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UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of            )
DUKE POWER COMPANY          )                        ,- [
(Oconee Units 1, 2& 3)            Docket Nos. 50-269A', 50-270A McGuire Units 1 & 2          )                50-267A 50-369A, 50-370A APPLICANT'S REPLY BRIEF ON THE EFF"CT OF DETEBMINATIONS BY THE FEDERAL POWER COMMISSION Duke Power Company (Applicant) submits this brief in response to the arguments of the Department of Justice and intervenors concerning the effect upon the issues in this proceeding of the rulings by the Federal Power Commission in FPC Docket No. E-7557.-1/
Applicant urges the Board to rule out consideration of factual contentions on the price squeeze issue in t'
* n proceeding.      Neither the Justice Department nor intervenors have presented convincing arguments for pursuing the matter here.                      -
THE NATURE OF THE FPC RULING HAS BEEN MISCHARACTERIZED The price squeeze issue involves the effect upon retail competition of the relationship between t
            ~1/ Duke Power Co., Opinion No. 641, FPC Docket No. E-7557,
(              Decemoer 18, 1972 and Opinion No. 641A, February 16, 1973 (Opinion and Order Denying Rehearing).
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Applicant's wholesale rate and its retail rate for industrial service. The central element in the Justice Department's position is the claim that the FPC declined on jurisdictional grounds to consider this question. Because of this jurisdictional ruling, says Justice, " Examiner Kaplan made no findings on whether or not there was a sufficient margin between the two rate levels to permit Applicant's wholesale customers effectively to compete for large industrial power loadd."      [ Emphasis supplied]
(Justice Reply Br., p. 11). Justice further argues that even if the FPC had considered the price squeeze    .
issue, this Board can still do so.      The Board, says Justice, is applying a different statutory standard and is not bound by FPC findings and conclusions which, according to Justice, are erroneous in any event. In support of this view, Justice cites the recent decision by the Supreme Court in Otter Tail Power Co. v. United States, (Slip opinion attached as Appendix A to Justice Reply Brief.)      Justice is wrong both as to what the FPC decided and as to the 1
 
impact which that agency's decision should have in this proceeding.
The FPC decided, quite clearly and unequivo-cally, that there was, in fact, no price squeeze.
The question whether a price squeeze existed was clearly presented to the FPC as a factual issue for determination.
The evidence showed that the rate schedules for indus-trial service were identical with those for wholesale service.~2/The wholesale customers argued that this rate parity precluded them from competing for indus-trial load. Applicant presented responsive testimony disputing this claim. All of this factual testimony was the subject of extensive briefing before the Examiner. Thus, squarely presented with the factual issue as to the effect upon retail competition of Duke's rate structure, the Examiner made a finding of fact on the subject. At pages 26-27 of his decision, the Examiner, having laid out the factual and legal contentions of the parties, addressed himself to the evidence before him. He said 2/  However, it should be noted that revenues per kilowatt hour are lower for the wholesale cus-tomers because the load factor is higher.
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                        "In any event, the evidence indicates that, on an overall basis, the municipalities and cooperatives have been in a position to compete with Duke for retail industrial customers for many years, as demonstrated by the consistently lower average costs per kwh to the wholesale customers, as compared with such average costs to the company's industrial customers. Although it is true that, generally, intervenors do not now serve any substantial industrial customers with loads of at least 5,000 kw, there is no specific showing that any such potential industrial customers have been lost to the intervenors because of the past parity of, or the present differential between, the respective wholesale and industrial rates. 'Moreover, it must be noted that, despite the alleged handicap under which intervenors compete for industrial loads, the record shows that the rate of growth of the wholesale customers during        .
the last decade has been substantially greater than that of Duke, measured by the company's total sales at wholesale as compared with retail."
[ Emphasis supplied]
The Justice Department seeks to brush this clear and  dispositive factual ruling aside, referring to it as " Examiner Kaplan's comments."    (Justice Reply Br., p. 12). This characterization is nothing more than a facile attempt to overcome an insurmountable            :
1 obstacle to the Department's theory. The Examiner had the facts before him. He was asked by the parties to l
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                                -Se decide the question. He did so, rejecting rhe claim of price squeeze.
Moreover, the Examiner made this ruling with
        . full awareness of his obligation to consider the possible anti-ccmpetitive consequences of Duke's rates in passing upon their acceptability under the FPC's statutory standards. At page 17 of his decision, the Examiner quoted from the decision in City of Lafayette v. SEC, 454 F. 2d 941 (D.C. Cir. 1971) cert.
granted sub. nom Gulf States Utilties v. FPC, 406 U.S. 956 (1972), where the court spelled out the obliga-tion of the FPC to consider possible anti-competitive effects.  "Accordingly",'said the Examiner in the next sentence of his opinion, "the contentions of the intervenors will be analyzed in the light of all the evidence presented."
3/ The fact that the FPC disposed of factual claims as to existence of a price squeeze is significant.
Essentially, the price squeeze issue in this proceeding is one of fact, and not of law. The Board is not being asked to take action with regard to Applicant's rates in an effort to eliminate the alleged price squeeze. Instead, the price squeeze argument is relied on as evidence of anti-competitive conduct demonstrating the requisite intent to support a finding of incon-sistency with Section 2 of the Sherman Act. There is simply no need to delay this proceeding by permitting the parties to relitigate this factual issue.
                                                                  + e
 
It was only after he had made the finding that there was, in fact, no price squeeze, that the Examiner noted that the FPC's jurisidiction is limited to wholesale rates and that retail rates are subject to the jurisdiction of the state commissions. Since he had already ruled that no price squeeze existed, these observations by the Examiner were not decisional in nature and must be regarded simply as dicta. None-theless, it is this language from the Examiner's decision on which opposing counsel rely for their claim that the FPC declined jurisdiction to consider the price squeeze argument.
This view cannot be sustained by the language used by the Examiner nor by the structure of his opinion.
The Commission plainly adopted the Examiner's treatment of the antitrust issues.    (FPC Opinion No. 641, p. 11).
Moreover, the Commission later itself reiterated that it had considered antitrust policies in sustaining the Examiner. Duke Power Company, Opinion No. 641-A, FPC Docket No. E-7557, Feb. 16, 1973.
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_7-This Board,then, must consider the price squeeze issue in light of the fact that the FPC, acting in the very heart of its regulatory responsi-bilities -- its power over rates -- has considered and rejected the claim that Applicant's wholesale rate structure, when compared with its retail rates, had adversely affected the competitive abilities of its wholesale customers.
THE FPC RULING IS FULLY APPLICABLE HERE Perhaps recognizing the weakness of'their position on what the FPC decided, both Justice and the intervenors go on to contend, arguendo, that, even if the FPC had considered the price squeeze issue, its ruling should be given no effect by this Board.
(Justice Reply Br. pp. 12-16, Intervenors' Brief,
        .p p . 2-6). They base their position on the claim that the statutory standard in the Atcmic Energy Act differs Le from that of the Federal Power Act. The Board should note that, in making this argument, neither the
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Department nor the intervenors explains why in their view the Board should not accept the FPC ruling on price squeeze as dispositive nor examines the decisional law in the field. They simply make the bald assertion that the statutory standards are different and, therefore, that no effect should be given to the FPC ruling .
Applicant's brief,. filed with the Board on February 15, 1973, spelled out in considerable detail the reasons why the FPC action on the price squeeze issue provides a basis for excluding that issue here.
That brief discussed the doctrines of primary juris-diction, res judicata and collateral estoppel, demonstrating that on any or all of these grounds, the FPC ruling is entitled to dispositive effect. The failure of Justice to address itself to the points made in our earlier brief, despite the fact thAt it was ostensibly filing a reply brief, should not pass with-out notice. We will not repeat the material set out in our earlier brief. We submit that the principles t
 
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l and precedents outlined there fully support our            l l
position that the FPC's ruling should be given effect here.
Nevertheless, Applicant accepts the obvious principle that different agencies are not always pre-cluded from examining the same facts on successive occasions if they are doing so for fundamentally different purposes. It so acknowledged in its Brief filed February 15, pp. 24-25. But that proposition has no applicability to a determination of a factual question -- whether or not there is a price squeeze --
by two agencies both expressly considering the matter from the perspective of the antitrust laws. The leading cases in this area, cited by Applicant in its original brief, are recent and quite informative.
In Ricci v. Chicago Mercantile Exchange, U.S.        , 93 S. Ct. 573 (1973),
the Supreme Court applied primary jurisdiction principles in holding that the Commodity Exchange Commission should be permitted to make an initial 3
 
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determination of " issues of fact and questions about the scope, meaning and significance of exchange membership. rules ...."  (93 S. Ct. at 582) (footnote omitted) (emphasis added). It did so even though the Commodities Exchange Act is not "particularly focused on competitive considerations" (93 S. Ct. at 580,-n. 13) because the agency's expertise and discretionary policy "will be a material aid" in the antitrust
                                  ~
proceeding.  (93 S. Ct. at 582)  Ricci, of course, is a pure primary jurisdiction case not involving immunity from the antitrust laws such as arises under      -
the Shipping or Civil Aeronautics Act.
In Safir v. Gibson, 432 F.2d 137 (2d Cir.
1970), the party resisting the application of res judicata sought to distinguish a statute prohibiting "any rates or charges... which [the FMC] finds to be so unreasonably high or low as to be detrimental to the commerce of the United States" (Shipping Act, 18b(5), 46 U.S.C.- S817 (b) (5) ) from one prohibiting participation in any agreement which is " unjustly l
                                                . . - - --  -    +
 
s discriminatory to any other citizen of the United States (who is an American flag carrier]"    Merchant Marine Act, S810, 46 U.S.C. S1227. Certainly dis-tinctions can be drawn between the two statutes. A rate agreement might be " detrimental" under the Shipping Act, for example, by discouraging the use of American carriers by foreign shippers without being
    " discriminatory" toward any American. Yet, despite plausible differences between the two statutes, Judge Friendly, usually an exceptionally careful elucidator of significant statutory standards, dismissed the      .
argument as "hypertechnical" and held the first (FMC) proceeding controlling.  (432 F.2d at 142).
Similarly, the FTC held that a determina-tion that an association was not a labor organization under the National Labor Relations Act was controlling under the labor exemption to the antitrust laws.
National Assn. of Women and Children's Apcarel Salesmen, Inc., FTC Dkt. No. 8691, CCH Trade Reg. Rep.
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119,538 (1971) (appeal pending) .-
The present case closely resembles the Safir case. Indeed, the Justice Department acknow-ledged at the February 15 hearing that the " duty" of the AEC here is "very similar .    . . but . . .
not identical" to that of the FPC in the rate case (Tr. 484). In making the factual determination that there is no price squeeze, the FPC was proceeding from an antitrust perspective, the same perspective applicable here. It is not necessary to consider possible distinctions between the two antitrust standards that may be pertinent for other purposes.
The threshhold determination whether a situation har      .. iccmpetitive impact condemned by the antitrust laws does ne: vary depending on the forum. Here, the specific question is whether there was a price squeeze. The question is the same whether
      .it is presented to a district court or to- an agency 4/  Pacific Seafarers, Inc. v. Pacific Far East Line, Inc.,  404 F.2d 804 (D.C. Cir. 1968), cert. denied, 393 U.S. 1093, cited by intervenors (Intervenors' Brief, p. 15) is inapplicable here, both because the issue there was explicitly one of legal con-clusion not fact (404 F.2d at 809) and because the question determined was the meaning of the phrase
            " foreign commerce" used in two clearly divergent statutory contexts (defining the jurisdiction of      i the FMC and limiting the substantive reach of          j the Sherman Act) (402 F.2d at 810).                    <
                                                                  )
 
applying a public interest standard,-5/  or to this Board under Section 105c of the Atomic Energy Act. If there is, in fact, no price squeeze, that finding will be reached regardless of the forum.
The Department places its primary reliance upon the Supreme Court's recent decision in the Otter Tail case.  (Justice Reply Br. , p. 14) Specifically, the Department argues that many of the facts relied on by the Court in Otter Tail must also have been considered by the FPC. Hence, argues the Department, it is perfectly proper for the antitrust agency (there the court) to consider facts also considered by the Commission. This reliance on Otter Tail is misplaced. In that case, both the Court and the Commission had concluded that intercontsetion was required. Elbow Lake v. Otter Tail Power Co., 46 FPC      3 675.
Thus, the Otter Tail opinion tells us nothing
-5/  Even the elaborate scheme extracted by Justice from FMC v. Aktiebolaget Svenska Amerika Linen, 390 U.S. 238 (1960) for application to cases involviny "public interest" standards does not change the nature of the inquiry as to anticompetitive impa:t.
 
about a situation where the Commission, acting within the ambit of its regulatory responsibilities, has rejected a claim being presented to the antitrust enforcement agency.      It is that situation which is presented to this Board. The Otter Tail opinion expressly recognized that this was not the situation before it.    (Slip Opinion, p. 9) .            '
i Moreover, the Justice Department fundamentally miocenstrues'the Otter Tail holding regarding the Federal Power Act and the Federal Power Otter Tail holds that the Power Act does Commission.
not grant immunity from the Sherman Act to electric utilities. This holding says nothing about the proposition it is cited for, the supposed necessity to relitigate a rate-related factual issue fully litigated before the FPC, (Justice Reply Brief, p. 14).
Even the Court's treatment of the FPC's authority over wheeling and interconnection is not dispositive of the effect to be given an FPC ruling on rates, where its pcwer is clear and plenary.
Indeed, the three Otter Tail dissenters, in arguing that a primary jurisdiction procedure was
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appropriate, sought to compare the FPC's role in regulating wheeling and interconnection to its function in the classic primary jurisdiction area, rates.    (Slip op., dissent, p. 9) .      And, as Justice notes, the majority cited U.S. v. Radio Corporation of America, 358 U.S. 334 (1959), the entire thrust of which is to contend that not all areas of regu-lation are as pervasive as rate regulation and that therefore, unlike the rate situation, deference to
                                  ~
the agency's determination'in those areas is not always required (358 U.S.        at 34 6-52) . Thus, Otter Tail is fully consistent with the applicability of primary jurisdiction to rate-related issues arising in anti-trust proceedings.
JUSTICE'S ARGUMENTS THAT THE FPC REACHED THE WRONG RESULT ARE DIRECTED TO THE WRONG FORUM, IRRELEVANT AND INCORRECT The Justice Department has suggested a standard which the FPC should have applied in viewing the purported anticcmpetitive conduct of the Applicant (Tr. 47 5-491) . rhls standard is derived principally from FMC v. Aktiebolaget Svenska Amerika Linen, 390 U.S.
                              ?
 
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  .                            238 (1968). The apparent contention is that this Board should rehear the price squeeze issue because the FPC did not follow the four-part test that Justice advocates, even if a conflict or repugnancy between the agencies results (Tr. 489-90). Neither the Department's test nor the crucial role the Department assigns to it are supported by the Svenska case and the brief line of cases interpreting it.
To begin with, Svenska clearly pertains to a special problem of statutory construction arising under the 1961 amendments to the Shipping Act, 75 Stat. 762, 46 U.S.C. 5801 et. seq., where a            .
congressional intent to limit severely antitrust consideration under the Shipping Act was plainly evident.
The District of Columbia Court of Appeals had twice held, 351 F.2d 756 (1965) and 372 F.2d 932 (1967),              ;
that the Shipping Act shielded conferenca actions from antitrust scrutiny, not only by the courts but by the l
FMC as well. The Supreme Court held that it did not (390 U.S. at 244-5, particularly, n. 4) . The Court also held that the actions taken by the FMC were one appropriate method of reconciling the policies of the
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antitrust laws and the Shipping Act.
Svenska has been cited in relatively few opinions and those have typically been concerned with specific problems under the Shipping Act.-6/  One court has explicitly construed Svenska as specifically limited to the Shipping Act context,Braman v. Hardin, 346 F. Supp. 934, 940-1 (S . D. Fla. 1972). That is also the conclusion reached in Antitrust Developments:
A Supplement to the Report of the Attorney General's National Committee to Study the Antitrust Laws in its very brief discussion of the case at p. 202-3, n. 117.
Moreover, Svenska merely approves the action of the FMC as one possible method of incorporating antitrust considerations into the general "public interest" standard. It did not say that it was the only acceptable method for that purpose.    "And while the Supreme Court (in Svenska] did not say that the FMC was obligated to display the degree of deference 6/ See,
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ge.., Marine Space Enclosures Inc. v. FMC, 420 F.2d 577 (D.C. Cir. 1969), Pacific Seafarers Inc. v.
Pacific Far East Lines, Inc., 404 F.2d 804, 815, n. 36 (D.C. Cir. 1968), cert. denied, 393 U.S. 1093 (1969),
Matson Navigation Co. v. FMC, 405 F.2d 796, 801, n.9, (9th Cir. 1968), Sabre Shipping Corp. v. American President Lines Ltd., 285 F. Supp. 949 (S . D.N .Y . 1968).
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for antitrust laws suggested by its rule, the Court did concludt that the antitrust test formulated by the Commission is an appropriate refinement of the statutory public interest standard", Northern Natural Gas Co. v. FPC, 399 F.2d 953, 960 (D.C. Cir . 196 8 ) .
.        Marine Space Enclosures Inc. v. FMC, 420 F.2d 577 (D.C. Cir. 1969), cited repeatedly by Justice on February 15, clearly recognizes that the Svencha rule is a discretionary policy and holds only that the reasons for a change in a rule in such an important area must be articulated:
                    "It is surprising to the point of concern that the Commission would make such a de-parture in an opinion that offers the sparsest of findings and speaks in the        ,
most conclusionary terms." 420 F.2d at 585.
Furthermore, Justice has not accurately summarized the FMC rule approved in Svenska.      Both the FMC in its decision in the case (Investig'ation of Passenger Steamship Conferences'Regarding Travel Agents, 10 FMC 27, 33-34 (1966)) and the Supreme Court (390 U.S.
at 243 and 390 U.S. at 250) recognized that actions 1
involved in Svenska, and indeed most activities by the
 
shipping conferences, would be illegal per se under the antitrust laws were it not for the Shipping Act.          There is simply no support in Svenska for the Justice Depart-ment's allegation that some kind of balancing test is applicable in agency proceedings to an indefinite class of actions which are "not quite" violations or
      " violation in spirit" of the antitrust laws.        Similarly, the third point of Justice's purported test, the consid-eration of alternatives (Tr.' 481-482), has no support in Svenska and indeed appears grounded solely on a passing dictum in Marine Space Enclosures, 420 F. 2d at 590.
As a matter of fact, the FPC did satisfy the test laid out by Justice. (It was, in fact, following the dictates of the case actually controlling, City of Lafayette v. S.E.C.,    supra.)      Clearly, the FPC is answering "no" to the first question put by Mr. Brand (Tr. 481):  "Is there any impact on competition by virtue of what the regulatory agency is doing?"          The FPC held that there is no price squeeze.        Under Justice's test, that is sufficient to end the inquiry.
 
The other decisions relied on by Justice are either irrelevant to this proceeding or pertain, to the 1
extent they have not been superceded by later decisions ,
to the divergence in legal standards which Justice purports to see between the Federal Power Act and S105c of the
                            ~~'
7/
i      Atomic Energy Act.          They suggest nothing about factual conclusions the agencies are to draw or their significance in this proceeding.      By contrast, Northern Natural Gas Co. v. FPC, 399 F.2d 953,      (D.C. Cir., 1968), repeatedly cited by Justice, specifically recognizes the distinction            ,
between the FPC's duty "to make findings related to the pertinent antitrust policies" and its obligation to " draw conclusions from the findings, and weigh those conclusions along with other important public interest r
considerations."    (399 F.2d at 961).      That, of course, is the distinction that Justice fails to recognize here.
_7,/ Pennsylvania Water & Power Co. v. FPC, 343 U.S. 414, 421-22 (1952), Denver & Rio Grande Western Railway v.
U.S.,  387 U.S. 485, 489, U.S. v.        El Paso National Gas Co., 376 U.S. 651,                656-57 (1964), U.S. v.
Philadelphia National Bank, 374 U.S. 321, 368 (1963)
McLean Truckinc Co. v. U.S., 321 U.S. 67, 77-88 (1944)
City of Pittsburch        v. FPC, 237 F.2d 741 (D.C. Cir. 1956).
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THE POSSIBILITY OF CONFLICT BETWEEN THE AEC AND THE FPC DOES EXIST The Justice Department claims that the Board need not concern itself with the possibility of conflict between this agency and the FPC, arguing that the relief sought here will not conflict with the " ultimate finding made by the FPC in Applicant's wholesale rate increase proceeding."    (Justice Reply Br., p. 17). It cites Otter Tail for this proposition. But in Otter Tail the Court considered a possible inconsistency between the district court's decree and FPC action as an additional concern when, as in that case, there is no possibility of a conflict on the merits. In seeking to apply this theory to the instant situation, the Department ignores the fact that it is plainly seeking from this agency a conflicting ruling on a factual issue which has been fully litigated before the FPC -- indeed, a ruling on an issue in the area of rates, a matter lying at the heart of the FPC's jurisdiction and expertise.
Further, Justice's arguments rests not upon any inherent impossibility of conflict, but simply upon the nature of the relief which it is seeking here. The possibility of gonflicting rulings cannot
 
be so lightly brushed aside.
Finally, the possibility does exist that the relief sought here will conflict with the FPC's conclusion as to Applicant's wholesale rates. The sale of unit power, one possible form of relief sought here, could create a repugnacy with the FPC decision because it is tantamount to a rate change. FPC jurisdiction would extend to the rate schedule, contract or tariff filed as a result.of an AEC-imposed condition to sell unit power and conceivably could be found unjust, unreasonable or unduly discriminatory by the FPC.
CONCLUSION The Federal Power Commission in Docket No.
E-7557 has made findings regarding the allegations of a rate squeeze raised in this proceeding. For the reasons cited in Applicant's brief of February 15, 1973, those determinations should be controlling in this forum as well. Nothing argued by the Department r
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of Justice or the intervenors indicates a contrary result.
Respectfully submitted, A
George A. Avery
                                  &b Toni K.
                                              &} ^ :=
Goldbn
                                ')  , _,
                                            .$  p --  ,
Thomas W. Brunner Wald, Harkrader & Ross 1320 Nineteenth Street, N.W.
Washington, D.C. 20036 Attorneys for Applicant March 5, 1973 as
 
                        ~
UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of                )
                                        ) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY              )              50-287A, 50-369A (Oconee Units 1, 2 and 3      )              50-370A McGuire Units 1 and 2)        )
CERTIFICATE OF SERVICE I hereby certify that copies of APPLICANT'S REPLY BRIEF ON THE EFFECT OF DETERMINATIONS BY THE FEDERAL POWER COMMISSION, dated March 5, 1973, in the above-captioned matter have been served on the following by deposit in the United States mail, first class or air mail, this 5th day of March, 1973:
Walter W. K. Bennett, Esquire        J. O. Tally, Jr., Esquire P. O. Box 185                        P. O. Drawer 1660 Pinehurst, North Carolina 28374      Fayetteville, N. Carolina 28302 Joseph F. Tubridy, Esquire          Troy B. Connor, Esquire    .
4100 Cathedral Avenue, N. W.        Reid & Priest Washington, D. C. 20016              1701 K Street, N.W.
Washington, D. C. 20006 John B. Farmakides, Esquire Atomic Safety and                    Joseph Rutberg, Esquire Licensing Board Panel              Benjamin H. Vogler, Esquire Atomic Energy Commission            Antitrust Counsel for Washington, D. C. 20545                AEC Regulatory Staff Atomic Energy Commission Atomic Safety and                    Washington, D. C. 20545 Licensing Board Panel Atomic Energy Commission            Mr. Frank W. Karas, Chief Washington, D. C. 20545            Public P'roceedings Branch Office of the Secretary Abraham Braitman, Esquire              of the Commission Special Assistant for                Atomic Energy Commission Antitrust Matters                  Washington, D. C. 20545 Office of Antitrust and Indemnity                      Joseph Saunders, Esquire Atomic. Energy Commission            Antitrust Division Washington, D. C. 20545            Department of Justice Washington, D. C. 20530
 
William T. Clabault, Esquire    J. A. Bouknight, Jr., Esquire David A. Leckie, Esquire        David F. Stover, Esquire Antitrust Public Counsel Section Tally, Tally & Bouknight Department of Justice            Suite 311 P. O. Box 7513                  429 N Street, S.W.
Washington, D. C. 20044          Washington, D. C. 20024 Wallace E. Brand, Esquire Antitrust Public Counsel Section Department of Justice P. O. Box 7513 Washington, D. C. 20044 Wald,{arkrader&    Ross By:  \ b-~  .) ( f~ -- -
Attorneys for Duke Power Company 1320 Nineteenth Street, N.W.
Washington, D. C. 20036 l
                                                                          .}}

Latest revision as of 18:16, 21 February 2020

Applicant'S Reply Brief on Effect of Determinations by FPC Re Allegations of Rate Squeeze Raised in Proceeding. Arguments Presented by DOJ & Intervenors Inadequate. Certificate of Svc Encl
ML19317E321
Person / Time
Site: Oconee, Mcguire, Catawba, McGuire  Duke Energy icon.png
Issue date: 03/05/1973
From: Avery G, Brunner T, Golden T
DUKE POWER CO., WALD, HARKRADER & ROSS
To:
US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912170544
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UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of )

DUKE POWER COMPANY ) ,- [

(Oconee Units 1, 2& 3) Docket Nos. 50-269A', 50-270A McGuire Units 1 & 2 ) 50-267A 50-369A, 50-370A APPLICANT'S REPLY BRIEF ON THE EFF"CT OF DETEBMINATIONS BY THE FEDERAL POWER COMMISSION Duke Power Company (Applicant) submits this brief in response to the arguments of the Department of Justice and intervenors concerning the effect upon the issues in this proceeding of the rulings by the Federal Power Commission in FPC Docket No. E-7557.-1/

Applicant urges the Board to rule out consideration of factual contentions on the price squeeze issue in t'

  • n proceeding. Neither the Justice Department nor intervenors have presented convincing arguments for pursuing the matter here. -

THE NATURE OF THE FPC RULING HAS BEEN MISCHARACTERIZED The price squeeze issue involves the effect upon retail competition of the relationship between t

~1/ Duke Power Co., Opinion No. 641, FPC Docket No. E-7557,

( Decemoer 18, 1972 and Opinion No. 641A, February 16, 1973 (Opinion and Order Denying Rehearing).

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Applicant's wholesale rate and its retail rate for industrial service. The central element in the Justice Department's position is the claim that the FPC declined on jurisdictional grounds to consider this question. Because of this jurisdictional ruling, says Justice, " Examiner Kaplan made no findings on whether or not there was a sufficient margin between the two rate levels to permit Applicant's wholesale customers effectively to compete for large industrial power loadd." [ Emphasis supplied]

(Justice Reply Br., p. 11). Justice further argues that even if the FPC had considered the price squeeze .

issue, this Board can still do so. The Board, says Justice, is applying a different statutory standard and is not bound by FPC findings and conclusions which, according to Justice, are erroneous in any event. In support of this view, Justice cites the recent decision by the Supreme Court in Otter Tail Power Co. v. United States, (Slip opinion attached as Appendix A to Justice Reply Brief.) Justice is wrong both as to what the FPC decided and as to the 1

impact which that agency's decision should have in this proceeding.

The FPC decided, quite clearly and unequivo-cally, that there was, in fact, no price squeeze.

The question whether a price squeeze existed was clearly presented to the FPC as a factual issue for determination.

The evidence showed that the rate schedules for indus-trial service were identical with those for wholesale service.~2/The wholesale customers argued that this rate parity precluded them from competing for indus-trial load. Applicant presented responsive testimony disputing this claim. All of this factual testimony was the subject of extensive briefing before the Examiner. Thus, squarely presented with the factual issue as to the effect upon retail competition of Duke's rate structure, the Examiner made a finding of fact on the subject. At pages 26-27 of his decision, the Examiner, having laid out the factual and legal contentions of the parties, addressed himself to the evidence before him. He said 2/ However, it should be noted that revenues per kilowatt hour are lower for the wholesale cus-tomers because the load factor is higher.

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"In any event, the evidence indicates that, on an overall basis, the municipalities and cooperatives have been in a position to compete with Duke for retail industrial customers for many years, as demonstrated by the consistently lower average costs per kwh to the wholesale customers, as compared with such average costs to the company's industrial customers. Although it is true that, generally, intervenors do not now serve any substantial industrial customers with loads of at least 5,000 kw, there is no specific showing that any such potential industrial customers have been lost to the intervenors because of the past parity of, or the present differential between, the respective wholesale and industrial rates. 'Moreover, it must be noted that, despite the alleged handicap under which intervenors compete for industrial loads, the record shows that the rate of growth of the wholesale customers during .

the last decade has been substantially greater than that of Duke, measured by the company's total sales at wholesale as compared with retail."

[ Emphasis supplied]

The Justice Department seeks to brush this clear and dispositive factual ruling aside, referring to it as " Examiner Kaplan's comments." (Justice Reply Br., p. 12). This characterization is nothing more than a facile attempt to overcome an insurmountable  :

1 obstacle to the Department's theory. The Examiner had the facts before him. He was asked by the parties to l

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-Se decide the question. He did so, rejecting rhe claim of price squeeze.

Moreover, the Examiner made this ruling with

. full awareness of his obligation to consider the possible anti-ccmpetitive consequences of Duke's rates in passing upon their acceptability under the FPC's statutory standards. At page 17 of his decision, the Examiner quoted from the decision in City of Lafayette v. SEC, 454 F. 2d 941 (D.C. Cir. 1971) cert.

granted sub. nom Gulf States Utilties v. FPC, 406 U.S. 956 (1972), where the court spelled out the obliga-tion of the FPC to consider possible anti-competitive effects. "Accordingly",'said the Examiner in the next sentence of his opinion, "the contentions of the intervenors will be analyzed in the light of all the evidence presented."

3/ The fact that the FPC disposed of factual claims as to existence of a price squeeze is significant.

Essentially, the price squeeze issue in this proceeding is one of fact, and not of law. The Board is not being asked to take action with regard to Applicant's rates in an effort to eliminate the alleged price squeeze. Instead, the price squeeze argument is relied on as evidence of anti-competitive conduct demonstrating the requisite intent to support a finding of incon-sistency with Section 2 of the Sherman Act. There is simply no need to delay this proceeding by permitting the parties to relitigate this factual issue.

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It was only after he had made the finding that there was, in fact, no price squeeze, that the Examiner noted that the FPC's jurisidiction is limited to wholesale rates and that retail rates are subject to the jurisdiction of the state commissions. Since he had already ruled that no price squeeze existed, these observations by the Examiner were not decisional in nature and must be regarded simply as dicta. None-theless, it is this language from the Examiner's decision on which opposing counsel rely for their claim that the FPC declined jurisdiction to consider the price squeeze argument.

This view cannot be sustained by the language used by the Examiner nor by the structure of his opinion.

The Commission plainly adopted the Examiner's treatment of the antitrust issues. (FPC Opinion No. 641, p. 11).

Moreover, the Commission later itself reiterated that it had considered antitrust policies in sustaining the Examiner. Duke Power Company, Opinion No. 641-A, FPC Docket No. E-7557, Feb. 16, 1973.

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_7-This Board,then, must consider the price squeeze issue in light of the fact that the FPC, acting in the very heart of its regulatory responsi-bilities -- its power over rates -- has considered and rejected the claim that Applicant's wholesale rate structure, when compared with its retail rates, had adversely affected the competitive abilities of its wholesale customers.

THE FPC RULING IS FULLY APPLICABLE HERE Perhaps recognizing the weakness of'their position on what the FPC decided, both Justice and the intervenors go on to contend, arguendo, that, even if the FPC had considered the price squeeze issue, its ruling should be given no effect by this Board.

(Justice Reply Br. pp. 12-16, Intervenors' Brief,

.p p . 2-6). They base their position on the claim that the statutory standard in the Atcmic Energy Act differs Le from that of the Federal Power Act. The Board should note that, in making this argument, neither the

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Department nor the intervenors explains why in their view the Board should not accept the FPC ruling on price squeeze as dispositive nor examines the decisional law in the field. They simply make the bald assertion that the statutory standards are different and, therefore, that no effect should be given to the FPC ruling .

Applicant's brief,. filed with the Board on February 15, 1973, spelled out in considerable detail the reasons why the FPC action on the price squeeze issue provides a basis for excluding that issue here.

That brief discussed the doctrines of primary juris-diction, res judicata and collateral estoppel, demonstrating that on any or all of these grounds, the FPC ruling is entitled to dispositive effect. The failure of Justice to address itself to the points made in our earlier brief, despite the fact thAt it was ostensibly filing a reply brief, should not pass with-out notice. We will not repeat the material set out in our earlier brief. We submit that the principles t

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position that the FPC's ruling should be given effect here.

Nevertheless, Applicant accepts the obvious principle that different agencies are not always pre-cluded from examining the same facts on successive occasions if they are doing so for fundamentally different purposes. It so acknowledged in its Brief filed February 15, pp. 24-25. But that proposition has no applicability to a determination of a factual question -- whether or not there is a price squeeze --

by two agencies both expressly considering the matter from the perspective of the antitrust laws. The leading cases in this area, cited by Applicant in its original brief, are recent and quite informative.

In Ricci v. Chicago Mercantile Exchange, U.S. , 93 S. Ct. 573 (1973),

the Supreme Court applied primary jurisdiction principles in holding that the Commodity Exchange Commission should be permitted to make an initial 3

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determination of " issues of fact and questions about the scope, meaning and significance of exchange membership. rules ...." (93 S. Ct. at 582) (footnote omitted) (emphasis added). It did so even though the Commodities Exchange Act is not "particularly focused on competitive considerations" (93 S. Ct. at 580,-n. 13) because the agency's expertise and discretionary policy "will be a material aid" in the antitrust

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proceeding. (93 S. Ct. at 582) Ricci, of course, is a pure primary jurisdiction case not involving immunity from the antitrust laws such as arises under -

the Shipping or Civil Aeronautics Act.

In Safir v. Gibson, 432 F.2d 137 (2d Cir.

1970), the party resisting the application of res judicata sought to distinguish a statute prohibiting "any rates or charges... which [the FMC] finds to be so unreasonably high or low as to be detrimental to the commerce of the United States" (Shipping Act, 18b(5), 46 U.S.C.- S817 (b) (5) ) from one prohibiting participation in any agreement which is " unjustly l

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s discriminatory to any other citizen of the United States (who is an American flag carrier]" Merchant Marine Act, S810, 46 U.S.C. S1227. Certainly dis-tinctions can be drawn between the two statutes. A rate agreement might be " detrimental" under the Shipping Act, for example, by discouraging the use of American carriers by foreign shippers without being

" discriminatory" toward any American. Yet, despite plausible differences between the two statutes, Judge Friendly, usually an exceptionally careful elucidator of significant statutory standards, dismissed the .

argument as "hypertechnical" and held the first (FMC) proceeding controlling. (432 F.2d at 142).

Similarly, the FTC held that a determina-tion that an association was not a labor organization under the National Labor Relations Act was controlling under the labor exemption to the antitrust laws.

National Assn. of Women and Children's Apcarel Salesmen, Inc., FTC Dkt. No. 8691, CCH Trade Reg. Rep.

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119,538 (1971) (appeal pending) .-

The present case closely resembles the Safir case. Indeed, the Justice Department acknow-ledged at the February 15 hearing that the " duty" of the AEC here is "very similar . . . but . . .

not identical" to that of the FPC in the rate case (Tr. 484). In making the factual determination that there is no price squeeze, the FPC was proceeding from an antitrust perspective, the same perspective applicable here. It is not necessary to consider possible distinctions between the two antitrust standards that may be pertinent for other purposes.

The threshhold determination whether a situation har .. iccmpetitive impact condemned by the antitrust laws does ne: vary depending on the forum. Here, the specific question is whether there was a price squeeze. The question is the same whether

.it is presented to a district court or to- an agency 4/ Pacific Seafarers, Inc. v. Pacific Far East Line, Inc., 404 F.2d 804 (D.C. Cir. 1968), cert. denied, 393 U.S. 1093, cited by intervenors (Intervenors' Brief, p. 15) is inapplicable here, both because the issue there was explicitly one of legal con-clusion not fact (404 F.2d at 809) and because the question determined was the meaning of the phrase

" foreign commerce" used in two clearly divergent statutory contexts (defining the jurisdiction of i the FMC and limiting the substantive reach of j the Sherman Act) (402 F.2d at 810). <

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applying a public interest standard,-5/ or to this Board under Section 105c of the Atomic Energy Act. If there is, in fact, no price squeeze, that finding will be reached regardless of the forum.

The Department places its primary reliance upon the Supreme Court's recent decision in the Otter Tail case. (Justice Reply Br. , p. 14) Specifically, the Department argues that many of the facts relied on by the Court in Otter Tail must also have been considered by the FPC. Hence, argues the Department, it is perfectly proper for the antitrust agency (there the court) to consider facts also considered by the Commission. This reliance on Otter Tail is misplaced. In that case, both the Court and the Commission had concluded that intercontsetion was required. Elbow Lake v. Otter Tail Power Co., 46 FPC 3 675.

Thus, the Otter Tail opinion tells us nothing

-5/ Even the elaborate scheme extracted by Justice from FMC v. Aktiebolaget Svenska Amerika Linen, 390 U.S. 238 (1960) for application to cases involviny "public interest" standards does not change the nature of the inquiry as to anticompetitive impa:t.

about a situation where the Commission, acting within the ambit of its regulatory responsibilities, has rejected a claim being presented to the antitrust enforcement agency. It is that situation which is presented to this Board. The Otter Tail opinion expressly recognized that this was not the situation before it. (Slip Opinion, p. 9) . '

i Moreover, the Justice Department fundamentally miocenstrues'the Otter Tail holding regarding the Federal Power Act and the Federal Power Otter Tail holds that the Power Act does Commission.

not grant immunity from the Sherman Act to electric utilities. This holding says nothing about the proposition it is cited for, the supposed necessity to relitigate a rate-related factual issue fully litigated before the FPC, (Justice Reply Brief, p. 14).

Even the Court's treatment of the FPC's authority over wheeling and interconnection is not dispositive of the effect to be given an FPC ruling on rates, where its pcwer is clear and plenary.

Indeed, the three Otter Tail dissenters, in arguing that a primary jurisdiction procedure was

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appropriate, sought to compare the FPC's role in regulating wheeling and interconnection to its function in the classic primary jurisdiction area, rates. (Slip op., dissent, p. 9) . And, as Justice notes, the majority cited U.S. v. Radio Corporation of America, 358 U.S. 334 (1959), the entire thrust of which is to contend that not all areas of regu-lation are as pervasive as rate regulation and that therefore, unlike the rate situation, deference to

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the agency's determination'in those areas is not always required (358 U.S. at 34 6-52) . Thus, Otter Tail is fully consistent with the applicability of primary jurisdiction to rate-related issues arising in anti-trust proceedings.

JUSTICE'S ARGUMENTS THAT THE FPC REACHED THE WRONG RESULT ARE DIRECTED TO THE WRONG FORUM, IRRELEVANT AND INCORRECT The Justice Department has suggested a standard which the FPC should have applied in viewing the purported anticcmpetitive conduct of the Applicant (Tr. 47 5-491) . rhls standard is derived principally from FMC v. Aktiebolaget Svenska Amerika Linen, 390 U.S.

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. 238 (1968). The apparent contention is that this Board should rehear the price squeeze issue because the FPC did not follow the four-part test that Justice advocates, even if a conflict or repugnancy between the agencies results (Tr. 489-90). Neither the Department's test nor the crucial role the Department assigns to it are supported by the Svenska case and the brief line of cases interpreting it.

To begin with, Svenska clearly pertains to a special problem of statutory construction arising under the 1961 amendments to the Shipping Act, 75 Stat. 762, 46 U.S.C. 5801 et. seq., where a .

congressional intent to limit severely antitrust consideration under the Shipping Act was plainly evident.

The District of Columbia Court of Appeals had twice held, 351 F.2d 756 (1965) and 372 F.2d 932 (1967),  ;

that the Shipping Act shielded conferenca actions from antitrust scrutiny, not only by the courts but by the l

FMC as well. The Supreme Court held that it did not (390 U.S. at 244-5, particularly, n. 4) . The Court also held that the actions taken by the FMC were one appropriate method of reconciling the policies of the

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antitrust laws and the Shipping Act.

Svenska has been cited in relatively few opinions and those have typically been concerned with specific problems under the Shipping Act.-6/ One court has explicitly construed Svenska as specifically limited to the Shipping Act context,Braman v. Hardin, 346 F. Supp. 934, 940-1 (S . D. Fla. 1972). That is also the conclusion reached in Antitrust Developments:

A Supplement to the Report of the Attorney General's National Committee to Study the Antitrust Laws in its very brief discussion of the case at p. 202-3, n. 117.

Moreover, Svenska merely approves the action of the FMC as one possible method of incorporating antitrust considerations into the general "public interest" standard. It did not say that it was the only acceptable method for that purpose. "And while the Supreme Court (in Svenska] did not say that the FMC was obligated to display the degree of deference 6/ See,

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ge.., Marine Space Enclosures Inc. v. FMC, 420 F.2d 577 (D.C. Cir. 1969), Pacific Seafarers Inc. v.

Pacific Far East Lines, Inc., 404 F.2d 804, 815, n. 36 (D.C. Cir. 1968), cert. denied, 393 U.S. 1093 (1969),

Matson Navigation Co. v. FMC, 405 F.2d 796, 801, n.9, (9th Cir. 1968), Sabre Shipping Corp. v. American President Lines Ltd., 285 F. Supp. 949 (S . D.N .Y . 1968).

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for antitrust laws suggested by its rule, the Court did concludt that the antitrust test formulated by the Commission is an appropriate refinement of the statutory public interest standard", Northern Natural Gas Co. v. FPC, 399 F.2d 953, 960 (D.C. Cir . 196 8 ) .

. Marine Space Enclosures Inc. v. FMC, 420 F.2d 577 (D.C. Cir. 1969), cited repeatedly by Justice on February 15, clearly recognizes that the Svencha rule is a discretionary policy and holds only that the reasons for a change in a rule in such an important area must be articulated:

"It is surprising to the point of concern that the Commission would make such a de-parture in an opinion that offers the sparsest of findings and speaks in the ,

most conclusionary terms." 420 F.2d at 585.

Furthermore, Justice has not accurately summarized the FMC rule approved in Svenska. Both the FMC in its decision in the case (Investig'ation of Passenger Steamship Conferences'Regarding Travel Agents, 10 FMC 27, 33-34 (1966)) and the Supreme Court (390 U.S.

at 243 and 390 U.S. at 250) recognized that actions 1

involved in Svenska, and indeed most activities by the

shipping conferences, would be illegal per se under the antitrust laws were it not for the Shipping Act. There is simply no support in Svenska for the Justice Depart-ment's allegation that some kind of balancing test is applicable in agency proceedings to an indefinite class of actions which are "not quite" violations or

" violation in spirit" of the antitrust laws. Similarly, the third point of Justice's purported test, the consid-eration of alternatives (Tr.' 481-482), has no support in Svenska and indeed appears grounded solely on a passing dictum in Marine Space Enclosures, 420 F. 2d at 590.

As a matter of fact, the FPC did satisfy the test laid out by Justice. (It was, in fact, following the dictates of the case actually controlling, City of Lafayette v. S.E.C., supra.) Clearly, the FPC is answering "no" to the first question put by Mr. Brand (Tr. 481): "Is there any impact on competition by virtue of what the regulatory agency is doing?" The FPC held that there is no price squeeze. Under Justice's test, that is sufficient to end the inquiry.

The other decisions relied on by Justice are either irrelevant to this proceeding or pertain, to the 1

extent they have not been superceded by later decisions ,

to the divergence in legal standards which Justice purports to see between the Federal Power Act and S105c of the

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i Atomic Energy Act. They suggest nothing about factual conclusions the agencies are to draw or their significance in this proceeding. By contrast, Northern Natural Gas Co. v. FPC, 399 F.2d 953, (D.C. Cir., 1968), repeatedly cited by Justice, specifically recognizes the distinction ,

between the FPC's duty "to make findings related to the pertinent antitrust policies" and its obligation to " draw conclusions from the findings, and weigh those conclusions along with other important public interest r

considerations." (399 F.2d at 961). That, of course, is the distinction that Justice fails to recognize here.

_7,/ Pennsylvania Water & Power Co. v. FPC, 343 U.S. 414, 421-22 (1952), Denver & Rio Grande Western Railway v.

U.S., 387 U.S. 485, 489, U.S. v. El Paso National Gas Co., 376 U.S. 651, 656-57 (1964), U.S. v.

Philadelphia National Bank, 374 U.S. 321, 368 (1963)

McLean Truckinc Co. v. U.S., 321 U.S. 67, 77-88 (1944)

City of Pittsburch v. FPC, 237 F.2d 741 (D.C. Cir. 1956).

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THE POSSIBILITY OF CONFLICT BETWEEN THE AEC AND THE FPC DOES EXIST The Justice Department claims that the Board need not concern itself with the possibility of conflict between this agency and the FPC, arguing that the relief sought here will not conflict with the " ultimate finding made by the FPC in Applicant's wholesale rate increase proceeding." (Justice Reply Br., p. 17). It cites Otter Tail for this proposition. But in Otter Tail the Court considered a possible inconsistency between the district court's decree and FPC action as an additional concern when, as in that case, there is no possibility of a conflict on the merits. In seeking to apply this theory to the instant situation, the Department ignores the fact that it is plainly seeking from this agency a conflicting ruling on a factual issue which has been fully litigated before the FPC -- indeed, a ruling on an issue in the area of rates, a matter lying at the heart of the FPC's jurisdiction and expertise.

Further, Justice's arguments rests not upon any inherent impossibility of conflict, but simply upon the nature of the relief which it is seeking here. The possibility of gonflicting rulings cannot

be so lightly brushed aside.

Finally, the possibility does exist that the relief sought here will conflict with the FPC's conclusion as to Applicant's wholesale rates. The sale of unit power, one possible form of relief sought here, could create a repugnacy with the FPC decision because it is tantamount to a rate change. FPC jurisdiction would extend to the rate schedule, contract or tariff filed as a result.of an AEC-imposed condition to sell unit power and conceivably could be found unjust, unreasonable or unduly discriminatory by the FPC.

CONCLUSION The Federal Power Commission in Docket No.

E-7557 has made findings regarding the allegations of a rate squeeze raised in this proceeding. For the reasons cited in Applicant's brief of February 15, 1973, those determinations should be controlling in this forum as well. Nothing argued by the Department r

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of Justice or the intervenors indicates a contrary result.

Respectfully submitted, A

George A. Avery

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Thomas W. Brunner Wald, Harkrader & Ross 1320 Nineteenth Street, N.W.

Washington, D.C. 20036 Attorneys for Applicant March 5, 1973 as

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UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of )

) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY ) 50-287A, 50-369A (Oconee Units 1, 2 and 3 ) 50-370A McGuire Units 1 and 2) )

CERTIFICATE OF SERVICE I hereby certify that copies of APPLICANT'S REPLY BRIEF ON THE EFFECT OF DETERMINATIONS BY THE FEDERAL POWER COMMISSION, dated March 5, 1973, in the above-captioned matter have been served on the following by deposit in the United States mail, first class or air mail, this 5th day of March, 1973:

Walter W. K. Bennett, Esquire J. O. Tally, Jr., Esquire P. O. Box 185 P. O. Drawer 1660 Pinehurst, North Carolina 28374 Fayetteville, N. Carolina 28302 Joseph F. Tubridy, Esquire Troy B. Connor, Esquire .

4100 Cathedral Avenue, N. W. Reid & Priest Washington, D. C. 20016 1701 K Street, N.W.

Washington, D. C. 20006 John B. Farmakides, Esquire Atomic Safety and Joseph Rutberg, Esquire Licensing Board Panel Benjamin H. Vogler, Esquire Atomic Energy Commission Antitrust Counsel for Washington, D. C. 20545 AEC Regulatory Staff Atomic Energy Commission Atomic Safety and Washington, D. C. 20545 Licensing Board Panel Atomic Energy Commission Mr. Frank W. Karas, Chief Washington, D. C. 20545 Public P'roceedings Branch Office of the Secretary Abraham Braitman, Esquire of the Commission Special Assistant for Atomic Energy Commission Antitrust Matters Washington, D. C. 20545 Office of Antitrust and Indemnity Joseph Saunders, Esquire Atomic. Energy Commission Antitrust Division Washington, D. C. 20545 Department of Justice Washington, D. C. 20530

William T. Clabault, Esquire J. A. Bouknight, Jr., Esquire David A. Leckie, Esquire David F. Stover, Esquire Antitrust Public Counsel Section Tally, Tally & Bouknight Department of Justice Suite 311 P. O. Box 7513 429 N Street, S.W.

Washington, D. C. 20044 Washington, D. C. 20024 Wallace E. Brand, Esquire Antitrust Public Counsel Section Department of Justice P. O. Box 7513 Washington, D. C. 20044 Wald,{arkrader& Ross By: \ b-~ .) ( f~ -- -

Attorneys for Duke Power Company 1320 Nineteenth Street, N.W.

Washington, D. C. 20036 l

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