ML17266A430

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

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

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UNITEDSTATESOFAMERICANUCLEARREGULATORYCOMMISSIONZntheMatterofFLORIDAPOWER&LIGHTCOMPANY(St.LuciePlant,UnitNo.2)DocketNo.50-389BRIEFOFRESOURCESRECOVERY(DADECOUNTY),INC.ANDPARSONS&WHZTTEMOREgINCINSUPPORTOFTHEIRPETITIONFORLEAVETOINTERVENEANDREQUESTFORANANTITRUSTHEARINGOnMarch9,1981,theNuclearRegulatoryCommissionpublishednoticethatFloridaPower&LightCompany(FP&L)hadappliedtopossess,useandoperateSt.LuciePlant,UnitNo.2,anuclearreactorlocatedonHutchinsonIsland,Florida.46Fed.Reg.15831(1981).ThenoticeallowsaninterestedpartytopetitionforleavetointerveneandtorequestahearingonorbeforeApril7,1981.Pursuanttothatnotice,ResourcesRecovery(DadeCounty),Inc.(RRD)anditsparent,Parsons&Whittemore,Inc.(P&W),havepetitionedtointerveneandhaverequestedahearingtodetermineifcertainspecifiedactivitiesundertheoperatinglicensesoughtbyFP&L"wouldcreateormaintainasituationinconsistentwiththeantitrustlaws."42U.S.C.52135(c)(5)

(1976ed.).-Section105c(2)oftheAtomicEnergyAct,as1/amended,42U.S.C.52135(c)(2),requiresanantitrusthearingatthisstageoftheproceedingbecause"significantchangesinthelicensee'sactivitiesorproposedactivitieshaveoccurredsubsequenttothepreviousreviewbytheAttorneyGeneralandtheCommission"oftheanticompetitiveimpactofFPGL'sproject.Thosechangesandtheirprobableanti-competitiveconsequencesaredescribedbelow.I.BACKGROUNDA.PriorProceedinsFPGL'sapplicationforalicensetooperateSt.LuciePlant,UnitNo.2,marks,thestartofthesecondphaseofNRC'slicensingprocess;theproceedingbeganin1973whenFPGLsough"aconstructionlicense.Duringtheinitialphase,FPGLsubmittedtheantitrustportionsofitsapplicationtotheAtomicEnergyCommission.TheCommission,inturn,transmittedtheapplicationtotheAttorneyGeneralforanantitrustrev.'ewinaccordwithSection105c(l)oftheAtomicEnergyAct,asamended,42U.S.C.$2135(c)(1).1/Thepetitionadvancestwolegalintereststhatsupporttheallowanceofintervention:petitioners'ightsunderPURPA,thePublicUtilitiesRegulatoryPoliciesActof1978,andtheirantitrustrights.Theseinterestsareseparatebutrelated,astheensuingdiscussioninthisbriefdemonstrates.Thebrief,howeve,isfiledonlyassupportfortheantitrustgroundofthepetition.ThePURPAgroundisfullyexplainedinthepetitionitself,anditisanindependentbasisforallowinginterventionwithoutthenecessityofafindingthatFPGL'scircumstanceshavechanged.

RespondingonNovember14,1973,theheadoftheAntitrustDivisionexpresseddeepconcernovertheanti-competitivepotentialofFp&L'sownershipofSt.LuciePlant,UnitNo.2.OfparticularrelevancehereistheJusticeDepartment'sanalysisofFP&L'smonopolypoweroverthetransmissionofelectricitythroughoutsouthernandeasternFlorida,whereitowns90%ofthehighvoltagelines(p.1).TheDepartmentconcludedthatFP&L'smonopolyraisedsignificantantitrustquestions:Ourantitrustreviewledustothefollowingconclusions:(1)Applicantisthedominant.electricutilityinFloridaandbecauseofitsownershioftrans-mission,astheowertorantorenotersstemsznx,tsareaeaccesstocoorenation-antusenucearpower-neededtocompeteinbulkpowersupplyandretailaistributionmarkets;(2)thereissomeindicationApplicant'sdominancemayhavebeenenhancedthroughconductinhibitingthecompetitiveopportunitiesofthesmallersystemsinitsarea;and(3)constructionandoperationofSt.LucieNo.2,andthesaleofpowertherefromtomeetApplicant'loadgrowthandcompetewiththesmallersystemsinitsareacouldcreateormain-tainasituationinconsistentwzteantitrustawsxaccesstonuceareneratxonwereensetosesmaer~sstems.pp.-,empasasaeDespitethesemisgivings,theJusticeDepartmentopinedthatanantitrusthearingwouldbeunnecessaryifFP&Lwouldagreetoshareownershipofthefacility.TheCommissionstaffadoptedtheDepartment'srecommendationandinsistedthatFP&Lacceptspecified

conditionsintheconstructionlicense.ThemajorconditionwasthatFP&Lofferanopportunitytopurchase-a..."reasonableownershipshare"ofSt.LuciePlant,UnitNo-;R,.-tosevennamedelectriccooperativesandtwonamedmunicipalities.-FP&L-2/promptlyaccepted,"forthepurposeofavoidinganantitrusthearing."-Later,inApril1977,aninitial-decisionorderedthattheconstructionpermitissue,5NRC1038,(1977),andthatdecisionwasaffirmedbytheAppealBoard,6NRC541(1977).Afterthepermitissued,theFifthCircuitdecidedGainesvilleUtilitiesDet.v.FloridaPower&LihtCo.,573F.2d292,cert.denied,439U.S.966(1978),holdingthatFP&LhadviolatedtheantitrustlawsbyconspiringwithanotherprivatepowercompanytodividetheFloridamarketforwholesalepower.ThatdecisionpromptedtheDepartmentofJusticetorequestthatNRCconductanantitrusthearingunderSection105aoftheAtomicEnergyAct,42U.S.C.52135(a).Thereafter,onSeptember12,1980,theDepartmentofJustice,theNRCStaffandFP&LenteredintoaSettlementAgreement;FP&Lagreedtoacceptcertain"ProposedLicenseConditions"inexchangefortheJusticeDepartment'scommitmenttoabandonitsSection105arequest.TheAgreementrequestedtheLicensingBoard,tomaketheproposedconditionseffective2/LetterfromJohnF.O'eary,DirectorofLicensing,AtomicEnergyCommission,toBenH.Fuqua,SeniorVicePresident,FP&L(Feb.25,1974).3/LetterfromBenH.FuquatoJohnF.O'eary(Feb.26,1974).

immediately,but"withoutprejudicetotheBoard'sauthoritytoimposedifferentoradditionalconditionsafterahearing"(Stipulation94).TheAgreementispresentlypendingbeforetheBoardonajointmotionforapprovalofthesettlement.ThesectionoftheAgreementatissuehereisSection~-governsFP&L'sobligationtoprovidetransmissionservicesthecentralproblemidentifiedbytheAntitrustDivisioninits1973lettertotheNRC.B.ThePetitionersRRDisawhollyownedsubsidiaryofP&W;aNewYorkCorporationengagedinavarietyofindustrialactivitiesintheUnitedStatesandabroad.RRD,aDelawarecorporation,isprimarilyengagedintheconstructionandoperationofasolidwasteprocessingfacilityinDadeCounty,Florida.lnconjunctionwiththatfacility,RRDownsandistestoperatinganelectricgeneratorwhicnproduceselectricityfromsteamraisedduringtheprocessingofsol'dwastes.OnMarch13,1981,RRDnotifiedtheFederalEnergyRegulatoryCommissionthatitisaqualifiedsmallpower4/producerwithintheambitofPURPA(App.A').4/Section210ofPURPAisdesignedtoencourageco-generationandsmallpowerproductionofelectricalenergy.Towardthatend,PURPAgrantstoqualifiedfacilitiestherighttoselltheirelectricaloutputtoanelectricalutility,tointerconnectwithautility,andtobuyatretailfromtheutilityalltheelectricpowerneededbythefacility.See,~e...16U.S.C.5796,andtheimplementingFERCregulations,18C.F.R.Part292(45Fed.Reg.,Mar.20,1980).

RRDsnotificationofitsPURPAau'alificationwasserveduponFP&LonMarch13,1901,alongwithastatementthatRRD"willbeginsalesofelectricenergytoFloridaPower&Lightonorafterninetydaysfromthedatehereof"(App~A)~Threeweekslate=,onApril3,RRDadvisedFP&Lthat-"AsanalternativetotheexclusivesaleofelectricenergytoFP&L,RRDwishestoexplorecompet'tiveopportunitiesforsalestootherelectricutilityentities."[App.BJThatletterasksFP&Ltoconfirmthatitwill"transmitelecricityinbehalfofRRDtopotentialcustomersotherthanFP&L."As-authorityforrequiringFP&Ltotransmitelectricityonitsbehalf,RRDisrelyingupontheantitrustlawsandtheproposed5/NRCSettlementAgreementdescribedabove.-FP&LhasbeenaskedbyRRDtorespondbyApril17toitsrequestforaccesstoFP&L'stransmissionlines.AnunconditionalaffirmativeanswerfromFP&Lwouldmakeitunnecessarytopursuethepetitionforleavetointerveneatthistime.Toprotectthemselvesagainsttheeventualityofanunwarrantedrefusal,Petitionershaveassertedtheirlegalrightsinthisproceeding.5/AsformerFloridaGovernorBeubinAskewrecentlytestif'ed(onbehalfofMetropolitanDadeCounty)beforetheFloridaPublicServiceCommission"adoptionofPURPAisintendedtobeneitthepublicbyencouragingdevelopmentofsmallpowerandcogenerationfacilitiesandtherebypromotecompetitionintheenergyproductionfield."[TranscriptofTestimony,p.133-1ThetestimonyofGovernorAskewisreproducedasAppendixC,tothisfiling.

C.TheProposedAnticomaetitiveTransmission.ActivitiesCaenePetitionersSectionXstatesthatFP&Lmusttransmitelectricalpower"(5)fromanyqualifyingcogenerationfacilityorsmallpowerproductionfacility(asdefinedbytheFederalEnergyRegulatoryCommissionin18CFR292,SubpartB)withwhichCompanyisinterconnectedtoaneighboringentityorneighboringdistributionsystem...."Thatstraightforward-soundingobligationismodifiedbytheprovisothat:"NothinginthislicenseshallbeconstruedtorequireCompanytowheelpowerandenergytoorfromaretailcustomer."[SectionX(b).]SincePURPAexpresslyrequiresautilitytosellretailpowertoaqualifiedfacility,-thequotedlanguagecouldbeconstruedbyFP&LtoundercutitsobligationtotransmitpoweronbehalfofRRDoranyqualifiedfacilitywhopurchasesretailpowerfromFP&L.Znaddition,underSectionX(a)(5)aqualifiedfacilitymustarrangefor"backuppower"and"maintenancepower"fromtheneighboringentityorneighboringdistributionsystemtowhichtransmissionserviceisrequested.FP&L'stransmissionobligationcouldthusbevitiatedwhenevertheprospectivepurchaserwasunwillingorunabletoprovidebackupormaintenancepowerfor6/A"utilitymustpurchasetheentireoutputofacogeneratororsmallpowerproducerattheutility'sownavoidedcostsand,atthesametime,mustsupplythecogeneratororsmallpowerproduceritsentireelectricrequirementundernon-discriminatoryrateschedules.Enshort,theutilitymustbuyatthemarginandsellatretail."IdahoPub.Serv.Comm'nOrderNo.15746,pp.6-7(Aug.8,1980),citingPURPA5210.

RRD.Thatcondition,whichdoesnotapplytoFP&L'stransmission=.obligationsonbehalfofothers,unreasonablydiscriminatesagainstRRDandallqualifiedPURPAfacilities.FP&L'stransmissionobligationsarefurtherconditionedbythefollowingprovisos:"Companyshallprovidetransmissionserviceunderthisparagraphonlyif(l);-Company'sandotherconnectedtransmissionlinesformacontinuouselectricpathbetweenthesupplyingandtherecipientsystems;(2)permissiontoutilizeothersystems'rans-missionlinescanbe'btainedbytheproponentofthearrangement;(3)theservicescanreasonablybeaccommodatedfromatechnicalstandpointwithoutsignificantlyjeopardizing.Company'sreliabilityoritsuseoftrans-missionfacilities;(4)reasonableadvancerequestisreceivedfromtheneighboringentityorneighboringdistributionsystemseekingsuch,servicestotheextentthatsuchnoticeisrequiredforoperatingorplanningpurposes,providedthatCompanydistributesawrittentimetablesettingforthreasonableperiodoftimewithinwhichsuchadvancenoticemustbereceivedfortrans-missionservicesoverexistingCompanyfacilities;and(5)areasonablemagnitude,timeanddurationforthetransactionsisspecifiedpriortothecommencementofthetransmission."[SectionX(a)-]TheseprovisosafordFP&LanopportunitytodefeattheverytransmissionrightheSettlementAgreementpurportsto7/create.-7/Asanillustration,FP&Lcouldnegotiateformonthsandyearsover"compliance"withSectionX'scomplexconditions,therebyusingitsmonopolypowertopreventcompetition,butdoingsowithoutdirectlyrefusinganyrequesttotransmitelectricity.

TheSectionXtransmissionprovisions:areambiguouswheretheyshouldbeplain,andaualifiedwherethey.should.beunconditioned.Thus,unlessPP&Ldecides:tointerpret:.SectionXinaprocompetitivespirit'aneventthat:-would-beawelcome,butunexpected,breakbyFP&Lwithitspast.-that..8/sectionismorelikelytoretardcompetitionthantopromoteit.Pctitioncr"contend,insum,thattheseflawedprovisionsfallfaxshortofcurbingthepotentialforantitrustabuseinherentinFP&L'sownershipof90%ofthetransmissiongridinitsoperatingarea.Onthecontrary,bycreatingthefalseilluionthattheyhaveloosenedPP&L'sstrangehold-overthedevelopmentofnewcompetitors,thetransmissionconditionsmaywellserveonlytomaintainandenhancePP&L'smonopolypower.TheremainderofthisbriefestablishesthattheSettlementAgreementandPP&L'sproposedactionsinimplementingitare"significantchangesinthelicensee's...proposedactivities"whichmay"createormaintainasituationinconsistentwiththeantitrustlaws."42U.S.C.523.35(c).8/Znthisregard,theFederalEnergyRegulatoryCommissionhasobserved:"theevidenceinthisrecordof[FP&L's]pastconductcastsashadowoverFP&L'sclaimedneedtorestrictseviceand,there-fore,isofprobativevalueindeterminingwhethertheCompanyhassatisfactorilycarrieditsburdenofjustificationrortheproposedservicelimitations."FERCOpinionHo.57,August3,l979,at3.Seealsopp.11-12,infra.

10IZ.THELZCENSECONDZTZONSZNTHEPENDZNGSETTLEMENTAGREEMENTARE"SZGNZFXCANTCHANGES"ZNPP&L"SPROPOSEDACTZVZTZESTheAtomicEnergyActof1954requirestheNRCtoreviewtheantitrustaspectsofaproposedprojectatanyappropriate..stageofthetwo-steplicensingprocess.Zn.theMatter.ofHoustonLihtinaPowerCo.(SouthTexasPro'ect,UnitNos.Land2),5NRC1303(1977).ThefocusoftheActisnotuponpreciseproofofantitrustviolationsinthetechnicalsense.Rather,itisconcernedwithwhether"therem~aheadverseantitrustaspects"totheproject(42U.S.C.52L35(c)(5),emphasisadded).TgeAct,inshort,isaCongressionaldirectiveagainstGovernmentalinvolvementincreatingormaintaininga"situationinconsistentwiththeantitrustlaws"(42U.S.C.52L35(c).(5).Anantitrustreviewmaybehadattheoperatinglicensestagewhen"significantchangesinthelicensee'sactivitiesorproposedactivitieshaveoccurredsubsequenttothepreviousreviewbytheAttorneyGeneralandtheCommission."42U.S.C.52L35(c)(2).Thissecondreviewdealswithcircumstancesthatchangedafterissuanceofaconstructionpermitandbeforetheapplicationforanoperatinglicense."Thisisnottosaythat'significantchanges'nalicensee'sproposalcanorshouldbeviewedinisoLationfromunchangedfeaturesoftheproposal."SouthTexas,~sura,5NRCat1322.Onceachangedcircumstanceisestablished,itsantitrustsignificancemustbeevaluatedinthecontextoftheentireproposalbeforetheCommission.Zd.

0-11-The"significantchanges"determinationthustriggersasecondantitrustreviewand,toalargeextent,definesitsscope.Xtalsoisaprerequisitetoanantitrusthearingattheoperatinglicensestage.IntheNatterofSouthCarolinaElectric&GasCo.(VirilC.SummerNuclearStation,UnitNo.1),11NRC817,824(1980).XnSummerStation,theCommissiondefinedthreecriteriafordeterminingwhether"signiicantchanges"haveoccurred:i.e.,theactionorproposedactionmust:"'(1)haveoccurredsincethepreviousantitrustreviewofthelicensee(s);(2)[be]reasonablyattributableto.thelicensee(s};and(3)haveantitrustimplicationsthatwouldlikelywarrant.someCommissionremedy."[Xd.at824.]Thosecriteriaaresatisfiedhere.A.TheXnterveninChanesinFP&L'sAcitivitiesTheJusticeDepartment'antitrustreviewofFP&L'sconstructionlice~seapplicationwascompletedonNovember14,1973,oversixyearsbeforeFP&LenteredintotheproposedSettlementAgreement.ThatAgreement,andespeciallyitsProposedXicenseConditions,willsignificantlymodifyFP&L'sfutureactivities.ThoseconditionsnotonlyaffecttheSt.LuciePlant,UnitNo.2;theyhaveabroadimpactuponFP&L'sentireoperation,asisevidencedbythetransmissionconditions9yatissuehere.-9/Implementationofthetwenty-ninepagesofproposedconditionsisobviouslyintendedtosubstantiallyalterFP&L'sactivities.TheconditionseithercontrolorimpactuponnumerousFP&Lpoliciesandpracticesastointerconnection,reservecoor-dinationandemergencypower,maintenancepower,interruptionandcurtailment,poolingandthesaleofwholesalepower.

12Sincethelicensingprocessbeganin1973,FP&Lhas'been-foundinseriousviolationoftheantitrustlaws,andithasbeen,chargedwithabroadrangeofantitrusttransgressionsbyaGovernmentagency(FERC)andbyagroupofprivateplaintiffs.Asnotedsunra,p.4,theFifthCircuitin'ainesvilleUtilitiesDet.heldthatFP&LhadunlawfullyconspiredtolessencompetitionbyagreeingwithFloridaPowerCompanytoallocateterritories.Pendingchargesagainstthe-FP&L-includethefollowing:(1)FP&Lhasfa'edtofileatariffforthetransmissionofwholesaleelectricpower;(2)FP&Lhasrefused.totransmitelectricpower,orhasdonesoonlyuponuneconomicalterms;(3)FP&Lhasrefusedtosellwholesaleelectricpowertomunicipalutilities,orhasdonesoonlyuponuneconomicalterms;(4)FP&Lhasrefusedtosellmaintenance,supplementalorbackuppowertomunicipalutilities,orhasdonesoonlyonuneconomicalterms;and(5)Fp&Lhascreatedartificialentrybarriersintoretailmarketsbyinsistinguponthirty-yearfranchiseterms.SeeCityofGainesvillev.FloridaPower&Light,Co.,No.79-5101-Civ.(S.D.Fla.,filedOct.31,1979);FloridaPower&Liht,Co.,Nos.ER78-19andER78-81,OpinionNo.57(FERC,Aug.3I1979)ThesefindingsandchargesevidenceanongoingeffortbyFP&Ltoeliminatecompetitioninthesaleofelectric'tyinFlorida.ThetransmissionprovisionsoftheSettlementAgreementfittha"

13anticompetitivepattern.Theprov'oquotedsuora,p..s,maywellpermitFp&Ltocontinuethefirstfourpractices.describedintheprecedingparagraph.TheSectionXconditionsalsocreateananticompetitivediscriminationagainstqualifyingPURPA.facilities.Beyondthis,theyexcessivelylimitFP&L'sobligationtoprovidethetransmissionservicesthatare.anessentialfirststepinintroducingcompetitioninto.FP&L'sdomain,theSouthandEastFloridamarketingareaitnowdominatesat.alleconomiclevelsbecauseofitsmonopolypoweroverthetransmissiongrid.ZnSouthTexas,theCommissionrecognizedthatthe"antitrustimplicationsofa'significantchange'ayindeedarisefromitsrelationshiptounchangedfeaturesoftheproposal."5NRCat1322.Here,Fp&L's1973monopol'sticcontrolovertransmissionservicesremainsunchanged.Thatcontrol,theJusticeDepartmentthenfound,empoweredFP&LtodenyothersystemsthenecessaryaccesstocompeteinFP&L'smarket.TheJusticeDepartmentalsofoundthatFP&Lhadenhanceditsmonopolypositionbyinhibitingthecompetitiveopportunitiesofsmallersystemsandthat"operationofSt.LucieNo.2...'couldcreateormaintainasituationinconsistentwiththeantitrustlawsifaccesstonucleargenerationweredeniedthosesmallersystems'(pp.6-7).AlthoughRRDdidnotexistwhenthoseconclusionswerereached,RRDcouldnowbecomepartofacompetitivesystem.indeed,seekingtobroadenitspotentialcustomerbase,RRDhasrequestedaccesstoFP&L'stransmissiongridforthepurposeofexploring"competitiveopportunitiesforsalestootherelectric utilityentities"(App.B).FP&L'scontinued:.,power-undertheSettlementAgreementtodenyRRDandotherqualified-facilitiesthatcriticalaccess"maintain[sjasituation'inconsistentwiththeantitrustlaws."B.TheChanedActivitiesareAttributabletoFP&L'sConductMaintenanceoftheanticompetitivesituationdescribedaboveis"reasonablyattributabletothelicensee."ThesecondcriterionofSummerStationisthereforesatisfied,forthisisnotasituationwhere"thecompetitivepicture[hasjbeenalteredinwaysforwhichtheapplicant(can]notreasonablybeheldanswerable."Zd.at825.TheSection105aproceedingwhichculminatedintheSettlementAgreementisdirectlyattributabletoFP&L'sadjudicatedviolationsoftheantitrustlawsintheGainesvilleUtilities~Det.case.=P&LdraftedmanyandnegotiatedallofthetermsofthatSettlementAgreement,includingSectionX,andhasmovedtheLicensingBoardtoapproveandauthorizetheirimplementation.FacedwithJusticeDepartmentinsistenceuponincreasedaccesstoitstransmissiongrid,FP&Laccededinawaythatdimin'shesthecompetitivethreatofgenerationbyqualifyingPURPAfacilitiesandotherpotentialcompetitors.Xnsum,FP&Lwasanactiveparticipantinbringingaboutchangesinitsactivit'esastheyexistedwhentheconstructionpermitwasgranted.Thosechangescreateandmaintainasituationinconsistentwiththeantitrustlaws,asituationwhichshouldbe 15scru"-'nizedbytheComm's'cndssrsngtheoperatinglicense10/proceeding.-C.TheSpecificAnticompetitiveImpactthatFP&L'sChangedActivitiesisLikelytohaveuponQualifiedSmallPowerProducersTheremainingSummerStationciterionisthatthe.changedcircumstancesportendanticompetitiveconsequencesthatwarrantNRCremedialaction.11NRCat,824.Ifso,anantitrustreviewshouldbeundertakenunlessitpromis'estoachieveonlydeminimisresults.Id.at835.Furthermore,itisnot'--Lnecessarythataspecificantitruststatutebetransgressedbythechangedcircumstances.Addressingthatpreciseissue,theCommissionhasneldthat-"conditionswhichrun'ountertothe~oliciesunderlying[theantitrustlaws],evenwherenoactualviolationofstatutewasmadeout,~ouldwarrantremediallicenseconditions.'"Id.at822,quotingInthematterofConsumersPowerCo.,6NRC892,908(1977)(emphasisinoriginal).10/ThisSettlementAgreementisoneofgeneralapplication;itaffectstherightsofpersonslikeRRDwhohadnoopportunitytoparticipateinitsnegotiation.Thepetitionaccordinglydoesnotraiseanyquestionofwhetherchangedactivitiesinimple-mentationofaSettlementAgreementwhichappliesonlytointervenorsandtheapplicantcouldconstitutea"significantchange"'ithinthemeaningofSection105c.

L6.-I(l)FP&L'snewactiviti~essanctioned-bySectionXofthe:"SettlementAgreementarelikelytohaveseveral,-.presentlyidentifiable,anticompetitiveconsequences.First,thetrans-missionprovisoswillimpedeacentralpurposeofPURPA,.tofosterthecreationandgrowthofsmallpowerproducerswMintheagreegate,couldbecomeaseriouscompetitiveforce.intheelectricpowerfield.Second,thecomplexandunnecessaryconditionsonFP&L'stransmissionobligationswilldiminish:thecompetitiveactivitythatwouldoccurifFP&Lhadanunqualifieddutytoprovidetransmissionservices-uponrequest.Third,theAgreementunfairlydiscriminatesagainstqualifyingPURPAfacilities,makingitevenmoredifficultforthemtocompete.Thesepredictableanticompetitiveconsequencesarenotaccidental.TheyareadeliberatelyplannedresultofFP&L'snegativeantitrustpolicy.Forexample,weareinpossessionofFP&L'spolicy"guidelines"whichdescribetheutility'sobjectiveto"fd]eterthecompetitivethreatofmunicipalgeneration"(App.D).Thatpolicyhasbeenalreadysuccessful;NRCshouldnotsanctionitscontinuation.(2)TherightsofsmallpowerproducersunderPURPAexistindependentlyoftheirantitrustrights.Yet,theserightscomplementeachotherinawaythatisrelevanthere.PURPAisaconversationmeasuredesignedtoencouragetherecaptureanduseofenergythathaslongbeenproduced(andwasted)asanindustrialbyproduct.PURPAisdoomedtofailure, howeverunlessqualifyingfacilities,likeRRD,areable-.to.becomeecnomicallyviablebycompetingsuccessfully.againsttheentrenchedmonopolistsintheelectricpowerfield,likeFP&L..-withoutassuredaccesstomonopoly-ownedtransmissiongrids,thispossibilityofcompetitionwillremainjustthat>>-.an.unrealizedpossibility.TheNRCnowhasanunprecedentedopportunitytouseitsantitrustmandatetofostercompetitionbetweenFp&LandqualifedpURpAfacilities.-XtshoulddosobysimplyinsistingthatFP&Lprovidetransmissionservicestosmallpowerproducersuponrequest.Theprocompetitiveeffectofthatactionwouldbeenormous.Alone,neitherPURPAnortheCommissionisempoweredtocrea+etheessentialcompetitiveatmosphere;together,theycaneasilydoso.PURPAguaranteesamarketforqualifyingfacilitiesl1/sothattheirconservationeffortsmaybecommerciallyworthwhile.ThetransmissionprovisionsoftheSettlementAgreementpurporttoenablesmallpowerproducerstocompetewithFP&L(andwitheachother)~FP&L,ofcourse,wouldratherbuyelectricpowerfromqualifiedPURPAfacilitiesthancompetewiththosefacilitiesforsalestoFP&L'sothercustomers.ThatispreciselywhyFP&Lhasapolicyofdeterringcompetitionfrommunicipalgenerating'ctingpursuanttotheCongressionalmandate,FERChaspromulgatedrulesthatrequiree3.ectricutilitiestopurchaseelectricityfromqualifyingcogeneratorsandsmallpowerproducersatavoided(marginal)costs,andtose3.1electricitytoqualifyingfacilitiesattheutilities'rdinaryretailprices.Theutilitiesalsoarerequiredtosupplybackuppower,supplementarypower,maintenancepowerandinterruptiblepower,uponrequestbyanyqualifyingfaci3.ity.18CFR5292.305(b).

plants(App.D).Asnowwritten,SectionXislikelytoassistFP&Linitsplantonegatethiscompetitive6ireat,forthe'ollowingreasons:(a)OneofthemostdangerousprovisionsofSectionXistheambiguoussentenceattheendofsubpaiagraph(b):"[n]othinginthislicenseshallbeconstruedtorequireCompanytowheelpowerandenergytoorfromaretailcustomer."Theterm"retailcustomer"isnotdefined,butPURPAaffordssmallpowerproducerstherighttobuyelectricityatretailfromFP&L,andRRDexpectstodoso.Likewise,amunicipalutilitywhichlacksgeneratingcapacitywouldhavetoconsumesomeofthepoweritpurchases;ittoowouldbebotharetailandwhole-salecustomerofFP&L.Werethisrestrictionappliedtosuchfacilities,itwouldvirtuallyeliminateFP&L'stransmissionobligation.Whatismore,therestrictionappl'eswheneithertherequestingfacilityorthepurchaserisa"retailcustomer"ofFP&L.Therestrictiontherebylimitstheacilitiesbetweenwhichtransmissioncouldberequired,esultinginadiminishedcustomerbaseforsmallpowerproducers.Therestriction,insum,isdoublyanticompetitive.ZtcouldbeemployedbyFP&Lasanexcusetodenysmallpo~erproducersaccesstoitstransmissiongridand,whenaccessisgranted,todeprivethemofcustomersforthetransmittedpowe

19(b)SectionX(a)(5)oftheSettlementAgreementprovides..thatPP&Lmusttransmitelectricpowerforqualifying.PURPAfacilitiesonlyifthecustomeragreestosellbackupand~~ttmaintenancepowertotheface.lxtyduringthetameandto.the,extentofitspurchases"fromthefacility.PURPA,ontheotherhand,requiresPP&Ltoprovidebackupandmaintenancepowertoaqualifiedfacilitywhorequestsit.16U.S.C.-5824a-3.Undersubsection(a)(5),qualifyingfacilitiesarevulnerabletothethreatthattheiruseofFP&L'stransmissiongridwouldwaivetheirPURPArighttomaintenanceandbackuppowerfromPP&L-apointwhichcouldmakeitimpossibleforthemtoutilizethetranmissionrightsgrantedbytheSettlementAgreement.Nosimilarrequirementisimposedinconnectionw'hothertransmissiontransactionsunderSectionX;theSettlemntAgreementthereforediscriminatesagainstqualifyingfacilities.Totheextentthattransmissionisimportanttocompet'ionandtheJusticeDepartmenthascorrectlydeterminedthatitiscritical--thisdiscriminationwillhaveaseriousanti-competitiveeffectonqualifiedfacilities.Theywillhavetoovercomeunnecessaryobstaclestothesaleoftheirpower;asaresult,theywillfaceagreaterriskoffailure.Thisresultisinconsistentwiththeantitrustlaws,whichfostersimilartreatmentofcompetitors,andwithPURPA,whichencouragesthedevelopmentofsmallpowerproducers.Qualifiedfacilities,insum,shouldnotbeforcedintoachoicebetween 20thebenefitsoftheSettlementAgreementandthebenefitsofPURPA-intothecompetitivelydifficultposition.,thatFP&Lwouldhavethemassume.(c)TheSectionXtransmissionconditionsguotedsuora,p.8,grantconsiderablelatitudeforanticompetitiveconduct,byFP&L.~Forexample,FP&Lcould.discouragesmallpowerproducersfromusingitstransmissiongridbyraisingtechnicalproblems,evenonesthatmaybeeasilysurmountableorunreal.ThetimeandexpenseofchallengingFP&Lmaymakeituneconomicalforasmallproducertoenforceitstransmissionrights.Inthisfashion,amongothers,seeminglyinnocentbehaviorin"discussing"transmissionproposalsmaywelldetercompetitionfromsmallpowerproducers.Similarconducthaslongbeenusedbymonopolists12/toentrenchtheirposition,-andFP&Lundoubtedlyis,awareofitspotential.TheCommissionshouldnotopenthisavenuetoFP&L.D.TheCommission'sPowertoRemedtheAnticomnetitiveEectsofFp&L'sChanedActivitiesWehavedemonstratedabovethatthenetoutcomeofSectionX'srestrictiveandambiguousconditionsisthatFP&LhasmaintainedtheunfetteredpowertoabuseitsmonopolycontrolE~.,UnitedStatesv.AluminumCo.ofNorthAmerica,148F.6~Inc.v.AmericalTel.&Tel.Co.,61F.2d372thCir.HYO)(reguatedindustryrefusaltodeal).

21-overthetransmissiongridintoitsmarkets;=Anunconditional:;:.transmissiondutyistheonlyviableremedy;-'-the-NRChaspowertoorderthatremedyattheoperatinglicense-stage.ofthis-proceeding.Pirst,theCommission'spowertoordertransmissionisalreadyreflectedintheprovisionsofSectionX..Second,'heSettlementAgreementitselfauthorizesNRC=toattach"differentoradditionalconditions"topp&L'soperatinglicense.-pinally,inUnitedStatesv.OtterTailPowerCo.,410U.S.366(1973),theSupremeCourtheldthattheantitrustlawssanction"wheeling"ordersevenwherethereisnospecificstatutoryauthorizationforthatremedy.NRChasundeniablepowertograntthereliefreauestedbyPetitioners.See,tothesameeffect,FERCOpinionNo.57,~susa,atpp.'-2.NRCshouldexerciseitsremedialpoweratthisstageofthelicensingproceedingtoprotect.petitioners'ntereststhatwillbeadverselyaffectedbytheSettlementAgreement.TodootherwisewoulddeprivePetitionersofafairopportunitytobeheard,sincethatAgreement,toourknowledge,wasnevernoticedorpublishedinthePederalRegister.

CONCLUSIONThepetitionforleavetointerveneandthepetitioners'equestforanantitrusthearingshouldbegranted.Respectfullysubmitted,GeorgeR.KucikMareGaryEenE.SwarARENT~FOXpKINTNER/PLOTKIH183.SHStreet,N.W.Washington,D.C.20006(202)857-6000CounselforPetitionersApril7,1981 LISTOFAPPENDICESDescriptionLettertoRobertTalionofFPGLfromGeorgeE.BoyhanofRRD,March13,1981.LettertoL.ChristianHauck,VicePresident,LegalAffairs,FPSL,fromDavidBardin,CounselforPetitioners,April3,1981.TranscriptoftestimonyofReubinAskewbeforeFloridaPublicServiceCommission.FP&L"GuidelinesForPowerGenerationFromi4lunicipalSolidWasteOperations,"undated.

'PPENDZXA GEB-81-58March13,1981RESOURCESRECOVERY(OADECOUNTY)lNC.Mr.RobertTalionExecutiveVicePresidentFloridaPower&LiqhtCompanyP.O.Box529100Miami,Florida,33152RE:NoticeofQualific'ationofSmallPowerProductionFacilitUnderSection210ofPURPA

DearMr.Talion:

IattachaNoticeofQualification,whichwasfiledtodaywiththeFederal.EnergyRegulatoryCommission,inaccor-dancewith18C.F.R.Sect'on292.207(a).Byserviceofthisnoticeuponyou,ResourcesRecovery(DadeCounty),Xnc.,notifiesyouthatwewillbeginsalesofelectricenergytoFloridaPower&Lightonoraferninetvdaysfromthedatehereof.Yoursvtruly,GeryeZ.BoyhanExecutiveV'cePresident/mdpEnclosurecc:Secretary,FederalEnergyRegulat'oryCommission=.O.BOX524056"..:At.ll.FLORIOA33152=.-:ONE:(305)592-2200