ML22230A055
| ML22230A055 | |
| Person / Time | |
|---|---|
| Issue date: | 12/15/1977 |
| From: | NRC/OCM |
| To: | |
| References | |
| Tran-M771215 | |
| Download: ML22230A055 (43) | |
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- RETURN TO SECRETARJAT RECORDS NUCLEAR REGULATORY COMM I SSIO N IN THE MATTER Of:
ADJUDICATORY SESSIO N 77 - 51 on ALAB - 420
- Place - Washington, D . C.
Date - Thursday, 15 December 1977 Pages 1 - 40 Te lephone:
( 202 ) 347-3700 ACE - FEDERAL REPORT ERS, INC.
- Official R epo rters 444 Nor th Capitol Street Wa shingto n, D.C. 20001 NATIONWIDE COVERAGE
- DAILY
(
DISCLAIMER This is an unofficial transcript of a meeting of the United States Nuclear Regulatory Commission held on December- 15, .1977 in the Commission's offices at 1717 H Street, N. \ .;-Washington, D. C. The meeting was open to public attendance and observation. This transcript has not been reviewed, corrected, or edited, and it may contain inaccuracies.
The transcript is intended solely for general informational purposes.
( As provided by 10 CFR 9.103, it is not part of the formal or informal record of decision of the matters discussed. Expressions of opinion in this transcript do not necessarily reflect final determinations or beliefs. No pleading or other paper may be filed vJith the Commission in any proceeding as the result of or addressed to any statement or argument
( contained herein, except as the Commission may authorize.
(
1 CR 5857 UNITED STATES OF AMERICA
~ 2 NUCLEAR REGULATORY COMMISSION 3
- 4 5
AD,JUDICATORY SESSION 7.7:-51 on 6 *ALAB-420 7
8 Thursday, 15 December 1977 9 1717 H. Street, N.W.
Room 1130 10 Washington, D.C.
11 12 Whereupon, the Commissioner's met, pursuant to
- 13 14 15 notice, at 9:30 a.m., Acting Director Gilinsky, presiding.
PRESENT:
COMMISSIONER GILINSKY COMMISSIONER PETER BRADFORD 16 COMMISSIONER RICHARD KENNEDY 17 JAMES KELLEY, Esq., Deputy General Counsel RUTH BELL, Esq., Office of the General Counsel 18 19 20 21 22 23 A c e -
- Reporters, ~n~.
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CHAIRMAN GILINSKY:
ALABL-420.
P R O C E E D I N G S Ruth, are you going to lead us throug 4 MS. BELL: I will try my best.
5 CHAIRMAN GILINSKY: Okay; a review of ALAB-420.
6 MS. BELL: We are here to discuss a review of ALAB-420.
7 I will start briefly by just going very briefly through 8 the normal antitrust review process of the Commission, and 9 then the facts of this case.
10 Normally, when an application for a Construction Permit 11 is received, the antitrust review.takes place at that time.
12 The matter is referred to the Attorney General for his views
- 13 14 15 and examination of the application .
And within 180 days, which is the statutory period, the Attorney General responds to this request. This response is published in the Federal Register with a general call for any-16 one who has some sort of complaint or statement about it, to 17 respond to the Federal Register notice.
18 In this particular application, the application for the 19
.CP was received in 1973. The application was routinely re-20 ferred to the Attorney _General and in Nove~ber --
21 COJ\'lMISSIONER KENNEDY: After review bv our own anti-22 trust staff?
23 MS. BELL: I believe so.
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In November 1973, the Attorney General recommended that 25 L
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no hearing was necessary in view of the fact .that the appli-cant was considering granting access to this facility to certain entities.
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COMMISSIONER KENNEDY:
tion to the Attorney General?
Does our staff make a recommenda-6 MS. BELL: I think the Attorney General makes a recom-7 mendation to our staff. And our staff, in this matter, then 8 apparently engaged in negotiations with the applicant.* And 9 as a result of that, a certain number of commitments were 10 made with respect to certain coops and munis, that the licen-11 see would offer each of these the opportunity to purchase a 12 reasonable ownership share.
- 13 14 15 And thete is a letter in the files, February i74, in which it reviews brie~ly the recommendation to the Department of Justice:
16 "The antitrust hearing was not necessary in view of the consideration of the granting of access to 17 this facility to certain entities. 11 18 And this states the vario~s conditions that the appli-19
- cant, the staff and he entities agreed to.
20 MR. KELLEY: These certain entities did not include the 21 people who are before it now; is that correct?
22 MS. BELL: That is correct. These are other entities.
23 COMMISSIONER: Are you going to explain why the differ-
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ence?
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4 MS. BELL: The record before us, I don't believe, 2 reflects why the difference. Certain entities apparently did 3 request access or participation and as a result of these neq-
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otiations, they worked out some conditions which resulted in an agreement between the various parties.
6 COMMISSIONER KENNEDY: The entities now before us, 7 however, did not so request and therefore were not i~cluded?
8 MS. BELL: Are different and did not request at 9 that time; that's right.
10 COMJY[ISSIONER KENNEDY: The question, then, of 11 course, is why didn't they? And isn't it alleged that they 12 were misled?
- 13 14 1§ MS. BELL: They allege that they were misled .
In August ~f 1976, another groups of munis, and others collectively known here as the Florida Cities, re-quested leave to intervene out of time and requested a hear-16 ing.
17 This was referred to a Licensing Board, and a 18 Licensing Board issued a decision allowing, granting the pet-19
.ition and setting forth -- granting the petition for relief 20 to intervene and s.etting the matter down for hearing.
21 This was appealed to the Appeal Board, which af-22 firmed the decision, and then a petition was filed with the 23 Commission requestinq review of the Appeal Board decision ..
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COMMISSIONER KENNEDY: The petition was bv the 25
5 applicant .
2 MS. BELL: The applicant requested review of that 3 decision.
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The questions that the Commissioners asked were laid out in its order of, I think, October 19, 1977. The 6 questions were whether in view of -- I should say; after the 7 Licensing Board decision but before the Appeal Board decision 8 was rendered, this decision:...._ this Commission decided the 9 South Texas matter in which for the first time, it discussed 10 late intervention petitions in the context of a petition that 11 was filed after_ the request after the CP was issued but 12 before issuance of an OL.
- 13 14 15 And although the issues raised by this petition were not squarely add~essed there, the Commission alluded to certain policies of early review and early consideration of 16 antitrust matters in the context of our licensing proceedings, 17 and stated that generally the antitrust review of this Com-18 mission was limited to the two-step licensing process.
19 MR. KELLEY: And thqt the second review would be less detailed than its first.
20 MS. BELL: And that the second review had to do 21 with significant changes, rather than a full-blown, broad-22 based antitrust examination.
23 Two, we requested briefing, then on -- as a result
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of the applicant's petition for review, we requested briefing 25
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on two matters .
claims.
One had to do with late consideration of antitrust We stated that we expected these parties to address
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whether the determination of the Appeal Board that acceptance of the Orlando petition did not constitute an abuse of dis-6 cretion, was consistent with the standards alluded in the 7 South Texas decision for late consideration of antitrust 8 claims.
9 Secondly, we requested briefing on whether it was 10 correct to allow participation by all petitioners in view of 11 the fact that if the Orlando -- let me backtrack a little bit.
12 A number of petitioners requested a late hearing
- 13 14 15 here. One of these petitioners, Orlando 6 made a case before the Licensing Board, which the Licensing Board accepted and the Appeal Boar.d accepted, that the reason they had not inter-16 vened earlier and requested a hearing, was that they had been 17 basically misled to believe that they would be granted access 18 to future units or facilities planned by this applicant.
19 They stated that when they determined that they 20 were not going to be granted such access, fuey then requested 21 this late COMMISSIONER KENNEDY: They were:not part of the 22 23 original discussion and understandings reached with the Justice Department?
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25 MS. BELL: No. They are not reflected in the
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license conditions that were written at that time.
conditions were granted with respect to certain people and they are not among the people who are there listed.
License 4 The question was whether --
5 COMMISSIONER KENNEDY: The question, then, is 6 I am trying to educate myself -- the question really is:
7 Whether their allegation is fact or not?
8 MR. KELLEY: The points needs to be made: They 9 came in and they filed affidavits sayin~ we were misled, that 10 actually statements were made by Flori0a Power and Light 11 that they would_be let in later, and Florida Power and Light 12 did not controvert those affidavits.
- 13 14 15 cord, said:
So that the Appeal Board, when it came to the re~
Well we h_ave to take these as true.
that all these facts are true --
Assuming COMMISSIONER KENNEDY: Because it had not been con-16 troverted.*
17 MR. KELLEY: Right, what will follow --
18 COM..1\ilISSIONER KENNEDY: Was there a reason-.. for 19 Florida at the time, procedurally,. to controvert it? Or could 20 it be that they just simply didn't feel it was even necessary 21 to do so?
22 MR. KELLEY: They could have controverted it.
23 They made it quite clear, I think, before the Appeal Board Ace-*I Reporters, ~n~.
and this is reflected in the Appeal Board opini9n. The 25
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Appeal Board said to c_ounsel before them:
controvert these affidavits.
Why didn't you just And the answer was that we made a tactical litigation judgment that we didn't have to and 4 we were better off not doing it.
5 COMMISSIONER KENNEDY: I see.
6 MR. KELLEY: So they thought about it and decided 7 not to.
8 COMMISSIONER KENNEDY! So one could say the ques-9 tion of fact is still open.
10 MR. KELLEY: The world is different in one respect 11 than the one th~t was before the Appeal Board. You might 12 comment on that development, Ruth.
- 13 14 15 MS. BELL: Well, I should say that -- before I say this, it is a* *well accepted fact that uncontroverted affidavits are usually taken as true. The other party norm~
16 ally has --
17 COMMISSIONER: That is sort of a rule; not a fact.
18 MS. BELL: Pardon me?
19 COMMISSIONER KENNED~: That is a rule, not a fact.
20 MS. BELL: Well, it tends to be a ru~e and there ar cases that support that. If the party had opportunity to come 21 in and controvert them and did not do so, that the only leg-22 itimate, or the most reasonable interpretation of the hearing 23 board at that stage is that the affidavit should be taken as
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true.
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Are you referring to the attempt to file --
MR. KELLEY: The late filing.
MS. BELL: *After the applicant filed a request for 4 review with the Commission, they then filed a pleading to 5 which they appended affidavits for the first time, contro~
6 verting or allegedly controverting, the,-.earlier affidavits 7 filed before the Licensing Board.
8 Now, under the normal rules of procedure of the 9 Commission, the SERT rules provide that only the request for 10 review is accepted and no papers thereafter, from the person 11 requesting revi~w_. So in a sense, it was an unauthorized 12 pleading and we haven't disposed either way of that matter.
- 13 14 15 They did apparently though attempt to lodge these affidavits with us.
MR. KELLEY: To fill it out a little bit, counsel for Florida Power and Light took umbrage to some statements 16 in the reply by Florida Cities.
17 Florida Cities had made some statements in their 18 reply pleadings to the effect that Florida Power and Light 19 was somehow abusing the process of the Commission. So the 20 procedural label on the paper that filed the affidavits, 21 was a motion to strike .those portions of the pleading that Ace-F 22 23 24 I Reporters, Inc.
they took exception to.
So one could argue that a motion to strike is a different beast *than an unauthorized reply to a reply.
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on that.
I think my reaction. is that you could go either way You could accept these, and one procedural outcome that we suggested on paper says:. Now that these affidavits 4 have been lodged, and if you choose to accept them, you could 5 remand this case for a hearing on the question of whether the 6 petitioners here were misled and go ahead and litigate that 7 issue, that narrow, factual question.
8 And if you found that they were not reasonable in 9 their expectations, then you could say good cause hasn 1 t been 10 shown and that would be the end of it.
11 On the other hand, if a hearing on th~s.issue 12 showed that they were misled and were reasonable in expecting
- 13 14 15 they would be let in later in another project, then that might be considered good cause and a hearing could follow from that.
But the world.is different in that respect. We 16 at least have before us these affidavits now, and it is up 17 to the Commission what-is to be done.
18 COMMISSIONER KENNEDY: Which aside from the proced-19 ural question*, lays open the question of the facts~
20 MR. KELLEY: Yes.
21 COMMISSIONER KENNEDY: What has *the Justice Depart-22 ment said about that, if anything?
23 MS. BELL: The Justice Department has not referred 24 to that. I don ',t think there is any reference to that in Ace-F* I Reporters, Inc.
the paper.
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MR. KELLEY: But we didn't call for briefing on what should the Commission do with these late affidavits.
And as I recall the papers, nobody addressed it.
4 MS. BELL: That's correct.
5 MR. KELLEY: And indeed, I don't believe that 6 Florida Power and Light makes a great deal out of those affi-7 davits . . Their argument, one argument at least, is that the 8 Commission in judging* *whether good cause has been shown for 9 a late filing, ought to corifine itself to papers in the 10 antitrust record. And this would lead to disregarding, not 11 only their affidavit but the other side's affidavit.
12 You just wouldn 1 t look at dealings outside the
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- 15 antitrust re6ord in deciding this question
- COMMISSIONE,R BRADFORD: Now that is more or less what would happen in any_case at the hearing; the affidavit 16 whether even taken as true, doesn't establish on its face a violation of the antitrust laws.
17 18 MR. KELLEY: The violations of the antitrust laws 19 are not before the house at all, and have not been reached by the Licensing Board.
20 And as a matter of fact, the Appeal Board decision 21 under review explicitly states that they are not intimating 22 any view on the antitrust violation. The Appeal Board says 23 that they are well pleaded. If what they say is true, there 24 Ace-F* Reporters, Inc.
may be a Sherman Act violation. But in terms of deciding that 25
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there has been an antitrust violation, nobody has decided that and there hasn't been any evidence preferred on that.
And that is not before us.
4 It is purely a procedural matter that is before 5 the Commission, not a substantive antitrust issue.
6 MS. BELL: And the affidavits 0nly _go to the question 7 of whether the cities or Orlando was misled, arguably misled, 8 into believing that if they did not intervene in this proceed-9 ing and did not press request for participation in the 10 planned facility, they would be granted some portion of future 11 planned facilities.
12 COMMISSIONER BRADFORD: Under the structure of
- 13 14 15 10 CFR 2.174, as the Commission construed it in the West Valley situtation, Orlando,.arguably, has made a showing of good cause and the other petitioners clearly, they haven't 16 even tried.
17 MS. BELL:* No.
18 COMMISSIONER BRADFORD: Is that fair to say?
19 MS. BELL: Before the Licensing Board, they were 20 a number of plans. One of them was this argument that Orlando 21 had been misled.
22 Second of all, there was an argument that in 1973 23 COMMISSIONER KENNEDY: Excuse me, Ruth.
MS. BELL: Yesa
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25 COMMISSIONER KENNEDY: And again,. I am just trying
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to be sure I have it clear.
MS. BELL: Yes.
COMMISSIONER KENNEDY: Whereas it was alleged that 4 Orlando was misled, it did not follow, or did it, that if 5 Orlando was misled, so were the other Florida cities?
6 MR. KELLEY: No. What follows -- there is a state-7 ment in the Appeal Board's footnote 13, as I recall, to the 8 effect that if Orlando gets in, the others can follow. But it 9 wasn't because they were also misled.
10 The reasoning that the Appeal Board adopted was 11 that if you let:Orlando in, you are going to have ~n antitrust 12 hearing with certain parameters, and the parameters of that
- 13 14 15 hearing will not be significantly affected by letting every-body else in, so you might.just as well.
But not -- I believe*there are some arguments:in 16 the brief of the cities to the effect that there is reason 17 to believe Orlando wasn't the only one, but that is not really 18 that is not the way the Appeal Board -- that is not their 19 theory of the case. Their theory was the scope 0£ the hearing 20 and the conclusion that it wouldntt be affected.
21 And I think that that is a subject that we might profitably discuss.
22 COMMISSIONER BRADFORD: That is where I was headed.
23 At least as far as the Appeal Board is concerned, though, the
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25 posture is that.Orlando has shown good cause and the others
14 have not?
2 MR. KELLEY: They simply didn't reach whether the 3 others had or not.
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The ~icensing Board said that the energy crisis in '7 3 was in one posture,* and it was worse in '7 6, and the 6 argument was made that we didntt think we needed it in '73 7 and we did in '76, and the Licensing Board accepted that 8 as good cause for other cities.
9 Right?
10 MS. BELL: That is correct.
11 MR .. ;KELLEY: The Appeal Board just simply didn't 12 address that, again, on their theory that if you let one in,
- 13 14 15 it is the same hearing, anyway.
COMMISSIONER BRADFORD: But the way the Commission has construed 2.714, you don't to have shown good cause if 16 you then can -- if you then qualify under the four sub-17 criteria?
18 MR. KELLEY: Yes. If you show_ good cause, you are 19 in. If you fail to show good ~ause, you might still make it 20 in, but you fiave to ]Jepretty well under the four criteria ..
It is a balancing kind of a test. But they did 21 hold there you didn't necessarily have to show good'cause.
22 But you don't show good cause, then the later you are, the 23 stronger your case has to be.
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And necesarily with that kind of a test~ you have 25
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a lot of discretion with the Licensing Board .
COMMISSIONER BRADFORD: But as to the other peti-tioners, other than Orlando, if you look at those four sub-4 criteria, are there any of them that would rule the other 5 ones out? Do they have other means by which their interest 6 may be protected? They can go the Justice Department route.
7 MR. KELLEY: They can go to the courts 8 COMMISSIONER KENNEDY: They can 1 t go to the Justice 9 Department.
10 COMMISSIONER BRADFORD: Excuse me. I meant to say 11 the courts, yes.
12 MR. KELLEY: They can go and aska
- 13 14 15 MS. BELL: The Justice Department is free to prosecute violations of the Sherman Act, independent of this.
COMMISSIONER BRADFORD: But everything that the 16 Appeals Board has said about that route with regard to 17 Orlando, presumably applies just as much to the others?
18 MS. BELL: You mean in the sense of other possible 19 means of 20 COMMISSIONER BRADFORD; Yes.
21 MS. BELL: Redress.
22 COMl'HSSIONER BRADFORD: Yes.
23 MR. KELLEY: There is another point that I think 24 should be made. A civil antitrust suit whether by the cities Ace-F* I Reporters, Inc.
25 themselves or whether the cities could induce the Justice
16 Department to sue on their behalf, does present a somewhat 2 different case, at least in theory, because our antitrust 3 jurisdiction extends to situations that are found to be in-
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consistent with the antitrust laws, including their policies, the theory being that we have a broader -- we are supposed --
6 we could theoretically catch the sort of incipient antitrust 7 violation that a court might not grant ,relief on, so that it 8 is at least in theory not correct to equate court relief with 9 what might be done before the Commission in its licensing 10 conditioning role.
11 I suppose another comment occurs to me. We did not 12 call for briefs on whether the other parties had made_good
- 13 14 15 cause. The Appeal Board didn't even look at it.* I _think that conceivably, if that became an important issue that the other parties show good cause_,--. i t isn't to say the record 16 is before you and you could reach it, but there is some dis-cussion of the.good cause of the other parties in some of the 17 briefs, but we didn't ask for it.
18 COMMISSIONER BRADFORP: What I am really after at 19 the moment is putting it in the framework that assuming that 20 it doesn't make any real difference if they are permitted to 21 participate -- and I guess I am using the criteria set forth 22 in the rule, to try and assess what kinds of difference it 23 makes one way or the other.
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MS. BELL: Well, there is debate among the parties 25
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17 on that. They argue, the applicant argues that the scope of 2 the hearing would be considerably wider if all the parties, 3 all the petitioners, were allowed to participate.
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COMMISSIONER KENNEDY:
of this widening scope?
Does he describe the nature 6 MS. BELL: Does the applicant?
7 COMMISSIONER KENNEDY: I know he argues this, but, 8 how does he contend with, what does he --
9 MS. BELL: The parties stand in various kinds *of 10 positions in terms of their proximity to the facility, their 11 distance, their --
12 COMMISSIONER KENNEDY: How does that widen the
- 13 14 15 scope of the inquiry?
MR. KELLEY: Maybe it would be helpful to talk about the normal scheme and then contrast it to what might possibly take place in this situation.
16 And. corre.ct me if I am wrong, Ruth, but I think 17 that if you take the normal case where there is an antitrust 18 review and there is a hearing; let"s pose that two or three 19
-municipals come in and ask for a hearing and they become 20 parties and they present their respective cases~
21 It is uhlike civil antitrust litigation. If those 22 same parties went to court and sued Flordia Power and Light 1 23 they would present their own cases, get whatever relief they
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were going to get and that would be it.
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Here you have. a different situation because you have got both the Attorney General and our antitrust staff presenting, if you will, the big_ picture.and endeavoring to
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present the interests of everybody that is affected by this licensing; not just those people who intervene.
6 So that putting to one side the lateness* factor, 7 you at least theoretically look at all the antitrust implica-8 tions of granting a license for St. Lucie 2. That's the 9 theory.
10 I think the staff quite candidly says that it is 11 unrealistic to .~xpect that they-really would-come tn and pre-12 sent in full the same case that a participating private party
- 13 14 15 would, because he has got a somehwat different, narrower economic interest in getting participation and in presenting his case.
16 So that it is a mix. On the one hand, you have 17 got this -- the Appeal Board says: If we. let one guy in; let 18 them all in. It is the same case. Theoretically, I think that is true.
19 20 COMMISSIONER KENNEDY: Yes.
MR. KELLEY: As a practical matter, when you let 21 everybody in, if they all show up with a different lawyer, 22 if they all want to make their own case -- and what Florida 23 Power and Light did to me last year and the year before; it
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does get to be a bigger hearing.
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COMMISSIONER KENNEDY:
the definition of scope?
A bigger hearinq; is that That is what I am trying to get at.
The issues are going to be the same issues.
4 MR. KELLEY: Theoretically again, I think that is 5 true, but if the issue is: Does Florida Power and Light have 6 monopoly power in the peninsula of Florida ..,.._ although, that 7 broadly stated may be the issue with various sub-issues, if 8 you have got a lot of private parties in addition to the staff 9 and the Justice Department litigating it, in realistic terms 10 the scope gets broader the more folks come in, i t would seem 11 to me.
12 MR. KENNEKE: Jim, doesn't this undermine the
- 13 14 15 South Texas effort to stablize the process.by saying you only consider, the Commission only considers it at two spec-ific stag.es. In effect, what you would be doing is granting 16 them a way -- the other cities, assuming Orlando put them 17 aside for a minute -- assuming they had no case, you are 18 granting them another avenue to get in, other than the two 19 stages when the Commission has .said in South Texas they have 20 *got to show a significant change in the circumstances.
21 MR. KELLEY: We ~re not out of stage one here.
22 These things were filed before the CP issued. So it is a con-23 ceptually different situation. They are late; that is true.
24 And we suggest in this memo that there may be ways in which Ace-F* Reporters, Inc.
25 one can restrict either hearing or relief so as to encourage
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people to come in on time. But you can't just cite South Texas and say case dismissed.
CHAIRMAN GILINSKY: Wpat do you see as the rele-4 vance,of that case?
5 MR. KELLEY: Well, there is support in the legisla-6 tive history that is quoted in the South Texas opinion to the 7 effect that utilities who set out to 15uild .. these,, expensive 8 facilities and commit these large sums of money, do have an 9 interest in a relatively early and certain a resolution of 10 who is going to own it. There is a quote from Holifield 11 expressing his-concern about getting this wrapped 1.1p early.
12 And that is quoted in South Texas for the p:uo-:':*-*
- 13 14 15 position that there we are just going to do i t at the licens-ing stage, the two licensing stages, and that the earlier stage is the fuller one where matters are, if possible, to be 16 resolved so that the utility can then move on.
17 Here, although, as I say i t is conceptually dif-18 ferent because these petitioners did come in before the CP 19 proceeding was over with, they.are two and a half years 20
- late. And the argument is made by Florida Power and Light 21 that they have gone that much further down the road. And they have spent a lot of money, and here they have thought for the 22 last two and a half years that i t was going to be all theirs.
23 And they have made decisions accordingly and to allow a full-
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25 blown hearing at this stage will disrupt their plans.
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That is the --
COMMISSIONER KENNEDY: But it was stipulated by all parties that it will not interfere with construction?
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MR. KELLEY: That's true. And an important point in the Staff's view was that we are not talking about critical 6 delay in building this facility, because everybody has agreed 7 that construction can move on. So letting cities in would not 8 be an exception to South Texas.
9 COMMISSIONER KENNEDY: You could let cities in 10 consistent with the South Texas decision.
11 MR. KELLEY: Yes.
12 The argument is made by the utility tha*t the
- 13 14 15 spirit of South Texas, if you--will, is offended by this late proceedi!.ng, and I think there is some merit *in that point.
And then it becomes a question of what the Commission might 16 do to accommodate bo~h policies.
17 COMMISSIONER KENNEDY: That comes back to the fact-18 ual issue that we were talking about earlier.
19 MR. KELLEY: Yes.
20 COMMISSIONER KENNEDY: If it is a fact that Orlando was misled, then that is new significant informatio~, which 21 would have affected or could have affected the nature of the 22 hearing that was held in the first instance r :*.:And therefiore, 23 a rehearing, a reopening of the hearing would not be in the
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least inconsistent with South Texas.
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The question is the facts .
MS. BELL: The South Texas decision did recognize situations like that, where part_ies had been misled and did 4 not pursue their rights because of that reason.
5 There is also an argument that can be made, I 6 have seen the applicant make it; relating the more relaxed 7 antitrust standard to the requirement for early review, be-8 cause later on, of course, like any other company in the 9 United States, they are open to litigation in the district 10 court under the stricter Sherman Act standard.
11 COMMISSIONER KENNEDY: Excuse me, *Ruth._ I can't 12 hear you.
- 13 14 15 MS. BELL: I am sorry.
The argument has something to do with the relation-ship between the more relaxed standard; that is, the situation 16 inconsistent rather than in actual violation of the antritrust 17 laws, and the requirement that parties who seek to take ad--
18 vantage of this more relaxed standard, come in early and make 19 their needs known very early.
20 And you can make an argument out of the legislative 21 history and the statut~s on that basis.
MR::* KELLEY: But in terms of judging the relative 22 equities 0£ the parties, I think that what. you were.* s-µ9gest-23 ing, that if they were misled, tying that in with South 24 Ace-F* I Reporters, Inc.
25 Texas -- we gave an example ori the South Texas opinion about
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- it, if a party gains a license by fraud or concealment, then 2 he has got no basis for complaining about a late hearing.
3 Here you have got a finding that one,. they were in
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fact misled ~nd two, they were reasonable in so being, in being so misled.
6 You don't have the third finding that Florida; 7 Power and Light did it on purpose. That is not a finding 8 that the Appeal Board made. I suppose that if you had a case 9 where the utility deliberately misled, then he has got no 10 equities at all.
11 COMMISSIONER KENNEDY: Well, now . let's go to the 12 equities or whatever. If what this is all about is to assure
- 13 14 15 that this government sponsored and supported technology is not used in a way to a_dversely affect the fortunes of smaller utilities which can't afford to employ itf if that .is what it is all about then you know, the niceties of deciding whethe 16 somebody was misled unintentionally or unintentionally-~
17 that is one issue. But if he was misled at all, it would 18 seem to me to argue that at le~st he ought to have his case 19 h_eard, going back to the point of the case in the first place, 20 which is to prevent a situation from arising in which* this 21 government sponsored and supported technology is not used by 22 utilities which can afford, to the disadvantage of those which 23 can't.
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MS. BELL: I think that is a very strong policy 25
24 enun:ciated by the Act .
2 COMMISSIONER KENNEDY: It seems to me that is the 3 kind of issue we ought to be addressing. That is the kind of 4 issue that maybe the Commission ought to be looking at here.
5 MS. BELL: That is the strong policy that the 6 cities point to in their briefs. And I think there is support 7 for that in the statute and in the history. And the applicant 8 argues that the other competing policy is the early decision 9 policy.
10 COMMISSIONER KENNEDY: That is a procedural ques-11 tion w.ith which I am wholly in accord.
COMMISSIONER BRADFORD: Well, the Appeals Board 12
- 13 14 15 said of the Licensing Board, that it wouldn 1 t reverse their decision, showing tha~ they had abused their discretions, and that is the standard to be applied to reviews 1n that situation.
16 Is the s~e constraint true of us? First of all, 17 is there any legal reason why it is true. And secmdly, as 18 a practical matter, is there a~y reason for us to use any 19 other standard?
20 MR. KELLEY: Well, you are bound by the rule; 21 2.714 is the rule on the books and it does apply to a late 22 intervention petition. It seems to me that whenever you have 23 got a rule that has that many balancing factors in it, you 24 Ace-F* al Reporters, Inc.
are talking about discretionary judgment.
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COMMISSIONER BRADFORD:
discretion within 2.714.
MR. KELLEY: Right.
There is considerable 4 COMMISSIONER BRADFORD: The Appeal Board said 5 by standard, I didn't mean that rule. I meant the abuse of 6 discretion standard as a basis for overturning the lower 7 board's action.
8 MR. KELLEY: Well, the Commission has said earlier 9 in West Valley, that that was the test. I would suppose that 10 as a legal matter, the. who.le record is before you in these 11 cases, generally speaking, and you can de novo review some-12 thing.
- 13 14 15 You didn't announce the review in those terms.
You asked for briefs on some rather specific points without suggesting that you were going to look at the whole record 16 and rejudge from scra~ch whether an abuse of discretion had 17 occurred.
18 I think that one thing that is properly before 19 the Commission now -- and briefs were asked for on this --
20 g.iven that if .iJ.s a discretionary judgment and you review for 21 abuse, should you factor in or should the board factor in 22 to its discretionary judgment the policies that were announced 23 in South Texas, which are to encourage early and certain 24 resolution of antitrust issues.
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25 And that would be -- it seems to be another factor
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on the scale that a Licensing Board would apply .
COMMISSIONER BRADFORD: But if South Texas had been decided three or four years earlier, what difference
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- 5 4 would it have made in this case? Again, takinq the affidavits as true, there isn't much that Florida Cities would have dQne 6 differently, if they had been aware of the Commission's 7 policy in South Texas.
8 MR. KELLEY: Well, indulging in what is sometimes 9 the fiction that people out there, you know, the utilities 10 lawyer could say: Well, it is a good cause thing and I can 11 always get in late. But this is an antitrust case. The 12 Commission has a policy for early resolution, so even though
- 13 14 15 we had this nice letter from the utility, we had better get in there early and let our voice be heard, otherwise the Commission may say that bur policy of early resolution; dis~
16 favors this application.
17 COMMISSIONER KENNEDY: I have the impression that 18 utility lawyers are acutely aware of those kinds of issuances 19 from the Commission.
20 MR. KELLEY: The nuclear bar laywers ,, yes, I think 21 that is right.
COMMISSIONER KENNEDY: That is an extensive bar.
22 23 COMMISSIONER BRADFORD: If I understand the affidavit correctly, to have done that would have cost them
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25 their alleged assurance of participation in the other units.
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COMMISSIONER BRADFORD: Again, if the affidavit is taken as true, that would be the case.
COMMISSIONER KENNEDY: We interrupted you a half 4 an hour ago.
5 MS. BELL: Well, I think we have covered the points 6 I wanted to make. I was just going to go through the factual 7 history here and the questions before the Commission. And 8 as I understood what we were doing today, we were just going 9 to discuss a little bit.th~positions of the parties and 10 possible outcomes for the Commission.
11 We stated in the paper we sent up various possible 12 outcomes the Commission could reach.
- 13 14 15 COMMISSIONER KENNEDY: You mentioned a range of possible outcomes, inc.luding on one side a full--blowri. hearing.
MS. BELL: That's right.
16 COMMISSIONER KENNEDY: Conducted by whom; by the Commission?
17 18 MS. BELL: Well, were the Commission to go ahead 19 and approve ALAB-420 or confirll]. it, there would be a: full-
- blown hear+/-~g beflore a Licensing Board.
20 COMMISSIONER KENNEDY: Before a Licensing Board?
21 MS. BELL: Before a Licensing Board.
22 COMMISSIONER KENNEDY: Not the Commission?
23 MS. BELL: Oh, no; which would be 1 I imagd.ne, like
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any other full-blown antitrust hearing that is being conducted 25
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before Licensing Board within the Commission .
MR. KELLEY: What we tried to do, I guess, is state extremes, our notion of what options the Commission has.
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And that would be the position most favorable to the inter-venors, would be a full-blown hearing.
6 I suppose at the other end of the spectrum --
7 COMMISSIONER KENNEDY: Can I ask how that would 8 work? In the present circumstances, given the range of 9 uncertainties which we have discussed this morning, both 10 factual and interpretative, if we simply call for a full-blown 11 hearing-by a Li9ensing Board, under what guidance would the 12 Board be proceedingf South Texas, essentially?
- 13 14 15 MR. KELLEY: The next question is: How much, if any,* guidance, do you.want to give the board with regard to the significance, if any, it should attach to the fact that 16 this is a late hearing? And that is something that we.ex-17 plore, not fully, bu.t suggest in the paper that we sent to 18 you.
19 COMMISSIONER BRADFOBD: But again, if the affidavit 20 is taken as true, and we in some way limit it to relief available, at least fo_r Orlando, in effect we would be on 21 one other assumption, that the statements in the affidavit 22 do in fact add up to something close to fraud,.we would then 23 be directly allowing Florida Power and Light to have profited
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from that set of circumstances, by limiting the relief 25
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available.
others out.
This is just as to Orlando, now, leaving the MR. KELLEY: Okay; ju~t focu~ing on Orlando; it
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seems to me i t is a question of how you read the affidavit.
Even if you say: Okay; we are going to take this as true, 6 you can then attach different degrees of significance to it, 7 and I am not going to attempt to do that now, but one could 8 the argument is made by the utility that in this business 9 world, they were not reasonable in relying, even ass~ming 10 those representations were made, they should have protected 11 their interest more fully than they did. And that_becomes a 12 judgmental question, it seems to me with the Commission;
- 13 14 15 you are going to yourselves assess the significance you would attach COMMISSIONER KENNEDY: Is that alleged to controver 16 the allegation?
17 MR .. KELLEY:. I am sorry?
18 COMMISSIONER KENNEDY: Is that kind of reasoning 19 alleged to controvert the allegation of misrepresentation?
20 MR. KELLEY: I am a little uncertain as to --
21 COMMISSIONER KENNEDY: Is that what Florida Power is saying is*a basic controverting of the allegation that 22 the others were misled.
23 MR. KELLEY: No. Their controversion, if I may
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25 invent a word, i-s in the form of these late affidavits. The
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argument made earlier was: Well, even if we did say that, nobody should be so naive as to accept such a thing, and they should have done something else._
4 COMMISSIONER BRADFORD: Given. -our long history 5 of dealing with municipalities in Florida, they should never 6 ac:::cept this sort of argument.
7 (Laughter.)
8 COMMISSIONER KENNEDY: How does that work in 9 rate hearings?
10 (Laughter.)
11 MR. KELLEY: Maybe it would be useful to try to 12 state options. It seems to me that the Commission by essent-
- 13 14 15 ially affirming the Appeal Board, you let a hearing go forward At the other extreme, the argument is made -- I am not saying it is an extreme; let me say it is the position 16 most favorable to Florida Power and Light -- would be to ac-17 cept the argument that you really shouldn *:t* look at matters 18 outside what they call the antitrust record, and what ever 19 we may have said in a meeting three years ago should be 20 *irrelevant.
21 It seems to me that that is a little hard to accept. I think we would have some trouble with that, and 22 23 I think that might be appealed.
There is, short of that, the option of accepting
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25 for £fling-the iate affidavits. This would be a very narrow
31 disposition of the case. Say: affidavits accepted; remanded 2 to the board for a hearing on the truth of whether they were 3 misled or not. If they were misled, have a hearing and if 4 not, not.
5 That wouldn't establish any particular precedent 6 and wouldn't give any guidance. That would be a way to dis-7 pose of the case; on narrow*grounds.
8 We suggested in the memo a possible middle course, 9 whereby you might give some guidance to the boards and also 10 attach some significance to the factor of lateness. 'There is 11 a great deal of_balancing that goes on in the area_of not 12 merely whether people have good cause for being late but also
- 13 14 15 questions like antitrust.
And it seems to us worth considering; that the Commission might on the one hand direct a hearing on this 16 case but provide guidance to the Licensing Board in the form 17 of recognizing. some discretionary authority to either limit 18 the scope of a hearing or following hearing, limit the kind 19 of relief that might be granted on the basis, in part, of 20 the delay in the municipalities or intervenors, generally, coming in and asserting their rights.
21 As a concrete example, Florida Power and Light 22 is essentially saying we need all of this facility for our 23 own needs, and the municipalities are coming in saying that
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they want a piete. The exact percentagei arentt specified, 25
32 but they say they want a piece 0£ it .
2 The Florida Power and Light argument essentially 3 is that this disrupts our planning process because we were 4 counting on all --
5 COMMISSIONER KENNEDY: They want a piece in terms 6 0£ purchase of power or purchase of plant?
7 MR. KELLEY: I don't know that that is specified.
8 It seems to me -- do you have that pleading?
9 MS. BELL: Yes.
10 COMMISSIONER KENNEDY: Let's check that, whether 11 they have asked for a right to buy or whether they want to buy the plant.
12
- 13 14 15 MS. BELL: They want a £air share entitlement in group participation, or in combination with others, or through unit *power purchasing.
There are 10 elements of relie£ that they are re-16 questing, inclµding ~oordinated planning and development, so 17 on and so forth. So they want entitlement in the plant, 18 basically; the first piece of relie£ and I guess the most 19
.important piece of relief.
20 MR. KELLEY: But the suggestion that we are making 21 somewhat tentatively is that if you had a situation where 22 you went to a late hearing and when a group 0£ municipalities 23 or small utilities or whatever, say they might want 30 per-
- 24 Ace-F I Reporters, Inc. cent of the plant output, and i£ they had been in on time, 25
33 maybe the Board would give them 30 percent. And possibly one 2 could compromise. The utility is saying we need it all.
3 Give them something, but some smaller piece as a penalty for
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arriving late. That is not something that the Commission could do sitt~ng up here, but simply saying to the Board, 6 one can factor in lateness both in;terms of scope of hearing 7 and the kind 0£ relief you grant after hearing. That seems 8 to me to offer some incentive for coming in on time.
9 MS. BELL: And, of course, also --
10 COMMISSIONER KENNEDY: But to even give that kind 11 of guidance, Ji~ -- I have been thinking that through since 12 I saw the suggestion, a little bit -- I have reached no con-
- 13 14 15 clusions, extept to say that I £ind it very hard to concept-ualize that without sqme appreciation of the facts, of the factual situation which would ar.ise from such guidance.
Suppose that you did give such guidance? What, 16 then,. would it do to Florida Power and Light on the one hand 17 and its customer service area? What effect is this going to 18 have? I don't have any idea.
19 So I could conceivably be giving guidance to a 20 board which could lead.a board to do things which would be, 21 if I looked at the conclusion they would then reach, could 22 be irrational. I don't think that would happen but it is 23 possible, since I don't know what the effect of my guidance
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would be, as it*was applied.
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MS. BELL: Well, ultimately, the Commission does review decision 0£ Licensing Boards and 0£ the Appeal Board, if that is what you are asking. So if they misintepret,
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misunderstand the guidance you are giving them, then --
COMMISSIONER KENNEDY: No; it would not be 6 misunderstanding it. It would be applying it. They under-7 stood the guidance all right, and then they applied it. But 8 when they applied it, they would be applying it in a particu-9 lar £actual situation vis-a-vis the utilities, their customer 10 service areas, demand for power and all the rest, none of 11 which I am aware 0£.
- 12 MR. KELLEY: Where does that leave you?
- 13 14 15 COMMISSIONER KENNEDY: It leaves me wondering*:*
HOw do we get the kind of understanding 0£ the factual sit-uation that would make guidance _specific enough on the one hand to be useful and general enough to be precedential as 16 well.
17 CHAIRMAN GILINKSY: Well, we are going to have to 18 give some guidance to the gene~al counsel.
19 COMMISSIONER BRADFORD: The only kind of guidance 20 that I would very comfortable with on the basis 0£ what we*
21 have before us now would be basically procedural. I could 22 see saying something to the effect that the good cause shown 23 by the other non-Orlando petitioners is not as strong as
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that shown by Orlando on the record that we have, and that the 25
35 board should keep that in mind in terms of its willingness 2 to broaden issues or make the proceeding more complex on the 3 basis of contentions from those utilities. That kind of
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procedural guidance I would be comfortable with.
I don't think I would feel that we would want to, 6 for example, say: Well, of the 10 bases for relief asked, 7 don't consider the ones with even numbers on them.
8 COMMISSIONER KENNEDY: Not only would I 9 how one could go even as far as counsel was suggesting; that 10 is, you could say: Well, you can be a little -- you can re-11 strict the reli_ef you want to grant. I don't know what that 12 means. If they did, they would say: Okay. We think, all
- 13 14 15 right, inste*ad of 30 percent, we will give them 22 percent.
But I don't know what that means. I have no idea what the effect would be, nor do I understand at this point 16 where the equities would lie in such a circumstance, going back to the basic premise ori which the whole procedure rests.
17 CHAIRMAN GILINKSY: It sou~ds like you want to 18 bring it up here.
19 COMMISSIONER KENNEDY: I am not prepared to say 20 that.
21 CHAIRMAN GILINSKY: We are going to have to wind 22 up pretty soon. I think we ought to give Jim some kind of 23 guidance as to what he ought to be doing between now and
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our next meeting.
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36 Do you haye any areas you particuarly want to have 2 explored.
3 COMMISSIONER KENNEDY: What would be the effect of 4 bringing the question here before the Commission?
5 MR. KELLEY: First, it would be the 6 COMMISSIONER KENNEDY: First, the factual question 7 would have to be resolved. That, I assume, should be done 8 by a board, the.-'factual question about the affidavits:
9 Were they misled or weren't they?
10 Now, if that were resolved, including the late 11 affidavits 12 COMMISSIONER BRADFORD: If you don 1.t include them,
- 13 14 15 there is no factual question.
COMMISSIONER KENNEDY: That's right.
First, resolve the factual question: Were they or weren't they misled?
16 Now., having. done that, if they weren't there is 17 no question it seems to me. But if there is substantial evi-18 dence that in fact they were o~ a board concludes that yes 19
-they.were, then suppose the question were returned to the 20 Commission and the Commission were to hold a hearing; what 21 would the effect be? I am no:t exactly clear on how it would 22 work and what kinds ,of problems would arise.
23 MR. KELLEY: If the Commission were to hold a hear-
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ing on the antitrust, the merits of the antitrust claim?
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37 COMMISSIONER KENNEDY: Yes .
2 MR. KELLEY: That I don't think is feasible, 3 frankly. I just don't
- 4 5 know.
COMMISSIONER KENNEDY: That'* s what I wanted to 6 CHAIRMAN GILINSKY: Does that answer satisfy you, 7 or do you want him to explore it further.
8 COMMISSIONER KENNEDY: Not altogether. I guess I 9 would like to know why.
10 MS. BELL: Well, an antitrust hearing tends typ-11 ically to be a very time consuming and complicated --
COMMISSIONER KENNEDY: That answers my question.
12
- 13 14 15 MS. BELL:
(Laughter.)
MR. KELLEY:
Okay .
It can go on for months.
MS. BELL: Yes.
16 COMMISSIONER KENNEDY: That answers the question.
17 But we cofrld, then, consider in a hearing, the 18 procedural questions.
19 CHAIRMAN GILINSKY: In a hearing before the Com--
20 mission?
21 COMMISSIONER KENNEDY: Yes**
22 MS. : "BELL: You mean on the affidavit question?
23 COMMISSIONER KENNEDY: No, no. If the affidavit
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question were answered in the affirmative: Yes; they were 25
38
- misled. Yes; the evidence says they were misled; then the 2 question of late filing, of all the other procedurals issues 3 that we have been talking about this morning still need 4 resolution.
5 MR. KELLEY: When you say hearing, are you suggest-6 ing that the Commission have an oral argument 7 COMMISSIONER KENNEDY: Yes.
8 MR. KELLEY: -- and then ask questions of counsel -
9 COMMISSIONER KENNEDY: Yes.
10 MR. KELLEY: -- what would happen; suppose we cut 11 you back to 20 .percent, does that make any sense?
12 COMMISSIONER KENNEDY: Yes.
- 13 14 15 MR. KELLEY: Okay.
I guess my .feeling had been that I didn't see it as an oral case, but that may be wrong.
16 CHAIRMAN GILINSKY: We are going to have it'wind up here, because we have got some people waiting for another 17 meeting.
18 COMMISSIONER KENNED~: Why don't you explore that?
19 CHAIRMAN GILINKSY: What I was going to suggest 20 is that you explore the course that Commissioner Kennedy 21 outlined and also prepare something along the lines of 22 either suggesting that we should basically, as I understand 23 it, affirm the Appeal Board with some guidance, pointing out
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that there are things to be taken into account here.
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39 COMMISSIONER BRADFORD: Let me just raise one other 2 quick point in connection with that. I don't remember -- I 3 may never have even seen i t -- how much of the share of the 4 plant these various groups are asking for.
5 COMMISSIONER KENNEDY: We don't know.
6 COMMISSIONER BRADFORD: Okay.
7 I would like to know whether that could reach a 8 scale at which it would reopen questions, for examp*le,;. under 9 the. financial qualifications. If the total were 30 percent, 10 I take it under the concerns we have:been discussing in 11 Seabrook, you ~hen would have to take a look.at these utili-12 ties as owners of 30 percent of the facility.
- 13 14 15 CHAIRMAN GILINSKY: That's another example of everything being conne.cted to everything else.
COMMISSIONER BRADFORD: Yes, it is.
It may not~be. Typical2y, municipalities in 16 cases I am familiar with, ask for very small pieces, and 17 COMMISSIONER KENNEDY: It would have to be done 18 anyway urider the rules; am I correct? It would have to be i9 done. If these utilities were afforded an opportunity for dir-20 ect participation in the financing of the plant; that is, 21 in ownership share, financial qualification would have to 22 be established. The board would have to establish it, under 23 the rules.
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COMMTSSIONER BRADFORD: If i t gets. down to the 25
40 level of what ever it was where the board held, at Millstone, 2 that even though Vermont-Yankee -- even though one of the 3 Vermont utilities wasn't financially qualified, it was so I e 4 small that it didn't matter. If :the share we are talking 5 about here is below that number, then --
6 COMMISSIONER KENNEDY: But the board would have to 7 at least assert that.
8 CHAIRMAN GILINKSY: Well, at any rate, we will 9 explore these two courses and prepare something, and we will 10 have. *another meeting and decide it at that point.
11 So we will in our next agenda session,~ guess, 12 pick a time for a meeting; some time in the near future.
- 13 14 15 Thank you.
MR. KELLEY: Thank you very much.
(Whereupon, at 10:35 a.m., the Commission meeting 16 in the above-entitled matter was adjourned.)
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