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
References
NUDOCS 8104090684
Download: ML17266A430 (32)

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UNITEDSTATESOFAMERICANUCLEARREGULATORY COMMISSION ZntheMatterofFLORIDAPOWER&LIGHTCOMPANY(St.LuciePlant,UnitNo.2)DocketNo.50-389BRIEFOFRESOURCES RECOVERY(DADECOUNTY),INC.ANDPARSONS&WHZTTEMORE gINCINSUPPORTOFTHEIRPETITIONFORLEAVETOINTERVENE ANDREQUESTFORANANTITRUST HEARINGOnMarch9,1981,theNuclearRegulatory Commission published noticethatFloridaPower&LightCompany(FP&L)hadappliedtopossess,useandoperateSt.LuciePlant,UnitNo.2,anuclearreactorlocatedonHutchinson Island,Florida.46Fed.Reg.15831(1981).Thenoticeallowsaninterested partytopetitionforleavetointervene andtorequestahearingonorbeforeApril7,1981.Pursuanttothatnotice,Resources Recovery(DadeCounty),Inc.(RRD)anditsparent,Parsons&Whittemore, Inc.(P&W),havepetitioned tointervene andhaverequested ahearingtodetermine ifcertainspecified activities undertheoperating licensesoughtbyFP&L"wouldcreateormaintainasituation inconsistent withtheantitrust laws."42U.S.C.52135(c)(5)

(1976ed.).-Section105c(2)oftheAtomicEnergyAct,as1/amended,42U.S.C.52135(c)(2),requiresanantitrust hearingatthisstageoftheproceeding because"significant changesinthelicensee's activities orproposedactivities haveoccurredsubsequent tothepreviousreviewbytheAttorneyGeneralandtheCommission" oftheanticompetitive impactofFPGL'sproject.Thosechangesandtheirprobableanti-competitive consequences aredescribed below.I.BACKGROUND A.PriorProceedin sFPGL'sapplication foralicensetooperateSt.LuciePlant,UnitNo.2,marks,thestartofthesecondphaseofNRC'slicensing process;theproceeding beganin1973whenFPGLsough"aconstruction license.Duringtheinitialphase,FPGLsubmitted theantitrust portionsofitsapplication totheAtomicEnergyCommission.

TheCommission, inturn,transmitted theapplication totheAttorneyGeneralforanantitrust rev.'ewinaccordwithSection105c(l)oftheAtomicEnergyAct,asamended,42U.S.C.$2135(c)(1).1/Thepetitionadvancestwolegalinterests thatsupporttheallowance ofintervention:

petitioners'ightsunderPURPA,thePublicUtilities Regulatory PoliciesActof1978,andtheirantitrust rights.Theseinterests areseparatebutrelated,astheensuingdiscussion inthisbriefdemonstrates.

Thebrief,howeve,isfiledonlyassupportfortheantitrust groundofthepetition.

ThePURPAgroundisfullyexplained inthepetitionitself,anditisanindependent basisforallowingintervention withoutthenecessity ofafindingthatFPGL'scircumstances havechanged.

Responding onNovember14,1973,theheadoftheAntitrust Divisionexpressed deepconcernovertheanti-competitive potential ofFp&L'sownership ofSt.LuciePlant,UnitNo.2.Ofparticular relevance hereistheJusticeDepartment's analysisofFP&L'smonopolypoweroverthetransmission ofelectricity throughout southernandeasternFlorida,whereitowns90%ofthehighvoltagelines(p.1).TheDepartment concluded thatFP&L'smonopolyraisedsignificant antitrust questions:

Ourantitrust reviewledustothefollowing conclusions:

(1)Applicant isthedominant.electric utilityinFloridaandbecauseofitsownershioftrans-mission,astheowertorantorenotersstemsznx,tsareaeaccesstocoorenation-antusenucearpower-neededtocompeteinbulkpowersupplyandretailaistribution markets;(2)thereissomeindication Applicant's dominance mayhavebeenenhancedthroughconductinhibiting thecompetitive opportunities ofthesmallersystemsinitsarea;and(3)construction andoperation ofSt.LucieNo.2,andthesaleofpowertherefrom tomeetApplicant

'loadgrowthandcompetewiththesmallersystemsinitsareacouldcreateormain-tainasituation inconsistent wzteantitrust awsxaccesstonuceareneratxon wereensetosesmaer~sstems.pp.-,empasasaeDespitethesemisgivings, theJusticeDepartment opinedthatanantitrust hearingwouldbeunnecessary ifFP&Lwouldagreetoshareownership ofthefacility.

TheCommission staffadoptedtheDepartment's recommendation andinsistedthatFP&Lacceptspecified

conditions intheconstruction license.Themajorcondition wasthatFP&Lofferanopportunity topurchase-a..."reasonable ownership share"ofSt.LuciePlant,UnitNo-;R,.-tosevennamedelectriccooperatives andtwonamedmunicipalities.-

FP&L-2/promptlyaccepted, "forthepurposeofavoidinganantitrust hearing."-

Later,inApril1977,aninitial-decision orderedthattheconstruction permitissue,5NRC1038,(1977),andthatdecisionwasaffirmedbytheAppealBoard,6NRC541(1977).Afterthepermitissued,theFifthCircuitdecidedGainesville Utilities Det.v.FloridaPower&LihtCo.,573F.2d292,cert.denied,439U.S.966(1978),holdingthatFP&Lhadviolatedtheantitrust lawsbyconspiring withanotherprivatepowercompanytodividetheFloridamarketforwholesale power.ThatdecisionpromptedtheDepartment ofJusticetorequestthatNRCconductanantitrust hearingunderSection105aoftheAtomicEnergyAct,42U.S.C.52135(a).

Thereafter, onSeptember 12,1980,theDepartment ofJustice,theNRCStaffandFP&LenteredintoaSettlement Agreement; FP&Lagreedtoacceptcertain"Proposed LicenseConditions" inexchangefortheJusticeDepartment's commitment toabandonitsSection105arequest.TheAgreement requested theLicensing Board,tomaketheproposedconditions effective 2/LetterfromJohnF.O'eary,DirectorofLicensing, AtomicEnergyCommission, toBenH.Fuqua,SeniorVicePresident, FP&L(Feb.25,1974).3/LetterfromBenH.FuquatoJohnF.O'eary(Feb.26,1974).

immediately, but"withoutprejudice totheBoard'sauthority toimposedifferent oradditional conditions afterahearing"(Stipulation 94).TheAgreement ispresently pendingbeforetheBoardonajointmotionforapprovalofthesettlement.

ThesectionoftheAgreement atissuehereisSection~-governsFP&L'sobligation toprovidetransmission servicesthecentralproblemidentified bytheAntitrust Divisioninits1973lettertotheNRC.B.ThePetitioners RRDisawhollyownedsubsidiary ofP&W;aNewYorkCorporation engagedinavarietyofindustrial activities intheUnitedStatesandabroad.RRD,aDelawarecorporation, isprimarily engagedintheconstruction andoperation ofasolidwasteprocessing facilityinDadeCounty,Florida.lnconjunction withthatfacility, RRDownsandistestoperating anelectricgenerator whicnproduceselectricity fromsteamraisedduringtheprocessing ofsol'dwastes.OnMarch13,1981,RRDnotifiedtheFederalEnergyRegulatory Commission thatitisaqualified smallpower4/producerwithintheambitofPURPA(App.A').4/Section210ofPURPAisdesignedtoencourage co-generation andsmallpowerproduction ofelectrical energy.Towardthatend,PURPAgrantstoqualified facilities therighttoselltheirelectrical outputtoanelectrical utility,tointerconnect withautility,andtobuyatretailfromtheutilityalltheelectricpowerneededbythefacility.

See,~e...16U.S.C.5796,andtheimplementing FERCregulations, 18C.F.R.Part292(45Fed.Reg.,Mar.20,1980).

RRDsnotification ofitsPURPAau'alification wasserveduponFP&LonMarch13,1901,alongwithastatement thatRRD"willbeginsalesofelectricenergytoFloridaPower&Lightonorafterninetydaysfromthedatehereof"(App~A)~Threeweekslate=,onApril3,RRDadvisedFP&Lthat-"Asanalternative totheexclusive saleofelectricenergytoFP&L,RRDwishestoexplorecompet'tive opportunities forsalestootherelectricutilityentities."

[App.BJThatletterasksFP&Ltoconfirmthatitwill"transmit elecricityinbehalfofRRDtopotential customers otherthanFP&L."As-authority forrequiring FP&Ltotransmitelectricity onitsbehalf,RRDisrelyingupontheantitrust lawsandtheproposed5/NRCSettlement Agreement described above.-FP&LhasbeenaskedbyRRDtorespondbyApril17toitsrequestforaccesstoFP&L'stransmission lines.Anunconditional affirmative answerfromFP&Lwouldmakeitunnecessary topursuethepetitionforleavetointervene atthistime.Toprotectthemselves againsttheeventuality ofanunwarranted refusal,Petitioners haveassertedtheirlegalrightsinthisproceeding.

5/AsformerFloridaGovernorBeubinAskewrecentlytestif'ed (onbehalfofMetropolitan DadeCounty)beforetheFloridaPublicServiceCommission "adoption ofPURPAisintendedtobeneitthepublicbyencouraging development ofsmallpowerandcogeneration facilities andtherebypromotecompetition intheenergyproduction field."[Transcript ofTestimony, p.133-1Thetestimony ofGovernorAskewisreproduced asAppendixC,tothisfiling.

C.TheProposedAnticomaetitive Transmission

.Activities CaenePetitioners SectionXstatesthatFP&Lmusttransmitelectrical power"(5)fromanyqualifying cogeneration facilityorsmallpowerproduction facility(asdefinedbytheFederalEnergyRegulatory Commission in18CFR292,SubpartB)withwhichCompanyisinterconnected toaneighboring entityorneighboring distribution system...."Thatstraightforward-sounding obligation ismodifiedbytheprovisothat:"Nothinginthislicenseshallbeconstrued torequireCompanytowheelpowerandenergytoorfromaretailcustomer."

[SectionX(b).]SincePURPAexpressly requiresautilitytosellretailpowertoaqualified

facility,

-thequotedlanguagecouldbeconstrued byFP&Ltoundercutitsobligation totransmitpoweronbehalfofRRDoranyqualified facilitywhopurchases retailpowerfromFP&L.Znaddition, underSectionX(a)(5)aqualified facilitymustarrangefor"backuppower"and"maintenance power"fromtheneighboring entityorneighboring distribution systemtowhichtransmission serviceisrequested.

FP&L'stransmission obligation couldthusbevitiatedwhenevertheprospective purchaser wasunwilling orunabletoprovidebackupormaintenance powerfor6/A"utilitymustpurchasetheentireoutputofacogenerator orsmallpowerproducerattheutility's ownavoidedcostsand,atthesametime,mustsupplythecogenerator orsmallpowerproduceritsentireelectricrequirement undernon-discriminatory rateschedules.

Enshort,theutilitymustbuyatthemarginandsellatretail."IdahoPub.Serv.Comm'nOrderNo.15746,pp.6-7(Aug.8,1980),citingPURPA5210.

RRD.Thatcondition, whichdoesnotapplytoFP&L'stransmission

=.obligations onbehalfofothers,unreasonably discriminates againstRRDandallqualified PURPAfacilities.

FP&L'stransmission obligations arefurtherconditioned bythefollowing provisos:

"Companyshallprovidetransmission serviceunderthisparagraph onlyif(l);-Company's andotherconnected transmission linesformacontinuous electricpathbetweenthesupplying andtherecipient systems;(2)permission toutilizeothersystems'rans-missionlinescanbe'btained bytheproponent ofthearrangement; (3)theservicescanreasonably beaccommodated fromatechnical standpoint withoutsignificantlyjeopardizing.

Company's reliability oritsuseoftrans-missionfacilities; (4)reasonable advancerequestisreceivedfromtheneighboring entityorneighboring distribution systemseekingsuch,servicestotheextentthatsuchnoticeisrequiredforoperating orplanningpurposes, providedthatCompanydistributes awrittentimetable settingforthreasonable periodoftimewithinwhichsuchadvancenoticemustbereceivedfortrans-missionservicesoverexistingCompanyfacilities; and(5)areasonable magnitude, timeanddurationforthetransactions isspecified priortothecommencement ofthetransmission."

[SectionX(a)-]TheseprovisosafordFP&Lanopportunity todefeattheverytransmission rightheSettlement Agreement purportsto7/create.-7/Asanillustration, FP&Lcouldnegotiate formonthsandyearsover"compliance" withSectionX'scomplexconditions, therebyusingitsmonopolypowertopreventcompetition, butdoingsowithoutdirectlyrefusinganyrequesttotransmitelectricity.

TheSectionXtransmission provisions:

areambiguous wheretheyshouldbeplain,andaualified wherethey.should.beunconditioned.

Thus,unlessPP&Ldecides:tointerpret:.

SectionXinaprocompetitive spirit'aneventthat:-would-be awelcome,butunexpected, breakbyFP&Lwithitspast.-that..8/sectionismorelikelytoretardcompetition thantopromoteit.Pctitioncr" contend,insum,thattheseflawedprovisions fallfaxshortofcurbingthepotential forantitrust abuseinherentinFP&L'sownership of90%ofthetransmission gridinitsoperating area.Onthecontrary, bycreatingthefalseilluionthattheyhaveloosenedPP&L'sstrangehold-overthedevelopment ofnewcompetitors,thetransmissionconditions maywellserveonlytomaintainandenhancePP&L'smonopolypower.Theremainder ofthisbriefestablishes thattheSettlement Agreement andPP&L'sproposedactionsinimplementing itare"significant changesinthelicensee's

...proposedactivities" whichmay"createormaintainasituation inconsistent withtheantitrust laws."42U.S.C.523.35(c).

8/Znthisregard,theFederalEnergyRegulatory Commission hasobserved:

"theevidenceinthisrecordof[FP&L's]pastconductcastsashadowoverFP&L'sclaimedneedtorestrictseviceand,there-fore,isofprobative valueindetermining whethertheCompanyhassatisfactorily carrieditsburdenofjustification rortheproposedservicelimitations."

FERCOpinionHo.57,August3,l979,at3.Seealsopp.11-12,infra.

10IZ.THELZCENSECONDZTZONS ZNTHEPENDZNGSETTLEMENT AGREEMENT ARE"SZGNZFXCANT CHANGES"ZNPP&L"SPROPOSEDACTZVZTZES TheAtomicEnergyActof1954requirestheNRCtoreviewtheantitrust aspectsofaproposedprojectatanyappropriate..

stageofthetwo-steplicensing process.Zn.theMatter.ofHoustonLihtinaPowerCo.(SouthTexasPro'ect,UnitNos.Land2),5NRC1303(1977).ThefocusoftheActisnotuponpreciseproofofantitrust violations inthetechnical sense.Rather,itisconcerned withwhether"therem~aheadverseantitrust aspects"totheproject(42U.S.C.52L35(c)(5),emphasisadded).TgeAct,inshort,isaCongressional directive againstGovernmental involvement increatingormaintaining a"situation inconsistent withtheantitrust laws"(42U.S.C.52L35(c).(5).Anantitrust reviewmaybehadattheoperating licensestagewhen"significant changesinthelicensee's activities orproposedactivities haveoccurredsubsequent tothepreviousreviewbytheAttorneyGeneralandtheCommission."

42U.S.C.52L35(c)(2).Thissecondreviewdealswithcircumstances thatchangedafterissuanceofaconstruction permitandbeforetheapplication foranoperating license."Thisisnottosaythat'significant changes'n alicensee's proposalcanorshouldbeviewedinisoLation fromunchanged featuresoftheproposal."

SouthTexas,~sura,5NRCat1322.Onceachangedcircumstance isestablished, itsantitrust significance mustbeevaluated inthecontextoftheentireproposalbeforetheCommission.

Zd.

0-11-The"significant changes"determination thustriggersasecondantitrust reviewand,toalargeextent,definesitsscope.Xtalsoisaprerequisite toanantitrust hearingattheoperating licensestage.IntheNatterofSouthCarolinaElectric&GasCo.(VirilC.SummerNuclearStation,UnitNo.1),11NRC817,824(1980).XnSummerStation,theCommission definedthreecriteriafordetermining whether"signiicantchanges"haveoccurred:

i.e.,theactionorproposedactionmust:"'(1)haveoccurredsincethepreviousantitrust reviewofthelicensee(s);

(2)[be]reasonably attributable to.thelicensee(s};

and(3)haveantitrust implications thatwouldlikelywarrant.someCommission remedy."[Xd.at824.]Thosecriteriaaresatisfied here.A.TheXntervenin ChanesinFP&L'sAcitivities TheJusticeDepartment' antitrust reviewofFP&L'sconstruction lice~seapplication wascompleted onNovember14,1973,oversixyearsbeforeFP&LenteredintotheproposedSettlement Agreement.

ThatAgreement, andespecially itsProposedXicenseConditions, willsignificantly modifyFP&L'sfutureactivities.

Thoseconditions notonlyaffecttheSt.LuciePlant,UnitNo.2;theyhaveabroadimpactuponFP&L'sentireoperation, asisevidenced bythetransmission conditions 9yatissuehere.-9/Implementation ofthetwenty-nine pagesofproposedconditions isobviously intendedtosubstantially alterFP&L'sactivities.

Theconditions eithercontrolorimpactuponnumerousFP&Lpoliciesandpractices astointerconnection, reservecoor-dinationandemergency power,maintenance power,interruption andcurtailment, poolingandthesaleofwholesale power.

12Sincethelicensing processbeganin1973,FP&Lhas'been-foundinseriousviolation oftheantitrust laws,andithasbeen,chargedwithabroadrangeofantitrust transgressions byaGovernment agency(FERC)andbyagroupofprivateplaintiffs.

Asnotedsunra,p.4,theFifthCircuitin'ainesville Utilities Det.heldthatFP&Lhadunlawfully conspired tolessencompetition byagreeingwithFloridaPowerCompanytoallocateterritories.

Pendingchargesagainstthe-FP&L-include thefollowing:

(1)FP&Lhasfa'edtofileatariffforthetransmission ofwholesale electricpower;(2)FP&Lhasrefused.totransmitelectricpower,orhasdonesoonlyuponuneconomical terms;(3)FP&Lhasrefusedtosellwholesale electricpowertomunicipal utilities, orhasdonesoonlyuponuneconomical terms;(4)FP&Lhasrefusedtosellmaintenance, supplemental orbackuppowertomunicipal utilities, orhasdonesoonlyonuneconomical terms;and(5)Fp&Lhascreatedartificial entrybarriersintoretailmarketsbyinsisting uponthirty-year franchise terms.SeeCityofGainesville v.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&Ltoeliminate competition inthesaleofelectric'ty inFlorida.Thetransmission provisions oftheSettlement Agreement fittha"

13anticompetitive pattern.Theprov'oquotedsuora,p..s,maywellpermitFp&Ltocontinuethefirstfourpractices.

described inthepreceding paragraph.

TheSectionXconditions alsocreateananticompetitive discrimination againstqualifying PURPA.facilities.

Beyondthis,theyexcessively limitFP&L'sobligation toprovidethetransmission servicesthatare.anessential firststepinintroducing competition into.FP&L's domain,theSouthandEastFloridamarketing areaitnowdominates at.alleconomiclevelsbecauseofitsmonopolypoweroverthetransmission grid.ZnSouthTexas,theCommission recognized thatthe"antitrust implications ofa'significant change'ay indeedarisefromitsrelationship tounchanged featuresoftheproposal."

5NRCat1322.Here,Fp&L's1973monopol'stic controlovertransmission servicesremainsunchanged.

Thatcontrol,theJusticeDepartment thenfound,empowered FP&Ltodenyothersystemsthenecessary accesstocompeteinFP&L'smarket.TheJusticeDepartment alsofoundthatFP&Lhadenhanceditsmonopolypositionbyinhibiting thecompetitive opportunities ofsmallersystemsandthat"operation ofSt.LucieNo.2...'couldcreateormaintainasituation inconsistent withtheantitrust lawsifaccesstonucleargeneration weredeniedthosesmallersystems'(pp.6-7).AlthoughRRDdidnotexistwhenthoseconclusions werereached,RRDcouldnowbecomepartofacompetitive system.indeed,seekingtobroadenitspotential customerbase,RRDhasrequested accesstoFP&L'stransmission gridforthepurposeofexploring "competitive opportunities forsalestootherelectric utilityentities" (App.B).FP&L'scontinued:.,power-under theSettlement Agreement todenyRRDandotherqualified-facilities thatcriticalaccess"maintain

[sjasituation

'inconsistent withtheantitrust laws."B.TheChanedActivities areAttributable toFP&L'sConductMaintenance oftheanticompetitive situation described aboveis"reasonably attributable tothelicensee."

Thesecondcriterion ofSummerStationistherefore satisfied, forthisisnotasituation where"thecompetitive picture[hasjbeenalteredinwaysforwhichtheapplicant (can]notreasonably beheldanswerable."

Zd.at825.TheSection105aproceeding whichculminated intheSettlement Agreement isdirectlyattributable toFP&L'sadjudicated violations oftheantitrust lawsintheGainesville Utilities

~Det.case.=P&Ldraftedmanyandnegotiated allofthetermsofthatSettlement Agreement, including SectionX,andhasmovedtheLicensing Boardtoapproveandauthorize theirimplementation.

FacedwithJusticeDepartment insistence uponincreased accesstoitstransmission grid,FP&Laccededinawaythatdimin'shes thecompetitive threatofgeneration byqualifying PURPAfacilities andotherpotential competitors.

Xnsum,FP&Lwasanactiveparticipant inbringingaboutchangesinitsactivit'es astheyexistedwhentheconstruction permitwasgranted.Thosechangescreateandmaintainasituation inconsistent withtheantitrust laws,asituation whichshouldbe 15scru"-'nized bytheComm's'cn dssrsngtheoperating license10/proceeding.-

C.TheSpecificAnticompetitive ImpactthatFP&L'sChangedActivities isLikelytohaveuponQualified SmallPowerProducers Theremaining SummerStationciterionisthatthe.changedcircumstances portendanticompetitive consequences thatwarrantNRCremedialaction.11NRCat,824.Ifso,anantitrust reviewshouldbeundertaken unlessitpromis'es toachieveonlydeminimisresults.Id.at835.Furthermore, itisnot'--Lnecessary thataspecificantitrust statutebetransgressed bythechangedcircumstances.

Addressing thatpreciseissue,theCommission hasneldthat-"conditionswhichrun'ountertothe~oliciesunderlying

[theantitrust laws],evenwherenoactualviolation ofstatutewasmadeout,~ouldwarrantremediallicenseconditions.'"

Id.at822,quotingInthematterofConsumers PowerCo.,6NRC892,908(1977)(emphasis inoriginal).

10/ThisSettlement Agreement isoneofgeneralapplication; itaffectstherightsofpersons likeRRDwhohadnoopportunity toparticipate initsnegotiation.

Thepetitionaccordingly doesnotraiseanyquestionofwhetherchangedactivities inimple-mentation ofaSettlement Agreement whichappliesonlytointervenors andtheapplicant couldconstitute a"significant change"'ithin themeaningofSection105c.

L6.-I(l)FP&L'snewactiviti~es sanctioned-by SectionXofthe:"Settlement Agreement arelikelytohaveseveral,-.presently identifiable, anticompetitive consequences.

First,thetrans-missionprovisoswillimpedeacentralpurposeofPURPA,.to fosterthecreationandgrowthofsmallpowerproducers wMintheagreegate, couldbecomeaseriouscompetitive force.intheelectricpowerfield.Second,thecomplexandunnecessary conditions onFP&L'stransmission obligations willdiminish:

thecompetitive activitythatwouldoccurifFP&Lhadanunqualified dutytoprovidetransmission services-uponrequest.Third,theAgreement unfairlydiscriminates againstqualifying PURPAfacilities, makingitevenmoredifficult forthemtocompete.Thesepredictable anticompetitive consequences arenotaccidental.

Theyareadeliberately plannedresultofFP&L'snegativeantitrust policy.Forexample,weareinpossession ofFP&L'spolicy"guidelines" whichdescribetheutility's objective to"fd]eterthecompetitive threatofmunicipal generation" (App.D).Thatpolicyhasbeenalreadysuccessful; NRCshouldnotsanctionitscontinuation.

(2)Therightsofsmallpowerproducers underPURPAexistindependently oftheirantitrust rights.Yet,theserightscomplement eachotherinawaythatisrelevanthere.PURPAisaconversation measuredesignedtoencourage therecapture anduseofenergythathaslongbeenproduced(andwasted)asanindustrial byproduct.

PURPAisdoomedtofailure, howeverunlessqualifying facilities, likeRRD,areable-.to.becomeecnomically viablebycompeting successfully.

againsttheentrenched monopolists intheelectricpowerfield,likeFP&L..-withoutassuredaccesstomonopoly-owned transmission grids,thispossibility ofcompetition willremainjustthat>>-.an.unrealized possibility.

TheNRCnowhasanunprecedented opportunity touseitsantitrust mandatetofostercompetition betweenFp&LandqualifedpURpAfacilities.

-Xtshoulddosobysimplyinsisting thatFP&Lprovidetransmission servicestosmallpowerproducers uponrequest.Theprocompetitive effectofthatactionwouldbeenormous.

Alone,neitherPURPAnortheCommission isempowered tocrea+etheessential competitive atmosphere;

together, theycaneasilydoso.PURPAguarantees amarketforqualifying facilities l1/sothattheirconservation effortsmaybecommercially worthwhile.

Thetransmission provisions oftheSettlement Agreement purporttoenablesmallpowerproducers tocompetewithFP&L(andwitheachother)~FP&L,ofcourse,wouldratherbuyelectricpowerfromqualified PURPAfacilities thancompetewiththosefacilities forsalestoFP&L'sothercustomers.

Thatisprecisely whyFP&Lhasapolicyofdeterring competition frommunicipal generating'cting pursuanttotheCongressional mandate,FERChaspromulgated rulesthatrequiree3.ectric utilities topurchaseelectricity fromqualifying cogenerators andsmallpowerproducers atavoided(marginal) costs,andtose3.1electricity toqualifying facilities attheutilities'rdinary retailprices.Theutilities alsoarerequiredtosupplybackuppower,supplementary power,maintenance powerandinterruptible power,uponrequestbyanyqualifying faci3.ity.

18CFR5292.305(b).

plants(App.D).Asnowwritten,SectionXislikelytoassistFP&Linitsplantonegatethiscompetitive 6ireat,forthe'ollowing reasons:(a)Oneofthemostdangerous provisions ofSectionXistheambiguous sentenceattheendofsubpaiagraph (b):"[n]othing inthislicenseshallbeconstrued torequireCompanytowheelpowerandenergytoorfromaretailcustomer."

Theterm"retailcustomer" isnotdefined,butPURPAaffordssmallpowerproducers therighttobuyelectricity atretailfromFP&L,andRRDexpectstodoso.Likewise, amunicipal utilitywhichlacksgenerating capacitywouldhavetoconsumesomeofthepoweritpurchases; ittoowouldbebotharetailandwhole-salecustomerofFP&L.Werethisrestriction appliedtosuchfacilities, itwouldvirtually eliminate FP&L'stransmission obligation.

Whatismore,therestriction appl'eswheneithertherequesting facilityorthepurchaser isa"retailcustomer" ofFP&L.Therestriction therebylimitstheacilities betweenwhichtransmission couldberequired, esultinginadiminished customerbaseforsmallpowerproducers.

Therestriction, insum,isdoublyanticompetitive.

ZtcouldbeemployedbyFP&Lasanexcusetodenysmallpo~erproducers accesstoitstransmission gridand,whenaccessisgranted,todeprivethemofcustomers forthetransmitted powe

19(b)SectionX(a)(5)oftheSettlement Agreement provides..

thatPP&Lmusttransmitelectricpowerforqualifying.

PURPAfacilities onlyifthecustomeragreestosellbackupand~~ttmaintenance powertotheface.lxty duringthetameandto.the,extentofitspurchases" fromthefacility.

PURPA,ontheotherhand,requiresPP&Ltoprovidebackupandmaintenance powertoaqualified facilitywhorequestsit.16U.S.C.-5824a-3.Undersubsection (a)(5),qualifying facilities arevulnerable tothethreatthattheiruseofFP&L'stransmission gridwouldwaivetheirPURPArighttomaintenance andbackuppowerfromPP&L-apointwhichcouldmakeitimpossible forthemtoutilizethetranmissionrightsgrantedbytheSettlement Agreement.

Nosimilarrequirement isimposedinconnection w'hothertransmission transactions underSectionX;theSettlemntAgreement therefore discriminates againstqualifying facilities.

Totheextentthattransmission isimportant tocompet'ion andtheJusticeDepartment hascorrectly determined thatitiscritical--thisdiscrimination willhaveaseriousanti-competitive effectonqualified facilities.

Theywillhavetoovercomeunnecessary obstacles tothesaleoftheirpower;asaresult,theywillfaceagreaterriskoffailure.Thisresultisinconsistent withtheantitrust laws,whichfostersimilartreatment ofcompetitors, andwithPURPA,whichencourages thedevelopment ofsmallpowerproducers.

Qualified facilities, insum,shouldnotbeforcedintoachoicebetween 20thebenefitsoftheSettlement Agreement andthebenefitsofPURPA-intothecompetitively difficult position.,that FP&Lwouldhavethemassume.(c)TheSectionXtransmission conditions guotedsuora,p.8,grantconsiderable latitudeforanticompetitive conduct,byFP&L.~Forexample,FP&Lcould.discourage smallpowerproducers fromusingitstransmission gridbyraisingtechnical

problems, evenonesthatmaybeeasilysurmountable orunreal.Thetimeandexpenseofchallenging FP&Lmaymakeituneconomical forasmallproducertoenforceitstransmission rights.Inthisfashion,amongothers,seemingly innocentbehaviorin"discussing" transmission proposals maywelldetercompetition fromsmallpowerproducers.

Similarconducthaslongbeenusedbymonopolists 12/toentrenchtheirposition,-

andFP&Lundoubtedly is,awareofitspotential.

TheCommission shouldnotopenthisavenuetoFP&L.D.TheCommission's PowertoRemedtheAnticomnetitive EectsofFp&L'sChanedActivities Wehavedemonstrated abovethatthenetoutcomeofSectionX'srestrictive andambiguous conditions isthatFP&Lhasmaintained theunfettered powertoabuseitsmonopolycontrolE~.,UnitedStatesv.AluminumCo.ofNorthAmerica,148F.6~Inc.v.AmericalTel.&Tel.Co.,61F.2d372thCir.HYO)(reguatedindustryrefusaltodeal).

21-overthetransmission gridintoitsmarkets;=

Anunconditional:;:.

transmission dutyistheonlyviableremedy;-'-the-NRChaspowertoorderthatremedyattheoperating license-stage.ofthis-proceeding.

Pirst,theCommission's powertoordertransmission isalreadyreflected intheprovisions ofSectionX..Second,'he Settlement Agreement itselfauthorizes NRC=toattach"different oradditional conditions" topp&L'soperating license.-pinally,inUnitedStatesv.OtterTailPowerCo.,410U.S.366(1973),theSupremeCourtheldthattheantitrust lawssanction"wheeling" ordersevenwherethereisnospecificstatutory authorization forthatremedy.NRChasundeniable powertograntthereliefreauested byPetitioners.

See,tothesameeffect,FERCOpinionNo.57,~susa,atpp.'-2.NRCshouldexerciseitsremedialpoweratthisstageofthelicensing proceeding toprotect.petitioners'nterests thatwillbeadversely affectedbytheSettlement Agreement.

Todootherwise woulddeprivePetitioners ofafairopportunity tobeheard,sincethatAgreement,to ourknowledge, wasnevernoticedorpublished inthePederalRegister.

CONCLUSION Thepetitionforleavetointervene andthepetitioners'equest foranantitrust hearingshouldbegranted.Respectfully submitted, GeorgeR.KucikMareGaryEenE.SwarARENT~FOXpKINTNER/PLOTKIH183.SHStreet,N.W.Washington, D.C.20006(202)857-6000CounselforPetitioners April7,1981 LISTOFAPPENDICES Description LettertoRobertTalionofFPGLfromGeorgeE.BoyhanofRRD,March13,1981.LettertoL.Christian Hauck,VicePresident, LegalAffairs,FPSL,fromDavidBardin,CounselforPetitioners, April3,1981.Transcript oftestimony ofReubinAskewbeforeFloridaPublicServiceCommission.

FP&L"Guidelines ForPowerGeneration Fromi4lunicipal SolidWasteOperations,"

undated.

'PPENDZXA GEB-81-58 March13,1981RESOURCES RECOVERY(OADECOUNTY)lNC.Mr.RobertTalionExecutive VicePresident FloridaPower&LiqhtCompanyP.O.Box529100Miami,Florida,33152RE:NoticeofQualific'ation ofSmallPowerProduction FacilitUnderSection210ofPURPA

DearMr.Talion:

IattachaNoticeofQualification, whichwasfiledtodaywiththeFederal.EnergyRegulatory Commission, inaccor-dancewith18C.F.R.Sect'on292.207(a).

Byserviceofthisnoticeuponyou,Resources Recovery(DadeCounty),Xnc.,notifiesyouthatwewillbeginsalesofelectricenergytoFloridaPower&Lightonoraferninetvdaysfromthedatehereof.Yoursvtruly,GeryeZ.BoyhanExecutive V'cePresident

/mdpEnclosure cc:Secretary, FederalEnergyRegulat'ory Commission

=.O.BOX524056"..:At.ll.

FLORIOA33152=.-:ONE:(305)592-2200