967. 8t.at 14 3.ri. et mm.bl < huge for enri. hmg ! (mulamrestal e oncept = =* limt al.c prke to I.e chargal t.y the AEC acr,we. w.mhi 4 32s re = g.arats.c ...rk unit. = ly., t to + hange me ! whomi.I Im l>a%nI **s 9he Teenscry 44 apsmatwiste Goverritncnt n.-tx G ssumthm* notere l=st u tt l.ste t k gensarante.sl $l188 erstmg. gJ.c6 t l.c ascrage I otrr a :=tn.sl e4 yrass ett s.nler to ste.wi.le .m stable pricing eersIath.en. Isa le.r. Ian erj.If to the 3=w ee'r e rawg eest I a br Joent ( *..en-
.,st n at um A.bleibmall , elee legblata c l.a. kgrmeet l Jneb c. the f.Jh.w-t mitter, the t 3 AO statnt no a Irs en ec...rt .4 N. ptemler 2*.19si7. t. t f.e n.g un.l.,1ying entent, w hi. h GAO in it. July 17.1970 regawt to alw J.4nt t '.mmut ere that the am mem e.1 526 geni we, "a.latuate t .*
Joint 4 %.mottee .neerrtly elevribes a4 follow * : lu runt rn o.ny .4 apreog<sas, t annnnwns unt. ,,ogn e,,1 oser a The leghlaisve hbtory .4 thh anh-ecebm 18 t v. ahaws an numl= r of vcar, and := cm.-est. ns m er i. f l.c 4 **mmcemm% .nt.-ren
, intrnt s f.x a e Imrge lonel gevectally ug== the rm.very .J mIJid J id ik F.h 8 II.et<r em i t.wml.rr :.*.t. 89e.ei " The e as )
,g ,, y,,,,,,,3 ,, g,49, v t hr Go wev m.wnt % n. t* ms *trant m 3. age 2 of the II pne llepor t 47sc Tk mly ei.airern e4 tl.c .Nent Cmnmettee m, Further. c went ri.ir that ik < bree aim provi!- n Atomw Fewegy = =* t h.at flw rnim tbm a :=mible elemenati m margin f,e cemtmen=w. we .lo not -- a 1.e4 f..r aw, sme
- u. nnht ery eu~*l4 f..r enrie hnt nranima maght raw,e tk prwe* that a mles.ly b I.eb g pre.. leil eo k .l. - o tir or fose.gn require.1 h rcn.vn nat to inw ren., .o 4gmfrantly tient th, mwirar omta-trw . , any g..ri . al-re.4
.h-velogmwnt .4 at m.ic :=mer m.uki f.e smj=,bl The atate- The=,14 .ritens ami sk impleme,.f mg enre fully arn.e.le.1 w it h ownt. .m paar IM .4 the llem e reg =st math reg.cet to f!*xa- tb hywletive intent up.h flying tb gwas een* .4 -nir**in.n 167 v bility ami omsulcrate.m of ele natemal mteret are derected upwifically and wirly to akh =rticukr gedJem ,,f sk At=s.'r En rq Art.
In our opini.m. the stateine t* nmrcemng !!cu.bb.ty ami As an m as the Jmnt Committre rcreived A EC' prosaned anwn l. nathmal interest us shi en lwate that the' rWase emly to the a,nt to th, ,ntens a Jane t i.197th it rc.pw.tni the General Ar-rerovery ..f l~than-full na t amt incrcly create eme caree- nmnting Oflire to nub t tlw malm.ettal In a very e aref.4 rever.. The tami to the cadier l=nitive =tatenwnt or page 2 of the reg =.rt Repart to the Jaint Gmemittec I.y al.e C..mptr.'.ller General .m Jidy that ahe rharge f or carwbir.g nranium win he " based generaHy 17. 1970 rontains the remilt< .4 tiw G Al D review . TIw rege.rt tatc=
. op..n al.e n e ..f l.=ng ne.v ar,v ge.rcemg e.- neparatsve thet banc.I on G Alra interjactaikm .4 1., Icg.4.tiv,. l.6 nry of ,ml._
work in the Governim-nt'. diffu,n.n planta" He think tl.a acetam I61 v. the pragwant anwndment to sk ha-n for prirang d.=
- tatement on page 2 rea=mably n=ht bn ertcrpreted as not appear to lie nestent with the intenti.e .2f the Congrm, Among other thing =, GAtt atate :
[ refluting an it.semt to prnb.le LIw *ceting .4 prices an as to ren-scr v.. war . . the n t h. G..veinnwnt'a full nat. .ncr a g. cts.=1 "'"'* '4 the .innenmahle m**l for, and the ap;Jwakhs y
,4 g,, of, the prnt. nl .titena meal GAO .I..nids a to it4 . lcar The criteria c :alJiJacs! by ahe Commh-iori in Ikember 1966 antimn.zatum, G AO doc % not l= kse ik prog =nni criteria
,b rmnptbwl math the geurns.m* aeal the sgant of ant crtum Int v of slw I.I k adopted mittume furet r a. Iam 1.y sk C.mgrew.
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e.a. a >. sca m =. .et m.m e , . e . The jmrpme of IGI v. m e, to gansnic f..r tra analJr e omprn-sta.*: 4
'""O* a.,en.au n a.ceo.sww.amar . e a. mea ss.same 'I.* 4 *** rnmerit oss the ha e4 4 t he rerovery .4 approprunte G..e cen-ettepl n.st* merrss"e.l user a pero l ..f venrw 'l*he ete.= ststcrea w e op thn h.os, TI -nlat it :.te ... nlled . nten arc ..my . .ni ..f a n. mil.rr .4
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t g, m,,,,, ,,,, , ,, g , h g , g ,,,,, ,,,,,,_g,,,,,,,,,,,lne,q,,,,, guq p.stp vv; s. I titele. mil +le.1) ,3thgw,,lly dre s m .th u. w. Isom 0 el 4 ler f. ell awl .* .h=.1*e.l h cor.r og ,g.c a 8 "l ler it h. ir.,1 p..r t n.m n o..l.1 f or ,e u . .le.1 t.. acc. .I w it te t he enh- . twl..., nn.1 et appear, to the s ommet tre el.at em u* fol te*r s=.-. * .*I l
.e.g uen t prm i,s..m of el.e f ait s.y=4 sing. t h . . In..inate.n of Ihe nm- i.e areve.1 hv omy.el;mg any remurrs* e in *erIw n MI TI" r.*."o*i'**
e rg.t ..I a hadmg of "pra.-th .J s alac" an.1 rmwen ing t he I wn-ing of here vnnalhes that anwmImerits, == me. h, to an cue-ei.y wa6e. te.m utshinibm and sm lo.ts.m fa. she i.
- for are l.rstrial or nm.merrist 104h bree-.ne we'l not alfert the enregite.m t.. *erte.we itKI lereminr II.
gmep.r s Tlie pl ra+ *%n lu.img kuhntrial mo." wout.1 la. revned howcerr. the facility a la he m..hiint an = h a .legree a* in nuatitute to "mrin. ling on hestrial or .oenwrerial mn" ami tha g-bra, "al.a a re . or m 6 tan +ially .hiferent feral.ty. == t.r..*ble.I in a ter*!stn* at
.lenn.mt rati.m of ahe prer.i. =I , ab.c of utiliratb m or gw.=her tion nr.ler imae.1 by O.e t *mmeree wm. the cereposen* to serta.m asEl bren=e,ng fa. shism for o hst nal or ron.mcre int gmrp.. m" w.ml.1 8=. e hange.1 im not inteni.ad ta be appiscalde to the nue==ary brene amem!m-nt.
ta "tho de.m.m-trati.m of a.l a u m .m si.e rosnmerriel or in.l.nt real Aamle from theae tua enreptum roterorie.' miesmm.trathm farihtu.e opph. ati.m ..f atomar energy." Th e e hangee arn ewentially tarhmral under the ne,peratsv g=..er reert..r desmm*tratkwe gevram and in nature; t hey .h. sw.t clin t any mah.e subtantire alterethm .4 previm,,1y ! renw.I 304b fanhtieg - may tweme ( r a atehzatum er
*.de*w m 31 a of th Art. g.n=lacti.m farshev for imbestnal or cornm.rriel beermen woc'd be
&rtion f of aha Inli amerals ebe sened nentrece of wtkm 56 of the se.se.I wmler aertie 103. unle=e =.=,* I,sture law *ther=i,e ap-vfws!!y Atamic Em rgy As t of 19M. == smen.61, a hich non gmwidm: providea.
The t %nmiiwi..n hall al.. c tshinh for auch perkala of *%fni 4 af the In!! amen.l. the fir *t mentence
- an6erikwi 103 m.
sin.c as it may .lwm unm.ary I.at a I to carce.1 ten years "I d'* 4's *hich now reada na foHow : as to any w h perb. l. Knaranter.1 periI.ame pne r* for sererwom Dun the heanng, pertsenmg to then legialatime there waa a ang-em L hrd in t he i*ctope 233 gm=Inw t i., a mn lear rwh< by a g= r m h. cmc.I under urtion 104 anel drhverr.1 in th, Fmtson} tat tb d ta k a rM dah.n 4 Ow.nal intent that aartim 272 el t*m Atomw luerry Art .lal, not em.atitute t *osnm6km = et hin the gn-n.-l of the guarantee. !!!al.r a 'f"=hfirstem of 0.* Fednal I*n=ce A rt. no Jomt ( *mu *uee my a,g,gg ) rerefully neandere.1 thig item aml emw imlal tirat tha Ws4 stave TI.e it al.rire.1 phrme a mal.1 he resi~e.1 to "umler sertion 1tr3 or . ert'"" history of ne. tk.ra 2T2 es=hrsted .g.ute eleerly that the rewnmittea an.1 IaH". Wet I. re-pr. t t . rnarantml gan ha-c g. rice. f..e l'233, u t irb tl'* th G nrrswa had not intembi therehy to rm-bly or affra n an., may 4 *ommews.m he, rewc t!v c% miele-l.c.I for = Wycar -rkal, it is appr*- de pn.ve. ion, of tim Faderal I%.er Art The rmme..it- unanim,malv g.reate an.1 a.tusal.le that t hew apply to teen nl rnalcar fa shes"*. rer mfiram the* intents.m. h. edTwt %ertson 272 -h mbl tw. rea.I == "f nu h fmg, as pr..u.tr.1 foe e,n s he Inli, alw- twen,nl umler arrILm 11!3. Om elauae "to the entent therem 3. rov =In!" appentra! at the ew! of g, g,,g,
&ction 3 4J the i 11 ameml4 crt m In2 of the At.m.ar Encrpy Att
.4 4%4, as ememic.I, t.. cluninsic t he reonirenwnt fos a fin.img by 8a0* T ***f 88 8 f *d'"F IF 'A' I**"'**'.**' #
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l t he 4 *.anmi- m "that any type .4 nestize'tsm or pro.l.w tkm Tanhty sertime IPf. the Gammem e.m scay eao* Iw emm la transfer or has hern 3umri.-utly . level.q=-1 to be .J gem, t= al w ahw f..e in.hntnas rm ave en Interstate commerre, ma*mIsr twre, prmlure, trarw
..r e.muncerial gerp.e.c=" as a nm.fitb.n prere. lent to the "rommen sal ** fer, anpsire paa=am, ere, swport, .s eagert un.ler the terma ed herswany .4 wn h ey ..f farshty umler ace tsoes in3 crataos Ilen!rr the revise. scribwe 102, all uttitratkwi ami pr.-lurtka fartle- en 123.agreement anch type offor ut: nw7e=zatson er pe+hwtson fa. shtyarrangal gmrwant
. !! talus ases for imin-trial or ..anmerreal gmr3==.e=, with two ese eptanng, woubt added) le =whjert to lirem.ng nn.ler new ts..ro IOL I'he t wo enreptsorts wmsl.1 Th itaieriza.8 clause wmsid lea deletal *itore the e==gnerement for a le (1) farihtic- r.mstructed or opriate.1 un.ler an arrangarnent with " practical value" fin.hng .md.1 he ehmmatal The rmwin.img ria.cie the (%mmemi.m entered inta umler - n=.peratase gmwer reastor "such tyge of utdiratum or go loctum fanhty" . sid I ehang-d sa
.lcmomteate.m t** gram, emlem the og , ahia law rm4* ire.1 lirement "utahzation or prodorteon fanhties f. r is=letn=3 r r..mmerriel Imr-nn.lcr sertha. 303, an.1 tis) fanlitseg rovere.1 by a suber i.m 104h. g.. a. " Th reri=a.I serms.ai ==dd g<owhle for the rauence ta para.**
nimen rthm g.rrmit or .q,ratmg firenac 1.cfore an.1 at the time the of ".o,nmerreal" brenwa with reapert t "usehratum aml gm=l.a ts..n bal i. enarte.1 into law. In regar l to ti), the haw for arranrements facihtkw for in.he enei r emome.rtal gwrpo=ca " nmirr ahe n .peratisc :..a er n.a o or .lcemm*tratam pn. gram, =hirh &rri,a A of ahe h.Il =mihl s e e,e .n vn a s m I04 h of the er t to program han for many years fun urparately n vere.1 in d
- AIM"* suthoriza the i mance of twemes umler + hat wie.crea.m f..r utshratkm authorirali..n art , er .arrlully er.iewed by this n.mmetUe Shonl.I .,e prmherto..n fanhtic for imletr al or r4 mmer. ial pw =.ac. li) here as he ele-ar.ble ri t he ra,e of any nmtemplat-.I future n.aperad.c specificalIV authorize.1 by law, or (til hare the fanlet, i* rmateurta l
. lcm..n-t res sm pioje. t to rr. pare that ti.e newlear farshty involve.1 r opeente.1 under en arter.gement with Ilm 4 *omme E.m entare.1 enta he brnne.1 nn.l. r *r. t um IH.I setta.1.4 an6n tsoes loth . thi4 c.nd.1 l.r .h.nc in el.c cumblme tatute in regard to (ii), the rmnmiter* sereder the noperative g o er rea. t..e .3 wa rm t e..ei program. me !
1.rlw s c4 it m.ml.i nng-r.c n unne rs-ary her.l-hip on m6erebm Itub the appbrable entutory amthorisat um .b.m emt requite ls en-mg under eerekm 303, or (int w here the fanhey e .4 theretofore Isreme.I umler fmer: ..n 104 h
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O O O O O o O O O t
~.lM 39 el6tence auth..rimi in engage in the dntrit.ution of riertrir energy 3,
; unta it has pubissArd m.twe vf !Ar ap;4.ratwa is au-4 tende er neu]w tlge, ram ,,f ,ge ,y pw&l.catwne ss tar tbmmaswn derms approprsate L. gier re asona&le ,,,f4,,,ct,J t ,,f,, g,g,, ,, 4,4,,,,,,g,, ,,, ,,rn puent mea og Nat, wJg,,,,f,atrJ Sy notace is n.unnenpuistees, pruner etslut.cs, real.c &.edws and cooperatius l'ouwd en RaJust.en l*raut.e and .11<amurements for a remyrrArmsw udiek mig 'd Aauw a jmtrutsal interest in suck utJnaat.en er production farJsty; an.d untilit has ambh-br.1 m.tke of nuri applwationi once cath and centunusneg resww of &a or raduatkn k.rdertwa sinendarste and tao ersertajir &aers LArrelar, pertonent to the ealth an.1 safat, emprets of
=cek for kr con +cuuve weck.* sa the Federa! hegioter, amt unta ,,p ,,,,,g, ,d eartarery resnit,n frem tar Jarletament. =st er cuatrJI Mr werks af ter b last notica. of ,r .e , c7,y, ,,,f ,, ,,,,,y
* * * * * *
- Brieure fer a cenipreArns,w an,d cent,nus.,y risww. of var &ial %ral,,,nt eta t efects of raduatoon en man and the trad jy *n order ta pr.,ruir enfernietan
" Sac.191 4touac Saravr aet - lassanne !!oanD -- pertinent te &asic radoetwa pretretwn stan ards. The rr*per'sw arepra of "a. Notwithstamling h provisions of sactione 7(a) an.18(a) ..f the tAs arranycnients sesay, en fAr elescreteen e/ tar l'res,.lcr.t er tat dessysistrJ Administrative l'ruce4 tare Act, 6 (bmmia.4m as autharise.1 to ascernment spenry, als, cerempass crimeure to (A. rs of raJastwn estal>Iide one or more atom:c safety and hesudeq tmania, each frene de=rres
- der tAan de Jervloperet, use er c mte ofalesnaccarray y>ued compensedof three members, [twoof whom nhed be terkm(com- cally 71e respectere arrespernesta sA.dl rr. fame quah OI the renduct &y tat Nateenal 4 b.ud on liad ation f *retxiion ministrative arid] ame of whom smarce.hngs shall f, and twobe va!inal in the conduct of ad-spAens sAall Aase sueA tecAnical and Alcaevremeras el a f Jssa!r imes. ef (Ar radeation Frefertie" er etker qualnJwatwas as tee]t 'emr.asswn Jees.ss apyrepriato to the av nasusa dra presently se effect &y certur of tar irremn r=Jatieas of tar se &e decairJ io condart aarh hearings as the G,mmimian may .lirect FrJeral Rads.stwa 4 bu~cJ and of all areJa< newnts.ne enferma-tion; amt make owls intermmhate or final derisione as the (benmine .i nemy auhrize with respect to the granting, euep,eul.ng. reveking or W) tAs ce=Just &y 2Ac NetwnaLicolemy *:/ Spirwes ela fa#*=le amending of any hrenne or authorustices under the provishme ed this mww ef *Ae Audogsel efects of rel.atwn, .mladeny all an=sda&le Art, any other provi*iem of law, or any arsenb)Ec informat.*n; lati.m of the (b.ambsion ieunt thescue, der. The Omimowkm may de ate to a leerd much other p) conentratwns &ctuern t.e Natiemst (b=ncJ en #adsatwn
- regulatory functi.ww na the O.mnairmsm deems appropriate The (km. l'redection an d Afrasurements and tar National .trolemy c/.% cam t assure me b n may app.mt a panel of qnsklied perums froan ehkh Imard e& ject,re orto.c cuerd =at on artsen 1Arar few Sediss to serve de memi.m may he uelected." tAs arrangments; (fI coursitataens &y LAr Natwaal4 bund en Rad atwn l*rencerem and hidesverments and &y de Netwnal strademy of Nescares.
res
" Sac. 270 (boramarson Wi raa Srstsa.- imely, mik wwntssts outsule and mtAnn tar Gowrnment, U 8A' P"P8r*'"* **# **'* *#f*l IF 'A' N8'E***I # k"* **
* *
- Hadsation 1*retutwo and Afrasurements sa tar l'resulent, or te de Gavrnment a administering tAs arranprments, anJ te (Ac es "le ['llere . Iscrrhy estallawhed a Federal Radiaton (buned, Cengress, &y 31, IMO, et nts prat cmnplete report e{ sts consieng of the Serreiary ,J llealth, IQhu stiim, and Welfare, the ,,,,,,, aerseities. =4 c4 .Aall also set forta .ts rer.nnmendations 4 %aarman of the Atomic k,nergy O mmaeson, h kretary of De' reapretray &asic nadastwn prefertwa standar.ls and (Ac ressens fense, the bretary .J Commerre, tha &rretary of Laimr, or thar dere/ss-demgacen, and noch other members as shall lee appointed by the Press- (d) IAr maintenance ey (As National (bancat on Red.orwn dent. 'Ihn (bunesi, shall,connuit quahfim! arsentsste and esperts en I'rotection and Measurt ments e/ reasona&ly tA,.remy4 &noudcJge raonation mattern, meludmg the Prenadent of the National Academy ,j,.,,4,,,,,m p,rt.uns te &ase redut an per tertwo stasJsrds of &ienren, the Chaarman of the Nation.1 (kmmittee on Re hatum etAin tie acept o Protection and hicasurement, ami qua.ific I esperts in the Geld of p,m,,g, g,j,,,.,f,rArJ.arranyment, currently sansluding st. Jus an.f researrA l
se or 6% ;4anarJ. l biology and snedkmc and in the fiehn of health .hysics. The Special (7) swA raremmenlatwns Ay (A< Netwn.nl (bencJ on Radia-Asni cant to & Premdent for drieme seyJ Terh .gy, or has d.ewgnee* ,,, f .,,,,,,,, , ,,g 3 g,,, ,,,,,,,, , ,g ,4, g,,,,,,g , g,,j,,, ,y is aubrucel to attemt mee-tmgs, partsrepate m,n.the debt.crations of-Neitwes inJed perht rrepecteny ta tar drconduit
&asa ofrmay etud.cs or researrA Jartraly er and tu advise the ibmwd. The Chazrman of A (knwil shall 1.
demignatal by the Pres d-nt, inan time to isme, from among th* g , 3;,j g ,j ,,,, ,j , g ,,,,,, ,d e g r % s M rJ,jyg ,9e,-
,, ,, , ,j g, y, enemhers of the Gunwil. The Omned shall ad*ise the Prelent with wpc ef reA mwg a rh % ha h&le res art to radiation metters, directly or imhrectly ma. wang healt.h, g ,, ,, ,y
- m. uding guidance f..r adt Fnl.rel .gewic m the formul.amn of radia- g g, ,,,,4,, ,./ sm W Wt tum ,,t.ml.rd and in h ntabh hment ami esecutk-a of prog ams of w aJewe &y de s o..prrati.m with St.tm
,ik G.um d shall al*. p rforns wwh ..ther g,g ,,,j ,, gu,,,, f .,,,, g g ,_, ,j
&y (Ar Na/mnal .Brademy el Wenm, mea.= FA, resprtig, uopre fum t:.ms as the Psmdent may swegse to at by Escrutsve Order ]
a de mento to th I'% d M h r - t e n di 1
, ,m .
.O O O O O O O O O O O 40
.Etates, and etArrt, at the repent e f FAr l'rrthlent er 'Ar thswrnme'nt arrancy andmoni.terung (Le arranatensents;
. VH 1Ar ferrnonArng of arrrerJe e n formatie.n an.1 adrwr by the ,
A,ntwaal t'anned en findrata ,or ly.o <rts,en r and Stra<wrrmente and ? by the Nat nal .trademy a,f %ruera, welken tar re=perteer sterre ef IAr arrargemrats, to IAr stngrees pnrsuant to tAs repest ef any A I* I* E N D I X l'ummettre ofIke l'engress; illo the preparelsen and transnaittal to the l*renedent er to the A N T'"NAL V*** ME "" U A E'E
- T*"N I'Et"M'T"M tlnwrnment agency adminteferung ike arrangements, and to IAr Ann f.ItannEenwn s'arrgrene, by tar Nat.enat l'enned en Radrateen 1*retertuen and A(resurements and by IAr Net:enal Academy of.%eners, at :Ar red L b Nb**ItoV"**i""""m, mentn, w in sulneertion **h of the Atmner Enesgy Art of Ik' ' " I" L"' * **I M "-
l of rock cairn Lar year nubsepent to l!r:0, of a report terrring their respectur, vernew Murttin dureng the year; tar report by the '.#* as ""amemled " try
" I'ny"u
" Law M 3D, Ma Cm.g , f, rat nemon, Nati mal 4 enned .m Red.at:en l*retectne.n anel Afrasuremesnte nkell Y.. Hy PuW' "l aw M3 376, "W" Mth (Nang. %" merom!
s s %.h.*.,,WN July 14, 964, alma artfartA any signikrant scientakt drwlopmente relatew to Gene redeateen pretrettaa standarde, incladrag an the Nataanal Comenittee on Radiateon l'ry.tects.m ami Men.uremen ,, e and ihr ref ert 6y tar National Acaden.grners ef .%y **" '"'"'porated as the Nathmal (,eum d an R hani.m I*rnterth.n l rAaltrecommendateene, act f rtA any signiMant neerntyr drwlepmente i*arung en tar &sologoralof!* cts *"O M'* " '"*"'"~Y*
- I '* *
- l* I* **0'" "' I"II*** -
of rodeahen m manysad tAs reelegy, includeng reremmendareane.- n s t rnetw. (11) (Ar prepzratee.i and transmittal to tar l'rrenfest, er te lAr 43 gg.T T. 6acorporate the Na,u g,,,,,, at c un.at u,,,,,,,,,,,,,,, Gowrnment egency administering lAr arrangements, and to the l'ongrens, by the National icuncil en Radsatsen l'retectsen aosd Be d enacted by tar Set. ate and flower of Heprenantatuws of tar l Afrasurements, of a prompt report of any engnnfrant changre arAirk (Inited Statte of Amence en t?enyree manemtdrd, TAat: \ el dernse adensable te reevnsmend sa regard ta as previene reconomenda. C M. Harure, Rockvale, Marylami; I trens respertmg 8aeir radmtion praters en etendside er ll.c areentife E. C. Barnen, Edgewo..d I*ennsylvania; 6eers (Arrrfer and not tArretofore edentifed in its reparte; and V. I*. Ilond, Setsuket, I,.ng Islaml, New York ; (tt) (Ar condert el tar Arter tire of fAr Nessenaf s'enard e. C. H Il strup, New York, New York; l Radral.en (*retortion~ anJ Afrasurement, and af tar National J. T Ibennan, He themia Marylami; Academy of .Wentre under tar renpretin arrangemente, in accerJ. I, T. Hrown, Hett.ende, Marylaml; l a er eerA A 34 s=&stantice and precedural erandards of sound R F. Brown, San Franri,rn, Cahfarnia; sementMc inwat gation and fadings. F. R. Hrnre, Oak Ri.fre, Tesmeure. Reporte rerrivedfrom IAr Natiemal t'euncil on Radiatism l'retectiem and J C. Hugher, Rio E%1 ras, I'verto itiro: Afrasuremente and the National Jeadem & R. Chadwirk, W M atitu.rn. Marylnn.l, ments =Aall 6e promptly pn4ti4Ard 6y tar 45=of Srvncre under the arrenpr.irrnmentR. II. L ambew1.in,bladcIgdiis, agency administering l'enn*yIvenes; tar arrangements All rer,wimandations, in eurA r parts 6y (Ar National J. F. Crew, Ma.fisem, Wiarrmnia; Ceuned on Radiation 1*redertien and Afraenrenents, respecting &asic R. I. Doan, hisho Falle, Idaho; radiation protection standards pertinent te (Ar AraftA and safety asprt, C. I Dunkm, Washingten District of Columbia; el espesure to radioertiesty reewiringfrees tAe drwlepnent, une er retrel T. C. Esavn, Iowa Caty, lowa; et stemic energy, eAall 6e carrf lly reneidered 6y any tierernment age,ry E. G. Fuller, Bett-I- Marylaml; haring eu!Aerity ta esta&lieA sura standarde, and, wirAin a resa n.aale R 0 Gemn, l'hiladgJ,ia, l'enn9ylvania; peri I of time, s srA 6 wrnment agency aAall em&mit to tA< 'eint l'em- J. W. IIealy, Chappaqua, New York; mitter a repart artting forth in detait um determ;natiens er.mrtsng tar l'. C. ifodgem, Claragn, Illinabo; rrremmendatiens and tar mammastre, rreisie e, er erArr ertiens a y.p ,, A IL Kc nc, Richland, Washingt,m; to takr, adept, er rhet in relatien to tar r-cara nendr,tica, M. Kleistfeld Hrm klyn, New York; II. W. Koch, SJrer Spring, Marylmani; } D. I. liscrmnr . Washingt.m, Dntrwt .4 Col.imbia; U. V. I,.Roy, Chicago, Ilbma ; W H. Mann, Chevy CWe, Marylan.1, W. A Mr Adam,, Sch nertady, New Ym k ; U. W. Morgan, Kenningem , Maryland; K. Z Margan, Oak Hi.lge, Tennen.m; II. J. Mume Hbomingt.m. Imleana; R. J. Nelsen, R..ck ville, Marylaml; ori
10 UNTTED STATES OF AMERICA IT1 Fell D NUCLEAR REGULATORY COMMISSION
- g BEFORE THE ATOMIC SAFETY AND LICENSING BOAi@ MY -8 AD 23 r, ; ,
2.; m . >
)
O In the Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440-A
) 50-346-A
' Perry Nuclear Power Plant, Unit 1, )
Facility Operating License ) NPF-58) (Suspension of O No )
) Antitrust Cond4tions)
THE CL8VELAND ELECTRIC ILLUMINATING ) COMPANY ) ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY )
)
O (Perry Nuclear Power Plant, Unit 1, ) Pacility Operating License ) No NPF-58) ) (Davis-Bessa Nuclear Power Station, ) Unit 1, Fr ility Operating License ) No. NPF-3) ) O ) ' CERTIFICATE OF SERVICE O I HEREBY CERTIFY that on this 7th day of May, 1992, e copy of the foregoing Applicants' Reply to Opposition Cross-Motions For Summary Disposition and Responses to Applicants' Motion for o Summary Disposition was served by Federal Express on each of the following: O Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 O O l
lO Charles Bechhoefer Atomic Safety and Licensing Board Panel U.S. Nuc' ear Regulatory Commission O 4350 East West Highway, 4th Floor Bethesda, Maryland 20814 G. Paul Bollverk, III Atomic Safety and Licensing Board Panel O U.S. Nucleac Regulatory Commission , 4350 East West Highway, 4th Floor Bethesda, Maryland 20814 Marshall E. Miller, Chairman g Atomic Safety al.d Licensing Board Panel U.S. ;iuclear Regulatory Commission 1920 South Creek Boulevard
, Spruce Cree't Fly-In
- Daytona Beach, Florida 32124 O
Joseph Rutberg, Esq. Sherwin E. Turk, Esq. S t ev e n R . Holit , Esq. Office of the General Counsel U.S. N" clear Regulatory Commission o 11555 Rockville Pike Rockville, Maryland 20852 Atomic Safety and Licensing Board Panel O U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 Office of Commission Appellate
- 0 Adjudication U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 O
O j i O
1 O Mark C. Schechter, Esq. Janet Urban, Esq. Transportation, Energy and O Agriculture Section Antitrust Division Department of Justice Judiciary Center Building 555 Fourth Street, N.W. Washington, D.C. 20001 O June W. Weiner, Esq., Chief Assistant Director of Law William M. Ondrey Gruber, Esq., Assistant Directcc of '.aw O William T. zigli, Esq. Assistant Director of Law City Hall, Room 106 601 Lakeside Avenue Cleveland, Ohio 44114 O Reuben Goldberg, Esq. Channing D. Strother, Jr., Esq. Goldberg, Fieldman & Letham, P.C. 1100 Fifteenth Street, N.W. Washington, D.C. 20005 O D. Biard MacGuineas, Esq. Volpe, Boskey and L ons 918 Sixteenth Street, N.W. Washington, D.C. 20006 O Philip N. Overholt Office of Nuclear Plant Performance Office of Nuclear Energy U.S. Department of Energy, NE-44 0 19901 Germantown Road, Room E-478 Germantown, Maryland 20585 E Kenneth L. Hegemann, P.E. President O American Municipal Power-Ohio, Inc. 601 Dempsey Road P.O. Box 549 Westerville, Ohio 43081 O O
O David R. Straus, Esq. Spiegel & McDiarmid 1350 New York Avenue, N.W. O Suite 1100 Washington, D.C. 20005-4798 Anthony J. Alexander, Esq. Vice President and Gene") cmansel O chio Edison Company 75 South Main Street Akron, Ohio 44308 Mary E. Oailly, Esq. O Supervisin9 .torney Legal Services Division The Toledo Edison Company Edison Plaza 300 Madison Avenue Toledo, Ohio 43652 O a O / ir SHAW, PITTMAN, POTTS TROWBRIDGE 2300 N Street, N.W. Washington, D.C. 20037 (202) 663-8000 0 O O-O _4 O
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