ML20150D354
| ML20150D354 | |
| Person / Time | |
|---|---|
| Site: | Perry  |
| Issue date: | 07/05/1988 |
| From: | Zahler R SHAW, PITTMAN, POTTS & TROWBRIDGE |
| To: | Thomas C Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8807130434 | |
| Download: ML20150D354 (62) | |
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SHAW, PITTMAN, PoTTs & TROWBRIDGE A PARTNEmsMip INCLUDeNG PROFESS *ONAL CompORATioNS P3OO N STREET N. W.
T E LtalCa tet t WASHINGTON. D. C. 20037 VIRGINIA CFFICE S3-26 93 (SMAwtAw wsM) iSot Fa*M Caton omrvt croN .*3." *3 o July 5, 1988 croa az'3 37e [Ea"as 37ei ROBERT E. ZAHLER, P.C. (202)7 338 Mr. Cecil J. Thomas Chief, Policy Development and Technical Support Branch Programs Management Office of Nuclear Reactor Regulation U.S. Nuclear degulatory Commission Washington, D.C. 20555 Re: Ohio Edison Company Antitrust License Amendment Application
Dear Mr. Thenas:
Enclosed is a copy of "Response of Ohio Edison Company to Comments on its Antitrust License Amendment Application."
I would note that at pages 3 and 7, Ohio Edison has re-quested that the Commission hold the p:;esent proceeding on the license amendment application in abeyance pending resolution of the court action filed on June 22, 1988. In addition, at page 7, note 11, Ohio Edison.has requested copies of all comments re-ceived from the Attorney General on the license amendment appli-cation.
Sincer yours, l
1 Robert a. h er Counsel for Ohio Edison Company I
Enclosure cc: Service List 8807130434 880705 %
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. UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR, NUCLEAR REACTOR REGULATION In the Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440A
)
(Perry Nuclear Power Plant, )
Unit 1) )
RESPONSE OF OHIO EDISON COMPANY TO COMMENTS ON ITS ANTITRU3T LICENSE AMENDMENT APPLICATION Gerald Charnoff Robert E. Zahler Deborah B. Charnoff Margaret S. Spencer SHAW, PITTMAN, POTTS & TROWBRfDGE 2300 N Street, N.W.
Washington, D.C. 20037 Tel: (202) 663-8000 Dated: July 5, 1988
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TABLE OF CONTENTS Pace I. PRELIMINARY STATEMENT............................ 2 II. INTRODUCTION AND
SUMMARY
......................... 4 III. PROCEDURAL ISSUES................................ 6 IV. THE NRC HAS THE AUTHORITY TO ADJUDICATE OS'S LICENSE AMENDMENT APPLICATION.................... 8 A. The Appeal Board Explicitly Authorized The Director Of Nuclear Reactor Regulation To Consider Antitrust License Amendment Applications................................ 9 B. The "Particularized Regime" Of Antitrust Review Under Section 105(c) Does Not Divest The Director Of His Authority To Consider Antitrust License Amendment Applications................................ 12 V. THE PRINCIPLES OF RES JUDICATA AND COLLATERAL ESTOPPEL DO NOT PRECLUDE ADJUDICATION OF OE'S LICENSE AMENDMENT APPLICATION.................... 16 i A. OE Did Not Raise, And Could Not Have Raised, The Arguments Now Advanced To Support Its Antitrust License Amendment Application........... ..................... 18 B. Cleveland's Reliance On The So-Called "Operating License" Proceeding Is Entirely Misplaced.......................... 21 C. Collateral Estoppel Does Not Bar The OE
( Antitrust License Amendment Application..... 24 l
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VI. NEITHER EQUITABLE' CONSIDERATIONS NOR THE DOCTRINE OF LACHES PRECLUDES ADJUDICATION OF OE'S LICENSE AMENDMENT APPLICATION............ 25 VII. THE-CHANGED CIRCUMSTANCES IDENTIFIED BY OE REQUIRE SUSPENSION OF THE ANTITRUST LICENSE CONDITIONS....................................... 28 A. Clyde's Substantive Comments................ 29 B. AMP-O's Subs. .re Comments................ 32 C. Cleveland's Substantive Comments............ 36 VIII. CONCLUSION....................................... 42 EXHIBIT A -- Ohio Edison Co. v. Zech, et al.,
No. 88-1695 (D.D.C., filed June 22, 1988)
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o a UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR, NUCLEAR REACTOR REGULATION In the Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440A
)
(Perry Nuclear Power Plant, )
Unit 1) )
RESPONSE OF OHIO EDISON COMPANY TO COMMENTS ON ITS ANTITRUST LICENSE AMENDMENT APPLICATION On September 18, 1987, Ohio Edison Company ("OE"), a co-owner of the Perry Nuclear Power Plant, Unit 1 ("Perry"), sub-mitted an application ("OE Appl.") to the Director of Nuclear Re-actor Regulation requesting that the Perry Operating License (No.
NPF-58) be amended by suspending the antitrust license conditions insofar as they apply to OE. The Nuclear Regulatory Commission
("Commission" or "NRC") published notice of this application on December 22, 1987, and invited comments on the application from
"[a]ny person who wishes to express views pursuant to the anti-trust issues raised in this amendment request * * * "1! . Follow-ing two extensions of time within which to submit comments,2/
written comments on the application were received from the City of Clyde, Ohio,E! the City of Cleveland, Ohio,d! and American l
I 1/ See 52 Fed. Reg. 48473-74 (Dec. 22, 1987).
l 2/ Notices granting the extensions were published at 53 Fed.
Reg. 4475 (Feb. 16, 1988) and 53 Fed. Reg. 9386 (Mar. 22, 1988).
3/ See "Comments of the City of Clyde, Ohio Opposing Request to Suspend the Perry Nuclear Power Plant Antitrust License Con-(Continued next Page)
i 4 Municipal Power-Ohio, Inc. ("AMP-O").E! On April 19, 1988, OE informed the Commission of its intent to respond to these com-ments.
I. PRELIMINARY STATEMENT On June 22, 1988, OE filed an action in the United States District Court for the District of Columbia against the NRC.
-Ohio Edison Co. v. Zecn, et al., No. 88-1695. That Complaint seeks: (1) an order suspending the antitrust license conditions insofar as they apply to OE; or, in the alternative (2) an order directing the NRC to so suspend the antitrust license conditions; and (3; such further relief as the Court deems reasonable, just f4nd proper.E! OE filed this Complaint because of the extraordi-nary events which took place on the floor of the United States (Continued) ditions aad Petition for Leave to Intervene," dated February 5, 1988 (hereinafter cited as 'Clyde Br.").
1/ See "Answer of City of Cleveland, Ohio, in opposition to Ohio Edison Company's Application for Suspension of Perry Operating License Antitrust Conditions," dated February 19, 1988 (hereinafter cited as "Cleveland Br.").
1/ See "Answer of American Municipal Power-Ohio, Inc. in Oppo-sition to Ohio Edison Company's Application for Suspension.
of Antitrust Conditions," dated April 6, 1988 (hereinafter cited as "AMP-O Br."). In addition, included in AMP-O's first motion for an extension of time was a request for leave to intervene in this proceeding. See "Motion of Amer-ican Municipal Power-Ohio for Leave to Intervene and Motion for Extension of Time for Filing Comments," dated January 29, 1988 (hereinafter cited as "AMP-O Motion").
1/ For the convenience of the parties, a copy of the Complaint is attached to this Response F.s Exhibit A.
Senate on~ March 29, 1988. At that time Genators Metzenbaum and others indicated in unmistakable fashion that they already had brought to bear, and would in the future continue to bring to bear, inappropriate political pressure to have the NRC dismiss OE's application to suspend the antitrust license conditions.
Notwithstanding the judicial action taken, OE is filing this Response when due because OE believes setting forth its views on the. issues raised by the three commenting parties is beneficial and will serve to expedite the eventual consideration of OE's ap-plication before the court. In particular, the comments filed by Clyde, Cleveland, and AMP-O paint a misleading picture of the relevant legal and factual issues. This Response by OE addresses the submitted comments and therefore is necessary to complete the administrative record. By making this filing, OE is not waiving its complaint that the inappropriate political pressure exercised against the NRC now and forever precPldes this agency from ruling on the OE antitrust license amendment application.
OE expects that at some point during the court proceedings, the Commission will forward to the ccurt the entire record of proceedings before it, and that' record will become part of the judicial proceedings.
This Response, therefore, will be available to the court to bet-ter inform the court about OE's position on the issues raised by the commenting parties.
In view of the pending court action, OE requests that the NRC hold this proceeding in abeyance until the court rules on OE's Complaint.
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II. INTRODUCTION AND SUMMARJ This Response includes a point-by-point answer to each of the significant issues raised by the commenting parties. In the case of Clyde.and AMP-O, this point-by-point answer is relatively straightforward. The response to Cleveland is only slightly more complex, not because the issues raised by Cleveland are more dif-ficult, but because the Cleveland comments to a large extent are unbelievably prolix and include much extraneous and irrelevant material. The Commission should cut through the "smoke screen" raised.by Cleveland and consider each issue on the merits. That evaluation shows that issues raised by the commenting parties are invalid.
A. Despite the claims by Cleveland and AMP-O to the con-trary, the NRC clearly has the authority to consider and adjudi-cate OE's license amendment application. This authority resides in the Director of Nuclear Reactor Regulation and was expressly recognized by the Appeal Board in its Perry decision. The "par-ticularized regime" of antitrust review under Section 105(c) does not change this result. While the statute does limit when the NRC can consider antitrust issues for the first time, the statute does not alter the NRC's continuing jurisdiction over licenses to which antitrust conditions were previously attached.
B. The principles of res iudicata and collateral estoppel do not bar the NRC from adjudicating OE's license amendment ap-plication. The crucial question is whether changed circumstances
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l varrant suspension of the antitrust license-conditions. That in-quiry is not altered by the legal principles of preclusion sug-gested by Cleveland. If, as OE maintains, the cost of nuclear
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power has risen so dramatically such that construction and opera-tion of Perry cannot be said to "create or maintain" a situation inconcistent.with the antitrust laws, then the license conditions should be suspended and principles of res iudicata or collateral estoppel should not preclude that result.
C. The equitable doctrine of laches and other equitable consideratiens raised by the commenting parties do not provide a justification for rejecting the OE license amendment application.
The commenting parties' arguments require one to assume that OE will, in the future, violate the law. In addition, the com-menting parties should have known that the conditions could be revoked, modified or suspended. Nor have those parties shown that OE unreasonably delayed in presenting its amendment applica-tion to the Commission.
D. The substantive arguments offered by the commenting parties for opposing the OE license amendment application should be rejected. The OE application makes a prima facie case that the dramatic change in the economics of nuclear power is suffi-cient reason for suspending the antitrust license conditions.
In addition to the errors of law and fact made by the com-menting parties, their papers disclose some confusion about the s 6 correct procedural posture of this proceeding. OE, therefore, describes in the next section of this Response its understanding of how this proceeding should be conducted.
III. PROCEDURAL ISSUES 1!
Both Clyde und AMP-O have petitioned for leave to intervene in this adjudication.E! Botn parties also believe they are late in seeking such intervention and have purported to address the factors governing late intervention set forth in the Commission's regulation at 10 C.F.R. S 2.714(a)(1)(i)-(v). The parties appar-ently have taken this position because, as AMP-O states, they be-lieve "this case began nearly fifteen years ago."E! This analy-sis of the current adjudication is wrong.
When OE filed the present application to amend the Perry Operating License, a new proceeding was initiated. To be sure, that proceeding has the same docket number as that used during the 1970's.1E! But that arises only becaus' the NRC has assigned 2/ OE repeats that the procedural discussion which follows would have governed had not inappropriate political pressure been exerted on the NRC. As a result of that pressure, this matter.must now be resolved by the federal district court.
The discussion which follows in the text is not a waiver of OE's view that the courts, and not the agency, mest now de-cide this case in the first instance.
8/ See Clyde Br. at 1-2, 13-14; AMP-O Motion at 1-5. While Cleveland has not sought to intervene, it does request "sum-mary denial of the application." Cleveland Br. at 1.
9/ E.Q., AMP-O Motion at 2; see also Clyde Br. at 13 ("[t]he licensing proceeding began years ago, and Clyde's petition for leave to intervene undoubtedly is untimely").
10/ Cleveland's ccmments erroneously include a caption that lists "Docket Nos. 50-440a, et al " OE does not know to (Continued next Page)
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a' single docket number for each nuclear power-plant. Procedures governing the amendment application, including review of the ap-plication, notices relating-to the application, determinations f about that application, and formal, on-the-record hearings on i
that application, are set forth in the Commission's regulations at 10 C.F.R. 5 2.101 .106 and 50.91 .92. The Commission already has given notice of receipt of the application and requested com-ments. The Commission also has requested comment on the applica-tion from the Department of Justice.11! In the normal course, having received OE's application, comments by interested parties, and OE's Response, the NRC would have been in a position to rule on the application. However, because of the inappropriate polit-ical pressure brought to bear on the agency, OE has requested that the NRC stay any action pending resolution of the court proceeding (see p. 3, supra).
(Continued) what other dockets the "et al." is intended to refer. It should be clear that the only antitrust license conditions applicable to OE arise from the Perry Unit 1 Operating License. In addition, both Cleveland and Clyde have cap-tioned this matter in the name of "The Cleveland Electric Illuminating Company, et al." Again, neither Cleveland Electric Illuminating nor any other former member of the Central Area Power Coordination Group ("CAPCO") or co-owner of Perry Unit 1 is a party to this proceeding. Thus, OE be-lieves it incorrect to title this proceeding in the name of a nonparty or to refer to other nonexistent parties by use of "et al."
11/ See 52 Fed. Reg. 484'3 (Dec. 22, 1987) ("(a} copy of the ap-plication for amendment has been forwarded to the Attorney General for his review and comment * * *"). OE has not re-ceived or been served with any comments from the Attorney General. OE requests copies of all comments received from the Attorney General.
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'IV. THE NRC HAS.THE AUTHORITY TO ADJUDICATE OE'S LICENSE AMENDMENT APPLICATION
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Both Cleveland'and AMP-O offer the remarkable argument that the Commission. lacks authority to adjudicate the license amend-ment application submitted by'CE.1 ! It.would indeed be a strange administrative regime that accepted a power to regulate and monitor its licensees and, in particular, to impose condi-tions on the conduct of those licensees, and then stood help-lessly by, mute in response to'a request by its licensee that some condition be modified, asserting only that it lacked the au-thority to consider the proposed modification. Such a result would be especially anomalous here, where this Commission plays so active a role in the day-to-day affairs of its licensees.
And, as indicated below, that the license amendment application involves antitrust issues rather than health and safety concerns is'no reason for the Commission to shirk its responsibility to properly consider and adjudicate all license amendment requests
-it receives from its licensees.
12/ See Cleveland Br. at 24-52; AMP-O Br. at 10-13. For the most part,' AMP-O merely repeats and summarizes the arguments presented by Cleveland on this issue.
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A. The Appeal ~ Board Explicitly Authorized The Director
'Of Nuclear Reactor Regulation To Consider Antitrust License Amendment Applications The simple and complete answer to the lack of authority ar-gument' raised by Cleveland and AMP-O is that the Appeal Board al-ready has ruled on this matter and has unmistakably held that the Director of Nuclear Reactor Regulation has the authority to en-tertain' antitrust license amendment applications from licens-ees.1EI The Appeal Board stated:
We agree that license conditions seemingly fair today may prove inequitable tomorrow. * ***
Commission regulations give the Director of Nuclear Reactor Regulation -- who is assisted by an able antitrust staff -- authority to modify license conditions where necessary and provide as well as (sic] means for review of his deter-minations. 10 CFR Section 2.200-2.204 and Sec-tion 2.206.11/
Cleveland offers three reasons why this clear and direct holding of the Appeal Board should be simply ignored. First, Cleveland asserts that this holding is "mere dicta." Cleveland Br. at 49. Just because Cleveland asserts this holding is dicta does not, of course, make it dicta. That this language is not ll/ See OE Appl. at 50-52. As if to deflect attention from the significance of the Appeal Board's prior ruling, and with a flash of literary style, Cleveland dismisses OE's reference to the Appeal Board ruling as "much ado about certain dicta." Cleveland Br. at 48. Despite the boldness of Cleveland's argument, the Cleveland position is nothing more than a brazen attempt to ignore the most relevant precedent on this point.
14/ Toledo Edison Co. (Davis-Besse Nuclear Power Station, Units 1, 2 and 2), ALAB-S60, 10 N.R.C. 265, 294 (1979)
(hereinafter "ALAB-560").
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I repeated'in the conditions themselves (as Cleveland apparently believes it should have been) is of no significance. Having ruled once on this matter, there was no need for the Appeal Board to repeat its ruling in the conditions. The test of whether lan-guage in a decision is or is not dictc is whether that language was necessary for the result reached. In the Perry proceeding, the applicants challenged various aspects of the relief formu-lated by the Licensing Board.1E! In response to specific con-cerns about reductions in wheeling service and the extent to which municipalities and cooperatives might use the services offered under the license conditions, Mr. Sharfman's opinion would have vested the Licensing Board with continuing jurisdic-tion to resolve such concerns.15/ The Appeal Board majority re-jected that solution and instead identified-the Director of Nuclear Reactor Regulation as the agency official vested with continuing jurisdiction.12/ It is thus clear that the opinion language was necessary for the result reached, and is not, as Cleveland would assert, "mere dicta."
Second, Cleveland appears to argue that the referenced sec-tions of the Commission's regulations, 10 C.F.R. SS 2.200 .206',
. apply only to violations and do not cover the present 11/ See ALAB-560, 10 N.R.C. at 385-98.
16/ Id. at 392 and 398.
17/ Id. at 294.
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.. .o situation.1E! Cleveland can make such an argument only by citing to, and quoting from, the wrona section of the Commission's reg-ulations. Thus, at page 50 of its brief, Cleveland quotes from 10 C.F.R. S 2.201 -- the provision on notice of violation. It is, of course, not surprising that the scope of that provision is limited to violations, as Cleveland attempts to argue b?/
emphasizing that word in its quotation. What Clevelan6 ignores is the language in 10 C.F.R. S 2.200 on the entire scope of the Commission's Part 2, Subpart B regulations. In contrast to the language quoted by Cleveland from section 2.201, Section 2.200 states:
This subpart prescribes the procedure in cases initiated * *
- upon request by any person,
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- to modify, suspend, or revoke a license, or to take other action as may be proper * * *.
There can, therefore, be little doubt that the Appeal Board was entirely correct when it identified the Director of Nuclear Reac-tor Regulation as the Commission official with continuing juris-diction over the antitrust license conditions. See also 10 C.F.R. SS 50.90 .92 (procedures governing licensee requests for
! license amendments).
l Third, Cleveland apparently believes there is some signifi-1 cance in the fact that Mr. Sharfman's original formulation would 18/ Cleveland Br. at 49-50; see also AMP-O Br. at 12. For the l reasons indicated in the text, Cleveland's extended discus-l sion (at pages 50-52) on the Director's enforcement decision l of June 25, 1979, is wholly irrelevant.
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have vested'the Licensing Board with continuing jurisdiction only in cases of "extreme hardship."1E/ If by noting this Cleveland means to imply that the Director's authority is similarly limited to situations involving "extreme hardship," that too is clearly wrong. In commenting on the Director's authority, the Appeal Board majority was not creating any new authority. It was simply confirming that authority which already existed under the Commis-sion's rules. That Mr. Sharfman would have gone beyond this al-ready existing authority and have authorized the Licensing Board to retain jurisdiction in cases of "extreme hardship" cannot possibly be viewed as thereafter limiting the Director's authori-ty in a similar manner. There is just no connection between the Director's authority and that continuing jurisdiction Mr.
Sharfman would have given the Licensing Board.
B. The "Particularized Regime" Of Antitrust Review Under Section 105(c) Does Not Divest The Director Of His Authority To Consider Antitrust License Amendment Applications Both Cleveland and AMP-O further attack the authority of the Director of Nuclear Reactor Regulation to consider OE's license amendment application by arguing that the "particularized regime" of antitrust review vested with the Commission somehow precludes th'e Director from considering this amendment application.20/ -
19/ Cleveland Br. at 48-49; see also AMP-O Br. at 12-13 n.7.
20/ Cleveland Br. at 25-47; AMP-O Br. at 10-11. On this issue, AMP-O again merely restates and summarizes the Cleveland po-sition.
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Despite the extended and prolix nature of Cleveland's argument, the singular fact ignored by Cleveland is that the Appeal Board decision here (ALAB-560) authorizing the Director to consider an-titrust license amendments was rendered after all of the agency decisions relied upon by Cleveland for the proposition that in the antitrust arena the Director does not have continuing juris-diction. Thus, Cleveland's argument is reduced to the absurdity that prior agency decisions overrule a later decision by the Ap-peal Board. Indeed, to accept the Cleveland argument requires one to assume that the Appeal Board either forgot about or was ignorant of those prior decisions. A more reasonable explana-tion, and one supported by a proper reading of the cases, is that, even in the antitrust arena, the Director continues to re-tain authority to modify existing license conditions.
Although lengthy, much of the Cleveland argument is either irrelevant or establishes points not in dispute. OE does not quarrel with the general propositions that (1) the NRC's anti-trust authority is limited, (2) "plenary antitrust review" (see Cleveland Br. at 29) generally is restricted to the construction permit stage, and (3) antitrust review can occur at the operating license stage only where "significant changes" are present. All of these points deal, however, with requests by non-licensees to have the conduct of a licensee investigated, and as a result of that investigation, impose new or additional antitrust conditions on that licensee. The legislative history quoted by Cleveland,
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and reviewed in the agency decisions cited by cleveland, aptly
. demonstrates that congressional concerns over the adverse impacts that might result from repeated antitrust investigations of licensees led to a "particularized regime" of antitrust review intended to prevent such adverse impacts by severely restricting the occasions on which such investigations could occur.
Cleveland's argument hinges on its reading of one Commission decision and one Appeal Board decisior. In Houston Lightino &
Power Co. (South Texas Project, Unit Nos. 1 and 2), CLI-77-13, 5 N.R.C. 1303 (1977), the Commission held that an antitrust review could not for the first time be initiated "during the period be-tween issuance of the construction permit and application for an operating license." The solution in that case was to expedite filing of the operating license application and consider the an-titrust issues in that proceeding. In Florida Power & Licht Co.
(St. Lucie Plant, Unit No. 1), ALAB-428, 6 N.R.C. 221 (1977), the Appeal Board held that an antitrust review could not for the first time be initiated after issuance of the operating license.21/ As the Appeal Board obser'ted in Florida Power, this result followed directly from the Commission's decision in South Texas. See 6 N.R.C. at 226-27.
21/ Cleveland purports to see something sinister because OE's amendment application did not cite the Florida Power case.
See Cleveland Br. Tt 26 & 34. As explained in the text of this Response, that decision is not especially relevant to the situation raised by OE's amendment application, and therefore was not cited in the application.
Because the Appeal Board's decision in Florida Power pre-cluded both a licensing board and the D. rector of Nuclear Reactor Regulation from initiating an antitrust review for the first time after issuance of.the operating license, Cleveland argues that in this case the Director is similarly precluded from addressing the OE license amendment application. It is, however, the very dif-ference between an initial antitrust review, on the one hand, and continuing jurisdiction over a previously conducted antitrust re-view, on the other hand, that Cleveland ignores and which explains the differing Appeal Board-rulings in Florida Power and ALAB-560. Post-licensing antitrust review like that sought in Florida Power is precluded because "Congress had no intention of giving (the NRC) authority which could put utilities under a con-tinuing risk of antitrust review." 6 N.R.C. at 206, quoting the Commission decision in South Texas, 5 N.R.C. at 1317. But, where a utility already has been subject to tne risk of antitrust re-view, and has had antitrust license conditions imposed, "the Di-rector of Nuclear Reactor Regulation * * * (has] authority to modify license conditions where necessary * * *." ALAB-560, 10 N.R.C. at 294.
In summary, despite Cleveland's attempt to shroud the issue in a haze of extended legal argument, the applicable rule is sim-ple and follows directly from the Appeal Board's ruling in ALAB-560. Where antitrust license conditions have been imposed, the Commission, through in the first instance its Director of
Nuclear Reactor Regulation, has the authority to consider changed circumstances that may require modification or suspension of the license conditions.
V. THE PRINCIPLES OF RES JUDICATA AND COLLATERAL ESTOPPEL DO NOT PRECLUDE ADJUDICATION OF OE'S LICENSE AMENDMENT APPLICATION Cleveland argues in the alternative that, even if the NRC has authority to consider OE's antitrust amendment application, the NRC should summarily reject the application because, in Cleveland's view, the application is based on arguments which "involve issues raised in the construction and operating license proceeding and were or could have been raised in those proceed-ings. Therefore, the arguments are precluded by the doctrine of res iudicata or, alternatively, collateral estoppel."22/ In sup-port of this claim, Cleveland sets forth a lengthy review of what it asserts are the relevant legal principles governir.g applica-cion of these preclusion principles in administrative proceed-ings.EE! The only significant point, however, is Cleveland's ex-plicit recognition that changed factual or legal-circumstances is a sufficient reason for not applying the res iudicata or collat-eral estoppel principles.2A A moment's reflection readily con-firms that this must be the case, especially in administrative 12/ See Cleveland Br. at 53; see also AMP-O Br. at 13.
21/ See Cleveland Br. at 54-59.
24/ Id. at 56.
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proceedings. By its very nature, almost every license amendment application seeks relief from, or.a change to, some requirement >
imposed upon the licensee during earlier NRC proceedings. If the preclusion principles relied upon by Cleveland were a bar to reconsidering such matters, no license amendment could ever be granted. The hundreds of such amendments granted each year by the NRC is strong testimony that a mere recitation to res iudicata or collateral estoppel principles cannot simply bar at the outset consideration of OE's antitrust amendment application.
The issue that must be addressed is whether there are changed circumstances that justify the license amendment. OE clearly recognized the need to make such a showing in its initial application, and presented an extended discussion of the applica-ble legal standards and how the circumstances present today dif-fered in significant and material vays from those assumed when the license conditions were imposed.2E/ Rather than respond di-rectly to the OE position, Cleveland has strained to impose an overly formalistic construct on the analysis by framing its argu-ments in terms of res iudicata and collateral estoppel. As shown below, these legal arguments add little to the analysis and the Cleveland position should be rejected.
1 25/ A discussion of the relevant legal standards appears at pages 47-52 of the OE Appl. The assumption and bases for i
initially imposing the antitrust license conditions are de-scribed at pages 26-47 of the OE Appl., and the changes in those circumstances are analyzed at pages 53-79 of the OE j Appl.
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A. OE Did Not Raise, And Could Not Have Raised, The Arguments Now Advanced To Support Its Antitrust' License Amendment Application
~ Cleveland asserts that OE's amendment application is based on an argument previously advanced to, and rejected by, the Ap-peal Board during the Perry construction permit proceeding. This argument is said to be the claim that "nuclear power has no cost advantages and, as a result, the requisite nexus between the licensed activity and the anticompetitive situation is lacking."2EI Cleveland's position is wrong for two reasons.
First, the legal argument advanced by OE during the Perry construction permit proceeding is markedly different than the legal argument being advanced by OE in support of its license amendment application. As Cleveland correctly observes, the Perry construction permit proceeding argument revolved around "nexus" -- i.e., whether there was a sufficient connection be-tween the licensed activities and the anticompetitive situation.
During the Perry construction permit proceeding, this "nexus" ar-gument took two forms: (1) a claim that the specific activities being reviewed by the NRC were so distinct and unrelated to the licensed activities as not to have the requisite "nexus," and (2) a claim that the relief being imposed by the NRC was so in-sufficiently associated with the proposed nuclear plant as to lack the requisite "nexus." These two parts of the nexus issue 11/ See Cleveland Br. at 65.
I were litigated, briefed and argued at every juncture during the Perry proceeding. OE lost on both parts of its nexus claim and is not now advancing either argument in support of its license amendment application.
The claim being made by OE today is in the nature of a ju-risdictional attack. Thus, in its application OE argued that if construction-and operation of a nuclear plant does not create or maintain a situation inconsistent with the antitrust laws because the economics of the plant are such that neither its construction nor its operation gives OE any competitive benefits, then the "NRC has no statutory basis for overseeing the licensee's busi-ness conduct, however anticompetitive it may be."11# As OE noted
-in its application, the universal assumption of all parties to the Perry proceeding was that nuclear power was low cost and, therefore, there was no claim that the NRC lacked the statutory basis for the antitrust proceeding.2E/
'll/ See.OE Appl. at 6; see also id. at 26 ("if a nuclear facility is not economically superior, thus maintaining or creating in its owners an automatically advantageous compet-itive position in the marketplace, there is no statutory basis for NRC conditioning the grant of a license for that plant").
28/ In its just-issued decision in Mississippi Power & Licht Co.
- v. Mississippi ex rel. Moore, 56 U.S.L.W. 4751 (June 24, 1988), the Supreme Court only recently had occasion to com-ment on the widely held, but unachieved, assuraption that E
nuclear power would be low cost. The high court stated (id.
at 4755 n.9):
At the time construction of Grand Gulf was initiated, ,
(Continued next Page) 1
.. 7 Second, the factual claims related to nuclear power costs advanced during the construction permit proceeding were very dif-ferent from the claims being made by OEin its amendment applica-tion. To be sure, as the-Perry proceeding drew to a close, some concerns about the relative cost of nuclear power were beginning .
I to appear. But.as Cleveland's quotation relating to Mr.
Kampmeier's testimony makes clear, the economic argument was framed in terms of the relative power costs between municipal or cooperative systems -- with their lower cost of money due to tax and financing advantages -- on the one hand, and the power costs of applicants, on the other hand. Thus, Mr. Kampmeier's testi-mony was cited for the proposition that a municipal system could construct a small coal-fired plant. and get power f rom it "at a total cost equal to, or closely approximating, the cost of power to Applicants from the large nuclear facilities being licensed."22/
(Continued) no one anticipated the enormous cost overruns that would be associated not only with that plant but also with virtually every nuc lear power f acility being con-structed in the United Stated.
See also id. at 4752 ("regulatory delays, additional con-struction requirements, and s evere inflation f rustrated the (nuclear] project"); at 4753 n.5 ("(rlegulatory delays, ad-ditional construction requirements imposed af ter the Three Mile Island disaster, and severe inflation, however, ran up .
Grand Gulf costs").
29/ Quoted in Cleveland Br. at 60.
.v 4.
l In contrast to this claim -- which was rejected in part be-
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cause the Licensing Board found that it was improper for appli-cants to be relying on a municipal's tax and financing advantages to show lower cost -- OE's amendment application is based on the indisputable fact that the cost of power from Perry is substan-tially greater than what power would have cost OE from a similarly-sized coal plant. In other words, the circumstance that has changed is that today nuclear is more expensive even for OE than a coal plant would have been, while when the Perry pro-ceeding was litigated, such a claim was untrue. In its broadside attack, Clevt'and conveniently ignores this significant factual difference.
B. Cleveland's Reliance On The So-Called "Operating License" Proceeding Is Entirely Misplaced Cleveland constructs an elaborate argument that res iudicata bars OE's license amendment application because "each of the events cited by Edison could have been raised during the operat-ing license proceeding."ES/ Thus, Clevelatid dismisses changes in circumstances relating to increases in the cost of nuclear pow r, the cancellation and delay of CAPCO nuclear plar.ts, and the ter-mination of the CAPCO pool as eve 7ts which could have been, but were not, raised in a so-called "operating license" proceed-ing.E1/ There are a number of substantial problems with this 30/ See Cleveland Br. at 66.
31/ While Cleveland makes passing reference to the substance or merits of the particular changed circumstances identifie by (Continued next Page)
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): ' argument.
First, the Cleveland claim makes assumptions about the "operating _ license" proceeding that are ur. warranted. Despite the implication one might get from reading the Cleveland Brief, there was no hearing or formal administrative proceeding that consid-ered antitrust issues at the operating license stage. Rather, pursuant to the NRC's regulations at 10 C.F.R. S 2.101(e), the Director of Nuclear Reactor Regulation solicited comments.from interested persons to assist him in determining whether signifi-cant changes in the licensees' activities had occurred since the antitrust review at the construction permit stage. Only if the Director had determined that significant changes had occurred 4
would there have been some form of proceeding. Her C.F.R.
S 2.101(e)(4). That proceeding would have been initiated by a referral to the Attorney General for his opinion (10 C.F.R.
S 2.102(d)(1)) and, if appropriate, notice of a hearing (10 C.F.R. S 2.102(d)(3)). None of this occurred because, in the context of the significant changes finding required at the oper-ating license stage, +he Director found in the case of OE that there was no need to refer the matter to the Attorney General or to give notice of any proposed hearing. By no stretch of the (Continued)
OE, the bulk of Cleveland's argument on t'ae merits is addressed later in its brief. In order to avoid duplica-tion, OE addresses all such matters in one place at Section VII of this Response.
F 6: 4-ima~gination can one' view the NRC's antitrust inquiry at the oper-
.ating license stage as the equivalent of a formal administrative proceeding that should be afforded res iudicata or collateral es-toppel-effects.
Second, as previously noted, Cleveland misconstrues the pur-pose-of the antitrust inquiry at the operating license stage.
That inquiry is aimed at determining whether a second, full-blown antitrust investigation of the licensee should be conducted lead-ing possibly to the imposition of new or modified license condi-tions. It certainly'would not be in the interests of OE to pro-voke such an investigation and roceeding. Indeed, there is no requirement of which OE is aware that would direct OE to raise at the operating license stage the concerns found in its amendment application.
Third, and directly related to the point just discussed, it is highly questionable whether the concerns addressed in the OE amendment application would have been relevant to the antitrust inquiry conducted by the NRC at the operating license stage. The relevant NRC regulation, 10 C.F.R. S 2.101(e)(1), begins by stating that, "(ulpon receipt of the antitrust information re-sponsive to Regulatory Gu e 9.3 submitted in connection with an application for a facility operating license * * *," the Director shall initiate his antitrust inquiry. However, none of the in-formation to be supplied by OE in response to Regulatory Guide 9.3 addresses the matters described in OE's antitrust license gy ;
For example, none of the questions posed
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amendment application.
by Regulatory Guide.9.3 inquires into the actual costlof nuclear power from the' plant being licensed or the relative cost of nuclear' power and reasonable alternatives to such power. In short, based on the way the NRC has framed the operating license
. antitrust inquiry, it appears to OE that the matters raised in this license amendment application would have been outside the scope of that inquiry.
C. Collateral Estoppel Does Not Bar The OE Antitrust License Amendment Application In the alternative, Cleveland argues that the doctrine of collateral estoppel bars the NRC from considering OE's antitrust license amendment application.12/ The bases for urging that col-lateral estoppel precludes the OE application are even weaker and more tenuous than the claims Cleveland makes for the application of res iudicata.
Accepting for purposes of argument the criteria set out in Commonwealth Edison Co. (Braidwood Nuclear Power Station, Units 1 and 2), LBP-85-11, 21 N.R.C. 609, 620 (1985), it is clear that Cleveland cannot sustain its collateral estoppel argument. As l
previously noted, there was no formal administrative proceeding that censidered antitrust issues at the operating license stage.
Thus, despite Cleveland's glib statements to the contrary, there 32/ See Cleveland Br. at 79-81.
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was no "prior' tribunal" that rendered a decision, there was no "prior valid final judgment on the merits," and the issues now u
raised by OE vere not "actually litigated and necessary to the 1
outcome of the first action." I.i short, Cleveland's collateral estoppel argument is entirely contrived. Under no circumstances
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could one conclude that the operating license antitrust inquiry
' constituted the type of prior proceeding to which one would attach preclusive effects.
VI. NEITHER EQUITABLE CONSIDERATIONS NOR THE DOCTRINE OF LACHES PRECLUDES ADJUDICATION OF OE'S LICENSE AMENDMENT APPLICATION All commenting parties raise issues associated with what could be viewed as equitable considerations or laches. Clyde as-serts that susponsion of the antitrust license conditions "fore-closes an assured wholesale power supply."1E/ We are told that Clyde relied upon the presence of thir Juaranteed source and that this was one of the reasons Clyde elected to establish a munici-pal electric system. AMP-O cites to the Cleveland Brief on lach-es and.also describes at some length the "undue prejudice" alleg-edly resulting to AMP-O from OE's "much delayed filing for relief be e."ES! Evidence of the "undue prejudice" arises from AMP-O's reliance oa the antitrust license conditions in undertaking ac-tivities like the proposed purchase of a 200 mv coal-fired plant 11/ See Clyde Br. at 7; see also id. at 2-6.
14/ See AMP-O Br. at 13-15.
- es . .o nea'/ .Marietta, Ohio. Finally, Cleveland sets forth a legal argu-ment centered around the theory of.laches.2E/ Cleveland asserts that it has made significant financial commitments in purchasing power from alternative suppliers and that it has relied upon the antitrust conditions in making these commitments.
The fundamental flaw in all these arguments is that the com-menting parties assume that, in the absence of the license condi-tions, OE would be unwilling to deal with them. This assumption is wholly unsupported. OE is not asking the Commission for au-thority not to sell wholesale power, or not to transmit power from a generating plant in Marietta to AMP-O, or not to transmit purchased power through its territory to Cleveland. All OE is requesting is that antitrust license conditions no longer appro-priate be suspended.
Indeed, if the conditions are suspended and OE refuses to deal with these entities in ways that violate the antitrust laws
- 't e or the Federal Power Act, the commenting parties have a ready for.tm to air their grievances either before the Federal Energy Regulatory Commission or in federal district court. It is simply not sufficient for the commenting parties to assert that, if the antitrust license conditions are suspended, OE will in the future violate the law.
11/ See Cleveland Br. at 82-86.
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In addition, whatever action the commenting parties took in reliance on the license conditions, they did so with full knowl-edge that those conditions were attached to a nuclear power license and could be revoked or suspended for a variety of rea-sons. For example, the NRC may not have granted Perry an operat-ing license, in which case the conditions would have terminated.
Even after grant of the license, the NRC retains authority to re-voke the license at any time. Moreover, given the clear Appeal Board language that the Director of Nuclear Reactor Regulation retains authority to modify these specific antitrust conditions, the commenting parties were on notice from the start that the an-titrust conditions might be revoked, modified or suspended.
Whatever reliance was made by the commenting parties was made at their own risk.
Finally, it is untrue as the commenting parties assert that OE has un.reoJonably del.ayed in filing its amendment application.
The NRC did not issue the full-power oparating license for Perry until the fall of 1986. Judicial review of that license was not ccmpleted until the spring of 1987. Perry was not placed into commercial operation unt.!1 November 1987. Given this chronology of events, OE's filing in September 1987 certainly does not con-stitute unreasonable delay. W;ile it is true, as Cleveland notes, that the cost of Perry was escalating throughout the 1980's, OE's rpplication is based on the final cost of Perry and not some interim catimate. Had OE filed earlier using projected
numbers, no doubt' Cleveland would have objected to the use of cost estimates. In any event, OE cannot be faulted for waiting until-the final numbers were available.EE/
For all these reasons, claims that the amendment application should be rejected on grounds of laches or equitable considera-tions are misplaced. OE has not unreasonably delayed in filing the amendmeit application. The commenting parties unjustifiably assume that, in the absence of license conditions, OE will vio-late the law. And if, as OE believes, the NRC lacks jurisdiction to continue imposing these conditions, then the conditions must as a matter of law be suspended regardless of the impact to the commenting parties.
VII. THE CHANGED CIRCUMSTANCES IDENTIFIED BY OE REQUIRE SUSPENSION OF THE ANTITRUST LICENSE CONDITIONS Putting aside the procedural issues raised by Cleveland, AMP-O and Clyde, the commenting parties raise very few issues di-rectly addressing the substance of OE's application: that the change in the relative cost of nuclear power, from an anticipated low cost to an actual high cost, is a sufficient basis for sus-pending the antitrust license conditions.E2# Those matters they 21/ In addition, OE had a legitimate interest in waiting until all licensing action for Perry was completed, so that the pendency of this amendment application would not unduly com-plicate or delay the licensing of Perry.
17/ In its application, OE also identified as significant changes the cancellation and delay of large nortions of the
.CAPCO nuclear program (OE Appl. at 72-73) and the termina-tion of the CAPCO pool (OE Appl. at 73-76).
do address relating to this issue are either factually or legally incorrect or are particularly garbled and difficult to compre-hend. Each party's substantive comments are addressed separately below.
A. Clyde's Substantive Comments
- 1. Clyde argues that suspension of the antitrust ,ondi-tions is unwarranted and would create a dangerous precedent.38/ -
While Clyde acknowledges that there "may well be circumstances when reopening the terms of a license is necessary or desirable,"
Clyde argues that to do so for "changed economic conditions" is inappropriate and might well "invit(e) a flood of filings."2EI Apparently, the basis for this conclusion is Clyde's view that the conditions were imposed not only because of "prospective and optimistic projections about the economics of nuclear power," but also "because of a retrospective history of anticompetitive deal-ings."SS/ To be sure, it was necessary during the Perry proceed-ing for the non-applicant parties to escablish anticompetitive behavior by the applicants. But, it also was necessary to show that licensing Perry would "crcate or maint&in" such an an-ticompetitive situation. This crucial link was essentially as-sumed by all parties because of the recognized low cost of 38/
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See Clyde Br. at i-9.
39/ Id. at 8.
40/ Id.
1
.. i nuclear power. Indeed, if as OE asserts the-change in the cost of nuclear power is sufficient-to remove this key link in the NRC's statutory mandate, then as Justice Cardozo wrote in United States v. Swift & Co. -- and cited by Clyde -- the changes "are so important" as to require a change in the license conditions.
- 2. Clyde also asserts that OE's "claims of economic woe" may be unjustified.S1/ The only basis for this allegation is that, during a meeting with Clyde, OE representatives noted that OE's "electric rate fuel component" was the lowest in Ohio.12/
There is, of course, nothing inconsistent with a low fuel cost component and a high cost nuclear plant driven by high capital costs. Moreover, Clyde seems to imply that OE's economic evalua-tion of nuclear power was performed in a vacuum, without regard to cost changes affecting alternatives. This is not so. The basic comparison in the OE application was between nuclear and coal back in 1976 and today. That comparison directly considers the impacts on other alternatives from change during this period.
- 3. Clyde also makes the remarkable argument that, if nuclear power is expensive, then OE need not worry about the license conditions because market conditions will be such that no entities will seek to take advantage of the license condi-tions.AE# While one would have assumed that antitrust license 41/ Id. at 9-10.
42/ Id. at 10.
43/ Id. at 11.
L g ,g-,.-, . ,
conditions attached to a nuclear plant operating license would have something to do with the nuclear plant, in fact that is not the case. Today, entities who have espressed no interest in nuclear power still request interconnett.cas, wheeling and other services that are not affected by the high cost of nuclear power.
It is for this very reason that the nuclear license, rather than being a competitive benefit, is a competitive disadvantage.
- 4. Finally, Clyde argues that OE may have contributed to the high cost of Perry and should not be rewarded for such mis-management.SSI While Clyde cites to the findings by the Public Utilities Commission of Ohio ("PUCO"), which currently are on ap-peal, it does not cite to two separate findings by the Pennsylvania Public Utility Commission that there was no misman-agement or imprudently incurred costs at Perry. Moreover, even if the costs disallcwed by the PUCO were not considered, the cost of power from Perry would still be greater than a current coal plant.1EI 44/ Id. at 12.
15/ The OE Appl. shot:s that a current coal plant costs one-half what Perry costs. A 15 percent reduction in the capital cost of Perry would not significe.ntly change that compari-son.
f ,, v B.' TAMP-O's Substantive Comments
- 1. AMP-O argues that Congress did not make the economic superiority of nuclear power "a condition precedent to the NRC's exercise of its [ antitrust] licensing authority."$5/ This is followed by an extended legal analysis designed to demonstrate that an administrative agency may not modify statutory provi-sions.S ! OE does not quarrel with AMP-O's statement that, as a general principle of law, administrative agencies may not expand upon their statutory mandate. That, however, is not the issue raised by OE's amendment application. That application seeks suspension of the license conditions because current circumstane-es are such that the statutory basis for imposing the conditions that activities under the license "would create or maintain" a situation inconsistent with the antitrust laws -- are no longer met. Thus, rather than have the NRC expand or modify its statu-tory mandate, the OE application merely seeks to have NRC enforce or obey the explicit directions of Congress.
As to the central issue, whether the high cost of nuclear power is such that construction and operation of a nuclear plant cannot "create or maintain" a situation inconsistent with the an-titrust laws, AMP-O is entirely mute. It offers no basis for disputing or contesting OE's analysis that the perceived low cost 46/ See AMP-O Br. at 5-6.
47/ Id. at 6-9.
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of~ nuclear power was the driving reason for Congress' decision to impose antitrust review on the licensing of nuclear power. Given the "create or maintain" language, OE cannot imagine anyone reaching a different conclusion.
- 2. While AMP-O broadly asserts that OE's "factual asser-tions are inaccurate," many of the claimed inaccuracies are acknowledged'by AMP-O to be "not especially relevant here."SE/
The one inaccuracy alleged by AMP-O to be relevant is more an ar-gument that-OE's power sales to AMP-O are not "forced" and do not require OE's retail customers to subsidize such sales.SE/ While this claim too seems to be of marginal relevance, the fact is that the AMP-O power contract does force OE's retail customers to subsidize the wholesale customers. Nonetheless, the sales con-tract was better than nothing, since in its absence the wholesale subsidy would have been even greater.EE/
18/ See AMP-O Br. at 15-16 and n.9.
19/ Id. at 16-17.
10/ As explained in the text below, the subsidy arises because OE had an obligation to plan for the needs of its wholesale customers. The ability of those entities to choose when and how much power they take allows them to shift to the retail customers some of the generation costs that properly should be placed on the wholesale customers. If OE had not accept-ed the power sales contract, the effect would have been to shift all of the generation and planning costs from the wholesale customers to the retail customers. This would have increased the subsidy even further. Thus, the power sales contract was the best of a bad situation. See also OE Appl. at 58 & n.123 (description of subsidy and reference to retail rate case before PUCO).
pc e c.-
a q 'The-AMP-Ofsituation.is different'than the sale to PEPCO, cited by AMP-0, bacause in the case of the wholesale customers, OE had a public utility responsibility to provide service,.if re- ;
quested. This public utility responsibility required OE to plan for and construct generation. The cost of that generation should be fairly' allocated to all OE potential customers, both retail and wholesale. However, through the license conditions, AMP-O can distort such planning by choosing at its option when it will or will not purchase power from 05. By contrast, OE has no pub-lic utility responsibility to provide service to PEPCO or its
- customers. -Therefore, it did'not plan for or construct geneca-tion to serve PEPCO. As a result of unforeseen circumstances, 02 has additional capacity that it was able to sell PEPCO. The key difference is, of course, that there was no OE obligation to plan for PEPCO while there was such an obligation to plan for AMP-O's-
' customers.
- 3. AMP-0, like Clyde, alleges that "a substantial portion of the Perry costs have been found (by the PUCO) to be a direct result of management imprudence."E1! While AMP-U chastizes OE for not' alerting the Commission to an as-then unissued PUCO 51/ See AMP-O Br. at 18. The parties' characterization of the PUCO decision is not entirely accurate. A very large part of the PUCO's proposed disallowance is not based on any al-i.
- leged management imprudence. Rather, with respect to the costs associated with General Electric's so-called "new loads", the PUCO decided, as a matter of policy, that $263.6 million of deferral costs are not properly included in the reasonable original cost of Perry.
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J W decision,ES! AMP-O mysteriously fails-to inform the agency of the two contrary decisions in Pennsylvania. In any event, it is a gross'misstatment to claim that the PUCO disallowed a "substan-tial" portion of the Perry costs. And, as noted in Section VII.A.4 above, the PUCO decision in no way alters OE's argument that the high cost of Perry (even if one ignores the disallowed costs)'is a sufficient basis for suspending the antitrust license conditions.
- 4. AMP-O's final argument is that the relief sought by OE
-- suspension of the antitrust license conditions -- is unworkable.EE# The concern expressed by AMP-O is that ever-changing economic conditions may result in suspension, reinstitution and suspension again of the conditions. AMP-O states that, in an industry like the electric utility industry where long lead times are required, this on-again, off-again na-ture of the conditions would be highly disruptive. OE finds it somewhat ironic that AMP-O complains about such pltnning dis-ruptions, when its very conduct of choosing when and how to pur-chase power from OE creates similar planning problems for OE.54/ --
52/ Id. at n.12, 53/ Id. at 19-21.
14/ See, for example, the FERC decison in Ohio Edison Co., 43 FERC 1 61,316 (May 26, 1988) (characterizing AMP-O power supply contract as giving AMP-O the right to decide how much power, up to 100 percent of its requirements, it will take from OE).
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'The. complete. answer to.the AMP-O claim is that AMP-O surely overstates the variability of the license conditions under OE's proposal. The cost of Perry is today known. It is so much greater than a coal plant, that the changes in economic condi-tions required to-make nuclear once again a low cost alternative
)
are so great as not to occur very frequently. If.OE is success-ful in its application, the prudent course would be for AMP-O to plan as if the conditions may never reattach.EE/ If conditions change substantially, and Perry does provide OE with a competi-tive advantage, the AMP-O planning assumption, .like all planning assumptions, can be revised. Thus, under the.OE proposal there is no need, as AMP-O suggests, for the NRC to be involved in annual reassessments of the relative cost of nuclear power.
C. Cleveland's Substantive Comments The essence of Cleveland's argument on the merits is that factors other.than cost were important in Congress' decision to impose antitrust scrutiny on nuclear power plants.EE# Although Cleveland divides its argument into three sections, each part of the analysis merely repeats the central premise. In the first 11/ It is worth repeating once again that suspension of the an-titrust license conditions does not mean that OE will not deal with AMP-O or the individual utilities now being served under contract with AMP-0. To the contrary, there is no reason why, in the absence of the conditions, OE and AMP-0, or the individual utilities being served by AMP-0, cannot enter into long-term arrangements that are mutually satis-factory.
11/ See cenerally Cleveland Br. at 87-117.
-3G-
section, Cleveland argues that Congress was concerned about fac-tors other than the low cost of nuclear power. In the second section, Cleveland argues that NRC precedent also has considered factors other than the low cost of nuclear power. And in its third section, Cleveland argues that the Licensing and Appeal Boards considered factors other than the low cost of nuclear power.
Before addressing the specific claims made by cleveland, two significant points should be noted. First, in establishing a re-gime of antitrust review, Congress uniquely tied such review to nuclear plant licensing. Such review is not required for the construction of large coal-fired or hydroelectric facilities. If Cleveland is correct that concerns about construction of large-scale generation facilities (regardless of cost), or coordination services, or transmission systems were also relevant, Congress should not have limited antitrust review merely to nuclear plants. What is unique about nuclear power was the expectation that it would be particularly low cost.E2/ To accept Cleveland's argument requires one to assume that Congress irrationally chose nuclear power for antitrust review while ignoring equally 12/ Cleveland does quote extensively from the testimony o( AEP's Philip Sporn to show that not everyone believed nuclear would be low cost. See Cleveland Br. at 91-94. Despite Mr.
Sporn's testimony, the fact is that all the congressional reports consistently refer to an expectation that nuclear power would be low cost. See, e.o., OE Appl. at 7-12.
Thus, it appears that Mr. Sporn's prognoses were not accept-ed by Congress.
.. s. ..:
applicable concerns arising from the construction of other large generating facilities. There simply is no basis for such an as-sumption, l Second, the Cleveland position defies all logic and readily apparent economic principles. Consider the following statement in the Cleveland Brief: EE/
s (Clongress recognized that in view of the large scale of a nuclear facility, and the associated transmission facilities and coordination ser-vices, operation of the facility by a utility with a dominant role in generation and transmis-sion of electricity in a market could enhance the utility's market pcwer. Therefore, Congress intended the NRC to impose antitrust conditions reoardless of the cost of the nuclear power to ensure that neighboring utilities have access to the transmission facilities, and the associated l coordination and wheeling services, which accompanied the nuclear plant. (Emphasis in l original.)
If the nuclear plant is high cost, the large scale of the facility, the associated transmission lines, and the coordination services do nothing to alter the fact that the plant is high cost. When it was assumed that the plant would be low cost, these ancillary facilities and services would have allowed the plant owner to exploit the low cost of the plant. But if the plant is high cost, no amount of ancillary facilities or services can change that fact.
58/ Cleveland Br. at 90.
.- =
When Cleveland argues that the cost of the nuclear plant is irrelevant -- that Congress intended the NRC to impose antitrust conditions "regardless" of cost -- it totally reads out of the statute the "create or maintain" language. If that part of the statute is_to have any meaning, then the relative cost of nuclear power must be relevant. Indeed, until OE read tne Cleveland com-ments, it did not believe that anyone contested this point.
Certainly, the Department of Justice ("DOJ") never believed that cost was irrelevant. As noted in the OE application, DOJ advised the NRC that no antitrust hearing was necessary for the
' Davis-Besse 1 plant when "(i]t appear (ed] that the estimated cost of producing power at the (proposed] plant (would] be about the same as the applicant's average system costs and higher than the estimated production costs of at least one of the similar-sized fossil-fuel plants being constructed by CAPCO members."EE! Simi-larly, the Licensing and Appeal Board decisions in the Perry pro-ceeding contain numerous references to the anticipated low cost of nuclear power.NS! It is thus apparent to OE that the Cleveland argument lacks certain basic indicia of credibility.
It should be approached with great caution.
In an attempt to obfuscate the issue, Cleveland quotes from the Joint Committee Report on the broad scope of the types of 19/ Quoted in OE Appl. at 4-2.
60/ See, e.Q., OE Appl. at 29-32.
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. . m activit'les under the license which need to be considered.51/
This material is wholly irrelevant. OE is not today arguing over the scope of activities under the license covered by Section 105(c). That nexus argument was raised and lost by OE in the 1970's. The issue today is whether those activities (however broadly defined) can "create or maintain" a situation inconsis-
-tent with the antitrust laws given the high cost of nuclear power. Cleveland's quotations from the Joint Committee Report do not address this matter.
Cleveland then attempts to turn the issue upside down and argues that "an increase in nuclear costs exacerbates the an-ticompetitive situation to an even areater extent."$2/ Appar-ently, the basis for this unique claim is that if OE's rates rise because of Perry, anticompetitive practices will force competing utilities to buy this more expensive power. There is not a sin-gle shred of evidence that Cleveland can point to which would in-dicate that this concern-was in any way of significance to Con-gress when it passed this legislation. In fact, the legislative history shows that i t was Congress' concern over the low cost of nuclear power, not high cost, which prompted the legislation.
This argument is just another example of the over-reaching in which Cleveland engages.
11/ See Cleveland Br. at 90-91.
62/ Id. at 98 (emphasis in original).
. . ;o Cleveland's selected quotations from, and analysis of, prior NRC precedent is similarly unreliable,55! and should be compared to the analysis in OE's application.5A! Suffice it to say that the Cleveland discussion contains much which is not relevant, nu-merous leaps of faith from the cited references to the conclu-sions drawn, and a generally distorted view of the applicable case law. For example, in discussing the Waterford proceeding, Cleveland quotes from a-licensing board decision which starts with the observation that the "(a]pplicant has or is attempting to acquire a monopoly of laroe low cost electrical generating units in the relevant geographic market,"EE/ and concludes that the licensing board opinion recognized that "the increase in mar-ket power which would accompany opc?ation of the nuclear facility would occur reoardless of whether the nuclear power was low cost
- * * "55#
The conclusion drawn by Cleveland is wholly un-justified.
Finally, Cleveland attempts to construct a similar argument that the Licensing and Appeal Boards in the Perry case also did not view the low cost of nuclear power as essential.52/ Rather 62/ id. at 99-110.
si/ See OE Appl. at 15-26.
65/ Cleveland Br. at 102 (emphasis added).
f6/ Id. (emphasis in original).
g2/ Id. at 110-17.
i
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'8 0 than repeat our previous arguments, one should review the rele-vant portions of the OE application.EE/ In short, the entire Cleveland argument on the significance of the change in the rela-tive cost of nuclear power from low cost to high cost is shrouded in a barrag2 of words that either are irrelevant or misstate the applicable principles, The Cleveland position should be re-jected.
VIII. CONCLUSION For the foregoing reasons, and for the reasons set forth in the OE application, the Director of Nuclear Reactor Regulation should suspend the antitrust license conditions attached to the Perry operating license until such time as there is a factual basis for imposing them.
Respectfully submitted,
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Gera1d Charnof(j/
Robert E. Zahler Deborah B. Charnoff Margaret S. Spencer SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.
Washington, D.C. 20037 Tel: (202) 663-8000 Dated: July 5, 1988 18/ OE Appl. at 29-32; see also id, at 33-47.
e, .."
.if:t G33 l o
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OHIO EDISON COMPANY )
76 South Main Street )
Akron, Ohio 44308, )
)
Plaintiff, )
- v. ) Civil Action NoSS-1695
)
L ANDO W. ZECH, JR. , THOMAS M. )
ROBERTS, KENNETH M. CARR, )
KENNETH C. ROCERS,' COMMISSIONERS, )
UNITED STATES NUCLEAR RE-GULATORY )
COMMISSION )
Washington, D.C. 20555, )
)
Defendant 9. )
)
s I
- VERIFIED COMPLAINT FOR DECLARATORY JUDGMENT Nature of the Case
- 1. Plaintiff Ohio Edison Company seeks a determination by this court of an antitrust issue. That antitrust issue is the continued imposition by the Defendants, the Nuclear Regulatory Commission (NRC), of eleven antitrust license conditions cur-rently constraining Plaintiff's business activities.
- 2. This Court has jurisdiction over this case pursuant to its g?neral federal jurisdiction (28 U.S.C. S 1331), as well as its jurisdiction over proceedings arising under "any Act of Con-gress regulating commerce or protecting trade and commerce
... v=>-
4 against restraint and monopolies" (28 U.S.C. S 1337). This mat-ter is ripe for the Court's consideration because of the NRC's inability to fairly hear the case due to an extraordinary situa-tion arising from the congressional threat to legislatively over-1 rule the NRC should it grant Ohio Edison's application.
Parties
- 3. Plaintiff, Ohio Edison Company, is a public utility in-corporated under the laws of the State of Ohio. Its principal place of business is in Akron, Ohio. Ohio Edison is a partial owner of ths Perry nuclear power plant (Perry), which is located approximately 37 miles east of Cleveland, Ohio.
- 4. Defendants Lando W. Zech, Jr. , Thomas M. Roberts, Kenneth M. Carr, and Kenneth C. Rogers are Commissioners of the United States Nuclear Regulatory Commission (NRC). Each of the defendants is sued in his official capacity. As used herein, the NRC also refers to those individuals acting pursuant to the Com-missioners' authority.
Jurisdiction and Venue
- 5. The action arises under the Atomic Energy Act, Section ;
105 (42 U.S.C. S 2135).
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9
- 6. This Cotrt has subject matter jurisdiction over this action pursuant to 28 U.S.C. SS 1331, 1337, and 1361.
- 7. The Court is authorized to issue appropriate declarato-ry relief against Defendants under 28 U.S.C. SS 2201 and 2202.
An actual and substantial controversy exists between Ohio Edison and the NRC. This matter should not be resolved by the NRC. And currently, the NRC continues to impose on Ohio Edison the re-strictive business conditions which Ohio Edison believes are un-lawful. In short, the parties have adverse legal interests of sufficient immediacy and reality to warrant issuance of a declar-atory judgment.
- 8. Venue is proper under 28 U.S.C. SS 1391(b) and 1391(e).
Statement of Facts
- 9. In 1977, the NRC granted the construction permit for the Perry nuclear power plant. At that time, there was a l universally-held anticipation that nuclear power would place the owner of a nuclear power plant in an economically advantageous position in the marketplace as a supplier of electricity. Sec-tion 105(c) of the Atomic Energy Act (42 U.S.C. 5 2135(c)) autho-
-rizes the NRC to grant licenses subject to restrictive conditions in order to avoid the likelihood of activities under the license creating or maintaining a situation inconsistent with the antitrust laws.
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- 10. Consequently, pursuant to Section 105 of the Atomic En-ergy Act (42 U.S.C. S 2135), the NRC held a hearing on the anti-trust aspects of licensing the Perry nuclear power plant. Fol-loving that. hearing, the NRC impcsed eleven conditions limiting the business activities of Perry's owners, including Ohio Edison, in order to prevent creating or maintaining a situation inconsis-tent with the antitrust laws.
- 11. The expectation regarding the competitive advantage of large nuclear power plants that would generate power at lower cost was a necessary precondition to the NRC's imposition of the Perry antitrust license conditions.
- 12. During the 1980's, trends'in the general economy had a large and adverse impact on the costs of nuclear power plants, including Perry. These trends included high interest rates and high inflation.
- 13. In addition, during the 1980's, nuclear power plants, .
e including Perry, were faced with unanticipated, extensive, frequently-changing and costly regulatory requirements imposed by the federal government.
- 14. Because the actual economics of nuclear power as re-lated to the Perry plant proved to be different from those antic-ipated, Ohio Edison did not achieve and does not possess the 4-
- h m- y __
T,
-a corpetitive advantage from its ownership interest in the Perry nuclear power plant which the restrictive license conditions were intended to mitigate.
- 15. Because the Perry nuclear power plant is not the eco-nemically_ superior source of energy that it was expected to be, the suspension of the restrictive conditions would not cause the licensing of the Perry facility to create or maintain a situation inconsistent with the antitrust laws.
- 16. Consequently, on September 18, 1987, Ohio Edison applied to the NRC to suspend the restrictive conditions.
- 17. On March 29, 1988, while Ohio Edison's application was pending before the NRC, Senator Howard M. Metzenbaum (D.-Ohio),
the Chairman of the Subcommittee on Energy Regulation and Conser-vation of the Senate Committee on Energy and Natural Resources, proposed Amendment No. 1913 to Senate Bill No. 2097, the proposed Uranium Revitalization, Tailings Reclamation and Enrichment Act.
Amendment No. 1913 provided in its entirety that "The Nuclear Regulatory Commission shall not suspend or modify the application of any antitrust provision contained in the Perry operating license No. NPF-SS, as such provision applies to any licensee of the Perry Nuclear Powerplant, Unit 1." 134 Cong Rec. S 3257 (daily ed. March 29, 1988) (copy attached as Exhibit A; videotape of proceedings attached as Exhibit B).
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- 18. After introducing Amendment No. 1913, Senator Metzenbaum stated in part:
The costs of building and operating the Perry nuclear powerplant have risen far beyond anything its owners ever anticipated. Nuclear power has not turned out to be the low cost alternative that they thought it would be.
Id. at S 3257
- 19. During the colloquy that followed Senator Metzenbaum's proposal of Amendment No. 1913, Senator Wendell H. Ford (D.-Ky.),
a member of the Senate Commit:ee on Energy and Natural Resources, expressed his belief that the Senate should not consider the pro-posed amendment until after the NRC had concluded its considera-tion of Ohio Edison's application. .. Senator Ford stated:
If the official retsult is not as the Senator from Ohio wants under this amendment, then he can come back at some later date and say to his people "This is what I am going to do if the NRC does not rule as we want them to under this particular amendment." . . . .
But I think we have an opportunity here to not do this subject to NRC's making the kind of judgment with the pressures being applied by the distinguished Senator from Ohio. That pressure is out there. It can be done. If NRC does not do i;, then he has a right to come back and say "They did not protect my people and I want to do some-thing about it."
Id. at S 3258.
- 20. Senator J. Bennett Johnston (D.-La.), the Chairman of the Senate Committee on Energy and Natural Resources, agreed that the Senate should delay action on the amendment until after the
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NRC had concluded its consideration of Ohio Edison's application.
Eenator Johnston stated:
I think there is a rea) desit e , m ommodate the Senator from Ohio on this committs . He is a good friend, and he is a valued member the com-mittee.
But two of my colleagues now have spoken rather strongly on this, and the NRt. has indicated that thef have no intention of approving this ap-plication.
With this record having been made and with our strong intanti'on stated to help the Senator just in case the action of NRC is not successful, I wonder if the Senator would consider withholding the amendment on this bill with the understanding that the committee will help him later on in case the NRC does not.
L$.
- 21. At various points during phe colloquy concerning Amend-ment No. 1913, several' Senators indicated that while Plaintiff's application was pending before the NRC, Congressional and NRC staffs apparently communicated with one another regarding the NRC's intent to deny the application.
- 22. During the colloquy concerning Amendment No. 1913, Sen-ator Metzenbaum stated:
I have a hunch that somehow (the NRC isj monitoring what is going on on the floor here since it is not a private meeting since it is a matter concerning them and certainly the Congressional Record will speak to the de-bate, and I am saying here and now that if we can get confirmation whether it is a final decision or not, that they do not intend to approve the application, I will join with the managers of the bill in urging that
, ,- , ~ . . , ,,
F 4
(Amendment No. 1913] be deleted in confer-ence.
Id. at S 3259.
- 23. Senator Metzenbaum later stated that he would "withdraw the amendment with the understanding that (he) will be protected to offer the amendment at a later point." Id.
CLAIM
- 24. The allegations of paragraphs 1 through 23 are incorpo-rated herein and realleged by reference.
- 25. As a result of the congressional pressure related to the threat to legislatively overrule the NRC should it grant Ohio Edison's application, the NRC is unable to fairly adjudicate Cio Edison's application. In fact, the appearance alone of the NRC's inability to impartially consider.the application is a denial of Plaintiff's right to due process.
- 26. Accordingly, while this case ordinarily would be decid-ed in the first instance by the NRC, the extraordinary circum-stances that have occurred compel consideration of this matter by this Court.
27 Because the anticipated economic advantages of nuclear power did not materialize, activities under Ohio Edison's
., *_ -m . . ,. _ , p 9 ..
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a ownership license for the Perry nuclear power plant could not "create or maintain a situation inconsistent with the antitrust laws," even if unrestricted by the eleven antitrust license con-ditions imposed by t.he NRC in 1977.
- 28. Consequently, Plaintiff Ohio Edison is entitled to the suspension of the restrictive conditions imposed on-its license to own the Perry nuclear power plant.
WHEREFORE, Plaintiff prays that this court:
- 1. Issue an order suspending the restrictive conditions to the Perry license as the conditions apply to Plaintiff, or, alternatively, issue an order directing the NRC to suspend the restrictive conditicns to the Perry license as the conditions apply to Plaintiff.
- 2. Provide such further relief as the Court deems reason-able, just, and proper.
1
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VERIFICATION UNDER PENALTY OF LAW I, Russeli J. Spetrino, Plaintiff's Executive Vice President and General Counsel, verify under penalty of perjury that the foregoing is true and correct. Executed on m u, I f IE_ .
/
.ils .Y/,$~h RussellJ.Spetr/no'/ ~
Respectfully submitted, SHAW, PITTMAN, POTTS & TROWBRIDGE n
Dated: ma w>d82F '8- . uL G4rald 'Chartio'f f 7 Bhr No 51276
/
Gerald Charnoff Robert E. Zahler Deborah B. Bauser Margaret S. Spencer 2300 N Street, N.W.
Washington, D.C. 20037 (202) 663-8000
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Marrh JS,1988 CONGRESSIONAL RECORD-SENATE S 3257 ness for the Corporation. The amend-ment also establishes a fund within there TheisPRESIDING OFFIC./R.
no further debate, If agreed the ques- in order to obtair. their ocarat.
ing licerue.
the Corporation into which D&D tion is on agieeing to the amendment.
costs, recovered in the Corporation's The amendment (No. 1912) was competition These conditions have maintained prices and charges, are to be deposited. agreed to. in the sale of elettrtetty' At this point, there is a great deal of Mr. METZENB AUM. Mr. President, forcing Ohio Edison and the other un&ta.nty concerning the ultimate I move to reconsider the vote by which utilities which ow
- erry to keep rates costs of D&D. the amendment was agreed to, low in order to retain municipal power systems s.s customers.
Applicable environmental standards Mr. McCLURE. I move to lay that are not entirely clear, motion on the table. Ohio Edison. however, hu applied to The timing of D&D is not certain. The motion to lay on the table wa.s the Nuclear Regulatory Commission The projected cost of particular de. agreed to. to be relieved of these antitrust condi.
contamination and decommissioning tions.
Mr. METZENBAUM. Mr. President, actions can be projected, but not with I thank the managers of the bill. If it were successful t e other Perry precision. I ask unanimous consent that the owners would presumably 'ollow suit-Furthermore, the process of recover, pending amendment be temporarily and Tohdo Edison ~
like Cleveland Electric laminating Ing D&D costs is not discrete. In the tald aside, in order that the Senator future, the Enrichment Corporation frrm Ohio may offer an amendment That's why the c1ty of Cleveiand ha.s will be making capital invu ment in which I understand will be accepted. filed a motion opposing the Ohio new plants. At the appropriate time The PRESIDINO OFFICER. Is Edison application pending before the the D&D ccets associated with these there objection? The Chair hears NRC. Cleveland's municipal power plants will have to be considered along none, and it is so ordered.
51th the D&D costs of property ini. auryowat no. s eis s\ })y stem d to re ults hi o d Llally transferred to the Corporation. ensue if the NRC accedes to Ohio In short, the process of funding the (Purpose: To prohibit the suspension or Edison's request mod:fication of the appilettion of anti.
D&D costs of the Corporation's prop. trust provtstons appikable to any licensee Such a decision by the NRC would erty will ne essarily be an iterative of the Perry Nuclear Powerplant. OH) essentially hold all ratepayers in one. The estimate of D&D costs that Mr. METZINBAUM. Mr. President, northern Ohio captive to the rising the Corporation seeks to recover wiu I send an amendment to the dest sad rates of a few utilities that own the have to be periodically recalculated as ask for its irnmediate cor. sideration. Perry nuclear plant, which has now provided in the amendment. At any The PRESIDING Ol'FICER. The turned out to be very expensive. -
given point, the estimated unfunded amendment will be stated. The costs of building and operating cost of D&D will constitute a prospec. Th? bill clerk read as follows: the Perry nuclear powerplant have t!ve cost of doing business to be recov. The Senator from Ohio f M r. Mm. risen far beyond anything its owners ered from customers-including the 28Anl proposes an smendment numbered ever anticipated. Nuclear power ha.s Depsttment of Energy-in prices. 1813- - not turned out to be the low cost alter.
Nevertheless, certain rules will Mr. METZENBAUM. Mr. President, native that they thought it would be.
apply. Section 1508 of S. 2097 provides I ast unanimous consent that reading Now those owners want to escape in effect that prices to corarnercial cus. of the amendment be dispensed with. the consequences of an unfortunate tomers shall be set at market levels, The PRESfDING OFFICER. With. business decision-a bad investment.
with the goal of recovering costs, out objection, it is so ordered. They want to transfer their burden whereas prices to the Department of The arr.endment is as follows: from the shareholders to the ratepay.
Energy shall be set strictly on the At the r;.propriate place. insert the fol. ers, by getting out from under the basis of cost recovery. This distinction lowing nea section; original terms of their license.
La preserved with respect to the recov. Ssc. Cl Puutv NocuAm PowntruwT AirTI. It is quite simply unfalt to deny mu.
ery of D&D costs in the Corporation's mn Paomt oss.-The Nuclear Regula. nlcipal power systerns the option of prices- tory Commluton shalt not suspend er supplying low cost, alternative power In addition. the amendment provides vulon modify the application contained of operating in the Perry any antitrust 11 pro. to their customers. And the fact is, that, sith respect to property used in cense No. NPF.58 as such provtsson applies they do provide cheaper power, the production of low. assay separative to artt ticensee of the Perry Nuclear Power. On average. Ohio s municipal power work, the Corporation may only recov. plant, Unit 1. systems provide power which is sub.
er IJ&D costs from comrnercial cus. Mr. METZENBAUM. Mr. President, stantia!!y less expensive than that sold tomers and the Department in propor. I am offering an renendment which by investor.oumed utiltles.
tion to the amount of separative work prohibits the Nuclee.r Regulatory For example, public power custom.
that has been produced for either Commtmafon from lif ting the antitrust ers in Cleveland pay approximately 20 during the life of the property. In the conditions imposed on the utilities percent less than utt11ty customers-ca.se of property used solely in the pro- which are licensed to operate the those served by CEI.
duction of high.sasay separative work. Perry Nuclear Powerplant in Ohio. An1 that gap will only grow as more D&D costs would only be recovered This amendment will protect the of Perry's costs are incorporated into from the Department. This allocation electricity consumers in northern rates.
assigns cost responsibility betwen the Ohlo from urfair rate increases due to In fact, on a statewide basis in Ohio.
two customer classes according to his. the Perry nuclear powerplant. municipal power systems sell power tortcal benefits received-mes.sured in Under the current terms of the that is 20 to 30 percent cheaper than terms of work performed. Perry nuclet plant license, the utili. power sold by mvestor. owned utilities.
Finally, the amendment provides for ties which own Perry are required to Twenty.one cities located in Ohio the Corporation to enter into contract carry power for municipal power sys. Edison's service territory could face for the performance of actual decom. tems (Munts! located within their higher rates if the Ohio Edison re-missioning and decontamination and service territories, quest is approved, includmg Amherst.
for the Corporation to pay the D&D This allows these local power supply Beach City. Brewster. Columbiana, costs for such property out of the fund systerns to shop around for the cheap. Custar. Cuyahoga Falls, Oallon. Oraf-created for such purpose. After decon. est available power, providing competi. ton. Hubbard. Hudson. Lodi. Lucas.
tamination and decommlasioning is tion to the owmers of the Perry plant, Milan. Monroesville, Newton Falls, performed the Corporation conveys thus helpina to keep rates lower. Niles. Oberlin. Prospect. Seville. South the property tolhe Secretary. This requirement to carry power was Vienna. Wadsworth, and Wellington.
Mr. President. I think this is an im. one of seve.al antitrust conditions im. In sum. I believe that the owners of provement of the bill, and we support posed en Perry's owners in 1976. It was Perry must be held to the original it. part of the deal which Perry's owners terrn.s of their license, and should not EXHIBIT A (Page 1 of 3)
S 3258 CONGRESSIONAL RECORD-SENATE March ?1, /SSg be allowed to force ratepayers to First, I do not want any impliestfon shoulder the ecsts of their mistakes, that I approve the result, because I am thing as it related to theeling. Here Mr. President., it is my understand.
bg that this aaendment is amptable not at proves theall certain result. This that desisthis withSenator some going ap-tonow we are abandon saying or reduce to NRC we wheeling to the managers ed the bill. questions that really ought to be titl- or whatever, and it Ls a problem I wish Mr. JOHNSTON. Mr. President, we ga'.ed between parties, some of whern would not have to be made on this bill are withat, with mme ruse.rvadons, to have already made an appileation I yield to my friend and disun.
accept this amendamant it is one of before the NRC to have their rights guished sairman and ask what he those amandments wisere the result is protected in the NRC. We are short. prefers in this particular case because sood but the precedent is nog perucu. circulting that process in which the he has a lot of weight with his respon.
natly good.
people would have the opportunity, in sibility and if his decision is approve it, M r. President. this amendment an open forum, to present their views. then fine.
wound r,rchibet. MRC frum suspending present their case, and seek a resolu* But I think we have an opportunity or moollying anutruet provisions con. tion of it. What we are doing, instead bere to not do this subject to NRC's tained in the operating L6 cense for the of allowing that process to be done in making the kind of Judgment with the Perry Nuclear plant. De anutrust the open processes before the NRC, la pressures being app!!eo by the distin.
prortalosis require invator. owned !!. to step in by legislation and mandate guished Senator from Ohio. That pres, censees to wheel for muturtr=1 ele. tric the nnal ruult. sure is out there. It can be done. If systems. As I said, this very wef1 might be NRC does not do it, then be has a One of the Perry tir*n=*e. OhH what NRC would ulthnstely decide to right to come bach and say,"They did Edison Co., has petitioned NRC to do; but all the parties would have had not protect my people and I want to walve the wheeling requiremant as to their say in court; they would . 49e do something about it."
itself. The company is currently pro. had their opportunity to present the Now, the procedure Is golos to be viding wheeling to its saunicipal cus. issue, ey wo I ha h e eliminated, and I am worried about y the procedure in the future.
N.tomars.
a anWust Ohio Edison wen concems aaseita that based the have had an opportunity to would The PRESIDING OPPICER, The on u.e assuinpuan that melear pow have a reamaamd resoludon of the Senator from I4uisiana.
would be "too cheap to meter," a pre. lashes by the tribunal which we have Mr. JORMON. Mr WesMent, I sumption that has not proven true. Mtablished by law to handle those think there is a real rh. ire to accoca-Ohio Edison and the affected mu. kinds of Lasues. There are some issues modate the Senator firm Ohio on this nicipantaes are currendy in se%iement Lavolved here, committee. He is a scod .rfend. and he negotiatinru; concerning the er.ne, So, to say that Lf we accept the is a valued member et the committee This is sn ongoing contested, adNdi. amendment offered by the disun. But two of my ecileagues now have catory prnreading before a regulatory guished Senator from Ohio, we can spoken rather strongly on this, and agency. Congress occashonally directa well say this is a precedent-I would the NRC has indicated that they have the result of agency deterralnation in certainly wish to say that, but for the no intention of approving this Splica.
noncontested matters. Only rarwly Senator frota Idaho it is not a prece, tion.
does it legislate the d* Man in a con. dent. As a matter of fact, I do not like With this record having been made tested case. Generally, this would only the result. or at least Pam not sure I and with our strong intendon stated occur as the result of a policy initan- like the result. I certainly do not ime to help the Senator ju.st in case the tive that has bad the' full benefits of the process of trying to mandate a action of NRC is not successful. I hearings and comrnittee candderation. result before the parties have had wonder if the Senator would consider Here with this amendment, we court, their opportunity and their day in sithholding the amendrnent on this would be gatuluously u.serfeeing with bill with the understanding that, the l I think it is bad for us to do that, committee will help him later on in agency adjudicadon. Thls ta a matter and I am more than a little bit con. case the NRC does not.
commftted to the NRC. Without ex. cerned about the form of the final res. Mr. METZENBAUM. Might I make
- presalng of any opinion the controversy, why sadon'tto thewemerita let olutest. twe na* I think there are a countersuggestion to my friend who the NRC decide as they are suppose to some questions with respect to wheth. Is a chairman of the committee and
! do? er oc not this is the proper resolation. the ranking member? I would like to The PRESIDING OFFICER (Mr. ask r - ether he would be willing to I
Frankly, NRC, and they we have say the spoken resultto is the OK.Dascuta).
Lucky. The Senator from Ken. accept the amendment between now Where the result La OK and where the and the time the matter gets to the Mr. FORD. Mr. President. I state on conference committee, and I will Senator and the NRC from does Ohio not object, wants that result the Raooms that thLs Senator wul not assume there wil I do not think ve should let the precedent of consider this as a precedent tn making mittee, that I perhaps may be in a po.
his decision as it relater to tbts subject sition to obtain some confirmat4on be amatter this precedent interfere.
in furtherThiscases. should not neatter in the future.
nere. from the NRC as to how they intend fore, we will not object. I have very, very serious reservsuons to dispose of the pending ruatter, and Mr. McCLURE. Mr. President, I find about the procedure here. I agree with if I am concerned and I am frank to my distinguished friend. The distin.
myself in kind of an awtrward positfon gutshed Senator from Louisiana said about say to highly the Senator I am rates escalating concerned, in the here, because frankly, I do not Ifke we are concerned about the precedent. northern Ohio sector. I am concerned the amendment.
I dislike it enough Itoam take notthe certain time ofthat It would be my judgment that this further that there was a commitment the Senate and cause the difficuttles amendment made originally by the powerplant, If the official could result be is notlaidasout thethere.
and I am suggesting that, he take the i that would coene if we contested the Senator from Ohio wanta under this amendment and amendment. We would have to go amendment, then he can come back at cannot get some confirmauon frorn let m i
I through the effort of centesting the some later date and say to his people the NRC.
amendment and taking the time to do '*This is what I am gotng to do if the The Senator just indicated that the so. But I nas troetded taot Just with ti.e NRC does not rule as we want them to NRC hs.s stated to hiro that they do procedent.
under this partleular amendment." not intend to approve the apphcation.
I have beess told that it is quite h at would be one surfestion I Mr. JOliNSTON. Not to rue, but to likely that this samendraent may ae. might have, but we are setting tnto an staff.
compumh what 3ERC preenbty would area here that we have argued a long Mr. METZENBAUM. To staff. Tbat here dame la the amamm of the time and the dtstinguished Senstor is even better. and Ihat being the case, semesadment.
about two thansa. But I ama osacerned from Idaho and I spent steepless perhaps I can get them to confirm it rights here trying to wert out some. to a Senator as well, that '>etng me.
EXHIBIT A (Page 2 of 3)
.,5 .
. March JS, IS88 CONGRESSIONAL RECORD-SENATE S 3259
' and under those circumstances wonder if we cannot work it out, I sometime tomorrow to perhaps run a tonight and would start afresh on the check.
!! the Senator will accept it and see Mr. MI.TZENBAUM. That is all Brsdley. Mr. EVANS EvansMr, amendment President hastomorrow t $
if I can get that confirmation. rtsht. Domenfel amendment been tald down$
Mr. JOHNSTON. Mr. President. I Under those circumstances. I am cer. Mr. McCLURE. Amendment No
am advised that thin has the status of tainly pleased to be accommodating. 1465 has been laid down.
a strong rumor and '. t an act tal The Sent. tor is trying to accommodate statement. Mr. EVANS. The Senator from me. I will withdraw the amendment Idaho would like to make a brtef Mr. McCLURE. Mr. President. If th with the understanding that I will be speech on the opening of that.
Senator will yield, I guess the t.lajer protected to offer the amendment at a We can lay down the amendment to.
reservation I would have with this sug. later point. night if you wish. We were going to gestion the Senator from Ohio has Mr. McCLURE. I thank the Senator. wait until some of the debate had oc.
made is that oftentimes when there is Mr. ME'I'2ENBAUM. I thank the curred on behalf of the Domenici action pending in the Congress. par. Senator. amendment or amendment 1465. but it ticularly if it is passed in a committee Mr. PrWdent. I withdraw the does not make very much difference as or in one body of the Congress, an ad. amendmer, .
ministrative agency will suspend any The FrtESIDING OFFICER. The far as laywe are concerned as to when we it down.
further proceedings with respect to amendment ts withdrawn.
(F t applications that are before it. I do NDNT 80 1"' Mr. JOHNSTON. 11 the Senator would yield. I think that, frankly, all r t think that is what the Senator Mr. JOHNSTON. Mr. President, the of the debate could occur on the Brad.
om Ohio is suggesting either. pending amendment, which ta amend. jey. Evans amendment tomorrow and Mr. MEr2ENBAUM. No. Just the ment 1465. puts back into the bin that there are 3 hours3.472222e-5 days <br />8.333333e-4 hours <br />4.960317e-6 weeks <br />1.1415e-6 months <br /> provided on that.
opposite. I am suggesting that $ hey portion dealing with charges for the Mr. McCLURE. Will the Senator move forward with dispatch, use of foreign uranium which were yje}qp Mr. McCLURE. I am not certain taken out of the bill in order to satts!y Mr. JOHNSTON. Yes.
how we best get that accomplished ce. the jurtsdictional objections of the F1 Mr. McCLURE. I am trying to ascer.
cause if we passed an amendment they nance Committee.
raay very well stop proceedings rather What it does is it creates a schedule tain now whether the Senator from than speeding up. of charges for the use of foreign urani. New Mexico also wants to make a Mr. MET 4ENBAUM. I have a hunch um in domestic reactors not for the statement on itThat tonight that somehow they are monitoring importation but for the use of the for, aHMr. WANS.
right' would be perfectly what is going on on the noor here h" th "
since it is not a private meeting since of o eign uttalum Would the Senator from Loulalana it is a matter concerning them and cer. excess of 37% percent. In other words, like us to lay down our amendmeat at tamly the Cowcarssione. Recoan wtll the first 37% percent of enriched ura. this Mr.time or walt' JOHNSTON, Perhaps if we speak to the debate, and I am saying nium tr.ay be used in reactors without aere and now that Li we can get confir- a charge. and above the 37% percent could ask that you lay it down at the mation, whether it la a final dectslon there is a slirting fee depending upor. end of such debate as we would have or not, that they do not intend to ap- the percentage of foreign uranium to tonight, tomorrow.
so we could start afresh on it prove the application. I will join with beMost used"of the existing contracts for Mr. EVANS. Assuming that the the managers of the billin urging that the use of foreign uranium are grand. debate and action would not be exten.
It be deleted in conference. fathered and the 37%. percent exemp- sive.
Mr. JOHNS TON Mr. President. I tion is vand until 1994 and it is 50 per. Mr. JOHNSTON. Of course, there is think I probably misspoke myself ear- cent thereafter. The charges expire in a time agreement anyway, tier by stating as a fact that we had 2001. It creates rules for what we call Mr. BRADLEY. Will the Senator such confirmation from the NRC. nag. swapping between different lots yield?
Staff advises me that it ts more in of uranium and that is where uranium Mr. JOHNSTON. Yes.
the nature of a judgment and rumors ts foreign owned but may not physical. Mr. BRADLEY. So it would be your rather than confirmation because ty move. So it is a cornplicated system intention to discuss the Domenici indeed in a pending case they simply that ts dealt with under what we call amendment that !s now pending, time will not tell you what they are going flag swapping, would expire on that, and the amend.
- to do. It deletes section 161v of the ment of the Senator frorn Washington They have not told my staff. my Atomic Energy Act which limits en. and the Senator from New Jersey staff has now advised me and they richment of foreign uranium. That is would be laid down and debate on that would not tell even us. We can pretty the provtston I referred to earlier that would occur tomorrow?
I well figure out what they are gotng to requires that we maintain a viable do. Mr. JOHNSTON. Yes, that would be do. I would not want to make the with. mestic uranium mining industry. And our desire, drawal of the amenunent dependent that provision, af course, 161v is Mr. BRADLEY. That is fine, on getting the NRC to say what they presently in litigation. Mr. EVANS. That is fine.
are going to do in a pending case be. So. Mr. Presidet.t. I think that ade- Mr. JOHNSTON. We have sent for cause they will not tell us. quately explains the amendment, the majority leader. If he blesses our Mr. METZENBAUM. Does the man- Mr. President, for the benefit of agreement, we can tell Senators there ager of the bill have any ides as to Senators. I think the following ta a will be no further votes tonight.
when the NRC will be acting? plan that the Senator from Idaho. Mr. Mr. McCLURE. But he hs.s not yet Mr. JOHNSTON. The sitf f does not McCt.cas, and I would like to follow, done so.
know. Senator McCLtnut would like to make Mr. JOHNSTON. That is right: he l Mr. METZENBAUM. In a matter of a brief speech, maybe 10 minutes, on has not yet done so.
this kind would it be within a week. a the pending amendment. Then we I yield the floor.
month, or a year? would like to put the matter over untti M r. McCLURE. Mr. President. I Mr. JOHNSTON. I do not know. tomorrow, subject, of course, to the want to speak very briefly with respect Mr. McCLURE. I wonder if the Sen- majority leader's concurrence, and to the pending amendment and recog-ator from Ohio could accornmodate us perhaps in the meantime lay down the n12e that this Ls only the opening salvo to this extent and that would be to Bradley Evans amendment which ha.s in the longer debate which will occur withdraw the amendment with the a 3. hour time agreement and start when the Evans.Bradley amendment right to offer it again before we con- that in the morning about 9:30. is of fered.
clude the consideration of this bill on U we could do that, that would mean We have in this Nation a uracJum j the floor, and that 'aill give us until we would have not votes on this bill industry that is down for the final
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EXHIBIT A (Page 3 of 3)
o July 5, 1988 UPiTED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR, NUCLEAR REACTOR REGULATION In the Matter of )-
)
OHIO EDISON COMPANY ) Docket No. 50-440A
)
(Perry Nuclear Power Plant, )
Unit 1) )
CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing "Response of Ohio Ediaon Company to Comments on its Antitrust License Amend-ment Application" were served upon the purtles on the attached Service List this 5th day of July, 1988, by deposit in the United States _ mail, first-class, postage prepaid.
Robert E aler N
,,ma ,- e, -~
c- w n- - e ,,
July 5, 1988 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR, NUCLEAR REACTOR REGULATION In th'e Matter of )
)
OHIO EDISON COMPANY ) Docket No. 50-440A
)
(Perry Nuclear Power Plant, )
Unit 1) )
SERVICE LIST
. Joseph Rutberg, Esquire Marilyn G. Zach, Esquire Benjamin H. Vogler, Esquire Director of Law Office of the General Counsel City Hall, Room 106 U.S. Nuclear Regulatory Commission 601 Lakeside Avenue Washington, D.C. 20555 Cleveland, Ohio 44114 Janet Urban, Esquire David R. Straus, Esquire United' States Department of Justice Spiegel & McDiarmid Antitrust Division, Room 9816 JCB 1350 New York Avenue, N.
555 4th Street, N.W. Washington, D.C. 20005 Washington, D.C. 20001 John Bentine, Esquire Gregg D. Ottinger, Esquire Bell & Bentine John P. Coyle, Esquire 33 Sorth Grant Avenue Duncan, Allen and Mitchell Columbus, Ohio 43215 1575 Eye Street, N.W.
Washington, D.C. 20005 Russell J. . ipetrino, Esquire Mr. Nelson E. Summit Ohio Edison Company City Manager 76 South Main Street 222 North Main Street Akron, Ohio 44308 Clyde, Ohio 43410 Secretary Reuben Goldberg, Esquire U.S. Nuclear Regulatory Kenneth M. Albert, Esquire Commission Goldberg, Fieldman & Latham, P.C. Washington, D.C. 20555 1100 Fifteenth Street, N.W. Attention: Chief, Washington, D.C. 20005 Docketing and Service Section
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