ML20126A587

Petition for Review.* Requests That NRC Review ASLB 921118 decision,LBP-92-32.Board Erroneously Interpreted Section 105(c) of AEA by Ignoring Fundamental Underplanning of Statute.Certificate of Svc Encl

ML20126A587
Person / Time
Site:	Davis Besse, Perry
Issue date:	12/08/1992
From:	Charnoff G OHIO EDISON CO., SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	NRC COMMISSION (OCM)
References
CON-#492-13449 91-644-01-A, 91-644-1-A, A, LBP-92-32, NUDOCS 9212210132
Download: ML20126A587 (13)

Text

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, /SW rotkr.iro U%C UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION

'92 D01 -8 P 2 :22 BEFORE THE NUCLEAR REGULATORY COMMISSION

)

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) ) (Suspension of Antitrust Conditions)

)

THE CLEVELAND ELECTRIC ILLUMINATING -)

COMPANY ) ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY )

)

(Perry Nuclear Power Plant, Unit 1, )

Fac.411ty Operating License )

No. NPF-58) )

(Davis-Besse Nuclear Power Station, )

Unit 1, Facility Operating License )

No. NPF-3) )

)

PETITION FOR REVIEW Pursuant to 10 CFR S 2.786, Ohio Edison Company ("OE")

respectfully requests that the Nuclear Regulatory Commission

(" Commission" or "NRC") review LBP-92-32, the decision of the Atomic Safety and Licensing Board in the above-captioned matter that was issued on November 18, 1992. In granting summary dispo-sition in favor of the NRC Staff and intervenors and against OE and the other applicants, The Cleveland Electric Illuminating Company ("CEI") and The Toledo Edison Company ("TECo"), the Licensing Board erroneously determined that, as a matter of law, the Commission retains authority under Section 105(c) of the Atomic Energy Act to impose antitrust license conditions on a 9212210132 921208 PDR ADDCK 05000346-H PDR f v7

i nuclear facility's operating license where the cost of nuclear power is greater than alternative sources, all as appropriately measured and compared. OE submits that this legal determination is incorrect. In addition, the treatment of the so-called agency bias issue by the Commission and by the Licensing Board in LBP-92-32 involves procedural error that prejudiced OE's right to be heard on this issue.

I.

SUMMARY

OF DECISION AND STATEMENT OF ISBUES RAISED OE is a co-owner of the Perry Nuclear Power Plant. In 1987, OE filed a license amendment request with-the NRC Staff.1I That request sought the suspension of the Perry licenso conditions that imposed antitrust restrictions on OE. A parallel request subsequently was filed by CEI and TECo.2/ Three years later,SI 1/ See Application to Amend the Perry Operating License to Sus-pend the Antitrust Conditions Insofar as they Apply to OE (Sept. 18, 1987) ("OE Application").

2/ See Application to Amend the Perry and Davis-Besse Operating Licenses to suspend the Antitrust Conditions (May 2, 1988).

1/ In the interim, relief had been sought by OE in the federal courts on certain issues of agency bias stemming from dia-logue concerning the disposition of the pending application that apparently had taken place between representatives of the NRC and certain senators opposed to OE's application.

See Ohio Edison Company v. Zech, No. 89-1014, slip op. (D.C.

DIr. Apr. 27, 1989).

e  !

the NRC Staff denied these requests.1/ A hearing was convened, and summary disposition motions were filed by the parties on the dispositive " bedrock" legal issue that formed the basis for the applicants' license amendment requests.E/ LBP-92-32 resolves that bedrock legal issue.

r OE seeks Commission review of the following question of law erroneously decided by the Licensing Board:

L A/ Letter from T. Murley to M. Lyster, CEI, and D. Shelton, TE (Apr. 23, 1991) (transmitting NRC Staff-Evaluation of Appli-cations for License Amendmentsoto Suspend the Antitrust License Conditions).and Notice of Denial of Applications for Amendments to Facility Operating Licenses and Opportunity for Hearing (Apr. 24, 1991). See also~ Notice:of Denial of Applications for Amendments to Facility-Operating Licenses and Opportunity for Hearing, 56 Fed. Reg. 20,0S7 (May 1, 1991).

5/ The issue-of-law raised in the bedrock legal issue was first raised by OE in the OE Application. After counsel for the various parties agreed on its formulation, the bedrock legal issue was incorporated into the Licensing Board's Prehearing Conference Order. LBP-91-38, 34 NRC 229, 258-59 (1991),

aff'd, CLI-92-11, 36 NRC (August 12, 1992), petition for review filed, No.- 92-1532 (D.C. Cir. Oct. 9, 1992). OE-filed two briefs addressing the bedrock legal issue, Appli-cants' Motion for Summary Disposition (January _6,-1992)

(# Applicants' Motion"); Applicants' Reply to Opposition Cross-Motions for Summary Disposition and Responses to ,

Applicants' Motion for Summary Disposition (May 7, 1992)

(" Applicants' Reply"), and argued the_ bedrock legal. issue

.before the Licensing Board at oral argument. See Transcript of June 10,.1992' Argument before the Licensing Board-("Tr.") 4 at pp. 251-305, 397-437.

, , , . ~ ~ . . . _ __ _ _ - _ . . _ . - , . _ - _

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Is the Commission without authority as a mat-ter of-law under Section 105 of the Atomic i Energy Act to retain the antitrust. license conditions contained in an operating license if it finds that the actual cost of electric-ity from the licensed nuclear power plant is higher than the cost of electricity from e alternatives sources, all as appropriately measured and compared?6 /

The Licensing Board answered the issue in the negative, and found that as a-matter of law the Commission has authority under Sec-tion 105(c) to retain antitrust license conditions even if the [

actual cost of electricity from a licensed nuclear power plant is higher than the cost of electricity from alternative sources.1/ ,

OE also seeks review of the Licensing Board's sua sponte decision to dismiss the agency bias issues,8/ which the NRC never .

heard.E/

i 6/ LBP-92-32, slip-op. at 6. See also Tr. at 244 (bedrock "

legal issue read into record).

1/ See LBP-92-32, slip op, at 60-61.

8/ The agency bias issues were raised below by CE and admitted for contention by-the Licensing Board. . See LBP-91-38, 34 l NRC at 255'58. See also-Letter from'G.-CharnoffEto Licens-

! ing Board (July 25, 1991) (containing enclosure setting

( forth congressional interference and staff. bias contentions).

2/ Before the agency bias issues could be heard by the Licens-ing Board, the Commission sua sponte orderedEthat those

~

matters be held'in abeyance. CLI-91-15, 34 NRC at 271. In LBP-92-32, the Licensing Board sua sponte dismissed the agency bias issues. LBP-92-32, slip op, at 68.

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__ . . _ . - _ _ . - . . - _ _ _ - _ . , _ _ _ . _ _ _ _ __a_ .

o II. THE LICENSING BOARD'S DECISIONS ARE ERRONEOUS A. The Bedrock Legal Issue The Licensing Board's holding on the bedrock legal issue is erroneous and should be reviewed by the Commission. LDP-92-32 is based on an incorrect interpretation o'f Section 105(c) of the Atomic Energy Act. That statute allows the imposition of anti-trust license conditions only where the activities of the licensed facility would " create cr maintain a situation inconsis-tent with the antitrust laws."1S/ The Licensing Board has ignored the " particularized regime" of antitrust review estab-lished by Section 105(c).

First, the Licensing Board's decision is based on the faulty position that the addition of a high cost facility may be compet-itively advantageous to an operator. Such a facility would increase the cost of the operator's power, necessarily allowing its competitors greater competitive freedom to take advantage of the operator's higher costs to attract new customers.11/

Second, the Licensing Board has ignored the fact that Sec-tion 105(c) is not a grant of plenary authority over antitrust matters.1S! Other agencies, including the Department of Justice lE/ 42 U.S.C. S 2135(c).

11/ See Applicants' Motion at 57-68; Applicants' Reply at 29-39.

11/ See Applicants' Motion at 16-34.

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and FERC, have continuing authority co review the competitive l implications of actions taken by operators of nuclear facilities, j In contrast, the Commission's authority under Section 105(c) is I limited to thi competitive impact of the licensed nuclear facil-ity. Review under Section 105(c) is not the same as a plenary l antitrust review, afd the Licensing Board was mistaken when it invoked a " market power" test rather than the cost-based test ,

applicable to Section 105(c).11/

Several indicia support the position advanced by OE. First, contrary to the " interpretation" of the Licensing Board, a fair and objective review of the legislative history of Section 105(c) discloses that the record is replete with statements by witnesses and legislators addressing the need for the imposition of Section 105(c) antitrust review because of the anticipated low cost of nuclear power.11/ The Licensing Board also ignored the broader context in which the amendment of Section 105(c) took place.1El The Licensing Board's decision is contrary to legal prece-dent. As OE argued before the Licensing Board, a number of com-i mission decisions and Department of Justice advice. letters 12/ See LBP-92-32, slip op, at 39; compare Applicants' Reply at 19-29. 'i id/ See Applicants' Motion at 34-45 (reviewing legislative'his-tory); Applicants' Reply at 40-57 (reviewing legislative history),

lE/ See Applicants' Reply at 57-62 (reviewing " practical value" ,

legislative history).

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b address the critical importance of the anticipated cost advantage i of nuclear power.15/ These cases turn upon the anticipated cost l advantage of nuclear power and the potential for misuse of this cost advantage by a nuclear operator.-

Finally, the Licensing Board's interpretation of the statute  ;

violates OE's right to equal protection as guarantead under the Due Process Clause of-the Fifth Amendment. A statute must be 1

rationally related to a legitimate government objective to sat-isfy equal protection requirements.11/ The Licensing Board's interpretation of Section 105(c) violates this requirement. If the cost of nuclear power is not competitively advantageous when compared with other sources of electricity (such as coal and oil), there is no rational basis for continuing to impose restrictive antitrust. license conditions not imposed on identi-cally situated operators of non-nuclear facilities.

B. The Agency Bias Issue OE sought to discover and present the facts concerning the- .

incident (s) of congressional interference and agency bias that 15/ See Applicants' Motion at 45-68-(reviewing NRC cases and DOJ ,

advice letters); Applicants' Reply at 62-70-(reviewing.NRC cases); see also Applicants' Motion at 68-76 -(other factors have no significance under Section 105(c)_-in the absence of a_ low-cost facility).

12/ City of Cleburne-~v. Cleburne Living Ctr., 4 7 3 . U '. S . 432, 440

-(1985). .See Applicants' Motion at 75-85; Applicants' Reply at 81-90.

n - _ _-_. - - _ . . . _ . _ _ . - , _ ~ - . _ _ . . . ..._.._..._..._2..___a._.._.-

occurred in this case.18/ OE not only has been denied that ..

opportunity, but it twice_has-been given-no notice or opportunity to address the fact that these issuesiwould be first tabled 1E/

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and then dismissed 22/ without having been addressed at all by OE.

These procedural' errors violated OE's due process rights.

III. THE COMMISSION SHOULD EXERCISE ITS POWER TO REVIEW THE y= LICENSING BOARD'S DECISION BECAUSE THE DECISION IS-H t CONTRARY-TO LAW AND. ESTABLISHE

D. PROCEDURE

, AND BECAUSE -

THE BEDROCK LEGAL ISSUE RAISES AN IMPORTANT QUESTION OF LAW AND POLICY LBP-92-32 erroneously interprets Section 105(c) and, accord-ingly, should be reversed by the Commission. It-also contains the procedural error of dismissing OE's agency biac contentions without providing any opportunity to OE to address-either the merits of those issues or the appropriateness of their dismissal.

7 Moreover, the bedrock legal issue raises a substantial ques-

, tion of law and policy. Antitrust matters are.not'the fundamen-tal business of the-NRC. This case raises an important question about the legality,-propriety and, indeed, reasonableness, of

_ continued exercise by the NRC of this peripheral authority when a--

nuclear power plantLis no longer competitively advantageous. As 18/ Letter from G. Charnoff to Licensing Board-_(July 2d, 1991)

(containing enclosure setting forth congressional interfer-ence_and staff bias contentions). See'also LBP-91-38,- NRC.at 255-58 (admitting issues.for contention).

~

12/. CLI-91-15,.34 NRC'at 271.

llE/ LBP-92-32, slip op, at 68.

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such, it goes to the very heart of continuing Commission author-ity over licensed nuclear' facilities. The Commission should make a determination on this question. Furthermore, the agency bias issue should be heard on the merits and certainly should not be dismissed without providing OE any opportuni.y to address the procedural merits of such an action. The agency's credibility is at issue here; the issue merits the Commission's attention.

In summary, in LBP-92-32 the Licensing Board has erroneously interpreted Section 105(c) of the Atomic Energy Act by ignoring the fundamental underpinning of the statute - the anticipated -

cost advantage of nuclear power. Without that advantage, OE sub-mits that the 9camission is without authority to continue to impose antitrust license conditions on OE. In addition, LBP-92-32 contains procedural error. Accordingly, Commisaion review of the decision is appropriate.

s ectfully submitted,-

i ,

/ Geral'd Charnoff Charnoff Deborah B.

Mark A. Singley SHAW, PITTMAN, POTTS &

TROWBRIDGE 2300 N Street, N.W.

Washington, D.C. 20037-(202) 663-8000 counsel for Ohio Edison Comp iry Dated: December 8, 1992 4

;t ei it D u AikC UNITED STATES OF AMERICA '92 DEC -8 P2

22 ;

NUCLEAR REGULATORY COMMISSION

, s sia a Cf 6f BEFORETHENUCLEARREGULATORYCOMMISSIONfj

)

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) ) (Suspension of

) Antitrust Conditions)

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY ) ASLBP No. 91-644-01-A THE TOLEDO EDISON COMPANY )

)

(Perry Nuclear Power Plant, Unit 1, )

Facility Operating License )

No. NPF-58) )

(Davis-Besse Nuclear Power Station, )

Unit 1,-Facility Operating License )

No. NPF-3) )

)

CERTIFICATE OF BERVICE I HEREBY CERTIFY that on_this 8th day of December, 1992, a copy of the foregoing Petition for Review was served by first class mail postage prepaid (except where otherwise indicated) on each of tne following:

I L Secretary of the Commission l U.S. Nuclear Regulatory Commission L 11555 Rockville Pike Rockville, Maryland 20852 l Attention: Docketing and Service Branch (BY HAND) l

s' 1

4 Charles Bechhoefer Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 4350 East West Highway, 4th Floor Bethesda, Maryland 20814 G. Paul Bollwerk, III Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 4350 East West Highway, 4th Floor Bethesda, Maryland 20814 Marshall E. Miller, Chairman Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 1920 South Creek Boulevard Spruce Creek Fly-In Daytona Beach, Florida 32124  : s Joseph Rutberg, Esq.

Sherwin E. Turk, Esq.

Steven R. Hom, Esq.

1 Office of the General Counsel U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission 11555 Rockville Pike -

Rockville, Maryland 20852 i Office of Commission Appellate Adjudication U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 Mark C. Schechter, Esq.,

Janet Urban, Esq.

Transportation, Energy and Agriculture Section Antitrust Division Department of Justice Judiciary Center Building 555 Fourth Street, N.W.

Washington, D.C. 20001 l

4.

4 t

June W. Weiner, Esq.,

Chief Assistant Director of Law William M. Ondrey Gruber, Esq.,

Assistant Director of Law William T. Zigli, Esq.

Assistant Director of Law City Hall, Room 106 601 Lakeside Avenue Cleveland, Ohio 44114 Reuben Goldberg, Esq.

Channing D. Strother, Jr., Esq.

Goldberg, Fieldman & Letham, P.C.

1100 Fifteenth Street, N.W.

Washington, D.C. 20005 D. Biard MacGuineas, Esq.

Volpe, Boskey and Lyons 918 Sixteenth Street, N.W.

Washington, D.C. 20006 Philip N. Overholt Office of Nuclear Plant Performance Office of Nuclear Energy U.S. Department of Energy, NE-44 19901 Germantown Road, Room E-478 Germantown, Maryland 20585 Kenneth L. Hegemann, P.E.

President American Municipal Power-Ohio, Inc.

601 Dempsey Road P.O. Box 549 Westerville, Ohio 43081 David R. Straus, Esq.

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Spiegel & McDiarmid 1350 New York Avenue, N.W.

Suite 1100 Washington, D.C. 20005-4798 Anthony J. Alexander, Esq.

Vice President and General Counsel Ohio Edison Company 75 South Main Street 19th Floor Akron, Ohio 44308

4 A

Gregg D. Ottinger, Esq.

John P. Coyle, Esq.

Duncan & Allen Suite 300--

1575 Eye Street, N.W.

Washington, D.C. 20005-1175 David A. Lambros, Esq.

Law Director City of Brook Park 6161 Engle Road Brook Park, Ohio 44142 James P. Murphy, Esq.

Colleen A. Conry, Esq.

Squire, Sanders & Dempsey 1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20044-0407 k n Mark A. Singley/ /

SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.

Washington, D.C. 20037 (202) 663-8000 m:0036:151mxa,92