ML20247A302
| ML20247A302 | |
| Person / Time | |
|---|---|
| Site: | Vogtle  |
| Issue date: | 03/21/1989 |
| From: | Rhex Edwards GEORGIA POWER CO., TROUTMANSANDERS (FORMERLY TROUTMAN, SANDERS, LOCKERMA |
| To: | Murley T Office of Nuclear Reactor Regulation |
| References | |
| A, NUDOCS 8903290092 | |
| Download: ML20247A302 (17) | |
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a saar ges . . ave. o pooagas.oe.46 conoomahonis , ATTORNEYS AT LAW f C AN DLE R BUILOf NG, SUITC 1400 ] s27 PEACHTmEC STRECT, N.g. l ROBERY R. COWARos, J R. ATLANTA, GEORGIA 30043-7101 wastem's ointer 0146 Nuweta 404/658 8000 4C4 658 8207 C484C: **at5'mc 'l 7 E 6 E c om' E m 404 - 2 41 04 e e I March 21, 1989 Mr. Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission i Washington, D.C. 20555 ! Re: Vogtle Electric Generating Plant, Unit 2 i Docket No. 50-425-A
Dear Mr. Murley:
1 On March 2, 1989, the Office of Nuclear Reactor Regulation l published a Notice of Finding of No Significant Antitrust Changes ' in connection with the operating license for Unit 2.of.the Vogtle Electric Generating Plant. Unit 2 is currently operating under a low power operating license issued on February 9, 1989. The. unit will be ready for increased power operations on March 30, less than two weeks from now, and Georgia Power anticipates issuance of the full power operating license at that time. The Notice provided that interested persons could comment on the NRC's finding within 15 days. On March 17, 1989, comments were filed by Municipal Electric Authority of Georgia (MEAG) and Oglethorpe Power Corporation (Oglethorpe). Both are co-owners and co-licensees of Plant Vogtle. Georgia Power is in agreement with MEAG's comments, which concur with the NRC finding that there have been no significant antitrust. changes in the licensees' activities since the Commission's last antitrust l review. Georgia Power joins MEAG in urging that no delay in the l issuance of the full power operating license result from Oglethorpe's comments. l Q,] 7. Murle AN N 8 8903290092 890321 i
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g I 4 . T86UTM AN, SANDERS, LOCMERM AN & ASHMORE 8 s a namesegesamie WCWOmo amortes.Omas consonat.oest Mr. Thomas E. Murley March 21, 1989 Page 2 Oglethorpe does not allege that the NRC's finding of no sig-nificant antitrust changes is incorrect. Nor does Oglethorpe seek to' delay issuance of the license. Oglethorpe Comments at
- 24. Instead, Oglethorpe asks the Director to (1) " correct the Finding to reflect accurately that the antitrust license condi-tions have not successfully and fully been implemented by (Georgia Power], and that certain 'procompetitive effects' iden-tified during the Vogtle 1 operating license review have not been achieved," and (2) " confirm and clarify that the antitrust license conditions entitle Oglethorpe and the other co-licensees to immediate and equal access to the integrated transmission sys-tem for off-system transactions."l/ Oglethorpe then asserts, not that there has been a significant change, but that absent such
" confirmation and clarification of the co-licensees' transmission rights," the NRC does not have an adequate basis for its find-ing.2/
Both in terms of the specifically stated purpose (as noted above) and the contents of Oglethorpe's comments, Oglethorpe is questioning Georgia-Power's compliance with existing antitrust l license conditions, not disagreeing with the NRC's determination of no significant changes. Indeed, Oglethorpe is not asserting that a significant change has occurred, and it has identified no , such change. The issues raised by Oglethorpe's comments should more appropriately be considered in an enforcement proceeding, and are not germane to the instant matter. Accordingly, there should be no delay in the issuance of the full power license for Unit 2 resulting from the Oglethorpe comments. Because a full antitrust review was conducted with respect to Plant vogtle at the construction permit stage, another anti-trust review now is not apprt 3riate unless, under the proviso to Section 105(c)(2) of the Atomic Energy Act of 1954, as amended, "the Commission determines such review is advisable on the ground that significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous review by the Attorney General and the Commission under this subsection in con-nection with the construction permit for the facility." The Commission has articulated three criteria for a determi-nation of no significant antitrust change.1/ Under the third 1/ Oglethorpe Comments at 1-2, 2/ Id. 1/ Section 105(c)(2) " contemplates that the change or changes-(1) have occurred since the previous antitrust review of the (Continued next page)
- TR6UTMAN, SANDERS, LOCKERM AN & ASHMORE Mr. Thomas E. Murley March 21, 1989 Page 3 criterion, a " change" is significant only if it would "likely warrant and be susceptible to a greater than dg minimus license modifications."A/ oglethorpe has not suggested that it desires 3 1
an antitrust review, and has certainly not suggested a need for a j change, dg minimus or otherwise, in the antitrust license condi- l tions. To the contrary, Oglethorpe's request is for confirmation ! and clarification of existing conditions, not changes in condi-tions. Consequently, Oglethorpe's Comments should not affect the finality of the no significant changes finding. The context of the current discussions between Oglethorpe and Georgia Power, the treatment of the subject matter by the current license conditions, and the insubstantial nature of ! Oglethorpe's quarrels with the Staff's discussion supporting the no significant changes finding each reinforce the conclusion that l a delay in licensing because of antitrust issues would be incon-sistent with both the intent of Congressi/ and the intent of the (Continued) licensee (s); (2) are reasonably attributable to the l licensee (s); and (3) have antitrust implications that would likely warrant some Commission remedy." South Carolina Electric & Co. (Virgil C. Summer Nuclear Station, Unit 1), 1 CLI-80-28, 11 N.R.C. 817, 824 (1980). ! 4/ South Carolina Electric & Gas Co. (Virgil C. Summer Nuclear Station, Unit No. 1), CLI-81-14, 13 N.R.C. 862, 864 n.3 (1981). 1/ The clear legislative intent underlying Section 105(c) was that the antitrust review not delay the licensing process. See H.R. Rep. No. 1470, 91st Cong., 2d Sess. (1970), i reorinted in 1970 U.S. Code Cong. & Admin. News 4981, 4996: The committee expects and will urge the Commission to make every reasonable effort to ! deal with the potential antitrust feature !
- under subsection 105c of the bill fully but
' 1 expeditiously. The committee anticipates that all the functions contemplated by these i paragraphs would be carried out before the ! radiological health and safety review and determination process is completed, so that ' (Continued next page) I i l 1 1
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Mr. Thomas E. Murley-March 21, 1989 Page 4 Commission's antitrust review procedures.5/ Context of Current Discussions With Oclethorpe. The focus of Oglethorpe's complaint that Georgia Power has not "successfully and fully . . . implemented" the antitrust con-ditions is the allegation that Georgia Power has taken the posi-tion that Oglethorpe has no "present right to use the (Integrated-Transmission System] for off-system transactions."l/ While this l fs not the forum to debate Georgia Power's compliance with the i aTtitrust conditions, a brief recitation of the underlying facts will place Oglethorpe's comments in their proper context and show that Oglethorpe's allegations are incorrect. Although not identified by Oglethorpe,- it.is Paragraph ~5(b) of the antitrust license conditional / which Oglethorpe asserts i that Georgia Power is not properly implementing. 'Under Paragraph i 5(b), Georgia Power must transmit power from Oglethorpe off of the Georgia Territoryl/ under certain expressly stated . l (Continued) j the entire licensing procedure is not further I extended in time by reason of the added anti- ! trust review function. Georgia Power has been issued an operating license for Vogtle Unit 2. The only question remaining is removal of the low power restriction as scheduled. s/ The procedures used by the NRC staff to implement antitrust review envision that "the antitrust OL' reviews for a signif-icant change finding reay be completed 12 months or more before the operating license is issued." NUREG-0970, Proce-dures for Meeting MRC Antitrust. Responsibilities (May 1985), Sec. 3.6. 2/ Oglethorpe Comments at 14. 1/ The antitrust license conditions (the " License Conditions") are currently appended to the Plant Hatch Unit 2, Plant Vogtle Unit 1 and Plant Vogtle Unit 2 operating licenses. 9/ The " Georgia Territory" is the area in the State of. Georgia in which Georgia Power, Oglethorpe and other " entities" (as defined by Paragraph 1(a) of the License Conditions) oper-ate.
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- T'ROUTM AN, SANDERS, LOCKERMAN & ASHMORE Mr. Thomas E. Murley March 21, 1989 Page 5 conditions. Oglethorpe asserts that it should be afforded, and has been denied, "immediate access" to transmission for off-system transactions and asks the NRC to " confirm and clarify" that such "immediate access" is mandated by the antitrust license conditions.lE/
The License Conditions, including Paragraph 5(b), resulted from a negotiated settlement of the antitrust licensing proceed-ing at the construction permit stage for Hatch Unit 2 and Vogtle Units 1 and 2. Oglethorpe's predecessor and its members were parties to this proceeding and settlement. As a result of the settlement, Oglethorpe and others obtained an ownership interest in Plant Hatch and Plant Vogtle, partial requirements service, and the transmission service rights stated in Paragraph 5. The License Conditions were implemented in part by the fil-ing of Partial Requirements and transmission service tariffs in i 1975, tariffs which remain in effect today. For some time, at Oglethorpe's request, Georgia Power has been negotiating with oglethorpe regarding potential power supply agreements that could supplement or replace the existing Partial Requirements tariff and transmission tariff. As these negotiations have evolved, Oglethorpe has asserted that the existing License Conditions require Georgia Power to deliver power from Oglethorpe to systems outside the Georgia Territory without regard to whether Oglethorpe has sufficient generating resources in Georgia to serve the requirements of its members. Oglathorpe has also asserted that Georgia Power should dedicate a certain portion of existing transmission capability to Oglethorpe's exclusive use. In its Comments, Oglethorpe recasts these demands as a demand for recognition of a "present right"ll/ to conduct off-system transactions and a related right to " access commensurate with its ownership share."ll/ Oglethorpe characterizes these asserted rights as " equal access" rights.ll/ oglethorpe wants these asserted rights embodied in what it calls an " appropriate generic scheduling agreement."ld/ 10/ Oglethorpe Comments at 2, 31. 11/ Oglethorpe Comments at 14. l 12/ Id. at 11. 11/ Id. at 4. 11/ Id. at 17. I
TRbUTMA$, SANDERS, LOCKERMAN & ASHMORE Mr. Thomas E. Murley March 21, 1989 Page 6 A stumbling block in the negotiations for supplemental or replacement power supply agreements, including the " generic scheduling agreement," has been the two parties' differing inter-pretations of one of the conditions of transmission service for bulk power exports. Paragraph 5(b) of the License Conditions has a "self-sufficiency" requirement that limits an entity's use of transmission for purposes of exporting bulk power; transmission may be used to export only bulk power resulting from an entity's
" excess capacity available from self-owned generating resources in the State of Georgia." Georgia Power has taken the position that the "self-sufficiency" requirement must be adhered to, while l Oglethorpe has advanced positions that Georgia Power believes do.
l not comply with that expressly stated license requirement. ! The transmission tariff, which has been in place and opera- ! tional since 1975, is in compliance with the License Conditions; Oglethorpe does not assert otherwise. There is no requirement for Georgia Power to renegotiate the present arrangements. 4 i Georgia Power nevertheless has been willing to renegotiate, and been more than cooperative toward that end. In particular, Georgia Power has agreed that the required self-sufficiency from "self-owned generating resources" can be satisfied by firm con- ; tractual commitments for power (as well as from ownership of generating facilities). Georgia Power has also gone out of its ! way to accommodate individual bulk transactions by Oglethorpe pending renegotiation. Oglethorpe's two Seminole Electric Coop-erative transactions fall into this category, l Negotiating differences arising in connection with service j arrangements developed under antitrust license conditions do not i constitute "significant changes" justifying a second, full-blown antitrust review at the operating license stage. If the transla-tion of negotiation positions into Comments on a no significant changes finding can threaten the timely issuance of an operating license, utilities will be deterred from negotiating with each other, and progress towards potentially beneficial relations will be stalled. Therefore, it is understandable that, to assure that negotiations are properly carried out, the Staff has previously-relied on the adequacy of the enforcement process instead of 1 withholding findings of no significant changes. The Office of Nuclear Reactor Pegulation has applied this ) principle on various occasions in reaching a finding of no sig- ! nificant changes. For example, in Carolina Power & Licht Co. (Shearon Harris Nuclear Power Plant), Notice of Finding of No significant Antitrust Changes, 51 Fed. Reg. 4547 (1986),
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Mr. Thomas E. Murley March 21, 1989 Page 7 CPL's sale of'an ownership share in Harris to i NCEMPA-(North Carolina Eastern Municipal
' Power Agency) and the associated service arrangements-[ vere viewed) as consistent with
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antitrust conditions contained in'other
. nuclear power plant licenses, and the trans-mi'ssion service arrangements consistent with its Harris antitrust. license conditions.
Althouch negotiations for transmission ser-vice arrangements between CPL'and the North' Carolina Electric Membership Corporation H (NCEMC) have not been^ completed, any subse-cuent problems that may arise therewith may be treated under the Commission's rules for ; enforcement of license conditions. ] R Id. (emphasis added). l Similarly, in Mississippi Power & Licht Co. (Grand Gulf Unit 1), Notice of Finding-of No Significant Antitrust Changes, 46 Fed. Reg. 51,682 (1981), even the possibility of unsuccessful settlement negotiations in connection with MP&L's apparent non- ! compliance with-license conditions instituted at the construction 1 permit stage did not constitute "significant changes" sufficient L to warrant another antitrust review at the operating license i stage: I MP&L's exerciselof its market power ~in west-ern Mississippi necessitated-instituting j license conditions at the CP atage of the Grand Gulf antitrust review. MP&L was con-tinuing to foreclose competitive: options to-smaller power entities in the area at the time a notice of. violation was issued by.the NRC in May of 1980. In the notice of viola-tion, the staff concluded that MP&L was not in compliance with its license conditions pertaining to transmission services, whole-sale power services, and ownership participa-tion in the Grand Gulf nuclear plant. How-ever, all present indications-are that MP&L has reversed its apparent policies that occa-sioned the notice of violation in May of 1980, has essentially-reached a settlement agreement with the complaining parties, and is pursuing acceptance of rate schedules and agreements before FERC that would bring it 1:
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Mr. Thomas E. Murley March 21, 1989 Page 8 i into full compliance with.its license condi-tions. In the unlikely-event that the set-tlement negotiations or the rate schedule implementations are unsuccessful, the:se mat-ters can be resolved before the NRC f.n the present compliance proceedino which will remain in effect until the matters are satis-factorily resolved. No additional remedies will result from a j formal operatino license antitrust review.
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1 Id. (emphasis added). The foregoing situations illustrate that negotiation dis-putes arising in. connection with existing antitrust license con-ditions do not satisfy a necessary criterion for "significant ; antitrust changes," since the " change" will not "likely warrant and be susceptible to a greater than de minimis license modifica-tion." Georgia Power has expended enormous efforts in-developing l potential alternatives to the current tariffs.and in discussing. these alternatives with Oglethorpe. Georgia Power hopes that these negotiations will continue with each party examining and proposing power supply options that make operating.and. economic sense. Delaying the issuance of a full power license because of disputes arising in negotiations such as these would_be-contrary to the interests antitrust review is-intended to foster. The License Conditions Address Oclethoroe's Concerns. Oglethorpe has asked that the NRC confirm and clarify that the antitrust conditions entitle oglethorpe and other co-licen- l sees to "immediate and equal access" to transmission for . ; off-system transactions. Georgia Power submits.that such a clar- ! ification is inappropriate in the context of a no.significant changes finding, and' properly belongs in the realm of an enforce- j ment proceeding. In any event, it is not clear from Oglethorpe's ; comments precisely what is meant by "immediate and equal access;" i if Oglethorpe believes, for example, that "immediate and equal
. access" means that it need not become generationally-self-sufficient prior to exporting bulk power, then "immediate and equal access" would be directly contrary to an express requirement of the License Conditions. ,
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l Mr. Thomas E. Murley i March 21, 1989 i Page 9 Oglethorpe's concerns.are addressed by the existing License l Conditions and no further antitrust review is required. Georgia Power's transmission obligations.arise from License Condition Paragraph 5, which consists of two parts. The first part, subparagraph (a), establishes Georgia Power's obligation to transmit power to Oglethorpe and its constituent members: 5(a) Applicant.shall transmit (" transmission
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service"7 entitylE or entities with which itbulk power over its system to any; is inter-1 connected, pursuant-to rate schedules on file- ) with the Federal Power Commission which will fully compensate Applicant for the use of its J system, to the extent that such arrangements can be accommodated from a functional engi-1 i neering standpoint and to.the extent that ' Applicant has surplus line capacity or rea-sonably available funds to finance new con-struction for this purpose. To the extent the entity or entities are able, they shall reciprocally provide transmission service to
. Applicant. Transmission service'will be pro-vided under this subparagraph for the delivery of power to an entity for its or its members' consumption and retail distribution or for casual resale to another entity,for (1) its consumption or (2) its retail distri- -l" bution. Nothing contained herein shall require the Applicant to transmit bulk power so as to have the effect of making the Tennessee Valley Authority ("TVA") or its 15/ The License Conditions define "entit's".do encompass inves-tor-owned, municipal, and cooperative utilities.. serving the public in the Georgia Territory. There is no doubt that
-Paragraph 5(a) of the License conditions and the TS-1 tariff (discussed below) provide transmission for Oglethorpe to use should it purcnase powersoutside of the Georgia Territory, whether it be to provide pumping energy for the Rocky Moun-tain project or for redistribution toLoglethorpe's members.
There is no doubt therefore that' Georgia Power's transmis ' sion service, and the resulting Integrated Transmission Sys-tem, do enable'Oglethorpe to engage in off-system transac-tions. There is no dispute concerning the'right to import power to the Georgic Territory pursuant to Paragraph 5(a).
. T,RouTMAN, SANDERS. LOCKERMAN & ASHMORE Mr. Thomas E. Murley March.21, 1989 )
page 10 H i distributors, directly or indirectly, a source of power supply outside the area determined by-the TVA Board of Directors by ; resolution of May 16, 1956 to be the area for 1 which the TVA or its distributors were the-primary source of power supply on July 1, ) 1957, the.date specified in the Revenue Bond l Act of 1959, 16 USC 831 n.'4.
. Subparagraph 5(b)~of the License Conditions addresses the obligation to provide transmission to transmit' power from entities. Because the destination of~such power is not j restricted, 5(b) provides, within'certain limits, for off-system '
transactions: (b) Applicant shall transmit over its-system from any entity or entities with which it is L interconnected, pursuant to. rate schedules on l file with the Federal Power Commission'which l will fully compensate Applicant for the'use of its system, bulk' power which results from any such entity havino excess capacity avail-
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able from self-owned ceneratino resources in l the State of Georcia, to the extent such ] l excess necessarily results from economic unit j sizing or from failure to forecast load accu-J rately or from such generatingLresources- 1 becoming operational earlier than the planned ' in-service date, to the extent that such arrangements can be accommodated from a func- l tional engineering standpoint, and to the l extent Applicant has surplus line capacity ) available. 1 Subparagraph 5(b) (emphasis added). Thus-this section requires that an entity be generationally self-sufficient before Georgia Power is obligated to transmit bulk power off-system.15/ 16/ This provision ensures that one entity's exports will not ; create shortfalls in capacity.which must be satisfied by l other Georgia utilities. As reported to the staff in 1983, i Georgia Power's Unit Power Sales.into Florida are examples of " excess" capacity being exported from the Georgia Terri-Transactions such as these are undertaken by tory. utilities, and approved by FERC, in order to' lower the' cost of utility service to consumers. 1
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Mr. Thomas E. Murley March 21, 1989 Page 11 A transmission services tariff (TS-1) filed with the Federal Power Commission (now the Federal Energy Regulatory Commission) embodies t J ditions.llpetransmissionobligationsimposedbytheLicenseCon-That tariff includes a standard form contract pursu-ant to which the parties provide each other with equal access to 4 their transmission facilities, thereby creating what is known as the Integrated Transmission System. Section 3.01 of the TS-1 Tariff establishes the extent to which the parties may use the Integrated Transmission System in a fashion that embodies the conditions of Paragraph 5 of the License Conditions: 3.01 Use. The parties shall utilize so far 1 as practicable the Integrated Transmission i system to transmit capacity and energy supplied from their generating plants and to transmit capacity and energy purchased from i other electric suppliers under contract therefor, for the separate distribution and ; sale of such capacity and energy by the par- I ties, respectively, each for its own account. After the Effective Date, each party shall have the right so to use the Integrated Transmission System without charge, provided, however, that the parties' use of such system shall not be in violation of the provisions of Paracraoh 5 of the Procosed License Condi-tions attached to the Settlement Acreement between the parties relating to Atomic Energy Commission Docket Nos. 50-366A, 50-424A, 50-425A, 50-426A and 50-427A. (Emphasis added.) Section 5.20 of the TS-1 Tariff provides that the transmis-sion tariff is to be read within the boundaries of the License Conditions: l l Section 5.20 Settlement Acreement. The par-ties have entered into a Settlement 12/ This tariff was approved by an Order issued by the Federal Power Commission on February 25, 1977, and has been in effect since without change. See Greensboro Lumber Co. v. Georcia Power Co., 643 F. Supp. 1345, 1353-54 (N.D. Ga. 1986), aff'd, 844 F.2d 1538 (11th Cir. 1988). l
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Mr. Thomas E. Murley March 21, 1989 Page 12 Agreement, including Proposed License Condi-tions, relating to Atomic Energy Commission Docket Nos. 50-366A, 50-424A,'50-425A, 50-426A and 50-427A. This Agreement is entered into by the parties in partial imple-mentation of and is to be construed within the boundaries of said-~ Settlement Agreement, including proposed License conditions, and. nothing contained here shall be in violation of said Settlement Agreement, including Pro-posed Licensed Conditions. Georgia Power's transmission obligations, therefore, are implemented by the FERC tariff which creates an Integrated.Trans-mission System 18/ among the' parties who obtain transmission ser-vices from Georgia Power pursuant to this tariff. Although Oglethorpe has contracted for transmission service pursuant to the.TS-1 tariff, and thereby participates in the. Integrated Transmission System, it has never contracted for power pursuant to the provisions of the Partial Requirements tariff. Instead, it has taken power pursuant to the Partial Requirements tariff on an instant by instant basis as.such power is needed to supplement Oglethorpe's other resources.. Oglethorpe states that it intends to purchase power to become self-sufficient, but it has not entered into any contract to purchase power and does not assert that it is self-sufficient now.12/ Oglethorpe.could also become self-sufficient by contracting to purchase power _outside the State of Georgia -- and Georgia Power would transmit such-power pursuant to Paragraph 5(a) of the License Conditions.2q/ 18/ These Tariff Sections 3.01 and 5.20 are the contract provi-sions cited by oglethorpe.in its Comments at 8.. 19/ Oglethorpe Comments, at 21, fn. 14. l 20/ With respect to Rocky Mountain, discussed in Oglethorpe's Comments at 21, Oglethorpe plainly can purchase pumping energy off-system. It can also become self-sufficient imme-diately by contracting for power, if.it chooses, and thereby be poised to export power. Oglethorpe has the power to enter the Florida market under.the License Conditions:and' therefore ought not urge a new antitrust review because it has not exercised that authority. If it' claims it has exer-cised that authority and has been thwarted by Georgia Power, enforcement proceedings are appropriate. l
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Mr. Thomas E. Murley l March 21, 1989 Page 13 off-system. contingencies must not, however, impair the reliability of the purchase as the equivalent of a generating resource in the State of Georgia. , Georgia Power's interpretation of its transmission obliga-tions under License Condition Paragraph 5(b) is based on the i principle that each utility should bear the burden of its own ~ planning mistakes. If a party exports resources off-system while refusing to accept the risk that its planning might be wrong, , those risks must be borne not only by Georgia Power, but also by ^ 1 the other Partial Requirements customers. If exported resources prove to be needed on system, everyone's costs are~ increased and reliability may be impaired. , In summary, the existing License Conditions provide:for off-system transactions by all entities, including oglethorpe,21/ and are implemented by the existing transmission tariff. If Oglethorpe truly disagrees with Georgia Power as to.the proper t interpretation of the License Conditions, the appropriate forum is patently not another full-f.ledged antitrust review, but fur-ther negotiation between Oglethorpe and Georgia Power, and, if necessary, NRC Staff review of Georgia Power's compliance with the License Conditions.22/ Even if, as Oglethorpe states, the "very meaning" of the License Conditions "is disputed among the parties bound by them,"21/ such issues do not constitute "significant changes"- l i 1 21/ Oglethorpe's demand for dedicated transmission capacity also is inconsistent with the equality of access provided for by these License Conditions. , 22/ See NUREG-0979, Procedures for Meeting NRC Antitrust Responsibilities (May 1985), Sec. 5.2.3. That section-states that "[t]he staff will enforce such conditions con-sistent with the actual wording of the license conditions. If the meaning of the wording is subject to dispute, such dispute will be resolved through negotiation or hearing." Id., Sec. 5.2.3. See also Houston Lichtina & Power Co. (South Texas Project, Unit Nos. 1 and 2), CLI-77-13, 5 N.R.C. 1303, 1311 (1977) ("the language in Section 186 (of the Atomic Energy Act) gives the Commission authority to initiate a postlicensing enforcement' proceeding in the event of violation of specific antitrust licensing condition"). 21/ Oglethorpe Comments at 3-4.
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Mr. Thomas E. Murley March 21, 1989 Page 14-under 5 105(c)(2) of the Atomic Energy Act. The License Condi-tions have been before the Commission and the parties throughout the construction process. . They do not represent ~ " changes." _ Georgia Power has-confirmed that Oglethorpe can export power'as Georgia Power does. For example, the Unit Power Sales consist of capacity which is excess within the meaning of Paragraph 5(b)'. Oglethorpe forgets its planning and power supply responsibilities when, claiming " equal access," it seeks a right to export power when it has no excess resource available to export. The License Conditions and the related transmission and power supply tariffs are a coherent package of rights and responsibilities that make economic and operating sense. Parts of that package should'not be cast aside piecemeal. No " confirmation" or " clarification" of the License Conditions is needed. Georgia Power recognizes that it is bound to the License Conditions and is absolutely committed to their faithful implementation. The No Significant Chances.Findinc Is Effective And Properly Supported. The filing of oglethorpe's Comments should not affect the finality of the no significant change finding. While Oglethorpe quarrels with minor elements of the Staff's discussion, l oglethorpe does not dispute that the License conditions have ) facilitated its evolution and the evolution of the other Partial l Requirements customers as vigorous competitors of Georgia Power, ) and that the continued effectiveness of the License Conditions is in Oglethorpe's interest and in the public interest. . Accord-ingly, while oglethorpe states in a footnote that its pleading.is ; a request for reevaluation, Oglethorpe does not'in fact request ' that the Staff find that significant. changes have occurred which warrant a new antitrust review. The Staff Reports concerning the evaluation of the power l supply market during the construction of Plant Vogtle Unit 1 and ! Unit 2 show a remarkable evolution. oglethorpe and MEAG have emerged as suppliers of bulk power to the numerous rural coopera- j tives and municipal systems that once depended on Georgia Power. 1 Oglethorpe, MEAG, and Dalton own interests not only in Plant Hatch and Plant Vogtle, but substantial interests in large, mod-
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een coal-fired plants. Oglethorpe's role as the lead owner for the Rocky Mountain Pumped Storage Project is a remarkable example of the emergence of new bulk power suppliers pursuant to the implementation of the License Conditions. The procompetitive effects of the emergence of the-partial requirements customers as bulk power suppliers -- which have displaced Georgia Power as the supplier for approximately ninety municipal and cooperative' ,
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Mr. Thomas E. Murley March 21, 1989 Page 15 i systems -- is the central thrust of the Staff Reports. There is no doubt that these key procompetitive effects are continuing. Therefore, no correction need be made to the finding that the procompetitive effects identified during the licensing of Plant Vogtle Unit 1 are continuing. Oglethorpe's exceptions to the Staff's discussion are insubstantial. With resp / ect to absence of a concluded " generic scheduling agreement,"21' Oglethorpe's subjective view of " equal l access" and of Oglethorpe's present rights indicates why negotia-tions have been, and will be, time-consuming. Oglethorpe was more candid in its February 28, 1989 letter to Joseph Rutberg of j the NRC's Office of the General Counsel, where Oglethorpe j attempted to shape the NRC's Notice of Finding of No Significant l Antitrust Changes so that the procompetitive effects of the License Conditions were minimized. Oglethorpe was unequivocal with regard to the absence of any significant changes requiring a new antitrust review: We would suggest that no significant change
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has occurred, including no change related to i implementation of the conditions resulting in further procompetitive environment. There-fore, . . . we do not believe that a new antitrust analysis is required (there having been no significant change) . . . .11/' Jd. at 2. With res to Oglethorpe's ability to " control its own destiny,"ll/ pectOglethorpe has always had the power to become self-sufficient, but has not accepted the planning risks associated with self-sufficiency. If Oglethorpe has permitted the develop-ment of the notion that it lacks control over its destiny, that is not attributable to Georgia Power. Also, Oglethorpe does not allege that it asked Georgia Power to assist in implementing transactions with AEC and SMEPA.21/ The alleged transaction that 21/ Oglethorpe Comments at 16. 25/ Id. at 2. 26/ Id. at 17. 27/ Id. at 19-20. l
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. TROUTM AN. SANDERS. LOCKERMAN & ASHMORE ;
Mr. Thomas E. Murley March 21, 1989 ) Page 16 1 fell through in October 1987 because Oglethorpe failed to provide adequate assurances shows that Oglethorpe has been aware for some j time of the difficulties with its off-system transactions, j Again, Oglethorpe's February 28, 1989 letter to the Staff is more i candid than its Comments on the topic cf significant changes. I l The Seminole transactions in fact took place. Georgia' Power 1 disagrees with Oglethorpe's characterizations of Georgia Power's i cooperation with Oglethorpe's Seminole transactions. Georgia I Power has worked hard to facilitate the Seminole transactions. 1 Georgia Power has discussed at length with Oglethorpe the causes of Oglethorpe's various disappointments. Oglethorpe should know that they did not result from anticompetitive animus. For exam-ple, Georgia Power agreed to back-up Oglethorpe's sales to Seminole from Plant Scherer, as shown by S 1.1(c) and 5 3.2 of the April 30, 1986, Scheduling Services Agreement. / The staff accurately reported that Georgia Power made its transmission f acilities available to f acilit ate Oglethorpe's I Seminole transactions. Oglethorpe's assertion that "Oglethorpe is already a co-owner of the 'necessary transmission facilities'"18/ is false. The Integrated Transmission System is ) not a discrete, co-owned transmission network, but ir. stead arises l from a FERC tariff by which Georgia Power and Oglethorpe contract to provide each other with access to their facilities on equal terms. Neither ownership nor system size has anything to do with access. Oglethorpe and Georgia Power agreed that the transmis-sion component of each Seminole transaction would be provided l pursuant to Georgia Power's existing transmission service tariff (see the references to the Integrated Transmission System in 5 5.5 of the April 30, 1986 Scheduling Services Agreement and 5 2.5 of the June 14, 1988, Scheduling Services Agreement, both on file with the Staff). There was therefore no need29/ to nego-tiate a separate agreement to provide Oglethorpe with access to Georgia Power's transmission facilities to the Florida border, 28/ Id. at 19 n.12. 29/ Under Oglethorpe's misconstruction of " equal access," small i utilities could not grow as rapidly as Oglethorpe has pursu-ant to the License Conditions. Under the Oglethorpe " ratio" I method of allocating access, there could be a need to nego-l tiate an increase in capacity dedicated to a small utility l seeking to sell more than its transmission " ownership share" l could accommodate from a plant.
t' 1 e TKOUTM AN, SANDERS, LOCKERMAN & ASHMORE
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Mr. Thomas E. Murley I March 21, 1989 I Page 17 q since the Integrated Transmission System Agreement provided'for equal access to each party.'s facilities.M/ l' In summary, Oglethorpe's quarrels with'the Staff report do
.not attack the no significant, change finding in a material way and fail to' cure the fundamental flaw-in Oglethorpe's Comments --
that'of attempting to misuse the no significant change review process as a means to enforce Oglethorpe's interpretations of License Conditions. Oglethorpe's Comments do not affect the Staff's ability to recommend, and the Commission's' ability'to issue, the full power license on March 30 as planned. For the foregoing reasons, we request' issuance of the_ full
. power license as scheduled, notwithstanding Oglethorpe's Com-ments.
Respectfully. submitted, A884/4/ Robert P. Edwards, Jr.' Counsel.For Applicant Georgia Power Company cc: Joseph Rutberg Counsel for Oglethorpe Power Corporation Counsel for the Municipal Electric Authority of Georgia' Counsel for the City of Dalton, Georgia M/ Oglethorpe does not complain of the expiration of the Seminole agreements by their own terms. L}}