ML20204G508
| ML20204G508 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 07/24/1986 |
| From: | Funches J Office of Nuclear Reactor Regulation |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| A, NUDOCS 8608070306 | |
| Download: ML20204G508 (7) | |
Text
f JUL 241986 MEMORANDUM FOR:
Harold R. Denton, Director Office of Nuclear Reactor Regulation FROM:
Jesse L. Funches, Director Planning and Program Analysis Staff, NRR
SUBJECT:
OPERATING LICENSE ANTITRUST ANALYSIS OF THE SOUTH TEXAS PROJECT, UNIT 1 Enclosed for yoursignature is a finding of no significant changes pursuant to the operating license antitrust review of Unit 1 of the South Texas Project.
This finding is based upon an analysis by the antitrust staffs of PPAS and 0GC (after consultation with the Department of Justice), which concludes that a "no significant change" finding is warranted.
The staff analysis is enclosed as background information.
This is an initial finding which will be noticed in the Federal Register, thereby providing the public the opportunity to request a reevaluation of your finding.
If there are no requests for reevaluation, the finding will become final, and the operating license antitrust review of Unit 1 of the South Texas Project will have been completed.
oristual sisuse W JesseFusshes Jesse L. Funches, Director Planning and Program Analysis Staff, NRR
Enclosures:
As stated Distribution -.. _...
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SOUTH TEXAS PROJECT, UNIT 1 OPERATING LICENSE ANTITRUST REVIEW FINDING OF NO SIGNIFICANT CHANGE Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an application for an operating license if the Commission determines that significant changes in the licensee's activities or proposed activities have occurred subsequent to the previousconstructiongermitreview.
The Commission has delegated the authority to make the significant change" determination to the Director, Office of Nuclear Reactor Regulation.
Based upon an examination of the events since the issuance of the South Texas construction permits to Houston Lighting and Power Company, et al. and the consummation of the settlement agreement before the Commission, the staffs of the Planning
.O and Resource Analysis Branch, Office of Nuclear Reactor Regulation and the Office of the General Counsel, hereafter referred to as " staff",
have jointly concluded, after consultation With the Department of Justice, that the char.ces that have occurred since the construction permit review are not of the nature to require a second antitrust review at the operating license stage of the application.
In reaching this conclusion, the staff considered the structure of the electric utility industry in east Texas, the events relevant to the South Texas construction permit review and the antitrust settlement subsequent to the construction permit review.
The conclusion of the staff's analysis is as follows:
" Prior to the antitrust settlement agreement before the Nuclear Regulatory Commission (NRC), competition for the purchase or sale of power and energy and related ancillary services in the Texas bulk power market was primarily limited to intrastate power transactions. This intrastate power network has remained in tact for many years--notwithstanding the fact that some power entities doing business on the perimeter of the state of Texas as well as some systems within the state have expressed interest in interstate bulk power transactions for quite some time.
Although the Texas bulk power market has remained primarily intrastate in nature, there have been several changes since the NRC settlement in 1980 that have provided competitive stimuli to this market-particularly in the areas served by the applicant systems.
"The change that has had the greatest impact in the Texas l
bulk power market has been the implementation of the l
settlement agreement.
Although both direct current (DC)
I
I transmission ties with the Southwest Power Pool (SWPP) have not been completed and DC wheeling rates not finalized, the North tie has been completed and she Central and South West operating systems are exchanging.coway and energy over this tie.
Plans have been developed t P6xpand the North tie (as contemplated in the settlement agreement) to accommodate a significant power transfer by a Texas co generating entity.
Capacity (15%) in both DC interties has been reserved for firm power transactions for power sy:;tems wishing to buy or sell in the interstate market.
Moreover, wheeling to, from or over the DC interties is now available to any system wishing to access the DC interties.
"To remedy a growing need to redistribute power from co generators
, E concentrated in industrialized pockets in the state, the Texas Public Utility Commission promulgated rules requiring mandatory transmission or wheeling of co generated power in Texas.
These rules have enabled corporate entities, heretofore spectators on the fringes of the Texas bulk power market, to market their by product power and energy and become players in the market, i.e., barriers to entry into the production and sale of bulk power in Texas have been lowered as a result of the newly adopted wheeling rules.
" Increased coordination and cooperation among bulk power suppliers has resulted in a more open market in the state of Texas over the past five years.
Houston Lighting & Power Co. (HLP) has increased and extended a power purchase agreement with the City of Austin and entered into a wholesale power purchase agreement with the Public Service Board of the City of San Antonio.
A computer controlled bulletin board, advising all members of the Electric Reliability Council of Texas (ERCOT) of available power and energy in the state is now in place, making " shopping" for power and energy easier for all systems in the state and enabling power systems to better meet the individual needs of their systems.
"All types of power entities in Texas, municipal, cooperative and investor owned, are beginning to explore joint generation projects both within and outside the state.
The concept of interstate planning and participation in interstate power projects is a new one for most Texas power entities.
Although the movement to interstate cooperation and competition is still in its embryonic stages in Texas, this movement was contemplated by and provided for in the antitrust settlement agreement before both the NRC and the Federal Energy Regulatory Commission.
l (The settlement agreement provides for requests for capacity l
increases and ownership purchases in the DC interties at intervals of every three years beginning in June of 1986 and lasting until June of 2004.) It is anticipated that this movement toward increased cooperation and competition will continue among
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. intrastatepowersystemswithinTexasandalsobetweenintraskate power systems wishing to engage in joint power supply planning and power supply transactions across state borders.
" Staff's analysis of the changes in the licensees' activities since the antitrust settlement, has not identified any significant negative activities which have adversely impacted the competitive process on going in the Texas bulk power market.
Although there are still physical impediments to complete synchronous operations between most Texas power entities and systems outside of Texas, i.e., there are no major alternating current interconnections between ERCOT and the SWPP, the settlement agreement provided power systems inside of Texas as well as in surrounding states the opportunity to exchange power and energy and engage in bulk a:
power transactions.
Staff views the settlement agreement as a major first step in opening up power supply options to all power M
entities in ERCOT and the SWPP.
Based upon the successful implementation of the settlement agreement to date and the lack of any significant negative competitive activities by the licensees since the settlement agreement, staff recommends that a no significant change determination be made pursuant to the application for an operating license for Unit 1 of the South Texas Project."
Based upon the staff's analysis, it is my finding that there have been no "significant changes" in the licensees' activities or proposed activities since the completion of the previous antitrust review in connection with the construction permit.
/
k Harold R. Denton, Director Office of Nuclear Reactor Regulation 1
l
~
I SOUTH TEXAS PROJECT, UNIT 1 OPERATING LICENSE ANTITRUST REVIEW FINDING OF NO SIGNIFICANT CHANGE Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an application for an operating license if the Comission determines that significant changes in the licensee's i
1 activities or proposed activities have occurred subsequent to the previous construction permit review.
The Comission has delegated the authority to make the "significant change" determination to the Director, Office of Nuclear Reactor Regulation.
Based upon an examination of the events since the issuance of the South Texas construction permits to Houston Lighting and Power Company, et al. and the consumation of the settlement agreement before the Comission, the staffs of the Planning and Resource Analysis Branch, Office of Nuclear Reactor Regulation and a
the Office of the General Counsel, hereafter referred to as " staff",
have jointly concluded, after consultation with the Department of Justice, that the changes that have occurred since the construction permit review M_.
are not of the nature to require a second antitrust review at the operating license stage of the application.
In reaching this conclusion, the staff considered the structure of the electric utility industry in east Texas, the events relevant to the South Texas construction permit review and the antitrust settlement subsequent to the construction permit review.
The conclusion of the staff's analysis is as follows:
" Prior to the antitrust settlement agreement before the Nuclear Regulatory Comission (NRC), competition for the purchase or sale of power and energy and related ancillary services in the Texas bulk power market was primarily limited to intrastate power transactions.
This intrastate power network has remained in tact for many years--notwithstanding 7
the fact that some power entities doing business on the perimeter of the state of Texas as well as some systems l
within the state have expressed interest in interstate l
bulk power transactions for quite some time.
Although the Texas bulk power market has remained primarily intrastate in nature, there have been several changes since the NRC settlement in 1980 that have provided competitive stimuli to this market-particularly in the areas served by the applicant systems.
"The change that has had the greatest impact in the Texas bulk power rarket has been the implementation of the settlement agreement.
Although both direct current (DC)
- -. ~
=.
~ _..
l transmission ties with the Southwest Power Pool (SWPP) have not been completed and DC wheeling rates not finalized, '
the North tie has been completed and the Central and South West operating systems are exchanging power and energy over this tie.
Plans have been developed to expand the North tie (as contemplated in the settlement agreement) to accommodate a significant power transfer by a Texas co generating entity.
Capacity (15%) in both DC interties has been reserveu for firm power transactions for power systems wishing to buy or sell in the interstate market. Moreover, e eeling to, from or over the DC interties is now available to any system wishing to access the DC interties.
"To remedy a growing need to redistribute power from co generators concentrated in industrialized pockets in the state, the Texas Public Utility Commission promulgated rules requiring mandatory transmission or wheeling of co generated power in Texas.
h These rules have enabled corporate entities, heretofore spectators on the fringes of the Texas bulk power market, to market their by product power and energy and become players in the market, i
1.e., barriers to entry into the production and sale of bulk power in Texas have been lowered as a result of the newly adopted l
wheeling rules.
" Increased coordination and cooperation among bulk power suppliers has resulted in a more open market in the state of Texas over the past five years.
Houston Lighting & Power Co. (HLP) has increased and extended a power purchase agreement with the City of Austin and entered into a wholesale power purchase agreement with the Public Service Board of the City of San Antonio.
A computer controlled bulletin board, advising all members of the Electric Reliability Council of Texas (ERCOT) of available power and energy in the state is now in place, making " shopping" for power and energy easier for all systems in the state and enabling power systems to better meet the individual needs of their systems.
"All types of power entities in Texas, municipal, cooperative and investor owned, are beginning to explore joint generation projects both within and outside the state.
The concept of i
interstate planning and participation in interstate power projects is a new one for most Texas power entities. Although the movement to interstate cooperation and competition is still j
in its embryonic stages in Texas, this movement was contemplated by and provided for in the antitrust settlement agreement before both the NRC and the Federal Energy Regulatory Commission.
(The settlement agreement provides for requests for capacity increases and ownership purchases in the DC interties at intervals of every three years beginning in June of 1986 and lasting until June of 2004.) It is anticipated that this movement toward increased cooperation and competition will continue among f
l l
. intrastate power systems within Texas and also between intrastate power systems wishing to engage in joint power supply planning and power supply transactions across state borders.
" Staff's analysis of the changes in the licensees' activities since the antitrust settlement, has not identified any significant negative activities which have adversely impacted the competitive process on going in the Texas bulk power market. Although there are still physical impediments to complete synchronous operations between most Texas power entities and systems outside of Texas, i.e., there are no major alternating current interconnections between ERCOT and the SWPP, the settlement agreement provided power systems inside of Texas as well as in surrounding states the opportunity to exchange power and energy and engage in bulk
.O power transactions.
Staff views the settlement agreement as a major first step in opening up power supply options to all power l"--
entities in ERCOT and the SWPP.
Based upon the successful implementation of the settlement agreement to date and the lack of any significant negative competitive activities by the licensees since the settlement agreement, staff recommends that a no significant change determination be made pursuant to the application for an operating license for Unit 1 of the South Texas Project."
Based upon the staff's analysis, it is my' finding that there have been no "significant changes" in the licensees activities or proposed activities since the completion of the previous antitrust review in j
connection with the construction permit.
1 Harold R. Denton, Director Office of Nuclear Reactor Regulation Distribution Docket File No. 50-498A PRAB r/f & s/f WLambe LSolander JFunches RVollmer HDenton BVogler, OGC Kadambi, PM NRCPDR
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