ML20211C581
| ML20211C581 | |
| Person / Time | |
|---|---|
| Site: | Byron, Braidwood, 05000000 |
| Issue date: | 10/16/1986 |
| From: | Lieberman M ZUCKERT, SCOUTT, RASENBERGER & JOHNSON |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| CON-#486-1192 A, OL, NUDOCS 8610210426 | |
| Download: ML20211C581 (5) | |
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October 16, 1986 I
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1 Director of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission j
Washington, D.C.
20555 Re:
Commonwealth Edison Company Docket No. 50-455A Request For Reevaluation of No Significant Changes Finding
Dear Sir:
Illinois Municipal Electric Agency (IMEA) files its request for reevaluation of the no significant changes finding entered in the above-captioned proceeding.
I.
BACKGROUND On March 17, 1986, IMEA filed comments with the Nuclear l
Regulatory Commission (NRC) alleging that "significant changes have occurred" since the antitrust review was conducted in connection with the construction permit application for Commonwealth Edison Company's (CECO) Byron Unit 2 and Braidwood l
nuclear stations.
IMEA requested that the NRC hold a hearing to l
determine whether CECO's activities under the license would create or maintain a situation inconsistent with the antitrust laws.
On May 24, 1986, CECO filed a reply to IMEA's comments.
On July 15, 1986, IMEA filed its response to CECO's reply to demonstrate that, contrary to CECO's assertions, antitrust proceedings would be appropriate in connection with the Byron Unit 2 and Braidwood Station operating license proceedings.
86102104 g h h 55 DR ADO PDR qq
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ZUCKERT, SCOUTT, RASENBERGER & JOHNSON Director of Nuclear Reactor Regulation October 16, 1986 Page 2 On September 16, 1986, Harold R. Denton, Director of the Office of Nuclear Reactor Regulation found that there have been no significant changes in the licensee's (CECO's) activities or proposed activities since the completion of the previous antitrust review in connection with the construction permit.
51 Fed. Reg. 34171 (September 25, 1986).
IMEA submits that such finding.is in error and should'be reevaluated.
II.
THE BASIS FOR IMEA'S ALLEGATION OF SIGNIFICANT CHANGES WAS TOTALLY OVERLOOKED BY THE STAFF.
Although the staffs of the Planning and Resource Analysis Branch, Office Nuclear Reactor Regulation and the Office of General Counsel (staff), in concluding no significant changes have occurred, state that comments from interested parties in the state of Illinois were considered, staff's analysis is, at best, a grievous misconception of IMEA's comments.
Staff summed up its analysis as follows:
.The Braidwood significant change review, covering changes in CECO's activities since the Byron No. 1, OL review, [See 51 Fed. Reg. 29350 (August 15, 1986)]
found no changes in the applicant's activities or proposed activities which could be considered significant from an antitrust standpoint and, therefore, did not recommend a formal antitrust review.
' Staff has not identified any significant negative competitive activities by CECO since the Byron No ', construction permit review that would warrant remedy by the NRC.
Consequently, staff recommends that a no significant change determination be made pursuant to the application for an operating license for Unit 2 of the Byron Station.'
In Staff's Braidwood significant change review, the Staff concluded:
Since the Byron, Unit 1 OL review, the changes in the company's activities have involved changes in rates and rate structure, both at the retail and wholesale level, which are the result of an order of the Illinois Commerce Commission and a ru
e f
ZUCKERT, SCOUTT, RASENBERGER & JOHNSON Director of Nuclear Reactor Regulation October 16, 1986 Page 3 settlement agreement filed with the Federal Energy Regulatory Commission.
Further, the applicant has contacted several electric utility companies and has offered to share participation in the Braidwood nuclear units.
Based on the NRC staff review, the applicant has not unreasonably restrained these utilities from further participation in the Braidwood units.
(Emphasis adde'd)
IMEA did not allege that CECO was unreasonably restraining other utilities from participation in the Braidwood units or Byron Unit 2.
Nor did the gist of IMEA's allegations center on changes in rates and rate structure which were the result of an order of the Illinois Ccmmerce Commission and a settlement agreement-filed with the Federal Energy Regulatory Commission.
Rather, the focus of' IMEA's allegations was on CECO's acts which had as their purpose the elimination of IMEA as a potential and actual competitor in the relevant electric power market and the unlawful denial of access to its transmission system.
CECO's conduct, all of which has occurred since~the antitrust review in connection with the construction permit, was described in detail in IMEA's initial and reply comments and only will be summarized here.
That conduct, however, was not referred to or discussed in staff's analysis.
Staff did not consider CECO's predatory discriminatory pricing practices.
CECO, in~its efforts to eliminate IMEA as a competitor, reduced its rates to its wholesale customers to a level approximately 46% below that required to recover its cost of service to those customers.
CECO refused to deal with IMEA and threatened to withdraw those offers of reduced rates to its wholesale customers if they were disclosed to IMEA.
Those cities which elected to pursue alternate sources of power and energy were forced to pay monopoly rents to CECO until alternate arrangements for power and energy were completed.
Furthermore, staff did not review CECO's acts of denying its customers access to lower priced power and energy ~by abusing its monopoly power over its transmission system, an essential facility.
CECO has engaged in pricing policies for its transmission service that had only one objective:
denial of transmission service and the
' elimination of lower priced power and energy as alternative sources of supply for CECO's wholesale customers.
a ZUCKERT, SCOUTT, RASENBERGER & JOHNSON Director of Nuclear Reactor Regulation October 16, 1986 Page 4 If the staff analysis had seriously considered those actions of CECO, it would have found that indeed significant changes have occurred since the completion of the previous antitrust review and that a hearing was necessary to determine whether CECO's activities under the license would create or maintain a situation inconsistent with the antitrust laws.
III.
CONTRARY TO ESTABLISHED PRECEDENT, STAFF'S ANALYSIS FAILED TO CONSIDER CECO'S ACTS IN THE CONTEXT OF THE BROAD SCOPE OF THE ANTITRUST LAWS.
The NRC's role in antitrust enforcement differs from standard judicial antitrust analysis, i.e. analysis that requires evidence of an actual or incipient antitrust violation.
That standard has not been incorporated into the Atomic Energy Act.
Alabama Power Co.
- v. Nuclear Regulatory Com'n., 692 F.2d, 1362 (llth Cir. 1983); cert. denied, 464 U.S.
816, 104 S.Ct. 72, 1983).
Rather, as the court in Alabama Power Co. stated:
The NRC is to look only for ' reasonable probability' of violation.
This command may result in the conditioning of licenses in anticipation of situations which would not, if left to fruition, in fact violate any antitrust law.
But Congress intended this broad inquiry using all availcble information to prevent infringement on the antitrust laws in the nuclear power field.
We also note that the Joint Committee Report did not limit the NRC's inquiry to probable contravention of the antitrust laws, but included 'or the policies clearly underlying these laws.'
Here again, a traditional antitrust enforcement scheme is not envisioned, and a wider one is put in place.
Id. at 1368.
The " reasonable probability" of violation can be based upon a forward look toward potential anticompetitive conduct.
Id. at 1367.
At the same time, the statutory language of 6 105(c) directs the "NRC to take a careful look at the present -- and the past -- to see if an anticompetitive climate exists and to see if the applicant has acted in an anticom-petitive manner."
Id. at 1367-1368.
Furthermore, the NRC is not to relax its antitrust responsibilities in favor of the
-Federal Energy Regulatory Commission, an agency whose regulatory
o
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ZUCKERT, SCOUTT, RASENBERGER & JOHNSON Director of Nuclear Reactor Regulation October 16, 1986 Page 5 scheme has a different purpose.
See, The Toledo Edison Company (David Bessie Nuclear Power Station, Units 1, 2 and 3), ALAB-560, 10 NRC 265, 284 (1979).
Contrary to this precedent, staff's analysis adopted an extremely narrow interpretation of the NRC's antitrust responsibilities.
Staff did not look.for reasonable probability of violation.
It considered only selective past conduct, not the totality of CECO's acts.
And staff failed completely to take a forward.look toward potential anticompetitive conduct.
Staff basically only considered whether CECO was unreasonably restraining utilities from further participation in the Braidwood units and Byron Unit 2, and ignored the significant changes in CECO's conduct.
By concentrating on that activity, staff placed blinders upon itself.
By taking those blinders off, CECO's predatory and discriminatory pricing policies and its unlawful denial of access to its transmission system come sharply into focus.
For the above reasons, IMEA requests a reevalution of the finding that there have been no significant changes in the licensee's activities or proposed activities since the completion of the previous antitrust review in connection with the construction permit; that upon reevaluation a finding be made that there have been such significant changes and that a hearing be held to determine whether CECO's activities under the license would create or maintain a situation inconsistent with the antitrust laws.
Res ectfull csubmitted, U (fr./km % it It{w _
^
Marvin S. hieberman Attorney for Illinois Municipal Electric Agency MSL:j cc:
Harold R. Denton, Director.
Office of Nuclear Reactor Regulation
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David M. Stahl, Esquire l
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