ML20126D580
| ML20126D580 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 12/23/1992 |
| From: | Hom S NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | NRC COMMISSION (OCM) |
| References | |
| CON-#492-13487 A, NUDOCS 9212280054 | |
| Download: ML20126D580 (18) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ,;,,,
1]EFORE THE COMMISSION l
'92 DEC 24 A7 57
)
In the Matter of )
)
e ,
OHIO EDISON COMPANY ) + ,
)
(Perry Nuclear Power Plant, )
Unit 1) )
. and ) Docket Nos. 50-346A
) 50-440A THE CLEVELAND ELECTRIC )
ILLUMINATING COMPANi ) -!
THE TOLEDO EDISON COMPANY )
)
(Perry Nuclear Power _ Plant, ) (Suspension of Antitrust Unit 1, and Davis Besse ) Conditions) !
Nuclear Power Station, Unit 1) )
) i NRC STAFF'S ANSWER IN RESPONSE TO PETITIONS FOR REVIEW FILED BY OHIO EDISON COMPANY, THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON COMPANY, AND CITY OF CLEVELAND '
i 0 ..
i Steven R. Hom ,
Couasel for NRC Staff December 23,1992 9212280054 921223 PDR ADOCK 05000346 1 M PDR 0'
e g, ,
L / Ws7 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION g 7, c3 tat HEFORE TIIE COMMISSION
'92 KC 24 A7 37
)
In the Matter of )
4M , yll'
)
[~~"W".:,,N OHIO EDISON COMPANY ) ei
)
(Perry Nuclear Power Plant, )
Unit 1) )
and ) Docket Nos. 50 346A
) 50-440A Tile CLEVELAND ELECTIUC )
ILLUMINATING COMPANi -)
THE TOLEDO EDISON COMPANY )
)
(Perry Nuclear Power Plant, ) (Suspension of Antitrust Unit 1, and Davis Besse ) Conditions)
Nuclear Power Station, Unit 1) )
)
NRC STAFF'S ANSWER IN RESPONr.TO PETITIONS FOR REVIEW FILED BY OHIO EDISON COMenNY, TH1: CLEVELAND ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON COMPANY, AND CITY OF CLEVELAND.
4-Steven R. Hom '
Counsel for NRC Staff '
)
December 23,1992 9212290054 921223 PDR ADOCK 05000346 0#\# -
M -j PDR h 1, >
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UNITED STATES OF AhiERICA NUCLEAR REGULATORY COhihilSSION :
BEFORI! T]I@ COMhilSS108 f i
) !
In the hiatter of ) i
. )
OHIO EDISON COh1PANY ) ,
) l (Perry Nuclear Power Plant, )
Unit 1) )
and ) Docket Nos. 50-346A 50-440A ;
)
THE CLEVELAND ELECTRIC )
ILLUbilNATING COh!P ANY )
THE TOLEDO EDISON COhiPANY )
)
(Perry Nuclear Power Plant, ) (Suspmsion of Antitrust ,
Unit 1, and Davis Besse ) Conditions) i Nuclear Power Station, Unit 1) )
J '
)
NRC STAFF'S ANSWER IN RESPONSE TO PETITIONS FOR REVIEW FILED BY OHIO EDISON COh! PAN'f, THE CLEVELAND '
ELECTRIC ILLUh11NATING COh1PANY, THE TOLEDO EDISON COh1PANY, AND CITY OF CLEVELAND l$
4 Steven R. Hom Counsel ivi NRC Staff December 23,1992 B
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TABLE OF CONTENTS Eatt TA!3LE OF AUTiiORITIES .................................il BACKGROUND . . . . . . . ................................ 2 DI S C U S S I O N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CONCLUSION . . . . . . . . ...............................11
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TABl.E OF AUTHORITIES
- t ADMINISTRATIVE DECISIONS - P2tc Duke Power Co. (Cherokee Nuclear Station, Units 1,2, & 3),
ALAB 482, 7 NRC 979 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Niagara Mohawk Power Corp. (Nine Mile Point Nuclear Station) ALAB-264,1 NRC 347 (1975) . . . . . . . . . . . . . . . . . 10 Ohio Ed/ son Co. (Perry Nuclear Power Plant, Unit 1),
CL1 91 - 15, 34 NRC 269 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 .
Ohlo Edison Co. (Perry Nuclear Power Plant, Unit 1),
LBP-91 38, 34 NRC 229 (1991) . . . . . . . . . . . . . . . . . . . . ... . . . . . . 2 Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1),
LBP 92-32, slip op. (Nov. 18, 1992) . . . . . . . . . . . . . . . . . . . . . . passim Rochester Gas and Electric Corp. (Sterling Power Project, Nuclear Unit No.1), ALAB-502, 8 NRC 383 (1978) . . . . . . . . . . . . . . 10 STATilTES AND REGl1LA]'lQNS 42 U S.C. Q 2135 (Section 105, Atomic Energy Act) . . . . . . . . . . . . passim i
, 4 10 C,F.R. 5 2.786 . . . . . . , , . . . . . . . . . . . . . . . . . . , . . . . . . passim .
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l UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ,
i BEFORE THE COMMISSION
)
. In the Matter of )
)
OHIO EDISON COMPANY ) Docket Nos. 50 346-A-50 440 A (Perry Nuclear Power Plant, Unit 1) )
)
THE CLEVELAND ELECTRIC )
ILLUMINATING COMPANY ) (Suspension of Antitrust THE TOLEDO EDISON COMPANY ) Conditions) l (Perry Nuclear Power Plant, Unit 1, ) j and Davis Besse Nuclear Power ) :
Station, Unit 1) )
NRC STAFF'S ANSWER IN RESPONSE TO PETITIONS FOR REVIEW FILED BY OHIO EDISON COMPANY, -
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON COMPANY. AND CITY OF CLEVELAND Pursuant to 10 C.F.R. 6 2.786(b)(3), the NRC Staff (Staff) hereby files its answer ia response to (a) the Petitions for Review filed by Ohio Edison Company (Ohio Edison),
The Cleveland Electric Illuminating Company (CEI), The Toledo Edison Company (Toledo Edison) (hereafter sometimes referred to collectively as " Applicants"), and (b) the Limited Petition for Review filed by intervenor City of Cleveland, Ohio (Cleveland).' In sum, while the Licensing Board's decision was fully in accordance with ,
legal precedent, because the " bedrock" legal issue is a substantial and important issue of-1 I See also Ohio Edison Co.- (Perry Nuclear Power Plant, Unit 1) (Dec.10,1992)
(Commission order requiring, Inter alla, a party to file a single pleading in answer to any
- or all petitions for review).
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law, the Staff does not oppose Commission review with respect to the " bedrock" legal issue; the Staff does oppose review to the extent sought by Cleveland.
4 IL&CKGROUND In 1987 Ohio Edison, and in 1988 CEI and Toledo Edison submitted applications l to suspend the antitrust license conditions contained in the operating licenses for the Perry Unit 1 and Davis Besse Unit 1 facilities. Generally, the basis for the applications was-the allegation that the cost of electricity from the nuc! car facilities had become higher than the cost of electricity from alternative sources; therefore, there allegedly is now no . l basis to conclude that their "high cost" nuclear facilities could create or maintain a ;
situation inconsistent with the antitrust laws, and thus there is no statutory basis for the existing antitrust license conditions. ,
In April 1991, the Staff denied the applications on the ground that they lacked legal merit. The Applicants then requested a hearing with respect to the denial, which .
' earing requests were granted in October 1991, by-the Atomic Safety and Licensing-Board (Board) designated to preside over this matter.'
The panies agreed that whether the Applicants could obtain the relief they sought i
on the basis of their applications depended upon the outcome of a decision on a -
" bedrock" legal issue, which was jointly formulated by the parties as follows:
-Is the Commission without authority as a matter of law under Section 105 of the Atomic Energy Act to retain the antitrust license conditions -
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See Ohlo Edison Co. (Perry Nuclear Power Plant, Unit 1), LBP-91-38,34 NRC
~ 229 (1991).
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f 3-contained in an operating license if it finds that the actual cest of electricity from the licensed nuclear power plant is higher than the cost of electricity from alternative sources, all as appropriately measured and-compared?
The parties further agreed that this " bedrock" legal issue could be briefed by the parties and disposed of by the Board on summary disposition, It was understood by the board and the pardes that if the " bedrock" legal issue was decided adversely to the Applicants, i.e., in the negative, an evidentiary hearing on the issue of costs weuld not be neecssary.
The parties also agreed upon a second issue proffered by the City of Cleveland that could i be briefed and disposed of on surnmary disposition:
Are the Applicants' requests for suspension of the antitrust license conditions barred by res judicata, or collateral estoppel, or laches, or the .
law of the case 7 i
Ohio Edison also proposed a contention asserting Staff bhs in denying the original i applications for suspension of the antitrust ' license conditions due to improper Congressional influence. Although the Board admitted this contention, the Commission <
later directed the Board to suspend its consideration.8 On November 18, 1992, after the parties filed motions and cross motions for
.ummary disposition and responses thereto, the Board issued its decision adverse to the ,
Applicants and in favor of the Staff and intervenors on the_" bedrock" legal issue. The Board found that the " plain meaning" of Section 105 of the Atomic Energy Act did not support the Applicants' view that the cost of electricity from a nuclear facility alone-determines whether the Commission has the authority to rettin antitrust license - 3
' Sec Ohio Edison Co. (Perry Nuclear Power Plant. Unn 1), CLI 91-:15,34 NRC ' -!
269, 271 (1991). _
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i conditions. Rather, the Board opined that Section 105 incorporates "the established l antitrust regulaton scheme," which focuses on market power and the use or misuse
. thereof, by which it is determined whether licensed activities will create or maintain a ,
e e situation inconsistent with the antitrust laws, and accordingly whether the Commission has the authority to impose or retain antitruu license conditions.' ;
In addition, the Board found that the legislative histo y of Section 105 reDected no "' clearly expressed legislative intention to the contrary' necessay to override' the clear language of Section 105.5 Further, the Board essentially held that consistent with
-F its interpretation of the scope of Section 105 as not necessarily being limited to low cost
, facilities, and givert the rational basis underlying the congressional determinatic*n to afford .
a distinctive antitrust treatment to nuclear uti:; ties, the Applicants were not being denied equal prot:ction or substantive due process.*
The Board also decided the " subsidiary" repose issues raised by Cleveland in ;
e favor of the Applicants and Staff and adverse to Cleveland. Cleveland, relying on the-existence of the Licensmg Board and Appeal Bond decisions under which the subject ,
i antitrust license conditions were first imposed, had argued that various doctrines of repose precluded the Board from redeciding or reaching the merits of the bedrock" legal issue. Jn deciding against Cleveland, the Board relied upon, inter alla, its conclusions ,
v
46 (Nov.18,1992). .
' ' See id. at 61.
p '* See id. at 61-65. ,
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(a) that the proceeding before it was not the same proceeding by which the antitrust license conditions were first imposed, thus rendering the doctrine of " law of the case" inapplicable;' (b) that the " bedrock" legal issue was never litigated, or should have been litiga'ed, at the operating license stage for these facilities, thus rendering the doctrines of res judicata and collateral estoppel inapplicable;' and (c) that there was no I
unter.sonable delay in the filing of the application regarding the Perry facility, thus supporting a decision to decline to invoke the doctrine of "laches."'
i Finally, the Board dismissed Ohio Edison's contention of Staff bias without further consideration, explicitly stating that its decision on this issue was not based on the merits.
The Board reasoned that since it resolved the " bedrock" legalissue as a matter oflaw on
- the basis of its " independent review of the legal principles involved," claims of Staff bias ,
were " immaterial to [the) disposition of the merits of [the) proceeding,"" .
D.11CUSSION ,
The granting of a petition for review is within the discretion of the Commission. ,
Under 10 C.F.R. 6 2.786, the following consideratious bear on z. decision whether to l
gran; review:
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' See id. at 14.
8 See Id. at 16,
' S.>e Id, at 20.
- See id. at 67-68.
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. 6-g -l (i) A firiding of material fact is clearly erroneous or in conflict l with a finding as to the same fact in a different proceeding; (ii) A necenary legal conclusion is without governing ;
precedent or is a departure from or contrary to established ,
law r
(iii) A substantial and important question of law, policy or ,
discretion has been raised;
'c (iv) The conduct of the proceeding involved a prejudicial proce. dural caror; or
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(v) Any other consideration which the Commission may deem to be in the public interest.
10 C.F.R. Q 2.786'b)(4). ,
it was assumed arguendo by the parties that for a decision on summary disposition, the relevant facts are "the actual cost of electricity from the licensed nuclear power plant is higher than the cost of electricity from alternative sources, all as appropriately measured and compared." Also, in this re3ard, it was assumed that "the situation is unchanged from the mid 1970s," and that the Licensing and Appeal Board factual findings made when the antitrust license conditions were first imposed were and
- are still correct." All of the principal issues addressed by the Board in its decision were matters of law not dependent upon any actual findings of fact.
The Applicants argue that the Board's legal conclusion on the " bedrock" issue is based on "the faulty [or fallacious) position that the addition of a high cost facility may_ -
" See NRC.. Staff's A swer in Opposition to Applicants' Motion for Summary Disposition and-NRC Staff's Cross Motion for Summary Disposition at 4-5.
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7- l be competitively advantageous to an operator.'" No legal precedent or established law is cited by the Applicants to demonstrate that such a
- position" contravenes established
. legal precedent. Rather the Applicants have argued throughout this proceeding that the ,
.L Staff and the Board's position is a departure from " logic."" To the contrary, it is clear -
that the established body of antitrust law, plainly incorporated by reference into Section +
105 of the Atomic Energy Act, supports the Board's view that an analysis of competition c
required under Section 105 focuses on market power and tne use or misuse of such power for anticompetitive purposes or with an anticompetitive effect, and a determination of whether the licensed facility will create or maintain an anticompetitive situation depends ,
upon such analysis of market power, not simply cost."
While the Applicants broadly state that the Board's ultimate decision is contrary to legal precedent, the " precedents" they cite censist only of several isolated references to " cost" in a few Commission decisions and Department of Justice advice letters.
Significantly, the Applicants have cited no holding or other definitive statement in any decided case that is contrary to the Board's decision on the bedrock" legal issue.
In further arguing the " bedrock" legal issue, the Applicants asserted during the proceeding before the Board that their equal protection rights guaranteed by the due process clause of the U. S. Constitution are violated under the Staff's interpretation of l
L
" Sec Ohio Edison Petition for Review at 5; CEI/ Toledo Edison Petition for Review at 4.
" Sec LBP-92-32 at 25,-
" See generally IJ. at 5-12.
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Section 105. The Applicants claimed that such interpretation failed the constitutionallaw b
- rational basis test" on the theory that it was overinclusive - f.c., that it reached *high j cost" facilities th?t could not create or maintain a situation inconsistent with the antitrust - ;
laws - as well as underinclusive - 1.c., that it did not apply equally to non nuclear facilities. Given that the Board's decision has not been shown to depart from established law c,r legal precedent, but indeed is based on, and is consistent with, the plain meaning i of Section 105 of the Atomic Energy Act, the legislative history, and decisions of the . j Commission, its adjudicatory boards, and the courts, the Applicants' equal protection claims as to overinclusiveness fail. This is because such claims rely wholly upon the .
l Applicants' " logic" that only " low cost" facilities can impart competitive harm and thus be subject to the Commission's authority to impose antitrust license conditions under Section 105. This " logic" was properly rejected by the Board as discussed above. Thus, there is a " rational basis" for Section 105 interpreted as authorizing the Commission to -
l impose or retain antitrust license conditions with respect to a "high cost" nuclear facility.
Further, with respect to the Applicants' "underinclusive" equal protection arguments, i because nuclear technology was largely government developed and f'manced, in contrast B
to other forms of energy technology, the Board's decision that there is a rational basis for Section 105 interpreted as subjecting only nuclear facilities to the Commission's antitrust authority was eminently sound and does not constitute a departure from established law.
l Further, the Board's non merits dismissal of Ohio Edison's " Staff blas" contention-- .
l was not a prejudicial procedural error that weighs in favor of Comniission review, as is l :
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now argued by Ohio Edison. Ohio Edison claims that it was denied the opportunity to !
" discover and present the facts" concerning alleged congressional interference and agency [
. bias, and twice has been given no notice or opportunity to address the tabling and ultimate dismissal of the contention." However, even assuming arguendo that Ohio j 1
Edison could show that the Staff was influenced by Congressional pressure in its review of the original applications, Ohio Edison fails to explain how that would have had or 4
could have any impact on the Licensing Board's independent resolution of the " bedrock" issue, a purely legal matter. The Board itself was not subject to any claim of having been inappropriately influenced. Therefore, there are no circumstances where it may be
~
argued, even assuming the Staff was biased in its own determination on the applications, that Ohio Edison was prejudiced during the proceeding before the Board. Thus, the Board's conduct of the proceeding cannot be said to have involved a prejudicial procedural error.
The Applicants finally argue that the Commission should exercise its power to review the Board's decision because the " bedrock" legal issue " raises an important-
! question of law and policy "" While the Staff believes that the Board correctly decided l
the " bedrock" legal issue, the Staff acknowledges thaf the " bedrock" legal issue is a-i l substantial and important question oflaw, which may impact many facilities now subject l-l
" Sec Ohio Edison Petition for Review at 7 8.
" Sec Ohio Edison Petition for Review at 8; CEI/ Toledo Edison Petition for Review at7.
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l to antitrust license conditions. Accordingly, the Staff would not oppose Commission review with respect to this issue."
Pegardino Cleveland's Limited Petition for Review in which Cleveland argues that the Board should have decided this matter on the basis of its arguments of " legal repose,"
the Staff notes at the outset that the Board's decision on the ultimate " bedrock" legal issue was favorable to Cleveland. Therefore, Cleveland's purpose in participating in the proceeding, to ensure that the subject antitrust license condit'ons remain in place, has been fully satisfied. Under such circumstances, Cleveland normally would have no right to appeal the Board's decision. See, e.g., Rochester Gas and Electric Corp. (Sterling Power Project, Nuclear Unit No.1), ALAB-502, 8 NRC 383,393 n.21 (1978); Duke Powcr Co. (Cherokee Nuclear Station, Units 1, 2, & 3), ALAB-482, 7 NRC 979,980 (1978). While in general, if another party appeals a decision, the party in whose favor the decision resulted may then urge any ground in defending the result, including grounds rejected by the decision-maker, this is not the situation here. See Niagara Mohawk ,
Power Corp. (Nine Mile Point Nuclear Station), ALAB-264,1 NRC 347,357 (1975).
The issue before the Commission is whether to undertake review of the Board's decision; an " appeal" has not yet been granted. Since the Board's decision was favorable to Cleveland on the ultimate " bedrock" legal issue, Cleveland's Limited Petition should not be granted. .
" See 10 C.F.R. 6 2.786(b)(4)(iii).
CDNCLUSION The Applicants have failed to demonstrate that the legal conclusions underlying the Board's decision are contrary to established law or were without governing precedent.
To the contrary, the Board dismissed the proffered " logic" arguments of the Applicants and relied instead upon the well-established body of antitrust law and the plain language of Section 105, legislative history, and Commission precedents to reach its conclusions.
The " bedrock" issue, however, is a substantial and important question of law.
Accordingly, the Staff does not oppose Commission review of the " bedrock" issue.
Finally, because the Board's decision was favorable to Cleveland, Cleveland's Limited Petition should not be granted.
Respectfully submitted,
- 4'[6 Ah A i
5 tven R. Hom Counsel for NRC Staff Dated at Rockville, Maryland this 23rd day of December,1992 l
tHD UNITED STATES OF AMERICA k-NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION
)
In the Matter of )
)
OHIO EDISON COMPANY )
)
(Perry Nuclear Power Plant, Unit 1) )
) Docket Nos. 50-346A and ) 50 440A -
)
THE CLEVELAND ELECTRIC )
ILLUMINATING COMPANY )
THE TOLEDO EDISON COMPANY ) (Suspension of Antitrust
) Conditions)
(Perry Nuclear Power Plant, ) .
Unit 1) )
and )
(Davis-Besse Nuchar Powcr Station, )
Unit 1) )
)
CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing "NRC STAFF'S ANSWER IN RESPONSE _
TO PETITIONS FOR REVIEW FILED BY OHIO EDISON COMPANY, THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON COMPANY, AND CITY OF CLEVELAND" in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, or as indicated by an asterisk through deposit in the Nuclear Regulatory Commission's internal mail system, this 23rd day of December,1992:
Marshall E. Miller, Chairman Charles Bechhoefer*
Atomic Safety and Licensing Board Adminisaative Judge 1920 South Creek Boulevard Atomic Safety and Licensing Board Spruce Creek Fly in Mail Stop: EW-439 Daytona Beach, FL 32124 U. S. Nuclear Regulato:y Commission Washington, D.C. 20555
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2 G. Paul Bollwerk, Ill* David R. Straus, Esq.
Administrative Judge Spiegel & McDiarmid ,
Atomic Safety and Licensing Board 1350 New York Avenue, N.W. ;
Mail Stop: EW-439 Suite 1100
. U. S. Nuclear Regulatory Commission Washington, D.C. 20005-4798 Washington, D.C. 20555 Philip N. Overholt Gerald Charnoff, Esq. Of6ce of Nuclear Plant Performance .
Deborah B. Charnoff, Esq. Office of Nuclear Energy t Margaret S. Spencer, Esq. U.S. Department of Energy, NE-44 Shav*, Pittman, Potts & Trowbridge Washington, D.C. 20585 2300 N Street, N.W.
Washington, D.C. 20037 John Bentine, Esq.
Chester, Hoffman, Willcox James P. Murphy, Esq. & Saxbe !
Squire, Sanders & Dempsey 17 S. High Street 1201 Pennsylvania Ave., N.W. Columbus, Ohio 43215 Washington, D.C. 20004 Anthony J. Alexander, Esq.
D. Biard MacGuineas, Esq. Vice President and General Counsel >
u Volpe, Baske and Lyons Ohio Edison Company 91816th Street, N.W. 76 South Main Street ;
Suite 602 Akron, Ohio 44305 ,
Washington, D.C. 20006 Gregg D. Ottinger, Esq.
Janet Urban, Esq. John P. Coyle U.S. Department of Justice Duncan & Allen Antitrust Division Suite 300 555 4th Street, N.W. 1575 Eye Street, N.W.
Washington, D.C. 20001 Washington, DC 20005-1175
. Reuben Goldberg, Esq. David A. Lambros, Esq.
Channing D. Strother, Jr., Esq. Law Director Goldberg, Fieldman & Letham, P.C. City of Brook Park 1100 Fifteenth Street, N.W.
6161 Engle Road _ 1 Washington, D.C. 20005 Brook Park, Ohio 44142
,4 . . . - . .
3-Office of the Commission Appellate Office of the Secretary * (16)
Adjudication
- ATTN: Docketing and Service biail Stop: 16-G 15 OWFN Liail Stop: 16 G-15 OWFN U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 Adjudicatory File (2)* Atomic Safety and Licensing Board Atomic Safety and Licensing Board Panel
- hiail Stop: EW-439 hiailStop: EW-439 U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555
//\h'%
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Stefen R. Hom Counsel for NRC Staff e
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