ML19326B062

Petition & Affidavit for Leave to Intervene in Facility OL Proceedings.Issuance of License Should Have Conditioned Requirement That Utils Grant Facility Participation Through Ownership Participation or Through Unit Power Sales

ML19326B062
Person / Time
Site:	Davis Besse
Issue date:	05/30/1973
From:	Perk R CLEVELAND, OH
To:	US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML19326B061	List: ML19326B060 ML19326B062 ML19326B063
References
NUDOCS 8003060838
Download: ML19326B062 (12)

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U'1ITED STATES OF AMERICA BEFORE THE ATOMIC ENERCY COMMISSION In the Matter of i The Toledo Edison Company I Docket No. 50-346A and i

The Cleveland Electric Illuminating I Company (Davis-Besse Nuclear Power Station) [

PETITION AND AFFIDAVIT OF THE CITY OF CLEVELAND, OHIO, FOR I. EAVE TO INTERVENE The Petitioner, City of Cleveland, Ohio, pursttant to Section 2.714 of the i

Commission's Rules of Practice, hereby petitions to interve in the above-captioned ma t t e r . In support of this petition, Cleveland showd:

1.

The City of Cleveland (Cleveland) is a municipal corporation organized ~

nnd existing under and by virtue of the Constitution and Laws of the State of Ohio and the charter adopted by its people. Cleveland owns and operates a Municipal Electric Utility Cenerating Plant and an electric distribution system (MELP) and is engaged in competition for electric customers with Cleveland Electric Illuminating

, Company (CET ).

2. Correspondence, notice and orders may be directed to:

Judge Herbert R. Whiting, Director Robert D. Hart, First Assistant Director Department of Law ,.

City Hall ,g'.

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g Cleveland, Ohio 44114 i -\

Tel.: (216) 694-2000 ,. J

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Reuben Coldberg, Esq.

David C. Iljelmfelt, Esq.

1700 Pennsylvania Ave., NW

Washington, DC 20006 Tel.

(202) 659-2333

3. Toledo (*dinon Company (Toledo Edir.on) anil CEI (hereina f ter referred to i

jnint ly as "Applicdnts") h.1ve filed an application for a licen::e to operate the Davis-

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1 Besse Nuclear Power Station located in Ottawa County near Port Clinton, Ohio. The L

Co:nission has given notice of receipt of the application, of consideration of is-suance of a facility operating license, and of opportunity for hearing. Pursuant to said notice, petitions to intervene are required to be filed on or before May 30, 1973.

4. Cleveland has heretofore filed a petition to intervene in the above-captioned i:a tter (Docket No. 50-346A) in connection with the antitrust revicu a spects of the opplication under Section 105(c) of the Ato:aic Energy Act. in which Cleveland has re-quested that the _ license be conditioned to require Applicants to grant Cleveland owner-t' chip or unit pouer participation in the Davis-Besse Nucicar Pover Station. Although it appears to Cleveland that intervention in the operating license aspect of the pro-ceeding may not be required to protect Cleveland's rights in the antitrust review aspects of the proceeding, out of an abundance of caution the instant petition and af fidavit are filed fully to protect and preserve the rights of Petitioner in these proceedings.

Cleveland's petitica ra intervene and all =atte et ..oner in support of its it.terventica in the antitrust review aspect I r h incorp rated increin and m.1de a part hereof.

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5. The Davie,-Ilesse Nucicar Power Station is located in north central Ohio on the shores of Lake Erie approximately 21 miles east of the City of Toledo. The plant is proposed to be jointly owned by Toledo Edison (52. 5%) and C El'(47. 5%). The estimated construction cost of the unit, including the nuclear fuct inventory for the first core, is $305,742,000. It is proposed that Toledo Edison have complete I responsibility for operation and maintenance of the unit.

6. Toledo Edison is a privately-owned integrated electric utility which serves a 2,500 square mile area in northwestern Ohio. Toledo Edison supplies electric power at retail to 47 municipalities, including .

the City of Toledo, and also supplies power at wholesale to 15 munici-

!. pally-owned electric systems.

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7. CEI is also a privately owned integrated electric utility which j serves a 1,700 square mile area in northeastern Ohio. CEI supplies i .

electric power at retail to 89 municipalities, including part of the City 1

of Cleveland, Ohio. It does not supply power at wholesale to any municipality, and there are only two municipal electric utility operations in the area served by CEI facilities, namely the municipal electric plant of the City of Cleveland and the municipal electric system of the City of Painesville. In 1972 CEI's electric operating revenue was .

$293,342,529. CEI's 1972 peak load was 2,822 Mw and its net gen-eration in that year was 15,546,473,000 Kwh of which 14,872,213,045 was sold to ultimate consumers. In addition to a proposed 47. 5%

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6 i ownership of Davis-Besso, CEI has filed an application to construct and operat e l'er ry Nuclear Plant Units No. I and 2 on I,ake Eric. C EI has two W, Kv interconnections with Ohio Edison Company and one each with Pennsylvania Eicctric Company and the Ohio Power Company. In addition it has three 132 Kv ties with Ohio Edison and a fourth underway.

8.

Toledo Edison and CEI are both members of a five company power pool known as CAPCO (Central Area Power Coordination Group) .

l which was organized in 1967. The other three members of the power 1 i

pool are Duquesne Light Company, Ohio Edison Company and Pennsylvania Powe r Company, a subsidiary of Ohio Edison Company. Through CAPCO the member companies coordinate their operations, interchange power and share reserves. Generation units and transmission facilities for the CAPCO members are planned on the basis of the requirements of the members of the pool as though they constituted a single company.

.The Davis-Besse Nuclear Power Station is the fourth generating unit (the first nuclear unit) to be planned and constructed by members of CAPCO. CAPCO plans seven new generating unit projects, all scheduled for completion during 1975-1980. Four of these units, including Perry and Davis-Besse, will be nuclear. CEI has ownership interests in six of the seven CAPCO plants. CEI's share of Eastlake No. 5, Mansfield Nos. I and 2, and Davis-Besse units will add 814,000 Kw to net system capability by year-end 1976, raising total capability including peaking un'its to more than 4. 6 million Kw.

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. t CAPCO members serve approximately 2 million customers within a 14,000 square mile area. The projected 1971 peak load for CAPCO w as '), 0?.3 Mw.

9. MELP supplies about 20% of the Cleveland electric market.

In 1971, MELP sold only 504 million Kwh compared to 14,065 million kwh sold by C EI. MELP is an isolated encircled system generating its own power. Its 1971 peak load was approximately 120 Mw. The

- s, largest unit in the system generates 80 Mw.

10. Control of all high-voltage transmission lines in the Cleveland area is in the hands of CEI. MELP does not have access to these facilities. Without such access, MELP is unable to participate with other systems in power pooling, reserve sharing, coordinated develop-ment and planning of generation and transmission. These arrangements j are the rule today among electric utility systems. They make for i

I greater reliability of service and provide economies of operation not otherwise obtainabic. Access to coordination with other systems and I

j the consequent ability to utilize large and efficient base-load units i

j constitutes a significant economic advantage. Without access to the t

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) area or regional power exchange markets, entities such as MELP, a

f -regardless of size and efficiency, cannot achieve optimum economy i

and reliability and cannot compete effectively with interconnected, integrated systems that have access to the area or regional power exchange market. MELP's isolation fr,om other electric utility

i syr.tcins, which has been a factor in its inability to realize economics of scale and reliability of operations associated with coordinated devel-opment and planning and integrated operations, is not accidental. It is the design of CEI.

I 1. To a degree seldom enccuntered in the public utility industry CEI and MELP engage in direct competition for retail trade. Both operate parallel distribution networks throughout the City of Cleveland.

They engage in street-by-street and house-by-house competition for customers. It is not unusual to find within the sama block one building served by CEI and a neighboring building served by MELP. In this 1

David anel Goliath situation petitioner has 20% of the market and CEI has the remaining 80%.

12. In the' competition between MELP and CEI, quality and reli-ability of service have been significant competitive factors. So long i

as MELP is forced to operate as an isolated system without access to a large bulk power supply and high voltage interconnection the deck will be stacked in favor of CEI. Operation and planning on an isolated bar,is does not produce power at a cost which permits successful J

i competition for customers. In recent years CEI has steadily enlarged its share of the Cleveland market. While MELP's customers have

.l t suffered interruptions in service which could have been avoided if the i

MELP system were not isolated, similar interruptions did not exist i

on the CEI system because of its interties with CAPCO.

13. An open CEI company objective, enunciated in a CEI memo-randum clated October 9 1970, f rom R. it. B ridps to I ec C ti.n. t . .

Vit e l're.4i. lent ,uul tiene t al Counsel os C1st is:

i "to reduce and ultimately climinate the tax-subsidized Cleveland and Painesville Muni-I cipal Electric System. "

As noted above, these are the only two municipal electric utility oper-1 ations in the areas served by CEI's facilities. CEI has long pursued a policy of anticompetitive practices to eliminate MELP.

I 14 Although the Federal Power Commission ordered CEI to make i

i an immediate emergency energy open switch non-synchronous connec-i tion with MELP, to be energized on request, capable to delivery of 40 MW at 69,000 volts, when an emergency occurred on MELP's system on December 15,1972 and at 10:00 a.m. the same day a request was made to energize the interconnection, CEI declined to supply emergency power unicss Mr. Raymond Kudukis, C1 tveland's Director of Public Utilitics first j i

agreed to release for approval by the City Council a proposed contract between the City and CEI for street lighting services. The interconnec- l

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I tion was not energized until 4 p.m. of December 15, 1972, - 6 hou rs l l

after the emergency developed.  !

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15. On February 6,1973, MELP again experienced an outage and request- )

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{ ed that the 69 KV interconnection be energized. MELP needed only i

30 MW of electricity from CEI, bt.t the President of CEI refused to ener-aize t e interconnection unless the City ag reed to t e e -; 3 .\;W.

16. The interconnections for emergency use should not be equated with '

arrangements required by the City for access to power pooling, reserve sharing, coordinated development and planning, and access to the economies of scale availabic from participation in large scale generating units such as those en joyed by CEI, Toledo Edison, and other members of CAPCO. The temporary 69 kv tie and permanent 138 kv tie recently ordered by the FPC do not provide such Lenefits. Such ties involve delivery only of emergency energy from 1

CEI to MELP. CEI has sought to give the impression that it has stood ready for years to interconnect with MELP in order to give MELP the benefits of t I

coordinated planning and operation, but its representations are misicading.

l The type of interconnection which CEI has offered is not the type the City has sought and needs -- one which provides the benefits of coordination, access to economies of scale, reserve sharing, etc. The interconnections proposed by CEI would not have provided such benefits and ameliorated MELP's condition as an isolated electric system. The interconnection CEI proposed would have basically provided only for the sale of power and would I have had the inevitable result of forever removing the City from contention as a viable competitor of CEI. In fac t , CEI imposed a condition on the

. availability of even such an interconnection which made acceptance impoesible:

that MELP would raise its rates to the level of CEI's rates.

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17. CEI, as Cleveland will prove at the hearing on antitrust review, 1 I

i has employed unfair methods of competition and unfair and deceptive acts I f

i against MELP in an ef.~ ort to destroy MEI.P as a viable comperirar. Such I l

methods and acts have included harassment and coercion of MELP's customers until they agreed to discontinue taking service from MELP and switch to l CEI, disconnecting MELP's service facilities to customers without authorization i

and substituting CEI's services, making of cash payments by CEI to induce existing and potential customers of MELP to take service from CEI, and i

generating of lawsuits to jeopardize MELP's ability to maintain a competitive stance.

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18. Through these and other actions all to be more fully shown at the hearings, CEI alone and acting through CAPC0 and Toledo Edison acting through CAPCO and as joint owner of Davis-Besse have pursued a cou se of conduct which is inconsistent with the antitrust laws and the policies underlying them to foreclose competition by the City or to gain competitive advantage over the City's electric system through denial to MELP of access to low cost bulk power

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supply, coordinated development and planning, emergency backup, and by the j use of unfair methods of competition.

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19. The granting of an unconcitioned license to opera te the Davis-3 esse Nuclear Plant will further the concentration of economic power in CEI to the

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great detriment of MELP. CEI either as owner or as participant in CAPCO seeks.

]t to gain control of all nuclear generation in the north Ohio area and to l

exclude MELP from ever participating either through ownership of generating

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l facilities or through unit power in the utilization of nuclear power for

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i electrical generation.

20. The cdditions of additional bulk power, even through a limited operating license, will increase the reliability of the CEI system and contribute to econoaies of scale on the CEI system. As a direct result, C EI will obtain an overpoucring advantage in its competition for customers with MELP. 1 l

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21. ~ Through its monopoly and ccatrol of high voltage transmission facilities which encircle and isolate MILP, CEI will ef fectively prevent MELP from participating with other parties in the construction of nuclear or conventional plants even assuming all possible sites are not usurped by CEI and CAPC0.

22. The granting of an unconditional operating license and the failure to add conditions to the construction license will result in the creation or maintenance of a situation incons stent with the antitrust laws. To avoid the creation or maintenance of a situttion inconsistent with the antitrust laws, any license issued to C3I and Tol..lo Edison should be conditioned to require I them to grant participation in the Davis-Besse Nucicar Plant to Cleveland either through ownership participation in the plant or through the sale of unit power, together with the transmission services necesscry to deliver power to MELP and together ,with participation with CAPCO members in coordinated operation, reserve 10

sha ring, .ind development .tud p l. inning o f t'ull powe t ,uppts ni.t it.tu sis., ton WilMRP.FOKl:, Pe t e t ietu r pray s that it be gt.tuted leave to t ut e i s e ne with respect to Applicant::: app li e.st (en t er <ut ope t a t t un 1 t een .. . .t n.1 se u ivt pale fully with respect to such matter, and that no operating license he granted unicss it is conditioned upon Applicants' ;; ranting ownership or unit power participation in Davis-Besse Nuclear Power Station, together with the transmission services necessary to deliver the power to MELP and together with participation with CAPCO members in coordinated operation, reserve sharing, and development and planning of bulk power supply and transmission.

City has heretofore requested a 200 MW share of Davis-Besse's 906 MW.

This request was made without regard to the Perry Nuclear Station. Since then, on March 23, 1973, CEI filed an application for a license to construct and operate the Perry Nuclear Plant Units 1 and 2. The City proposes to request access to 150 MW of the Perry Plant. If the City were to secure 150 MW from Perry, City would amend its request for 200 MW from Davis-Besse to 50 MW.

Respectf v submitted, CI OF CLEVELA! , HIO BY I N" g Ralph J( Peck, 2:ayor l

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i COUNTY Oi> )

El f Ralph J. Pcrk, being duly sworn, deposes and says that he is Y

-l the Mayor of the City of Cleveland, Ohio, and that he is authorized to execute and file the foregoing Petition and Affidavit and the City of i

Cleveland, Ohio, For Leave to Intervene; that he has read said petition 1

and affidavit and is familiar with the contents thereof; and that all

- statements of fact therein set forth are true and correct, to the best l

of his knowledge, information, and belief.

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'M l W

.I MRalph J. ' Perk i

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. Subscribed and sworn to before me this ~ 3 day of ' ri+y , 1973.

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