ML17266A430

Pleading by Parsons & Whittmore,Inc Supporting Petition to Intervene & Request for Antitrust Hearing. Significant Changes in Licensee Activities Occurred Since Previous Anticompetitive Impact Review of Project

ML17266A430
Person / Time
Site:	Saint Lucie
Issue date:	04/07/1981
From:	Gary M, Kucik G, Sward E ARENT, FOX, KINTNER, PLOTKIN & KAHN, PARSONS & WHITTEMORE
To:
Shared Package
ML17266A429	List: ML17266A428 ML17266A430 ML17266A431
References
NUDOCS 8104090684
Download: ML17266A430 (32)

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{{#Wiki_filter:UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Zn the Matter of FLORIDA POWER & LIGHT COMPANY Docket No. 50-389 (St. Lucie Plant, Unit No. 2) BRIEF OF RESOURCES RECOVERY (DADE COUNTY), INC. AND PARSONS & WHZTTEMORE g INC IN SUPPORT OF THEIR PETITION FOR LEAVE TO INTERVENE AND REQUEST FOR AN ANTITRUST HEARING On March 9, 1981, the Nuclear Regulatory Commission published notice that Florida Power & Light Company (FP&L) had applied to possess, use and operate St. Lucie Plant, Unit No. 2, a nuclear reactor located on Hutchinson Island, Florida. 46 Fed. Reg. 15831 (1981). The notice allows an interested party to petition for leave to intervene and to request a hearing on or before April 7, 1981. Pursuant to that notice, Resources Recovery (Dade County), Inc. (RRD) and its parent, Parsons & Whittemore, Inc. (P&W), have petitioned to intervene and have requested a hearing to determine if certain specified activities under the operating license sought by FP&L "would create or maintain a situation inconsistent with the antitrust laws." 42 U.S.C. 52135(c)(5)

(1976 1/ Section 105c(2) of the Atomic Energy Act, ed.). as amended, 42 U.S.C. 52135 (c) (2), requires an antitrust hearing at this stage of the proceeding because "significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous review by the Attorney General and the Commission" of the anticompetitive impact of FPGL's project. Those changes and their probable anti-competitive consequences are described below. I. BACKGROUND A. Prior Proceedin s FPGL's application for a license to operate St. Lucie Plant, Unit No. 2, marks, the start of the second phase of NRC's licensing process; the proceeding began in 1973 when FPGL sough" a construction license. During the initial phase, FPGL submitted the antitrust portions of its application to the Atomic Energy Commission. The Commission, in turn, transmitted the application to the Attorney General for an antitrust rev.'ew in accord with Section 105c(l) of the Atomic Energy Act, as amended, 42 U.S.C. $ 2135 (c) (1) . 1/ The petition advances two legal interests that support the allowance of intervention: peti tioners 'ights under PURPA, the Public Utilities Regulatory Policies Act of 1978, and their antitrust rights. These interests are separate but related, as the ensuing discussion in this brief demonstrates. The brief, howeve , is filed only as support for the antitrust ground of the petition. The PURPA ground is fully explained in the petition itself, and it is an independent basis for allowing intervention without the necessity of a finding that FPGL's circumstances have changed.

Responding on November 14, 1973, the head of the Antitrust Division expressed deep concern over the anti-competitive potential of Fp&L's ownership of St. Lucie Plant, Unit No. 2. Of particular relevance here is the Justice Department's analysis of FP&L's monopoly power over the transmission of electricity throughout southern and eastern Florida, where it owns 90% of the high voltage lines (p. 1). The Department concluded that FP&L's monopoly raised significant antitrust questions: Our antitrust review led us to the following conclusions: (1) Applicant is the dominant .electric utility in Florida and because of its ownershi of trans-mission, as the ower to rant or en ot er s stems zn x,ts area e access to coor enation an t us e nuc ear power needed to compete in bulk power supply and retail aistribution markets; (2) there is some indication Applicant's dominance may have been enhanced through conduct inhibiting the competitive opportunities of the smaller systems in its area; and (3) construction and operation of St. Lucie No. 2, and the sale of power therefrom to meet Applicant ' load growth and compete with the smaller systems in its area could create or main-tain a situation inconsistent wz t e antitrust aws x access to nuc ear eneratxon were ense t ose sma er

             ~s  stems. pp.    -  , emp  asas a   e Despite these misgivings, the Justice Department opined that an antitrust hearing would be unnecessary           if FP&L would agree to share ownership of the       facility.

The Commission staff adopted the Department's recommendation and insisted that FP&L accept specified

conditions in the construction license. The major condition was that FP&L offer an opportunity to purchase-a..."reasonable ownership share" of St. Lucie Plant, Unit No -; R,.-to seven named electric cooperatives and two named municipalities. 2/ FP&L-promptly accepted, "for the purpose of avoiding an antitrust hearing."- Later, in April 1977, an initial-decision ordered that the construction permit issue, 5 NRC 1038, (1977), and that decision was affirmed by the Appeal Board, 6 NRC 541 (1977) . After the permit issued, the Fifth Circuit decided Gainesville Utilities De t. v. Florida Power & Li ht Co., 573 F. 2d 292, cert. denied, 439 U.S. 966 (1978), holding that FP &L had violated the antitrust laws by conspiring with another private power company to divide the Florida market for wholesale power. That decision prompted the Department of Justice to request that NRC conduct an antitrust hearing under Section 105a of the Atomic Energy Act, 42 U.S.C. 52135(a). Thereafter, on September 12, 1980, the Department of Justice, the NRC Staff and FP&L entered into a Settlement Agreement; FP&L agreed to accept certain "Proposed License Conditions" in exchange for the Justice Department's commitment to abandon its Section 105a request. The Agreement requested the Licensing Board, to make the proposed conditions effective 2/ Letter from John F. O'eary, Director of Licensing, Atomic Energy Commission, to Ben H. Fuqua, Senior Vice President, FP&L (Feb. 25, 1974). 3/ Letter from Ben H. Fuqua to John F. O'eary (Feb. 26, 1974) .

immediately, but "without prejudice to the Board's authority to impose different or additional conditions after a hearing" (Stipulation 94). The Agreement is presently pending before the Board on a joint motion for approval of the settlement. The section of the Agreement at issue here is Section ~- governs FP&L's obligation to provide transmission services the central problem identified by the Antitrust Division in its 1973 letter to the NRC. B. The Petitioners RRD is a wholly owned subsidiary of P&W; a New York Corporation engaged in a variety of industrial activities in the United States and abroad. RRD, a Delaware corporation, is primarily engaged in the construction and operation of a solid waste processing facility in Dade County, Florida. ln conjunction with that facility, RRD owns and is test operating an electric generator whicn produces electricity from steam raised during the processing of sol'd wastes. On March 13, 1981, RRD notified the Federal Energy Regulatory Commission that it is a qualified small power 4/ producer within the ambit of PURPA (App. A') . 4/ Section 210 of PURPA is designed to encourage co-generation and small power production of electrical energy. Toward that end, PURPA grants to qualified facilities the right to sell their electrical output to an electrical utility, to interconnectelectric with a utility, and to buy at retail from the utility all the power needed by the facility. See, ~e. .. 16 U.S.C. 5796, and the implementing FERC regulations, 18 C.F.R. Part 292 (45 Fed. Reg., Mar. 20, 1980).

RRD s notification of its PURPA au'alification was served upon FP&L on March 13,1901, along with a statement that RRD "will begin sales of electric energy to Florida Power & Light on or after ninety days from the date hereof" (App A ) ~ ~ Three weeks late=, on April 3, RRD advised FP&L that "As an alternative to the exclusive sale of electric energy to FP&L, RRD wishes to explore compet'tive opportunities for sales to other electric utility entities." [App. BJ That letter asks FP&L to confirm that it will "transmit elec ricity in behalf of RRD to potential customers other than FP&L." As-authority for requiring FP&L to transmit electricity on its behalf, RRD is relying upon the antitrust laws and the proposed NRC Settlement Agreement described above. 5/ FP&L has been asked by RRD to respond by April 17 to its request for access to FP&L's transmission lines. An unconditional affirmative answer from FP&L would make it unnecessary to pursue the petition for leave to intervene at this time. To protect themselves against the eventuality of an unwarranted refusal, Petitioners have asserted their legal rights in this proceeding. 5/ As former Florida Governor Beubin Askew recently testif'ed (on behalf of Metropolitan Dade County) before the Florida Public Service Commission "adoption of PURPA is intended to bene the public by encouraging development of it small power and cogeneration facilities and thereby promote competition in the energy production field." [Transcript of Testimony, p. 133-1 The testimony of Governor Askew is reproduced as Appendix C

    ,to  this filing.

C. The Proposed Anticomaetitive Transmission .Activities C a en e Petitioners Section X states that FP&L must transmit electrical power "(5) from any qualifying cogeneration facility or small power production facility (as defined by the Federal Energy Regulatory Commission in 18 CFR 292, Subpart B) with which Company is interconnected to a neighboring entity or neighboring distribution system . . . ." That straightforward-sounding obligation is modified by the proviso that:

             "Nothing in this license shall be construed to require Company to wheel power and energy to or from a retail customer." [Section X(b) .]

Since PURPA expressly requires a utility to sell retail power to a qualified facility, the quoted language could be construed by FP&L to undercut its obligation to transmit power on behalf of RRD or any qualified facility who purchases retail power from FP&L. Zn addition, under Section X(a)(5) a qualified facility must arrange for "backup power" and "maintenance power" from the neighboring entity or neighboring distribution system to which transmission service is requested. FP&L's transmission obligation could thus be vitiated whenever the prospective purchaser was unwilling or unable to provide backup or maintenance power for 6/ A "utility must purchase the entire output of a cogenerator or small power producer at the utility's own avoided costs and, at the same time, must supply the cogenerator or small power producer its entire electric requirement under non-discriminatory rate schedules. En short, the utility must buy at the margin and sell at retail." Idaho Pub. Serv. Comm'n Order No. 15746, pp. 6-7 (Aug. 8, 1980), citing PURPA 5210.

RRD. That condition, which does not apply to FP&L's transmission =. obligations on behalf of others, unreasonably discriminates against RRD and all qualified PURPA facilities. FP&L's transmission obligations are further conditioned by the following provisos:

              "Company shall provide transmission service under this paragraph only if (l);- Company's and other connected transmission lines form a continuous electric path between the supplying and the recipient systems; (2) permission to utilize other systems 'rans-mission lines can be'btained by the proponent of the arrangement; (3) the services can reasonably be accommodated from a technical standpoint without signif icantly jeopardizing.

Company's reliability or its use of trans-mission facilities; (4) reasonable advance request is received from the neighboring entity or neighboring distribution system seeking such, services to the extent that such notice is required for operating or planning purposes, provided that Company distributes a written timetable setting forth reasonable period of time within which such advance notice must be received for trans-mission services over existing Company facilities; and (5) a reasonable magnitude, time and duration for the transactions is specified prior to the commencement of the transmission." [Section X(a) -] These provisos af ord FP&L an opportunity to defeat the very transmission right he Settlement Agreement purports to create. 7/ 7/ As an illustration, FP&L could negotiate for months and years over "compliance" with Section X's complex conditions, thereby using its monopoly power to prevent competition, but doing so without directly refusing any request to transmit electricity.

The Section X transmission provisions: are ambiguous where they should be plain, and aualified where they. should. be unconditioned. Thus, unless PP&L decides: to interpret:. Section X in a procompetitive spirit ' an event that:-would-be a welcome, but unexpected, break by FP&L with its past. that.. section is more likely to retard competition than to promote it. 8/ Pctitioncr" contend, in sum, that these flawed provisions fall fax short of curbing the potential for antitrust abuse inherent in FP&L's ownership of 90% of the transmission grid in its operating area. On the contrary, by creating the false illu ion that they have loosened PP&L's strangehold- over the development o f new compet i tors, the tran smis sion conditions may well serve only to maintain and enhance PP&L's monopoly power. The remainder of this brief establishes that the Settlement Agreement and PP&L's proposed actions in implementing it are "significant changes in the licensee's . . . proposed activities" which may "create or maintain a situation inconsistent with the antitrust laws." 42 U.S.C. 523.35(c). 8/ Zn this regard, the Federal Energy Regulatory Commission has observed:

            "the evidence in this record of [FP&L's]

past conduct casts a shadow over FP&L's claimed need to restrict se vice and, there-fore, is of probative value in determining whether the Company has satisfactorily carried its burden of justification ror the proposed service limitations." FERC Opinion Ho. 57, August 3, l979, at 3. See also pp. 11-12, inf ra.

10 IZ. THE LZCENSE CONDZTZONS ZN THE PENDZNG SETTLEMENT AGREEMENT ARE "SZGNZFXCANT CHANGES" ZN PP&L" S PROPOSED ACTZVZTZES The Atomic Energy Act of 1954 requires the NRC to review the antitrust aspects of a proposed project at any appropriate.. stage of the two-step licensing process. Zn.the Matter. of Houston Li htin a Power Co. (South Texas Pro'ect, Unit Nos. L and 2), 5 NRC 1303 (1977) . The focus of the Act is not upon precise proof of antitrust violations in the technical sense. Rather, it is concerned with whether "there m~ahe adverse antitrust aspects" to the project (42 U.S.C. 52L35 (c) (5), emphasis added) . Tge Act, in short, is a Congressional directive against Governmental involvement in creating or maintaining a "situation inconsistent with the antitrust laws" (42 U.S.C. 52L35 (c).(5) . An antitrust review may be had at the operating license stage when "significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous review by the Attorney General and the Commission." 42 U.S.C. 52L35 (c) (2) . This second review deals with circumstances that changed after issuance of a construction permit and before the application for an operating license. "This is not to say that

'significant changes'n       a licensee's proposal can or should be viewed in isoLation from unchanged features of the proposal."

South Texas, ~su ra, 5 NRC at 1322. Once a changed circumstance is established, its antitrust significance must be evaluated in the context of the entire proposal before the Commission. Zd.

0 The "significant changes" determination thus triggers a second antitrust review and, to a large extent, defines its scope. Xt also is a prerequisite to an antitrust hearing at the operating license stage. In the Natter of South Carolina Electric & Gas Co . (Vir il C. Summer Nuclear Station, Unit No . 1), 11 NRC 817, 824 (1980) . Xn Summer Station, the Commission defined three criteria for determining whether "signi icant changes" have occurred: i.e., the action or proposed action must:

              "'(1) have occurred since the previous antitrust review of the licensee(s);

(2) [be] reasonably attributable to. the licensee(s}; and (3) have antitrust implications that would likely warrant. some Commission remedy." [Xd. at 824.] Those criteria are satisfied here. A. The Xntervenin Chan es in FP&L's Acitivities The Justice Department' antitrust review of FP&L's construction lice~se application was completed on November 14, 1973, over six years before FP&L entered into the proposed Settlement Agreement. That Agreement, and especially its Proposed Xicense Conditions, will significantly modify FP&L's future activities. Those conditions not only affect the St. Lucie Plant, Unit No. 2; they have a broad impact upon FP&L's entire operation, as is evidenced by the transmission conditions 9y at issue here. 9/ Implementation of the twenty-nine pages of proposed conditions is obviously intended to substantially alter FP&L's activities. The conditions either control or impact upon numerous FP&L policies and practices as to interconnection, reserve coor-dination and emergency power, maintenance power, interruption and curtailment, pooling and the sale of wholesale power.

12 Since the licensing process began in 1973, FP&L has'been-found in serious violation of the antitrust laws, and it has been, charged with a broad range of antitrust transgressions by a Government agency (FERC) and by a group of private plaintiffs. As noted sunra, p. 4, the Fifth Circuit in'ainesville Utilities De t. held that FP&L had unlawfully conspired to lessen competition by agreeing with Florida Power Company to allocate territories. Pending charges against the-FP&L-include the following: (1) FP&L has fa'ed to file a tariff for the transmission of wholesale electric power; (2) FP&L has refused. to transmit electric power, or has done so only upon uneconomical terms; (3) FP&L has refused to sell wholesale electric power to municipal utilities, or has done so only upon uneconomical terms; (4) FP&L has refused to sell maintenance, supplemental or backup power to municipal utilities, or has done so only on uneconomical terms; and (5) Fp&L has created artificial entry barriers into retail markets by insisting upon thirty-year franchise terms. See City of Gainesville v. Florida Power & Light, Co., No. 79-5101-Civ. (S.D. Fla., filed Oct. 31, 1979); Florida Power & Li ht, Co., Nos.ER 78-19 and ER 78-81, Opinion No. 57 (FERC, Aug. 3I 1979) These findings and charges evidence an ongoing effort by FP&L to eliminate competition in the sale of electric'ty in Florida. The transmission provisions of the Settlement Agreement fit tha"

13 anticompetitive pattern. The prov'o quoted suora, p..s, may well permit Fp&L to continue the first four practices. described in the preceding paragraph. The Section X conditions also create an anticompetitive discrimination against qualifying PURPA. facilities. Beyond this, they excessively limit FP&L's obligation to provide the transmission services that are. an essential first step in introducing competition into.FP&L's domain, the South and East Florida marketing area it now dominates at. all economic levels because of its monopoly power over the transmission grid. Zn South Texas, the Commission recognized that the "antitrust implications of a 'significant change'ay indeed arise from its relationship to unchanged features of the proposal." 5 NRC at 1322. Here, Fp&L's 1973 monopol'stic control over transmission services remains unchanged. That control, the Justice Department then found, empowered FP&L to deny other systems the necessary access to compete in FP&L's market. The Justice Department also found that FP&L had enhanced its monopoly position by inhibiting the competitive opportunities of smaller systems and that "operation of St. Lucie No. 2... 'could create or maintain a situation inconsistent with the antitrust laws if access to nuclear generation were denied those smaller systems' (pp. 6-7) . Although RRD did not exist when those conclusions were reached, RRD could now become part of a competitive system. indeed, seeking to broaden its potential customer base, RRD has requested access to FP&L's transmission grid for the purpose of exploring "competitive opportunities for sales to other electric

utility entities" (App. B) . FP&L's continued:.,power-under the Settlement Agreement to deny RRD and other qualified- facilities that critical access "maintain [sj a situation 'inconsistent with the antitrust laws." B. The Chan ed Activities are Attributable to FP&L's Conduct Maintenance of the anticompetitive situation described above is "reasonably attributable to the licensee." The second criterion of Summer Station is therefore satisfied, for this is not a situation where "the competitive picture [hasj been altered in ways for which the applicant (can]not reasonably be held answerable." Zd. at 825. The Section 105a proceeding which culminated in the Settlement Agreement is directly attributable to FP&L's adjudicated violations of the antitrust laws in the Gainesville Utilities ~De t. case. =P&L drafted many and negotiated all of the terms of that Settlement Agreement, including Section X, and has moved the Licensing Board to approve and authorize their implementation. Faced with Justice Department insistence upon increased access to its transmission grid, FP&L acceded in a way that dimin'shes the competitive threat of generation by qualifying PURPA facilities and other potential competitors. Xn sum, FP&L was an active participant in bringing about changes in its activit'es as they existed when the construction permit was granted. Those changes create and maintain a situation inconsistent with the antitrust laws, a situation which should be

15 scru"-'nized by the Comm's'cn dssrs ng the operating license proceeding. 10/ C. The Specific Anticompetitive Impact that FP&L's Changed Activities is Likely to have upon Qualified Small Power Producers The remaining Summer Station c iterion is that the. changed circumstances portend anticompetitive consequences that warrant NRC remedial action. 11 NRC at, 824. If so, an antitrust review should be undertaken unless it promis'es to achieve only de minimis results. Id. at 835. Furthermore, it is not '-- L necessary that a specific antitrust statute be transgressed by the changed circumstances. Addressing that precise issue, the Commission has neld that "condi tions which run 'ounter to the

                ~olicies underlying [the antitrust laws],

even where no actual violation of statute was made out, ~ould warrant remedial license conditions.'" Id. at 822, quoting In the matter of Consumers Power Co., 6 NRC 892, 908 (1977) (emphasis in original). 10/This Settlement Agreement is one of general application; affects the rights ofpersons like RRD who had no opportunity to it participate in its negotiation. The petition accordingly does not raise any question of whether changed activities in imple-mentation of a Settlement Agreement which applies only to intervenors and the applicant could constitute a "significant change"'ithin the meaning of Section 105c.

L6 .- I (l) FP&L's new activiti~es sanctioned-by Section X of the:" Settlement Agreement are likely to have several,-.presently identifiable, anticompetitive consequences. First, the trans-mission provisos will impede a central purpose of PURPA,.to foster the creation and growth of small power producers wM in the agreegate, could become a serious competitive force. in the electric power field. Second, the complex and unnecessary conditions on FP&L's transmission obligations will diminish: the competitive activity that would occur if FP&L had an unqualified duty to provide transmission services- upon request. Third, the Agreement unfairly discriminates against qualifying PURPA facilities, making it even more difficult for them to compete. These predictable anticompetitive consequences are not accidental. They are a deliberately planned result of FP&L's negative antitrust policy. For example, we are in possession of FP&L's policy "guidelines" which describe the utility's objective to "fd]eter the competitive threat of municipal generation" (App. D). That policy has been already successful; NRC should not sanction its continuation. (2) The rights of small power producers under PURPA exist independently of their antitrust rights. Yet, these rights complement each other in a way that is relevant here. PURPA is a conversation measure designed to encourage the recapture and use of energy that has long been produced (and wasted) as an industrial byproduct. PURPA is doomed to failure,

however unless qualifying facilities, like RRD, are able -.to. become ecnomically viable by competing successfully. against the entrenched monopolists in the electric power field, like FP&L..- without assured access to monopoly-owned transmission grids, this possibility of competition will remain just that >>-. an . unrealized possibility. The NRC now has an unprecedented opportunity to use its antitrust mandate to foster competition between Fp&L and qualifed pURpA facilities. -Xt should do so by simply insisting that FP&L provide transmission services to small power producers upon request. The procompetitive effect of that action would be enormous. Alone, neither PURPA nor the Commission is empowered to crea+e the essential competitive atmosphere; together, they can easily do so. PURPA guarantees a market for qualifying facilities l 1/ so that their conservation efforts may be commercially worthwhile. The transmission provisions of the Settlement Agreement purport to enable small power producers to compete with FP&L (and with each other) ~ FP&L, of course, would rather buy electric power from qualified PURPA facilities than compete with those facilities for sales to FP&L's other customers. That is precisely why FP&L has a policy of deterring competition from municipal generating'cting pursuant to the Congressional mandate, FERC has promulgated rules that require e3.ectric utilities to purchase electricity from qualifying cogenerators and small power producers at avoided (marginal) costs, and to se3.1 electricity to qualifying facilities at the utilities'rdinary retail prices. The utilities also are required to supply backup power, supplementary power, maintenance power and interruptible power, upon request by any qualifying faci3.ity. 18 CFR 5292. 305 (b) .

plants (App. D). As now written, Section X is likely to assist FP&L in its plan to negate this competitive 6ireat, for reasons: the'ollowing (a) One of the most dangerous provisions of Section X is the ambiguous sentence at the end of subpaiagraph (b): "[n]othing in this license shall be construed to require Company to wheel power and energy to or from a retail customer." The term "retail customer" is not defined, but PURPA affords small power producers the right to buy electricity at retail from FP&L, and RRD expects to do so. Likewise, a municipal utility which lacks generating capacity would have to consume some of the power it purchases; it too would be both a retail and whole-sale customer of FP&L. Were this restriction applied to such facilities, it would virtually eliminate FP&L's transmission obligation. What is more, the restriction appl'es when either the requesting facility or the purchaser is a "retail customer" of FP&L. The restriction thereby limits the acilities between which transmission could be required, esulting in a diminished customer base for small power producers. The restriction, in sum, is doubly anticompetitive. Zt could be employed by FP&L as an excuse to deny small po~er producers access to its transmission grid and, when access is granted, to deprive them of customers for the transmitted powe

19 (b) Section X(a) (5) of the Settlement Agreement provides.. that PP&L must transmit electric power for qualifying. PURPA facilities only if the customer agrees to sell backup and maintenance power to the face.lxty

                                ~  ~

tt during the tame and to. the, extent of its purchases" from the facility. PURPA, on the other hand, requires PP&L to provide backup and maintenance power to a qualified facility who requests it. 16 U.S.C. 5824a-3. Under subsection (a)(5), qualifying facilities are vulnerable to the threat that their use of FP&L's transmission grid would waive their PURPA right to maintenance and backup power from PP&L a point which could make it impossible for them to utilize the tran mission rights granted by the Settlement Agreement. No similar requirement is imposed in connection w'h other transmission transactions under Section X; the Settlem nt Agreement therefore discriminates against qualifying facilities. To the extent that transmission is important to compet'ion and the Justice Department has correctly determined that it is critical -- this discrimination will have a serious anti-competitive effect on qualified facilities. They will have to overcome unnecessary obstacles to the sale of their power; as a result, they will face a greater risk of failure. This result is inconsistent with the antitrust laws, which foster similar treatment of competitors, and with PURPA, which encourages the development of small power producers. Qualified facilities, in sum, should not be forced into a choice between

20 the benefits of the Settlement Agreement and the benefits of PURPA into the competitively difficult position.,that FP&L would have them assume. (c) The Section X transmission conditions guoted suora,

p. 8, grant considerable latitude for anticompetitive conduct, by FP&L. ~

For example, FP&L could. discourage small power producers from using its transmission grid by raising technical problems, even ones that may be easily surmountable or unreal. The time and expense of challenging FP&L may make it uneconomical for a small producer to enforce its transmission rights. In this fashion, among others, seemingly innocent behavior in "discussing" transmission proposals may well deter competition from small power producers. Similar conduct has long been used by monopolists 12/ to entrench their position, and FP&L undoubtedly is, aware of its potential. The Commission should not open this avenue to FP&L. D. The Commission's Power to Remed the Anticomnetitive E ects of Fp&L's Chan ed Activities We have demonstrated above that the net outcome of Section X's restrictive and ambiguous conditions is that FP&L has maintained the unfettered power to abuse its monopoly control 6~ E~., United States v. HYO) (regu ated Aluminum Co. Inc. v. Americal Tel. & Tel. Co., 61 F. 2d of North America, industry refusal to deal) . 372 148 th Cir. F.

21-over the transmission grid into its markets;= An unconditional:;:. transmission duty is the only viable remedy; the-NRC has power to order that remedy at the operating license- stage. of this-proceeding. Pirst, the Commission's power to order transmission is already reflected in the provisions of Section X.. Second,'he Settlement Agreement itself authorizes NRC= to attach "different or additional conditions" to pp&L's operating license. pinally, in United States v. Otter Tail Power Co., 410 U.S. 366 (1973), the Supreme Court held that the antitrust laws sanction "wheeling" orders even where there is no specific statutory authorization for that remedy. NRC has undeniable power to grant the relief reauested by Petitioners. See, to the same effect, FERC Opinion No. 57, ~su sa, at pp.'-2. NRC should exercise its remedial power at this stage of the licensing proceeding to protect. petitioners'nterests that will be adversely affected by the Settlement Agreement. To do otherwise would deprive Petitioners of a fair opportunity to be heard, since that Agreement,to our knowledge, was never noticed or published in the Pederal Register.

CONCLUSION The petition for leave to intervene and the petitioners'equest for an antitrust hearing should be granted. Respectfully submitted, George R. Kucik Mare Gary E en E. Swar ARENT ~ FOX p K INTNER / PLOTKIH 18 3.S H S treet, N.W. Washington, D.C. 20006 (202 ) 857-6000 Counsel for Petitioners April 7, 1981

LIST OF APPENDICES Description Letter to Robert Talion of FPGL from George E. Boyhan of RRD, March 13, 1981. Letter to L. Christian Hauck, Vice President, Legal Affairs, FPSL, from David Bardin, Counsel for Petitioners, April 3, 1981. Transcript of testimony of Reubin Askew before Florida Public Service Commission. FP&L "Guidelines For Power Generation From i4lunicipal Solid Waste Operations," undated.

'PPENDZX A GEB-81-58 March 13,1981 Mr. Robert Talion Executive Vice President Florida Power & Liqht Company P.O. Box 529100 Miami, Florida, 33152 RESOURCES RECOVERY RE: Notice of Qualific'ation of Small Power Production (OADE COUNTY) lNC. Facilit Under Section 210 of PURPA

Dear Mr. Talion:

I attach a Notice of Qualification, which was filed today with the Federal. Energy Regulatory Commission, in accor-dance with 18 C.F.R. Sect'on 292.207(a). By service of this notice upon you, Resources Recovery (Dade County), Xnc., notifies you that we will begin sales of electric energy to Florida Power & Light on or af er ninetv days from the date hereof. Yours v truly, Ge rye Z. Boyhan Executive V'ce President

                        /mdp Enclosure cc:   Secretary, Federal Energy Regulat'ory Commission

=.O. BOX 524056 "..:At.ll. FLORIOA 33152 =.:ONE:(305) 592-2200}}