ML17207A354

Motion by Fl Cities Requesting That FERC 790803 Opinion & Order Rejecting Fl Power & Light Tariff Restrictions Be Incorporated in Proceeding for Relevancy.Opinion & Certificate of Svc Encl

ML17207A354
Person / Time
Site:	Saint Lucie, Turkey Point
Issue date:	08/09/1979
From:	GUTTMAN D SPIEGEL & MCDIARMID
To:
References
NUDOCS 7909050226
Download: ML17207A354 (63)

Text

0UNITEDSTATESOFAMERICANUCLEARREGULATORYCOMMISSIONFloridaPower&LightCompany(St.LuciePlant,UnitNo.1)(-/'etgpAUg1$';~/pp'ocketNo.50-35AFloridaPower&LightCompany(TurkeyPointPlant,UnitNos.3&4)FLORIDACITIES'ocketNos.50-250Aand50-251AMOTIONTOLODGETheCommissionisconsideringwhethertoconducta5105(a)antitrustproceedinginthesedockets,possiblytobeconsolidatedwiththe5105(c)proceedinginFloridaPower&LightCompany(St.LuciePlant,UnitNo.2),NRCDocketNo.50-389A.Initspleadings,FloridaPower&LightCompany("FP&L")hasraisedissuesastothescopeoftheFifthCircuitdecisioninGainesvilleUtilities

Deartmentv.FloridaPower&LihtCo.,

573F.2d292(5thCir.1978),whichwouldtriggersuch5105(a)proceedings.OtherpartieshavecontendedthattheviolationoftheantitrustlawsfoundinGainesville,~sura,mustbedeemedcontinuing.1/OnAugust3,1979,indecidingissuesrelatingtoFloridaPower&LightCompany'proposedtariffrestrictions"onwholesalepowerandcoordination,theFederalEnergyRegulatoryCommissionconsideredthefindinginGainesville,~sura,andreviewedFPaL'sconduct.FloridaCities2/believethat"hisOpinionisrelevanttotheissuesstated1~E..,"ReplyofFloridaCitiesinOppositiontoMemorandumbyFloridaPower&LightCompany,"pp.12-23,September5,1978.2/FloridaCitiesincludetheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWorthUtilityAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtilitiesCommission,andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociation.'~9OgoSOgg,g

-'2aboveandparticularlytotheconclusionthatFP&L'santicompetitiveactivitiesmustbedeemedtobe-continuing.Therefore,theymovetolodgethisopinion.1/WHEREFORE,FloridaCitiesrespectfullyrequestthatthe"OpinionandOrderReversingInitialDecisionandRejectingTariffAvailabilityLimitationsandNoticeofCancellation",FloridaPower&LightCompany,FERCDocketNo.ER78-19(PhaseI),etal.,(OpinionNo.57,August3,1979)belodged.Respectfullysubmitted,LawOfficesof:RobertA.JablonDanielGuttmanAttorneysfortheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWorthUtilityAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtiitiesCommission,andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.Cloud,andTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociationSpiegel&McDiarmid2600VirginiaAvenue,N.W.Suite312Washington'EC.20037(202)333-45001/IntheeventthattheCommissionshoulddeterminethatitcannotdeterminewhether5105(a)isapplicableasamatteroflawwithoutanevidentiaryreviewofoneormoreissues,thisOpinionandOrdershouldbemadepartoftherecordandconsideredbytheofficersassignedtomakesuchinitialdetermination.

~ITEDSTATESOFAMERICAN~EARREGULATORYCOMMISSIFloridaPower&LightCompany)(St.LuciePlant,UnitNo.1)))FloridaPower&LightCompany)(TurkeyPointPlant,UnitNos.)3&4))DocketNo.50-335ADocketNos.50<<250Aand50-251ACERTIFICATEOFSERVICEIherebycertifythattheforegoingMOTIONTOLODGEhasbeenservedonthefollowingpersonsbydepositintheUnitedStatesmail,firstclass,postageprepaid,this9thdayofAugust,1979:ChaseStephens,ChiefDocketing&ServiceSectionNuclearRegulatoryCommissionWashington,D.C.20555LeeDewey,'sq.Fred,Chanania,Esp.DaveEvans,Esq.OfficeoftheExecutiveLegalDirectorNuclearRegulatoryCommissionWashington,D.C.20555IvanW.Smith,ChairmanAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555RobertLazo,Esq.AtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington.,D.C.20555JeromeSaltzman,ChiefAntitrust&IndemnityGroupNuclearRegulatoryCommissionWashington,D.C.20555HerbertDym,Esq.DanielGribbon,Esq.JoanneGrossman,Esq.Covington&Burling88816thStreet,N.W.Washington,D.C.20006MelBerger,Esq.MildredCalhoun,Esq.DepartmentofJusticeAntitrustDepartment1101PennsylvaniaAvenue,N.W.Washington,D.:C.20530JohnE.Mathews,Jr.,Esq.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg;Jacksonville,Florida32202J.,A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis&Axelrad1025ConnecticutAvenue,N.W.Washington,D.C.20555ValentineB.Deale,Esq.AtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555RobertA.Mblon,AttorneyfortheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWorthUtilityAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtilitiesCommission,andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociation UNITEDSTATESOFAMERICAFEDERALENERGYREGULATORYCOMMXSSIONOPIiVXONNO57FloridaPower&LightCompanyDoc>catNos..ER78-19(PhaseI)andER78-81OPINIONANDORDERREVERSINGINXTXALDECISIONANDREJECTINGTARIFFAVAILABILITYLIMITATIONSANDNOTICEOFCANCERATIONIssued,:August3,1979DC-A.-7 UNITEDSTATESOFAMERICAFEDERALENERGYREGULATOR'YCOMMISSIONF1ordaPower&LghtCompanyDocket,Nos.ER78-19(PhaseI)andER78-81OPINIONNO.S7APPEUQVQlCESHarryAPoth,Jr.,RobertT.HallZXX,JamesK.MitchellandFoL.NortonZVRem&PriestforForxaPower&LightCompanyWilliamH.Chandler,WilliamC.Wiseand'obertWeinberforSeminoleEectz.cCooperativeRobertA.Jablon',DanielJ.GuttznanandSandraJ.StrebelfortneUtxlxtxesCoamu.sszonofNewSmyrnaBeach,FortPierceUtilitiesAuthority,CitiesofStarkeandHomestead,FloridaRobertF.ShairoandHarveL.ReiterfortheStaffoftheFeeraEnergyRegulatoryCommzsszon WHOLESALEELECTRICSERVICE:AVAILABILITY:ANTITRUSTUNITEDSTATESCFAMERICAFEDERALENERGYREGULATORYCOMMISSIONBeforeCommissioners-CharlesB..Curtis,Chairman;GeoxgianaSheldon,andMatthewHolden,Jr.FloridaPoweraLightCompany)DocketNos.'R78-19)(PhaseI)andER78-81OPINIONNO~57OPINIONANDORDERREVERSINGINITIAlDECISIONANDREJECTINGTARIFFAVAILABILITYLIMITATIONSANDNOTXCEOFCANCELLATXON(XssuedAuqust3,1979)BeforetheCommissionisaconsolidatedproceedingto..determinewhethercertainlimitationsontheavailability.offirmwholesalereauirementsservice,alongwithnoticesofcancellationofsuchservicetospecificwholesalecustomers,areunjust,unreasonableorundulydiscriminatory,andparticularlywhethertheyareanticompetitiveineffect.,Hithoneexception,wefindthattheproposedlimitationsonre'cuirements,service,availabilityhavenotbeenjustified.Accordingly,werejectthesetariffprovisions.Moreover,sincethenoticesofcancellationarefoundedupononeoftheserejectedlimitationsonavailability,theymustlikewiseberejected.Tosetthestageforourdiscussion,wewishtostateattheoutsetourviewthat,whereautilitypossessingmarketpowerinarelevantniarketseekstoamendageneraltarifftoimposeconditionswhichforeclosesupplyoptionsorincreasethecostsofcompetitors,orwhichotherwisecontributetotheacauisitionormaintenanceofmonopolypower,itsapplicationforamendmentmustberejectedandfoundunjustandunreasonableunderSections205and206oftheFederalPowerAct-unlesstheutilitycanshowthatcompellingpublicinterestsjustifytheservice'conditions.

Docket'Aos."-R78-19,etal. Marcover,evenwhereoverridingpublicpolicyobjectivesareshowntojustifysomerestrictiononwholesaleservice,suchautilitymustbecalledupontodemonstratethatitsproposalistheleastanticompetitivemethodofobtaininglegitimateplanningorotherobjectives.Onthebasisofouranalysisoftherecordbeforeus,weconcludethatFP&L'proposedtariffrestrictionswouldeliminatetheonlypracticalsourceofbase-loadpowerorenergytocompetingutil'itieswithinthemarketsdominatedbytheCompany.'urthermore,theprogosedrestrictionswouldappeartocreatethepotentialforadditionalanti-competitiveeffectsbyinhibitingtheformationofnewdistributionutilitieswithinthesemarkets.FP&Lhasfailedtosatisfactorilydemonstratecountervailing'ublicintereststhatwarrantapprovalofanyoftheseprogosals,exceptfortheonewhichwouldprovideseparatepartialreauirementsservice.Totheextentthatlegitimatepur-gasesaresought.tobeattainedbyFPSL,thereappeartobeanumberofalternativemeansoflessanticompetitiveeffectfortheiraccomplishment.TheCommissionwishestoemphasizethatwearenottodayholdingthatautilitywithmarketgoweris,oerse,precludedframamendingageneraltarifftoimposecondxtionswhichlimitserviceavailability.TheFederalPower'ctaccordsautilitytherighttoproposesuchlimitationsandanopportunitytodemonstratethatitsarogosedchangeinserviceisjustandreasonable.Intheinstantcase,wefindonlythatFPaLhasfailedtocarryitsburdenofjustification.Aninitialcommentisalsoinorderconcerningtheapplicabilityofantitrustlawsandpoliciestoourpro-ceedings.Fromitsinception,thisproceedinghasfocusedonissuesre1atedtothejustnessandreasonablenessoZFPaL'rateproposalswhenevaluatedin1ightoftheirallegedanticomgetitiveeffects.'TheallegationsandevidenceofstaffandtheintervenorstogetherwiththeassociatedresponsesoftheCompanyhavecoalescedintoissuestypi-callyexaminedinthecontextofamonopolizationcaseunderSection2oftheShermanAct.TheCommissionacknow-ledgesthatitisnotsgecificallyresponsibleforenforcingtheShermanActoranyotherofthisnation'antitrustlaws.Andwewish'oemphasizethati'nevaluatingtheanti-competitiveeffectsofaproposedratechangeandinmakingfindingswithrespectthereto,wedonotmakefindingsthatviolat'ons.oftheantitrustlawshaveoccurred.Instead,itxsourobli@ationtoevaluatethepublicgoliciesexpressedinFederalantitrustlawsandtoreflecttnosepoliciesintheconductafourresponsibilitiesundertheFederalPowerAc"~1/hiswehaveendeavoredtodointneinstantase.1/Itisnowbeyondcuestionthatantitrustlawandpoliciesdorelatetah'Cammission'respansibilitiesunderthe-n~ara>Neverh{.t.see,GulfStatesUtilitiesCo.v.FPC, DocketVos.KR78-19,etal.~awhilewebelieveourevaluationoftheanticomgetitiveeffectsoftheproposaliscorrectandsupportedbytherecord,werecognizethattheseanticomoetitiveeffectsmaynothavebeendemonstratedwiththerigoraswouldbedemandedinoroceedingswherespecificfindingsofviolationsoftheantitrustlawsareat'ssuewithattendantpotentialfortheimpositionofcivilandcriminalpenalties.Lastly,wewishtonotethatthefairlyelaborateaccountofFP&L'sgastconductinitsmarketplaceisnotintendedbythisCommissiontobeadeterminationoffactualdisputeswhichmaybethesubjectoflitigationinotherforums.Ratherwemerelyobservethattheevidenceinth'isrecordofthatgastconductcastsashadowoverFP&L'sclaimedneedtorestrictserviceand,therefore,isofpro-bativevalueindeterminingwhethertheCompany.hassatis-factorilycar'rieditsburdenofjustificationforthegrooosedservicelimitations.hestructuralandconductanalysesrequiredinanantitrustproceeding,andpresentedtoushere,areofconsiderableassistanceinisolatingdemon-stratedanticomoetitiveeffectfromunfocusedallegations.Etisimoortanttoexaminethemarketsinwhichrelevantelectricservicesareboughtandsoldandthendeterminehowthequestionedrateprovisionsmayaffectthecompetition,orootentialcorn"etition,in,thesemarkets.Thisopinionattemotstopresentourinterpretationofthefactsandlawalongtheselines.BACKGROUNDTheProceduralHistorOnOctober14,1977,FP&Lfiledxn.DocketNo.ER78-19proposedchangestoitsfirmwholesaleelectrictariff,scheduleSR-1,whichwouldbifurcatethatscheduleintoafullrequirementsscheduleSR-2andaseparatepartialrequirementsschedulePR,andincreasetheratesforeachoftheseservices.UnderscheduleSR-1firmservicehasbeengenerallyavailable"inallterritoryservedbytheCompany."FP&Lnowproposestolimittheavailabilityoffirmwholesale~servicestothoseexistingcustomersnamedinthetwonewschedules,whichoreviouslypurchasedunderscheduleSR-l.Also,theCompanywouldlimitserviceunderschedulePRtoexistingcustomerswhichdonotownsufficientgeneratingcagacitytomeettheiroeakloadrequirements.

DocketNos.ER78-19,etal.,Inarelatedaction,FP&LfiledinDocketVo.ER78-81,onDecember1,1977,anoticeofcancelLationoffirmpartialrequirementsservicetooneofitsSR-Lcustomers,theCityofHomestead,Florida,whichhassufficientcapacitytomeetitsload.Instead,theCompanywouldmakewholesalesalestoHomesteadunderrateschedulesinaninterchangeagree-mentbetweenthesetwoparties.UnderSections205and206oftheFederalPowerAct,autilitymustreceiveCommissionapprovaltoreplaceoneservicetoawhoLesalecustomerwithanotherservice.Commissionjurisdictionoverchangesin~rates,charges,classificationorservicenecessarilyen-compassesthissituation.TheCommissionmustfirstfindthatthiscustomerreclassificationisinthepublicinterest.See,PennslvaniaMaterandPowerComanv.FPC,343;U.S.414g422-424(1952).ByorderofDecember30,1977,theCommissionconsoli-datedthesedockets,suspendedboththetariffavailabilityrestrictionsandthe.Homesteadcancellationforfivemonths,andsuspendedtheproposedratechangesfortwomonths.PhaseIoftheseconsolidatedproceedingswasestablishedtoallowforseparatehearinganddecisionontheLegalityofthetariffavailabilityrestrictionsandthecancellationofthefirm"serviceto.Homestead.Followingascheduleofconferences,evidentiarysub-missions,hearingsandbriefs,PresidingAdministrativeLawJudgeCurtisWagnerissued,.hisInitialDecisiononApril21,1978.Heconcludedthattheproposedavailabilitylimita-tionsforfullandpartialrequirementsservicesarejustandreasonable,andapprovedthecancellationoffirmpar--tialrequirementsservicetoHomestead.Briefsonexceptions,totheInitialDecisionwerefiled.onHay8',1978,bytheCommissionStaff,theCooper-ativegroup'ofwholesalecustomers,2/andthemunicipalgroupofwholesalecustomers(theFloridaCities).3/OnMay12,1978,FP&Lfileditsbriefopposingtheseexcept'ons,2/3/TheCooperativesincludeSeminoleElectricCooperative,ClayElectricCooperative,LeeCountyElectricCooperative,OkefenokeRuralElectricMembershipCorporation,andSuwanneeValleyElectricCooperative.TheFloridaCitiesincludeFortPierce,NewSmyrnaBeach,Homestead,andStarke.

DocketNos.ER78-19,etal. EyorderissuedJune1,1978,theCommissionstateditsintentiontoissueafin~1decisioninPhaseIassoonaspossibleandurgedFP&LtorefrainfromimplementinathetariffavailabilityrestrictionsandcancellationofreauirementsservicetoHomestead,pendingafinalrulingontheseissues.ByletterdatedJune9,1978,FP&LinformedtheCommissionthat,withoutwaivingitslegalrights,itwouldprovidePRservicetoHomesteadandalsototheCityofFt.Pierce,Florida,pendinafinalCommissionaction.TheRateChaneProosalsFirmwholesaleserviceunderFP&LscheduleSR-2,fz.ledonOctober14,1977,wouldbe-availabletomeetthetotalcapacityandenergyrequire-mentsofpurchasingutilitiesovertheindefinitefuture.Etiscomprisedofatwo-partdemandandenergyrate,basedonFP&L'saveragesystemcostswhichincludestheproductioncostsofitsnuclear,gasandoil-firedgeneratingplants.Its.predecessor,scheduleSR-l,wasmadeavailabletoallwholesalepurchaserswithinFP&L'sserviceterritory.However,theCompanynowproposes:;olimitfullrequirementsservicetosixruralelectriccooperativeswhichpresentlytakethisservice.ApotentialpurchaserreauestingfullrequirementsservicefromFP&Linthefuturecouldnotanticipatereceivingthisserviceandwouldnot~receivetheSR-2rateforanyserviceitwasabletoarrange.4/Whilethere,willbenoabatementofretailsalestonewcustomers,FP&Lhasstatedthatitisnotwillingtocommititselftoserveanynewwholesalecustomersbutwouldbewillingtodiscussthepossibilitywhenthesituationarises.5/FP&LwholesaleschedulePR,alsofiledonOctober14,1977,isamodificationofscheduleSH-1desianedtomeetpartialpowerandenergyreauirements,complementingthepurchaser'sowngenerationorotherfirmpowerpurchases.LikescheduleSR-2,itiscomposedofatwo-partdemandandenergyratebasedonaveragesystemcost;however,theratelevelsaredifferentandthedemandcomponentisstratifiedtoreflectdifferingpricesforpeakandbase/intermediatedemand.Eachtariffhastwoenergyrateblocks,but,theSR-2lowerblockisattainedafterpurchaseof4/FP&Lbriefo!posingexceptionsat10.:-/Zd.

DocketVos"R78-19,etal.275kWhperkWofbillingd'emand,versus400kWhundereche"ulPR.."moreover,"schedulePR'equiresthecustomer."os"ec'its"contractdemand"onFP&Lforsucceeding2;..onth"eriods.Thecustomer'smonthlybillingdemand'sneverlessthan90$ofitscontractdemandplus75%ofi"smaximumrecordedpeakdemand.Conversely,thedemandchargeforpurchasesabove110$ofcontractdemandishigherandthecustomermaynotincreaseitscontractdemandforsucceedina12monthperiodsbymorethan125%withouttheconsentofFP&L.TheCompanyassertsthatthesedesigndifferencesbetweenschedulesPRandSR-2encouragepartialrequirementscustomerstoincreasetheirloadfactors.Partialrequirementscustomers,includingtheCitiesofHomesteadandNewSmyrnaBeach,previouslytookserviceunderscheduleSR-1which,asnotedearlier,wasavailabletoallcustomersinFP&L'sserviceterritory.WiththefilingofschedulePR,however,FP&Lproposestolimitthisservice,tothreecustomers,theKeysElectricCooperativeandtheCitieso"NewSmyrnaBeachandStarke.Homesteadwhich,likeFortP'erce,hassuff'cientgeneratingcapacitytomeetitsload,wouldbe'excludedfromthisservice.6/Althoughnotdirectlyatissueinthisproceeding,itwouldaidtheclarityofthisdecisiontodescribethefourintercnangepowerandenergyserviceswhichFP&Landseveralutilitiesreciprocallyprovideunderbilateral.agreements.Thetransactionsundertheseagreementsarevoluntaryandofrelativelyshortduration.Ratesaredeterminedatthetimeofsale,basedonincrementalinsteadofaveragesystemcosts.Emergencyinterchargeservice,denominatedScheduleA,providesthebuyerw'hcapacityandenergyintheeventofaforcedoutage,foraperiodlastingnolongerthan72hours.Forpricingpurposes,ScheduleAserviceisdeemedtobeprovidedbytheseller'sdesignatedfossil-firedsteamorcombustionturbinegeneratorsandrecoversonlyout-of-pocketenergycosts.7/6/Aswillbediscussedlater,FortPiercebeganpurchasingunderschedulePRonMarch28,1978.HomesteadalsocontinuestoreceiveservicebyagreementofFP&L.However,FP&Lassertsthatitwillterminateservicetoboth,iftheCommissionapprovesitsratechanges.7/~ndercertaincircumstances,thebuyermayalternativelyre~urncapacityandenergyinkindwithinthecurrentbilingper'od.

DocketNos.=R78-9,etal. Scheduledinterchangeservice,Schedul'eB,providescapacityandenergyforperiodsoflessthan12months,whenthebuyerisshortofcapacityprimarilyduetoforcedorscheduledplantoutages.ThebuyermustmeetthereservereguirementassociatedwithScheduleBservice.DeliveryofScheduleBpowerandenergyoccurswhenintheseller'sdiscretionnoimpairmentoffuelstocksorservicetoothercustomerswouldresult.Capacityandenergyratesarebasedontheproductioncostsoftheseller'sfossil-firedandcombustionturbinegeneratingunits.Economyinterchangeservice,ScheduleC',providesfornon-firmenergyexchangesofshortduration,pricedtosplitthesavingsbetweentheseller'sincrementalcostofgenerationandthebuyer'deercmentalcost.8/Finally,'firminterchangepower,Schedule0,providescapacityandenergyforperiodsof12to36months.UnlikefirmserviceunderScheduleSR-2andPR,thisserviceiscurtailableduringextremecoldweatherandemergencyconditions,inwhichcasethedemandchargemaybeadjusted.ScheduleDservicei"apparentlypricedatthescheduledoutagerate,ScheduleB,forfossil-fueledand.combustionturbin~'apacityandenergy(Exhibit29).WithintermittantusageScheduleDmaybechea'perthanthePRrate;however,itapparentlybecomesmoreexpensivethanSchedulePRasthecustomer'loadfactorincreases(Tr.254).FPaLproposestoprovidefirmservicetoHomesteadandFortPierceonlyunderScheduleD,andhasofferedthem240NNofScheduleDcapacitythrough1980.TheXnitialDecision'ThebasicissueofthisproceedingascharacterizedbythePresidingJudgeiswhetherFPaLcanjustifyareclassificationofwholesaleservicesbasedontherlationshipofcustomerloadtocustomergeneratingcapacity.Xnhearingthiscase,theJudgeimposedtheburdenofproofonFPRXtodemonstratethatitsproposedtariffmodificationsandrestrictionswerejustandreasonable.HelargelyrefrainedfromconsideringtheevidencepresentedbyStaffandtheFloridaCitiesintendedtodemonstratethattheproposedrestrictions8/ThepriceofinterchangeenergyischaracteristicallydeterminedbyFP&Z,'sgeneratingunitswithhighoperatingcosts,notbybase-loadednuclearor-naturalgas-firedunits.

DocketNos.ZR78-L9,etal.-8wereoartofananticompetitivepatternofactivitiesbvtheCompany,leadingtowardmonopolizationofthetheretailpowermarket.ThePresidingJudgeconcludedthatFP&L'sproposedrestrictionsoneligibilityforwholesaleserviceswerejustifiedonthebasisofdifferencesincostofservice.HeagreedwiththeCompanythattheload'atternsofcustomerswithcapacityeauaLtotheirpeakdemandscouldbesoeraticastomakeFP&Lsystemplanningundulydifficult,warrantingthecompleteexclusionofsuchcustomersfromwholesaleserviceataverage-costrates.Hedecidedthatincrementally-pricedinterchangeservices,describedabove,wereacceptablealternativesforcustomerssuchasHomesteadandFortPierce.TheJudgefoundthatinterchangepowercouldbeusedtomeettheirbaseloadrecuirements"atalowerratethanunderthepartialreauirementsschedule,"InitialDecisionat14,andsuggestedthattheseself-sufficientutilitiescouldpurchasebulkpowerfromothersourcesbecauseFPsLhasagreedtowheel.HedeferredtocivilcourtstheallegationsofthesetwocustomersthatFP&LhadbreachedcontractualobligationstoservethemunderscheduleSR.TheJudgealsofoundthatthebifurcationofscheduleSR-1intoseparateSR-2andPBscheduleswasjustandreasonable.Moreover,heconcludedthattheCompanycouldchangetheavailabilityprovisionofitstarifftolimitwholesaleservicestocustomersnamedinschedulesSR-2andPR.Thiswasbasedonhisassessmentofcertainfinancial,operationalandcapacityplanningproblemsassertedbyFP&Landhisdeterminationthatthetwo-yearnoticeofterminationprovisionintheschedulesdidnotassurethattheCompanywouldrecoverallcapacitycosts.TheJudgedismissedtheallegationsthatFP&L'sproposalswouLdhaveananticompetitiveeffect,basedonaCompanyrepresentationthatithadnointerestinaccuiringnewretaiLfranchisesbecauseoffuelproblems.Finally,hesoughttomitigateconcernthatFP&LwouldstrictlyconstrueitstarifflimitationsbyrecitingseveraloftheCompany'sinterpretationsmadeduringthecourseoftheproceedings,butnotaddedtotheproposedtariffs.Insum,thePresidingJudgeapprovedeachoftheCompany'sproposedchangestoitswholesaletariff.Basedonthis,hea'soapprovedtheproposalthatHomestead(andFortPierce)becomeineligibleorserv'ceunderFP&L'average-oricedwholesaleratesandallowedtotakefirminterchargeserriceonly.

DocketNos.ER78-19,etal.-9PositionsofthePartiesThepositionoftheapplicant,FPRL,hasbeensummarizedinthetwoproceedingsectionsoftnisopinion.ItfurtherstatesthatpublicutilityobligationsundertheFederalPowerActarelimited.However,wearebasicallyconcernedherewith.theobligationsundertakenbyFPGLitselfinitsscheduleSR-1tariff,whichmakeswholesaleservicegenerallyavailablethroughouttheCompany'sserviceterritory,incontrasttotheproposedlimitationsonavailabilityofschedulesSR-2andPR.9/Finally,FPSLdeniesthatithasengagedinanticompetitiveactivities,statesthatStaff'sandFloridaCities'llegationsarelargelyirrelevantandquestionstheirapplicationoftheantitrustlaws.Exceptions-totheInitialDecisionraisedbyFloridaCitiesareprolix.However,theymaybesimplified,briefly.FloridaCitiescontendthattheproposedtariffisanattempttoabandonservicetotheCityofHomesteadbecauseHomesteadiscurrentlyreceivingfullinterchangeserviceandunderthetermscftheproposedrateschedulecouldnolongerreceivepartialrequirementsservicealthoughitdesirestodoso.Citiesclaimthatretrictionsintheproposedfellandpartialrequirementstariffsaretana-mounttorefusalstodealineithertotalorpartialrequirementsservice.FP&L'spartialrequirementstariff,theyassert,isdesignedtolimitthesaleofwholesalepower.Thisisaccomplishedbyrestructuringthesaleofpartialrecuirementsservicetoonlythosesystemswhichrequire'uchservicetocomplementtheinsufficientgenera-tingcapacityorfirmpowerpurchasestomeettheirnativeloadsandthereforedoesnotapplytosystemswhichnominallyhavegenerationsufficienttomeettheirloadsregardlessoftheageorefficiencyofsuchgeneration.BothHomesteadandFortPiercewouldbeservedonlyatinterchangerates,creatingapricesqueeze.9/TotheextentthePresidingJudgemaysuggestthatscheduleSR-1doesnotmakewholesaleservicegenerallyavailablebecauseservicecontractsmaystillberequired,InitialDecisionat8,thisisnotreflectedintheprovisionitself.DuringcrossexaminationFP&L'sratedesignwitnessacknowledgedthatutilitieswithintneCompany'sserviceterritory,suchasFortPierce,JacksonvilleandOrlando,wereeligibleforfirmservicetnde"thetermsorScheduleSP.-1.~ee,infraat30..a=toall,theourooseofthisproceedinghasbeentolim'"thatprovisiontocertainnamedandexistingcustomers.moreover,FPaLhasinthepastfiledunexecutedservice"agreements"whencustomershavecommencedservice.

DocketDos.ZR78-19,etal..-].p-CitiescontendthatFP&Lisattemptingtodenyormakeitmoredifficultforthemtoestab'.isheconomicalernatives.Apartfromthetariffproposalsatissue,hisisaccomplishedbydenyingjointparticipationinnewnucleargeneration,opposingmunicipallysupportedlegislation,ancrefusaltofileorestablishageneralratefortrans-mission.TheyalsostatethatFP&LhasrefusedtosupportageneralintegratedpowerpoolinFlorida.heCooperativesassertintheirbriefonexceptionsthattheInitialDecisionignoredtheirpositionandreliedexcessivelyonFP&Ztestimony.TheCooperatives,whichthroughSeminoleareplanningbaseloadgeneratingunits,willrequirepartialrequirementsserviceinthefutureinstead'ofscheduleSR-2service.BecausetheyarenotnamedinthePRtarifftheyarenotassuredofthisservice,sothattheselimitationsdenythemthenecessarysupplyflexibilitytoaccountforchangingsituations.StaffallegesseveralactsofmonopolizationbyFP&L.S"afstatesthatFP&Lhasrefusedtosellwholesalepowertothemunicipalutilities,therebyconstitutingarefusaltodealproscribedbyUnitedStatesv.OtterTailPowerCo.,331F.Supp.54(D.Minn.1971),aff'd>410U.S.366(1973).Inthisregard,itpointstoanhrstoricFpaLpolicynot.toservemunicipalsystemsatwholesale,anFP&LrefusaltoserveFortPierceundertheSR-1tariff,andthelimitationsontheavailabilityoftheSR>>2andPRtariffspresentlyatissue.StaffviewsFP&L'sdominanceovertransmissionfacilitiesanditscorrespondingrefusalstowheelasbottleneckmonopolizationproscribedinUnitedStatesv.OtterTailPowerCo.,suora.StaffcitesexamplesofFp&L'srefusingto.wheelthrrdpartybulkpowertotheCitiesofJacksonville,So>aestead,andLakeNorth,andi"assertsthat,whileFP&LhasveryrecentlyannouncedinDocketNo.ER77-175anewpolicytopermitwheeling,thatpolicyisfartoorestrictiveintermsofratesandterms.StaffseesanotherexampleofmonopolizationinFP&L'srestrictionsonaccesstoitsnucleargeneratingunits.Specifically,Staffassertsthatsmallerutilitiesdonothavetheindividualloadstojustifyanuclearunitbut,duetotheeconomiesofsuchunits,utilitiesmaybecomeuncompetitivewithoutaccess.StaffalsoallegesthatFP&Lhasunreasonablyretrictedcoordination,bothintermsofeconomyexchangesandpowerpooling.ItthencontendsthatFP&Lhasestablishedbarrierstoentryintheformofrestrictionsinitsfranchiseagremntsw'hmunicipalities,-particularlythestancardthirtyyear"rm.hisisoccurring,accordingtoStaff,whileF'P&L.-.,a'ntarnsapol'cy"ofacquiringmunicipal.sys"ems;however,.=P&L',".asnotacquiredanotherutilityinrecentyears.he"Sta=fconcludesthatFP&L'sproposedtariffrestrictionswouldrtheritsmonopoly.=owerintherelevantmarkets,asce.nedbvitseconomicwitness.

DocketVos.ER78-19,etal.THEEXZSTENCEOFCOHPETZTZOtlA'ADN10ViOPOLYPOWER'he".elevantMarketsWebeginourdiscussionofF?&L'stariff"roposalsbydefiningtherelevantmarkets,wh'c.."rovideaframework'ordeterminingthepossibleexistenceofmoropo'ypower,theopportunitiesforcom-pe:itionandŽherequiredbredthofanyremedialaction~emayorder.TheStaffeconomicwitnessidentiiectwobroadly-definedproductmarketsasrele-vanttotheinvestigationoftheanticompetitiveeffectofF?&Z,'proposedtariff=restrictions.ThisanalysiswasnotchallengedbyanypartyaridreflectsFP&Z,'sowncon-ceptuali"ationofitsbusiness.10/TheretailmarketinvolvessalesofcapacityandenergytoultimateconsumersbyverticallyintegratedutilitiessuchasFP&Landbydistributionutilities.Thebulkpowermarketinvolvessalesofwholesalepowerandenergytoretaildistributors('nclud'ngthecaptiveretaildistributioncentersofvertically-integratedsystems)bybulkpowerproducersandsuppliers.Theseproductmarketdefinitionsareamplysupportedbvtherecord,andweadopttheminouranalysis.ThebulkpowerproductmarketwasfurtherdisaggregatedbytheStaffwitnessintofivesubmarketsessentiallyconsistingoffullrecuirementspower,partialreguirementsandcoordinationservices,componentbulkservices,salesattransmissionvol-tgestoultimateconsumersandtransmissionservices.Znsodoingheattemptedtodemonstratetheinter-changeabilityoffirmfullreauirementspowerwith"unbundled"bulkpowerserviceswhichmaybepurchasedfromseveralsourcestomeetthereauirementsofaretaildistri;butor,inconjunctionwithgenerationownedbythatdistibutor.1vhilewedonotdisputethevalidityofthissubdivisionofthewholesalemarket,amorepracticalmethodofanalyzingthatmarketforpurposesofthisproceedingistoseparatebulkpowertransactionsintodiscretefirmreauirementsandcoordinationsubmarkets.Essentially,thisparallelsthedistinctionbetweenFP&L'sscheduleSR-2andPRfirmservicesontheonehandanditsinterchangeservicesontheother.F?&L'sfirmservicesarenon-interruptible;pricedonthebasisofaveragesystemcosts;designedtomeeta1p/Zna1976presentationtotheCompany'sSeniorManagementCouncil,F?&L'svcepresidentforstrategicplanningsub-dividedtheCompany'sactivitiesintodiscretebulkpowerareelcticsevicebusinesses(ExhibitG-3,at3).

DocketDos.ER78-19,etal.customer'sbase,intermediateand/orpeakloadrequirements;andcontinuouslyavailable.overtheindefinitefuture.Con-versely,interchangeservicesareinterruptible;incrementallypricedonthebasisofoil-firedgenerationcosts;ancillarytobulkpowersupplyandnotpracticablesourcesofbaseloadpower;andoflimitedduration.Dependingonthefeasibilitytothecustomerofself-genera'tionorsupplementaryfirm-powerpurchases,partialrequirementsserviceisreasonablyinter-changeablewithfullrequirementspowertomeetaretailload.Suchinterchangeabilityisarequisiteforgroupingproductsinacommonmarket.See,UnitedStatesv.duPont&Co.,351U.S.377,393(1956).Ofcourse,PPaLdidnotrtself'istinguishbetweenthesetwofirmservicesinitsSR-1schedulepriortothiscase.However,interchange-servicescannotbeusedtosustainloadrequirementsandmayonlybeusedtoaugmentotherprimarysourcesofbulksupply.lnparticular,FP&L'swholesalecustomersdonotregardScheduleDfirmpowerasinterchangeablewithSRorPRfirmpowerandtheCompanydescribesthemasdifferentservices.FP&LsellselectricpowerandenergytomostoftheheavilypopulatedareasalongtheeasternandlowerwesterncoastsofpeninsularFloridaandportionsofcentralandnorth-centralFlorida.'ithinoradjacenttothisserviceterritoryare22smallerareasservedbymunicipaland,coop-erativeutilities.TheStaffwitnessidentifiedthiscompositearea,comprisedofsome35Floridacounties,astherelevantgeographicmarketforbothretailandwholesaleproductmarkets.ThiswasprimarilydeterminedfrominformationinFP&L's1975annualreport.Theserviceterritoriesoflargerborderingutil'ties11/wereexcludedfromtheretailgeographicmarketbecauseoftheunavailabilityofwheelingserviceintotheFP&LserviceterritoryandtheexistenceofretailterritorialallocationagreementswithFP&Lwhichprohibitretailcompetition(ExhibitGT-6,at8-9).12/Thisisnottosaythatcompetitiondoesnotexistxntherelevantretailmarket.Aswediscusslater,thereissignificantcompetition,primarilyfranchiseandyardstickcompetition,11/FloridaPowerCorporationandTampaElectricCompany.12/Theseretailterritorialagreementsarenotatissueinthisproceedingandweexpressnoop'nionastotheirmerit.They"equireapprovalbvtheFloridaPublicServiceCommissionandhaveheenupheldonjudicialreview.Storevv.Ãavo,217So.2d304(Pla.1969),crt.den.,395U.S.909(1969).Zn1974thisauthorrtywasexoresslygiventotheFloridaCommission.See,Florida'StatutesAnnotated$366.04.

DocketNos.ER78-19,etal.andFPsLitselfhasrecognizedthatitsneighboringutilitiesarebothcustomer'sandcompetitors(ExhibitGT-6,at1).Furthermore,eventerritorialallocationagreementsaresubjecttomodificationunderlimitedcircumstancesinpro-ceedingsbeforetheFloridaPublicServiceCommission.peoplesGasSystemv.Mason,187So.2d335(Fla.1966).Thewholesale.bulkpowergeographicmarketwassimilarlyconstrainedbecause'relativelyfewwholesaletransactionsaremadeacrossitsboundaries.Thisgeographiclimitationappliesaswelltothebulkpowersubmarkets,particularlythefirmrequirementssubmartet,describedsunra,becauseofwholesaleterritorialagreementsandtheabsenceoffirmpowertransmissionservices.Althoughthereisapotentialforcompetitioninthewholesalemarket,actualcompetitionhasbeeninhibitedbyPPSL,aswediscussbelow.Wearenotrequiredtoremedythatsituationnow.Thisopinionreflectsourconcernthatwholesalemonopolypowernotbeusedtomaintainorenhanceautility'sretailmarketposition.MonopolyPowerMonopolypowerhasbeendefined'astheabilitytocontrolpricesorexcludecompetitionfromarelevantmarket.UnitedStatesv.AluminumCo.ofAmerica,148F.2d416(2d.Cix.7945).Ztmaybereadrlyapoarentincaseswherepriceshavebeencontrolledorcompetitiondemonstrablyexcluded;however,'suchshowingsarenotessen-tial.AmericanTobaccoCo.v.UnitedStates,328U.S.781U.(1I*,h*b***'*bonafirm'sshareofthemarket,andapredominantsharewarrantstheinferenceofmonopolypower.UnitedStatesv.CrinnellCora.,384U.S.563,571(1966).InUnitedStatesv.OtterTarlvowerCo.,331F.Supe.54(D.Minn.1971),aff'd,410U.S.366(973),aninferenceofmonopolypowerwasbasedonafindingthatthedefendantutilitypossesseda75.6%shareoftherelevantmarket.WefindthatPP&Lhasmonopolypowerintheserelevantmarkets,asdeterminedbyDr.,Taylorinunrebuttedtestimony.Basedon,1976data,PPSLhasbeenshowntopossessa76%shareoftheretailmarketintermsofcustomersserved.ItsclosestrivalsaretheeightmunicipalutilitieslocatedwithinPPSL'sserviceterritorywhichgenerateaportionoftheirpowerrequirements.14/Collectively,theseeight13/MonopolypowercanbeexercisedaswellthroughsubtleefFortstopreventcompetitionfromdeveloping.UnitdSatesv.GriffithAmusementCo.,334U.S.100(1948).TheeightutiliiesareFloridaPublicUtilitiesinFrnandino,FortPierceUtilitiesAuthority,theCityofHomestead,JacksonvilleElectricAuthority,CityofKeybest,LakeWorthUtilities,theCityofHewSmyrnaBeachandtheCityofStarke(ExhibitGT-5).

DocketNcs.ZR78-19,etal.systemshavea12%shareofretailcustomersserved(Exhi-bitGT-3).En1976FP&L'sshareoftotalkilowatthourssoldatretailwas758,comparedtothecollective13%soldbvtheeightgeneratingmunicipals.15/Thestatisticalmeasurementofmonopolypoweradopted'nUnitedstatesv.OtterTailPowerCo.,snore,wastheoercentageortownsserveatretarlwrthintherelevantmarket.FP&Lprovidesretailservicetoapproximately90%ofthecommunitiesintherelevantmarketwithpopulationsofover1000people(Tr.1569).~16TheinferenceofFP&L'smonopolypowerintheretailmarketisstrengthene'dbyseveraladditionalconsiderations.First,theexistenceofterritorialallocationsobviouslyprovidesaveryeffectivebarriertonewretailcompetitionfromexistingutilities.Second,thesubstantialcostofaccuiringutilitypropertyattheexpirationofanexistingsupplier'sfranchisecouldbeabarriertocompetitionforexistingfirmsandnewentrantsaswell(ExhibitST-8).Third,theabsenceofwheelingservicesthatwouldallowautilitytoprovideretailservicetoanoncontiguousareawouldstopanyretailcompetitionwhichovercamethefirsttwobarriers.17/Znsum,thesehighmarketentrybarriersconfirmtheinferenceofmonopolypowerbasedon15/FP&L'sshareoftherelevantmarkethasgrownsome-whatbetween1966and1976from73%to76%oftotalretailcustomersandfrom74%to75%ofretailsales(Tr.1568).16/Cf.,BrownShoeCo.v.UnitedStates,370U.S.294,337(1962),acasebroughtunderg7oftheClaytonActwheremonopolypowerwasmeasuredonthebasisofcitiesintherelevantmarketwithpopulationsexceeding10,000.XnCitofHishawakav.AmericanElectr'cPowerCo.,465F.Supp.1320,1325(N.D.Ind.1979),thecourtfoundmonopolypowerwherethedefendantservedatretail89%ofthemunicipalitiesintherelevantmarket.17/Cf.,BostonEdisonCo.,DocketNos.E-8187andE-8700,OrderReversinginPartandAffirminginPartinitialDecision,mimeoat3(December7,1976),wheretheCommisiondealtwithatransmissionrateforretailservice'oanoncont'guousterritory.

DocketNos.E378-'19,etal.-15FPaL'marketshare.ConsumersPowerComan,6NBC892,'013(1977).Moreover,entrybarriersenhancetheopportu-nitiesforexploitationofthisgower.AlthoughtherecorddoesnotcontainprecisestatisticalindiciaofFPGL'sshareofthewholesalepowermarket,itisclearthattheCompanyhasmonopolygoweroverbulkpowertransactionsaswell.PPSL'sshareoftheretailmarketisasuitablebaseonwhichtoassessitsshareofthewholesalemarket,becausethebulkgowerwhichtheCompanyproducestoserveitsowncaptiveretailserviceterritorymustbeincludedaspartofthewholesalemarket.UnitedStatesv.AluminumCo.f'*,~.148.2d424~pleasta75'tshareofthewholesalemarket,towhichmustbeaddedtheCompany'swholesalesalestomunicipalandcooperativeutilitieswithintherelevantmarket.TheonlyothersupplierofwholesalerequirementsservicewithintherelevantmarketistheJacksonvilleElectric.Authoritywhichsuppliesitsowndistributionsystem,plusthedistributionutilitiesinJacksonvilleBeachandGreenCoveSprings.Moreover,includedinFPaL'sbulkpowerresourcesarevirtuallyallofthenucleargeneratingcapacityandsub-stantiallyallofthegas-firedgenerationavailablewithintherelevantmarket,eachofwhichgivetheCompanyasigni-ficant.edgeintheproductionoflow-costpowerforbaseloadrequirements.ThreeofthefouroperatingnuclearplantsintheStateofFloridaaresolelyownedbyFPsL(Tr.588,1625).18/OnlyNewSmyrnaBeachandtheCooperatives,actingthroughtheirgenerationandtransmissionsubsidiary,havegaineddirectaccesstonucleargeneration,throughsmallownershipinterestsinFLoridaPowerCorporation'snuclearplant.TheCompanydoesnotdisputethatitslong-term,noncurtailablesupplyofnaturalgasgi.vesitanadvantageovermunicipalgeneratingsystems;19/however,itassertsthatitshouldbealLowedtoretainthisbargained-foradvantageforsalestoexistingcustomers(Tr.205).Bycomparison,municipalgeneratingunitsaresmall-capacity,oil-firedsteamorinternalcombustionmachinesLS/See,FortPierceUtilitiesAuthorityv.Nuclear'ecrulatorvCommission,F.2d,D.C.Car.Nos.77-1923and77-2101(March23,1979).9/Seaenerallv,SebrinaUtilitiesCommissionv.~ZRC,F.2d,5thCar.Nos.77-2911and77-2972(March20,1979).

DocketNos.ER78-19,etal.-15whichcharacteristicallyhavehighoperatingcostsandareill-suitedtoprovidebaseloadrequirements.20/Finally,wenotethatFPSLowns81%ofthetransmissionlineswithintherelevantmarketwithoperatingvoltagesof59kVorabove.TheJacksonvilleElectricAuthorityownsthenext-largestshare,5%(ExhibitGT-5).ThesearethefacilitiesoverwhichbulkpoweristransportedwithintherelevantmarketandFPaL'sownershipsharegivesit"strategicdominance"overtransmission.UnitedStatesv.OtterTailpowerCo.,~sura,331P.Supp.at60.Asnotedabove,FPtZdidnotundertaketodefinerelevantmarketsanddidnotchallengetheanalysisofStaff'economicwitness.Instead,itseconomicpolicywitnesschallengedthebasicrelevanceofstructuralanalysistoregulatedpublicutilities.TheCompany'sthesisisthatregulationpreventsautilityhayingmonopolypowerfromcontrollingpricesandexcludingcompetitionfromthemarket,i.e.,theindiciaofmonopolizationunderSection2oftheShermanAct.21/However,thisis'notreallyarebuttaltoStaff'.positron.Instead,itsimplyconfirmstheroleoftheCommissionineliminating'ormodifyingrateprovisions,desinedbautilit,whichwouldotherwisefacilitatepricecontrolorexclusionofcompetitors.22/Webelievethe"ideathatregulatedutilitiesareimmunefromchargesbasedontheexerciseofmonopolypowerhasbeenthoroughlydiscre-ditedbyUnitedStatesv.OtterTailPowerCo.,sunra.ACTIONSOFCOMPETINGUTILITIESWITHINTHERELEVANTMARKETSIntroductionIncaseswheretheanticompetitiveeffectsofwholesalerateschedulesareatissue,weanti-cipatefocusingprimarilyonstructuralanalysistomeasuretheexistenceofmonopolypower,andonthesuspectrateorovisionsthemselvestodeterminetheireffectsonthe20/FloridaCities'riefonexceptionsat,76-77.See,Exhibits28(REB-C)and41(JW-1,at3-4).21/FPSLbrief.opposingexceptionsat43.22/Clearly,regulationdoesnotinsulateelectricutilitiesfromoperationoftheantitrustlaws.Cantorv.DetroitEdisonCo.,42&U.S.379(1976);see,ConsumersPowerpowerComnanv,suura,6SRCat1011-12.SorrsthisCommissionprecludedfromconsideringantitrustlawandpolicy.GulfStatesUtilitiesCo.,DocketNo.ER76-816,OrderApprovingSettlementSubjecttoCondition(October20,1978).

DocketNos.ZR78-19,etal.enhancementormaintenanceofmonopolypower.If,forexample,arateprovisionwouldweakenacompetitororraisetheentrybarrierstoamarketwherecompeti-tioncanexist,thatwilllikelybesufficientevidenceofanticompetitiveeffecttowarrantits,eliminationor-modification-absentaweightiershowingthattheprovisionservessomecountervailingpublicinterest.CityofHuntinburv.FPC,498P.2d778(D.C.Cir.1974);NorthernNaturalGasCo.v.PPC,399P.2d953,971(D.C.Cxr.1968).23PUnlikepresentationsincivilandcriminalactionstoenforcetheantitrustlaws,itisnotnecessaryinourdeliberationstohaveanextensiverecordonthepastconductofautilitytowardsitscustomers,oritsintentinestablishingormaintainingarestrictiverateprovi-sion.See,MissouriPower8LihtComan,OpinionNo.31,mimeoat9-10(October27,1978).24EveryratecaseinwhichanticompetitiveeffectsareallegedneednotbecomeafulL-blownantitrustproceeding.23/24/Inratechangeproceedingssuchasthisone,heardunderSection205ofthePederalPowerAct,theappli-cantbearstheultimateburdenofnonpersuasion.However,Staffandintervenorsmayberequiredtocomeforwardwithsomeevidencetofocustheirallegationsofanticompetitiveeffect,andtorelatethatevidencetothetargetedrateprovi-sion.See,NorthernCaliforniaPowerAencv.FPC,514P.2d184(D.C.Car.1975).However,theremaybesituationsinwhichtherateproponentmaydemonstratetheinnocuityof-aquestionedprovisionbecause,forexample,theutilityhasageneralwheelingtariff,orundertakenotheractionswhichweaken1""PlPP~~1PowerPool,OpinionNo.775,mimeoat331.11111,ofGrotonPetal.v.'ERC,987F.2d1298(D.C.Car.1978I.

DocketSos.ZR78-19,eeal.-18However,asnotedsuora,at2,conductmayberelevanttoourassessmentofthejustificationforandpurposeofaservicelimitation.ZnthecasebeforeusaullrecordhasbeencompiledandwearefurtheraidedbyarecentdecisionoftheCourtofAppealsfor'he1FifthCircuit'5/infullyunderstandingtheanticompetitiveefectsofFP&L'srateproposals.26/Moreover,thedocumentaryevidenceofStaffandtheCities,largelyobtainedfromCompanyfiles,isfrequentlyincongruouswiththetestimonyofCompanywitnesses.27/Byandlargethetestimonyofwitnessespresented-byStaffandtheCitiesisasummaryrecapitulationofhundredsofpagesofcorrespondenceandinternalcompanydocumentscontainedinover200exhibits.ThisevidencehasbeenefsignificantassistanceinprobingtheeffectsofFP&L'sallegedneedtorestricttheavailabilityofserviceunderschedulesSR-2andPR.TheCompany'sreactiontothevoluminousevidenceoftheCitiesandtheStaffrelatingtoanticompetitiveconductisessentiallyademurrer.FP&Lassertsthatthisevidenceisirrelevanttoitsproposedtariffmodificationsandthatissuesofanticompetitiveconductshouldberaisedinotherforums.WhileweagreethattheCommissionhasnoauthoritytoenforcetheantitrustlaws,thisdoesnotmaketheevidenceirrelevanttotheformulationofremedieswellwithinourauthority.28/25/GainesvilleUtilities

Deartmentv.FloridaPower&1U.S.,

99S.Ct.454(1978).ThusopinionwasissuedafterJudgeWagnerwrotehisInitialDeci-sion.26/ThisevidenceconfirmsourconclusionthatFP&Lhasmonopolypowerintherelevantmarkets.JudgeWagnerwasalsoconcernedbywhathecharacterizedas"disturb-ingepisodesofFloridaPower&LightCompany'spastconductwhichraiseseriousantitrustquestions."ZnitialDecisionat5.However,timeconstraintsledhimtodefertotheCommissionortheJusticeDepartment.27/-Se,GainesvilleUtilitiesOenartmentv.FloridaPower<'ohtCo.,suora,57329adt301,note14.28/FedealPowerCommissionv.ConwavCora.,426U.S.271(1976);CstvofPlttsburcv~PPC(237F~2dI4'75'D.C.Cir.1956);PacificGasandElectricCo.,FPCProjectNos.1988and2735,msmeoat10-13,orderofApri',1976.

19DocketSos.ER78-19,etal.tvholesale~tarketDivisionFP&LhasbeenfoundtohaveengagedinaoerseviolationoftheShermanActbvconspiringwithFloridaPowerCorporationtodividetheFloridawholesalepowermarket.InGaines-villeUtil'tiesDenartmentv.FloridaPower&LightComoanv,29/theUnrtedStatesCourtofAppealfortheFif-hCircuitr'eversedandremandedadistrictcourtjudgment,basedonareviewoftheevidencewhich"com-pelled"afindingthatthetwo,largestutilitiesintheStateofFloridahadconspiredtoavoidsellingwholesalepowertocustomersineachother'sserviceterritories.30/ThiscasearosefromeffortsbytheGainesville,Florida,municipalutilitysystemtoenditscostlyoperat'oninisolationbyinterconnectingwitheitherF+&LorFloridaPowerCor'p.31/TheCourtfoundthatbeginningin1965Gainesville'seffortstointerconnectandcoordinateitsoperationsweremetwithajointstrategytoinducethemunicipaltointerconnectwithFloridaPowerCorp.,onpreconditionthatallthreesvstemsagreetoaretailterritorialallocation.CorrespondencesenttoGainesvilleandtotheFederalPowerCommission,regardinganinterconnectionapplica-tionunderSection202(b)oftheFederalPowerAct,wasroutinelypassedbetweenFP&LandFloridaPowerCorp.withtheunderstandingthat-concertedactionwascontemplatedandinvited.32/29/Suora,note24.Therecordinthiscasecontainsanumberofexhibitsfromthatantitrustproceeding.tt30/GainesvilleUtilitiesDepartmentv.FloridaPowervrlleandtloxzdaPowerCorp.reachedasettlementbeoretheactionwastried.31/See,GainesvilleUtilitiesDenartmentv.FloridaPowerCoraoratzon,40FPC1227(1968),reversed,425F.2d1196(5thCir.1970),reversed,402U.S.515(1971).32/SeealsotheconsentdecreeinUnitedStatesv.FloridaPowerCora.andTamaaElectricCo.(1971raceCasespara.71,637,A.D.Fla.1970).

20Docket'Dos.ZR78>>19,etal.Thecourtwasparticularlyimpressedbythedocumen-tarvevidencewhichdemonstrateda"routine"courseofconductspanningtwodecadeswherebyeachutilitywouldrefusetosellpowertoexistingwholesalecustomersoftheotherortomunicipalitiesservedatretailbytheotherwhichwereattemptingtoestablishnewdistributionutilities.Onremand,thecaseisonceagainbeforethedistrictcourtforprecisedeterminationoftheeffectofthewholesaleterritorialallocationonGainesville'difficultyinobtaininganinterconnection,plusattendantdamages.Untilthetrialcourtentersitsnewjudgment,weshallnotknowhowFPaListobeenjoinedfromengaginginanticompetitiveconductagainstmunicipalutilitiesor-directedtoremedythedamagedone.AcuisitionEffortsandFranchiseComaetitionTheprincipalallegationleveedagainstFPaL'starifflimita-tionsisthatbyrestrictingaccesstowholesalepowertheCompanymaytherebyincreaseitsdominanceasaretailsupplier.TherecordisrichlydetailedwithevidenceofretailcompetitiontoserveentirecommunitiesbetweenFPaLandexistingmunicipalsystems.FPSL'sfirstattempttoacauiretheKakeNorthutil-ityisdocumentedinalettertoFPaLemployeesfromtheCompany'sNestPalmBeachDivisionManager,datedJune18,1958,whichsouqht"alistofyourrelativesandfriendswholiveinKakeNorth."TheDistrictManagerproposedtosendthesesympatheticmembersofthecommunityinfor-mationconcerninqaforthcomingelectiononaproposed30-yearleaseofthemunicipalsystemtoFPaL,whereasuccessfulvotewould"assistusinournegotiationsforothermunicipalsystems"(ExhibitGT-34,at64).Liter-aturedistributedtoLakeNorthvoterspromisedbetterserviceandanimmediateratereductionaveraging20%<plusanaqgreqatereductionof$14millionoverthe30-yearlease..Althoughwinningasimplemajorityvote,theelec-tionfailedtoattracttherequisite60%voterparticipa-tionandthepropositionfailed.Effortswererenewedin1968throughaLakeNorthpropertyowner;however,preliminarydiscussionswereterminatedwithoutaction.FPSLofferedtofurnishfirmpowertothe01ewSmyrnaBeachmunicipalutilityduringthewinterof1958,providedtheCityCommissionwouldagreenottoorderanyadditionalgeneratingeauipmentandenactanordinancewhichshouldoermitdispositionofitselectricutilityonamajority DocketDos.ER7819Fetal.vote.33/FP&Lthenplannedtonegotiatealeaseoftheutilitythefollowingspringandsubmitittothevotersforapproval(ExhibitQT-34).AnApril1959reporttoCompanymanagementstatedthattheproposedacquisition"certainlyprovidessomedistinctadvantagesotherthanjusttakingoveramunicipallyownedproperty."Thereportnotedtheconsiderablepossibilitiesofindustrialandresidentialdevelopmentinthearea(ExhibitGT-34,at73)~TheCompany'sactionin1959didnotwinitaleaseoftheNewSmyrnaBeachsystem(ExhibitGT-34,at61);however,FP&Ltriedagainin1965,sendinganinquirytotheCityCommissionwhichwasvirtuallyidenticaltothelettersenttoFortPierceinNayofthatyear(ExhibitGT-34,at75).34/FP&T.ExecutiveVicePresidentR.C.FullertondescrxEedtheprospectoftakingovertheHewSmyrnaBeachmunicipalsystemtothechairmanofanotherinvestor-ownedutiLityassomethingtheCompanyviewed"withnaturalenthusiasm"(ExhibitQT-34,at75).Alsoin1965,FP&L.purchasedfromNewSmyrnaBeachallofitselectricutilityfacilitiesintheCityofEgewater~hereithadpreviouslyprovidedretailservicetoonlyaportionofthecommunity.IntermittentnegotiationsoccurredbetweenFP&ZandHewSmyrnaBeachinL970and1973.In1974,theCompanydevisedaninternaLplanforacquiringthemunicipaLutility(ExhibitGT-34,at32),andsentseniormanage-mentrepresentativestodiscussanacquisitionproposalwiththecityutiLi'tycommission,estimatingaratereductionofmorethan$600,000underFP&Lownership..CompanymanagementinformedtheutilitycommissionersthatFP&Z,couldprovidecheaperandmoredependableservicebecauseofitsgreaterpowerplantcapacityand33/Characteristically,Floridamunicipalchartersrecuiretheapprovalofgreaterthansimplemajorityofvotersfordispositionoflocalutilities.SimilartermswereextractedfromtheCityofClewistonin1965.See,theinitialdecisioninFloridaPower&LightCo.,37"-.P.C.360,673,adooted,37FPC344(1967),affirmedsubnom.,FederalPowerCommissionu.FloridaPower&LightCo.,404U.S.453(1972).34/infra,a"22.

22"ocher,Nos.ER7S-19,etal.i"sdiversitvoffuels(ExhibitGT-34,at34).Anotheracquisitionoresentationwasmadetotheutilitycommis-s'onin1975,attheCity'srequest.FP&LsoughttoacquiretheFortPierceutilityin1965whenthesubjectwasraisedbyacitycommissionertameetingconvenedtodiscussapossibleinterconnec-tionofthetwosystems(ExhibitGT-59).Therespon'seoftheCompany'sdivisionmanagermentionedtheinter-connectiononlyasaninterimarrangement,concentratinginsteadonthesaleorleaseofthemunicipalutility.FP&Lstatedthatanyleaseshouldbeforaperiodof30-yearstocoincidewiththetermofastandardelectricfranchise.Inreturn,theCompanyofferedtoimmediatelyinterconnectthesystems,applyFP&L'slowerretailratesand"lenditsfullsupporttowardattractingindustrytothearea."FortPiercethereafterinvitedleaseorsaleproposals;however,negotiationsstoppedshortofacqui-sition.AcquisitionwasagainraisedbyFortPierceofficialsinMarchof1976.TheminutesofameetingwithFP&LseniormanagementofficialsrecordthattheCityfeltthatdispositionofitsutilitysystemwasnecessitatedbyaninabilitytoexploittheeconomiesofscaleinelectri-cityproduction:Mr.Skinner[FortPierce'sChiefEngineer]saidwethinkitsveryefficientlyoper-ated.Werealizethebigproblemfacingusisnotthehighcostoffuelortheinefficiencyofoursystem,buttheineffi-ciencyascomparedwithputtingoilintoalargerboilerandturbine.That'wherewe'egettingcaughtshortontheheatrateinputtotheboiler.WehaveaproblemcompetingwithFP&Lfavorablytodaybecauseitrepresentsaround65%roughlyofthecostofdoingbusiness,thecostforfueloil.(ExhibitGT-31.)WhenFortPierceinquiredatthatsamemeetingaboutthepurchaseof30MWofbase-loadfirmpower,theCompany:espondedthatitdidnotwishtosellfirmpowerunlesstne"urchasercouldreciprocatewithsalesoffirmpower-otheCompany.ThiswouldrequireFortPiercetomain-taingeneratingcapacitysufficienttomeetitsown1oad.FP&LalsodiscouragedpurchaseundertheSR-1schedule, 23DocketNos.K378-19,etal.indicatingthatitwasnotreallyfirmand"awfullyexpensive"(ExhibitGT-31,at17).TheCompanycontinuedtodevelopanacquisitionpro-"osecthroughout1976(ExhibitGT-34).However,enthu-s'asmwasapparently.dampenedwhenFortPierceinter-venedinproceedingsbeforetheNuclearRegulatoryCommissionregardingFP&L'sproposedSouthDadenucleargenerator.FP&LproposedasaleorleaseoftheHomesteadutilityin1976whenitspresidentmetwithcityoffi-cialstodiscussHomestead'srequestforaretailter-ritorialagreement,anemergencyinterconnectionandwholesalepurchases(ExhibitGT-18,at1).In1976theHomesteadCityCouncildiscussedthetopicwithFP&L;however,negotiationswereapparentlynotcontinued.Therecordindicatesthatacquisitionof.theVeroBeachutilitywasconsideredbyFP&Lin1957,1958and1959.35/Thereafter,aseriousefforttoacquiretheVeroBeachsystemwasundertakenin1976whichculmi-natedinapprovalofthesalebytheCityelectorateandanapplicationtotheFederalPowerCommissionunder~Section203oftheFederalPowerAct.InternalmanagementcorrespondenceconcerningimplementationoftheacquisitionbyFP&LsuggeststhatVeroBeachwouldbeviewedasabellwetherbyothermunicipalsthinkingofenteringor'avingtheutilitybusiness:TheimpactpotentialoftheVeroBeachacquisitiononthefranchiseelectioninDaytonaBeachandotherNunicipaloperationssuchasFt.Pierce,Hcmestead,etc.makesrtreparativethatwenctunderachievewithourVeroBeachoperation.(Emphasissupplied.)36/AfterhearingsinDocketNo.E-9574,theVeroBeachacquisitionwasapprovedbyanadministrativelawjudgeongrounds,advocatedbyFP&L,thatthemunicipalutilitycouldnolongerefficientlygenerateitsownpowerrequire-mentsandthatFP&Lwould,provideaneconomicsourceofretailsu-plvortheci'zensofVeroBeach.Th'scon-35/ExhibitsGT-34,at74;GT-52;andGT-52.36/StaffExhibi"G-34,at1.

DocketNos.ER78-19,etal"24trastswiththefindingbythe'residingJudgethatVetoBeachwasa"trulyexcellent"utilitywithoutstandinggrowthpotential.See,FloridaPower&LightCo.,Docket'Ao.E-9574,InitialRulingandOrderonPhasesIandII(February6,1978).However,FP&Lthereafterwithdrewitsapplicationinearly1978priortothecommencementofafinalphaseoftheacquisitionproceeding'whichwastoconsider'thepossibleanticompeti'tiveeffectsoftheproposal.Insummary,therecorddocuments20years'orthoffranchisecompetitionbetweenFP&Landthemunicipalutilitieslocatedwithinitsserviceterritory.AtvarioustimesFP&Lhaspromotedacquisitionorwillinglyreceivedmunicipalproposals.Roost,ifnotall,ofthoseincidents'ccurredwhenthemunicipalsystemswerearrangingnewbulkpowersuppliesfromtheoptionsofself-generation,wholesale,purchasefromFP&L,andretailpurchasefromFP&Lafterfranchisedisposition.TheCompanyhasnotsucceededinmanyacquisitions,becausethemunicipalcandidatessolvedtheirsupplyproblemsbyaddinggeneration.However,therecordstronglyindicatesthatself-generationisbecominglessandlessattractivetothepointwhereFP&Z'switness-Gerberhasdescribedsmallscalegenerationasananachronism.SinceFP&Lcontrolstheremainingtwooptions,37/weconcludethatitswholesalemonopolypowercanonlyincrease,and,thereafter,itsretailpower.aswell.See,BorouhofEllwoodCitv.PennslvaniaPowerCo.,462F.Supp.1343,1346(W.D.Pa.1979)~ThePresidingJudgeexpresslyacceptedtheCompany'srepresentationthatitwasnotinterestedinacquiringHomesteadorFortPiercebecauseofcapacityproblemsandoperatingdifficulties.Sincewefindthepremiseofthisrepresentationunconvincing,38/wewouldberemisstowholeheartedlyacceptitsconclusion.Inanyevent,itdoesnotovercometheweightoftheevidencetothecontrary.39/37/asdiscussedinfsa,at31,municipalpurchaseofentitlementsinlargegeneratingunitsconstructedbyFP&Ldoesnotcurrentlyappeartobeaviableoption.38/In=raat34-37.39/Altrnatively,itappearsthattheFloridaPublicServiceCommissioncouldrequireFP&Ltoprovideretailserviceifthecustomersofamun'ipalutilityvotedtodis-bandoperations.See,FloridaStatutesAnnotated,5366e03.

DocketNos.ER78-19,etal.-25-PotentialLossesofFranchisesTheCompanyappearswellawareoftherelationshipbetweenitswholesalesalestomunicipalutilitiesanditsabilitytoretainexistingretailfranchises.InMarchof1977,amarketdevelopmentpresentationwasmadetoEprLmanagementwhichstressed,interalia,theneedtomaintaintheintegrityoftheCompanyinrelationtopubliclyfinancedutilities(ExhibitGT-64).40/Between1976and1985,forexample,franchi.sescoveringretailsalesto41.88ofFP&L'scustomersaretoexpire(ExhibitGT-66).Inaddition,FP&Lservesanother93communitiesatretailwithnofranchiseagreement.Franchisecompetitioncanbeapositiveforcetoencouragebetterserviceandlowerrates;thus,autilityshouldnotbeallowedtotiltthebalancebyartificiallymakingwholesaleserviceunattractivetopotentialretailmarketentrants.UnitedStatesv.OtterTailPowerCo.,suera,331E.Supp.at61.Therecordcontai.nsevidencerelatinctothreefranchiseexpirations,ofwhichDaytonaBeachisthemostfullydocumented.In1975or1976,theCityofDaytonaBeachunder-tookastudyofmunicipal.distributionversusFP&Lfranchiserenewal.Inresponse,theCompanymountedasignificantefforttoinformCityresidentsofthebenefitsoffranchiserenewal.OfpartieularnotearetheCompany'sstatementsthateachoftheFloridamunicipalutilitieshadrateshigherthanFP&L(exceptfortwowithaccesstohydroelectricpower)andthatmunicipalschargethesehigherratesbecauseFP&L"cangaingreatereconomi.esofscaleinallfacetsofitsopetion"(ExhibitST-5,at1and3).FP&Lwonrenewalra-40/Ina1975paperon"StrategicIssuesInInter-utilityRelations"preparedbyCompanywitnessGardner,emphasiswasplaced,interalia,onfranchiserenewalsandphaseoutofwholesaletariffs(ExhibitGT-30).Seealso,ExhibitGT-49.

Docke.yos.ER7S-19,etal.-26ofitsfanchiseafterarecordhighelectionexpendi-ture(ExhibitGT-76).Duetothecontinuingexpirationsofretailfranchises,weconcludethat'vigorousfranchisecompetitionexistswithintheretailmarketwhichFP&Lcaninf'uencethroughitswholesalesalespolicies.TheCompanycharacterizesitseffortstorenewfranchisesandacquireothersassalespromotionandbusinesspreservation.41/'owever,theseactionsmaystillrunafoulofantitrustlawandpolicywhenundertakenbyapossessorofmonopolypower.OtterTailPowerCo.v.UnitedStates,410U.S.366(1973);andCatvofAishawakav.AmericanElectricPowerCo.,465F.Supp.1320,1329-32(N.D.End.1979).FP&L'sRelationshiwithHomesteadTraditionally,FP&Lhasdemonstratedconsiderablereluctancetoengageinfirmpowertransactionswithmunicipalutilities,evenwithinitsownserviceterritory.Duringthe1950'sand1960'sthisamountedtoanunqualifiedrefusal.RatescheduleRCunderwhichfirmservicewasprovidedtocooperativesrequiredthatcapacityandenergy"notberesoldordistributedbytheCustomertoanymunici-palityorunincorporatedcommunityfo>>resale"(ExhibitGT-51).XnaninitialdecisionadoptedbytheFPCinFloridaPower&LihtCo.g37FPC544(1967)42/HearingExaminerWennerrecountedsixseparateinstancesoveraperiodof13yearswhentheClewistonmunicipalutilityrequestedandwasrefusedwholesaleservicebyFP&L.43/En1963;theCompany'presidentinformedtheCityofWinterGardenthatFP&Ldidnot"supply41/FP&Lbriefonexceptionsat45.42/Affirmed,FederalPowerCommissionv.FloridaPower&LightCo.,404U.S.453(1972).43/37FPCat572-73.

goc~e"Sos.ER78-19,etal~"."..unic'palsystemsfirmwholesalepowerfordistributionthroughamunicipaldistributionsystem"(ExhibitGT-'6).44/Homesteadfirstrequestedfirmwholesaleservice'romFP&Lin'967,towhichtheCompanyrespondedthatitd'dnotprovidethisservicetomunicipalitiesandc'cnotwishtoserveany.WholesalepowerfromFP&LwasHomestead'alternativetotheimmediateinstalla-tionofnewgenerationordispositionofitssystem(ExhibitGT-22).RobertFite,theCompany'spresident,andF.E.Autrey,avicepresident,statedthatFP&Lwouldnotrefusetosellwholesalepower,ifthatwastheonlvarrangementnegotiable;however,theyaddedthattheCitywouldnotreceivetherateatwhichfirmsalesweremadetocooperativesandthataretailterritorialallocationwasanecessarypreconditiontoanyservice.FP&Lemphasizedthecomparativebenefitsofanemergencyinterchangeagreementorsaleofthemunicipalsysteminlieuofwholesalepurchases(ExhibitGT-18).HomesteadwasunabletonegotiateafirmwholesalecontractandinsteadmadeintermittentpurchasesfromFP&Lovertheensuingfive'earsataveragepricesthatwereconsiderablyhigherthanthosepaidbyFP&L'scooperativecustomers(ExhibitGT-29,at33).InAprilof1972,HomesteadrequestedamoresophisticatedinterchangeagreementwithFP&LincludingthepurchaseoffirmpowertomeetaportionoftheCitv'sload;howeversFP&LnegotiatorsrespondedthatFP&Lwasonlyinterestedinaninterchangewherebothpartieshadcapacitytomeettheirowndemandsplusamplereserves(ExhibitGT-29,at1-3).Instead,HomesteadandFP&LenteredintonewemergencyserviceagreementswherebytheCompanyonlyagreedtosupplyemergencypowerneeds"totheextentithascapacityavailable...."FP&Lapplieditsthen-existingrateschedule"NH,"applicabletototalrequirementsour-chasesbycooperativecustomers(ExhibitGT-29,at4-11).HomesteadnextrequestedpowerfromFP&LinAugusto"1973,proposingafirmpurchaseof12-16MWfrom197Sthrough1980.TheCitystatedthati"intndedtouse<<4/Seealso,GainesvilleUtilitiesDenartmentv.FloricaecweaLucreCc.,auut,.=73:-.3dat398.

DocketVos.ER78-19,etal.-28thiscapacityforbaseload,purchaseinterchangeenergytomeetitsintermediateloadanduseitsowngenerationonlyforpeakloadcapacityandreserve(ExhibitGT-29,at12).45/TheCompanyfir.stdecidedtorespondtoHomestead'requestwiththeso-called"MarshallTheory":HomesteadwastobetoldthatFPSL,hadnofirmpowertosell.Companynegotiatorswereadvisedtohaveloadandre-serveestimatesavailabletosubstantiatethisresponse(ExhibitGT-29<at14).Immediatelythereafter,however,theCompanyconcludedthatHomesteadhadbeenlistedasacustomerunderallrequirementsscheduleSRandwasactuallyreceivingfirmpoweratcommitted'ntervals.46/FP&LthendecidedthatifHomesteadrequestedatrans-missioninterchangeagreementaswellasfirmpower,itwouldemployScheduleDanduseScheduleSRasthenego-.tiatedratethereunde'r.ZnOctoberof1973,Homesteadsubmittedacompre-hensiverequestforaninterchangeagreementandsimul-taneouspurchaseoffirmpowerfromFPsLtoservethebase-loadportionoftheCity'srequirements(ExhibitGT-29,at24-28).However,ExhibitGT-29(at29-31)revealsthattheCompanywantedtoavoidanyobligationtosellfirmpowertoHomesteadbywithdrawingscheduleSRfromitsexistingwholesalecustomers,includingHome-steadandreplacingitwithan"EmergencyRateSchedule"tellingtheCitythatithasnofirmpowertosell.45/TheCompany'schiefrepresentativeatthismeetingwasitsvicepresident,E.L.Bivans,wholatertestifiedinthisproceeding.CopiesofBivan'snotes(ExhibitGT-29,-at12)weresenttotheCom-pany'spresidentandotherexecutives.46/ThisdiscussionisrecountedinthenotesofCom-panyemployee"NHK"(apparentlyN.M.Klein,anego-tiatorindealingswithHomestead),ExhibitGT-29,at15.ThenotesbespeakacertainsurpriseinlearningthatHomesteadwasanSRcustomer:"RateSRoffersfizmpower.Apparently,theCompanyhasbeenhonoringtheirrequestforanumberofyears,andisnotinagoodpositiontorefusetocontinueofferingfirmbaseloadpowerof12NNto14NR,whichisconsistentto[sic]theirpreviousdemancs."

DocketNos.ZR78-L9,et.al.Alternatively-,itconsideredofferingHomesteadaScheduleD(firminterchange)ratelowerthanscheduleSPinreturnforasignedcontractstating.thattheCitywouldinstalladditionalgenerationcapableofcarryingitselectricalload.ThefinalparagraphofthisinternalmemorandumseemsanaptsummarizationofPP&L'sreactiontoHomestead'srequestforfirmgower:ItisourbeliefthatifwerefusetoselltheCityofHomesteadPirmPowertheywillimmediatelyrequestustowheelf'romothermunicipalities.Ifweencouragethemtoincrease.theirgenerationwherewecanpurchasegowerfromthem,wemayoffsetthedemandforwheelingaswellasavoidalong-termPirmPowercommitment.(ExhibitGT-29,at31.)PP&L'shopetoinduceHomesteadtoconstructaddi-tionalgenerationforhaseloadrequirementsinlieuoffirmgowerpurchasewasnotdonewithoutknowledgeoftheconsequencesfortheCity.InDecemberof1973,PP&L'sfinancialplanningdepartmentpreparedananalysisofPP&Iandthemunicipalitiesinornearitsserviceareaentitled"ComparativeAnalysisofMunicipalandInvestorOwnedUtilitiesandtheBenefitstoTheirCustomers",(ExhibitGT<<34,at42-44).Thisstudydeterminedthat,exceptforOrlandoandJacksonville>municipalutil'tieschargedhigherretailratesthanPP&L,because:Thesizeofmostmunicipalunitsislimitedbythesizeofthecity.Thislimitonsizepreventsthesmallermuni-cipalutilitiesfromrealizingmanyoftheeconomiesofscaleavailabletolargeutilities.Thisfactwasclearlyrevealedintheanalysis.ThesmallerutilitieshadlessefficientheatratesandhigherfuelandoperatingcastsperKWHofpowersold.Thesehighercostsappearedtobemajorcontributingfactorsinthehighcostofgowertotheircustomers.3egotiationsontheHomesteadinterchangeagreementcontinuedandinDecemberof1973afinalsetofdiscus-sionsoccurred,fromwhichPP&Llearnedthatthe DocileNos.ER78-19,etal."key"othisagreeementwas'P&L'swillingnesstosimultaneouslysupplyserviceunderboththeinterchangeagreementandscheduleSRafterconstructionofneces-saryinterconnectionfacilitiesbyHomestead.Engin-eeringandbillingproblemswerenotconsideredseriousbyFP&Lpersonnel.'owever,CompanynegotiatorsopposedawrittencommitmenttoservetheCity'nderScheduleSRaftercompletionoftheinterconnection"becausewe[FP&L]alreadyhaveacontracttoservethemonSP.andtheagree-mentdoesnotnecessarilyprohibitsuchanarrangementtocontinue"(ExhibitQT-29,at39).Instead,FP&L'vicepresident,R.G.MulhollanddidsendalettertoHomestead'sCityManager,inJanuaryof1974,aftertheinterchangeagreementwassigned,statingtheCompany'understandingthatitwouldprovideHomesteadwithelec-tricpowerfor36monthsaftercompletionoftheCity'newinterconnectionfacilxtresataratenottoexceedtheCompany'sapprovedwholesaleratescheduleineffectatthattime(ExhibitGT-29,at43).Homestead'high-voltageinterconnectionfacilitieswerecompletedinOctoberof1977.WithoutadvancenoticetoHomesteadoranyindicationfromtheCitythatit,nolongerwantedaverage-pricedfirmpower,FP&LfiledtheratechangeapplicationwiththisCommissionwhichproposestoterminateSRservicetoHomestead.InplaceofSRpower,FP&LstatesitwillsellHomesteadincre-mentally-priced,curtailableScheduleDpower,whichtheCompanyadmitsismoreexpensivethanschedulePRwhenusedforbaseload.Thus,HomesteadhasreceivedwholesaleservicefromFP&Lsincethe1950's,includingfirmreauirementsser-viceundertheSR-1tariffsincethattarifffirstbecameeffective.Fromthetimeofagreementin1973tocompletionoftheintrconnectioninOctober1977,FP&LservedHome-steadundertheSR-1tariff(Exhibit29).WefindnoevidencetosupportFP&L'scontentionthatcompletionoftheinterconnectionsomehoweliminatedHomesteadasanexisting-wholesalereauirementscustomer.NorisitpersuasivetoassertthatthepartiesintendedforHome-steadtobeservedatanincrementally-pricedScheduleDrateinsteadoftheaverage-costscheduleSR.47/Therecordind'catesthatFP&LdidnotpublisharatelevelformulaforScheduleDuntilFebruary10,1978,whenitmadeanofferofScheduleDcapacityFor"Prce.

DocketNos.=R7S-L9,etal.-31-Indeed,knowingHomestead'desireforbase-loadfirmpower,theCompany'representationsastothemeaningoftheirinterchangeagreementinJanuary.of1974arequitetothecontrary.Itwouldbedifficulttoreachanyothercon-clus'on,giventheweightofthislargelyunrebuttedevidence.FP&L'sPelationshiwithFortPierceTheeffortsofFortPiercetopurchasefirmpowerfromFP&LbearamarkedsimilaritytothoseofHomestead.InMarchof1976,FortPierceapproachedtheCompanyaboutpurchasingfirmpowertomeetthetheCity'sbaseloadrequirementsandusingitsowngeneratorsforpeakingcurposes.FortPiercereneweditsrequestinlettersto.FP&LinAprilandDecemberof1976.TheDecemberletterrequestedseparatepricequotationsforbase,inter-mediateandpeakingcapacity.TheCityalsoinformedFP&Lthatitimmediatelywishedtobeginpurchasing"basecapacityandenergyonayear-roundbasisinamountsrangingfrom25NWto30MW,"andrequestedastatementoftheComcany'stermsandconditions.AlthoughFP&IrecognizeditsobligationtoprovideserviceunderscheduleSR-L,bothinaninternalmemorandumandinalettertoFortPierce,theCompanyfailedtorespondwithspecificinformationonwhichFortPiercecouldact.AfteranotherlettertoFP&LinAprilof1977',thepartiesmetinJul.y:andFortPiercewastoLdthatFP&LhadnofirmpowertoseL1.48/FortPiercemaintaineditspositionthatitwasentitledtofirmpowerundertheSR-1tariffthroughouttheremainderof1977.OnOctober14,1977,FP&Lfiledchangestothetariffwhichlimitedits.availabilitytoexistingcustomers.Thereafter,theCompanyofferedFortPierceupto240NWofcapacitythroughtheendof1980,butunderthetermsofinterchangeSchedul'eD,notscheduleSR.CnMarch24,1978,duringthecrossexaminationofFP&L'sratedesignwitness,LloydWilliams,bycounselforFortPierce,Mr.WilliamsacknowledgedthattheCitywaseligibletopurchasefirmserviceundertheSB-Ltariff.Thesameday,FP&LdeliveredadraftserviceagreementtotheCityandfirmservicebeganimmediately.Ho~ever,adisputeremainsconcerningthedurationofserviceandFP&LhasstateditsintentiontoterminatservicetoFortPierceifweapproveitscroposedre-strictionoffirmservicetonamedandexistingcustomers48'owever,inJulyof1976FP&L'SystemPLanningDepar"ventpreparedamarketassessmentoffirminterchargesalsbetween1977and1985whichpro-jec"edan"availablesupclyfromFPL"rangingbetwen1604MWand1995MWin1977.h'sreportassessed"heopportun'tiesforsaleoffirmpowerto10differentutilit'esinceninsularFlorida,incl.udingFor"Pierce(".xhibitGT-7).

32DocketNos.ER78-19,etal.whichdonothavegeneratingcapacitysufficienttomeettheirpeakloads.T.imitationsonAlternativeSourcesofCaaacitUnre-buttedCompanydocumentsinevidenceindicatethatitisFP&L'spolicytoretainfullownershipofthenucleargeneratingplantswhichitconstructs.TheCompanyhasstatedthatthefullcapacityoftheseunitsisneededtoserveitsowncustomers,sosharingisnottobeanti-cipatedunti'1FP&Lreachestheoptimumamountofnuclearcapacityfoiitssystem(Exhibit27).However,nopartydisputesthatjointownershipofsuchfacilitieswouldprovidemunicipalandcooperativeutilities(aswellasotherutilitiesintheregion)withaccesstoFP&L'seconomiesofscale(ExhibitGT-1,at6).FP&Listhesoleownerofthreeoperatingnuclearplantshavingaggregatecapacityof2,188Nf.FP&LhasagreedtoshareaportionofSt.LucieNo.2nuclearplantwithneighboringsystemsincludingHomesteadandNewSmyrnaBeach;however,FP&TdocumentsinevidenceindicatethatthiswasdoneattheinsistanceoftheJusticeDepart-mentandthatFP&Lhasnotcommitteditselftosharethecapacityofanyfutureunit(ExhibitGT-71,at22).49/TheAvailabilitofTransmissionServicesFP&Lnowoffersfourwheelingservices.whichcorrespondtoitsinterchangecapacityandenergyservices.50/Wheelingmaybeprovidedforone-yearperiods,withserviceavailableatthesolediscretionofFP&Lwhentrans-missioncapacityisnototherwiserequiredbytheCompany.TransmissionschedulesTA,TBandTCcorrelatetointer-49/In1973FP&LconsideredcancellingSt.TucieNo.2becauseof"escalatingcostsandJusticeDepart-mentreviewofourantitruststatus"(Exhibit20).Thenin1976theCompanyconsideredashifttocoal-firedplantsforfuturebase-loadgeneration"toeliminatetheAtomicEnergyActasaroutetomunicipals'nvestmentingeneration"(ExhibitGT-1,at13).Seealso,thedecisionoftneAtomicSafetyandLacensingAppealBoard,NuclearRegulatoryCommission,inFloridaPower&LightCo.,DocketNo.50-389A(ALAB-420,July12,1977),reaardinaantitrustreviewproceedingsonSt.LucieVo.2.50/Acompletedescriptionofthesefourservicesis"oundinExhibit28(RES-AX),adraftserviceaareementsenttotheCityofFortPierceonDecember6,1977.heratefortheseservicesiscurrentlyunderadjudication.

DocketNos.ER78-19,etal."changeschedulesforemergency,scheduledandeconomycapacityand/orenergyservices.Sl/OfparticularsignificancetothiscaseisscheduleTD<denominated"firmtransmissionservice."However,"firm"isamisnomerbecauseScheduleTDservicemaybereducedorintrruptedattheCompany'sdiscretionforperiodsupto30days.52/Inshort,thesefourwheelingservicesonlyoffersurplustransmissioncapacityonanas-availablebasis.PPaLdoesnotcontendthatanyofthesefourwheelingservicescouldbeutilizedtotransmitalternativegowersuppliestoutilitieswithintherelevantmarketsfromthirdpartieseauivalenttothoseobtainableunderschedulesSR-2orPR.TheCompanystatesthatanappropriateratewouldhavetobenegotiatedatthetimeapotentialwheeling"customerarrangeditsalternativegowersupply.53/51/Suaraat4-5.52/SectionEofthedraftagreement(Exhibit28,REB-AX)provides:IntheeventthatFirmransmissionServicecannotbeprovidedduetoanunanticipatedreductionorinterruptionofPPaL'stransmisionfacilitiessupplyingsuchservice,orifsuchserviceisprovidedinanamountlessthan80%oftheContractedDemandforFirmTransmissionServiceasaresultofunanticipatedreductionorinterruptionofgowerdeliveredbytheCommissiontoPPaLfortheCity'saccountpur-suanttoServiceScheduleDoftheCity-CommissionContract,andsuchreductionorinterruptioncontinuesforaperiodofthirty(30)days,theChargeforFirmTransmissionServicewillbeadjustedasfollows:Ineachsucceedingmonth,thehigherof(a)themax'mumNNdeliveredtoPPSLinanyonehourduringthatmonth,or'b)themaximumMNdeliveredtoPP&Linanyonehourduringtheprecedingsixmonths,willbesubstitutedfortheContractDemandforFirmTransmissionServiceforpurposesofcal-culatingtheChargeforFirmTransmisisonService.Uponsuchreducedorinterruptedserviceacingrestoredto80%ormoreoftheCont"actDemand.forFirmTransmissionService,theChargeineachsucceed'ngmonthshallbebaseduponthefullContractedDemandforFirmTransmssionService.53/PPsLbriefopposingexcept'onsat42.

DocketNos.ER78-19,etal.-34THEREASONSGIVENSYFPRLFORZTSTARIFFLIMITATIONPROPOSALSFPsLwouldseektojustifyitsproposedlimitationsonfullandpartialrequirementsavailabilityintermsofoperationalconstraints.Specifically,itassertsthatfuturepowersupplyistoouncertain-toallowunlimitedaccesstoitsrequirementsservice.AccordingtoFP&L,customerswhichareself-sufficientingeneratingcapacitycouldarbitrarilyshifttheirload'etweenservicefromFP&Landtheirowngeneration.ThiswouldpurportedlyleadFPGLto,maintaincapacityinexcessofitsothercustomers'eedsbutwithnoassurancethatsuchcapacitywouldbefullyutilizedptherebyincreasingratestoallcustomers.TheCompanyprooosestoremedythisuncertaintybymakingtheseon-again/off-againcustomersineligibleforserviceunderschedulePR.However,.thedifficultywiththispropositionisthatithasvirtuallynorecordsupportandisbasedonafewconjecturalstatementsbyCompanywitnesses.Znfact,FP&L'sratedesignwitnesspreparedamodelloaddurationcurvein1975showingthatcustomerswithgeneratingcapacitylessthanpeakdemandandcustomerswithcapacitygreaterthanpeakdemandwouldeachpurchasebase-loadrequirementsfromtheCompany,underanSR'chedulemodifiedforparalleloperation,andusetheirowncapacityintermittentlytomeetintermediate,peakandreservedemands(ExhibitGT-71,at33).ThisisconsistentwiththerepeatedrequestsofHomesteadandFortPierceforbase-loadfirmpower.54/Moreover,thenaturalinclinationofthesesystemstobuybase-loadpower.wouldapparentlybereinforcedbythedesignofFP&L'sPRratewhichisintendedtopromotehighloadfactors.55/54/Sunraat27-31.Againintheirtestimony,PloridaCrtresstatetheirintentiontouseschedulePSorbase-'oadourposesandusetheirowngenerationforpeak'ngtTr.659).55/Sunra3-4.PhlePP'&Lisdis.couracingpurchases'oyeel=-tuff'c'entmunicipalsithasapoarentlyaoooteoamarketingstrategywhichpromoteshighloadfactorusageasameansofimproving,itsdecliningsystemloadactor(ExhibitGT-54).

OocYetNos.='R78-19,etal.35FP&Lreliesonoil,naturalgasanduraniumtofuelitsgeneration.Itcitesthe1973oilembargoandresulting-rasticoilpriceincreasesandtheexpirationoflong-termoilsupplycontractsandreplacementbythree-year"ontractstocastuncertaintyuponitsoilsupply.Asorgassupplies,itreferenceshighlevelsofcurtailmentandtheexpirationofamajorgassupplycontractin1979.Concerningnuclearfuel,FP&Inotesthatitonlyhasatwoyearinventoryandthatitslong-termsupplycontractwascancelledbythesellerin1975.FP&Lmaywellfacefuelsupplyproblems,asdoothersuppliersintheelectricutilityindustry.However,theyarenotofamagnitudethatwouldjustifytheproposalsbeforeusinthiscase.ItappearsthatFP&Lcontinuestopossesslong-termfueloilcontractsandthatithasenteredintoshorter-termoilcontracts(3years)withfavorablecancellationprovisionsinordertogaingreaterflexibilityinrespondingtopricechangesontheopenmarket(Exhibits22,at3;51,at9).FP&L'naturalgaswarrantycontractwithAmocoProductionCompanyprovidesfordailydeliveriesof200NHcfthrough1988,suchdeliveriesbeingbeyondthepurviewof,.thepresentcurtailmentplanofthetransporterofth'sgas,FloridaGasTransmissionCorporation(Exhibit51,at9;Tr.431).56/Finally,anaffiliateofFP&Lisengaged"inuraniumexploration(Tr.454)andFP&L'sexistingnuclearunitsdonotappearindangerofbeingcurtailedduetofuelshortage.57/56/Eee,SehrincUtilitiesCommissionv.FEEC,F.2dothCir.Eos.77-2911and77-2972(March20,1979).57/In1978FP&Landseveralotherutilitieswonajudgmentinfederaldistrictcourtagainsttheirnuclearfuelrecuirementssupplier,NestinghouseElectricCorporation.VirginiaElectric&PowerCo.v.'WestinhouseElectricCoro.,Crv.No.75-0514-E(E.D.Va.October27,1978).lnanunreportedopinionthecourtheldthatWestinghousewasnotexcusedfordeliveringnuclearfuelbyreasonf~g**""hvariousutxlxtxes.See,AntitrustTradeRegulationReporter,No.887,atA-15(november2,1978).

DocketVos.ER78-19,etal.-36-Amongthefuel-relatedproblemswhichFP&Lgivesasareasonforlimitingfirmwholesaleserviceisitsinabilitytoprocureacoalsupplycontract.However,oncrossexamination,FP&LvicepresidentGardneracknowledgedthattheCompanyhasnocoal-firedgenerationandhasnoplanstoconstructany.ThesepointsareconfirmedbythetestimonyofFP&L'svicepresidentinchargeoffuelprocurementwhichwaspresentedtotheFloridaPublicServiceCommissioninthespringof1977(Exhibit"22).58/Onbrief,FP&Lhasarguedthattheinabilitytoobtainacoalsupplycontracthasimpaireditsabilitytoplancoal-firedgeneration.However,theonlyevidenceintherecordofFP&L'sneedforsuchaplantwasitsdesiretoavoid-municipalaccesstonucleargeneration,thebase,loadalternativetocoal,whichcouldcomefrom.antitrustreviewbeforetheNuclearRegulatoryCommission.59/FP&Ipointstoenvironmentalregulationswhichmakeconstructionofcoal-firedunitsdifficultandmakenuclearunitsalmostimpossibletobuild.Italsopointstoescalatingcosts,litigationandregulatorydelaysandrequirementsasadditionalfac'torsstoppingfuturenuclearunitconstruction,oratleastyieldinga12yearleadtimewhichnecessitatesequalleadtimeforloadforecasting.ItreferstoitscancellationoftheproposedSouthDadenuclearunits.andthesubstantialdelayinlicensingandresultingincreaseincapitalcostsofitsSt.LucieNo.2nuclearunit.Asforexistinggeneratingunits,FP&LstatesthatitsTurkeyPointnuclearunitshaveexperiencedsteamgeneratorleakscausingunscheduledoutagesinthepastandrequiringextensivescheduledoutageinthefutureforrepair,andthatitscombinedcyclePutnamunits,duetotheirnoveldesign,havenotbeenreliable.Finally,FP&Lreferstoitscommonstocksellingbelowbookvalueasevidenceoffinancialdifficultieswhichhavelimiteditsconstructionbudgettointernallygeneratedcash.58/Exhibit22indicatesthatwhilecoalmaywellbeusedinthefuture,economic,environmentalandreliabilityproblemsmakeitlargelyirrelevanttoFP&L'scurrentcapacityplanning.59/Suutaat32,n.48.

Docket.Sos.FR78-19,eCal.-37-NecertainlycannotdenythattheseconstraintsdoposeproblemsforutilitiessuchasFP&K,buttherecordfailstoestablishthatFP&T.issohamperedbyregulatoryrecuirementsandfinancialdifficultiesastobeincapableofevpandinqitsgeneratingcapacityasneededinthefuture.FP&?.is,afterall,offering240MWofScheduleDcapacitytoHomesteadandFortPierce,andtherecentrateofincreaseindemandbyFP&Z'sothercustomerscannotbecharacterizedasrapid.FP&Lhasbeengreatlyreducingitsdemandandloadforecastsinrecentyears,withtheactual~rateofgrowthbeingrelativelylowaveragingatmostaroundfourpercentannually(Tr.848).TotheextentthattherecordgivesanyindicationofFP&G'scurrentfinancialcondition,itrevealsthatFP&hhasexperiencedsignificantimprovementinearningsandrelatedmarketfactors.AboutthetimeFP&T.filedthiscase,itwasreportinqlower,moremanageablegrowth;greaterinternalgenerationoffunds;improvedearningsandcoverageratios;andincreaseddividends(ExhibitGT-78).Sufficeittosaythattherecord,comprisedLargelyofcompanydocuments,isambivalentonthisissue.-P&5wouldsupporttheseparationoffullandpartialrequirements.tariffsintermsofcostsofserviceonthebasisofdifferentloadpatterns.60/Theseseparatefullandpartial,requirementstariffsdiffer-bothinterms~ofdemandandenergycharges.FP&Lcontends,-therefore,thatithasdesigneddifferentratestoreflectmorepreciseLythedifferentcostsofservinqthesedifferentcustomergroups.Establishmentofseparatefullandpartialwholesalerequirementsratesiscommonpractice.Wehaveinfactrecognizedthedifferencesinthecostsofservingfullandpartialrequirementscustomers,nottomentiondifferenttypesofpartialrequirements'ustomers.6L/Xnthepresentcase,FP&Z,'s,proposaLofseparatefullandpartialrequirementsratesappearsreasonable.62/60/6L/62/FP&Lassertsthatitswholesalecustomerswithoutanygeneratingcapacityhaverelativelystableandpred'ctableloadpatternswhichallowsittoplanoperationsanddesignratestorecovercostsofservingthesefullrequirementscustomers.L'tfurthercon-tendsthatpartialrequirementsloadsarelessstablhut.thatthePRtariffallegedlyencouragessuchcustomerstostabiLizetheirpurchasesofpower.bostonEdisonCompany,Opinionlo.809-A,Docket.los.E-7738andZ-7784,issuedDecember9,1977(mimeoat20}.O"course,inPhaseXofthisdocketwearenotaddressingthespecificcostsofserviceandratedesignsoftheSR-2andPRtariffs.Accordingly,ourdeterminationdoesnotreflectonhowthesetworateswillactuv DocketNos."-R78-19,etal.38BALANCINGTHEPUBLICINTERESTCONSIDERATIONSNhentheSR-2andPRtariffsareviewedfromaper-spectiveontherelationshipsbetweenFP&Landotherutilitieswithintherelevantmarkets,thePresidingJudge'sconclusionthattheCompany'sproposalhas"nodiscernibleanticompetitiveeffectinandofit-self"isinadequate.63/Pithalternativesourcesofbase-loadwholesalecapacityunavailable,FPsL'starifrestrictionswoulddenytoHomestead,FortPierceandothernominallyself-sufficientutilitieswithintherelevantmarkettheonlyremainingsourceofsupply,schedulePR.Itwouldconclude,finally,themunicipalseffortsovertenyearstoobtainasourceofeconomically-priced,base-loadpower.MunicipalslikeHomesteadandFortPiercewouldbecomelikeliertoleavetheutilitybusiness.Indeed,thecitizenrymightforcetheseutilitiestocometoFPaLrequestingtakeover.See,CityofMishawakav.AmericanElectricPowerCo.,auora,.465F.Supp.at1329.Qfevengreaterrmportancetothecompanywouldbetheassurancethatinfuturefranchiserenewalcontestswithpotentialretailmarketentrants,itcouldpointtoexistingmunicipalutilitiesascharacteristicallyexpensiveandunabletoexploitscaleeconomies.rHomesteadandFortPiercewouldnotbeabletoeconomicallyutilizehigher-priced,lower-qualityScheduleDservicetomeettheirbase-loadrequirements.Suchoffers:tosellatimpracticalpricesandterms,havebeenconstruedasunlawfulrefusalstodeal,whendonetofurthermonopolypower.EastmanKodakCo'.v.SouthernPhotoMaterialsCo.,273U.S.359(1927).63/NerecognizeandfullyappreciatethattheInitialDecisionwaswrittenbeforeFP6LagreedtocontinuetoserveHomesteadandFortPierceunderitsPRtariffpendingthefinaloutcomeofthiscase.NehavenotbeenburdenedbythetimeconstraintsfacedbythePresidingJudge.UnderthecircumstancestheJudgeistobecommendedforhisefforts.

DocketSos.ER78-19,etal.-39-Therestrictionofwholesaleservicetonamedandexistingcustomersisanevengreaterthreattopotentialfranchisecompetition.Therecordindicatesthat.FP&Lgenerallyplanstominimizesalesofaverage-pricedwnolesalepowertomunicipalsandcooperatives(ExhibitST-17).AfterreviewingtherecordofFP&L'seffortstorenewtheDaytonaBeachfrachise,itdoesnotappearlikelythattheCompanywouldofferapotentialdistributionutilityanaverage-costrate.Thesignaltopotentialretaildis-tributorsinareaspresentlyservedbyFP&LatretailandoverwhichFP&Lhaswholesalemonopolypowerisquiteclear.Cf.,CityofMishawakav.AmericanElectricPowerCo.,sunra.roaL'soffertodiscussthefeasrbrlltyofservicetonewcustomersunderspecificcontractratesdoesnotreassureus.64/Thebalancingofcompetitionagainstotherpublicinterestconsiderations,requiredbyCitofHuntinaburv.FPC,65/becomesrelativelysimpleoncethxscaseis64/AsStaffnotesinitsbriefonexceptions,at9,thePresidingJudgeerredinfindingthatFP&LhadcommittedtoservenewsystemsinF?&L'sserviceterritory.6~/498Fe2d778(D.C.Cir.1974).

Docile+Nos.ER78-19,etal;40-Tstrippedtoitsessentialelements.Theproposedrestric-tiveprovisionsareanticompetitive,wefindnocounter-vaili.".greasonsfortheirimplementation,andtheyaretobedeleted.TheCompanyhasnotdemonstratedthatitshouldbeallowedtochangethegeneralavaiLabilityprovisionofscheduleSR-1whichmakeswholesaleserviceavailabletoallmunicipalandcoooerativecustomersinFP&L'sserviceterritorv.66/Proposedterminationsoffirm,average-costservicetoHomesteadandFortPiercearebasedontheserestrictiveprovisions,sotheproposedcancellationsarerejected.TheHomesteadcancellationwouldalsoviolatetheunderstandingofthepartiesthatthiscustomerwouldcontinuetopurchasescheduleSRafterthecompletionoftheirinter-connection.FP&LshallcontinuetoserveHomesteadandFortPierce,underschedullePR.However,theproposaltobi-furcatescheduleSR-1intoseparateratesfortotalrequire-mentsandpartialreguirementsserviceissoundlybasedwithnodiscernibleanticompetitiveeffectandweapproveit.Inspiteoftheanticompetitiveconductrecountedabove,wew'shtostressthattheremaybeacceptableservicelimitationswithdiminishedanticompetitiveeffectswhichameloriatesomelegitimateoperationalproblemsfacedbyFP&L.Indeed,theintervenorsrecognizethattheCompanyshouldbeallowedtofashionreasonabletermsandconditionstowholesaleservice.However,FP&Lhasnotprovideduswithanymiddleground,muchlessashowingthatithasselectedatarifflimitationthatistheleastanticompetitivemeansofsolvinganysuchoperationalproblem.Finally,wenotethatFP&Lhasmatterspendingbeforeusin.over30dockets,mostinvolvinginterchangetransmissionservicefilingsinwhichantitrustallegationshavebeenmade.66/Schedule.SR-1provides:AVAILABLE:InallterritoryservedhytheCompany.APPLICATION:Toelectricservicesuppliedtoamunicipalelectr'cutilityortoacooperative,.on-profitmembershipcorporationorgani-edundertheprovisionsoftheRuralElectricCooperativelawfortheirownuseforresale.

DocketHos.ER78-19,etal.-41-Neseelittleneedinthosecasesforthekindofelaboratepresentationmadeinthisone.ItwouldbehelpfultotheCommissionforthepartiestopinpointthecompetitivepro-blemsanddefensesrelatingtothefilingsineachofthesecases.TheCommissionorders:(A)TheInitialDecisionissuedintheseconsolidatedproceedingsonApril21,1978,isherebyreversed.(B)Alllimitationsontheavailabilityofwhole-salerequirementsservice,asproposedbyFPaL,exceptforthelimitationoffullrequirementserviceundertheSR-2tarifftoutilitieswithnogeneratingcapacity,areherebyrejected.(C)FPSLisdirectedtoreviseitsproposedSR-2an'dPRtariffstoconformtothisorder'within60days.UntilrevisedtariffsareacceptedbytheCommission,theavailabilityprovisionsoftheotherwisesupersededSR-1tariffshallremainineffect.(D)ThenoticesofcancellationofrequirementsservicetoHomesteadandFortPierceareherebyrejected.(E)Exceptionsnot.grantedaredenied.BytheCommission.(SEAL)LaisD.Cashell,ActingSecretary.

IntheMatterof09~1~~UNITEDSTATESOFAMERICANUCLEARREGULATORYCOMMISSIONBEFORETHECOMMISSIONFLORIDAPOWER5LIGHTCOMPANY(St.LuciePlant,UnitsNo.'andNo.2)FLORIDAPOWER5LIGHTCOMPANY(TurkeyPointPlant;UnitsNo.3andNo.4)NRCDocketNos.-50-335A0-389NRCDocketNos.50-250A50-251ASTAFFRESPONSETO'FLORIDACITIES'ARCH28,1979ANDAPRIL2,1979MOTIONS1/BymotionsdatedMarch28,1979andApril2,1979,FloridaCitiesrequesttheCommissiontoinitiateanantitrusthearingintheabovecap-2/tionedmatterspursuanttoSection105(a)oftheAtomicEnergyAct.ThisrequestisbasedupontheCommission'sJuly27,1978Orderaskingforadviceastowhether,inviewoftheFifthCircuitCourtofAppealsdecisioninGainesvillev.FloridaPower8Liht,573F.2d292(1978),cert.,denied,U.S.,47USLW3329(No.78-476)(ll/14/78),anantitrustpro-ceedingattheNRCshouldbeinitiatedand,ifso,whenitshouldbeinitiatedandwhetheritshouldbeconsolidatedwiththecurrentantitrusthearinginDocket50-389AforSt.LucieUnit2.InurgingtheCommission~1FloridaentitiesinvolvedinthispetitionincludetheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWorthUtilitiesAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtilitiesCommission,andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.Cloud,andTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociation.~2TheonlysubstantialdifferencebetweenthetwomotionsappearstobethattheMarch28,1979MotionrequeststhataSection105(a)pro-ceedingbeinitiatedwhiletheApril2,1978motionrequeststhattheSection105(a)proceedingbeconsolidatedwiththependingSection105(c)proceedinginvolvingFloridaPower5Light'sSt.LucieUnit2.

toinitiatethishearingFloridaCitiescitetherecentU.S.CourtofAppealsopinioninFt.PierceUtilitiesAuthoritoftheCitofFt.Pierce,et.al.v.NuclearReulatorCommissionwhichspecificallyrefersto3/theCommissionsauthorityoVermatterspertainingtoSection105(a).FloridaCitiesalsopointoutthatCommissionactionisnowmoreappropriatethenitwasatthetimeoftheJuly27,1978Orderinviewofthe.Supreme4/Court'sdenialofcertiorarioftheFifthCircuit'sdecisioninGainesville.5/Staff'sresponsetotheCommission'sJuly27,1978inquirywasthattherewasnoneedtoinstituteaSection105(a)proceedingagainstFloridaPower8LightCompanyregardingtheGainesvillemattersincethesameissueswerealreadyincorporatedinanongoingSection105(c)NRCantitrustproceedinginvolvingthelicensingofSt.Lucie2inDocket50-389A.Hefurtherpointedoutthatifaseparate105(a)proceedingwasdeterminedtobenecessary,thentoavoidduplicationoftrialeffortssuchaproceedingshouldbeformallyconsolidatedwiththeSt.LucieUnit2proceeding,~3F,2d(D,C,Cir.1979),Dkt.No.77-1925,etal.,S'lipOpinionpps,30-31;March23,1979.Inthisregard,theCourtstatedthat,"...Section105(a)notonlyprovidesthatnothingintheActpreemptsthenormaloperationoftheantitrustlaws,butalsoveststheCommissionwithauthoritytorevokeormodifyFPSL'soperatinglicensesintheeventthatacourtfindsthatFPSLhasviolatedthoselawsinthecourseoflicensedactivity,therebyconfirming'theCommission'santitrustauthorityinthisregard."4/SeeNovember29,1978letterfromMr.JablontoCommissionSecretaryChilk,enc'1osingacopyofthedenialofcertiorari.5/August25,1978NRCStaffResponsetoCommissionOrderofJuly27,1978.

I NeitherthedevelopmentsnotedbytheFloridaCitiesnortheirargu-mentsbasedonthosedevelopmentswarrantstheactiontheyhaverequestedoftheCommission.TheFt.PiercecasetoshichtheyreferhasnobearingonthemannerinwhichtheCommissionmayimplementSection105(a).Similarly,the'GainesvillecaseisnotrelevanttothematterofwhetheraseparateSection105(a)proceedingmaybeinstituted.NothinginthesecasesorintheFloridaCitiesargumentinsupportoftheirrequestsalterstheStaffspositionreflected'initsAugust25,1978briefwithrespecttotheCommission'sauthoritytoinitiateaseparateproceedinginthismatter.Accordingly,theFloridaCitiesmotionsshouldbedenied.Respectfullysubmitted,LeeScottDeweyCounselforNRCStaff/La.~cedricD.ChananiaCounselforNRCStaffDavidJ.EvansCounselforNRCStaffDatedatBethesda,Marylandthis17thdayofApril1979.

UNITEDSTATESOFAMERICANUCLEARREGULATORYCOMMISSIONBEFORETHECOMMISSIONIntheMatterofFLORIDAPOWER&LIGHTCOMPANY(St.LuciePlant,UnitsNo.1andNo.2)FLORIDAPOWER&LIGHTCOMPANY(TurkeyPointPlant,UnitsNo.3andNo.4)))))))NRCDocketNos.50-335A50-389ANRCDocketNos.50-250A50-251AJ.A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis&Axelrad1025ConnecticutAvenue,N.W.WashingtonD.C.20036CERTIFICATEOFSERVICEIherebycertifythatcopiesofSTAFFRESPONSETOFLORIDACITIES'ORCH28,1979ANDAPRIL2,1979HOTIOflS,intheabove-captionedproceeding,havebeenservedonthefollowingbydepositintheUnitedStatesmail,firstclass,or,asindicatedbyanasterisk,throughdepositintheNuclearRegulatoryCommission'sinternalmailsystem,this17thdayofApril1979.IvanW,Smith,Esq,,ChairmanAtomicSafetyandLicensingBoardPanelU,S,Nuc1earRegulaoryCommissionWashington,D,C.20555*ValentineB.Deale,Esq.AtomicSafetyandLicensingBoardPanel1001ConnecticutAvenue,N.W.Washington,D.C.20036RobertH.Lazo,Esq.,MemberAtomicSafetyandLicensingBoardPanelU.S.NuclearRegulatoryCommissionWashington,D.C.20555*DocketingandServiceSectionOfficeoftheSecretaryU,S.NuclearRegulatoryCommissionWashington,D.C.20555*JeromeSaltzman,Chief.Antitrust&IndemnityGroup.U,S,NuclearRegulatoryCommissionWashington,D,C.20555*TracyDanese,Esq.YicePresidentforPublicAffairsFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101JackW.Shaw,Jr.,Esq.JohnE.Mathews,Jr.,Esq.Hathews,Osborne,Ehrlich,HcNatt,Gobelman8Cobb1500AmericanHeritageLifeBuilding11EastForsythStreetJacksonville,Florida32202HarryW.WrightExecutiveYicePresidentSeminoleElectricCooperative,Inc.Suite1082410EastBuschBoulevardTampa,Florida33612 Hr.RobertE.BathenNr,FredSafferR,H;Beck8AssociatesP.O.Box6817.Orlando,Florida32803.jDr..John.H,WilsonWilsonlmAssociates2600YirginiaAvenue,N.W.Washington,D.C.20037ThomasGurney,Sr.,Esq..203NorthHagnoliaAvenueOrlando,Florida32802RobertA.Jablon,Esq.DanielJ.Guttman,Esq...Alan.J,Roth,Esq,2600VirginiaAvenue,N.H.'ashington,D,C.20037DonaldA.Kaplan,Esq.DavidA.Leckie,Esq.P.O.Box14141,Washington,D.C.20044WilliamH.Chandler,Esq.Chandler,O'NeaI,"Avera,Gray,Land8StriplingPostOfficeDrawer0Gainesville,florida32602Hi11iamC.Wise,Esq.RobertWeinberg,Esq.Suite200,101919thStreet,N.W.Washington,D.C.20036Hr.DavidSpringsSouthernEngineeringCompany1000CrescentAvenue,N.E.Atlanta,Georgia30309AtomicSafetyandLicensingBoardPanelU.S.NuclearRegulatoryCommissionWashington,'.C.20555*Daniell<.GribbonHerbertDym-Covington8Burling888SixteenthStreet,N.H.Washington,D.C,.20006ChairmanHendrie.OfficeoftheCommissionU.S.NuclearRegulatoryCommission"Washington,D.C.20555"CommissionerGilinskyOfficeoftheCommissionU.S.NuclearRegulatoryCommissionWashington,D.C.20555*Con>sssonerKennedyOfficeoftheCommissionU.S..NuclearRegulatoryCommissionWashington,D.C.20555*ComissionerBradfordOfficeoftheCorrmissionU.S.NuclearRegulatoryCommissionWashington,D.C.20555*CommissionerAhearneOfficeoftheCommissionU.S.NuclearRegulatoryCommissionWashington,D.C.20555*fredricD.ChananiaCounselforNRCStaff UNITEDSTATESOFAi~IERlCALEARREGULATORYCOMMISSIBeforetheCommission))FloridaPower&LightCompany)(St.LuciePlant,UnitNo.1).)))FloridaPower&LightCompany)(TurkeyPointPlant,Units3)and4))DocketNo.0-33DocketNo.50-250A50-251A+u>"qV~cg0$4~qg4to<"~ioqgcl+RESPONSEOFFLORIDAPOWER&LIGHTCOMPANYTOCITIES'OIONSOnMarch28,1979,theCitiesfileda"MotionforanAntitrustHearing,"and,onApril2,1979,theyfileda"MotionforConsolidatedHearings."Thereisnodiscernabledifferencebetweenthetwopleadings.Noproceedingispendinginwhichthesetwomotionscanbeconsidered;accordingly,themotionsshouldnotbeconsideredoractedupon.Forreasonspreviouslystatedinfilingsrequestedby1/theCommission,FloridaPower&LightCompanyopposesthereliefrequestedbytheCities.RespectfullySubmitted,DanielGribbonHerbertDymCovington&Burling88816thStreet,N.W.Washington,D.C.20006J.A.Bouknight,Jr.Lowenstein,Newman,Reis,Axelrad&Toll1025ConnecticutAvenue,N.W.Washington,D.C.20036JohnE.Mathews,Jr.1500AmericanHeritageLifeBldg.llEastForsythStreetJacksonvilleFloa.da32202By:fA.Bouig,Jr./SeeFloridaPower&LightCompan'spleadingsdatedAugust25,andSeptember5,1978.

UNITEDSTATESOFAlKRICANUCLEARREGULATORYCON'EMISSIONBeforetheCommissionllos<~'cgOpegVpy9()pic+bIntheMatterof:FloridaPower&LightCompany(St.LuciePlant,UnitNo.1)FloridaPower&LightCompany(TurkeyPointPlant;Units3and4))1))DocketNo.50-335A)))))DocketNo.50-250A)50-251A)CERTIFICATEOFS"RVICEIHEREBYCERTIFYthatcopiesofthefollowing:RESPONSEOFFLORIDAPOWER&LIGHTCOMPANYTOCITIES'OTIONShavebeenservedonthepersonsshownontheattachedlistbydepositintheUnitedStatesMail,properlystampedandaddressedonApril13,1979.By:.A.Bounz.g,Jr.owenstein,ewman,Reis,Axelrad&Toll1025ConnecticutAvenue,N.W.Washington,D.C.20036CounselforFloridaPower&LightCompany ChairmanJosepn.'I.Hendr'Of=-'ceoftheComnissionesU.S.Nuc'arReculatoryCommissionNashihgton,D.C.20555CommissionerVictorGilinsky0f'ceoftheCommissionersU.S.VLuclarRegulatory'ommissionNashincton,D.C.20555Commiss'onerRic"..ardKennedyOficeo=theCommissionersU.S.Nuc'earRegulatorvCommissionNashincton,D.C.20555CommissionerPeterBradfordOfficeoftheCommissioneis.U.S.Nuc'arReculatoryCommissionNashincon,D.C.20555Conmiss'nerJoi:nF.AhearneOfficeoftheCommissionersU.S.NuclearReculatoryCommission<Uashircton,D.C.20555AlanS.Rosenthal,EscuireAtomicSafetyandLicensingAppealBoa"dPanelU.S.Nucle"ReculatoryCommissionNashington,D.C.20555JeromeE.Sharfmn,EsauireAtomcSatvandLicensingAppeal,BoardPanelU.S.NuclearReculatory.CommissionNasnington,D.C.20555RichardS.Salzman,EsauireAtom'cSafe+'randLicensingAppealBoardPanelU.S.Nuclear'RegulatoryCommissionNashincton,D.C.20555IRobert!1.Lazo,EsauireAtomicSafetyandLicensingBoardPanelU.S.NuclearRegulator:CommissionLUashinc"on,D.C.20555ivan"1.Snitn,EscuireChairna.".,A"on'Sa.fetyandLicensingPo~a'<Qv~aiolM~4U.S.NuclearReculatorirCommissionNash>..eton,D.C.20555ValentineB.Deale,EscuireAtomicSafetvandLicensingBoardPanelU.S.NuclearRegulatoryCommissionNashington,D.C.20555RobertA.Jablon,EsauireSpiegel&5'tcDiarmid2600Virg'niaAvenue,N.N.Nashington,D.C.20037MelvinG.Berger,EsquireAn"itrustDivisionU.S.DepartmentofJusticeP.O.Box14141'ashincton,D.C.20044LeeScottDewey,EsquireCounselfortheStaffU.S.NuclearRegulatoryCommission;.Nasi:ington,D.C.20555'.R.Stephens,Supervisor(20)DocketingandServiceStat'onOfficeoftheSecretaryoftheCommissionU.S.NuclearRegulatoryComm'sioaNashington,D.C.20555Nill'amC.Nise,EsauireSuite200101919thStreet,N.lU.Nashington,D.C.20036NilliamH.Chandler,EscuireChandler,O'Neal,Avera,GryLang&StriplingP.O.Drawer0Gainesville,Florida32602JeromeSaltzmanChief,AntitrustandIndemnity'roupU.S.NuclearRegulatorrConnissior,Nashington,D.C.20555Sanue1J.Chi1k.SecretaryU.S.NuclearReculatorvConmissicn,!lashington,D.C.20555 GEORGESPIEGELROBERTC.MODIARMIDSANDRAJ.STREBEIROBERTA.JABLONJAMESN.HORWOODALANJ.ROTHFRANCESE.FRANCISDANIELI.DAVIDSONTHOMASN.MCHUGH.JR.DANIELJ.GUTTMANPETERK.MATTDAVIDR.STRAUSLAWOFFICESSPIEGELSviWXCDIzlRNID2600VIRGINIAAVENUE.N.W.WASHINGTON.D.C.20037TELEPHONE(202I3334500TELECOPIER(202)333.2974April2,1979BONNIES.BLAIRROBERTHARLEYBEARTHOMASC.TRAUGERJOHNMICHAELADRAGNACYNTHIAS.BOGORAD,(MASSACHUSETTSSARONLY)GARYJ.NEWELLMARCR.POIRIERChaseR.Stephens,ChiefDocketing&ServiceSectionU.S.NuclearRegulatoryCommissionWashington,D.C.20555RE:FloridaPower&LihtCo.(St.LuciePlant,UnitNo.2;Turkey-tgPlant,UnitNos.3and4),DocketNos.-335A,50-250A650-251A

DearMr.Chilk:

Enclosedforfilingintheabove-captioneddockets,onbehalfof:FloridaCities,aretwentycopiesandasignedori-ginalofthefollowingdocument:MOTIONFORCONSOLIDATEDHEARINGSRWewouldappreciateitifyouwouldhavethetwoaddi-tionalcopiesencloseddateandtimestampedandreturnedtothisofficeintheenvelopeprovided.Verytrulyyours,RobertA.JablonAttorneyfortheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWorthUtilitiesAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtilitiesCommission,and,theCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.Cloud,andTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociation UNITEDSTATESOF'MERICANUCLEARREGULATORYCOMMISSION))FLORIDAPOWER6LIGHTCOMPANY))(St.LuciePlant,UnitNo.2)))(TurkeyPointPlant,Unit)Nos.3a4))DocketNos.50-335ADocketNos.50-250Aand50-251AMOTIONFORCONSOLIDATEDHEARINGS'OnJuly28;1978,theCommissionissuedanOrderinthesedocketsrequestingadvicewhetheritshouldinstitutea105(a)proceedingwithregardtothesedocketsinviewof-theadverseantitrustfindingagainstFloridaPower&LightCompanyinGainesvilleUtilities

Deartmentv.FloridaPower&LicLht,

573F.2d,292(l978).Thisdecisionisfinalandnolongersubjectto,SupremeCourtreview.LetterofRobertA.JablontoMr.SamuelJ.Chilk,Secretary,NRC(November29,1978).ByarulingdatedMarch23,1979,theUnitedStatesCourtofAppealsfortheDistrictofColumbiainFortPierceUtilitiesAuthoritoftheCitofFortPierce,etal.v.UnitedStates,etal.,No.77-1925etal.,upheldtheCommission'sdeterminationthatitdoesnothavejurisdictiontoorderanantitrustreviewunderSection186oftheAtomicEnergyActwithregardtotheseplants.1/1/ThisdeterminationissubjecttocertiorarireviewbytheSupremeCourt,althoughactionherecouldmootsuchreview.

However,theCourtheld:"Tosoimmunizethelicensesatissueherefrompost-licensingantitrustreviewunderSection186(a)isnotasFloridaCitiesassert,togiveFPGLa'carteblanche'ouse[its]facilitiesdirectlycontrarytotheantitrustlaws.Section105(a)notonlyprovidesthatnothingintheActpreemptsthenormaloperationoftheantitrustlaws,butalsoveststheCommissionwithauthoritytorevokeormodifyFPGL'soperatinglicensesintheeventthataCourtfindsthatFPGLhasviolatedthoselawsinthecourseoflicensedactivity."(SlipOpinion,Pages30-31).InviewoftheconfirmationbytheCourtoftheCommission'sauthorityunderSection105(a)"torevokeormodifyFPGL'soperatinglicenses"andtheFifthCircuitdeci-sion,nowfinal,thatanantitrustviolationhasoccurred,itisappropriatethattheCommissionnow,rulepursuanttoitsJuly28,1978Order.FloridaCitiesdonotdeemitappropriatetorearguethegroundsforsuchorder,sincethemattersatissuehavebeenfullybriefed.However,theydopointoutthependencyofthehearinginFloridaPower6suggestthatintheeventtheCommissiondoesnotdeemitappropriateforittoruleontheissuesinvolvedinitially,themattersmaybeconsolidatedforrulingwiththatdocket, subjectofcoursetotheCommission'sappellatereviewpro-cess.However,inanyevent,themattersareplainlyripefordecision.Respectfullysubmitted,RobertA.JablonAttorneyfortheFortPierceUtilitiesAuthorityoftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectric-WaterandSewerUtilities,theLakeWorthUtilitiesAuthority,theUtilitiesCommissionofNewSmyrnaBeach,theOrlandoUtilitiesCommission,theSebringUtilitiesCommission,andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry,St.Cloud,andTallahassee,Florida,andtheFloridaMunicipalUtilitiesAssociationApril2,1979LawOfficesof:Spiegel&McDiarmid2600VirginiaAvenue,N.W.Washington,D.C.20037.(202)333-4500

UNITEDSTATESNUCLEARREGULATORYCOMMISSIONIntheMatterof))FloridaPower"&LightCompany))(St.LuciePlant,UnitNo.2)))(TurkeyPointPlant,Unit)Nos.3&4))DocketNo.50-335ADocketNos.50-250Aand50-251ACERTIFICATEOFSERVICEIherebycertifythattheforegoingMOTIONFORCONSOLIDATEDHEARINGShasbeenservedonthefollowingper-sonsbydepositintheUnitedStatesmail,firstclass/postageprepaid,this2nddayofApril,1979:Ch'aseStephens,ChiefDocketing&ServiceSectionNuclearRegulatoryCommissionWashington,D.C.20555LeeDewey,Esq.FredChanania,Esq.DaveEvans,Esq.OfficeoftheExecutiveLegalDirectorNuclearRegulatoryCommissionWashington,D.C.20555IvanW.Smith,ChairmanAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555RobertLazoAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555JeromeSaltzman,ChiefAntitrust&IndemnityGroupNuclearRegulatoryCommissionWashington,D.C.20555ValentineB.Deale1101ConnecticutAvenue,N.W.Suite504Washington,D.C.20036HerbertDym,Esq.DanielGribbon,Esq.JoanneGrossman,Esq.Covington&Burling88816thStreet,N.W.Washington,-D.C.20006MelBerger,Esq.MildredCalhoun,Esq.DepartmentofJusticeAntitrust-Department1101PennsylvaniaAvenue,N.W.Washington,D.C.20530JohnE.Mathews,Jr.,Esq.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg.Jacksonville,Florida32202J.A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis&Axelrad1025ConnecticutAvenue,N.W.Washington,D.C.20555RoertA.JponAttorneyforFloridaCities ea~