ML17209A516: Difference between revisions
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BEFORETHEUNITEDSTATESNUCLEARREGULATORYCOMMISSIONBEFORETHEATOMICSAFETYANDLICENSINGBOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389ACERTIFICATE,OFSERVICEIherebycertifythatcopiesoftheforegoinghavebeenservedonthefollowingbydepositintheUnitedStatesmail,firstclass,postageprepaid,this8thdayofJanuary,1981.IvanW.Smith,Esq.,ChairmanAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555MichaelA.Duggan,Esq.CollegeofBusinessAdministrationUniversityofTexasAustin,Texas78172RobertM.Lazo,Esq.,MemberAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555JeromeSaltzman,ChiefUtilityFinanceBranchNuclearRegulatoryCommissionWashington,D.C.20555ThomasGurney,Sr.,Esq.203NorthMagnoliaAVenueOrlando,Florida32802J.A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis,Axelrad&Toll1025ConnecticutAvenue,N.W.Washington,D.C.20036AtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555TracyDanese,Esq.VicePresidentforPublicAffairsFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101JackW.Shaw,Jr.,Esq.JohnE.Mathews,Jr.,Esp.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg.llEastForsythStreetJacksonville,Florida32202WilliamH.Chandler,Esp.Chandler,O'Neal,Avera,Gray/Land&StriplingP.O.Drawer0Gainesville,Florida32602RobertE.BathenFredSafferR.W.Beck&AssociatesP.O.Box6817Orlando,Florida32803 WilliamC.Wise120018thStreet,N.W.Suite500Washington,D.C.20036PeterG.Crane,Esq.OfficeoftheGeneralCounselNuclearReuglatoryCommissionWashington,D.C.20555DanielM.GribbonHerbertDymJoanneB.GrossmanCovington&Burling88816thStreet,N.W.Washington,D.C.20006DonaldA.Kaplan,Esq.JanetR.Urban,Esq.JohnS.Caragozian,Esq.RobertFabrikant,Esq.GeorgeM.Pond,Esq.DepartmentofJusticeP.O.Box14141Washington,D.C.20044obertA.ablonAttorneyortheLakeWorthUtilitiesAuthority,NewSmyrnaBeachUtilitiesCommission,SebringUtilitiesCommission,GainesvilleRegionalUtilitiesandtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,FloridaandtheFloridaMunicipalUtilitiesAssociation | 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BEFORETHEUNITEDSTATESNUCLEARREGULATORYCOMMISSIONBEFORETHEATOMICSAFETYANDLICENSINGBOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389ACERTIFICATE,OFSERVICEIherebycertifythatcopiesoftheforegoinghavebeenservedonthefollowingbydepositintheUnitedStatesmail,firstclass,postageprepaid,this8thdayofJanuary,1981.IvanW.Smith,Esq.,ChairmanAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555MichaelA.Duggan,Esq.CollegeofBusinessAdministrationUniversityofTexasAustin,Texas78172RobertM.Lazo,Esq.,MemberAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555JeromeSaltzman,ChiefUtilityFinanceBranchNuclearRegulatoryCommissionWashington,D.C.20555ThomasGurney,Sr.,Esq.203NorthMagnoliaAVenueOrlando,Florida32802J.A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis,Axelrad&Toll1025ConnecticutAvenue,N.W.Washington,D.C.20036AtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555TracyDanese,Esq.VicePresidentforPublicAffairsFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101JackW.Shaw,Jr.,Esq.JohnE.Mathews,Jr.,Esp.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg.llEastForsythStreetJacksonville,Florida32202WilliamH.Chandler,Esp.Chandler,O'Neal,Avera,Gray/Land&StriplingP.O.Drawer0Gainesville,Florida32602RobertE.BathenFredSafferR.W.Beck&AssociatesP.O.Box6817Orlando,Florida32803 WilliamC.Wise120018thStreet,N.W.Suite500Washington,D.C.20036PeterG.Crane,Esq.OfficeoftheGeneralCounselNuclearReuglatoryCommissionWashington,D.C.20555DanielM.GribbonHerbertDymJoanneB.GrossmanCovington&Burling88816thStreet,N.W.Washington,D.C.20006DonaldA.Kaplan,Esq.JanetR.Urban,Esq.JohnS.Caragozian,Esq.RobertFabrikant,Esq.GeorgeM.Pond,Esq.DepartmentofJusticeP.O.Box14141Washington,D.C.20044obertA.ablonAttorneyortheLakeWorthUtilitiesAuthority,NewSmyrnaBeachUtilitiesCommission,SebringUtilitiesCommission,GainesvilleRegionalUtilitiesandtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,FloridaandtheFloridaMunicipalUtilitiesAssociation}} | ||
}} | |||
Revision as of 18:48, 18 May 2018
| ML17209A516 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 01/08/1981 |
| From: | JABLON R A AFFILIATION NOT ASSIGNED, SPIEGEL & MCDIARMID |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML17209A515 | List: |
| References | |
| ISSUANCES-A, NUDOCS 8101090360 | |
| Download: ML17209A516 (173) | |
Text
BEFORETHEUNITEDSTATESNUCLEARREGULATORYCOMMISSIONBEFORETHEATOMICSAFETYANDLICENSINGBOARDInthe.MatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389AREPLYOFFLORIDACITIESTOFLORIDAPOWER&LIGHTCOMPANY'SRESPONSETOJOINTMOTIONRobertA.JablonAlanJ.RothMartaA.ManildiAttorneysfortheLakeWorthUtilitiesAuthority,NewSmyrnaBeachUtilitiesCommission,SebringUtilitiesCommission,GainesvilleRegionalUtilitiesandtheCitiesofAlachua,Bartow,Ft;Meade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,FloridaandtheFloridaMunicipalUtilitiesAssociationJanuary8,1981>4~sxoF090'>4 TABLE,OFCONTENTSPacaeTABLEOFAUTHORITIES~~~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~INTRODUCTIONS'.~~.~~.~..~~~..~~~...~~~..~~~~...~...2ARGUMENT~~.~.o..~..~..o~~~~~..~...~~~~~.~.~.~~~.~~~4I.TheBoardHasTheAuthorityAndObligationToAssureThatTheSettlementIsInThePublicInterest..................................4II.TheLicenseConditionClauseBindingTheArbitratorConcerningLiabilityIsContraryToPublicPolicy..................8III~FP&LShouldNotBeAbleToOperateTheUnitContraryToTheInterestsOfTheOtherParticipantsWithoutBeingSubjectToAmeliorativeContractProvisions........19IV.FP&L'sRefusalToOfferAReliabilityExchangeAndSellbackConstitutesABlatantActofDiscrimination............~.22V.FP&L'sContentionThatCitiesAre"Insincere"IsGroundlessandSpurzous...................................28VI~TheCorrespondenceBetweenTheIntervenorsAndFloridaPower&LightDemonstratesFP&L'sRefusalsToDealAndConfirmsThatAnyDelayResultsFromFP&L'sActions:TheCorrespondenceIsAdmissibleForThesePurposes...........43VII.Miscellaneous..............................53CONCLUSION~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~54 APPENDICESAppendixA-'xcerptsfromMidlandandCrystalRiverParticipationAgreementsAppendixB-LetterdatedApril1,1980fromRobertJ.GardnertoEwellMengeAppendixC-LetterdatedApril21,1978fromGeorgeSpiegeltoHarryA.PothAppendixD-LettersdatedMarch30,1976fromTracy.DanesetovariousFloridasystems~~11 TableofAuthoritiesCOURTCASESPacaeAlabamaaVicksburRailwaCo.v.MississiiRailroadCommission,203U.So496(1906).o..o.ooo.........oo..o.oo...26AmericanTruckinAssociations,Inc.v.Atchison,Toeka&SantaFeRaz.lwaCo.,387U.S.397(1967)................~~~~~..~26AssociatedPressv.U.S.,326U.S.1(1945)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-~~~~~~~24-25AtlanticRefininCo.v.PublicServiceCommissionofNewYork,360U.S.378(1959)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o~~~B&BInvestmentClubv.Kleinert's,Inc.,472F.Supp.787(E.D.Pa.1979).................48Brattv.WesternAirLines,169F.2d214(10thCir.),cert.denxed,335U.S.88(1948)~~~~~~~~~~~~~~~~~~~~~~~~o~~~~o~~45ConwaCor.v.FPC,510F.2d1264(D..CCar.1976),aff'd,426U.S.271(1976)......................................26Drakev.DetroitEdisonCo.,443F.Supp833(WDMich'978)~...~~17Fedorv.MauwehuCouncil,BoScoutsofAmer>.ca,21Conn.Supp.38,143A.2d466(Super.Ct.1958)...........................Fletcherv.WesternNationalLifeIns.Co.,10Cal.App.3d376,89Cal.Rptr78(1970)................................50Ft.PierceUtilitiesAuthoritv.U.S.,606F.2d986(D.C.Cz.r.,cert.denied444U.So842(1979)..oooo..o.....o....26 PacaeGainesvilleUtilities
Deartmentv.FloridaPower&LxhtCo.,
573F.2d292(5thCar.),cert.denied,439U.S.966(1978).............6,30Gamcov.ProvidenceFruit&ProduceBuildinInc.,194F.2d484(1stCar.),cert.denxed,344U.S.817(1952)...................25HamlinTestinLaboratoriesv.U.S.AtomicEnerCommxsszon,357F.2d632(6thCar.966)~~~~~~~~~~~~~~~~~~~~~~o~~~~~~~~~~~~~~~~~~114L'Heureaxv.Hurle,117Conn.346,168A.(1933)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12Huhesv.WarmanSteelCastinCo.,174Cal.556,163P.885(1917)....................12ICCv.Delaware,Lackawanna&WesternRailroadCo.,220U.S.235(1911)..........~..26InsirationConsol.CoerCo.v.LumbermensMut.Cas.Co.,60F.R.D.205(STDoN~Yo973)~~~~~~~~~~~~~~~~s~~~~~~~~~~~~~~48IvePlants,Inc.v.FMCCor.,282So.2d205(Fla.App.1973).............~.~~~..12Jacksonv.ShellOilCo.,401F.2d639(6thCir.1968)...............................45JanetRealtCor.v.Hoffman's,Inc.,154Fla.144,17So.2d114(1943).............Johnstonv.Faro,184N.Y.379,77N.E.388(1906)..........,.................LibertMutualIns.Co.v.Davis,412F.2d475(5thCar.1969)..................48louisville&NashvilleRailroadCo.v.U~S~(238U~S~1(1915)~~~~~~~~~~~~~~~~~~~~~~~MissouriPacificRailwaCo.v.LarabeeFlourMz.llsCo.,211U.S.612(1909)..........Munnv.Illinois,94U.S.113(1876)............Norlinv.Carr,211F.2d897(7thCir.954)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~126262645iv PacaeOtterTailPowerCo.v.U.S.,410U.S.366(1973)~~~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OverseasMotors,Inc.v.ImortMotors,Ltd.,375F.Supp499(E.D.Mich.1974)gaaadonotherrounds,519F.2d119(6thCar.),cert.denxed,423U.S.987(1975)~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~PennslvaniaGassWaterCo.v.FPC,463F.2d1242(D.C.Cir.1972)................48,49,50Pittsburh,C.C.&St.L.R.Co.v.~Kinne,95OhioEt.64,115N.E.505(1916)~~~o~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12Reichenbachv.Smith,528F.2d1072(5thCar.97652ScenicHudsonPreservationConferencev.FPC,354F.2d605(2dCar.1965),cert.deniedsnhncm.ConsolidatedEdisonCc.ofNewYorkv.ScenicHudsonPreservationConference,384U.S.941(1966)...............Snderv.SouthernCaliforniaEdison,44Cal.2d793,285P.2d912(1955)...........14SouthernSteamshiCo.v.NLRB,316U~S~31(1942)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~16Srinerv.Citizen'sCas.Co.ofN.Y.F246F.2d123(5thCar.1957)..................48Sternbererv.U.S.,401F.2d1012(CtoClo1968)~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~~~Tarbellv.RutlandR.Co.,73Vt.347,41Ao6(1901)o.oo....o....o.oo..oooooo...UnitedStatesv.CaitalTransitCo.,325U~S~357(1945)~~~~o~~~~~~~~~~~~~~~~~~~~~~26UnitedStatesv.Griffith,334U.S.100,1948)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(28WesternUnionTelerahCo.v.CallPublxshznCo.,181U.S.92(1901)............26 PacaeAGENCYCASESConsumersPowerCo.(MidlandUnits1and2)gALAB452(6NRC892(1977)~~~~~~~~~~~~~~~~DukePowerCo.(CatawbaNuclearStation,Units1and2),LBP-74-47,7AEC1158.(1974)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~17'8/20~224-5,23ReFloridaPower&LihtCo.,FERCDocketNos.ER78-19(PhaseI)andER78-81,OpinNo.57,32PUR4th31(1979)............FloridaPower&LihtCo.,FERCDocketNo.ER78-19(PhaseI),"OpinionandOrderDenyingRehearing",OpinionNo.57-A(October4,1979)..................,....FloridaPower&LihtCo.(St.LuciePlantUnitNo.2),CLI-78-12,7NRC939(1978)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~FloridaPower&LihtCo.(St.LuciePlantUnitNo.2),LBP-79-4,9NRC164(1979).ion6,27,326,3252HoustonLihtin&PowerCo.(SouthTexasProject,Units1&2),NRCDocketNos.50498AetalgOrder(April15'980)~~~~~~~ViriniaElectricPowerCo.(NorthAnnaPowerStation,Unitsand2),InitialDecision,LBP-7554~NRCI75/9(Sept.10,1975).....~..~..~~~...~~~~~~~5213-14,15STATUTESAtomicEnergyActgl(a)52(d)g2(e)52(g)52(i)53(d)5103(d)5105(a)5105(c)(6)~42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.52011(a)52012(d)f2012(e)52012(g)52012(i)52013(d)g2133(d)g2135(a)f2135(c)(1973)(1973)(1973)(1973)(1973)(1973)(1973)(1973)(6)(1973)13131313131313,172625 ParcaeMISCELLANEOUSFed.R.Eirid.408,andComment..................passimU~C~Csg2609~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~5115Williston3d51751.................~~~.~..~..12 BEFORETHEUNITEDSTATESNUCLEARREGULATORYCOMMISSIONBEFORETHEATOMICSAFETYANDLICENSINGBOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389AREPLYOFFLORIDACITIESTOFLORIDAPOWER&LIGHTCOMPANY'SRESPONSETOJOINTMOTIONFloridaCitieshavebeenactivelypursuingtheirrightstonuclearaccess,transmissionandcoordinationforalongtime.FloridaPower&LightCompany("FP&L")hasenteredintoasettle-mentwiththeGovernmentparties,whichamongotherthingsgrantssomecitiesparticipationinSt.Lucie2.TheCitiesfindthesettlementunacceptablebecauseitdoesnotrecognizetheirrightsorsatisfytheirneeds.Thesettlingpartiesseekwhattheycall"immediateimplemen-tation",thatis,Boardapprovalandanordergrantingimmmediateeffectivenesstothesettlement.Inastronglywordedpleading,filedDecember3,1980,FP&LseekstopreventasubstantiveBoardreviewofthesettlementtodeterminewhetheritisinthepublicinterest.Bypressingitsrighttowithdrawthesettlement,ifitisnotacceptedimmediatelyandwithoutconditions,theCompanyseekstoimposethetermsofthesettlementupontheCitiesortoforceyearsofexpensivelitigationinordertoavoidmodifica-tionsoradditionalterms.TheCompanyseekstojustifyitspositionbyattackingtheCitiesasbeing"lessthansincerein espousinginterestinparticipationinSt.LucieUnitNo.2"andallegesthatthey"wouldpursueastrategyofprolongingnego-tiationsoverthetermsofparticipation."FPGLResponse,p.9.ThefollowingisinreplyandoppositiontoFPGL'spleadingofDecember3,1980.INTRODUCTION1.Itistimetoconfronttheobvious:UntiltheinstantsettlementwiththeGovernment,FP5Lhasresistedsellingvir-tually~ancapacityfromSt.Lucie2oritsothernuclearunits.Foryears,bothinthecontextoftheSouthDadeproceeding(DocketNo.P-636-A)andthisproceeding,theCompany'openlydeclaredpositionhasbeenthat,apartfromverylimitedoffersundertheearlierSt.Lucielicenseconditions,itwasundernoobligationtosellnuclearcapacitytotheCitiesandwouldnotdoso.WhileFP&Lprofesses"reasonforbelievingthatatleastsomeoftheinterveningCitiesarelessthansincereinespousinginterestinparticipationinSt.LucieUnitNo.2",itisawarethatCitieshaveobjectedandcontinuetoobjectthattoolittlecapacityisbeingofferedattoounfavorableterms.However,nothingpreventstheCompanyfromofferingmorecapacity,shoulditdesiretotesttheCities'sincerity".FP&LrefusestodealingreateramountsofnuclearcapacitythanaresetforthintheGovernmentsettlementorunderimprovedterms.2.WhileFP&LclaimsthattheCitieswillnotbehurtbyimmediateimplementationofthelicenseconditions,itseekstoimposelegallybindingcontracttermswhichsubsequentBoard orderscouldnotchange.Moreover,evenifthecontractscouldbechanged,underFPGL'slegaltheoriesitwouldtakeyearsofexpensivelitigationtochangetheterms.InanumberofaspectsthetermsofferedarelessfavorabletotheCitiesthantheNRChasapprovedinothernuclearparticipationagreements.ThetermsthatFP&Lwouldimmediatelyimposelackareliabilityexchangeorsellbackprovision,providequestionablebackuparrangements,includealiabilityclauseunderwhichFPGLwouldexcuseitselffromvirtuallyanywrongfulactionthatitmaytakeinconstructingoroperatingtheplant,includeonerousdepositrequirements,andomitopportunitiesfortransmissioninvestmentandothereconomicarrangementscommontotheindustry.3.FPGLdoesnotwanttheBoardtobeabletoruleanytimesoonwhetherthesettlementisinthe"publicinterest"orwhethercorrectiveconditionsshouldbeordered.Thus,itseekstoimposethesettlementwithout~ansubstantiveBoardreview.4.TheFloridaCitiesgrouphasbeenlitigatingwithFP&Lsince1976overthesematters.Iftheonlywaythattheycanobtainanypracticalreliefistoaccept"immediateimplementation"ofthesettlementandenterintoSt.Lucieparticipationcontracts1/nomatterhowadversetheterms,atleastsomecitiesmayfeelconstrainedtodoso.Thepresentandantici-patedcompetitivesituationgivesthemnochoice.Indeed,the1/ContractswouldprobablybewiththeFloridaMunicipalPowerAgency.
verypointFPaLmadeinitsvariouspastattemptstoacquiremunicipalsystemswasthatithadaccesstoeconomicgenerationsourcesandthatsmallersystemsdonot.TheCitiessimplycan-notaffordtheluxuryoflitigatingforevertoobtainreasonableterms.5.Giventhiscontext,theCities'ositionisthat:(a)Bythreateningtowithdrawthesettlementoffer,FPGLhasthepowertoseektocoerce"immediateimplementation"ofitsterms;however,useofsuchthreatenedoractualwithdrawaltoprecludeBoardconsiderationofthesettlementwoulditselfbecoerciveandanticompetitive.TheBoardhasareviewfunctiontodeterminewhetherthesettlementshouldbeaccepteduponreasonableconditionswhichtheCitiesseek;reaso-nable.conditionswouldincludecorrectionofthoselicensecon-ditionsthatwouldpermitimpositionofunfairandanticom-petitivecontracttermsorthatmightprecludepracticalreliefafterfutureproceedings.(b)Reasonabletimeperiodsandproceduresshouldbesetforresolutionoftheentireproceedingoratleastforsimplificationofissuesandprocedures.ARGUMENTI.TheBoardHasTheAuthorityAndObligationToAssureThatTheSettlementIsInThePublicInterest.AswasrecognizedinCatawba,aBoardorderacceptingapro-posedsettlementshouldnotissueabsentareasonablelikelihood thatthesettlementis"withinthepublicinterest".DukePower~Coman(CatawbaNuclearStation,Unitsland2),UBP-74-47,7AEC1158,1159(1974).FP&LwouldhavetheCommissionignorethesestandardsandissueanorderacceptingthesettlementwithoutconcernastowhetheritisinthepublicinterest.Thispositionisuntenable.AstheSecondCircuitstatesinScenicHudsonPreservationConferencev.FPC,354F.2d608,620(2dCir.1965),cert.deniedsubnom.ConsolidatedEdisonCo.ofNewYorkv.ScenicHudsonPreservationConference,384U.S.941(1966):"Inthiscase,asinmanyothers,theCommissionhasclaimedtobetherepresen-tativeofthepublicinterest.Thisroledoesnotpermitittoactasanumpireblandlycallingballsandstrikesforadversariesappearingbeforeit;therightofthepublicmustreceiveactiveandaffirmativeprotectionatthehandsoftheCommission."Ingrantinglateinterventioninthisdocket,theCommissionrecognizedthispolicy:"Ifahearingisconvened,wethinkitshouldencompassallsignificantantitrustimplicationsofthelicense,notmerelythecomplaintsofinterveningprivateparties.Ifnooneelseperformsthisfunction,NRCStaffshouldassurethatacompletepictureispre-sentedtolicensingboards."FloridaPower&LihtComan(St.LuciePlant,UnitNo.2),CLI7812g7NRC939g949(1978)~ThefactthataproposedsettlementisbeingconsidereddoesnotdetractfromtheBoard'sauthoritytoattachconditionstoapprovalofthesettlementassurethatitisinthepublicinterest.PennslvaniaGas&WaterCo.v.FPC,463F.2d1242(D.C.Cir.1972).WhileFP&Lmaythreatennottoacceptpublic interestconditions,attheleasttheBoardshouldconsidertheirappropriateness.SeeAtlanticRefininCo.v.PublicServiceCommissionofNewYork,360U.S.378(1959),wheretheSupremeCourtadmonishedtheFederalPowerCommissiontoprotectthepublicinterest,withoutregardtothreatsbytheapplicantsthattheywouldwithdrawproposedgassalesiftheCommissionorderedconditions.FP&LarguesthatFloridaCitiescannotbehurtby.immediateimplementationofthesettlementconditions,eveniftheyareunreasonable,becausetheCitiesreceivecertainbenefitsunderthesettlementandcanlitigateformore.ThisstatementistrueonlytotheextentthattheCitieswouldnotbeboundbyadversepresentlicensetermsorimposedcontractualprovisions,shouldtheBoardfindthata"situationinconsistentwiththeantitrustlaws"exists,1/andonlytotheextentthatCities'onfinement1/A"situationinconsistent"doesexistasamatteroflaw:TheFifthCircuithasmadeafactualfinding,whichisbindingonPP&Lunderdoctrinesofresjudicataandcollateralestoppel,thattheCompanyhasconspiredwithFloridaPowerCorporationtounlawfullydivideFlorida'swholesalepowermarkets.GainesvilleUtilities
Deartmentv.FloridaPoweraLihtCo.,
573F.2d292(1978),cert.denied,439U.S.966(1978).Morerecently,theFederalEnergyRegulatoryCommissionhasfoundthat"FPGL'spro-posals[refusingtodealinwholesalepower]wereunjustandunreasonableunderthestandardsofSections205and206oftheFederalPowerAct,particularlybecauseoftheiranticompetitiveeffect."FloridaPower6LihtComan,FERCDocketNo.ER78-19(PhaseI),"OpinionandOrderDenyingRehearing",OpinionNo.57-A,October4,1979,SlipOpinionatl.Indeed,inmakingthisdetermination,theCommissionreliedinpartupon"unrebuttedCompanydocumentsinevidence"thatFP&L'spolicywastodenyothersaccesstonucleargeneration.Re:FloridaPowerTheofFPaLnuclearillegal~sura.termsofthesettlementthemselvesdemonstratearefusaltodealwithutilitiesoutsideitsserviceareaincapacityandotherservices,therebyperpetuatingtheterritorialityfoundbytheFifthCircuitinGainesville, tosuchadverselicensetermswouldberemediablelater~Suchisnotthecasehere.TheCompanyrecognizesthatifthelicenseconditionsasproposedprecludeorprejudicetheCities,thentheycouldnotbeadoptedasinthepublicinterest.TheCompanystatesatp.6:"ThedecisiveanswertotheCities'ear,however,isthatimmediateattachmentoftheCommissionoftheconditionwillnotinanywayprejudicetherightofCitiesunwillingorunabletoparticipateinSt.LucieNo.2underthesettlementconditionstopursuetheirclaimof'rights'oparticipateundermorefavorableconditions.AnOrderattachingtheconditionsimme-diatelydoesnotimairtherihtofanintervenortohaveitscaseheardonthemertsandtoavailitselfofandifferentoraddxtxonalcondztxonsreardenarticxationxnSt.LucreUn>,tNo.2whichmxhtultima-telbeordered.Thus,theCities'rofessedfear-thatanintervenorwhichfailstopar-ticipateinaccordancewiththesettlementconditionswouldloseanyopportunityforpar-ticipationevenifprevailedonthemeritsandobtaineddifferentconditions-isgroundless."(Emphasissupplied)Indeed,consistentwiththeabove,theCompanysupportsanewconditionassertedlydesignedtopermitmodificationofpar-ticipationcontracts,shouldtheBoardordernew"control"provisions.However,thisadditionalFPGLcommitmentislimitedsolelytoaconflictwiththeprinciplesofSectionVIII(i)andwouldbeoflimitedvalue,ifthenewlicenseconditionspermitotheradversecontractualterms.Forexample,iftheconditionpermitsalaterreductionofnuclearcapacityofferedwhich-inthecontextofthesmallamountsofnuclearcapacitybeing purchasedandfinanced-couldhaveadversefinancingimpacts,theCitiescouldbeprecludedasapracticalmatterfromtakingadvantageoftheproposedclause.Moreimportantly,onp.6,n.6,FPaL"questions"theNRC's"authoritytoamendaparticipationagreement"and"reservesitsrighttotakeanylegalpositiononthatquestion".TheplainimplicationisthattheCitieswouldbeboundbyparticipationagreementsthattheynowenterintoasaresultofanorderapprovingimmediateimplementation.ImmediateimplementationshouldnotbegrantedunlessFP&Lacceptsasaconditionitsstatementinthetextofitspleading,withoutitsfootnotequalifications:"Theattachedconditions'donotimpairtherightofanyintervenortohaveitscaseheardonthemerits'ndtoavailitselfofanydifferentoradditionalconditionsregardingparticipationinSt.LucieUnitNo.2."Further,thelicenseshouldbeconditioned,asisdiscussedinfraandinCities'nswestoJointMotion.II.TheLicenseConditionClauseBindingTheArbitratorConcerninLiabilitIsContrarToPublicPolicFP&Lhasinsisteduponasettlementtermwhichstatesthat~anliabilityprovisionproposedbytheCompanymustbeacceptedunlessthearbitrator"determinesthattheprovisionproposed'bytheCompanyconstitutesanunreasonableproposalwhichrendersmeaninglesstheCompany'sofferofparticipationinSt.LucieUnitNo.2."LicenseCondition,SectionVII(E)1.TheCompany defendsthisprovisionascdmmerciallyreasonable,since"norationalfirmwouldenterintoacommercialarrangementwhichinvolvesundertakingsubstantialpotentialliabilitieswithoutanyprospectofprofit..."Response,p.19.TheshortansweristhatifFP&Lissoconfidentthatitspositioniscorrect,itneednothavetherestrictivelicenseconditionlanguage,languagewhichtoourknowledgeappearsinnootherlicenseconditionsorderedoragreedtobeforetheNRC.FP&Larguesthatitissellingnuclearcapacity"withoutanyprospectofprofit".TheCompanyissellingnuclearcapacityinanattempttosettleclaimsofnuclearmonopolization.TotheextentthatitwouldviolateantitrustprinciplesforFP&Ltobeabletoconstructandoperatenuclearunits,whileexcludingsmallercompetingsystemsandtheirratepayersfromtheeconomicadvantagesassociatedwithsuchunits,itwouldbeagainstpublicpolicyfortheCompanytoretainfullownershipoftheunits.Therefore,FP&Lisnotentitledto"profit"inthesensethattheCompanyusestheterm.1/Entitlementtoa"profit"onnuclearconstructionwouldmeanthatlargeutilities,whoaretheonlyoneswhocanconstructandoperatenuclearplants,couldbegivenabuilt-incompetitiveadvantageoversmallercompetitorsbecauseofthisability.NRClicensingwasdesignedtoprecludesuchresults.1Infact,FP&Lzswronginitscharacterization.Inthenor-maluseoftheterm,thereturntotheequityholdersofabusi-nessisprofit.InthesaleofSt.LuciecapacityFP&Lseekspaymentforequitycostsassociatedwiththeconstructionoftheplant.Traditionally,asasellerofmonopolyservices,utilityservicesaresoldat"cost",whichincludesreturn.Thus,theplantwillactuallybesoldataprofit.
10InnegotiatingtheGovernment'swithdrawalfromlitigation,FP&Lwillobtainvaluableconsideration.Furthermore,FP&LtherebyincreasestheCities'itigationburden.Thesettlementis"profit"enoughtoFP&L,withoutimposinganundulyrestric-tiveliabilityterm.AsthesolepossessoroftheabilitytoconstructandoperatethenuclearplantgFP&Lfurtherstatesthatthepricetosmallersystemsofnuclearparticipationisthattheymustwaiverightstheywouldotherwisehaveunderlaw.Iftherewerenolicenseconditionprovisionswithregardtoliabilityandthecontractsweresilent,anyliabilitytothirdpartieswouldbeborneinaccordancewithstatutoryandcommonlawstandardsthathavedevelopedovercenturies.TotheextentthatFP&Lhaddefensesthatunderagencylaworotherwiseitsliabilityshouldbelimited,thesecontentionscouldberaisedindefenseofanyclaim.However,byimposingLicenseConditionVII(E)(1),FP&LseekstoavoidhavingtomakeorprovedefensesthatitmighthaveunderagencyandtortlawandtoforcetheCitiestoagreetoliabilityinadvance,evenwhereFP&L'sactionscausealoss.Underthelicenseconditions,FP&Lwouldhavecompleteandabsolutecontrolovertheoperationoftheplant.EvenassumingthatitwouldbejustifiabletoincludeatermsimilartotheoneintheMidlandagreements,immunizingFP&Lfromliabilityattri-butabletotheCities'hareoftheplantforconsequentialdama-gesandforitsnegligentconductexceptwheretheCompanyhad failedtouseprudentutilitypractices,thequestioniswhethertheCompanyisentitledtoevengreaterprotectionand,ifso,whatprotection.Whereoneoperatesequipmentthatcancausegreatharm,thereismore-notless-reasontoinsistonhighlevelsofcare.ThereisnoreasoninlaworequitywhyFPGLshouldbelegallyexcusedfromliabilityforitsownimprudentconduct.Underthelawliabilityordinarilyfollowsfault.Insurancemaycoversuchliability,butCitiesshouldnot,ineffect,beforcedintoinsuringFP&L.Thisisespeciallytruewherethereleaseprovisionispartofacontractforsomethingwhichoneparty(FPGL)controlsandtheother(Cities)cannothaveother-wisethanbythecontract.Inthesecircumstances,whenthesub-jectofthecontract(here,nuclearaccess)istiedtothereleaseprovisiononatake-it-or-leave-itbasis,itcontravenespublicpolicy.See,Fedorv.MauwehuCouncil,BoScoutsofAmerica,21Conn.Supp.38,143A.2d466,467(1958)(Agreementsignedbyinjuredcampers'arentsrelievingboyscoutcampofliabilityunenforceableasagainstpublicpolicy:lowincomefamilyhadnochoiceotherthantosignwaiverinordertoavailchildrenofbenefitofcamp);JanetRealtCor.v.Hoffman'sgInc.,154Fla.144,147,17So.2d114(1943)("Publicpolicyfavorscompetitionintradeandopposesunreasonablerestraintsonusefulcommoditieswhenthepublicwelfareisinjuriouslyaffected.");Seealso,Tarbellv.RutlandR.Co.,73Vt.347,41A.6(1901);Johnstonv.Faro,184N.Y.379,77N.E.388(1906);
12Pittsburh,C.C.6St.L.R.Co.v.Kinne,95OhioSt.64,115N.E.505(1916);Huhesv.WarmanSteelCastinCo.,174Cal.556,163P.885(1917).ProfessorWillistonhastermedprovi-sionsavoidingliabilityinthiscontext"peculiarlyobnoxious".15Williston3d51751at148.Wherethepartyseekingtoavoidliabilityhasapublicinterestobligation,itcannotavoidtheconsequencesofitsneglectofthatobligation.L'Heureaxv.Hurle,117Conn.346,356,168A.8(1933)("Publicpolicyrequiresthatdutiesofthiskindshallbedischarged,andthatallconsequencesofafailuretodososhallfollow.")Courtshavespecificallyrefusedtopermitpublicutilitiestoavoidliabilityforevenordinarynegligencein'theirperformanceoftheirdutyofpublicservice.AFloridacourthasobserved:[Wjheretherelativebargainingpowerofthecontractingpartiesisnotequalandtheclauseseekstoexemptfromliabilityfornegligencethepartywhooccupiesasuperiorbargainingposition,enforcementoftheexculpatoryclausehasbeendenied.(citationsomitted)4/4/Atypicalsituationinvolvingsuchinequalityforbargainingstrengthisonewhereapublicuti-lityoracompanyservingsomepublicfunction,asapreconditiontodoingbusinesswiththem,requirestheircustomertosignastipulationexemptingthecompanyfromliabilityfornegligence.IvePlants,Inc.v.FMCCor.,282So.2d205,208-209(Fla.App.
13FP&L'simportantdutiesasanelectricutilityaremadeevenmorecompellingbecausetheconstructionandoperationofanuclearunitisatissue.ThetermsoftheAtomicEnergyActandpriordecisionsbythisCommissionareunequivocalinthisregard.TheActisrepletewithreferencestoits'purposes,whichareabovealltogoverntheuseofnuclearpowerinamannerconsistentwiththecommondefenseandsecurityofthepublicandwiththepublic'shealthandsafety.SeeAEA551(a);2(d)(e)(g)(i);3(d);103(d).Section2(e)statesparticularlythat:Sourceandspecialnuclearmaterial,produc-.tionfacilities,andutilizationfacilitiesareaffectedwiththeublicinterest,andreulatxonbtheUnitedStatesoftheproduc-tionandutilizatxonofatomicenergyandofthefacilitiesusedinconnectiontherewithisnecessarinthenationalinteresttoassurethecommondefenseandsecurxtandtorotectthehealthandsafetoftheublxc.ThisCommissionhasalreadyrecognizedthedutyincumbentuponittoenforcethehigheststandardsofcareconsistentwiththispublicinterestobligation.InanalogouscircumstancestheCommissionhasrefusedtoallowavoidancebyalicenseeoftheconsequencesofnegligentactscommittedbyindependentcontractors,preciselybecauseitwouldbeinimicaltothepublicinterest.ViriniaElectricPowerComan(NorthAnnaPowerStation,Units1&2),InitialDecision,LBP-75-54,NRCI75/9,Sept.10,1975.TheissueintheNorthAnnacasewaswhetherconstructionpermitsshouldbesuspendedorrevokeddueto 14omissionsofmaterialfactsandmaterialmisstatementsmadeinreportingtotheCommission.TheASLBheldthatVEPCOcouldnotdelegateitsxesponsibilitytofulfillitsreportingrequirements,stating:AstheActimplies,thepublichealthandsafetyistoovitaltothenationalinteresttopermitsuchanavoidance[ofresponsibility].Thus,therequixementsoftheActandtheCommission'sregulationsthereundertoprotectthepublichealthandsafety,canbeenforcdonlyiftheapplicant's,reportingdutiesarenon-delegable.ThisrulewasappliedinthecaseofSnderv.SouthernCaliforniaEdisonCo.,44Cal.2d793,285P.2d912(1955),whereitwasheldthattheState'sregulatoryschemeprohibitedautilityfxomescapingliabilityfornegligenceonthegroundsthatthenegligencewascommittedbyanindependentcontractor.2NRCat505.Thus,itisrequiredbyFP&L'spublicduties,bothasanelectxicutilityandasanuclearplantlicensee,thatitassumeliabilityforanyharmwhichresultsfromitsnegligence,andafortiorifromanymoreseveredegreeofbadbehaviorsuchasgrossnegligenceorwillfuldisregardforitspublicduties.AstheSixthCircuitobserved,"...wecanimaginenoarearequiringstricteradhexencetorulesandregulationsthanthatdealingwithradioactivematerial,fromtheviewpointofbothpublichealthandmaterialsecurity."HamlinTestinLaboratoriesv.U.S.AtomicEnerCommission,357F.2d632,638(6thCir.1966).
15ThisCommission'sdecisionintheNorthAnnaproceeding,~sura,alsorevealsthatitisagainstthepublicinterestforFP&Ltobeheldaccountable(thatis,liable)foreveninten-tionalwrongdoingonlywhenitisdonebyoneexercising"managerialresponsibility".Whilethemeaningofthatphraseisfarfromclear,anyintendedlimitationmustberejected:[TjhereisnomeritintheLicensee'spleathatitsofficershadnoknowledgethatthestatementsdiscussedhereinwerematerialfalsestatements.IftheLicenseewereper-mittedtoavoidresponsibilitybecauseitsagert'tsoritsindependentcontractorsfailedtoinformitofmaterialinformation,itcouldthwartthepurposeofthisAct.2NRC504-505.Thesameprinciplemustapplytonegligentactsofalicensee'sagents.FPGLcitesnocasesinsupportofitsgeneralclaimthatithasapresumedrighttooperatetheplantunsafelywithoutbeingsubjecttoliability.TheCompanyisstatingthat,ifseveredamagetothirdparties(forexample,residentslivingnearSt.Lucie)werecausedbyafailureofitsemployeestoconnectbackupcoolingequipment,indirectviolationofNRCrules,othersshouldbearthecostsofitslackofsafety.Thatpropo-sitionthatitshouldbeexcusedfromwrongdoingasamatterofgeneralcommerciallawhasnosupportinsofarasweareaware.NordoesithaveNRCcasesupportthatweknowof.AcommonsensewaytotestthepropositionpropoundedbyFPsLthatitshouldbefreedofliabilityforits,ownwrongdoingwouldbetoaskwhetherFP&Lwoulddesireitspositiontobegenerallyknown.
16MesuspectthatifitwerepublicknowledgethatFP&Linsisted-orthattheNRCagreed-thattheonlywaysmallersystemscouldobtainaccesstonuclearpowerwouldbetoexculpateFP&Lfromliabilityforoperatingtheplantsunsafely,andeveninviola-tionofNRCregulations,anationalscandalwouldresult.IfwearecorrectfFP&Lshouldnotbeabletoburyitsshockingpropo-sitioninthetechnicallanguageoflicenseconditions.Thelaw,ofcourse,haspurposesbeyondrecompensationforloss.Onesuchpurposeisencouragementofproperconduct.OnecanhardlyimaginetheNuclearRegulatoryCommissionseekingtoestablishaprinciplethatreleasesnuclearplantoperatorsfromliabilityforunsafeplantoperationsandindeedtheCommissionhasrefusedtodosointhepast.NorthAnna,~sura.SuchpolicyplainlyrunscontrarytothepurposesunderlyingtheAtomicEnergyAct.Apartfromantitrustconsiderations,theBoardhasaresponsibilitynottoignoreotherpurposesofitsenablingstatute.AstheNLRBwasadmonishedinanother(butnottoofarremoved)context,administrativeagenciesarenottocon-centrateso"singlemindedly"ontasksbeforethemthat"theywhollyignoreotherandequallyimportantCongressionalobjectives."SouthernSteamshiCo.v.NLRB,316U.S;31,47(1942).Moreover,FP&L'sattemptstoconditionaccesstonuclearpowerbysmallersystemsontheiragreeingtosufferthecostoftheCompany'simprudentoperationofnuclearunitsisplainlyagainstpublicpolicy.TheCommissioncannotapproveanylicense(orcondition)which"wouldbeinimicaltothecommondefenseand
-17securityortothehealthandsafetyofthepublic."AtomicEnergyAct5103(d);10CFR550.40(c).Itisapparentthatthepurposeofthelicenserequirementistoprotectmembersofthepublic,Drakev.DetroitEdison,443F.Supp.833,840(W.D.fMich.1978),byprovidingadequateexaminationbytheCommissionofvariousfactors,including"competentsupervisionandoperationofnuclearfacilities."Drake,at837.Onewouldexpectthatcommercialplantdealsamonglargerandsmallerutilitieswouldreflectcontractualprovisionsweightedtowardslargerones,whoafterallcontroltheplantsinthefirstinstanceandwhogenerallyhavemorebargainingpower.Infact,however,mostplantagreementsarelessrestrictivetosmallerparticipantsthantheproposedFP&L-Orlandoagreement,whichFP&LseekstoimposeontheCities.FP&LessentiallyadmitsthattheliabilityprovisionsintheMidlandagreementaremorefavorabletoparticipants.AppendixA.TheFloridaPowerCorporationCrystalRiverAgreementsmakeFloridaPowerliableforfailuretouseprudentutilitypractice.AppendixA.WhileFP&LrespondsthattheCitiespaid110%ofFloridaPowerCorporation'scost,thatcostwasfarless-aboutone-thirdoftheanticipatedSt.Luciecosts.1/1/Asmightbeexpected,liabiityclausesinparticipationagreementsvaryintheextenttowhichownersmaybeliabletoeachotherorthirdparties.Forexample,theliabilityclausesoftheDukePowerCompanyandcertainotherparticipationagreementsarerelativelyfavorabletotheoperators,asFP&Lstates.However,thoseagreementsincludemanyfavorableecono-micterms.Forexample,theDukeagreementshaveareliabilityexchangeandsell-backopportunities,whichFP&Lwouldwithhold(footnotecontinuedonnextpage)
-18tVedoubtthatanyoftheattorneysinvolvedinthiscase,whethersupportingoropposingtheproposedsettlementlicenseconditions,wouldinvesthisorherownmoneyinaventurewhereaprospectivepartnerwouldhavecompletecontrolofconductingabusiness,butwouldnotbeliabletoco-ownersforanythingthepartnerdid.Certainly,amunicipalityshouldnotbetreatedinsuchamanner.Yet,underitsproposedlicenseconditions,FPSLcouldviolatetheagreementitselfwithoutpenaltyorameansofredressforthosewhoareharmedasaresult.TheproposedliabilityprovisioninparagraphVII.E(1)shouldbeeliminated.(footnotecontinuedfrompreviouspage)here.IftheDukereliabilityexchangeconceptswereappliedinFloridaandSt.LucieUnit2weredamagedorwentoutofservice,co-ownerswouldbetreatedasowning1/4oftheshareoftheiroriginalpurchasefromtheunit.Bythesametoken,ifSt.LucieUnit1orTurkeyPointUnit3or4wentoutofservice,co-ownerswouldbereatedasowning1/4ofeachoftheseunits.AnticipatedcostsofthisarrangementwereapproximatelyhalfofSt.Lucie.SinceMidlandwasthefirstfullylitigatedantitrustcaseandsinceFloridaPowerCorporationisFPGL'sneighboringutility,theMidlandandCrystalRiveragreementsseemgoodguidesastoappropriateliabilityclauses.However,ultimatelythequestioniswhetherasettlementimposing(orpermittingacompanytoimpose)overlyrestrictiveliabilityclausescanbesaidtobeconsistentwiththepublicinterest.
19III.FP&LShouldNotBeAbleToOperateTheUnitContraryToTheInterestsOfTheOtherParticipantsWithoutBeingSub'ectToAmeliorativeContractProvisions.Undertheproposedlicenseconditions,FP&Lhascompletecontroloverconstruction,operationanddecommissioningoftheunit.UnderthesetermsFP&Lcoulddelaytheplant,failtomaketheplantavailableforbaseloadpower,orprematurelycancelitforitsowninterestsanddirectlycontrarytotheinterestsofJotherparticipants.FP&Lrecognizesthatitscompletecontrolcouldcreateinequitiesforotherco-ownersandhasproposedacorrectivelicenseprovisionthatwouldpermitcontractmodifica-tionsinthisonearea,butonlyintheeventtheBoardweretoapprovemodificationsofthelicenseconditionsandonlyifpar-ticipantsweresubjecttosubsequentcapacityreductionswhichtheyhadalreadyfinanced.ThereisnoequitablereasonthattheCitiesshouldbeforcedtoacceptthecostsofFP&L'sself-servingactsasaconditionofCityparticipation.FloridaCitiesdonotobjecttoFP&Lgasmajorityowner,havingcontrolovertheoperationoftheplant,assuch.However,intheeventthatsuchcontrolisexercisedinFP&L'sinterestsandagainstthatofotherparticipants,FP&Lshouldmaketheotherparticipantswhole.AlicenseconditiongrantingFP&Lsuchcontrol,butstatingthatintheexerciseofsuchcontrolFP&Lshallbeobligatedtotakefairaccountoftheinterestsofotherco-ownersortoredresstheviolationofsuchinterestswherethisisimpossiblewouldsuffice.Suchprovisionsshould 20providesufficientleewaysothatintheeventofdisputeanarbitratorwouldnotfeelforeclosedfromequitablybalancingtheinterestsofthepartiesintheeventofcontractdisputes.1/Othercontractconditionshavesuch,proposals.Forexample,theMidlandownershipandoperatingagreement(whichispartofthesettlementagreementinConsumersPowerComan,NRCDocketNos.50-329A,etal.)provides:6.1Authoritfor0erationandManaement.CONSUMERSshallhavesoleauthoritytomanage,control,maintainandoperateMIDLAND,andshalltakeallsetpswhichitdeemsnecessaryorappropriateforthatpurpose.CONSUMERSshalldischargesuchauthorityinaccordancewithGoodUtilityPracticeandtheotherprovisionsofthisAgreement.Anacceptaeconditionwouldstate:"InaccordancewithlicenseconditionVII(i),Companymayretaincompletecontrolandactfortheotherparticipantswithrespecttothedesign,engineering,construction,operationandmain-tenanceofSt.LucieUnitNo.2,andmakealldeci-sionsrelevanttheretoinsofarastheydealwiththerelationshipbetweentheCompanyandtheotherparticipants,including(butnotlimitedto)deci-sionsregardingadherencetoNRChealth,safetyandenvironmentalregulations,changesinconstructionschedule,modificationorcancellationoftheunitandoperationatsuchtimeandsuchcapacitylevelsasitdeemsproper,allwithouttheconsentof.anyparticipant.InexercisingsuchauthorityCompanyshallgivedueregardtothereasonableinterestsandneedsofotherpartiesandshallactinaccor-dancewithGenerallyAcceptedElectricUtilityPractice,theselicenseconditionsandthepar-ticipationagreement..IntheeventtheinterestsorneedsofthepartiesconflictandFPLexercisesitsauthoritytotakeactionscontrarytothoseinterestsorneeds.FPLshalltakereasonablestepstoassurethatthereasonableinterestsandneedsofallpartiesaresatisfiedorshallappropriatelycompensatesuchotherparties."
21Acityoughtnottohavetoturnovermoneytoabusinesscompetitor-suchasFP&L-andtogivethatcompetitorcompletecontroloverafacilityessentialtoitwithnoobliga-~tiononthepartofthecontrollingpartytoconsidertheCity'interests.Suchlicenseprovisionisanticompetitiveonitsfaceandagainstpublicpolicy.ItmustbestressedthatFP&Ldoesnotdefendtheneedforsuchcompletecontrol.Theonlyargumentsitadvancesinfavorofitspositionis(1)thatthecitedlanguagewasinthelicenseconditionsacceptedbytheCompanyin1974(notunsurprisingly)andis(therefore)includedinitspresentconstructionpermitand(2)thattherearecertainameliorativeprovisionsintheOrlandolicenseconditions,whichallegedlylessenCities'isk.TheOrlandoparticipationcontractcontainsnorequirementwhat-soeverwithregardtowhentheplantwillgointoservice;itpermitsFP&LtooperatetheplantinanymannerFP&Lchooses;anditprovidesforthesupplyofsubstitutepowertoco-ownersonlywhentheCompanyfailstousetheplantforbaseloadbecauseofeconomic,butnotforoperational,reasons1/,anditpermitstheCompanycompletediscretionwithregardtoadditionsorreconstructionaswellascancellationorretirementoftheunit..Thus,thereissubstantialreasontofearthatifthepresentconditionsareadopted,FP&LwillinterpretitsrightstatedinproposedlicenseconditionVII"toretaincompletecontroland1Forexample,FP&LmaychoosetobaseloadfuturecoalunitsinplaceofSt.LucieUnit'forreasonshavingtodowithFP&L'stotalgenerationconfiguration.
22actforotherparticipants"assanctioningsuchdecisionswithoutregardtotheinterestsofsuchotherparticipants.IV.FP&L'sRefusalToOfferAReliabilityExchangeAndSellbackConstitutesABlatantActofDiscrimination.AswasexplainedbytheAppealBoardinMidland,aproblemfortheelectricutilityindustryisthatanygenerationunitmaybesubjecttoforcedoutagesorbetakenoutofserviceforrepairs.Industrycoordinationandpoolingarrangementsaredesignedtopermitutilitiestoconstructlargeeconomicunits,whilemilitatingagainstsuchrisks.ConsumersPowerComan(MidlandUnits1and2)g6NRC892952960'971005'0621064(1977).Afurthermeansofmitigatingtherisksofsuchoutagesorotherinefficientorexpensiveoperationsofunitsistoshareownershipinunits.Forexample,inoperatingfournuclearunits,FP&Lreducestheharmtoitselfifanyoneunitisoutofservicefordisproportionateperiods.Further,itsufferslesseconomicharmwhenoneparticularunitisdownforrepairs.Underareliabilityexchange,FloridaCitieswouldpurchaseallowedcapacityinSt.Lucie2attheSt.Lucie2price,butimmediatelytradesomeofsuchcapacityforcapacityinFP&L'sothernuclearunits.Thus,ifasaresultofsuchtradeseachFloridacityowned25%ofitstotalnuclearparticipationineachofFP&L'sfournuclearunits,whenanyoneunitisdown,aCitywouldlose25%ofitsnuclearentitlements;undersuchinsuranceconcepttotalsystemreliabilityisincreased.Seep.18,n.lg 23shura.Bythesametoken,FP&Lwouldenhancethe.reliabilityofitsopertations.BecauseitwouldtransferanequivalentshareofeachunittotheCitiesinexchangeforSt.ZucieUnit2capacity,itwouldequalizerisksofoutageamongitsunitsanditwouldreceivethehigherSt.Lucie2priceforallcapacity.Areliabilityexchangeisaninsuranceconceptwhichbenefitsallsystems.FP&LhasagreedtosuchconceptinitssettlementswithOrlandoandFt.Pierce.ThisconceptisembodiedintheCatawbaagreements.FP&LhasalsoagreedwithFt.PierceandOrlandotoa"sell-back"ofcapacitybythecitiesattheiroptionunderwhichFP&LwouldpurchaseacertainamountofcapacityfromtheCitiesoutoftheirparticipationshares.Suchconceptsareembodiedinmanyparticipationagreements.Becausemunicipalfinancingisoftenlessexpensivethaninvestor-ownedutilityfinancing,a"sellback"allowsapurchasingutility(i.e~,FP&L)tobuyelectricityatlessthanthatutility'sowncostofconstructingandoperatingtheunit.Ontheotherhand,itallowssmalleruti-litiesto"growinto"plantandtomakeaprofitonthesaleofelectricitytothelargerutility.QlThus,itplainlybenefitsbothparties.roughlythemidpointofthefinancingcostsbetweentheinvestor-ownedandmunicipalutility.FP&Zwouldimposetermsmorefavorabletoitandconditionthereliabilityexchange,whichisbeneficialtoFP&L,onagreementofsmallersystemstoagreetoitssellbackproposal.LetterofRobertJ.GardnertoEwellNenge,April1,1980,AppendixB.
24Initsansweratp.17,n.14,FP&Lstatesthatitwillnotofferthe"reliabilityexchangeandsellbackprovisions"thatare"containedinanagreementbetweenFP&LandtheFt.PierceUtilitiesAuthority".Thus,thetermsoftheofferwouldbediscriminatoryagainstFloridaCities.ThestatedreasonisthattheCitieshavenotagreedto"a'ettlementagreementwithFP&L".WhileFP&Lmaydeemtheseprovisionsancilliarytopar-ticipationagreementsorreservedformunicipalsystemswhohavesettledtheirlegalclaims,suchsellbackandreliabilityexchangeprovisionsareintegralportionsofotherparticipation-contractsanddirectlyaffecttheeconomicsandtheadvantagesanddisadvantagesofowningnuclearcapacity.FP&Lhassoughtappro-valbythisCommissionoftheOrlandoandFt.Pierceagreements.FP&L'slimitationinnotprovidingsimilarreliabilityandsellbackprovisionstotheothercitiesisplainlyanticompetitiveanddiscriminatory.AsmonopolyownerofnuclearcapacityavailableinFlorida,FP&Lshouldnotbepermittedtotransfercapacityonlessfavoredtermstosomeutilitiesthantoothers.Indeed,itisillegalforFP&Lasmonopolyownerofnuclearunitstodiscriminateagainstcustomersbyofferingtosellthesameproducttosomeonmorefavorabletermsthantoothers.AstheAtomicEnergyActitselfattests,especiallyinitsantitrustreviewprovisions,nuclearpowerisavaluedandvitalresource.SeeOtterTailPowerCo.v.U.S.,410U.S.366(1973).FP&Landotherscannotenterintofavoredagreementswhicheffec-tivelyexcludeordiscriminateagainstsomepotentialownerstotheadvantageofothers.AssociatedPressv.U.S.,326U.S.1 25(1945);Gamcov.ProvidenceFruit&ProduceBld.,Inc.,194F.2d484(1stCir.1952),cert.denied,344U.S.817(1952).HavingagreedtomakeavailablenuclearcapacitytoOrlandoandFt.Pierce,includingoptionsforreliabilityexchangeandsell-backarrangements,FP&Lcannotlegallydenysimilartermstootherparticipants.1/FP&L'sexcuseisthat,unlikeOrlandoandFt.Pierce,theCitieshavenotagreedtogiveitanantitrustrelease(i.e.,agreetoceaselitigationbeforetheNRCintheseproceedingsandbeforetheFederaldistrictcourt).AnantitrustreleasemaybevaluabletoFP&L.+2However,theCompanyhasnorighttowithholdmakingnuclearcapacityavailabletosystemsonnon-discriminatorytermsjustbecausetheyraiseantitrustclaimsagainstit;certainly,theNRCshouldnotapprovesuchrestrictions.Indeed,theAtomicEnergyActspecificallycreatestherightoftheCities'oseekinterventionandattempttoobtainlicenseconditionsinthe"publicinterest"under5105(c)6.FloridaCitieshadtolitigateallthewaytotheCommissiontoobtaininterventioninthisproceeding.NorisFP&Lentitledtosecureareleaseagainstcourtliti-gationasthepricefornondiscriminatoryparticipation.ItwouldplainlybeagainstpublicpolicytoassertthattheonlywaythattheCitiesareentitledtonondiscriminatorynuclearaccessisbyagreeingtowaivewhateverantitrustclaimsthey1/TheseprovisionsarebeneficialtoFP&L,astheirinclusion7notheragreementsdemonstrate,sothattherefusaltomakethemavailabletootherCities(whocontinuetolitigate)aspunish-mentwoulditselfconstituteanabuseofFP&L'smonopolypower.2/GivenFP&L'sconduct,FloridaCitieswouldconcedethattheCompanyshouldviewsuchreleaseasextremelyvaluable.
26haveagainstFP&L.1/Section105(a)expresslypreservestheantitrustclaimstheCitiesmayhave.eItisoffurthersignificancethatutilitylawsupportsandreaffirmsantitrustlawincondemningdiscriminatorydealings.Thisisnotsurprisingsinceutilitylawisconcernedwithabuseofmonopolypowerovervitalservices.Antitrustlawislikewiseconcernedaboutmonopolycontrolorpracticesinrestraintoftrade.Thus,industries"affectedwiththepublicinterest"aresubjecttoregulatorycontrol.Munnv.Illinois,94U.S.113(1876).2/1InsuccessfullyarguingagainstSection186(a)applicationtoFP&L'soperatingunits,FP&Lrepeatedlypointedtotheavailabi-lityofadistrictcourtremedy.E.g.,Ft.PierceUtilitiesActhoritv.U.S.,606F.2d986(D.C.Cir.979),cert.dented,4U.S.842(979),BriefofIntervenorPloridaPower&L&ghtCo.(April21,1978).Forexample,atp.10,theCompanystates:"Moreover,thereisnoquestionaboutthefullapplicationoftheantitrustlawstoFPL'sactivi-tiesoroftheCommission'sabilitytoconditionorrevoketheselicensesonthebasisofacourtfindingofviolationoftheantitrustlaws(Section105(a),42U.S.C.g2135(a)(1973))."8ThebrieffortheCommissionandDepartmentofJustice(April21,,1978)tookthesameposition(Brief,p.16,n.6).2/CasesenunciatingthewellsettledprinciplesthatutilitiesareobligatedtodealonnondiscriminatorybasisincludeWesternUnionTelerahCo.v.CallPublishinComan,181U.S.92,99-100(1901);Alabama&VicksburRailwaCo.v.MississiiRailroadCommissxon,203U.S.496(1906);MxssourxPacxfxcRaxlwaCo.v.LarabeeFlourMillsCo.,211U.S.612,619,620(1909);ICCv.Delaware,Lackawanna&WesternRailroadCo.,220U.S.235(1911);Louisville&NashvilleRailroadCo.v.U.S.,238U.S.1,19(1915);UnitedStatesv.CaxtalTransitCo.,325U.S.357(1945);AmericanTruckinAssocxatons,Inc.v.Atchison,Toeka&SantaFeRa&lwaCo.,387U.S.397(1967).See~Conwa271,holdingthattheFederalPowerCommissionmustconsider"pricesqueeze"issuescreatedbydifferencesinstateand(footnotecontinuedonnextpage) 27Effectivelythen,FP&L'sreasonfordenyingFloridaCitiesnondiscriminatorycontracttermsisthattheCitiesmightother-wiseexercisetheirundoubtedrightstoseekprotectionbeforethisagencyandtheCourtsagainsttheverysamecontractualtermsthatFP&Lseekstoimpose.Obviously,ifFP&LcanjustifytheimpositionofdiscriminatorycontracttermsongroundsthattheCitiesretaintherightstocontestthetermsoffered,FP&L(footnotecontinuedfrompreviouspage):I'ederallyregulatedelectricrates,evenwhererateswereother-wise"justandreasonable"underf205oftheFederalPowerAct.16U.S.C.824d(e).AsignificantandtypicalexampleinthislineER7819gOpinionNo~57g32PUR4thg313(1979)~1/AfterquotingthetestimonyofOtterTailPowerCo.'sVicePresidentandGeneralManager,explainingthebasisfordiscriminatoryrates,that"inanynegotiationthereisalwaysalittlegiveandtake",theCommissionstates:"Thisisclearlyillustrativeofthegenesisandtheviceofdiscriminationwhichregulatorycommissionsarealmostuniformilydirectedtoremovebythestatutesunderwhichtheyoperate.Asamatteroffact,theevilofdiscriminationwasoneoftheprimemoti-vatingfactorsoftheearliestregulatorystatutes....Neneednotgointothelonghistoryofabuses,discriminations,preferences,rebates,etc.whichwerethepri-marycauseoftheinhibitionagainstthisformerpracticeintherailroadregulatorystatutes.Theinhibitionsoriginallywrittenintothesestatutesweresubstantiallycarriedoverintopracticallyallotherutilityregu-latorystatutes....Thereisoneotherphaseofdiscriminationwhichweshouldmention.Givenamonopolistpositionandtherighttodiscriminate,anelectricutilitycompanyisinpossessionofstrongandunfairweaponsinitsdealingswithmunicipalities.2FPCat142,143.
28isfreeeithertoeffectivelybartheCitiesfrompursuingtheirlitigationrightsortodiscriminateinthesaleofnuclearcapacity.Suchimposedtermsareplainlycontrarytoantitrustlawandshouldberejectedoutofhand(e.g.,UnitedStatesv.Griffith,334U.ST100(1948)pcondemningamotionpicturechain'swillingnesstodealwithasupplierintownswherethechainhadamonopolyonlyonconditionthatthesuppliergivethechainpreferredtreatmentinareaswherethesellerha'dalter-nativeoutlets).TheconditionbyFP&LisillegalthatFloridaCitiesmustagreetoanantitrustreleaseinordertoobtaintypicalcontractterms.FP&L'sstatedpositionatp.6,n.6ofitsResponseapparentlyseekstoseparatewhatitdefinesascontracttermsnecessarilyrelatedtonuclearparticipationfromotheraspectsofcontractualarrangements.Suchartificialseparationistroubling.Forexample,transmissionarrangementsarenecessaryforallsystemsandbackuparrangementsfromFP&Lcouldbeessen-tialforatleastsome.InviewofFP&L'spositionstatedatp.17,n.14,thesebackuparrangementsmustbedefinedasacon-ditiontoimmediateimplementation.Onewouldassumethat,asiscommontoparticipationagreements,adequatetransmissionandbackupwouldbeavailable,butFP&Lhasnotsaidthatitagrees.FP&Lshouldberequiredtoclarifysucharrangements.V.FP&L'sContentionThatCitiesAre"Insincere"IsGroundlessandSurious.FP&Lseekstojustifyoneroussettlementprovisions-anditsownrefusalstodeal-byassertingthatithasreasonto 29believe"thatatleastsomeoftheinterveningCitiesarelessthansincereinespousinginterestinparticipationinSt.LucieUnitNo.2,andwouldpursueastrategyofprolongingnego-tiationsoverthetermsofparticipation."Itthenblandlysetsforthalistofallegations,whichitclaimssupporta"basisforconcernthatatleastsomeoftheintervenorscombinealackoffocusedinterestinparticipationinSt.LucieUnitNo.2withadesire,duetotacticalconsiderationsoflitigationoreconomicmotives,tokeeptheissueopenforaslongaspossible."FPGLResponse,pp.9-12;quotationsatp.9,12.Amongotherthings,FPSLattackstheseniorpartnerofSpiegelMcDiarmidandquotesorreferencesothermaterialsinamannerwhichseemtobeknowinglyoutofcontextandmisleading.ItisofmorethanpassingnotethatFPGLdoesnotsuggestthattheCitiesdonotdesireadditionalSt.Lucieorothernuclearcapa-citytothatwhichisoffered,andFP&Ldoesnotstatethatitiswillingtooffermore.FP&L'sargumentsareoutrageousbecause,astheCompanyanditsattorneyswellknow,FPGLhasbeenrefusingnuclearaccesstotheCitiessinceatleast1976.Suchaccesshasbeenrequestedandcontinuestoberequestedandisrefused,exceptfortherecentsettlementofferofsmallamountstocertainCitiesandnottoothers.ThepresentproposedsettlementlimitsCities'uclearopportunitiesandmakesnoallowanceforparticipation 30forsomeCities.1/Further,totheextentthatFP&L'spleadingstatesorimpliesthatitwillnotevenconsiderBoardorderedconditions,FP&Lunderscoresitsownstrategyofdelay.IfFP&LcanmakeittakelongenoughandmakeitsufficientlyexpensivefortheCitiestoobtainrelief,itwillhavesucceededinnuclearmonopolizationandotherviolationsoftheantitrustlaws,whateverthemeritsofthiscase.FP&Lisplainlythesourcefordelay,itsattacksontheCitiesnotwithstanding.WhiletheCitiesbelievethatFP&Z'sconductspeakslouderthanitswords,giventhepotentialharmtoleavingFP&Z'sattacksandinnuendosunanswered,werespondtoeach:(1)FP&LimpliesthatGeorgeSpiegel,counseltotheFt.PierceUtilitiesAuthority,recommendedastrategyofdelayinnegotiationswithFP&L.AsFP&L'scounselknows,andtheFt.Pierceminutesshow,whenmakingthestatementquotedbyFP&LfGeorgeSpiegelwasreferringtoasituationwhereautilitysuchasFloridaPower&Lightdelaysofferingparticipationinaunit.Thisstrategyofdelaybytheutilitybackfiresagainstitsowninterests.Nr.Spiegelwascomparingutilities,suchasthoseinNewEnglandandFloridaPower&Light,ontheonehand,whichhaverefusedtoagreetodealwithmunicipalsortoagreeto1TocuresuchunfairnessFloridaCitiesmaytransfersomeofthecapacitythatisofferedamongthemselves.FP&L'sproposednewlicenseconditionthatcouldeffectivelycreateasubsequentdivestitureofnuclearcapacityasaconditionforfaircontracttermscouldacttoinhibitsuchtransfers.Thesettlementprovi-desforillegalterritorialityonitsface.GainesvilleUtilitiesv.FloridaPower&LihtComan,573F.2d292(5thCir.1978),cert.denied,439U.S.966(1978).
31participation,andotherssuchasFloridaPowerCorporationandautilityinKansas,whichwerereadytodealingoodfaith.InresponsetoaquestionofhowquicklyFt.Piercewouldhavetofundparticipationshares,Mr.SpiegelcontrastedthesesituationsandstatedthatinthelattersituationaCitywouldhavetoputupitsmoneyquickly,butintheformersituation,~'eadelayinpayment.Indeed,FP&L'sDivisionManager,J.K.Daniel,waspresentatthemeetingandwarnedFt.PiercethatFPtLwasnotgoingtovoluntarilyagreetoSt.Luciepar-ticipationbytheCity.ThefulltextoftheminutesshowthatFt.Piercewasveryconcernedaboutdraggedoutlitigation,suchasthatwhichFPGLhascreatedinfact,andthatGeorgeSpiegel.offered,ifnecessary,toworkforreducedrates-orevenfornothing-tocombatthefearedFPGLstrategyofdelay:"Ifthey[attorneysforCities]findintheiropi-nionthattheCompanyisunreasonablydraggingitout,thentheybeginworkingatlowerandlowerrates.They'ediscoveredtheanswertowhatMr.Daniels[ofFPGL]wasimplying,istohanginasattorneys,eveniftheyhavetoworkfornothing.Heisnevergoingtositinaconferenceroomwitheanyutility...andhe'snevergoingtobeinapositionwherehesaystohisclientthatthey'egotarightouscause,butbecausethey'einapositiontodragitoutandmakeitexpensive,you'dbettergiveup.He'lworkfornothingforasmanyyearsasnecessarytotryasbesthecantorightthebalancebetweenthesmalllitigantwiththelimitedresourcesandamajorcompany,thefifthlargestutilityinthecountry,anunlimitedlitigationbudget,whichthecustomersarepayingfor.Mr.Spiegelstatedthathewouldsaythis,thatifthisthingisgoingtobedraggedoutandtheprotectionofyourinterestrequiresit,he'lworkfornothing."
32Whilethedocumentisparaphrasedfromthemeeting,anyfairreadingofitshowsthatitwasFt.PiercewhowasconcernedaboutdelayandFP&LwhowasthreateningextensivelitigationratherthangrantnuclearparticipationtoFt.Pierce.FPaLhastriedtouseitsout-of-contextandmisleadingquotationfromtheminutesbefore;Mr.SpiegelhadrespondedtoFP&Lcounsel,whichcorrespondenceisattachedasAppendixC.YetFPaLdidnotevenmakereferencetosuchcorrespondenceorresponseortothefactthatithasbeenpreviouslyunsuccessfulinitsattemptstocreateanissue.FPSL'sattempttoimplyarecommendationtoFt.Piercetodragoutnegotiations,whenFt.Piercewasobviouslyconcernedaboutdelay,isscandalous.ThefactsarethatFP&Lwasseekingtoforceasaleofthesystem(astheminutesshow),1/was1SeeFPaL'srelatedrefusalstosellFt.Piercewholesalepowertoenhancetakeoveropportunities,whichweredetailedinFERCOpinions57and57-A.FPGL'shopesoftakingoversmallersystemsarenotadeadissueasitsVicePresident,RobertJ.Gardner'sstatementstoVeroBeachshow(MeetingofJan.'3,1980):Gardner:Idon'tthinkthere'smuchliklihoodofthereactivationofthearrangementthatwehadin1976and7inthatsameform.Ithinkthatthereisatleastaglimmerofpossibilitythatotherarrangementsmightbeworkedoutifdependingonwhaty'all'sobjectiveswereandwhatyourdesirewere.I'msayingthatdependingonwhatyoureallywantingtoaccomplishis...Ithinkthattheinadditiontotheantitrustproblemstherewassomevulnerabilitytothearrangementthatwehadbefore.I'mjustspeakingofmyownpersonalassessmentofthat.Theproblemtwostandpoints.Oneisthesubstitutionofpri-vatecapitalanditscostsformunicipals(footnotecontinuedonnextpage) 33refusingtopermitparticipationintheplantatissueandwasforcing-andcontinuestoforce-yearsoflitigation.Alawyerwhoseekstocombatdelaytacticsbyagreeing,ifnecessary,toworkfornothing;cannotbeaccusedofdelay.At(footnotecontinuedfrompreviouspage)capitalmayhavecost.Andtheotherwasamergeroftheratesofthetwosystems.Ifwecouldfindacceptablewaysaroundthoseproblems,itmaybepossibleto...andifVeroBeach'sdesiressimplytonothavetheconcer'nsofmanagingasystem,Ithinkitmaybepossibletoputsomearrangementstogether.Ihavenotgivenitagreatdealofthoughtonlyacursorythought,butifyouwanttoexploreit,we'dbehappytodoso.VeroBeach:Gardner:VeroBeach:Bob,whatIthoughtIheardyousayearlierwasthateverysinceouraborteddaywithJustice,DaveandIwerethere,sowasTom,everybody,thatyouhaveinfactbeentakingcareofthoseso-calledtenconditionsthattheysaidwouldbesomethingyou'dhavetoagreetoinorderforthemtowithdrawfromtheFERCproceeding.NowifwhatI'mhearingyousayisthatyouhaveoraredealingwiththosetenconditionsthenthenextquestionisifwewentbacktoFERCtomorrowwithasimi-lararrangementbymutualagreement,wouldJusticestayoutofitVIdon'know.-Wehaven'reallytalkedtothemdirectlyaboutthatquestionyet.Well,Iwouldn'tthinkthatthiswouldbethetimetobetalkingaboutit.
34theleast,FP&LsholdhavehadthecourtesyofattachingMr.Spiegel'sresponse.1/1/Mr.SpiegelwrotethecounselforFP&L(AppendixC):"Itappearsthattwoalternativeswerebeingpresented:thatFP&Lmight'pposeparticipationoveralongperiodofyearsliketheNewEnglandcompanies,inwhichcasefinancialcommitmentwouldbeputoffperhapsuntiltheplantwascompleted;orFP&LmightactforthrightlylikeKansasCityPower&LightCompanyandFloridaPowerCorporation,inwhichcasefinancialcommit-mentbytheAuthoritywouldbeamatterofsixmonthstoayear.Inthiscontext,thereferencetoan"idealsituation".wasmeanttoillustratehowcounterproductiveitwouldbeforFP&LtobeobdurateliketheNewEnglandcompanies,inwhichcasetheAuthority'sdecisionastowhethertocommitfinanciallywouldbetomadefardowntheroadwhenmanyrisksoftheunknownhadbeeneliminated.Inshort,myconcernwaswiththepossibilitythatFP&Lwoulddragoutthematter."TheminutesgoontoreportthecommentsbyMr.KennethDaniels,FP&LDistrictManager(pp.5-7),closingwiththestatement:"Mr.Danielssaidifheunderstandswhathasbeensaidsofar,inordertogetinvolvedinananti-trustreviewofFP&L'sapplicationforalicense,theCitywouldhavetobringaboutallegationsofanti-trusttoFP&Landbepreparedtodefendthem,because,Mr.Danielsstated,'IcantellyouthatFP&Lwilldenythemanddefendthemvigorously.'efurtherstatedheisjusttryingtocleartheairherebecausehedoesn'tthinktheBoardreallyunderstooditthatway"InthegiveandtakewithMr.Daniels,priortohisaboveconclusion,theminutesreportme[GeorgeSpiegel]asstating(p.6):'Thereasonthereisonthefaceofit.Theantitrustquestionwhichjustifiesintervention,is,asheunderstandsit,becauseFloridaPower&Lightisrefusingtopermitthesmallersystemstoparticipate.Hethinksthatisreallythebasicproposition.Hethinksthatisfundamentaltoit.TheroblemcaneasilberesolvedifFloridaPower&Liht,andheissuretheDepartmentofJusticewouldsupportourposition,offersanoortunittothevariouscitiestoartxcxate....TeproemcaneeasilysolvedifFloridaPower&Lightofferssomefairshare,arelativelysmallshare,bymakingaproposaltosharethenuclearplant."(footnotecontinuedonnextpage) 35(2)FP&LarguesthatnegotiationswithNewSmyrnaBeachwereundulyprolonged.FP&Lisabsolutelycorrect.Thereasonsforthedelayarewell-illustratedbyFP&L'proposedOrlandoagreement,whichprovidesamongotherthings,imposedtermswherebyFP&Lwouldmaintaincompletecontroloftheunitwithouthavinganyobligationtotakeintoaccounttheneedsofothers;andwouldbefreedfromliabilitytoCitiesevenforitsfailuretousegoodutilitypracticeinrunningtheplant.Afaircom-parisonofFP&L'sproposedagreementandtheConsumersPowerorFloridaPowerCorporationorotheragreementswouldshowthecauseof"unduedelay".ThefactisalsothattheparallelnegotiationswithSeminolehavenotyettocounsel'sknowledgebeencompletedorhavebeenrecentlycompleted,andthosenegotiationshavetakenyears.(footnotecontnuedfrompreviouspage)LetterfromGeorgeSpiegel,Esq.toHarryA.Poth,Jr.,Esp.,April21,1978(AppendixC).Astheletterconcludes,FP&L'sapparentpositionthatFt.Pierce'sattorneyadviseddelayedparticipationis"nonsense".First,FP&L'srepresentativemadeclearthatFP&Lwouldnotagreetoparticipation;second,theNRCitselfwouldlimittheperiodfornegotiations.Further,asMr.Spiegel'sresponsetoFP&Lmadeclear:hewouldnotbe"(i)soinjudiciousastogivesuchadviceandatapublicmeeting(atwhichanFP&Lrepresentativewaspresent),and(ii)sopublicspiritedastogivesuchadviceinordertocommitthefirmtoprovidelegalservicesatalossofoveraperiodofuptotenyears."Id.
36Simplystated,thecauseforthedelayisthatFP&Lisanunwillingsellerofnuclearcapacity,whichhopestosellnuclearcapacity,ifatall,onlyonitsterms.Inthiscontext,FloridaCitiesbelieveitappropriatethattheBoardscrutinizethelicensingconditiontermswhichFP&Lwouldimpose.1/(3)FP&LimpliesthatbecausenoutilitiesenteredintoanI'greementwithregardtoitsalleged.-proposalforajointnuclearunitinCentralFlorida,thattheCitieswerenotinterestedinnuclearcapacity.ButcomparethefactthatmanyoftheCitiesareparticipantsinFloridaPower'sCrystalRiverUnit3.TheallegedproposalbyFP&LforparticipationinaCentralFloridaUnitwasactuallymadeinthecontextofFFaL's~refusintoselltheCitiesparticipationintheSouthDadeunit.Moreover,theCompanydemandedthattheCitiesinvestapproxi-mately$1millionforasitesurveyforwhichFP&Lwouldspendno1/Itmustbestressedthatoneadvantageofmunicipalpar-ticipationinnuclearunitsasopposedtopowerpurchasesfromthem(whichFP&Lalsohadnotoffered)isthattheycancommittheirowncapital,oftenatreducedcosts.Thecostofdelaytomunicipalsfromfailuretoreachagreementcanbehigh.Notonlydomunicipalsystemsnothaveaninterestindelay,butintheirjudgment,afairorderfromthisBoardwouldpenalizeFP&Lforthecostsofitsdelay.
37moneyofitsownandwouldnotnegotiateontermsimportanttotheCitiesbeforesuchmunicipalinvestmentsweremade,Finally,whiletheCompanynowprofessesthatitspie-in-the-skyproposalhadsometangibility,andthatitwaswillingtoconstructsuchaplantforothers,thefactisthatitcancelledtheSouthDadeUnitratherthanofferparticipationinSouthDadetoCities.ThebackgroundtoFP&L'sallegednuclearjointventureofferisasfollows:Inearly1976,anumberofutilitiesexpressedinterestinparticpationinFP&L'sproposedSouthDadeNuclearUnits.FP&LrefusedparticipationbylettersdatedMarch30,1976.Theselettersstated:"Whileweappreciateyourexpressionofinterest,FPLhas-decidedtoproceedindependentlywiththedevelop-mentoftheSouthDadeProjectandtoutilizetheProject'selectricgeneratingfacilitytomeetourownsystemneeds....[However,]FP&Lispreparedtomeetwithrepresentativesofthosesystemswhichareinterestedincommitingtothejointdevelopmentofanuclearprojectforafulldiscussionofthissubject[W]edonotfeelthattheterm"discussion"asusedhereinshouldbeconstruedasanoffertonegotiatenordowebelieveourselvesunderanyobligationtounder-takethewhole,oranysubstantialportion,oftheresponsibilitytocarryoutsuchaprojectasenvisionedhere.Whatwedoproposeistheopeningoftalksandthedevelopmentofatruejointnuclearpowerproject."LetterfromFP&Ltovarioussystems,datedMarch30,1976.AppendixD.Thusthegenesisofthe"truejointnuclearpowerproject"wasinthecontextofFP&L'srefusaltodealintheSouthDadeNuclearProject.TheCitiestoldFP&Lthattheyhadcertainneedsinconnec-tionwiththeproject,includinglegislationthatwouldpermitmunicipaljointfinancingoftheproject,aswellasvarious 38transmissionandbackuparrangements.Theseneedsweresetforthinvariouscorrespondence,whichisattached.AppendixD.However,FP&Linsistedthatpublicfundsbecommitedtoasitesurveystudyandthatnegotiationsconcerningthe"hardware"andrelatedaspectsofthenuclearjointventureresumethereafter,deferringconsiderationoftheseothercrucialmattersuntilpar-ticipantscommittedtoa$1millioninvestmentinthestudy.Whiletheabovedescribeddiscussionsweretakingplace,FP&LdecidedtocanceltheDadeCountyUnits.TheCitiesimme-diatelysuggestedthatFP&Lmakeavailableitsexistingcontracts(onaconfidentialbasis,ifnecessary)andthatitcommencedevelopmentofaworkableparticipa'tionagreementwithothersystems.SucharrangementswouldhavegivenFP&Lameaningfulinterestintheunits,wouldhavepermittedearlyconstructionoftheunitsandwouldhaveeliminatedmostofthethencurrentobjectionstoconstructionbeforetheNRC.LetterfromRobertA.Jablon,Esq.toTracyDanese,Esq.,July21,1976.FP&Llaterwithdrewtheunit,butdidnotthenorlaterrespondfavorablytomunicipalrequestsforpursuingparticipation.FP&LnowcontendstheCitieswereinsincerebecauseapro-jectdidnotcomeintobeing.ThefactisthatFP&Lofferedtheprojectfor"discussion"whileitwasrefusingparticipationbythemunicipalsinthemoreviableunitsatSouthDade.FP&Linsistedonmunicipalinvestmentsbeingmadeinadvanceofanyagreementsregardingparticipationtermsorothermajormatters.
39AndFP&Litselfresistedparticipatingintheproject.ThetenorofFPGL'soffercanbereadilydiscernedfromadocumentpreparedbyFP&L'sTreasurerandCounselmemberanddiscoveredlaterbyCities(DocumentNo.280954):"FPLfinancialexposuremustbeheldtoabsoluteminimum~~~~2~cParticipantsmustbuildandpayfortheirownreservestobackupthenuclearplant.FPListohavenoobliga-tionorliabilitywithrespecttobackup,power3.aFPLisnottobeheldresonsibleforanthin6.FPLshouldreceiveasubstantialmanagementfee(overandabovecostsandoverheads)tocompensateforresour-cesdivertedfromFPLbusiness.Asui'tablefeemightbe2%oftheprojectcosts.[1/]7.ItwouldprobablybebestifFPLdidnothaveanyownershipintheplant.a.Bynotbeinganowner,FPLisfurtherprotectedfromanyliabilityorrisksconnectedwiththeplant.b.Iftheplantweresetupasalegalentity(suchasageneratingcompany)FPLwouldbecomesubjecttotheHoldingCompanyActasapart-owner(1)Iftheplantweresetup.asanunincorporatedjointventurewiththepartnershavingundi-videdinterest,partnershipintheplantwouldnotputFPLundertheHoldingCompanyAct.(2)Butjointventurewouldbedifficultforthepartnerstofinancesinceeachpartnerwouldhavetocomeupwithitsshareofthemoneythroughitsownresources;soweshouldpro-bablyexpecttheparticipantswillneedtosetupanentitysuchageneratingcompanywithitsownfinancingcapability."(Emphasisinoriginal.)1/FPGLinfactproposed5%.SeeAppendixD.
Thetoneandcontentsofthememorandum,attached,contrastswiththe"truejointventure"suggestioninFP&L'sMarch30letterinwhichallparticipantswouldhe~reuiredtomake"fullcommitment",accordingtoFP&L.The.factthatthefinancingarrangementproposedbyFP&L"wouldbedifficultforthepartnerstofinance"wasknowntoFP&Lmanagement,butitproposedsucharrangementanyway.Thattellsitall.(4)FloridaCitieshavecasttheirrequestsforreliefbeforethisagencyintermsofgivingsmallersystemsnuclearopportunitiesandofmakingnuclearaccessavailableinalter-nateforms(e.g.,directownership,purchasedpower,par-ticipationthroughapowersupplyagency).Theyhavealsorequestedtheavailabilityofbaseloadandwholesalepowersales,whicharepartiallynucleargenerated.FP&LcriticizesthispositionandquotesfromastatementbycounselforsomeofFloridaCitieswhoareplaintiffsinCityofGainesvilleReionalUtilities,etal.v.FloridaPower&Liht,No.79-5101-CIV-JLK(S.D.Fla.),whichwasmadeinresponsetoaclaimbyFP&LbeforetheDistrictCourtthattheCitieswereengaginginshamlitigation:nottopartxcipatethatCitieshavebeendenied.Neverhavingallegedthattheywouldnecessarilyelecttoparticipateinanyparticularunit,theirpositioncannotbeasham."Thisquotationisfrompage23of"CitiesMotiontoDismiss,OrforSummaryJudgmentofFloridaPower&LightCompany's'mendedCounterclaim"(June26,1980).FP&Lfailstoquotetheimmediatefollowingsentence:
41"FloridaCitiesdonotmeantoimplythatthedenialofnuclearaccesshasnotgreatlyinjuredthemorthattheydonotdesireaccess,althoughtheformofaccessmayvary."WiththeexceptionoftheGainesvilleaffidavit,neitherdoesFloridaPower&LightcalltotheBoard'sattentionthevariousaffidavitsofCities'anagersthatwerefiledinDistrictCourtattestingtothefactthattheydoindeeddesirenuclearpoweraccess.PFP&LalsoquotesfromtheaffidavitofRichardHesteroftheCityofGainesvilleandfromTallahasseecityminutesagainforthepropositionthattheCitiesmaynothavea"focusedinterest"inSt.Lucie2participation(p.12).OfnoteisthefactthattheCompanydoesnotallege-nordoesithaveanybasisforalleging-alackofinterestonthepartoftheCities.InthecaseoftheGainesvilleaffidavit,Mr.HesterdidstatethatGainesvillewouldhavetostudythespecificproposal.AsFP&Lwellknows,utilitiesgenerallyarrangetosecurepowersupplyinanticipationofloadgrowth,sothattheyoftenhavemorecapacitythantheyneedwhentheyfirstobtainnewpowersupplyandmustsellpartofit.WhileFP&LcomplainsthattheCitiesmightdelaynegotiations,thefactisthatFP&LblockedGainesville'saccesstonuclearpowerplantsorotherjointmunicipalventures,andGainesvillewasforcedtoconstructalternativegenerationinGainesvilleandwasdamagedthereby.Underthesecircumstances,havingbeenforcedtoconstructplantbecauseofFP&L'santicompetitiverefusalstodeal,Gainesvillewouldneedtocarefullyconsiderwhetherandtowhatextentit 42couldnowparticipateinSt.Lucie2.Suchdecisioncouldwe>~dependuponotherrelief,suchwhethertherewillbeanintegratedpoolinFloridasothatGainesvillecouldmosteffec-tivelyuseitsexistinggeneration.FP&L'spositionwithregardtoTallahasseeisevenstranger.FP&LrefusestoselltoTallahasseenuclearcapacity,evenunderthesettlement.InanaffidavitnotreferredtobyFP&L,theTallahasseeutilitiesmanagerstatedthathewouldrecommenddirectownershipofSt.LucietotheCityCommission.TallahasseeCityManagerDanielKlemanexplainedthatinaddi-tiontoseekingtherighttoownashareofthenuclearplants,theCityhadalsorequestedreliefbeforethisBoardsothatitcouldbuycheaperbaseloadpower.Tallahasseehasalsosoughtimprovedtransmissionservice.OftheCityCommissionerswhodiscussedtheproposal,onestatedthatheopposedownershipinthenameoftheCityofTallahasseeintheplant,butthathefavoredpurchasingunitpower.AnotherCommissionerstatedonlythatsheopposedownership.OneCommissioner,MayorWilsondidseemtodoubtthewisdomorpolicybehindthesuitintheDistrictCourt.TheCityofTallahasseehascontinuedtopar-ticipateinboththeinterventionandtheDistrictCourtproceedings.Thus,thebestthatFloridaPower&Lightcando,afterhavinghadfullopportunitiesfordiscoveryintheDistrictCourtcase,istoraisequestionsofwhethertwocitieswouldparticipateinSt.Lucie2:one,becauseitwasforcedtomakealternativepowersupplyarrangements;asecond,basedupon 43FP&L'sreadingofacitycouncildiscussion,wheretheCityvotedtocontinueparticipationintheDistrictCourtaction,seekingsuchparticipation.VI.TheCorrespondenceBetweenTheIntervenorsAndFloridaPower&LightDemonstratesFP&L'RefusalsToDealAndConfirmsThatAnyDelayResultsFromFP&L'sActions:TheCorrespondenceIsAdmissibleForThesePuroses.OnJuly28,1976,theChairmanoftheNuclearIntervenorsGroupandcounselfortheCitieswroteFP&Lalettersettingforthanuclearproposal.FP&Lrespondednegatively.Understandably,FP&Lseekstoerasethecorrespondencefromtherecordsinceitsresponsesetsforthaclearrefusaltodeal.FP&LthusseekstohavethisBoardignoreCities'etteronthegroundsthatitissomehowprivileged,andapparentlythenintendstoassertthatIntervenor'scannotprovethattheysoughtaccesstonuclearresources.Asamatteroflaw,noprivilegeeverattachedtotheletters.TheywereadmittedintoevidenceinFERCDocketNo.ER78-19,etal.withoutobjectionandformedapartoftheevi-dentiarybasisfortheCommission'sconclusionthatFP&Lhadbeenactinganticompetitively.1/Thus,evenifthereoncewereanyvaliditytoFP&L'snewfoundclaimsofprivilege,theobjectionhasbeenwaivedlongsince.TheletteronbehalfofCities(hereafter"Cities'etter")toFP&LclearlysetsforthaproposalandarequestfornuclearaccessbytheCities.LetterfromHarryC.Luff,Jr.andFP&Lxsestoppedfromraisingthisclaimofprivilegenow,afteritdidnotobjecttotheuseofthesedocumentsintheFERCproceeding,andafteradecisionadversetoFP&Linthatdocket.TheCompanycannotpickandchoosetoadmittoevidencewhenitthinksitwillhelp,andobjecttoitwhenitthinkstheevidencewillbehurtful.
44RobertA.Jablon,July28,1977toMr.MarshallMcDonald.FP&L'sresponsewasplainlyoneofrejection.LetterfromRobertJ.Gardner,VicePresidenttoHarryC.Zuff,Jr.andR.A.Jablon,September16,.-1977.1/FP&LassertsthattheJuly28,1977letteronbehalfoftheCities"constitutesasettlementproposal."FP&LBrief,p.21.Itthenconcludes,withoutanycasesupport,thatthelettercouldnotthereforebeadmittedintoevidenceundertheFederalRulesofEvidence,R.408.FP&Lisjustplainwrong,fortheseveralreasonsthatfollow.Citiesagreethattheirletterconstitutesasettlementproposal,although'onegotiationswereconducted,astheCitiessought.FP&L'sresponsiveletter,however,whichwasanoutandoutrefusaltodeal,isnot"[e]videnceof(1)furnishingorofferingorpromisingtofurnish,or(2)acceptingorofferingorpromisingtoaccept,avaluableconsiderationincompromisingorattemptingtocompromiseaclaim..."R.408.Thepolicybehind1/FP&Lnowcomplainsthattheproposalwasconditionedandtheactualpurchaseofinterestinnuclearunitsneededcityappro-valsand,therefore,thetermswere"economicallyunattractivetoFPL".Infact,the'letterhadbeencarefullyconsideredbyintervenors'anagement,includingmanyoftheirpoliticalofficials.However,itwassentatatimewhenFP&ZhadbeenabsolutelyrefusingtodealwiththeCitiesconcerningmanyofthemattersexpressedintheletter.Obviously,intervenorsandFP&Zrecognizedthatcontractualarrangementswouldtakenego-tiationsandformalapprovals.Asstated:"ThisproposalrepresentsacombinedeffortoftheIntervenorGrouptoprovideabasisforagreement.Wearepreparedtoconsideranyobjections,modificationsorcounterproposalsofFP&L."However,FP&L'sresponsewastotallynegative.Thus,therewasnothingtobeconsidered.
Rule408istoencouragesettlements,nottoencourageflatrefu-salsofsettlementoffers.Thus,regardlessofthecharac-terizationofCities'etter,FP&L'snegativeresponsecertainlyisadmissible.FP&Ldoesnotappeartodisagree,andhasitselfputthisletterbothbeforethisCommissionbyitspleading(AppendixFthereto),andbeforetheFERCbyitsfailuretoobjecttoitsadmissioninevidenceinFERCDocketNo.ER78-19.TheCompany'sargumentthatCities'etterisinadmissiblemissestwoessential,andinterrelatedpoints.First,evenifRule408hadcreatedaprivilegeforCities'etterpriortothewaiverofthatprivilegewhenFP&Lacquiescedtoitsuseinevidence,theprivilegewouldbelongtoCities:ItwouldoperatetopreventuseoftheletterinevidenceagainstCitiesattherequestofFP&L~Absentprioragreementtothecontrary,itwouldnotprecludetheCitiesfrommakingpublicorofferingintoevidencetheirownstatementoftheirposition,insettlementnegotiationsorotherwise.Thus,FP&Lcouldnotmoveasettle-mentofferintoevidenceinordertoshow,forexample,thatCitiesvaluedtheirclaimsforagivenamount,andthereforearenotentitledtomoreinjudgment(althoughCitiesmakenosuchclaimofprivilegeinfact).See,e.g.,Jacksonv.ShellOilCo.,401F.2d639(6thCir.1968);Norlinv.Carr,211F.2d897(7thCir.1954);Brattv.WesternAirLines,169F.2d214(10thCir.),cert.denied,335U.S.886(1948).
46AssumingthatCities'etterisasettlementoffer,arguablyitcouldnotbeintroducedbyFP&LagainsttheCitiesasanadmissionthatCitiesdidnothaveasupportableclaim.Theobviousreasonisthatoffersmadetocompromiselitigationindi-cateonlyadesireforpeace,notanadmissionregardingthevalidityoramountofaclaim.Sternbererv.U.S.,401F.2d1012,1018(Ct.Cl~1968)~FPGLwouldturntheRuleinside-out.Thisisapparentifananalogouspositionisconsideredinthecontextofotherprivileges:FPSLislikeaprosecutorwhowouldpreventawitnessfromtakingthestandinhisowndefense,becauseoftheexistenceofthewitness'ifthAmendmentprivilege.CitiesdoubtthatFPaLwouldclaimthatCitiescouldnotdisclosecorrespondencepassingbetweentheCitiesandtheirattorneys,ifCitiessochose,becausetheattorney-clientprivilegepreventsit.YettheCompany'spresentargumentisnodifferent.ThefactthatadocumentwassentbyCitiestoFPaLcannotpreventCitiesfromputtingthatdocumentintoevidence(absenttechnicalobjection,suchasauthenticity,orsomeagreementbetweentheparties,whichisnotpresenthere).Citiesknowofnocasewhichspecificallyholdsthattherecipientofasettlementoffercannotpreventthesenderfromputtingitintoevidence-perhapstheargumenthasneverbeenmadebefore.However,allthecasesofwhichCitiesareawareinvolvesituationsinwhichthereceivingpartysoughttohavethesettlementofferadmittedagainstthesender,andtheRule 47itselfandthecommentsoftheadvisorycommitteeareclearlystatedintheseterms.Forexample,theCongressionalConferenceReportontheFederalRulesofEvidencebill,P.L.93-595;88Stat.1926(Jan.2,1975)(quotedintheFed.R.Evid.,CommentstoRule408),statesat6:TheHousebillwasdraftedtomeettheobjectionofexecutiveagenciesthatunder-theruleasproposedbytheSupremeCourt,apartycouldpresentafactduringcompromisenegotiationsandtherebypreventanoosinartfromofferinevidenceofthatfactattrialeventhoughsuchevidencewasobtainedfromindependentsources.TheSenateamendmentexpresslyprecludesthisresult.(Emphasisadded.)(ThedebatebetweentheHouseandSenatever-sionscenteredaroundwhetherfactsstatedinsettlementnego-tiationsshouldbeincludedwithintheambitoftherule:theassumptionbybothsidesthroughoutwasthatthesettlementoffermightbeexcludedwhenofferedby"anopposingparty".)ThatanofferingpartymayputitsownofferintoevidenceisanecessarypartandparcelofthesecondessentialpointwhichFP&Lhasfailedtocomprehend:Rule408onlyexcludesevidenceofsettlementnegotiationsofferedforthespecific,purposeofshowing"eithervalidityoramount"ofaclaim.Therule,byitsownterms,doesnotrequiretheexclusionofanyevi-denceotherwise-discoverablemerelybecauseitispresentedinthecourseofcompromisenegotiations.Thisrulealsodoesnotreuireexclusionwhentheevidencex.sofferedforanotherurose,suchasprovingiasorpregudzceofawxtness,negativingacontentionofunduedelay,orprovinganefforttoobstructacriminalinvestigationorprosecution.(Emphasisadded.)Thecasesareinaccord.Evidenceofsettle-mentnegotiationsbetweenatortplaintiffandthedefendant's insurerisadmissibleinanactiontoshowbad-faithfailuretosettlewithinpolicylimitsonthepartoftheinsurancecompany.LibertMutualIns.Co.v.Davis,411F.2d475,483-84(5thCir.1969).InBaBInvestmentClubv.Kleinert's,Inc.,472F.Supp.787(E.D.Pa.1979),theCourtpermittedevidencerelatingtocompro-misenegotiationstoshowwhetheranindividualdefendant,whohadsettledclaimsofsecuritiesviolationswiththeplaintiffclass,hadreacheda"successful"settlementwhichwouldentitlehimtoindemnificationfromacorporateco-defendant.Inrulingthatevidenceofthesettlementprocesswasadmissible,theCourtstatedtheobvious:[Indemnitee's]objectionisnotwelltakenbecausetheruleexcludesevidenceofacompromiseonlyontheissueoftheamountorvalidityoftheclaimwhichisthesubjectofthecompromise.Ifthecompromisenegotiationsareusedforanotherpur-posetheyarenotinadmissibleunderRule408.B&BZnv.Club,~suraat791.Thesameprinciplewaswellestablishedinthecommonlaw,whichRule408incorporatesinthisregard.E.g.,OverseasMotors,Inc.v.ImortMotorsLtd.,Inc.,375F.Supp.499(E.D.Mich.1974),aff'donotherrounds/519F.2d119(6thCir.),cert.denied,423U.S.987(1975);InsirationConsol.CoerCo.v.LumbermensMut.Cas.Co.,60F.R.D.205,211(S.D.N.Y.1973);QlSrinerv.Citizen'sCas.Co.-/Consol.Coer,~sura,weredecidedpriortothepassagebyCongressofcurrentRule408,theyweredecidedafterasimilarrule,promulgatedbytheSupremeCourtonNovember20,1972,wassenttoCongressonFebruary5,1973.TheCourt'sversionoftherulealsostatedthatofferswereinadmissible"toproveliabi-lityfororinvalidityoftheclaimoritsamount",andthat"[t]hisruledoesnotrequireexclusionwhenevidenceisofferedforanotherpurpose...."SeeFed.R.Evid.,CommenttoRule408.
49ofN.Y.,246F.2d123(5thCir.1957).AlthoughCitiesmightseektoshowliabilitybasedontherefusaltodeal(heretheyonlyseektorefutethattheirstatedinterestisinsincere,orthattheydelayed)whichthecorrespon-denceconstitutes,thismustbedistinguishedfromtryingtouseanoffer(oracceptance)asanadmissionofliability.ItisthelatterwhichRule408prohibits.InOverseasMotors,Inc.v.ImortMotorsLimited,Inc.,~sura,anautomobiledealersoughttointroduceintoevidencecorrespondencebetweenitandvariousmanufacturers(defendants),andcorrespondenceamongthemanufacturers.Thecorrespondence,whichconstitutedsettlementnegotiationsundertakenaftertheplaintiffhadthreatenedalawsuit,wasnotadmittedbytheCourttoshowconspiracybecauseoftheuniquerequirementsofconspiracyclaims.1/However,theCourtmadereferencetopre-ciselythesituationwithwhichCitiesarefacednow,indicatingthatsettlementdocumentsshouldbeadmittedwhenthecorrespon-denceitselfgivesrisetotheclaimathand:1/375F.Supp.at537:"[P]ermittingproofofsuchactivitycouldeasilymisleadajuryintofindingaShermanActconspiracybasedonthedefendants'ooperationindefendingthissuit."
50Itisgenerallyrecognizedthatoffersincompro-miseareinadmissibleonlywhenofferedtodemonstratesomeelementofliabilityinthecaseathand.Theymaybereceivedforotherpurposessuchasproofofcosts,duediligence,explanationfordelay,etc.[footnoteomitted]Althoughthereislittleauthorityonthepoint,itwouldalsoseemreasonabletoadmitsuchevidencewhetherthesettlementneotxatxonsarethemselvessub'ectsofthelawsuit-i.e.,oerativefacts.OverseasMotors,~suraat537(emphasisadded).TheCourtwentontoexplain,375F.Supp.537,n.128:Theprincipleisofcoursenotthesameastheotherexceptions,forheretheproofwouldgotoliability.Itisanalogous,however,inthattheliabilityinquestionwouldnotbeontheclaimwhichwasoriginallyindisputeandwhichwasnego-tiated...butonthedistinctantitrustclaimwhichgrewoutofit.SeeFletcherv.WesternNationalLifeIns.Co.,10Cal.App.3d376,89Cal.Rptr.78(1970)(tortclaimforemotionaldistressinwhichdefendant'soffertosettleinsuranceclaimwaspartoftheconductallegedlycausingthedistressandwasprovableassuch).ItispreciselythecaseherethatthelettersarethemselvesoperativefactsofanantitrustclaimandacloseranalysisshowsnotonlytheabsurditybuttheevilofFP&L'sposition.Cities'etterandFP&L'snegativeresponsiveconstitutearequestbyCitiesforaccesstoavitalgood(i.e.,nuclearpower)overwhichFP&Lclearlyhad(andhas)amonopoly,andacorrespondingillegalrefusaltodealinthatgoodbyFP&L.Thus,adistinctantitrustclaimarisesfromthatrequestandrefusalandthecorrespondenceisadmissibletoshowit.1/1Certainlythelettersareatleastadmissibletonegativeanyinference,impliedbyFP&L,thatCitiespositioninthisdocket/thattheydesirefairnuclearaccess,isinsincere,and,inthelanguageoftheRule,forthepurposeofnegativingacontentionofunduedelay."
51Inthissense,Cities'equesttoFPGLislikeademandforassurancesofperformanceofacontract.Repudiationofademandconstitutesabreachofcontract(e.g.,UniformCommercialCedeg52-609).Thedemandisadmissibletoshowitsownexistence,andarefusaltocomplywiththedemandisadmissibleasabreachofcontract,althoughonecouldconstrueboththedemandandtherefusalas"settlementnegotiations"inthat,ifthedemandiscompliedwith,nosuitwouldfollow.+1Similarly,arequesttodealandarefusaltodealmustbeadmissibleinthecontextofantitrustallegationstoprovetheirownexistence,eventhoughcompliancewiththerequestwouldbea"settlement"andnoantitrustclaim2/wouldhavearisenfromthattransaction.Ifitwereotherwise,FPaLwouldbeintheincrediblepositionof=beingableunilaterallytopreventanyevidenceofrequeststodealbyothersandofitsownrefusalstodealsimplybecausealitigationcontext(promptedbyearlieranticompetitiveactsofFP&L)allowstheprobativedocumentstobecharacterizedas1Or,,zfsettlementnegotiationsculminateinanagreementwhichissubsequentlybreached,andthebrea'chingpartyclaimstherewasnoagreement,evidencethatanagreementdidinfactexistwouldbeadmissibletoestablishtheclaimforbreach.2/Thatis,noclaimbasedonarefusaltodealonafairbasis,withintheambitfairlycoveredbytherequest.Citiesdonotmeantoimplythatallantitrustclaimsonanybasiswhateverwouldbeforeclosedbysuchadealing.
52settlementnegotiations.1/Clearly,nosuchresultwasintendedbyRule408,nordoesatechnicalapplicationofits,termsrequirethisconclusion.Asthis,Boardstatedinanearlierrulinginthisdocket,"...apartymaynotseizeuponsettlementnegotiationsasadevicetodefusedamningevidenceagainstit."OrderofFebruary9,1979.2/Thus,thecorrespondenceatissueheresimplyisnotwithinthescopeofRule408,whichisdesignedtoencouragesettlementbyprohibitingoffersofcompromisefrombeingusedeitherasadmissionsofliabilityorasadmissionsastothevalueofa1/Thepointcanalsobemadefromadifferentperspective.If,asFP&Lclaims,Rule408doesprovideaprivilegeorbasisforexclusionforthecorrespondence,itisaqualifiedone.E.9.,Reichenbachv.Smith,528F.2d1072,1075(5thCir.1976),statingthatwithrespecttoevidenceofsettlementbetweenaplaintiffandaco-defendant,atrialcourtmustbalanceofthepolicyofencouragingsettlementswiththeneedforevaluatingthecredibilityofwitnesses.Inthiscase,thepolicybehindRule408wouldhavetogivewaytotheneedtoproveactsinviolationoftheantitrustlaws,andactswhichwereintendedtoimpedejusticebydelay.2/LBP-78-4,9NRC164,184.ContrarytoFP&L'scontention,Briefp.21,thatorderdidnotruleonthelettersatissuehere.ZnthatOrder,theBoardruled,interalia,thatCities'ocumentrequestdirectlyseekingFF&L'ssettlementdocumentsshouldberejected,inlightofthepolicybehindRule408and10C.F.R.52.759.Asexplainedabove,thepresentsituationiswhollydifferent:Citieshereseektousetheirownofferandrequest;FPaL'sresponsewasaflatrefusalandthereforenotwithineithertheletteroforthepurposebehindR.408;andtherequestandrefusalthemselvesareoperativefacts,analogoustotheofferandacceptanceofacontract.Onanotheroccasion,theAppealBoardhasexpressed"considerabledoubtwhether,asageneralmatter,thereisanysettlementprivilegewhichmightassistpetitioners'resentendeavortoresistdiscovery".HoustonLihtinaPowerCo.,etal.(SouthTexasProject,Units1&2),NRCDocketNos.50-498A,etal.,ASLABOrderApril15,1980,at3.
53claim.Letterswhich,althoughwritteninthecontextoflitigation,areofferedbytheauthortoshowthatarequestwasmade,toshowdelay,ortoshowindependentanticompetitiverefu-salstodeal,arenotcontemplatedbytheRuleandarenotrequiredbetoexcludedfromevidence.Inshort,Rule408isirrelevant.VII.Miscellaneous.AsFP&Lstates(Response,pp.20-21),theCitiesattachedcertaincorrespondnecetoshowtheirexclusionfromthenego-tiationprocess.Theycontinuetobelieveandrepresentthatwhile,asFP&Lnotes,theycould"expresstheirviewsforcefullyatthehighestlevels",theywerenotallowedtobepresentatthenegotiatingsessionswherethedealwasessentiallystruck..Certaincorrespondence,citedbyFP&L,includescriticismoftheCompany'sconduct,althoughthecorrespondencewasnotincludedtoraisethatissue.FP&LcomplainsthatJudgeKing'sorder(oftheDistrictCourt)wasnotattached,which"ruledthatFP&L'sactionswereproperineverrespect."IfFP&LreadstheorderasgivingitacleanbillofhealthasopposedtomerelydenyingCities'equestedinjunction,sobeit.Citiesdisagreewiththeinterpretation.
54CONCLUSIONFortheforegoingreasonsandthosestatedin"FloridaCities'nswertoJointMotion"aprehearingconferenceshouldbeorderedandproceduresadoptedtoruleonallpleadingsbeforethisBoard,includingtherequestsforreliefatpp.8,18,20,24and28ofthisReply.Respectfullysubmitted,RoertA.JionAlanJ.RothMartaA.ManildiAttorneysfortheLakeWorthUtilitiesAuthority,NewSmyrnaBeachUtilitiesCommission,SebringUtilitiesCommission,GainesvilleRegionalUtilitiesandtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,FloridaandtheFloridaMunicipalUtilitiesAssociationJanuary8,1981LawOfficesofSpiegelaMcDiarmid2600VirginiaAvenue,N.W.Suite312Washington,D.C.20037(202)333-4500 APPENDIXAExcerptsfromMidlandandCrystalRiverParticipationAgreements ExcerptsfromMidlandAreementGoodUttvpractice:Ataparticulartime,anyozthepractices,methodsandacts,wnich,~wtheexerciseor,reasonableludgment'"thelightorthefactsteo~watthet'methedecisioncpsmade,wou'dhavebeenexpectedtoaccomplishthedesiredresultatareasonablecos"cons'stentwithreliabilityandsafetyandCONST&'5obligationsu"de.theDowGeneralAgreementandallapplicableLawsandgovernmenta'ules,regulationsandordersperta'ning.toHTDLAÃ)~Suchpract'ces,methodsandactsshallinclude,butsh~notbeLimitedto,anyoithepract'ces,methodsandactsengagedinorapprovedbyasigniicantportionoitheelectricut'lityindustrypriortothetimethedecisionwasmade.GoodUtiL~typracticeistotintendedtobeLimitedotheopt~~umpractice,methodoract,totheexclusionoiallothers,butrathertobeanumberofpossibleoractices,methodsoracts.
54ARTECL=.6OPTEDARRAÃGc~S6.1Authority"orOperationandPenaement.CONST~sha11havesoleauthoritytomanage,control,maintainandoperate~i~LA%i,andsha11takeallstepswhichitdeemsnecessaryorappropN~ted'orthatpurpose.CONSUiSshal'ischargesuchauthorityinaccordancw'thGoodUtilityPracticeandtheotherprovisionsoxthisAgree'men't~
~ICLE15Liabi'i~tohird2art'esZo~zhstandinganyprovisiontoehecontrazyMthisAgrement,anyliab"ityozanypayment,cost,expenseorobligationarisingomaclaimozL~b~~ty(azterapplicationtheretoofanyinsurancecoverageorproceeds)toac".2"d~yor~rt"esagainstoneorbothofthe2ARZI"=Sandarisingfromtheac~~sitionoz~23~%)oz'nypar-thereoz,theplanning,eng~meering,desi~,1'censing,procurement,construction,inst~ationorcomplet'onof~L>%)oranypart"".ereof,theoperation,use,management,control,maintenance,replace-ment,altarat'on,mod~"ication,renewal,rebuildingorrepairofRELATE)oranypartthereof,theretirement,decommissioning,disposal,nz'alvagigozKDLA'G)o-anypartthereof,orfromanyotheractionorfailuretoactbyCQNS~(or'tsemploys,agentsorcontactors)1ncar=iingoutanyoztheprovisionsozthisAgreementinregardto&~LANDincluding,withoutlimitation,theprovi-sionsorRclearFuel,shallbeallocatedtotheelectricpropertyDeludedinM&LA%)'ntheratiothattheAllocated"=lectricInvestmentinYRLKG)bearstot"eCostofConscactionoz~LA%)andsha'~beallocatedtothestamoropertyincludedm~~LAW)intheratiothattheAU.ocatedSteamInvestmentinKZ)LAÃ)beastotheCostofConst~ctionofKZ)LAÃ).
170Theportionofanysuch1iabi3.ityoranypayment,cost,expenseor\obligationarisingfromanysuchclaimofliability(afterapplicationtheretoozanyinsurancecoverageorproceeds)toa'thirdpartyorpartieswhichisallocatedtotheelectricpropertyin'.udedini~LANDasaforesaidshallbesharedbythePARTTESinproportiontotheirrespectivepercentageownershipinterstsintheelectricpropertyincludedinK%LANDinallcircumstancesexceptwheresuchliabilityorclaimofliabilityistheresultoffailurebyCONSEKRStocomplywithGoodUtilityPracticeorgrossnegligenceorinten-tionalwrongdoingonthepartorCONSUMERS.Zf,byreasonofanysuchliabilityorclaimofliability(afterapplicationtheretoofanyinsurancecoverageorproceeds)toathirdpartyorparties,eitherPARTYsha31becalledupontomakeanypaymentortoQxcuranycost,expenseorobligationinexcessofthatforwhichitisresponsibleundertheprovisionsoftheprecedingsentence,thentheotherPARTYshallreimbursethePARTYmakingsuchexcesspaymentorincurringanysuchexcesscost,expenseorobligationtothefullextantoftheexcess.Theportionofanysuchliabilityoranypayment,cost,expenseorobligationar'singfromanysuchclaimofliability(afterapplicationtheretoofany~msurancecoverageorproceeds)toathirdpartyorpartieswhichisallocatedtothesteampropertyincludedin~iLAiU3asaforesaidshallbeborneentirelybyCONSUMERSandshallnotbesharedby.~SPA.15.2LiabilitBetweenthePARTES.CONSI2KRFsha13.notbeliableto~iAforanyloss,cost,damageorexpenseincur.edbyKAPPAasaresultoianyactionorfailuretoact,underanycircumstances,byCONS~iS(oritsemployees,agentsorcontractors)fn 171carryingoutanyoxtheprovisionsoxthisAgreementinregardtoxheacquisi-tionoxMID'%)oranypartthereox,thepLanning,engineering,design,licensing,procurement,construction,installationox'ompletionof~ALAÃ)oxanypartthereof,theopeation,use,management,control,maintenance,replace-ment,alteration,modification,renewaL,xebuilding'rrepairof~iLAÃ)oranyaxtthereoz,theretirement,decommissioning,disposal,orsalvagingofMIDLAND)oranypart,thereof,oranyothermatterconcerning~iLANDincluding,withoutlimitation,NuclearPuel,exceptthatCONSUMERSshallbeLiabletoMPPAforanysuch'Loss,cost,damageorexpensewhichistheresultof(a)failurebyCONSPJKtStoperformthisAgreementinaccordancewithitsterms,or(b)grossnegligenceorintentionalwrongdoingonthepax'toxCONS~Innoevent,however,sha11CONSUMERSbeLiabletoMPPAwithrespecttoanyclaim,whetherbaseduponcontract,tort(includingnegligence),patent,trademarkorservicemark,orotherwise,foranyindirect,special,incidentalorconsequentialdamages,including,butnotLimitedto,lossofprofitsorrevenues,lossofuseofMIDLAND<oranypartthereof,costofcapital,costoxpurchasedorreplacementpower,claimsoftheParticipantsorothercustomersofMPPAforserviceinterruptions,ox'laimsofcustomersoftheParticipantsforserviceinterruption,butnothinginthissentenceshallprecludeLiabilityfoxdirectandpunitivedamages.Purther,CONSUMERSshalluotbeliabletoKAPPA1nanysingleoccurrenceunlesstheuninsureddamagestoMPPAresultingx'omtheoccurrenceareinexcessof$15,000intermsozthevalueofthedollarasoxJanuary1,1979.Inaddi-tion,CONS~ishallnotbeliabletoMPPAunlessdemandismadeby~i 1.72writingandreceivedbyCONS~withintwo(2)yearsaftertheoccur"enceforwhichdamagesarebeingclaimedbecomesknowntoMPPA.ZtisagreedbythePARTIESthatinnoeventshallanyof(i),(ii),(Q.i)and(iv)belowbeconsideredasfailurebyCONSUMERStoperormthisAgreement~accordancewithitstermsorasgrossnegligenceorintentionalongdoingonthepartofCONS~r(i)anydecisionbyCONSUME%,foreitherofthereasonsspecifiedin(a)and(b)orthefirstandthirdsenten-cesinthefirstparagraphofSection5.3.2andsub)ecttothe24~oathtimelimitationspecifiedinsaidfirstandthirdsentences,nottohaveMIDLAND)2orKQ)LAÃ)lincommercialelectricoperationbytheirrespectivescheduledCommercialElectricOperationDates(assaidscheduledCommercialElectricOperationDatesmaybeextendedbyallinterveningeventsofforcemajeure),(ii)theentering~mtothisAgreementbyCONSUMERS,orthecontinuationofconstructionof~i'Ã)byCONSEKRS,underanyconditionswhereCONSUMERSshouldhaveforeseenthattheremightbeadecisionbyCONSUMERS,foreitherofthereasonsspecifiedin(a)and(b)orthefirstandthirdsentencesinthefirstparagraphofSection5.32,nottohaveMIDLAND2or~iLA%)lincommercialelectricoperationbytheirrespectivesched-uledCommercialElectricOperationDates(assaidsche-173duledCommercial"='ctricOperationDatesmaybeexended.by'Llinterveningeventsoforcemajeure),(iii)ehe.enter~MtathishgreemenebyCONS~,orthecontinuatianozconsecutionof~iLANDbyCONS~iunderanycandit'ansAreteCONSUMERSshouldhaveforseenthatit.aight~wtersufferaf~~ialdebilitytacompleteconstructionoreheelectric,propertydeluded.inKZLhÃ),or(iv)'eheoperationaz~LAW)byCONS~iinsuchmannerthaethesupplyofProcessSeeamtoOa~framMZ)LAÃ)~mgivenpriorityoverelectricgenerationaeKZLA%).Provided,however,that~m.naeventshallCONS~beexcused:omliabilityfaries~udulentaces.
ExcerptsfromCstalRiverA'eement2.2.2.RepresentationsandWarranties(Section6.)AstheParticipants'rrevocableagent,theCompanyhasthesoleresponsibility,tobedischargedinaprudentmannerinaccordancewithgoodutilitypractices,fortheplanning,licensing,design,con-structionandtestingofCR-3.IntheeventtheCompanyisfinanciaHyunabletocompletetheunit,thentheParticipantsmayprovidetheadditionalfundsrequired;andundersuchconditionsthegenerationentitlementshareswillbeadjustedaccordingly.IftheCompanyincursanyliability'oanythirdpartyforwhichallthePa'rticipantsandtheCompanyareliable,theamountpaidshallbesharedinproportiontothegenerationentitlementsharesunless(1)thereiswillfulmisconductbytheCompanyoranyofitsemployees,or(2)theCompanyoranyofitsemployeesfailtofulfilltheirresponsibilitiesasagentfortheParticipants,or(3)theCompanyoranyofitsemployeesfailtoplan,license,construct,acquire,complete,maintainandoperateCR-3inaprudentmannerinaccordancewithgoodutilitypractice.19.6GoodUtilityPractices.TheCOMPANYandPARTICIPANTSshalldischargeanyandallobligationsunderthisAgreementinaprudentmannerandinaccordancewithgoodutilitypractices.
,APPENDXZBApril1,1980LettertoEwellMengefromRobertJ.Gardner P.O.8OX529IOO,MIAMI,FL33I52FLORIOAPOWERILLIGHTCOMPANYApril1,1980~ih'.EwellNengeUtilitiesDirectorFortPierceUtilitiesAuthorityP.O.Box3191FortPierce,Florida33450
DearEwell:
ThiswiU.confirmourdiscussiontotheeffectthatFPLispreparedtoenterintoasettlementwiththeFortPierceUtilitiesAuthorityonthesamebasisasthesettlementbetweenFPLandtheOrlandoUtilitiesCommissioninwhichfinalsettlementpapersarenowbeingprepared.Insummary,settlementbetweenFPLandFPUAwouldincludethefollowing:l.FPLwillmakeavailabletoFPUAuptoanapproximate1%share'nSt.LucieUnitNo.2,onthebasisofaparticipationagreeme..tsimilartothatofferedbyFPLtotheOrlandoUtilitiesCommisson.Onthebasisofapresentlyestimatednetoutputof802It~,a,1%sharewouldamounttoabout8IS.2.FPLwillprovidetransmissionservicetoFPUAinconnectionwithitsshareofSt.LucieUnitNo.2inaccordancewithatrans-missionserviceagreementtobenegotiatedbetweenus.Intheeventwecannotreachagreement,FPUAwillconsenttoFPL's~:ili:.'heagreementwiththeFederalEnergyP..::gulatoryCommissionfor.adjudi-cation.3.FPLwillprovidebackstandservicetoFPUAforitsshareofSt.LucieNo.2foralimitedperiodsubsequenttoSt.LucieUnitNo.2commercialoperationinaccordancewithabackstandagreementtobenegotiated,shouldFPUAdesirethisservice.IfFPUAisagreeable,FPLwillmakeavailableanapproximateadditional0.333%shareinSt.LucieUnitNo.2which'FPUAi~illsellbacktoFPLoverthelifeoftheunit.FPLwillagreetopayFPUA1/overFPUA'scostofinterestonbondsissuedtofinancesuchshare,withpaymentsbyFPLtobeginuponcommercialoperationofSt.LucieUn~tNo.2oronsomemutuallyagreeabledatecertainifcommercialooeratonisdelayed.5.SubjecttoFPUA'sacceptanceoftheprovisionsofparagraph"ourabove,FPLwill,priortoSt.LucieUnit2frstachievingco-,erci-1operationandattherequestofFPUA,negotiateanarrange-
~i'.EwellMengeApril1,1980PageTwomentwherebyFPUAcanexchangeaportionofFPUA'sshareintheoutputofSt.LucieUnitNo.2,foranequivalentportionoftheoutputforeachofFPL'sotheroperatingnuclearplants,suchexchangetobecomeeffectiveuponSt.LucieUnitNo.2firstachievingcommercialoperation.SuchexchangewouldnotentitleFPUAtoownanyportionoftheoperatingplants,butonlytoreceivetheoutput.6.FPUAwillreleaseallofitsclaimsagainstFPL,willwithdrawasaPlaintiffinCivilActionNo.79-5101-CTV-JLK,willwithdrawitsinterventionintheNuclearRegulatoryCommiss'onanti-trusthearing,andwillwithdrawitsrequestforaSection105(a)hearingbeforetheNRC.7.ShouldFPLenterasettlementwithanyothercityunderwhichthecitywillreceiveproportionatelygreaterbenefitsthanwouldbeprovidedtoFPUAunderthissettlement,FPL'sobligationtoFPUAwillbeincreasedinordertoprovideFPUAanysuchgreate-benefits.8.FPLiswillingtoreimburseFPUAforactualcostsoflitigationexpensesinconnectionwithFPUA'sinterventioninSt.Lucia2anti-trusthearingsandinconnectionwithpursuingthecurrentanti-trustcivilactionagainstFPLwithamaximumof$35,000.00,Bycopyofthisletter,Iamrequestingourattorneytoforwardtoyouacopyoftheparticipationagreementpresentlybeingnegotiated.withOrlandoUtilitiesCommission,asthatagreementnowstands.FPLwouldnegotiateparticipationagreementswithFPUAgenerallyinaccordancewiththeaboveagreement.FPUAmayjointheFPL/OUCnegotiationsiitwishesorwewillnegotiateseparately,asyoudesire.5Tewi11appreciatebeinginformedbyFPUAoftheacceptabilityoftheabovebasisforsettlementassoonaspossible.Ue,ofcourse,recognizethatanyoasisofsettlementagreeduponwouldnotbebindingoneithe-ofusuntilallagreementshavebeenincorporatedinexecutedcontracts.Uelookforwardtohearingfromyou.Verytrulyours,Jg].~.',.~.P'L,Rob=rt'.Gardner~VicePresidentg!?.G/smh APPENDIXC(1)April21,1978LettertoHarryPothfromGeorgeSpiegel.(2)May4,1978LettertoGeorgeSpiegelfromHarryPoth.(3)May8,1978LettertoHarryPothfromGeorgeSpiegel.
QKORQESPIEGELRCSERTC.McOIARMIOS*NORAJ.STRESELROSERTA.J*SLONJAMESN.HORWOOOALANJ.ROTHPRANCESE.PRANCISOANIELI.OAVIOSONTHOMASN.MCHUQH.JR.LAWOPPICESSPxzGELdhKGD~MD2500VIRGINIAAVENUE.N.W.WASHINGTON,O.C.20037TELEPHONEIZ02l333.4400April21I1978PETERILMAT7OANIELJ.QUTTMANOAVIOR.STRAUSSONNIES.SLAIRROBERTHARLEYSEARTHOMASC.7RAUQERJAMESCARLPOLLOCKHarryA.Poth,Jr.,Esq.Reid&Priest40WallStreetNewYork,NewYork10005Re:FloridaPower&LightCompanyFERCDocketNos.ER78-19(PhaseI)andER78-81
DearHarry:
Reid&Priest,inabriefsignedbyyouandthreeassociates,characterizesmyadvicetoaclientcityseekingtoparticipateinFloridaPower&LightCompany'sSouthDadenuclearunitsas:adviceofcounselforFt.Piercethattheyoffertoparticipateintheseunitsbutthattheyprolongnegotiationsuntilconstructionofthe.plantiscom-pleted.""/Thecharacterizationisfalse.Further,Iwouldexpectthat,beforeafirmorReid&Priest'snationalstandingwouldsoattackitshumblebrethren,anyevidencewouldbethoroughlydocu-mentedandcarefullyevaluated,andtheallegationmadeinacontexaffordingafellowattorneyampleopportunitvforreply.Instead,thecharacterizationismadewithoutsupportingfacts.orcitationandintheReplyBriefofanReplyBriefofApril12,1978,p.32,footnote.
HarryA.Poth,Jr.,Esq.April21,1978expeditedproceeding<</ratherthanintheOpeningBrief,sothatthereisnonormalproceduralopportunitytoreply.Ordinarily,wewouldignoresuchcharacterizationasunworthyofreply.<<*/Here,however',theallegationismadebysoprominentalawfirmandapparentlyisintendedtohaveasubstantiveimpact,thatweareconstrainedtodefendbothourreputationandtheclient'sinterests.Reid&Priestanditsclienthavehad,undertheFloridaSunshinelaws,opportunitytoreadallthecorres-pondencebetweenthislawfirmandtheclient.Theso-called"adviceofcounsel"isnottakenfromanysuchcorrespondence(Tr.409-410)butapparentlyrestssolelyonFP&LVicesPresidentRobertJ.Gardner'scharacterization(Tr.214-5,1852)ofastatementmadebytheundersigned(Exhibit10attachedhereto,emphasisadded)atapublicjointmeetingoftheFortPierceUtilitiesAuthorityandtheFortPierceCityCommissiononMarch26,1976,inthepresenceofthecitizenry,FP&Lrepre-sentatives"**/andthepress.Noverbatimtranscriptwasmade,andtheremarksappearintheparaphrasedminutespreparedbytheSecretaryoftheAuthority.Onequest'onpresentedatthemeetingwaswhethertheAuthorityshouldauthorizeapetitiontointerveneinFloridaPower&LightCompany'sapplicationforaconstructionpermitfortheSouthDadenuclearplant(NRCDocketNo.P-636A)toseekanopportunitytoparticipateintheplantcapacity.TherewasalsosomerelateddiscussionofpossiblenegotiationforthesaleoftheFortPierceelectricsystemtoFP&L.Aquestionwasputasto"atwhatpointintime"wouldtheAuthorityberequired"tocomeup"withthemoneytofinanceparticipation(Exhibit10,p.3)?Theresponse,asnotedintheminutes,coveredthefollowing:<</ProceduralScheduleasestablishedpursuanttoFERCOrderofDecember30,1977:Hearingscompleted-March27,1978Simultaneousopeningbriefs-April7,1978Simultaneousreplybriefs-April12,1978initialdecision-May1,1978(onorabout)FinaldecisionbyFERC-June1,1978(onorabout)<<"/See,forexample,FP&L'ssimilarallegation(againinafinalreplybrief)madethroughtwootherlawfirms,ReFloridaPower&LihtCo.,NRCDocketNo.50-389A,ReplyBriefofFP&L,'ovember21,1977,pp.14-5."**/Messs.KenDaniels,HarrySchindehette HarryA.Poth,Jr.,Esp.-3-April21,1978First.IftheCompanyweretoallowpar-ticipationitwouldhenecessarytomakeaclosestudyoftheCompany'seconomicdataandironoutthecontractbefore,afinancingcommit-mentcouldbemade(id.pp.3-4).Second.Itwasnotedthatthereis"onecompanyout,westthatismovingalongfastandifthecompanydoesthat,themunicipalisgoingtohavetoputupitsmoneyandcomeinontheladder"(KansasCitPower&LihtComan,WolfCreeknuclear,NRCDocketNo.50-482A;andthiswascontrastedwiththehappeningsinNewEngland(VermontandMaineYankeenuclearplants)where"they[powercompanies]werearguingandlitigatingwhiletheplantwasbeingbuilt.Theresultwasthatthey[municipals]didn'0havetoputinanymoneyuntilaftertheplantwasoperatingandtheyalreadyknewwhattheyweregettinginto."Third.The.minutesread"Itdependsonhowthecourseofeventsgowiththecompany"(meaningFP&L),andafterdiscussionofthe1985-6proposedcommercialoperationdateandrelatedfinancing,"Mr.SpiegelsaidtheidealsituationisthatyouarguewithFloridaPowerandLightupuntilthedaytheplantisreadytogointooperation.Atdecidetooaheadwithou,theywanttoseeourmoneasfastasnossible.Inanynegotiationssomepeoplearepushingandsomearepulling."(Emphasisadded).Fourth.Theminutesthendiscussedthemattersthatneedtobenegotiatedandcontinues:"He[Spiegel]statedheworkedthisoutwithFloridaPowerCorporationin6monthswhichhefeltwasdarngoodconsideringitwasafirst.Itcanbedonein6months.Morelikelitwouldtakeaearbeforethxsrouwouldberesentedandvotetosaendthem~one."(Emphasisadded)
HarryA.Poth,Jr.,Esq.-4April21,1978Itappearsclearthattwoalternativeswerebeingpresented:thatFP&LmightopposeparticipationoveralongperiodofyearsliketheNewEnglandcompanies,inwhichcasefinancialcommitmentwouldbeputoffperhapsuntiltheplantwascompleted;orFP&LmightactforthrightlylikeKansasCityPower&LightCompanyandFloridaPowerCorporation,inwhichcasefinancialcommitmentbytheAuthoritywouldbeamatterofsixmonthstoayear.Inthiscontext,thereferencetoan"idealsituation"wasmeanttoillustratehowcounter-productiveitwouldbeforFP&Ltobeobduratelike.theNewEnglandcompanies,inwhichcasetheAuthority'sdecisionastowhethertocommitfinanciallywouldbemadefazdowntheroadwhenmanyrisksoftheunknownhadbeeneliminated..Inshort,myconcernwaswiththepossibilitythatFP&Lwoulddragoutthematter.TheMinutesgoontoreportthecommentsbyMr.KennethDaniels,FP&LDistrictManager(pp.5-7)closingwiththestatement:"Mr.Danielssaidifheundezstandswhathasbeensaidsofar,inordertogetinvolvedinananti-trustreviewofFP&L'sapplicationforlicense,theCitywouldhavetobringaboutallegationsofanti-trusttoFP&Landbe.preparedtodefendthem,because,Mz.Danielsstated,'IcantellyouthatFP&Lwilldenythemanddefendthemvigorously.'efurtherstatedheisjusttzvingtocleartheairherebecausehedoesn'thinktheBoardreallyunderstooditthatway."(Inamatterofdaysthereafter,FP&LdidrefusetheAuthorityparticipationinSouthDadeandothernuclearunits.SeeFortPierce-recuestofMarch31andFP&LrejectionofApril1,1976,FERCER78-19,etal,Exhibits30and31).Inthegiveandtakew'thMr.Daniels,priortohisaboveconclusion,theminutesreportmeasstating(p.6):"Thereasonthereisonthefaceofit,ananti-trustquestionwhichjustifiesintervention,is,asheunderstandsit,becauseFloridaPowerandLightisrefusingtopermitthesmallersystemstoparticipate.Hethinksthatisreallythebasicproposition.Hethinksthatisfundamentaltoit.TheproblemcouldbeeasilyresolvedifFloridaPowerandLight,andheissuretheDepart-mentofJusticewouldsupportourposition,offersanopportunitytothevariouscitiestoparticipate."
HarryA.Poth,Jr.,Esq.-5April21,1978TheMinutesthenreportfurther(p.8):DanielssaidtheMayorimpliedthatweprobablywouldnotfeelintheproperposturetotzytobuythesystemwhiletheAuthorityislitigatingagainstusinananti-trustmatterwhichwouldfurtherthatanti-trust."Mr.Daniels'tatementsthusconfirmedinmymindtheviewthattheAuthoritywasfacedwithprotractedFP&Lresistanceandassociateddelay.Thus,theMinutes'eportmystatements:"TheproblemcanbeeasilysolvedifFloridaPowerandLightofferssomefairshare,arelativelysmallshare,bymakingaproposaltosharethenucleazplant."(p.8)Andfurther,thatthereohisbusinesswhenheeffectthatthey'enotThereafter,theMinutesistheoccupationalhazard[Mr.Daniels]saidsomethingtothegoingtogiveupeasily."(p.8)report:"Zfthey[Spiegel&McDiazmidjfindintheiropinionthattheCompanyisunreasonablydraggingitout,thentheybeginworkingatlowerandlowerrates.They'ediscoveredtheanswertowhatMr.DanielsfofPP&LJwasimplyingistohanginasattorneyseveniftheyhavetoworkfornothing.Heisnevergoingtositinaconferenceroomwithanyutility...andheisnevergoingtobeinapositionwherehesaystohisclientthatthey'egotarighteouscause,butbecausethey'einapositiontodragitoutandmakeitexpensive,you'dbettergiveup.He'lworkfornothingforasmanyyearsasnecessarytotryasbesthecantorightthebalancebetweenthesmalllitigatewiththelimitedresourcesandamajorcompany,thefifthlargestutilityinthecountry,withanunlimitedlitigationbudget,whichthecustomersarepayingfor."/"/Seeminglyconfirmedbysubsequentevents:PP&LE'ERCPozm1reports,forexample:ChargesforProfessionalServices:19761977Covington&Hurling-0-$12,458Lowenstein,Newman,etal411,676373,966Matthews,Osborne,etal87,317206,304Reid&Priest260,781552I635Stel,Hector&Davis1I3143602/634p331 Har~A.Poth,Jr.,Esq.April21,1978Mr.Spiegelstatedthathewouldsaythis,thatifthisthingisgoingtobedraggedoutandtheprotestionofyourinterestrequiresit,he'lworkfornothing."CommissionerCaynonsaidyou'egotadeal"(p.9).Harry,Reid&Priest'sconclusionthattheAuthorityreceived"adviceofcounsel...thattheyoffertoparticipateintheseunitsbutthattheyprolongnegotiationsuntilconstruc-tionoftheplantiscompleted,"isnonsense.Znthefirstplace,FPaL'representativemadeclearthatFP&LwouldnotagreetoCityparticipat'onwithoutalengthyfight,andthusyourpredicateofFP&Lenteringinto"negotiations"ishypothetical-withnothingtoprolong.Second,itisunrealistictoassumethatwethoughtwecouldprolongthehypotheticalnegotiationssome10years,i.e.,1976throughthe1985-6commercialopera-t'ondate,despitetheViRCallowanceofoneyearlimitfornegotiationsafteranofferismade.Finally,youmustassumethatIwouldbe:(i)soin-judicicusastogivesuchadviceandatapublicmeeting,and(ii)sopublicspiritedastogivesuchadviceinordertocommitthefirmtoprovidelegalservicesatalossoveraperiodofupto10years.Ourfifteenyearsofadversaryassociationshoulddisabuseyouoftheformer,anditissubmittedthatevenafirmwithaslargea"probono"budgetasReidaPriestmusthaveisunlikelytoproposethelatter.NordoesitappearcrediblethatthiscommentofmineisareasonFPGLdeniedparticipation,astheReplyBriefnowargues,andnottoservesomedeepersubstantivepurpose.Znviewofthe,shortperiodavailableforAdministrativeLawJudgereview,Iamsendingacopytohimandtheservicelist.Pleasefeelfreetoreplyinkind,whileImustreservemysur-rebuttalrights.Sincerelyyours,GeorgeSpiegelGS/nzbcc:AdministrativeLawJudgeCurtisL.Wagner,Jr.Allpartiestoservicelist EXHIBIT~>(MG10)OacjcotHo.ER78-'19(Consists.of12sheets)MINUTESOFASPECIALJOINTMEETINGOFTHEFORTPIERCEUTILITIESAUTHORITYAWTHEFORTPIERCECITYCOMMISSION,FRIDAY,MARCH26,1916,AT3x30P.M.UtilitiesAutharityMembersPresentxChairman,EwellMange;ViceChairmanSamReilly;Secretary,HavertL.Fenn;ErnestE.Settle,MayorBenL.Bryan,JrePEx-OfkiciaMemberCharlesJacksonCityCammissianez'sProsentxCammissionersBrowning,Caynon,Leslie,Longand,Mayor-CommissionerBryan.OtherspresentxDirectorafUtilities,WalterBaldwin;U.A.Attorney,CharlesR.P.Brown;CityClerk,InesLowery;HarrySchindohetteandKenDanielsofFloridaPowerandLight;AttorxxeysGeorgeSpeigelandBobJablon;FiscalAgent,D.C.Huskey;SuaerintondentofElectricDistribution,GlenMonnette;AdministrativeAssistant,JohnLitton;DirectorofFinance,BillBidle;SuyerintondentElectricTransmission,TroyLee;U.A.ChiefEngineer,BobSkxnner;ElectricalEngineer,TamMoulton;CustomerServiceManager,JohnPtadd:PaverPlantHcparlntaadentJ,ackHalth;AtnHtlderedthe'ltiamiHeraldDanTurk,FMUADir.Cammunicatians.Mr.MangecalledtheUtilitiesAuthoritymeetingCoorder.MayorBryancalledtheCityCammissiontaordereMr.MengesaidwehavewithustodayMr.SpeigelandMr.JablonframChefirminWashingtonChatispresentlyrepresentingusanthegassuitsandsaforth.Hethinkstheyhavesomething.cobringusac.thistime.Mr.MangeturnedthemeetingavertoMr.Spiegel.andMr.Brown.tMr.BrawnstatedhemightsayawordbywayofintroductionforthosewhodonotknowMr.Speigel..HehasrepresentedChe.CityandAuthorityintheGasTmxsmissionsuitwhichispendingintheDistric"andFederalCourtinMiami.Itstartociin19II.Wehadaninitialsettlementin1972.Hespecial-i=esinthiskindofworkorhisfirmdoesand,heisprobablythemostqualifiedattorneyinthecountryinthisparticularkindofwozkinvolvingGasTransmissionCompaniesandallfacetsofutilities.Nr.Speigelsaiditisapleasuretabehere.HehasnevervisitedherealthoughhehasrepresentedtheCityforEaurorfiveyears.AlthaughhisfirmdoesworkingasperhapstheLargestpartofhiswarkisdealingwithelectricproblems.TheirIawfirmdoesalmostnothingbutrepresentmunicipalgroups,municiyalutilities,authoritieswhoowntheirawnelectric,gasandmunicipal,operations.Their,woz'kbasicallyisnegotiatingEorthem,arrangementswithmajorpowercompanies.inthecauntryandaccasianallydealingwiththeFederalPowez'ommissionandotheragenciesinordertoprotecttheirinterests.Thethingthatstrikeshim.abouttheFortPiercesituationisthatitislikesamanythings.Theyhaveagoodoperationhereandsomethinghashayyened.Hez'etheyarelosingtheirgassupylywhichwasproducingenergyatafairlycheaprateandhavehadCoshifttoail.Everyut'lityfacedwiththat,particularsituationfoundthattheirrateswereescalating.What.needstobedaneinevaluatingthesituationisfirsttoevaluatewhetheryouneedtooperateyoursystemadifferentwayinviewofthechangeofeconomicsTherewasafuelsupplywh:chpermittedchesystemtooperate.baseload.Thofuelwascominginprettycheaply.HecauldtalkforanhouraboutwhythepriceofChatgaswaskeptdown.There'wasacayputonthepriceofgasandbutfor'thatcay,thepricewouldhavegoneuy.ItnolongermakossensetoaperatebaseIaad.NawtheCi.ywantscaoyerateunderaveryexcellentagreementtheyhavewithFIarida.PawerandLight.Thereisanintercannectionagreementand.thefirstthingthatshauldbestudiediswhattheeconomicsaftheoperationwouldbe--whatkindofratescauldbecharged--onaful1ycannected,fullyintegratedbasiswithFloridaPowez'ndLight.AnoperationIikothatwhichiscontemplatedbythe.agreementandcontemplated.asbeingdonethroughoutthe-industry,thentheplantwouldayerateasparrofa-combined,systemmadeuyafFIoridaPowerandLight,thissystemandsameoftheothez'ystemsthatFIoridaPowerand..LightdisylayCathem.Thehourstheplantwouldoperatewouldbegreatlydecreaseci,thoamountofoilburnedwouldbegreatlydecreased.Hehasn'lookedatallcheengineeringaspectsoftheoyerations,buc,theplantwouldprobablyoperateasapeakingplant,a.flawEactorcyclingplant.Theplantwouldbeturnedanandgeneratewheneveritisinthebestinterestafthecombinedsystemsinchathourtogenerate.OnchatbasisyouwouldEindthatthetotalcostofpowerisconsiderablycheaper.That,isaneanalysisChatneedstobemade..Thesecancianalysisisthefactthatwiththenewgeneratorcomingin, PageZ5/Z6/76yauaretemporarilysurplusincapacity.Whar.youaddgenerating'unitsyoudon'tgetjustenoughtotakacareofthisyearandnextyear;youhavecosi=eitbigenoughsoyauhaveafairlyefficientunitand,therefore,yauputinmorecapacitythanisneededintheyearinwhichitisinstalled.Itusuallycakes3,4,or5yearscagrowintochatcapacity.WhattheydoissellchairexcesscapaciCy.Theanalysishastobemadeofwhatyaucauldsellthatexcesscapacity'or,whatprice,ona.short;langormediumtermbasis.Therearesome40ar50separateelectricutilitiesinFlorida.Ananalysisneedstabemadeastowhattheirrelationshipsarebetweenhowmuchcapacitytheyhaveandhowmuchleaddotheyhave.SomeyearsagotheCityofLakelandvasselLingtemporaryexcesscapacityaverFloridaPaverandLight'ssystem,CotheCityofJacksonville.FloridaPowerandLightvastransmittingthepower.Thewaythcarrangement,wassemanticallyputtogetherwasasaleframLakelandtoFloridaPowerandLightandasaleframFloridaPaverandLightto'Jacksanville.InconnectionwiththeNewSmyrnasituation,FIoridaPowerandLightagreedtotzansmitpowerforNewSmyrnaBeachandhethinkstheyagreedtotransmitpowerfozthiscapacity.Hehasn'tLookedatFloridaPowerandLight'sbalancebetweencapacityandload.Hedaesn'tKnowyetwhethertheyneedit.IfChereissameothersystemthat,needsit,itissalable.Itseems,tohimintalkingwith,CharlieBrawnlastweek,thata,studyhastobemadeastowhetherunderarevisedoperatingbasiswithFloridaPowerandLight,youwouldvanttoseewhetheryourratesinFartPiercemightbereduceddawn.Hedaesn'tknowhowfardown.Theymightwellgetbolo~FloridaPowerandLight.Thczeisanothertheme-thatneedstobestruckhere.Anybusinesshasgaadtimesandhard.times.Yauhaveagoodbusiness..IfyoulookbackonChehistory.ofthebusiness,yau.wil1secthat,ithasbeenagoodbusiness.Ithasproduced.Zthashadalot.ofecanomicbenefitstotheCity.Likeanybusinessiccomesintohard.times.Thosethingsdan'tnecessarilylastforever.TodayFlorida,PowerandLight'sratesazclowerthan'ortPierce'srates.Thereazeanumberofreasons,aIatofwhicharecothecreditofFloridaPowerandLight.They'egenedeeplyintonucleargeneration.Theytaaktheirchances.They~madetheirjudgementsandmadetheinvestments.Aslongasthosenucleargeneratorsarerunningandtheydon'tzunintoanyspecialproblems,great.Yaudon'tknowwhatcaulihappentomorrow.If(heydevelopproblemswithsameoEthesenucleargenerators,suddenlythesituationcauldchangeandifandwhentheyliketheCityarefacedwithrunningoutoftheirfuelsupply,oumightfindinax!otheryearortvo=thatthesituationisreversed.Heasseenanumberofsituationswheresystemsvezesoldbecauseoftheanti-cipation.oflowerratesEzomanothercompanyandtwoorthreeyearslater,yaufindthatbecauseafsituatiansandcircumstances,thisdaesn'tmaceziaL-ice.Hcdoesn'mean'tounderestimatethcproblemthatfacesFartPierce,buthewouldsaythatastheownersofthisbusiness,itwouldseemtomakesensecofirstsccifthereisanatherwayofapezatingitataprofit,atgood.Lowratesand.evaluatethatalongwitheverythingelsethat.maybeevaluated.Hesaid,hcwouldbehappyto-answerquestionsbecausehe'striedtosayaIotina.relativelyshorttime.Mr.Mcngesaidhcunderstandsone-ofthe.actionsthisboard.needscotakeistoEileourintentianstobuyapieceofchenucleazpowerplantthatistobebuiltinSauthDadeCaunty.HeaskedifthatisinthepzacessofbeingdaneararewewaitingEordirectiononthat.Mr.Baldwinsaidheiswaitingorsamewordtogoahead.Wchavewrittenthem,askedChemaboutitsometimeago,buthaven'tgottenanyEurcherwithit.Mr.Mangeunderstandsourintentionshvetobefiled.intheearlypartafApril.Mz.Baldwinconfirmed.this.Mr.SettleaskedMr.SpeigelifhcisgoingCosetintosomeofthesealternatives.Mr.SpeigelsaidhewouldatthectizcctianofthisAuthority.HesaidheisrepresentingtheAuthorityingasmattersandiftheydesirehim.torepresentCheminelectricmatezs,hevillbe.glad.todoit.Mr.SettleaskedhimwhatsameoftheaLternativcsare.Mr.Speigelsaidtobespec'c,theAuthorityhasafine.interconnectionagreementwithFloridaPowerandLight.HeremembersthisveryacutelybecausewhenhearguedthecasefarCheCityofGainesvilleintheSupzemeCourt,hebroughtthatagreementuponChedayoftheargument.HesaidthatallGainesvilleisaskingforEzamFIozidaPowerCorporationiswhat,FortPiercehasEzamFloridaPowerandLight-Page33/Z6/'T6ThereisanagreementbutFortPierceisnotutilizingittoitsfullextent.ThefirstthingthatneedstobedoneistomakeananalysiswhichultimatelyhastabeajointstudybetweenFortPierceandFloridaPowerandLight,astohowthetwosystemscanmosteconomicallybenefitframacombinedoperatianwhichgenerallywillhavecentralieddispatchbyFloridaPowerandLight.Thenanevaluationofthecosts,chargesandrateswouldbenecessary.Mr.SettlesaidNr.Syeigelisspeakingofpeakload.Nr.SpeigelsaidthatisrightHewouldhavetoknowthecharacteristicsofthegeneratingunit.Ideallythiswouldbepeakingandreservecapacity.Everyelectricalsystemhastohavebaseloadcapacity,peakingcapacitysuchasturbinesandgenerallytheiroldercapacitywhichusuallyisn'tworthverymuch,theyholdinreserveIntheeventafautagesofthegoodunits,theyhavetobringintheolderstuff.We'eonacombinedoperationbasisand,PortPiercewouldn'tbeburningalltheoilthey'eburning,energycostswould'bereduced..SettleaskedWi.SyeigelifherepresentstheFMUA.Ar.Speigelsaidhedoesn'trepresenttheFMUAassuch.Herepresentsanumberofcitiesin,FMUA.Mr.SettlesaidheknowsNr.Speigelrepresentstheso-calledsevencities.AsNr.SettLeunderstandsit'heFMUAcangointogethernowandbuildtheirownnuclearplant.Heaskedifthisiscorrect.Nr.Speigelsaidhedealtwiththeedgesofthatissue.Heisn'tsureandwouldhavetoturntosomeFloridaLawyersanthat.TherewasLegislation'assedinconnectionwiththeChrystaLRivergenerator.There,FloridaPowerCorparationsold100megawattstoanumberofmunicipalsinFIoridaandtherewasspecial,legislationrelated.tothat.Therewasanatherbi11.introducedwhichhebelieveswasapposedbyFIaridaPo~erandLightunderwhichthemunicipalscould,havedonewhatNr.Settleissaying.Mr.Settleaskedifthatbi11waspassid.Mr.Brownsaid.DonTurkcauldprobablyte11Mr.Settle.Nr.Turkintroducedhimself.HestatedheisDirectorofCommunicationsEarFMUA.HestatedtherewereZ,billsintro-duced-insessionlastyear.OnewasinresponsetotheConstitutionalAmendmentapprovedinNovember,1974,whichwauldallowprivatecompaniesandmunicipaLstobainvolved.togetheringenerationandtransmissionfacilities.TherewereZintroducedlastyear:OnetoallowparticipationinFloridaPo~erCorporation's'nuclearunitandanotherwhichbecameknownsharctitle-wiseasjointpowerauthoritywhichFMUAintroduced.ThebillthatallowedtencaoperativesgoparticipateinFloridaPowerCorporationsnuclearunitpassedandtheotherisstillanfileintheHouse.ofRepresentatives.Thereissomedisagreementastowhethercitiescouldgettogetherwithpresent.Legislation.Ithasnot.beentested.ThebillFMUAfiled.pertaining.tojointpowerisstillintheLegislature.Nr.Settle,saidsoatthispointtheanswerisna.Mr.Turksaid.thatprobabLywouldbethe.quickestanswer.Nr.Settle-saidthat,wouldbringautanotherquestianinhismind.Lfwefile.interventionintheDadeCaunty'lantofFP5Lsomeonehassaid,andheisgoingbackinhismindanddoesn'tknowwhosaiditorwhereorwhen,thatthebandscouldbesoldonfuturerevenueof.thisparticipationinthisplant.Heasked.ifthatispassible.Nr.Huskey-saidthatis'apossiblemeans.Ifyaucanshaw-asufficientsavingsavera.periodoftime,itisapassiblewayoffinancing.Mr.Settleaskedwhatthecostpermegawattwasforthisplantdownhere.Mr.Schindehettestatedthatifhe.recallscorrectlyitwasaround$1,000to$1,100perkilowatt.MayorBryan.askedwhatheestimatesthecostafthenewplanttobe.Mr.SchindehettesaiLitwould.beapproximately5800,000,000.It<<illbeinthesama-area.perkilowatt,butthatdoesn'tincludeinflation.Mr.SettlesaidL08ofthatwould.be$80,000',000.Ifwecanshowthatwe'egoingtosaveenoughmoneytopayoffthe80'miLIiondollarsoveraZO.yearpetiod,wecansellthe.bondsonthatbasis.Mr.HuskeysaidthereareanumberofcitiesthathavedoneexactLythatincannectionwiththeFIoridaPowerCarparatiandeal.Thesame.processcouldbefaLLowedexceptthatthisisaLittlebitdifferentsituationinthat:theyanticipatebeingonthelinesame-timeLatethisyear.Itwasn'tan8or10yearproposition.Itwasayeartaa'earandahalfbefare.theycouLd,startreceivingthosebenefits.Itwouldbeanciovetart.ir.settesaidheistryingtopicturethisinhisownmind.HeaskedMr.SoeigLehowmuchleadtimeisinvolved.SupposeweinterveneinthesecondplantandwanttobuyLOtoftheplantinDadeCounty-atwhatpointintime,eitherinconstruction,aaplicatianorcompletion,dawehavetocomeupwiththe80KLLiondollars.Nz.Speigelsaiditvariesdependinguponhowthemat.erisresolved.Ifthecamyanysaysthey'arewillingtoLet,yauinasaparticiyantandsaytolet'ssitdawnandgetthecontractdraftedandthestudiesaut,thereareZthingsyou.needtodo:Youhavetotakeagoadcloselookattheacanamicdatathatanlythecompanyhas-whatisitreallygoingtocostT RPage45/Z6/76SecondLy,youhavetoironoutthecontracts.Whenyouareputtingyourmoneyautforaplantsomewhereelse,youhavetamakesureyouhavethetransmissianandeverythingelse.ThereisanecompanyoutwestthatismovingalongEastandifthecompanydocsthat,themunicipalisgoingtohavetoputupitsmoneyandcome'nontheladder.SameofthesesituationsupinllewEngland,theywere,arguingandlitigatingwhiletheplantwasbeingbuiLt.Theresultwasthartheydidn'thavetoputinanymoneyuntilaftertheplantwasoperatingandtheyalreadyknewwhattheyweregott'nginto.Itdependsonhawthecourseofeventsgowiththe.,cam~any.Nr.Settlesaidlookingaitfromourownparticulars'tandpaintifwearelackingatlcadtimeandhedoesn'tknowhowlongit,takes--MaybeHarrycananswerthis--ifwefileinterventionandaresuccessfulandtheysaythey'ILsellusapercentageaftheplantorregardlessofwhetherwedon',whatpoinr.intimeistheDadeCauntvplantgoingtobeinoperation.Arewetalkingtenyears,fiveyearsorwhatfMr.Danielssaid1985-86.Mr.SettlesaidthisisaboutIOcats.eausserxausyxwecoulpayxnterestonteonsoratlengtottime.Nr.Huskeysaidyouwouldn'tneedtoselL80milliondollarsworthofbandsatonetime.',Yauwouldse114orSseriesofbonds.Yauaren.'tgoingtoneedtoputup80milliondollars.Mr.Settlesaidpossiblywecouldwarkitoutlikethecompanyoutwestandnxt'itupafteritisinaperation.FloridaPowerandLight'sgotallthemoneyintheworld.Mr.HuskeysaidheissurethatFloridaPowerandLightisn'tgoingtobarrow800milliondollars.They'egoing,toborrowit.astheyneedit...Spcigelsaid,theidealsituationisthatyouarguewithFlorida,PoweranL'ightupuntilthedaytheplantisreadytogointaoperation.AtthattimeyoufinalLygetyaurcantract.Qnce.the.decidetooaheadwithauthcwanttosecourmoneasfastasosszoc.nanynegotxatxonssomepeopearepushxngandsame.arepullxng.Tewayhclooksatitis'hepetitiontointerveneisforthepurposeofestablishingyour-rightto,.havetheopportunitytobuy;Whenyaupetitiontointerveneyou'enotmakingyourdecisionbecauseyaucan'tmakeadecisionuntilyouhavemoreofthefactsandthewholelegalrelationshipclarified.Itcostsmoneytodothat.Yau'retalkingaboucmiIlionsofdollarsininvestments.You'rcgoingtohavetaspendmoneyonconsultantsanalyingthethingbefareyoucommityourself..Yaucanstudyeverythingintheworld,unlessyouknowyauhavesomethingthatisreal.That'sthepositionhehastakenineveryproceedinghe'shandled.ThedutyofthecompanytonakeapropasaL,adefxnitiveproposaLwiththefactsand,dataisneededbyCityofficialstomakeanintelligentdeterminatian.as.towhetherornottheywanttodoitHeremembersthisincannectionwiththeNaheYankeeplantwhere-thecampanysaiddramaticallybeforetheFCC,"Nell,Mr.Speigcl,are.yourclientsreadytoputuptheirmaneyf"He=saidtheyarenatreadyuntilyougiveusaproposaI,andwaknewwehaveanoffer,thepeople.canspenLthe-moneyneededtoevaluaetheofcrandgeti.Atthcfirstrtageyoudevelopyourrighttohavetheproposalmadedefinitively.Thereafter,yaumakeyaurstudiesandsitdawntonegotiatewiththecompany.,Everythingmaybefineexceptthepriceforsomeofthoback.upandthings.LiRethatmaybetoomuch.Inthatcaseifisn'teconomic.HcstatedheworkedthisautwithFloridaPowerCorporationin6monthswhichhefeLtwasdarngaodconsideringitwasafirst.Itcanbedonein6months.Morelikclitwouldtakeavearbeforethisrouowoucrcscnteanvotetosentemone.iayorryansaxIorxdaPowerCorporationwasinabin,weretheynotVMr;Speigelsaiditwaspartlythatanditwaspartlythat'hereweresomegaadrelationshipsdevelopedbetweenFLoridaPowerCarporationandthemunicipalsandcooperativestheydobusinesswith.About:Sor4yearsagoLitigatianandarguingterminated.Theyarewi11ingto.dobusinessanthatbasis.Nr.FennsaidaslongasMr.SpeigclissayingthattheAuthorityisnotobligatingitselftotheolantitselfandthatwe'ejustgoingtouseaurprivilege-ofinterveningandletting,themknowthatweare.interested,hcdoesn'tscewhywccouldn'tgoaheadand'ntervene.Nr.Mengesaidifthishad.beendonesamefiveyearsagoonunitno.Iwcwouldbeinonthatnow.MayorBryanaskedwhatisinvolvedinintervcntianintermsofwhatwcobligateourselvesto.Mr.Speigelsaidwhenyau'reintervening,draftingthepetitionisn'ttooexpensivea.prooosition,althoughitisbecomingamoreexpensivedocument.Thebigquestionis,isitgoingtogotohearingsandwhatkindofhearingsaretheygoingtobe.Itisdifficulttaknow.VeryEcwafthemhavegonetohearings.Somehavegonetohearingsandthey!vebeen1onganddifficult.ThereareanumberofothercitiesinFIoridathatareconsideringinter-vening.Ifthatwouldhappen,thecostwouldbesplitamongthem.Basicallv,you'eintervening.ingoodfaithwithintentionofpursuingthematter..Qn Page55/26/76theotherhand,realitiesbeingwhattheyare,ifyou'efacedwithaIong,expensivehearingprocedure,youhavetore-evaluatehowdeeplyyouwanttogetintotheproceedings.Hewouldsaythey'ecommittingthemselvestoaninterventionandtothecostofarelativelyshorthearing,not100daysofhearings.MayorBryanaskedhowmuchNr.Speigelistalkingabout.Nr.Speigelsaidifthereisagroupitwouldcostaboutthesamething.Inter-ventionistalkingabout2-4thousanddollars.There'dbesomeadditionalpleadingsandthenthere'lbecontracts.Withallpreliminariesandeverythingelse,you'dprobablygetuptomaybe$10,000forallthecitiesparticipating.Generallyspeaking,mostofthesecaseshavebeenresolved,dependinguponthepositiontheJusticeDepartmenttakes.Hecanthinkoffhandofthreecasesthathavegonetolengthylitigation,twoofwhichhisfirmwasinvolved.OneoftheminLouisianna,theywereabletoconfinetoarelativelyshorthearing.OneinMichigancouldn'tbeconfinedandwentto10-80daysofhearings.Whattheydidinthatparticularproceedingwastoputtestimonyinanddidn'appearatthehearings.TheyputintheircaseandtoldtheAdministrativeLawJudgethatitwasfineiftheCompanyandtheDepartmentofJusticewantedtogointoanintellectualbitofresearch,buttheyjustcouldn'tspendthemoney.Ifyougotoareasonablyappropriatehearingyou'etalkingaboutcostsintheorderof40-80thousanddollars,legalandtechnicalpersonnel.Hewould.say,heshouldbe.abletoanswerthisquestionmorebriefly.Lawyersalwaysexpectotherpeopletoanswertothepoint.Hethinksintermsofimmediatecommittment,,it'sintheneighborhoodof,5-10thousanddollarsspreadamonga.groupofcities.MayorBryansaidasanindividualcity,ifwedecidedtodothis,couldwepulloutatanytimewewantedtowithnofurtherobligation.He-asked.ifthatwouldbecorrectornot.Mr.SpeigelsaiLhewouldthinkit'scorrect,subjecttowhatlawyersknow.Youmakeagoodfaithrepresentationbutthatasgeneral,istheexperience.That'stheunder-standingamongthegroups.Mr.Settlesaidhe.isnotwillintoconcedeasaletdFloridaPowerandevenowxzterexntereste.InIgtotatanwattheMayorassaid,overandoveranwat,etuyconcurswith,tha-itseemsthatatomicpower,istheonlywaywe'egoingtobeabletogotogetthisratedown,hewouldmakeamotionthatwefileforinterventionintheSouth.DadeAtomicPlantofE1ardin~overendLdtht.NrPenn.strandedthenatdan.Nr.BaldwinaskedtW.Speigelifitwouldbenecessarytohaveafairlycom-prehensivestudymadebeforeweintervene,decidingtheamountofelectricitywe'lneed.Mr.Speigelsaidthiswouldnotbeneeded.Generallyspeaking,weknowenoughfacts.MayorBryanaskedwhatthedeadlineoninterventionis.Mr.Speigelsaid.itisApri114thMr.Baldwinsaidthat;isthelast.he.heard,too%CommissionerCaynonaskediftheyshould,haveanappraisalmadeontheolantbeforetheystartoutand,seewhattheyhavetoworkwith.Mr.Settlesaidright.drwe'retalkingaboutbuying,notsellingourplane.'r.Ãengesaidwe'etalkingaboutbuying,themoutnow.Nr.DanielsofFlor'da.PowerandLightasked,.ifitispermissibletomakeacomment.MayorBryansaidhewouldliketohear.fromhim.Mr.Danielssaidhe.wouldliketobring'utacouplerofthingsforhisownclarificationiffornobodyelse'.OnethingisyouaretalkingaboutaninterventioninsomeproceedingsinWashington.Heisn'talawyersoheaskedeveryone.tobearwithhim.Itishisfurtherunderstandingthatwhatyouaretalkingaboutwouldrequirebringingasuitessentiallyallegatinganti-trustactions;that.is,thatFloridaPowerandLightishavingdealingsthatareinconsistentwiththeanti-trustlaws.<~fr.Speigelsaidthatisonlypartlycorrect.Basically,whetherthesituationandcircumstancesmaybe-inconsistentwiththeanti-trustlaws--youmaynotbedoinganything,butyoumayhavefromaneconomicspointofview,thekindofmonolopy,whicheventhough,personally,you'enotdoinganything,youshouldn'tdo,youhave.obtained.sucha.monolopy,woulLbeanissue.Thereareanumber,ofac.ionsonoccasionwhichtheyhavetakenanissuewith,withFloridaPowerand,Light.Nr.Danielssaidheknowsthat.Hispointisthatjustasimplestatementofvotingforinterventionis,inhisview,aIittlebitmorethansigninga"metooetpetition.ThatisyouaregoingtoessentiallybringthosethoughtsagainstFP6LwhichsaysthattheyareintheirdealingswithFortPierce,inconsistentwiththoselaws-dealingwithanti-trust.Mr.Pennsaidhedidn'tunderstanditthatway.
Page6.3/Z6/76HeEeltMr.Speigelwassayingthat.asamunicipalownedutility,thatvchavetheprivilegeafbuying.intotheSouthDadeNuclearPlant.ÃemissedthatopportunitysameyearsagowiththeaneonHutchinsonIsland.Sometimeagowhenwecontactedacertainagency,theytoldusweweretoolatetonegotiattobuyintotheHutchinsanIslandplant.ThereisanothernuclearplantwhichwillbebuiltinSouthDade.Asheunderstandsi"wchaveuntilApril14thtoshawaurinterestinbuyingintothispLant.Inordertodosowchavetogothroughthepraceduxeofintervening,sayingtatheDepartmentthatingoadfaithwewant,tobuyintathisplant.opportunxtyoflocalutilities,smallerutilities,toparticipateIntheawnershipafalargenucleargeneratorisconsideredimplicitinanti-tzustlawsinthesekindafcircumstances.Youhaveadramaricexampleheretoday,whereyouazesuddenlyfacedwithasituationwhereyourailcostshaveganeupand.youdon'thaveanynuclearenergy,you'zeputinadisadvantageouspasitian.Thisisnotbecauseyoudon'thaveagoodsystemorbecauseyoudidn'tuseforesight,but.totalcircumstancesresult.Theconcept,behindthenucLearactwasthatthisnewEormofcheapenergywhichhadbeendevelopedatgreatcostbythegovernmentandtaxpayers,wouldputlargecompaniesvhoareina.positiontoouttogetherthetzemendousaggregateofcapitalnecessarytobuildthcTurkeyPaintozSt.Lucic,Qxapositionwheretheycouldputevery-bodyelse.autofbusiness.HehearspeoplesaywehavetosellauttheFortPiercesystembecause-we.haveaiLandnotnuclear.Thisstatutewasdesignand;hcwasn'tinvolvedinthedrafting,butwasinvolvedinitsmodifications,and.theconcernwasthatsmallerutilitieslikeFartPierceshouldhaveanopportunitytoparticipateinnucleardevelopmentwiththebigcompaniesasameansoEbeingabletostayixxbusinessbecauseitwasfeltthat,basically,evenintheutilitybusiness,competitionisaEundementalprincipalunderlyingthiseconomicsociety.Theconcept.ofcourtshavesaidthattheyhavetopreserveasmuchcompetitionaspassible,becauseifyouwipeoutthesmallsystemsandturnthestateovertooneortwobigcompanies,thentheydon'havetocamocteandtheed'avebee~icnt.t0hat'sinvolvedhereat.ercasoxxthere,isontheEnceofit,ananti-trustquest.onwxcjustifiesinterventian,is,.asheunderstandsit,,becauseFloridaPaverandLightisrefusingtopermitthesmallersystemstoparticipate.Hethinksthatisreallythebasicproposit'an..Hethinksthatisfundamentaltoit.:The.problemaflitigationcauldbeeasilyresolvedifFloridaPowerandLight,'nd.hcissuretheDepartmentoEJusticewouldsupportourposition,afersaxxopportunitytothevariouscitiestoparticipate.Maor8ansaidwhatconcernshiminlightoEMr.Daniels'emarksisthatetxnswe'eapproaching.thisinterventionmore-inanefforttoobtaininformationonthisasacomparison.Ifitcosts80miL1iondollarstoacquirctheportionoNthe-plantthatwasneeded,andwe'esittingwith30miLLiondollarsworth'fbondsonaplantve,alreadyhaveandvehavemarepowerthanvcneed,thatitmightve11bethataEterinterveningforavhiLe,thatwould,beeliminated.asanalternativeorasareasonablealternativeor.somewhereaLangthewayvemight'indoutthatwecouldn'.WhattheMayorwouldhatetosechappenthenistohavesameotherpartiestakeaurownpleadingsifwehavetoallegeanti-tentactionotsamesorttogctQxthere,andusethattoblockthenegatiatiansEozthesaleofthesystemwhichvenavhave,toFloridaPowerandLight.Thisbusinessafbuyingpoweriscertainlysomethingthatneedstobeexplored,butve'rcsittingherewithaplantthatcanatleastfartheconceivableSuture-assoonasthegeneratorgoesonline,makemorcpoverthanwhatwecanuse.Itisanexpensethat'sgoingtobethereregardlessafwhether'<<e.azcgoingtobeabletocomeupwithsolutianstobuypo~eratacheaperrateExamFlorida.Paverandlight.'>le'vcstillgatthcbondsontheplants,theempLoyeesattheplantandtheplanttomaintain-.Ashcundezstoadthcproposalthatwasbeingmade,wasthatweneededtoexplore-alternativesand,heagreeswiththat,buthedoesn'twanttoexploreanalternativewhichisgoingtoknackusoutofthcballparkthenanwhatmaywelI.bethemastxcasanablesalutiantatheroblcmandthatwouldbetaHewouldhesitatetovateoramatxonthatwaulaveachanceofknackingusautofthenegotiatianstaselltheplantbasedanourinterventionandpleadingswemightmakerelativetaanti-wastviolationsbyFloridaPowerandl.ight.Heiswonderingifitmightbebetter,becauseitIsawfuLhardtotalkintheabstractabautpleadings,tohavesomethingdraftccl,aproposalastowhatwccandointheEormoEinterventionandwhatvcwauldbesayingintheintervention,whatpositionwewouldbetaking,andlookatthatandhaveittousintimethatwccouldseeitandLookitoverEaradayatleast.ancehaveaspecialmeetingandthenvoteanwhattado.
Page75/26/76TheMayordoesn'twanttogetalCernativesbyhedoesn'tthinkit'out-ofwhatlookslikewaynegotiationsgoatogethungonthesaleofChcsysteminaneffortexpLoringanavenueChat'sreasonabletoexplore,butreasonabletoexploresomethingthatmightknockusareasonablesolutionatthispointdependingonthcrNr.DanielsaskedforaclarificationofwhatMr.Speigelsaidastoyourimplicitrightstosomeoneelse'snuclearunit.HcstaCedChaCitishisunderstandingthatthelawdoesnotsaythat.Itmaybeimpliedbutitisn'inthclawthatanyonehasarightofaccessforsomebodyelse'sproperty.Heaskedifthatistrue.Mr.SpeigclsaidChcLawdoesnotsaythat.Asfarasheknowstheonlypeople,privatecompaniesChathaveaccesstootherpeople'spropertyareutiliticsexcrcizingtherightofeminentdomain.Autilitywhichhasthisrightisexercizingsomeoftherightsofthesovereign.Inorderforcompetitor.ontosurvive,itneedsaccesstothisnewformofenergywhichisonlyavailable.inratherLargeplants..Theconclusionwhichhasbeendrawnandappliedin,manycasesisinordertomaintainasituati.onconsistentwiththeanti-trustlaws,a.Portionoftheplantshouldbeofferedtootherutilities.Nr.Danielsstatedchatisn'titreallytruechatsincethelawdocsnotsaychat,thatthe.implicationsarechatifI'utilityisinfactinconsistentundertheanti-trust.laws,then.theJusticeIhparcmentmaytrytogetasettlemcnttohavetheotherpartygainaccessratherthanhavingadirectrighttojust.say,"Hey,Iwantapicccofyourunitoverhere,"andthat'sallthere.istoit.Nr.SoeielsaidhearceswithMr.Danielsin'hatthisisnotcheIaw.ir.annessaxzeunerstanswatrasbeensaxsocar,xnorertogetinvolvedinananci-trustreviewofFP5L'sapplication.forlicense,theCitywouLdhave.tobringaboutallegationso'.anti-trusttoFP5Landbepreparedtodefendthem,because,Mr.Daniels'tated,"IcanCellyouthatFP4Lwilldenythemanddefendthemvigorously."'efurtherstatedheisjusttrying,tocleartheairhercbecausehodoesn'thinktheBoardreallyunderstooditthat,way.Mr.SettLewouldliketotake.oppositiontoFloridaPowerandLightobjectsstrenuouslyproceedingaccordingCowhatNr:.DanielsisutusinamuchbetterosostowhatthcMayorhassaid.ObviousLy,Cousfilingthisinterventionsaying.,telethinksicwouldFloridaPowerandLihtifweofIcthisinte'ecce~.Heisnotwillingtosayattn.stameteatthatisthebestthingtodo.Hedoesn'tthinkanyofuscantakethatpositionatthispoint.MehavenoideaChatFloridaPowerandLightwantsCobuythisplantandifwedo,whatthey'ewillingCoofferusforthisplant.1'(cdoknowwc'reputtingsome$600,000ayearoutofthisplant.intotheGcncralFundatthispoint..MayorBryan.said$462,000plusa$70,000credit.Nr.Settlesaidalright.-$56$,000.Itiscloseto$600,000.ItseemstoMr.SettlethatifwegctcomparedtowhattheyofferthcCityofVeraBeachwhichhebelieveswassixandahalfmillionifherecalls,andifChat,couldbe--noCwill5e--b7'omefutureCityCommission,scenasawindfalltopavestreetsandsoforthandChenthemoneyisgone,thenyou'egottogointotaxesto.raisebondsforthegeneraLfund'.Always20'4ofthepeoplepay80"ofthetaxes.ItwouldseemcohimthisisgoingtohavetobestudiedlongandhardasCowhetherwc're-reallyinterestedinselling.HcforoneisnotwillingCotakethepositionat.thispointChatwe'rcinterestedinselling.HemightalsopointoutthatMr.LittlewasaformeremployeeofFLoridaPowerandLightformanyyearsandisnowthe-CityhfanagerofVereBeach.Nr.Settlecansee~here.FloridaPowerandLightwoulddefinitelyLikeCobuyPortpierceandVcroBeachandgetridofthispocketofcompetition.HcwouldhavetoCakeavery,very1onghard.Lookatitbeforehewould.voteforsellingit.,Mr.Settlewouldprefertovoteonthemotiononthe.floor.MayorBryansaidthepointhewastryingtomakewasifwebypassing.thismotion,takeachanceoneliminatingthepossibilityofsellingthisplanCtaFloridaPowerandLightbyalleging.anti-trustaction,chenobviouslyifwegointocourt,andproveanti-trustactiononthepartofFloridaPowerandLightinanefforttowinChcoppoMnityCopurchase104orsomepc.centoftheplantdowninMiami,thenchenextanswerbyanyoneelsewhowantedcointervene,ifaftergettingtheopportunitytopurchasethatplant,thedetcrminationweremadethatitwerebeternottospend80milliondollarstohaveaportionofaplantinMiamiandthat.itwouldbebettertoproceedtoselltheplanttoFloridaPowerandLightoratleasthavethataliveasanalternative,thatanyinterestedpartyopposedtothatforwhateverreasonwouldthenbcablecotakethepositioncheCityhadtakenincheinterventionCoestablishChatbasedontheCity'sownpleadingsChatFloridaPowerandLightshouldnotbcallowedtonegotiatewiththeCitybecauseitwouldfurthertheanti-trustviolationswhichwchadallcgcdFloridaPowerandLightwerecommitting.
~'
3/$6/76HissuggestionwasthatwedeferactiononthisuntilwecanseewhatisactuallygoingtobepledinthisinterventionandhavesometimeEorconsider-ationofthismattertodeterminewhateffecttheinterventionwouldhave,ifany,onthecontinuingeffortstonegotiatewithFloridaPo~erandLight.Heisn'tpreparedtosaythatwewillselltoFloridaPowerandLighteither.Heispreparedtosaythathe~antstoseeanofferframFloridaPowerandLightsothatwecanandthepeopleofthiscommunitycanconsiderthatofferandhe.isn'tpreparedtovoteinfavorofamotionthatmighteliminatethochoiceofthepeopleofthiscommunitytohavetheopportunitytoconsiderwhetherornottheywanttosellthisplanttoFloridaPowerandLight.HeispreparedtoproceedfurthertoaskNr.Speigelorwhoeverisappropriatetosubmittousforconsideration'ataspecialmeetingbeforethe14th,whatevereffectinter-ventionmighthavesothatwecansee.Heissittingherebeingaskedtovoteonamotiontofilepleadingsthathchasn'tseentoraiseissuesthatheisn'tsureof,butapparentlyoneofthemisanti-trust,andwithoutbeingadvisedoftheramificationstousofraisingtheanti-trustissueandthceffectthatwouldhaveonournegotiationswithFloridaPowerandLightandheisn'goingtovotainfavorofthat.rNr.SettLeaskedifwecouldaskNr.Danielsthatquestion.Nr.Danielssaidhewouldliketoclearuponepoint.Heisn'therctodaytotrytogetthis'bodynottointervene--noway--thatisyourchoice.Hisonly.pointinbeinghereistomakesure-thisbodyunderstandswhatisinvolved.Ashesaid,heisn'.a.lawyer,butistryingtosaywhatheknowsofthcsituation.Mr.DanalssaidFPL<<asaskedtocomeadtal.wthtieAuto'tad,aroosaIortheosaCYTheywilldothatifthatisstillwhatisdesired.Theyaregoingtolookatitverycarefullyfor3pointsOneis,isitgoodforFortPierce,isitgoodforFP6Landitsshare-holdersandisitgoodEorthccustomersandemployeesofFortPierce.Ifthosethingsdon'tjiveup,asEarasFPOLisconcernediEtheycan'tmakeaproposalsuitabletothosepoints,theywillprobablycomeandsay,"Sorry,wcdon'thinkwecando,businesswithyou."Nr.Settleasked.Nr.Danielsifhecouldaskhimaquestionwithaycsornoanswer.Nr.Danielssaidhecan.Nr.SettleaskediffilinganinterventionuiIX.ceasenegotiations.Nr.DanielssaidhethinkstheMayorans>>aredthatalready.Mr.'anielscan',answerthatbecauseheisn'tanofficerofthecompanyandthatdecisionwillhavetobemadebyone.Nr.Settlesaidhadidn'getthcMayor's-answer.Heaskedwhatitwas.Nr.Daniels.saidtheNaorimpliedthatweorobabiwouldnotEeelintheroerosturetottoutesstemldwxeteAutoratsloftiatinaainstusinananti-trustmatterwxcwouNr.SettIesaidashe,understandsit,ifthereissuchathingasafr'endlyanti-trustsuit;thisauldbeoneofthem.Nr.Danielssaidhcisn'tawareofanyofthattype.Mr.Settlesaid,FPCLiscreatingamonopolyinthesouthFloridaarea.Hethinksitwould.beargued.onthatbasis,especiallyifVeraissoldtoFPtlL.Hc.understandsDaytonaBeachisconsideringatthispointgoingbackintotheirownsystemsince-theircontracthasexpired.Nr.Danielssaiditwillexpire.Nr.Settlesaiditwillexpirenextyear.Personallyfromhisownstandpoint,asabusinessmanandnotasanattorney,ifhcwereFloridaPowerand.Light,hemightnegotiatemoreanxiouslyifinterventionwasfiledMayorBryansaidifyouareinadangerouspositionrelatingtoanti-trustandtherearecivilandcrhaiaaIactionswhichcanbetakenagainstyouforanti-trustand.allegationsaremadethatyou.alreadyhavetoomuchofanarea,,youmightverywellfeelthatyoucan~tnegotiateforanymoreofthatareaoncethatallegationismadebythepartywithwhomyouaresupposedlynogotiating.Mr.Settlesaidheunderstood.therewouldbenocriminalcharges,simpIyacivilcharge;bfayorBryansaidEoranti-tmtthere,arecivilandcriminalchargesthatcouldbemade.Mr.Settlesaidtherearebutinthisoarticulare<<oudtheebecriminalcharcs?br.pelagesa'xno.ascaly,wewouldbestatingfactswhichshowonthegroundsorprincipal,whywhatthey'rcdoingmaybeinconsistentwiththeguidelinesoftheanti-trustlaws.Thisisaltogetherdifferentfromacasaincourt.TheproblemcanbceasilysolvedifFloridaPo~erandLightofferssomefairshar~,arelativelysmallshare,bymakingaproposaltosharcthenuclearplant.TherewasonecommentMr.SpeigelnoticedearlierbyNr.Daniels.Thisistheoccupational,.haardofhisbusinesswhenhesaidsomethingtothceffectthatthey'enotgoingtogiveupeasily.
Page95/Z5/T6Mr.Speigelwouldliketohave504for.evcrytimehe'sheardthatfromamajarucilitiescompany.Manymajorcompanieshavesucceededincarryingtheirpointjustbyimpressinguponsomcbadythatdisagreeswiththemchafactthat.itmaybelongandexpensiveanddifficulttoprevail.Mr.Speigeihasbeensurprised,howrapidlythesituation.changesveryquickly.Whenyougaaheadanddoitallofasuddenyaufindthatithappens.Hcthinkshecanprobablyprobehismemorieswhenhe'sheardthisevenfromFloridaPowerandLightbefore.That'sanoccupational.haaard.hfr.SpeigelCakeshiswarkveryseriously.IftheyfindxnChairapinionChatthecompany"isunreasanablydraggingitaut,Chentheybeginworkingatlowerandlowerraces.They'ediscoveredtheanswertowhathfr.Danielswasimplying,istohanginasattorneyseveniftheyhavetoworkfornothing..Heisnevergoingtasitinacanferenc'ezoomwithanyutility--hereprcsentcdasmallcityinFloridasame10yearsagowhentheylookedFloridaPowerandLightintheeye--and,he'snevergoingCabeinapositionwhorehesaysCohisclientthatthey'egotarighteauscause,butbecausethey'einapositiontodragitautandmake.itexpensive,you',bettergiveup.He'lworkEornothingfarasmanyyearsasnecessarycotryasbesthccantorightthebalancebetweenthesmalllitigatewiththelimitedresourcesandamajor.company,thefifthlargest.utilityinthe,country,withanunlimitedlitigationbudget,which,thecustomorsarepayingfor.Mr.Speigolstatedthathewauldsaythis,thatifthisthingx.sgoingtobedraggedoutandtheprotectionofyourinterestrequiresit,he'l.workfoznothing.CommissionerCaynonsaidyaugveygota.deal.htr.Speigelthinksthisisveryimpoztantwhenaprivateutilicycomesbeforeapublicagencyandmakeswhat,hethinkswasclearlyimplicit.inwhat.her.Danielssaid.MayorBryansaidwhatconcernshimisnotdraggingicoutor.howlongit'goingCoCake.He'sconcernedabouttheinitialactionandthecffcccthaticwouldhave.IfwewerenocintherecessofconsidcrinsaleofCheplanttoF1oridaPowerandLihtanweweredeterminedcooaheaorsurevxcoutconsiderinthisasanalternativeifweweretoaahead.andoacrateamunxcxaanc,owounteconcerneaoutcezoccurcoencor-eeaaHccinksvanton.tn,oscorrawwevesttgocapant,toprtoneofthachoicesbeingconsideredatthistimebythecityandUtilitiasAathorityisthepotentialofchesaletoFloridaPowerandLight,PurchasebychamancLthcsalebytheCity.Heisconcernedthatthepapersfiledinthisinter-ventionwouldhaveaneffectonthccotherchoicewhichmighcormight'ocprovetobethebestsolutionfarthecity,byeliminatingit-asachoice.Heisconcernedthatifweproveour,casecoogaadintheintervention,wemightgetalldanewit'gitanddetermineitisnoteconomicallyfeasibleCogoaheadand.getapieceaftheplant,andsothenwesaywedon'twanttodothat.and.decidecogoback,ta"go"andtalktoFloridaPowerandLightandtheysay,"Sozzy,wecan'ttalktoyou.You'eprovensowelltheanti-trustallegationsyou'e.madethat.youdon'thavechat;asachoiceanymore.Mecan'taford.togetintathat."Rr.Speigelsaid.heisveryoftengladhe'snotaMayorwhohastobefacedwiehtoughdecisions.Herecognirestherearesomecoughelementsinic.Onepzablemisthatyou'egota.deadline.That'schezealproblem.Xfyaudidn'tWavetafacethezealitythatFloridaPower'ndLight,unlessyau.dointervenebyApril14th,isgoingtosayastheysaid:aboutCheocherunits,thatyou'zeaut---ifFloridaPowerandLight'srepresentativeiswillingtosaythatevenifFort'iercedoesnotintervene,theywillnonethelessbegivenchesameopportunitiescoparticipateintheplantasanyocherintervenerhas;thentheycauld.get:PortPierceoffthehookinChatfashion.Iftheyarewi1lingtoworkoutsameocherinterimarrangementthatwould,doit.Ifthey'zenot-,Fare,Pierceisfacedwiththeproblem.MayorBryansaidifwecouldintime.tomeetchcdcadlinc,haveacopyoftheproposed.pleadingsandaletterfromlegalcounseladvisingusthatifchasepleadingsarefiled,chacthiswouldnocprohibit,win,loseordraw,oreffectaurabilityconegotiateasaletoFloridaPowerandLighc,wecouldatchateifwehadthatadviceandacopyofthepleadingssowecauldactuallyseecheaQegaciansrelatingCaanti-trust,bein.apositionCo/mowwhat'beingfiledandhaveexpertakviceastochospeciiceffectoffilingthosespecifics,onthealternativeofsellingtheplanecoFloridaPowerandLight.~~
~~PageLO3/Z6/76Hr.Speigelsaidtheyknowwhatitistahavedeadlines.IftheCommissionandAuthoritydesireit,theycertainlywillgetthisthingdraftedasEastastheycan.Hewouldexpectthattheycouldgetittothebodies.HewouldpreferwheneveritispossiblethatthcpleadingsbereviewedbytheCityitselfbefaretheyarcfiled,becauseitisthecity'saction,nothis.Hedoesn'tknowiftheywillbeabletoanswerpreciselythequestionbeingplacedbeforethem.bfayorBryansaidthatisthequestionhe'sinterestedin,becauseiEfilingofthosepleadingsisgaingtaeliminatethepassibilityofncgotia'tingwith.FloridaPowerandLight,weaughttoknowthatontheErontendofthatfilingandnotfileit,ratherthancameinonthebacRendandbetoldwe'vcknocRedourselvesoutofthcpassibilityofnegotiatingwithFloridaPowerandLight.Hr.Mangesaidhcissorrytosaythatwe'egotacoupleofmemberswhahavepriorengagementsandthey'rcgoingtahavetoLeaveus.There'isaquestionanthe-floor.Nr.'Fenncalled.forthcquestion.MayorBryansaidhewauldLiRctoofferasubstitutemotion.Mr.SettlesaidHr.Penncalledthcquestion.Mr.MengesaidtheMayorcouldofferhismotion.MayorBryansaidhewouldliketomovethattheAuthorityauthori=ethcpreparationofpleadingsforinterventionintheprocedureinvolvingthcplantxnDadeCountyEorsubmissiontotheAuthorityatthcearliestpossibledateandthataspecialmeetingbecalledtoconsiderthosepleadingsandthatalongwiththepleadings,advicebesoughtastotheeffectoffiling.thesepleadingsonanypotentialorprospectivenegotiationswithFloridaPowerandLigfctconcerningthesaleoftheelectriCsystem.Thismotiondiedforlackofasecond.Hr.Mangeaskedthattherollbecalledonthequestion.Mr.Fenn,Mr.Rcilly,Mr.Settle-andMr.Mangevotedyes.MayorBryanvotedno.Motioncarried.Nr.Pennex'.tcd,atthispointCommissionerCaynonsiidnobodyeversaid,whatthisplantwauLdbcworthifweweretosellit.Hr.Mengesaid.thatistrueanl,thatisthcnextthingwe'rcgoingtatakeup.HeisgladtohavetheCityCommissionheretodaybecausehcthinksit'importanttohavethemknowwhat'sgoing.onbecausethey'egoingtobeinvolvedinanyfinaldecisionmade.Xehaveherc-atthepresenttimearesolutian--onethatwaspresentedandonethattheMayorhasrevisedthatnowgetsinvolvedinthesaleoftheplant+Mr.NengeaskedMr.Baldwinifthereisanyparticulardisagreementwi.ththerevisedresalutian.Nr.Baldwinsajdhehasn'thadtimetocomparethem.Hedoesn'tthinktherewouLdbe.anyprablem.Mr.Nengcsaid.basicallyit'sthcsamething.Thoreissamechangeinwarding.Mr.BaldwinsaidhethinksthcNayarhasessentiallyrequiredanestimateofcost.Mr.Mangesaiditstateswewill.proceedtobringaboardsomeexpertpcrsans,engineers,accountsandsaforth,tomakeanevaluationofaurplantsowecanEindautwhatweown.Youcan'tscilanythingunlessyauknawwhatyouhave.Rightnawhcdoesn'thinkanyofusknowwhatwedohave.1feneedtoknawthenctworth,marketvalue,potentialvalue,whatwillhappenEiveortcnyearsdowntheroad.Mr.BaldwinsaidMr.Brownindicatedtherewasnoquarrel.withtheMayor'resolution.Mr.Settlesaidtheanlythinghenoticesthathasbeanchangedisratherthanhiringpeople,thatwegetproposals.Heisinagreementwiththis.Mr.BaldwinsaidhethinksNr.BryanalsoexcludestheattorneysinthelastLine.Nr.Bryansaidhewasassuming,maybehcwasassumingwrong,that.itwouldbeMr.Brown.Hegathersthatmayhavebeenanerror.
Pagell3/26/76Mr.SettlemovedthatResolutionU.A.70-Sbeadopted.Nr.Baldwinsaidsotherewillbenoquestion,thisisthesubstituteresolutionpreparedbyMayorBryan.MayorBryansaidhchasanoriginalhere.TherollwascalledwithNr.Reiiiy,.Nr.Settle,bfr.Bryanandhfr.Nengevotingycs.Notioncarried.Therebeingnofurtherbusinesshfr.NengeadjournedtheUtilitiesAuthoritySpecialMeeting..MayorBryanadjournedtheCityCommissionSpecialhfeeting.ATTEST:ecretaryairman N1QTC>NOA'ICE30ROCKZLRPLAZ*NEWYORE.N.Y.10020'2844H.EID(9PRIEST40WALLSTREETVEWYORK,V.Y.1000531334nn33OLDEADDR?SS:RLIDAIW"INTLRNAX1ON~TELEX:22019$May4,1978h'kSBZNOTOVOFFICE1201KSTREET.N.W.WASHTBOTON,D.C.000620222111D2GeorgeSpiegel,Esq.SpiegelGMcDiarmid2600VirginiaAvenue,N.H.Nashington,D.C.20037Re:FloridaPower6LightCompanyFERCDocketNos.ER78-19(PhaseI)andER78-81
DearMr.Spiegel:
ThisistoacknowledgereceiptofyourpuzzlingletterofApril21,1978whichwasreceivedonApril26.SincethattimeIhavebeentryingtodiscernitspurpose,otherthantosupplementimproperlyyourreplybriefofApril12,1978,intheabovecaptionedproceeding.YoubeginbyquotingthefollowingexcerptfromourreplybriefofApril12andstatingthatitfalselycharacterizesyouradvicetoyourclient,Ft.Pierce:adviceofcounselforFt.Piercethattheyoffertoparticipateintheseunitsbutthattheyprolongnegotiationsuntilconstructionoftheplantiscompleted."Youthen,however,goon,atpage3ofyourletter,toquotefromExhibit10inthisproceeding,theoriginofthestatementinourbrief:"Mr.SpiegelsaidtheidealsituationisthatyouarguewithFloridaPowerandIightupuntilthedaytheplantisreadytogointooperation.Atthattimeyoufinallygetyourcontract."Exhibit10,asyouarewellaware,isacopyoftheminutesofajointmeetingoftheFt.PierceUtilitiesAuthorityandtheFt.PierceCityCommissiononMarch26,1976,despiteyourgratuitousassertion"Noverbatimtrans-criptwasmade,andtheremarksappearintheparaphrasedmllutespreparedbytheSecretaryoftheAuthority."IcanonlyassumethattniscommentisintendedtosuggestthattheSecretarydidnotaccuratelysummarizewhatyousaidatthe meeting.Ifthatisso,IamcompletelyatalossastowhyyouwaitedformorethantwoyearswithoutcallingthesupposederrortotheattentionoftheSecretaryofyourclient.Ofasubstantiallymoreseriousnatureisyouraccusationthatthelanguageyoucomplainofappearedinourreply,ratherthaninouropening,briefsothattherewas"nonormalproceduralopportunitytoreply."Thereasonthatsuchlanguageappearsinthereplybriefisobvious.Itwasinreplytocharges,inyourinitialbrief,astotheaccuracyofFloridaPoweraLightCompany'sevidenceastowhyithadcancelledtwoproposednuclearplants,includingtheSouthDadeplantyoureferto.Moreimportantlyyourchargethatyouhad"nonormalproceduralopportunitytoreplyiscompletelybeliedbythetranscript.inthisproceeding.Atpages1851-52thefollowingcollocgxytookplacebetweenyourassociate,Mr.Guttman,andMr.RobertJ.Gardner,VicePresidentoftheCompanyandamajorwitnessinthisproceeding:"QNow,Mr.,Gardner,couldyoulookatthebottomparagraph,.page29ofyourerebuttal[sic]testimony?AYes.Q-InthatparagraphyourefertoExhibit10,whicharetheexhibitsofameetingoftheFt:.PierceUtilitiesCommission,whichyoustatereflects,theadvicegiventoFt.PiercebyGeorgeSpiegel,,attorneyfortheFt.PierceUtilitiesAuthority,inwhichherecommendecLthat.Ft.Pierce'ffertopartici-pateinFP&T.'sSouthDadenuclearplantbutthatthecompletionofnegotiationsrelatingtothatplant.bedelayeduntiltheplantcommencedoperationsotheparticipationandfinancingcouldbedeferredaslongaspossibleHaveIread.,thatcorrectly?A.YesQ.'IsExhibit10the.soledocumentyourelyonforthestatementIjustread?1A.Yes."
IfMr.GuttmanthoughtthatMr.Gardner'stesti-monyandExhibit10inaccuratelyportrayedyouradvicetoyourclient,hehadfullopportunitytoraisetheissueatthatpointinthehearing.Onthecontrary,hethenshiftedtoalineofquestioninginvolvingacentralizedeconomicdispatchstudybeingconductedbytheFloridaCoordinatingGroup,andnofurtherreferencewasmade,asfarasIamaware,toyouradvicetoFt.Pierce.eytrulyrHAP/gegHay.PJr.cc:Administrative-LawJudgeCurtis.L.,wagner,Jr.A11.parties GEORGESPIBGEIROBERTC.MCDIARMIDSANDRAJ.STREBELROBERTA.JABLONJAMESN.HORWOODALANJ.ROTHFRANCESE.FRANCISDANIELI.DAVIDSONTHOMASN.MCHUGH.JR.LAWOFFICESSrrxozx.8nMcD~xm2EOOVIRGINIAAVENIJE,N.W.WASHINGTON,D.C.20032TELEPHONEI202I333~00May8,1978PETERK.MATTDANIELJ.QUTTMANDAVIDR.STRAUSBONNIES.BLAIRROBERTHARLEYBEARTHOMASC.TRAUGERJAMESCARIPOLLOCKHarryA.Poth,Jr.,Reid&Priest40WallStreet:NewYork,NewYorkEsq.10005Re:,FloridaPower&LightCompanyFERCDocketNos.ER78-19-(PhaseT)andER78-81
DearMr.Path:
ltmaybe"puzzling"toReidandPriest,asstatedinyourletterof-May4,1978,thatanattorneybelievinghimselffalselyaccusedbyReid&Priestonthebasisofanout-of-contextquotationwoulddefendhisreputation,asIdidinmyextendedreplyofApril21,1978.Thisperhapsindicatesthatourstandardsdifferastotheimportanceofanattorney'sreputationandthecourtesiesandresponsibilities.owedbyonememberofthebartoanother.IThisappearstobeconfirmedbythefactthatyourletterdoesnotconsiderthe,manyspecificpointsinmyletter,whichplacethesinglequotationintothecontext:ofthelengthypublicdiscussion.Zncontext,thequotationdemonstratesthatitwouldbecounter-productiveforFlori:daPower&LightCompanytoopposeoveralongperiodoftimewhatIbelieveistheinevitableestablishmentoftherightofFortPiercetoparticipatein,FP&L'snucleargeneration.Etwillbecounter-productivetoFP&LbecauseFortPiercewouldnotbegintasharefinancialrisksuntilFP&LadmitsFortPierceintoparticipation.4 HazryA.Poth,Jr.>Esq.May8,1978Yourletterappearsfurthertoconfirmtheaccuracyofmyprediction,thatFP&L,byrefusingvoluntarilytograntnuclearparticipation,would,ironically,forceuponFortPierceasituationunderwhichFortPiercewillnotberecpxizedtoputupitsmoneyuntilFP&L.iscompelledtograntparticipation,bywhichtimeconstructionwillbefaradvancedandmanyrisksalreadyresolved.Answeringspecificallytheonlypointmadeinyourletter,onceitwasestablishedthatFP&L'switnesswasre-lyingsolelyupontheminutesofthepublicmeeting,weweresatisfiedthatnofurther.responsewasnecessary.Wecouldnot,andstilldonot,believethatanyresponsibleattorneywould.place,upontheout-of-contextquotation,theinterpre-tationchosenbyReid&.Priest-oncethelengthycontextisreviewed.Verytrulyyours,GeorgeSpiegelGS/nzbcc:AdministrativeLawJudgeCurtisL.Wagner,Jr.Allparties
APPENDIXD(1)Z'ettersdatedMarch30,1976fromTracyDanesetovariousFloridamunicipalsystemsRe:SouthDadenuclearproject.(2)LetterdatedApril14,1976fromGeorgeSpiegeltoTracyDaneseRe:SouthDadenuclearproject.(3)LetterdatedApril29,1976fromTracyDanesetoGeorgeSpiegel(4)LetterdatedJuly21,1976fromRobertA.JablontoTracyDaneseRe:SouthDadenuclearunits.(5)LetterdatedJuly28,1976fromR.J.GardnertoRobertA.Jablon.(6)LetterdatedAugust3,1976fromJ.T.BlounttoRobertA.JablonRe:SouthDadenuclearunits.(7)JointParticipationAgreement,GeneratingPlantStudy.(8)September10,1976DraftFloridaJointNuclearFacilitiesSteeringCommitteeMeetingMinutes.(9)LetterdatedOctober21,1976fromRobertA.JablontoTracyDaneseRe:JointVentureProject.(10)LetterdatedNovember12,1976fromRobertA.JablontoRobertJ.GardnerRe:FPGL'sProposedJointVenture-Project.(ll)LetterdatedDecember16,1976fromRobertA.JablontoRobertJ.GardnerRe:FP&L'sProposedJoint-VentureProject.(12)February21,1977Statement.releasedbyMr.MarshallMcDonald,presidentandchiefexecutiveOfficerofFP&L,relativetothedecisionannouncedinTallahasseebytheFloridaPublicServiceCommission.
~0~P.0SQXOI31CO,JNIAhll,fLQRIOA33)OII,~Ip'Ig%OR.QRlOAPQWER5UGHTCQi'APAiMY.March30,1976Hr.JoeB.Dykes,Jr.~DiectorFlectricDepartmentCityofTa3.lahasseeCityEallTallahassee,Florida32304.DeaH.Dykes:Thisrespondstoyou~,inauiryregardingourCompany'sSouthDadenuclearproject.Whileweappreciateyourexpressionofinterest,'PLhasdecided.toproceed.independenlywithdevelopmentoftheSouthDadeproject'.andtoutilizetheproject'selectricgenerating,capabilitytomeetourownsystem'senergyneeds.FloridaPower&LightCompanyrecognizesthewidespreadinterestwithinFloridainthejoint.developmentof'uclear,powerfacilities.Enthatregard,FPLwouldconsiderbeingpartofajointventuretoconstructanuclearfacilitysomewhere.intheCentra3.Floridaareasoastobeconveniently.located.forpotentialparticipants.,Suchaprojectwouldbeatruejointventurefromitsinitialinceptionthroughcompletionandwould.recuirefullcommitmentsofallparticipantscommencingwiththeplanningstages.WewouldbepreparedtoutilizetheexperienceandexpertiseofFPLinthenuclear,environmentalandengineeringareasincoordinationwiththoseofparticipatingsystems.FPLwould,atth'stage,considervariousalternativesastoutilizingtheoutputofsuchafacilitydependingontheoverallparticipation.Forexample,itmightbedesirab3.efromtheviewpointsofallconcernedforparticipantsotherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecreasingcpzantitiesastheneedsoftheownershipparticipantsinceaseThiswouldbeonlyoneofmanypossibleapproaches.Accordingly,FPLispreparedtomeetwithrepresentativesofthosesystemswhichareinterestedincommittingtothejointdevelopmentofanuc3.earproject.forfulldiscussionofthissubject.WefeelContinued...
Mr..Joe:B.Dykes,Zr.March30,'L976geTwo.that'or.suchdiscussionstobe-real'stic,allparticipatingsystems-wouldhaveto,.execiseproportionate-degreesofinitiativeandresponsibi3.ityinan,atmosphereofmutualcooperat'on.Inthatcontext,wedonotfeel,thattheterm"discussion".asusedhereinshould,beconstrued'sanoffertonegotiate.nordowebe3.ieveour--selves-underanyobligationtoundertakethewho3.e,,oranysub-stantialportion,of'heresponsibilitytocarryoutsuchaprojectasenvisionedhere.Whatwedoproposeistheopeningoftalksonthedevelopmentof.atruejoint.nuc3.earpower.project.Veytrulyurs.,VicePresidentPublic:A+fairs
- +~6!$4$%l'a~~>(@March30,1976HrRodneyNewtonDirector-ofUtilitiesSt.CloudPublicUtilitiesSt.Cloud,Florida32769
DearNr.Newton:
ThisrespondstoyouincuiyregardingourCompany'sSouthDadenuclearproject.Whileweappreciateyourexpressionofinterest,FPLhasdecidedtoproceedindependentlywith.developmentoftheSouthDadeprojectand'outilizetheproject'selectricgeneratingcapabilityto-meetour;ownsystem'senergyneeds.,Florida-Power6LightCompanyrecognizes,thewidespreadinterestwithinFlorida.in-thejointdevelopmentofnuclearpowerfacilities.Xnthatregard,FPLwouldconsider.beingpartofajointventuretoconstructanuclearfacilitysomewhereintheCentral.Floridaareasoastobeconvenientlylocated'forpotentialparticipants.SuchaprojectwouldbeatruejointventurefromitsinitialinceptionthroughcompLetionandwouldrequirefullcommitmentsofalXparticipantscommencingwiththeplanningstages.Wewouldbe,preparedtoutilizetheexperienceandexpertiseofFPLinthenuclear,environmentalandengineeringareasincoordinationwiththoseofparticipatingsystems.FPLwould,atthisstage,considervariousalternativesastoutilizingtheoutputofsuchafacilitydependingontheoverallparticipation.Forexample,itmightbedesirablefromtheviewpointsofallconcernedforparticipantsotherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecreasingquantitiesastheneedsoftheownershipparticipantsincrease.Thiswoul'dbeonlyoneofmanypossibleapproaches.Accordingly,FPLispreparedtomeetwithrepresentativesoEthosesystemswhichareinterestedincommittingtothejointdevelopmentofanuclearprojectforfulldiscussionofthissubject.WefeelContinued...
Hr.RodneyNewtonMarch30,1976'ageTwothatforsuchdiscussionstoberealistic,allparticipatingsystemswouldhavetoexerciseproportionatedegreesofinitiativeandresponsibilityinanatmosphereofmutualcooperation..1nthatcontext,wedonot.feelthattheterm"discussion"asusedhereinshouldbeconstruedas.-anoffertonegotiatenordowebelieveour-selvesunderanyobligationto'undertakethewhole,oranysub-stantialportion,oftheresponsibilitytocarryoutsuchaprojectasenvisioned.here.What.wedoproposeistheopeningoftalksonthedevelopmentofatruejointnuclear.powerproject.Verytrulyyours,*~1I~~TracyDa>>eseVicePresidentPublicAffairsTD:mh R.OAIOAPOWVjR5LIGHTCOMPANYMach30,1976H-.Wa3.terBaldwinDirectoroUtil'tiesFortPierceUtilitiesAuthorityP.O.Box3191FortPierce,Florida33450
DearKr.Baldwin'IThisrespondstoyourinauiryregardingourCompany'sSouthDadenuclearproject.Whileweappreciateyourexpressionofinterest,
FPLhasdecidedtoproceedindependentlywithdevelopmentoftheSouthDadeprojectandtoutilizethepx'oject'selectricgeneratingcapabi3.itytomeetouzownsystem's.energyneeds.FloridaPower&LightCompanyrecognizesthewidespreadinterestwithinFloridainthejointdevelopmentofnuclearpowerfacilities.Xnthatregard,FPLwouldconsiderbeingpartofajointventuretoconstructanuclearfacilitysomewhezeintheCentralFlorida,areasoastobeconvenientlylocatedforpotentialpax'ticipants.Suchaprojectwouldbeatruejointventurefromitsinitialinceptionth"oughcompletionandwouldzecpxirefullcommitmentsofa3.1participantscommencingwiththeplanningstages.WewouldbeprepaxedtoutilizetheexperienceandexpertiseofFPLinthenuclear,env'ronmentalandengineeringareasincoordinationwiththoseofpart'cipatingsystems.FPLwould,atthisstage,considervariousaltexnativesastoutilizingtheoutputofsuchafacilitydependingontheoverallparticipation.Forexample,itmightbedesirablefromtheviewpointsofallconcernedforparticipantsotherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecxeasingcpxantitiesastheneedsofthe'wnershipparticipantsincx'ease.Thiswouldbeonlyoneofmanypossibleappx'oaches...:/Accozdingly,FPLispreparedtomeetwithrepxesentativesofthosesystemswhichaeinterestedincommittingtothejointdevelopmentofanuclearpr'ojectforfu3.1discussionofthis'subject.Wefee3.~Continued...HFt.Pl"t<ysill<.Q'R:fib Hr.WalterBaldwinMarch30,1976PageTwothatforsuchdiscussionstoberealist'c,allpaticipat'ngsystemswouldhavetoexerciseproport'onatedegreesofin'tiativeand.responsibilityinanatmosphereofmutualcooperation.Inthatcontext,wedonotfeelthattheterm"discussion"asusedhereinshouldbeconstruedasanoffertonegotiatenordowebelieveour-selvesunderanyobligationtoundertakethewhole,oranysub-stantialportion,oftheresponsibilitytocarryoutsuchaprojectasenvisionedhere.Whatwedoproposeistheopeningoftalksonthedevelopmentofatruejointnuclearpowerproject.Very..trulyyours~r&7TracyDaneseVice.Presid'entPub3:icAffairs P.O.SOXOIDICO,MIA/Al.ROIIIOAX?IIIICR.cnlQAPOVN=R5UQHTOOVIPAi4YMarch30,1976Mr.H.C.LuffAssistantGenealManagerOrlandoUtilitieaCommissionP.O.Box3193Orlando,Florida32802
DearMr.Luff:
ThisrespondstoyourinquiryregardingouCompany'sSouthDadenuclearproject.Whileweappreciateyourexpressionofinterest,FPLhasdecidedtoproceedindependentlywithdevelopmentoftheSouthDadeproj'ectandtoutilizetheproject'selec-r'cgeneatingcapabilitytomeetourownsystem'senergyneeds.FloridaPower&L'ghtCompanyrecognizesthewidespreadinteestwithinFloridainthejointdevelopmentofnuclearpower-facilitiesZnthatregard,FPLwouldconsiderbeingpartofajoint.venturetoconstructanuclearfacilitysomewhereintheCentraFloridaareasoastobeconvenientlylocatedforpotentialparticipants.Suchaprojectwouldbeatruejointventurefomitsinitialinceptionthroughcompletionandwouldrecpxirefullcommitmentsofallpartic'pantscommencingwiththeplanningstages.NewouldbepreparedtoutilizetheexperienceandexpertiseofFPLinthenuclear,environmentalandengineeringareasincoordinationwiththoseofparticipatingsystems.FPLwould,atthisstage,considervariousalternativesastoutilizingtheoutputofsuchafacilitydependingontheoverallparticipation.Forexample,itmightbedesirabI.efromtheviewpointsofallconcerned,forparticipansotherthanFPLtoowntheentireoutputandFPLinturntopu-chaseunitpowerindecreasingauantitiesastheneedsoftheowneshipparicipantsincrease.Thiswouldbeonlyoneofmanypossibleapproaches'ccordingly,FPLispreparedtomeetwithrepresentativesofthosesystemswhichareinterestedincommittingtothejointdevelopmentofanuclearprojectforfullciscussionofthissubject.WefeelContinued...
r.H.C.Luffinarch30,l976Page-Twothatforsuchdiscussionstoberealistic,a13.participatingsystemswouldhavetoexercisepropotionatedegreesofinitiativeandrespons'b'l'tyinanatmosphereofmutualcooperation.Xnthatcontext,wedonotfeelthattheterm"discussion"asused,hereinshouldbeconstruedasanoffertonegotiatenordowebelieveour-selvesunderanyobligationtoundertakethewhole,oranysub-stantialportion,oftheresponsibilitytocarryoutsuchaprojectasenvisionedhere.WhatwedoproposeistheopeningoftalksonthedevelopmentofatruejointnuclearpowerprojectVe.trulyyo~Cji'.~TracyaneseV'cePresidentPubl'cAfairsTD:mh
~~OKORQK5PISCiKLROSSRTO.M44IARMIO5ANORAJ,5TRSSSIROSSRTAJASLONJAMS5N.HORWOOOALANJ.ROTH4P44Urc4CLLAWOFFICK5SPIEGzL8rMcDIARMID25OOVIRGINIAAVKNIJS.N.VV.WASHINGTON.O.Cc'ROOQ7TtlAtH4NCI141l111~144AprilL4,1976OANISII.'OAVI45ONPRANC555.PRANCI5THOMASN.MCHUGH.JRPSTSRK.MATT'CMICI*CMTTMCM4AMCCCCAICCMMCCÃTracyDaneseVicePresident.PublicAffa'rsP.Q.BoxOl3l00Miami,PLorida3310l
DearTacy:
Re:PLorida'Power6LightCompany,SouthDadenuclearoro'ectThisiswithreferencetoyourLettemofMarch30,1976toanumberofmunicipalut'LitiesinPloridainwhichyoudecline,onbehalfofPloridaPoweraEightCompany,to.affordtheopportunityoftheseutilitiestoparticipateintheCompany's,proposed'outhDadenuclearproject.YoualsoindicatethattheCompany"wouldconside"beingapartofajointventuretoconstructanuclearfac'litysomewhereinCentralPloridaandthatitispreparedtomeetfor"fulldiscussion"inan"atmospnereofmutualcooperation."'Youpointoutthatthisisnot"anoffertonegot'te"nordoestheCompanyconsiderthatithas"anyobligation"alongtheseLines.TheseLetteshavebeenreferredtomeforreplvbysomecftherecipients.WearepleasedwiththisproposalandarehopefulthatdiscussionsalongtheseLinesmaydevelopandultimatelyprovehelpful.lw'lcertainlyrecommendtoourcLientsthatthesediscussionsbeinit'atedataconvenientandappropratetime.You,ofcourse,recognizethatthisdoesnotaffecttheimmed'ateeconomicandlegalauestionswhichhavemotivatedmanyofthemunicipaluti,litiestointerveneattheNuclearRegulatoryCommissionwithreferencetoPPSZ'sapplicationforaconstructionpermitforitsSouthDadeNuclearproject,toobtain TracyDaneseAprilL4,1976essen~a'eaupcwe.,Thecurrentcircumstanceshavemanvfacets,partofwhichistheCompany'spxograminvol'vingtheac-cuisition.ofanumber.ofmunicipalutilitieswhosecurenteconomicsituat'onstemsin.LargepartfrompastandcurrentCompanypolicies.ThismatterwilLbedevelopedinsomedetailinthejointpetitiontointerveneintheNECproceedings.Inthisregard,youwi3.1reca3.1,duxingtheperiodinwhichyourepresented,asattorney,theFloridai>unicipalUtilitiesAssociation,thatFloridamunicipalutilitieshadtwoprincipa3.objectives:.(a)legislationtoauthorizemunicipalutilitiestoestablishanauthorityforjointmunicipalownershipofLargeplantssuchasyourlettersuggests;and(b)thedevelop>>mentofaful3.yintegratedFloridaPowerPool(whichwou3.dprovideimmediatebeneftsand.isanessentialpredicatetothetypeofjointventuresuggestedinyourletter).Ibel'evethatbothoftheseobjectiveswouldhavebeenattainedbynowbutfortheopposition.orFPK,andi,t.isbelievedthatFPKiscont'nuingitsopposition.'Theevistenceofsuchapoo3.wouldgreatlyame3ioratetheeconomicsaueezeonmunicipalutilitiessuchas,forexample,PierceandhieroBeach.Thosesystems'navegoodgeneatingplantsbutareunderaninterimpressurebecause,operatingthei-generationatsystem-loadcapacityfactors,theymustpassintothei-retailratesaLargeproportionofhighcostoil.Undeaproper,fu3.lyintegrated,F3.oridaPowerPoo3.,therewouldbesingle-systemopeationofa13.F3.oridae3.ectricuti3.itiesandineverygivenhour,on3.ythelowestcostunitswouldbeoneratingstatewideinordertoservethestatewide3.oadattheLowesttotaLcost..Thesmallerun's,havinghigherheatratesandopeatngcosts,andtheunitsbeaingthelargerpecentagesofhighepricedoiL,wouldoperateonlywhennecessary;theywouldbecomethecycling,pea3cingandreserveunitsfortheintegratedsystem.TheenergvneedsorsuchsystemswouldbesuppliedgeneraLLyonthebasisofeconomyenergypricedonasplit-the-savingsbasis,orsomeothersecondaryenergybasis,suchas,forexample,theF3.oridaPowerCorporationsalestotheCityofSebring.ThiswouldimmediatelyreducetheleveLofthefueladjustmentsintheratesofcitiesLi!<eFtPierceand.VeroBeachandthuseducethe TracyDaneseAprilLA,1976differen'tialsbetweentheirretailratesandthoseof'P&L.Such'ransactionswouldalsobenefitPP&Eandotherlargeutil'itiesbecauseofthe.additiona3.prozittheywouldearnonsalesofeconomyenergy.PP&Ewouldjuztherbenej'duringperi.odsofnucl'earshutdown,when,withitsLow-cost.nuclearenergyun-availabLe,itwouldbeabletodrawupontheLowestcostsourcesavailableingenera.torsofothersystems.Suchapoolwouldalsoinc3.udearrangementsforstate-widetransmissionobulkpowe~onajointratebasisthatwou3.denabLesystemssuchasPt..PiezceandVeroBeachtosellthe'rinterimexcesscapacitytoothersystemswhich.maybetemporari.'vshortofcapacity.Withaproper-pool,,thesearrangementsaremadeonajointlyplannedandcoordinatedbasissothatthetimingoftheinstallat'onofnewcapacitybyeachmembersyst:emisarrangedsoastominimizethetotalgenerationinvestmentnecessarytoservethetotalFloridaLoad'.WiththerevenuesthatFt.PierceandVeroBeachwouldreceivefromsuchtzansactions,itappearsthattheywou3.dthen.beinapositiontoreducetheirretailratesto.alevelcurrent3.ycompetitivewithPP&Eandsurviveasindependententities.E)reover,suchcoordinatedpool.operationswouldbebenefi.cialtoPP&E,sinceitwould.helpitminimizeitsinvestmentin'eneration,itwouldprovideitwithadditionalrevenuesfromitstransmissioninvestment,and,intheeventPP&Eisunable'tosolvethecurrentspent-fuel,tank-3.eak,problemojTurkeyPoint,enabLeittokeepitsretailratescompetitivedespiteanyLong-termshut-downoztheTurkeyPointgenerators.AthirdareatobeconsideredisrP&E'shistoricpol'cyconcerningitsrefusal,orstrictreluctance,tosellfirmwholesalepowertomunic'paLutil'ties.Zenclose,forexample,acopyozaLetterofNovember28,3.967whichPP&LsenttotheCityComm'ssionofVeroBeach,inwh'chtheCompanystatedthat"wearereluctant"togofurtherintothematterofsellingwholesaLepowertotheCitybecauseoftheneedtostudythreeotheralternatives,twoozwhichinvolvedthetakeover.byPP&EoftheCity'sbusinessby"outrightpurchase"or"30-yearlease"ofthesystem.
TracyDaneseApril14,1976Thispalicyhascontributedtotheproliferationofrelativelysmall,generatorsonmunic'palsystemsintheareaservedbyFPEZascompaxedwi&themanymun'cipa3.utilit'esintheareaserved.bvFloridaPoweCarporationwhichpuchasepoweratwholesa3.e.Municipals.connectedtoFloridaPaweCorporation'stransmissionsystemhavecachedbasicagreementswiththatCorporationcavexingsystem-wide.transmission,back-upandrelatedarrangementswhichnowenablethemtoplanthecoordinateddevelop-.mentofefic'entgeneatingunits.Thus,forexample,within6manthsw3.975,participationw=3.00,000kwintheCrystalRivernuclearp3.antwasmarketedtoa.numberofmunicipa3.sandoneco-op,complexpaticipatian-agreementswerenegotiated,arange-mentsweremadefortransmissionand.back-upandthenecessaryfinancingstepsweretaken..F?&L,however,appearstobecontinuingitshistoricpo3.icyagainsttransmission,generaLLyofbulkpave,althoughtherehavebeenafewrecentstatementsastoitswillingnesstoprovide'transmissioninafewtightlylimitedcircumstances.Znsummary',thereareimportantareasofimmediateconcernand-impactwhichyoushouLdtakeupwithmanagementsothattnemunicipalutlitiesreceivingyourLettervillbeabLetooperatetatheirfu13.efficiencyandremaininbusiness3.angenoughtoaccompLishthelang-termobjectiveofyourMarch30,1976Letter.3:naddition,.asapredicatetothatobjective,themunicipalsneedassurancenawthat-FPSZ.wi13.providebulkpowertransmissionthroughoutitssystem,that'willtakea3.LstepsinitspowertobringafuLLy-integratedF3.oridaPo~erPoa3.intobe'ng,andthatitwillsupport'he3.egisLa,tionwhichi,thas.prev'ous3.ysuccessfu'Lyopposed,whichthemunicipals.arstiLLseekng,toauthorizeforma-tionafanauthorityforthejointmunicipalownersh'poflargegeneratingunits.IlaokbackvithaLeasuretoocrfiendlyassociationasca-counse1totheFloridaMunicipalUti3.itiesAssociationandtrustthatyouvillrecognizethattherapportveestablished TracyDanese5Apzi3..14,1976thenshould'ehelpful,nowthat.thisfirm,wil3.berepresenting.a,numberofseparate,mun'cipalswithreference:toPP&L'sSout:hDadeunits.thuss'mplifyingfozPPSZthematterofdealingwithanumberofseparatemun'cipals.Quzpastrelationshipshouldenableustoresolve.theforegoingmattersinanamicab3.emannerintheinterest,ofallpitiesconcerned.-Please-donot.hesitatetoca13.me-withzeezencetoanyoftheforegoingmattes.Sineelyyours,GS/nzhGeorgeSpiegelMr.NiLLiamT.Mayo,.Chairman,FloridaPublicServiceComm'ssionCLientsMr.MacCunningham,ExecutiveVicePresident,PNUACharlesR.,P.Bzown,Esq.,CityAttorney,Vt.P~erceQseePagan,,Zscr.,CityAttorney,GainesvilleMr.JohnR.Kel'Ly,.DirectorofUtilities,NewSmyrnaBeachThomasGurney,Esc.,Attorney.,OrlandoUtili;tiesCommissionMz.ZamesE..Phi13.ips,Genera3.Manager;SebringMr.,GlenDuBois,CityPotager,ALachuaMrDonS..Baldwin.SuperintendentofUtilities,Ba,towJosephMinotti,Zsq.,C'tyAttorney,BushnellMz.ClydeEopkins,C'ySuper'ntendent,ChattahoocheeZohnC.Chew,CityAttorney,DaytonaBeachMr.Fvezett.B.Eowe,CityManager,ct.MeadeEonorableZrstonRoyal,Mayor,LakeEelenMr.CliffordC.,Blaisde13.,Zr.,UtilitiesDiectoz,iakeNorth-Mr.CalvinZ..Glidewell,City8~ger,I.eesbuzgMr..CecilBarks,DirectorofUtilities,MountDoraMr..Z.N..Caldwell,D'zectorofUti3.it'es,HewberzyFe.Z.C.Shreve,J.,DirectoroUtilit'es,Qcala8.,Nilliam;.Zohnson,CityManager,QuincyMr..C.R..Bevezly,President,N'listonMr.C.ECorn,Superintendent,Tallahassee TracyDaneseApril.l4,l976ccOtheraddesseesoz'P&LAprill,l976letterreSouthDadesite:Mr..RW'ochxan,Supt.Planning&,Engineering,Lakeland,Fw.Zohn.T.Doughtxy,Manager,UtilityBoaxdofCityozKeyNestNr..williamR.Snow,Cityi>~ager,CityofGreenCoveSpringsMr..C..PBlai-,CityManager,ClewistonMr.RodneyHewton,DirectorofUtilities,St.CloudMr.EenxvC'eters,Sr.,Dixectoz'fUtilities,homesteadMrQ.H'..Sykes,President,GladesE3.ectxicCooperative,.Tnc.Nr;PeterJ".Gibson,,Manager,,Qkezenoke~~Mr.,ZedraH..hamilton,President,ClayZ3.ectricCooperat'e,Znc.MxArnoldE.Smith,'eneralManager,SuwanneeValleyElectricCooperative,Xnc.Mr;KarlM..Allison,Zr.,w+ecutivei<mager,LeeCountyElectricCooperativeMr.Richard;Maenpaa,P~ager,PeaceR'verElectricCooperative,ZncMx.PmionESweet,Chaixzan,.JacksonvilleElectricAuthorityFredKxay,GeneralManager,FloridaKeysFleexicCooperativeAssociation P.O.SOX010100,NIAAII,.FIORIOA3510IFLORIOAPOWER5UGHTCOMPANYApril29,1976"GeorgeSpiegel,Esp..Spiegel&McDiarmid2600Virginia.Avenue,N..W..Washington,D..C;.20037'earGeorge:I.aminreceiptofyourletterofApril14whereinyouhaveexpressedinterest,onbehalfofvariousmunicipalclients,inour.suggestion-that.wejointlyengageintalkslookingforwardtoatruejoint;ventureinanucleazfacilityin.thecentralpart:ofthestate..iInadditiontothosemunicipalitiesonbehalfof.whichyouresponded,theJacksonvilleELectricAuthorityandFloridaPowerCorporationhave-alsoexpressedinterestinthiscon-cept;Subseauently,Ihavetalked'ithMr.Ron.KuetheroftheJacksonvilleElectricAuthorityandhavesetameetingdatefor"May13,L976,,in-,JacksonviLle.,Inviewofthelargenumberofclientswhich.yourepresent,Iwouldthinkthatitmightbehelpfulifsomeofyourclientscouldsendsystemrepresentativessothatindividualneedsandtimeframescanbeinitiallydiscussed.Themeetingwillbeheldat1:30PMattheJacksonvilleElectricAuthoritybuilding,233W..DuvalSt.,Jacksonville,Florida..Anagendawillbeforwarded.toyoupromptly.Very,.trulyyours,/.TracyDaese.zesidentPublicAffairsVxcePTD:mhcc:Mr.RonKuetherMr.GeorgeC.MooreClientsofSpiegelSMcDiarmidHKLPIiVGBUILOPLORIOR CSORCSSPISOSLAOSSRTC.MCOIARMIO5AHORA*5TRSSSLROSSRTAJASLOHJAMSSN.HOIIWOCOALAN*ROTACPCOIIII5N~W.OPRICZSSPIEGEL8oMcDl&RMID2SOOVIRCINIAAVENVOI.N.W.WASHINGTON,O.C.2OOSTTZLZPIICHC'24SI4QSM544'AHISII.O*VIOSOHPRAHCKSILPRAHCI5~TIIOMASN.MCIIIICILJR.PCTSRILMATTOAHISL,JCVTTMAN"'OletflS5.SLllRJAMSSCARt,POLLOCK21.July1976TracyDanese,,FsauiraVicePresidentfoxPublicAfairsFloridaPower&LightCompanyP.O.BoxOI,3100KLami,Florida33101;Re::SouthDadeNucleaxUn'ts
DearTracy.ThisletterconcernsreportsthatFlorida,
Power6LightCompanyplanstocancelordeferitsconstructionandnuclearsearnsupply'ystemcontractsfortheSouthDadenuclear=generatingunits..3numberofmyclientshaverequestedpar'cipat'onintheseproposed.nuclearunits.Byletterof30March1976,youstated:FPThasdecidedtoproceedindependentlyw.'th-davelopmentoftheSouthDadepxojectand.toutilizetheproject'selectricgeneratingcapabilitytomeetourownsystemtsenergyneeds.You.didindicatem~.that1'etar,however,that:.FPTwouldconsiderbeingpartofajoinventuretoconst~anuclearfacilitysomewhereintheCentral.Floridaa~aOn14April1976,GeorgeSpiegel,Zsq.,respondedwithaletterstatingthathewaspleasedwiththeproposalforanewjointventureandsettingforthelementsnecessaryforitsconsideration.Hithoutrespondingsubstantivaly,you Pm.Danese2LJu3.y1976scheduledameetingonthe13th'ofNay,1976,inJacksonville,taconsidersuchjointventure.Atth'smeeting,youreiteratedthatP3.axi.daPower&LightCompanydidnotwishtoshaeSouthDadecapacity,sincesuchcapacitywasnecessarytomeettherangementsoftheCompany'sawncustomex's.Atthattimeyoudiscussedloadgrowthestimates.PP&Lanticipatedthatbythe.end'fthecenturyitwouldneedtoaddtoissystemanewnuc3.eaxunitannually.Atthe22June'1976meetingoztheSteex'ingCommitteefortheproposedCentralPloridajointven-.ture,needsfor.newnucleaxcapacitywere-againdiscussed,eludingPP&L'sneedsforanumber.afnewplants.Atthistime,.Bab"Gaxdneragain.statedthat:.FloridaPower&LightCampanywasunwil3.ingto,shareSouth,Dadenuc3.eacapacity.Purther,inPP&L's"ResponsetoJointPetitionofP3.aridaCities,"filedwiththeNuclearRegulatoryCommissionin.DocketHo.P-636-A(South.DadePlants),.P&Zstatesthat(p-6)-"Applicant'sprim~concernisthatthemeritsofthecasebereachedandxesolvedina.timelymannersothatconstructionoftMsvitallyneededgenex'atingcaaacityisnotthreatenedwithde3.ay."Ztwas,theefore,withsomesurprisethatZlearned1ateonMondayafternoon,thxoughpressreports,thatPloridaPower&LightCompanywascansidex3ngpostponementoftheSouthDadeunits.ZwasfuMersumrisedtolearnthatatameetingatTampaElectricCompanyyesterday>>-to.whichneithex'norapparentlymanyoxmyclientswereinvited-BobGaxdnerstatedthatbecauseofpresentlyprajectedlackoffutureloadsuf-ficienttosupporttheunits,PP&LintendedtodeferplanstoconstmcttheSouthDadeunitsandtapossiblyternatethewestinghousecontractintendaysand,further,that,ifothersw'shedtoassumetheHestinqhousecentactforconstruc-tianatanotherplantsite,thedecisionwouldhavetobemadewi~saidtendayperiod.BobGax'dnera3.sosaidthatPloridaPawer&LightCompany'sparticipationinsuchconstructioncou3;dnotbecountedon.however,heappaxentlyindicatedthatPP&Lwouldbewillingtasellitsownersh.'pinteresttoothers,pro-videdthatadecisionwasmadew'thintendays.Thefollowingthoughtscametomind.=irst,consider-ingnewcapacityneedsandescalatingcapitalcosts,itwouldbeunfortunateiftheplanningthathasgoneintoSouthDade,andthecastsassaciatedwiththatplanning,werelost.As-suminqPP&L'sproposedcancellationsordeferralsdoresult.fomanant'cipateddecxeaseinloadgrowth,stepsshouldbe Hx.Danese21July1976takentoassuretnattheinvesMentmadeintheprojectmaybeutilizedbyotherswhose3.oadgrowthwhencombinedwiththatofPPa3'ouldsuxelybesufficienttosupport.theproject..Xnthisregard,were.PPaZorathersta.buildsubstitutenuc-Learcapacitywithout.takingadvantageofyourinvestment,thesubstituteplantsmightwellcaine'onLinetwoarmoreyearsLaterthantheSouthDadeunits,atmuchhigheassoci>>atedcasts.1'tisvirtuaLly.impossibLeforothersystemstomaReaf.xmdecisianwhethertoutilizetheSouthDadecontracts.andtomaRetheassociatedcommitmentswithintendaysbecauseofthemyriadofengineering,financingandLegaldecis'onsinvolved.Xndeed,theonlyhopeforacruickdecisionwouldinvolveFPGL'sagxeemeatosellasubstantialportionoxtheunitsforcanst~ctionattheplannedSauthDadesiteandtheCompany'simmediateagxementinprincipLetothenecessaryback-uparxangements,inc3.udingthosediscussedin.GeorgeSpiegel's14April3.etter..BeforecommittingthemselvestothetypesofinvesMentinvo3.ved,systemswou3.dhavetabeassuredoftheavailabilityaxtransmissionanreasanabletermsforbothSouth'Dadepowerandnecessaryback-upandotherpowesauces.Pmy-systemswouldneedjointfinancingLegislation~anintegratedpowerpoa3.andotherappropriatebacRup.FloridaPower&Light-Company'sreducedLoadgrowthwouldapaeartaaffordtherealisticpossibilityfo-ajoinparticipat'onagreementthatwouldbeneitLax'gesegmentsofFlorida'spopulationtathedetrimentafnone.ParticipantscauldseLLcapacityfxomthe'rownershipsharetoeachotherinamannerthatbestfitstotalelectricaLandeconomicneecsoftheparticipantsfromyeaxtoyear.Certainly,ifde3.ayaftheunitsisnecssa~,whenbuilt,theymustbejoinlyownedunits.3:thereforesuggestthefalLowing:(1)Plox'idaPoweaLightCampanyshouldprovidei"sexistingcontractstoaLLsystems(onacanfidentia3:basis,ifnecessary),includingdetailsofcostsarpena3.tiesassaci-atedwithgoingforward,taa3.1awsuchsysems,onanintex'imbasis,todetexminethefeasibilityoftheircantin~dngtheproject.(2)FloridaPoweraLightCompanyandotherscauldseekagreementfromNestinghousetoallowtimeforallsystem Kr.Danese421.July1976todecidewhethertoparticipate.(,3)Plarida.Power&Ligh<Companyshouldimmediatelyinformallsystemsof-itsinvestments,includingsitingplans,andprovideaccesstocompletecas<andengineeringstudiesre3.atingtoSouthDade,sothatconstructionmaygoforwadasplanned.atpxesentlyselectedsites.(4)FloridaPower&LightCompanyandothersystemsshouldcommencedevelopmentafaworkableparticipationagree-mentfortheplannedSouthDadenuc3.earunits.Florida.Power&LightCompanyshouldproceedwiththeSouthDadeplantwithasubstantially3esserawnexshipinterest.Thiswouldaccomplishseveal.worthyobjectives.(a)Thiswould.recognizePP&L'scurrent1'aweredesimateofrecpxiredcapacity.(b)ThiswouldeliminatemostofthecurxentobjectionstoconstructionintheHuclearRegula.ataryCommissionproceeding.(c)ThiswouldgivePP&Lameaningfulinterestinunitsthatwouldse~futurerecuirementswithinthestate.(d)Thiswould.permitea3ycans~ctianoftheunitswithoutunduede3.ayatareducedcapitalcostcam-paredwithalaterunit,aswe3,1assubstantiallyreducingFP&L'scurrentcapitalrequiementsforsoleawnexship.Totheextentthesesteasarenottaken,increasedcostswillbecreatedfaxmyclientsand,theircitizensandratepayersand,Zbelieve,forPlaridaPowex&LightCompanyaswell.Suchunnecessarycostsmayhopefullybeavoidedthroughmutual.cooperation..Moreover,suchagreementcanhelplimit,orelimina,e,furthercontroversyconcerningrightstojointSouthDadeparticipationandback-uparrange-mentsoras.to.>>loridaPower&LightCompany'spossiblelega3.rightstowithdrawitsplanfox'heseunitsatthistime.
Mr;Danese.21Ju3.y1976Sincerelyyou~RobertA.J'ahlonAttoxney'arthePlorida-Munic~alUtilitiesAssociation,thePortPierceUMlitiesAuthority.oftheCityofFortPierce,theGainesville-AlachuaCountyRegionalElectricWaterandSewerUtilities,theLakeWar&UtilitiesAuthority,theUtilitiesCammissianoftheCity.of'ew-SmyrnaBeach,theOrlandoUtilitiesCommissionandtheSehringUMlitie'ommission,andtheCitiesofA3.achua,Bartaw,Bushnell,Chattahaochee,DaytonaBeach,.PortMeade,Homestead,KeyWes,LakeHelen,Leeshurg,MountDora,Nevhe~,Ocala,Quincy,StCloud,WillistonandTa3.3.ahassee,Ploridacc.J.ABauknight,Jr.,Esture[ByhandlJohnEMathews,Jr.,EstureMr.Mac.H.CunninghamCharlesR.,P.Brawn,Esca.reOseeR.Pagan,EsquireMr.ClifardC.Blaisde13.,Jr..Mr.JohnR.Kel3.y.ThomasGurney,Sr.,EsquieMr..JamesHPhillipsMr.GlennDuBoisMx.AW.KellyJosephMinotti,ZsauireMr.Clyde.HopkinsJohnC.Chew,EsquireMr.EverettB.HoweHonarah3.eErstonRaya3.Mr.Ca3.vinE.GlidewellMr.Ceci3.Barks-Mr.J.W.CaldwellMichae3.Watkins,,ZscpzireMr.E.C.Shreve,Jr.Mr.WilliamP.JohnsonMr.CR.BeverlyMr.C.H.CornMr.JohnT.DaughtxyMr.RadneyNewtonMr.RobertZ.BathenBlindcc:DanMcZntoshJoeJacobs e.o.aoxo>a>co,w~t,acro~auoi'mari;~<sx.FiORiOAPOWER5IJGHTCQ<VPAT;YJuly28,1976Mr;,RobertA.JablonSpiegel5,Mc0ianrid2600Virginia.Avenue,H.W..Washington,0.C.20037OearMr.Jablon:IThisisinresponsetoyourletterofJuly8,T976,addressedtoNr.TracyOanesewhoisout.oftheofficeforanextendedperiod..WithregardtoFloridaPower5LightCompany'sparticipationinthejointventurewhichwasproposedbyMr.Oanese'sletterofApril29,1976,anduponwhichwe.elaboratedinthetwoJacksonvillemeetings,youhaveincorrectlycharactrized-FPL'sposition.Wethinkthereislittletobegainedbywritinglettersbackandforthparaphrasingwhatwassaidatthismeetingorthatinanattempttocreatearecordtotheadvantageofoneentityortheother.Webelievewedescribedourpositionquitopenlyandclearlyatthoseandsubsequentmeetings.AsubcommitteeoftheSteeringCorrmitteeisatworkdraftinganoverallprojectparticipationagreement.Thatagreementwillconstitutethefinalintentofallthesignatoryparties.Speculationsconcerningthemotives,intent,policies,andthelikeof'nyofthepartiesarepremature,untilsuchagreementhasbeenfinalized.'nthemeantime,theSteeringCommitteeisproceedingonanadhocbasiswiththeirplantoinvestigatethefeasibilityofandtodefinetheultimateproject.Theothermattersreferredtoinyourletterareatissueinotherforums.OurrespectivepositionshaveandwillberevealedandadvocatdinduecourseandthisresponseshouIdnotberegardedasanindicationofagreementonourpartwithanyofyourcoamentsorobservationsonsuchissues.Wedonotbelievetheseissues,haveanynecessaryconnectionwiththe.ultimatefeasibilityoftheproposedjointventure.Verytruly.yours,R.J.GardnerVicePresidentRJG:stdHBLPINg9VI(.APLQPio; P.O.SOX010100,AIIAMI,FlQRIDAMIOIII;PLQRIOAPOWER4LIGHTCOMPANYAugust3,1976Mr.RobetA.JahlonSpiegel&McDiaxmid2600VirginiaAvenue,N.W.Washington,D.C..20037Re:.SouthDadeNuclearUnits
DearMr.Jahlon:
InMr.Danese'sahsence,IamxespondingtoyourlettertohimofJuly21,.1976.YourletterreflectsaseriousmisunderstandingofthenatureofFPL.'sannouncementxegardingdevelopmentoftheSouthDadeproject.FPLhasnotcancelled,butintendstoproceedwiththatproject.Whileexploring'ertainmodificationsofourcontractwithWestinghouse,Mr..Gardnerdiddiscusswithothersthepossibilityoftheirinterestin.theunitintheeventobtainingsuch.contractmodificationswereunsuccessful.Howevex,we.havenowworkedoutdesiredcontractmodificationsandthecontract.willremaininforce.Thus,FPLstillplanstodeveloptheSouthDadeprojectindependentlyandtoutilizetheproject'sgeneratingcapabilitytomeet-oursystem'senergyneeds.Much.oftheremainderofyourletterrelatestomattersincontx'oversyinNRCDocketNo.P-636-A,and'twouldnotbeappropriateformetocommentonthesematters.JTB:dtSincex'ely,/-/T.Blount=.anagerofTegalAffairsHELPING8VILORLOPIIOA ADDRESSEES':Nr..GeorgeMoore.FLorida.PowerCorporationP.O.Box14042St-Petersburg,.Floxida.33733Mr.,RayWelchTampaElectricCcmpany.P.O.Box,llLTampa,Flaxida33601..Mz.StanLivengoad'ainesville-AlchuaCountyRegional.UtilitiesBoazdP.O.Box490Gainesville,Florida32602Mr.R..C.ZuetheJacksonvilleElectric.AuthorityP.O.Box53015Jacksonville,Florica32201'Mx.RobertW..CochranDept.afElectric&WaterUtilit'esC'tyofLakeland'00E.ParkerStreet=Lakeland,Florida33802Nr',HarryLuffOrlandoUtilitiesCommissionP.O.Box-3193Orlando,Florida32802Nr.RadneyNewtonSt.CloudUtiliiesCommissionNewYorka9thStreetSt.Cloud,Florida32769Nr.HarryWrightSeminoleElectricCooperative24LOE.BuschBLvdTampa,Florida.336L2Nr.JaeDykesTallahasseeFlectzicDept.2602JacksonBluffRoadTallahassee,Flaxida.32304Mr.,RalphBowersBartowMunicipalZlectricDept.P.O.Box1069Baztow,Florida33830Nr'..C.F.BlairClewistonElectzicSWaterSystemP.O.Box698Clewiston,Florida33440Mr.FredK"ayFloridac(eysElecticCaopeativeP.O..Box377Taverniez,FLorida33070Nr.WalteBaldwinFortPierceUtilitiesAuthorityP.OBox3191,Ft.Pierce,,Florida33450,Mr..,L.AddisonGulfPowerCompanyP.O.Box1151Pensacola,Florida32520M-.Hen=yC.Peters,Jr.HomesteadMunicipalElectricDept.P;O.-Drawer429Homestead,Florida33030'r.ZeithRobertsDept.ofFlectricUtilitiesCityofJacksonvilleBeachJacksonvilleBeacn,Florida32250 ADDRESSEESCQiViiiVuu3:=Mr.O.Robers,Ouincy.MunicipalElectrcLightDept..404W'.Ze~ferson.Street.Quincy,Florida32351Mr..J..K.Phillips-SehringUtilitiesCommission213.S.CommerceSt=eetSehring,Plozida33870M'.G..GraudonStazkeLight&,WaterPLant.DrawerCStazke,PL'orida3209L~Mr~G~BuzisWauchulaMunicipaLLigh~.Plan.~P.O.Box818Wauchula,PLorida33873Mr.D.JTannerWillistonMunicipal,ElectricDept..P.O..Box160Williston,,Florida326967Kr.N.Z.Parish,XZZChoctawnatcheeElecicCooperative700W.BaldwinAvenueDePuniakSprings,Florida32433M.H.P.PruettEscamhiaRiverElectricCooperativeP.O.Box428Jay,Plorida32565Mr.,M.V..Truitt,Jz.GulzCoastElectricCooperativeP.O.Box217Wewahitcnka,.Florida32465Nr.E.FranklinWestFloridaEleczicCooperativeAssociationP.O.Box127Graceville,Plozida32440 INFORMATION=FORTHOSESYS~iMHICHHAVEPREYIOUSLYO'PRESSEDINTERESTINTHEJOINTPROJECTThefollowing-scheduleshows.theproportionateshare'ofeachutili.ysystemwhichhasthusfarexpressedaninterestinthejoiN.projectifnoothersystemsparticipate.Tneformulaisthesameasthatusedtoderivepropor-tionatesharesofeachutilitysys~intheStateofFloridaifallutilities'eretoparticipate.This,scheduleisbeingfurnishedonlytothoseutilitysystarsnamedtherein.IncludincOthersExcludinoOthersUtilitAFactorShareAl.Fac.orShareSartaw,CityofClewiston,CityofFloridaPowerCorporationFt.PierceUtilitiesAuthorityGainesville/AlachuaCountyRegionalUtilitiesSoardGulfPowerCompanyHomestead,CityofJacksonvilleEle~c.AuthorityKeyMes,CityofLakeMorthUtilitiesAuthorityLakeland,CityofLeesburg$CityofOcala,CityofOrlandoUtilitiesCommissionSt.Cloud,CityofSeminoleElectricCooperative.Tallahassee,CityofTampaElecricCompanyVeroSeach,Cityof.0052..0019,2358.0099.0221.1124.0057.1192.0116.0083.0306.0066.0142.0540.0026.0725.0308.1832.0091$58059.601,848.70229,433.40'9,632.7021,503.30109,365.205',546.10115,981.6011,286.808,075.9029,773.806,421.8013,816.6052,542.002,529.8070,542.5029,968.40178,253.608,854.30.0236.1202.0061.1274~.0124.0088.0327'0070.0152.057?'.0027.0775.0329..1959.009722.,962.80116,954.605,935.30123,960.2012,065.208,562.4031,817.106,811.0014,789.6056,142.102,627.1075,407.5032,011.70190,610.709,438.10.0055$5,351.50.00201,946.00.2520245,196.00.010610,3'l3.80 JFLORIDAELECTRICUTILITIESQOINTPARTICIPATIONAGREEMENT'ITHFLORI.DAPOHER&LIGHTCOMPANYGeneratingPlant:SiteStudy'pThe.electricutilities,whoseseparatelysignedletterssignifyingtheiragreementtoparticipateareattachedhereto,(Participants)hereby)ointly.agreetoparticipateina.studytoidentifyandevaluateelectricpowergeneratin'gsitesinnorthernpeninsularFlorid.The-scope,generalcriteria,andtermsandconditionsofsuchstudyaresetforthinadocumententitled"AProposalfromFloridaPower&LightCompanytoFlori'daElectricUtilitiesforanElectricPowerGeneratingSiteStudy.9-15-76",whichdocumentissignedbyFlorida-Power&LightCompany(FPL)andisattachedheretoandmadeaparthereofas.ExhibitA.TheParticipantsacceptsuchproposalfromFPLandagreethat'PLactingonbehalfoftheparticipantswillmanagethestudy,,contractforoutsideservices,anddoallsuchworkandcoordinationwhichisnecessarytocompletethestudyasdefinedinExhibitA.TheParticipantsagreetoshare,inaccordancewiththetermsofpthisAgreement,thecostsofsuchstudyandtoreimburseFPLforsuchcostsinaccordancewiththetermsandconditionsofExhibitA.NopartytothisAgreementshallbeliableforanydamages,costs,orotherexpensesresultingfromanyact,omission,determination,orrecommen-dationmadebysuch.partyinconnectionwithorarisingoutofperformanceofthisagreementorasaresultofanyconsequencesresulting,romsuchperformance.Thetotalcostofthestudyshallnotexceedtheamountof$973,000,exceptbytheexpressmutualagreementoftheParticipants,whichamount.shallhknownhereinasthe"MaximumAuthorizedCost".~~~1~EachParticipantshallbeliabletoFPLforthatshareorproportionofthecostsincurredbyFPLincarryingoutthestudyuptotheMaximumAutho-rizedCost,whichissetforthoppositeitsnameinExhibit8entitled"ScheduleofParticipantShares"whichisattachedheretoandmadeaparthereof.
I~QfwThis-agreementshallbecomeeffectiveuponthereceipt:byFPLofthelastsignatoryletterfromthegroupofparticipantswhohavepreviouslyindicatedtheir-intenttoparticipateinthestudy.FPLmayterminate.thisagreementwith30daysnoticeafternon-receiptofanyinvoicedamountdueunderthetermsandconditionsofExhibitA.FLORIDAPOWER5LIGHTCOMPANYSyYancePres>dentDate~\~'C\
Exhibit"A"'~APROPOSAIFRON'LORIDAPOWER'.&LIGHTCDHPNYTO'LORIDAELECTRIC'TILITIES'ORŽANELECTRICPOWER'EHEKTIHGSITESTUDY9-15-76'FloridaPower&LightCompany(FPL)proposes,as'apart.ofa'ontinuingwork-p1anintendedtoleadtoajointnucleargeneratingplantproject,,toconduct'nelectricpowergenerating..site.locations.udyonbehalfofagroupof'lorida.utilities(Participants)inaccordancewiththefollowingtermsandconditions:A:~Scoe2.~3.4.Thegeneralareaofthe.study.will'ethenorthernhalf'ofpeninsularFlorida;thatis,,thearealyinggenerally'orthandwestofFlori'daPower&,LightCompanyserviceterritory.Theroughboundariesofthe.studyare--northof'alinerunningfrom.,PineyPoint.toCocoa-east.of'heApalachicolaRiver.Candidatesite,locationswillbeselectedbyreferencetoexistingandfutureelectricalloaddistributionsinthe.abovearea,'ggregatedgeographicallyin5,000td10,000mwamounts.Approximateloadcenterswillbelocated.SuchloadcenterswillbeconsistentwiththeFloridaElectric.PowerCoordinatingGroup,,Inc.PeninsularFloridaGenerationExpansionStudy,1976-,1990.Sitingresourcessuchasexistingtransmission,watersources,andtransportationfacilitieswillbeidentifiedinrelationtotheaboveloadcenters.Suchresourcesandload,centerswillbegroupedintositingareasoAnadvisorygroupofstateandlocalofficialsandrepresentativesofconcernedcitizengroups-willbeformedtoadviseonrelevantsiting'riteriaandratings.
5.Specifictractswil'Jbe.'identifiedineachofthesitingareasusingtheresourcesofFPLandotherFloridautilities.Thetractswillbesuchastosupporttotalgenerationadditionsof2,000to10;000nr.6..Asetofcriteria-willbedevelopedto-screenthecandidatesitesN'toapproximatelythreeineachloadarea.,7.Afur.her-set:ofcriteriawillbedevelopedtoperformadetailedevaluationofeachofthesites.8..Oatawillbecollected..oneachoftheremainingsitesusingpublishedsourcesorinformationinthepossessionofFloridautilities,public,agencies,andotherinstitutions..Consultantswillberetainedto,collectandevaluatecertainspecializeddataareas.9.Aratingwillbeestablishedforeachsitebyapplyingthedevelopedinformationtotheevaluationcriteria.10..Suitablereviewsoftheprocess+illbemadetoadvisorygroupsandFloridaUtilities-SteeringCommittee.11.AreportshallbepreparedandsubmittedtotheParticipantssettingforththe.resultsof'he.studywhichshallcontainrecommendationsofpreferredsitesineachof'hedesignated.loadareas.GeneralCriteria.1.Sitesshouldbecapableofsupportingdifferentland-basedfueland'enerationtypessuchascoal,nuclear,combinedcycle.2.SitesshouTdbeawayfrompopulationcentersandoutofthepathoffuturedevelopment.3.'itesshouldbecapableofsupportinggenerationadditionsforanextendedperiod,saytentotwentyyears.4.S'itesshouldhavethecapabilityforsomemulti-purposedevelopmentoralternativelyhavesubstantialarea'sofundevelopedbufferzone.S.Theprocessofsiteselectionshouldbeopenandaccessibletoresponsibleagencies,'nterestedmembersofthepublic,andthemedia,6,TheprocessofsiteselectionshouldstressearlyidentificationandJresolutionofpolicyandproblemareas.
7..Theprocessshallmakemaximumuseofexistinginformationinthehandsof'loridautilitiesandothergroups-.8.S'tudyshallbefullycoordinatedwithFCGGenerationPlanningStudy.~~eIdentify.tracts...OevelopcriteriaScreening...........InformationcollectionEvaluationRecommendations......~Hudete~~~~~e"~~~eet4mn'~e~~~'~~~e~~~~~~~~~~'~~~~'~~~~~~'ee~~~~~~\FPL'imeandoverhead:,SystemPlanning...7man-weeksProjectManagement.8man-weeksEnvironmental....60man-weeksLandHanagement..12man-weeks-ContractAdministration..1man-weekScheduleIdentifyloadareas.......Identifysitingareas........'-...Startto4weeks4weeksto8weeks-8weeksto20weeksStartto20weeks20weeksto24-weeks24weeksto36weeks36weeksto40weeks40weeksto42weeksStrategicPlanning.8man-weeks96man-weeks9$1,500Expenses.-travel,60weeks9$200...,Reports:-.printing..~IOutsideServices:.Land...,..$57,000Engineering'.250,000Environmental.500000~~~~~~a~r'$144,00012,00010,000507000TotalEudget........................$575,000.TermsandConditi~n1.FloridaPower5L;ghtCompanywillbereimbursedforthecostsofthestudyasfollows:a.TimespentontheprojectbyFPLexempt,salaried,professional,technical,andadministrativepersonnelwillbeaccountedfortothenearesthour.b.FPLwillbereimbursedforalltimeaccountedforonthebasisof$1,500/weekforeachfortyhoursormajor.fraction".hereof, c.ActualtravelexpensesincurredbytheaboveFPLpersonnelwillbeaccountedfor.FloridaPower&LightCompanywillbe.reimbursedforsuchactualtravelexpensesspentonproject.businessplus105ofsuchexpenses.d.TheactualcostofoutsideservicesspentontheprojectandbilledtoFPL.plus5CofsuchserviceswillbereimbursedtoFPL.2.FPLwillrendermonthlyinvoicesattheendofeachcalendarmonthforcostsincurredduringsuch~leadarmonthtoeachparticipantwhichwillbecomedueonthe10thofthefollowingcalendarmonth.Suchinvoicesha11berenderedonthe10thofthemonthfollowingthefirstfullca)endarmonthaftertheeffectivedateofthepartici-pationagreement.FLORIQAPOMMER&LIGHTCONPNY'ateBy>ceresdent RQG9/14/76Exhibit"8"FlORIDAELECTRICUTILITIESJOINTPARTICIPATIONAGREEiMEilTWITHFLORIDAPOWEREcLIGHTCOHPNYScheduleofPartiripant.SharesUtilitShare
~ICOPIESTO:Membersof:FloridaUtilitiesSteeringCotnaittee-Nr.GeorgeMoore.'1oridaPowerCorporationP.0.,Box14042StrPetersburg,R.33733R.J..Gardner(TemporaryChairman)FIoridaPower5LightCompanyP.0.Box013100Miami,FL33101Nr.StanLivengoodGainesville-AlachuaCountyReg.UtilSoldP..0.Box490'ainesville,FL32602Nr.R..C.KuethorJacksonvi.lieElectricAuthorityP.0.Box53015Jacksonvi1Ie,FL32201Nr.RobertH.CochranCiLyol'akolanIlUnapt.ofEloc.8MaterUtil.100E.ParkerStreet,LakeIand,FL.33802Nr.HarryLuffOrlandoUtiIitiesCommissionP.0.Box3193Orlando,FL32802Mr.E.C.Shreve,Jr.CityofOcala'Iec.UtilityOept.P.0.Sox1270Ocala,FL32670Nr.RodneyNewton't.CloudUtilitiesCatmnissionNewYork89thStreetSt.Cloud,FL32769Nr.HarryWrightSeminoIeEIectricCo-Operative2410E.SuschSoulevardTampa,FL33612Mr.JoeOykesTallahasseeElectricOepartment2602JacksonBluffRoadTall'ahassee,FL32304Mr.RayklelchTampaEIectricCompanyP.0.Sox111,Tampa,FL33601(Continuedne..tsheet)
COPIESTO:(continued)Mr.NichehlR.GentFloridaElectricPowerCoordinatingGroup402ReoStreetTampa,FL33609Hr..OonTurkFloridaMunicipalUtilitiesAssociationP.0.Box2402Lakeland,FL33803Mr.J.0.DenkinsFloridaPublicServiceCommission~700SouthAdamsStreetTallahassee,FL32304FPLPersonnel-E.A.Adomat3.T.BloutE.L.Bivans~TracyOaneseH.M.Kloin0.F.Poarson
'~~~FLORIDAJOINTNUCLEARFACILITIESSTEZRlNGCOMiVIITTEEMEETQTGMINUTESDRAFTDate:SeptemberIQ,1976Place:LakelandUtilitiesOffices,ConferenceBoomAttending:Seeattachedlist.'.TheminutesfromthelastmeetingweretakenbyMr.JoeDykesofTallahasseeandhavenotbeendistributedtomembers.2TheChairmandescribedtheeventssincetheMiamimeetingto~.bringeveryonetothesamepointintimeforthismeetingofSeptember10:a)TheMiamimeetingwasca,liedtomoveforwardwithanuclearprojectassoonaspossible.b)Theplan,asofthat.meeting,wastomeetandreviewtheproposalsreceivedfromengineeringcompanies.Therewasatievotewhichwasthenbroken,bytheChairmaninfavorofmovingforward,consistentwiththephilosophyofobtainingajointnuclear-projectasquicklyaspossible.c)DiscussedwithMr.Gardinertheramificationsofmovingforwardandrequestedthatanothervotebetaken.d)TelephonepollwastakenwhichresuLted.infivevotesagainstreceivingtheproposalsandmovingforwardxvithaneconomicstudy.offloatingversuslandnuclea.rpowerplants.Thevotewasasfollows:.Infavorofcontinuingthe.study:.Againstcontinuingthestudy:JEASt.Cloud~~egxinoleainesvilleTallahasseeOrlandoTampaFlorida.PowerCorp.LakelandFloridaPowerCcLightdidnotvote.e)FloridaPowerCcLightadvisedconsultantstopostponetheirpresentationanddidnotcancel.shouldthegroupdesiretochangeitsposition.
FLORIDAJOINTNUCLEARFACILITIESSTEERSGCOMiVTTTZEMEET'MINUTESSeptember10,1976page2.f)'dvised-St;ClouL.ofthecancelingofplansandalsoadvisedoftheplanstomeetinaone-day'meetinganddiscussthenewapproachofmovingforward.~vithjustalandsitingstudy..g)Gilbert&United.Engineershavevolunteeredtogivesummariesofthestatusofthefloatingnuclearplantlicensehearings;3.FloridaPower&XightisproposingtodoasitingstudyandtheproposaLwillincludethefoLLowingbasicpoints:a)IdentifyloadareasoutsideofFlorida.Power&Light'sserviceterritory.b)Examinesiting:resources.c)Dramconclusions'toarriveatbasicsitingareas.d)Developatractsearchfromavailablelandrecords.e)Developscreening,evaluationcriteriaasrequiredby'permittingagenciesandcomeforthwiththree,approximatesites.'f)DeveLopadetailedratinganalysiswhichisnecessaryto-studyeachsiteindetail,but:notnecessarily'erformon-sitestudies.g)Develop,recommend,andpresentthesite.reportto.the'roup.Ph).FloridaPower&Lightproposestodothisunderafee.arrangementplusanadderplusout-'of-pocketexpensesplusa5'.feeplus.outsideconsultants'ees.i)Thetimescheduleforthestudywouldbeapproximatelysixtoninemonths.j)Theproposalwillbeinthemailonthe15thofSeptember.k)Wouldliketogetbackandreviewanddiscusstheproposed'roposalbythe20thto27thofSeptember.1)Asharingformulawasthendiscussedingeneralandthatwhichappearedacceptablewastheadjustednetenergyforsystemfor1975...Thisformulawastobeworkedoutby.theFloridaElectricPowerCoordinatingGroupandisincludedhereinasExhibitI.
FLORIDAJOINTNUCLEARFACILITIESSTEERINGCONMITTEEMEETBTG-MI:NUTESSegtember.10,1976Page.3;.4.Lakelandpresenteditsthoughtsonthesubjectofmovingforwardasa.groupinareas=whichdefinitelyneedworkfor.a.jointproject-taproceed.,Their;thoughtswereoutlinedonasheetwhichisin-cludedhereinasExhibitII.AgeneraldiscussionwasheldwithseveraLmotionsbeingofferedforcorisideration.Philosophicalproblemswhichwereaddressed'ncludedrisksharing,trans-missionwheelingagreements,andonesystemversustwosystems'withinFlorida.Theconsensusofthegroupwastoallowutilitiesinterestedtoget*togetherwithLakelandandpresenttheirview-points.toFCGfor'considerationofestablishment'.oicommitteestoaddressthesespecific.problems.,6.FloridaPower&.Lighta~in'statedtheirproposaltothegroupwhichisunderstood.as;.')TheirwLLLingnesstoassist;intheprojectbyofferingtheresourcesofthe-company'Ib)Tooperatethefacility,ifdesiredbythegroupc)Toshareintemporarypurchasesofpowerfromthejoint,project.toassurethatitwouldmoveforward.6.FloridaPower&.Lightstatedthattheywouldnotshareinthe~,.costofthelandsitestudysinceithasidentifiedallsitesavai'-..'blein.itsserviceareaandtheirproposalistoidentifysites'utsideoftheirservice.area.whichcouldbeconsideredasjointsites.-7.ThenextmeetingwasscheduledforSeptember30attheoQicesofTampaElectricCompanyat10:00a.m.Theagendaisbasicallyasfollows:a)TodiscusstheFloridaPower5LightCompanyproposalb)~ekeamendmentswherenecessaryc)Reachagreementontheamountofparticipationbyeachutility8..AnexpressionofinterestwiLLsoonbeneededsothatallpartiescanunderstandwhattheircostofthestudymaybeandalsohowmuchpowertheycouldexpectfromsuchajointproject,ifitweretoproceed.HCK:fcEnc.cc:CommitteeMembers8cOthersonMailingList ll4~:86tlC;C,hz)dLi'.g~g<'vJ;.Qg,a)(.A~kC94.~r'(.guNc,~IrAte'tCA~Q~rC..~.+Qi7+4-.~Bzy~m~D.I:<.!macwD/g,8&)&8))~::~udr~c,Cz,C.Modem.IJ,~QQAtCgg~~IJ~~Fcc.'QogD>c'F'cps1"'JpgcWliLc.)(~1~..))min'ouil(e.tr'.goP4ACC/7-Pc..'(&I76C'cDPlPRi<Y'CRPAZI~t~
EXHIBITI(Page1)FI.QAIOAEI.ECTAICFOYERCQQROINATINC'CRQUP(FCC)l(fO"tA(KT.SUI(fio'sblaAPA.FLOIHO-~r>~ISI3Iol'I.Mal~0>1~~September13,1976I~j/Mr.R.C.KuetherAssociateManagingDirectorJacksonvilleElect=ic.Au&orityP.O.Box53015.Jacksonville,Florida32201JointNuclearFacilities'Stud'udetAllocation
DearRon:
Enclosedaretheallocation.factorsfortheFloridaUtilitiesSteeringCommitteeasrequestedattheirmeetingonSeptem-ber10,1976.Theallocationsarebasedonthe1975AdjustedNetEnergyforSystem(NES)andareintendedforstudycostassessment..Table1liststhefactorsforeachofthetwentyparticipatingutilities'hefactorsonTable2werecalculatedtoshowtheassessmentsforthesitingstudywhichisbeingproposedbyFloridaPoweraLightCompany.~Since.theNESforSeminoleCo-op.iszero,.the2,744,352Mt/Hindicated.ontheenclosedtablesrepresents.thetotal1975NESofSeminole'seleven'memberco-ops.~~PleaseSeelfreetocallmeif'ouhav'eanyquestionsconcerning.theseallocations.ISincerely,.DONALDM.BENJAHXHStaffEngineerDMB/tmbEncl.~~
FLOnIDAJOINTN..ff;AnFACILITXHSTABLE.1STUDYCOSTALLOCATIONfACTOf\SBasedon.1975AdjustedNctHneryforSstem1975AdjustedNetEnergyforSystemMHfl1975NetEnergyforSysteml/MHHAllocationFcctct~0tillt.0035.0013.3725,1582.0066.0148.0754.0038~.0799.0078.0056;0205.0044.'0095.0362.0017.0486.0206.,1229.0061147,91053,682'156839,0646,725,3212&2,639630',9583,206,472~'62,3763,399,385331,009236,132872,734187,111404;6591,540,44673,0362,066,611877,6205,225,949.258611'147;91053,68235,547,65912,763,303..282,639638,6984,644,120162,376'4,965,642'331,009.236,132.940,917187,111404,-6591,867,410~73,0362,.744,352'2/'47,0259,014,873258,6111CityofBartow2CityofClewiston3FloridaPowerf'ightCompany4FloridaPowerCorporation5Ft.PierceUtilitiesAuthorityGainesville/AlachuaCountyRUB7GulfPowerCompany8Cityofllomestead9JacksonvilleElectricAuthority10CityofKeyHestll'akeNorthUtilitiesiAuthority12CityofLakeland13CityofLeeshurg14CityofOcala.15OrlandoUtilitiesCommission16CityofSt.Cloud17SeminoleElectricCo'-op.18CityofTallahassee19TampaElectricCompany20CityofVeroBeach-Total'6,211,16442,521,725.9999ofFirst600,000offofNext900,000MHflofNext.4,500,000MWflofallOvei6,000,000MHflNESAdjustedMethod:,100%80%604f,40't1/Source,.1975FPCForm12/12A2/NESofmemberCo-ops.~~~~0~r~M4aq.et~~4444~44 FLORIDAJOINTNLi.EARFACILITIESSTUDVCOSTALLOCATIONFACTORSBasedon1975Ad'ustedNetEnerforSstem(.FloridaPower6Light:Co'mpanyExcluded)TABLE.2~L'tilit1;Cityof.Bartow2CityofClewiston3FloridaPoweraLightCompany4FloridaPowerCorporation-5Ft.PierceUtilitiesAuthority6Gainesville/AlachuaCountyRUB7GulfPowerCompany0CityofHomestead9JacksonvilleElectricAuthority10CityofKeyWest11LakeWorthUtilitiesputhority12CityofLakeland13CityofLeesburg14"CityofOcala15OrlandoUtilitiesCommission16CityofSt.Cloud17SeminoleElectricCo-op.10CityofTallahassee19.TampaElectricCompany20CityofVeroBeach1975NetEnergy.forSysteml/HWll147,91053,60212,763,3032024639638,6984,644,120162,376.4g965,642.331,009236,132940,917107jlll404,6591;067,41073,0362,'744,352.2/~947,025.9,014,073250,611'1975Ad)ustedNetEnergyforSystem~l'1WH147,910~.53,6026,725,321.202,639630,958'-..3,206,472162,376~.3,'399,30533lc009236,132072,734107,111~404,6591,540,44673,0362;066,611877,6205,225,949-250,611'AllocationFactor..0055.0020.2520.0106.0236.1202.0061,1274..0124.0000.0327.0070.0152.0577.0027.0775.0329.1959.0097Total40,663,505~26,602,661.9999,Il/Source:1975FPCForm12/12A2/NESofmemberCo-ops.NESAdjustedHethod:100%of80%of~,60%of40%ofFirst'00>000HWllNext900,000HWHNext4,500,000HWll..allOver6,000,000HWll
'XHIBITII'ROPOSEDCHANGESTOFLORIDAJOINTNUCLEARSTEERINGCOMMITTEE3;..Reexamine,identifyandrestatetheobject-ivesofthecommitteeI.toinclu'decoalfiredand;otherfossi1-fueledgeneration).2.Renamecorn'mitteesomeappropriatename(suchasF'.CG.JointPowerSupplyCommittee),andrequestF..C.G.,Executive.CommitteetoembracethiscommitteeasacommitteeoEF.C.G.5..Define-scopeofcomnitteeactivities,suchas:l..Si.ting.2.Contractsandworkingagreements3.Financing4..Construction'S.Interfacewithgovernmental"agenciesIngeneralthepurposeoftheCommitteewouldbetoimlementthefin'dingsofthePlanningCommittee',toeveloppowersupplyprojectsasindicatedbythePlanningCommittee.StanLivingoodhassuggestedthatanappropriatenamemight',bethe"FCGImplementa-tionCommittee".
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4:~Rahe~2Zah>ang~~~~cat.~~~<<aIa~s+~+Q.+~a.~1~@QQ~C~eren'e(@~ad4~l~~,'eSq,weP20';(GU~wlt'4na~~~eC~7cale'rv<<o'v.k6Be+ar~eOr~>U~w>"-a-He6e,=a-esc,"vhes,ectees'=-/4faaParaHex'"e~Q'"-c~,S~.C"Qu,,'ns"ne~Q'>~>>'=.Pssee,->ar=,CC0-sateZ'lM-~'apM,p-ner>g+~MPes'P3Q~~~iIsC~~Ose2~ecep)isv~~e'~mT1~IQP++QEp.sGU~~e'~(8p~s~~~~'eG"~=Ov>a'C~vce;ay~>v.suah&C.C"Le%'s~cv~~e~~3.-Qbe:-c.arab~e=-sanRave~Ca~~v~x=GL'>e~.-e~~Vz.'c'~Ba=ks~\leIfeC~~de4c~"ColT1PPe~ez7yZap~'D.QpL~cih~4'z'8".evMeehanZcae>>~BR'~
CCORCC5RICCCLROSCRTC.MCOIARMIO5*HORA*5TRCSC!ROSCKTAJACLOH4AMCSH.)IORWOOOALANAROTIIFRAHCCSC.RRAHCI5OAHICLI.OAVIO5CHTIIOMASH.MCIIUCII.jRMwORRIczs-SPTEGEL8cMCDl*RM1DCSCOeVIRCIHI*AVCHVFH.W.WASMIHCeOH.O.C'COS7TCL4IeIICHCl5dCI455~4ddNovember12,1976IICTCRK.MATTOAHICL*QUTTXIAHeaeeie~.eeeieJAMCS.CARIRCLLOCXPx.RobertJ.GardnerFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101Re:PPGZ,'sProaosedJointVenturePro'ect
DearBob:
This,letterisw-'ttanonbehalfo"theZntarvenorGroupinasponsetoyourOcober26letter.Lsthatlettevoustate"...,[TjheSteeringCommitteehassuggestedthatlettersofintent-beorwardadtotheundersigned.nolaterthanNovembe22,.1976".Whileindividualsystemsmaydesire=torespondseparatelyortosupplementthisletter,itisintendedthat,thisletterrespondgenerallyfortheZntarvanors..Yourecuestthatpublicmoneysnowbecomm'tedtoajointventurenL'.clearproject.however,beforecommittingfundstosuchproject,acitywouldhaveafiduciaryobligationtoi"scitizensandratepayerstocarefullyevaluate~heengineering,economicandlegalaspectsoftheprojec"suff'ientlytojust'ytheexpend'ureofpresentandfuturemoneysinvolved.WhiletheCitiesdonotbel'evethatfinalagreementmustbenecessarilycachedonall'ens,attheLeastthereshouldbeagreementsinprincipleonmattersthatcouldhaveasubsantialimpactontheirdecisionwhethertoparticipate.Xn,myOctober21,1976le"arXstated:"Amemorandumofunderstandingw'lhenecessarytomeetanumberoft2esholdconcernsinconjunctionwithagreementtoasitestudy.Theitemsthatmustbeagreeduponbeforesystems,cancommitfundstotheprojectinclude,leg'lationopermitjoin"financing;transmissionandbackuparrangements;an'ntegratedpowepool;useofsitesbestadaptedfornewgenerationregardlessoftarritorv,.procurmentofnuclearfueland,E'PaL'sparticipation RobertJ.GardnerNovember3.2,1976'ntheproject.Ia.addition,thereLationshipbetweentheSouthDadePlantandtheCentralPlor'daPlantshouldbeclari'ed....""/SincePP&Lhasnotyet:respondedtathislette,thereisnobasisfortheCitiesnowdetrminingwhethertheyshouldcommittotheprojectatthistime,a3.thoughIrecognizethatPP&LmaystiLLbecansideringthe'temsraisedtherein."*/Toput,thisLetterinitspropercontext:,itisappropriatetareviewthehistoryofnegotiat'ons.Thepossibi3.'yofajointventureprojectwasf'rst.proposedbyTracyDanese'~hisletterofMarch30,1976,inresponsetonumerousrecuestsforparicipation'n.theproposedSouthDadeNuclearUnits.,Inthatletter,Tracyrefusedreauestsforpazt'cipationinSouth.Dade.However,hestated:PP&Z,wouldconsiderbeingparofajointventuretaconstructanuclearfaci3.itvsomewhereinthecentral.Ploridaareasoastobeconveniently3.ocatd.forpotentialpartic'pants.Suchaprojectwouldbeatruejointventuefromits.initia3.inceptionthzoughcompletion.Tracya3.sostatedthath'slettershouldnot"beconstruedasanoffertonegotiate"$outhDadeparticipation.SincePloridaPower&Lighthadrefusedtarecognizetheizrightstojointparticipation,theJointIntervenorGroupintervenedbefore.the.'nuclearRegulatoryCommissiontoseekenforcementoftheirr'ghtstonuclearparticipat'on.However,cantemporaneous3.y,GeorgeSpiegelresaondedtaTracy'sletter:"Wearepleasedwiththisproposalandarehopefu3.thatdiscussionsalongthese'inesmaydevelopandultimtelyprovehe'pfu3.."LetterofGeogeSpiege1,toTracvDanese,April14,1976.Amongotherthings,hecitedasnecessary,mattersforagcement,legislationtoauthorizemunicipalutilitiestoestab3.ishauhoritiesforjointmunicipaLownershipoflargeplantsandthedevelopmentofafullyintegratedpowerpool.PP&Edidnotrespondtotheseconcerns.OnApril29,1976,TracyannouncdthatPP&LhadarrangedameetinginJacksonvillefori<Lay13tod'scusspp&E,'sjo-'ntventureproposaland,stated:"Iwouldthinkthatitmightbehelpfulifsomeofvourclientscouldsendsystemrepresentativessothatindividualneedsandtimefzamescanbeinitiallyd'cussed."Foryouconve~c,Ien~seapiesozcaresponcenceandwr't"amat~~re~ta.~/Iun'd~HarryLufft~~tyouaintmd'garsponseto~Ce~of~i'5,1976,renxsmgawr't~aresponseanthepositionsvoutookattheNm~ber4,Tata~~~g.Ii~thatsuchresponsewi3~addressthe~mmsexnressedI RobertJ;.Gardne~;November12,1976J'iatelyupanreceivingknowledgeaftheLet"er,althoughbothheand;Iwere.outoftawn,GeorgeSaiegel.replied(LetttoTacyDanese,May6,1976):"Newill.makeevervefforttoarrangeforrepresentatives.ofourclientstoattendthe,meetinginJacksonville...AsIstatedin,myletterof'4April,,'willalsobenecessarytad'scussthefollowing'matters:.theearlyformation.ofafullyintegxated"-Loridapowerpool,includingPLarica~cetransmissionsexvceandplanningcaordinat'on,aswellasLegislat'onenablingtheformationofjointmunicipaLacencieswi;ththeabil'tytofinance,cons-uctandtoowngenerationandtransmissionfacilities.WeCMnkthemeetingwillserveaconstructivepurpose.TheeisnaquestionthattheearlyestablishmentoraFloridaPower?oolisaprerecuisitefortheabilityofmunicipaluilit'estomakefinnestimatesandcommitmentsconcerningtheplanninganddevelopmentofanuclear.plantwhichwould.comeintooperationmanyyearsinthefutue".A"themeets~g;chairedbyTracyDanese,PP&L.madeaprepared,presentation,includingslides,inaccordancewithapreviouslysuppliedPP&Lagenda.Eowever,otherthantastateitwaswillingtod'cusssuchmatterssubsequently,PP&Laidnotaddresstheconcernsexpressed'nGeorgeSa'egel'sLette.Atthatmeeting,theseconcernsrerera'sedbvbothmvclientsand.myself.Tracydidstatetha"thecastsforaproposednewunitwouldbeinthe."samegeneralrance"and"timeframe"asSouthDade.Eowever,hestatedthatSouthDadewasPLannedforP?&L'sneeds..Thus,PP&Zrefused.tomitigateriskstoallsystemsincludingitselbysharingSouthDadecapacityin,exchangeforcapacityinpassibleadd'ionalunits.I'nsubsequentmeetingsand.thxoughsubsecuentcor-spondence,IandthesvstemsthatIrepresenthavetiedtoconveythattheyneedsubsant'veresponsestoquestionsthathadbeenra'edfromtheoutsetandthatweresummarizedinmyOctober21,L976Letter.Thus,forexampLe,attheJune3,1976meetingoftheSteeringCommittee,EaxyLuffstatedthattheissuesraisedbymeat.thepreviousmeetincandbvGeorgeSpiegelinhisletterstoPP&Lneededtobediscussedbecauseoftheimportanceoftheissuestosomesystemswhomavdesiretoparticipate'nthisproject.TracyDaneseadMowledgedth'sstatement,buttherewasnowillingnessexpressed.bvP?&Ltodiscusstheissues.
RobertZ.Gardner~ilavemher12,1976OnZuly8onbehalfofcertainmembersoztheSteeringComm'tee,i.wrotetoTracyDanese:"'U.yaudonotenvisiond'xecownershipgaxmcipatian.byPloz'idaPower&LightCompanyin.theproposedunits,wefeelitincumbentupon.youtaLet.usknowatthistime.Wehavebeensurprisedbyyouxapparentunwillingness.tashareSouthDade(orother)'apacityandjointventuxecapacity.Assumingcostcamparahil'y,hy'educingriskstoindividualsystemsofa-part:iculagzohLemun't,,suchshazinqshouldbeadvantaqeoustoallconcerned.Such.shainqalsoappearstohaveadvantagesinfinancing'nd'nqa'ningflexibilityinthetimingoz.placingnewblocksofnuclearcapac'yon.Line...Znhisletterof14Apr',...'eorgeSpieqelpoints-auttheimmediateconcernsofobtainingafullyintegrated'owergaol,Legislation'uthorizing-theformationozmun'ipal'uthoritiesandappropr"atetransmissionarrangements'.This14AprilLettrhasnevebeen.respondedto,otherthanhyyour29Aprilletter(settinguptheJacksonvillemeeting).Sincethese.itemswouldaffecttheecanomicsof'newcapacity,theymust.beaddxessed,bytheLegalcommitteeaspaxtof.jointventurealarming".OnJuly13,HarryW.WrightofSeminoleElectricCoop'e"ativesentacopytayouofaletterezpressinqsimilarconcerns:"Thereisnodouhtthatwewereallcuitedisappointedtoobservethedimin'shedinterestozPlaxidaPower&LightCompanyinownershipparticipationoftheproposedCentralPloridaUnit.EtisouxopinionthatfortheCentalPlorida.Unittobeviableand-successful,itisabsolutelynecessarythatPlordaPower&Lightcompanyawnaparticipatinginterestintheplant...Neareozthefixmopinionthatcertain'ollateralarrangementsmust.bemadewithPloridaPower&L'ightCompanyforthesuccessfulandreasonableuse,oznucleazcapacityfomanynewunits".AtaJuly21meeting,youannouncedthatbecauseofpresentlyprojectedlackoffutureload.suficienttosuppozttheunits,PP&LintendedtodeferglanstoconstructtheSouthDadeUnitsandtopossiblyterm'natetheWestinghousecontracintendays.However,fartheirsttime,vouindicaedthatPP&LwauldbewiLLingtosell,itsownesh'pinterest'nSouthDadecontractstoothes.
Robert.J;GardnerNavember12,1976stated:Znaletter.thatsamedaytaTracyDanese,"Itisv~duallyimpossible.forothesystems-tommeafirmdecisionwhethertout'lizetheSouthDade.contractsandtomaketheassociatedcommitmentswith'nten,daysbecauseofthemyriacofengineering,inancingandlegaldeci,sicnsinvolved.Indeed,theonlyhopeforaauickdecsionwouldinvolvePP&E'sagreementtosellasubstantialportionoftheunitsforconstructionat;-the:plannedSouh-DadesiteandtheCompany'sediateagreementi.priacipletothenecessa~back-uparancements,includincthosediscussedinGeorgeSpiegel's14Apri3.letter.Beforecommittingthemselvestothetypesafinvestmentinvolved,systemswould.havetobeassuredofthe--availabilityaftransmissiononreasonabletermsforbothSouthDadepowerand,necessaryback-upand,otherpowerso~~ces.Manysystemswouldneedjoint.financinglegislat'on,anintegratedpower~poolandother'-appropriateback-up".Withoutstatinginwhatregard,yourespondedthatIhadincorrectlycharacterizedZP&L'sposition.LetterofJuly28,1976..Nr..Blountstated:"YourletterreflectsaserousmisunderstanMgofPP&Z'sannouncementrecardingdevelopmentoftheSoutnDadeProject.ZP&Lhasnotcancelled,butintendstoproceedwiththeproject....Muchoftheremainderofyourletterrelatestomattersincont=oversyinNRCDocketNo.P-636-A,anditwouldnotbeappropriate"'ormetocomment-onthesematers".Letteror"August3,1976.-Neitherletterdiscussedthemattersofconcernraisedfromthebeginnincw'thregardtoajointnuclearventureandyouwithdrewthepossibilityofparticipationinSouthDade.5OnOctober15,1976,SeminolecruestionedtheappaentattemptofFP&Ltolimitconstructionoftheproposed.jointun't"toanareainPlaridanormofalinermningframPineyPointtoCocoa".LetterofBarryW.WrighttoTracvDanese,October15,1976.Thehistorycitedaboveofrepeatedattemptsbvmyselfand'yclientsta.obtainresponsetaconcernsraisedbythemthataffectthei.'rabilitytaparticipateinyour.proposedjointventureprojecledtomyOctober21letespecifyi.ngi,temsnecessaryforresolution.AmeetingoftheSteeingCommitteewasheld.onnovember4attherecuesofGainesville.RepresentativesfromGainesv'lie,Orlandoandothersrecuestedspecificresponsetothitems1'stedinmy RobertJ.Gardne:November12,1976lettersothattheycouldeva3.uatewhethertheycouldpar"'cipateinthejo'ntventuze.ThecitiesZrepresent.arefaced.withanobviousdilemma,,butonethat"-P&L',canresolve,tothebenefitofallF3.oridaconsumersof-electricity.Citiesazeoperatingin.aneconomicenvironmentwhezefoss'.fuelsa"einshorto"uncertainsupply,areofhighand-uncertainpr'ce,orboth.Moreover,becauseofFP&L'sunwillingnesstoagreetonecessarylegislation,appropriatetransmissionz'hts,andasatewidepowerpoo3.,theproblemscreatedbvthefuel.marketsarecompoundedinthat-PP&Z,'nhibitsCities'bilities.toobtaintheLo~westcostpowezsupplvthroughbeingabletomaximizethemoseeff'cienuseoftheirgenerationandintegratethatgeneration.withoptimaloff-systempowesupplysources.NorhasPP&Z,indicatedawillingnesstosellunitpower.fromitsexisingunitsorwholesa3.epowertomeetbaseloadgenerationrecuirements.SuchagcementbyPP&LwouldmakeavailablebM~powersupplvtomunicipalsysiemsbasedupon,nuc3.eazfuelcostsandatpricestoFP&Z,equiva3.enttothoseitcouldexpect,toreceive.fromreta'1sales.,Theotherhalfofthed'ilemma,asisstatedabove,isthat.youazeaskingCitiesto'nvest.substantialsumsinanuclearprojectwithouthavingspecificanswerstocuestionsthatvitallyaffectitseconomics.Theunwillingnessof>>P&Ztodiscussthesematterscreatesaddeddifficulties.Underthecircumstances,iftheyinvestnowintheproject,cities,cannotassumefuturecooperationconcern'ngtheseitemsspecifiedabove.Thus,eventhoughasystemmightbelievethatinviewofthecurrentstateofthefuelmarkets,itisvitalfarittopursueajointgenerationproject,'cannotdoso.ThedilemmaiscompoundedbyPP&L'sexpresseddesizetoaccuireindependentsystemsasdemonstratecbyRalphHulholland'srecommendationtothevotersofVeroBeachtoapproveasaleo'fthat-svstemasameansofaccui'ngaccessto'&L'sreducedpowercostsanticipatedfromuseofitsSt.Zucienuclearcapacity.LetterofR.G.Hulho3.landtoVezoBeachresidents,September4,1976.eZnlightoftheabove,thelettersrequireresponsetotheitemsstatedinmyOctober21letterande'sewhere.
RohezZ.Gafldner,November12,1976'pec'fically,potent'plparticipantsmustknow.whetheF9&Iis'reparedtoassumeashustanti3.ownezshipshareand.underwhat-,te~andconditionsZftheresponseisnegative,otherpotentialpart:icipantswil3findthemselvesin;thepotentiallyawkwardpositionofhavingsubstantialinvestmentsin.ap3.antaverwhichFPGIisinchargeafconstructionand,operationsvithouthavinganyeconomicinterest..Underthesecircumstances,itvauldhedifficultfartheCitiestomeettheirfiduciaxyahl'ationstothei-citizensabsentamechanismtoassureprotectionoftheirinvestmentswhichPPaZmayhaveindependentprioritiesofconstructionandapezatianframthejoint.ventureun'.2.Absent3.egalah'3.ityforsystemstajointogethertofinancetheiintereststhrougha.jointagency,municipaLsvstemsmayhe1~tedmtheirabilitiestofinanceand.manage.theizawnershipshares.Examples.in.otherstatesshowthat.eventhesmallestsystemscanparticipateinjointgenerationprojectsth-oughpuxchas'ngfromajoint.agency,therehvmak'ngtheirpar,"icipationana3.agoustopurchasingwholesalepower.Zfthisoptianisforeclosed,manysystemsvillundoubtedlyheunabletoparticipate.3.-Wlhatarrangementswouldbecontemplatedwithregardtofuel?Zffue3.istabepurchasedand,financedseparatelyheeachparticipant-totakeoneexample-therisksarefardifferent.thanif.-P&Lprooosestotakeresponsihi3.ityforfuelaccuis'ian.ZffuelistoheprocuredindependentlyafSouthDade,thentherisksandcostso"th'sprojectwould.not:hecomparabletaSouthDade..4.Theremustbeprovisionmadeforcapac'yandenergy,fortimeswhenitisoutofservice,and'ftheun'isde3.ayed.Zuther,.participantsmustknovhovtheunitvill.heoperated.Theseconcernscanbepartiallymetbytheestablishmentofastatewidepaverpooltoassureopeationofthelowestincrementa3.castgenerationatanyonetime.Therehavebeennospecificdiscussionsorback-upresourcesfortheunit,oftransmissionavailabilityandafoperations.Suchsubjectshavehadimoortantbearingsonnegatiatiansfornuclea".capacityelsewhereintheUnitedStatesandwouldaffecttheeconomicshexe.5.ZsPPGLwillingtaagreetouseofthemosteconomicallyandenvironmentallycompatiblesite?(e.g.,SouthDade).Again,theansvertothiscuestionwou3.dhaveasubstantiaLbearingonthedecisionasystemwouldmakewhetherand.tovhatextentitiswillingtoparticipate'theproposedjointventuxeunit.
RobertJ.CadnerNovember12,19766.-EsFPGLwillingtomin~~zerisksbyagreeingtosharingcapacityinSouthDade?Asis-statedinitially,as.ageneral.matter,thesystemsthatErepresentcannotnowrecommendtotheir.governingboardsthatpublicfundsbecommittedtoyourproposedjointventureproject:,absentagreementonthesecpxestions.ThepositionoftheCitiesisnotthat.thereisnoroomfornegotiationonthesubstanceofthesematters,ortomeetFPGL'sneeds..However,theyhavenothacKsubstantiveresponsefromyouconcerningthem.Sincethesemattersvitallyaffecteconomicsofpart'cipation,asageneralmatter.,theCitiescannotgofozwazdwiththeproject,althoughforparticularcitiesind'vidualfactorsmaymodizythisresponseWhetherseparatelyoraspartofthesamelett",anyresponsetoHarryLuff'sNovember5letteshou3.dincludesubstantiveresponsetothemattesraisedhee.Shit.etheCit'escannotagreetopart'ipationinthejointventureproject=withoureceivingsuchresponsetothe'rconcerns,theymaintainaninterestinexploringtheproject.Thisassumes,ofco~~se,thatyourresponseprovicesabasiswherebytheprojecŽcan.becommencedonasoundeconomic.andlegal,basis.TheCitieswou3.dcerainlywishtoconsiderlaterpazticipationinanyprojectresultingfromasitingstudy,althoughthemethod,ofdesixedparticipationmightvaryamongsysems(forexample,dixectownezship,participationthxoughjointagencyorauthority,un'.powezpurchase,etc.)Ehaveoutlinedthehistoryofconsidezat'onoftheproposedjointunitsothatyoumayunderstandtheCities'osition.However,EefezbacktoCworaeSpiegel'sApril14letter.Hestated,thatifseiousdiscussionstakeplaceconcerningthematters-thatdividePP&LandtheCit'es,anyproblemsshouldbecapableofresolution.EhooeforanaffirmativeresponsesothattheCitiesandPP&Lcan=worktogethertomeettheneedsofa3.ltheir"customers.Sincerely,RobertA.JablonBAZPcgEnclosures RoberJ'.GardnerHovemberl2,1976CooJ.A.,Boukaight,Jr.,Esp.JohnE.Mathews,Jr.,Esc.Nr.NacH.Cunningham,EsaCharlesR.P.Brown,Esc.OseeR.Pagan,sc..Nr.ClifordC.Blai*sdell,Yw.JohnR.KellyThomasGu~ey,Sr.,Esp.JamesH.PhillipsGlennDuBoisNr.A.Ã.KellyJosephNinotti,Esc.ClydeHopkinsJohnC.Chew,Esc.Nr..EverettB.HoweHonorableErstonRoyalCalvinE.GlidewellNr.CecilBa~ksMr.J.,H.Ca>dwellMichaelWatkins,Esp.Mr.Ãi13.iamF.JohnsonC.R.BeverlyNr.C.H.CornNr..JohnT.Daught~Mr.RodneyNewonMr.RoberE.BathenMr.TracyDaneseJr..
~EXTOATTIC~:HTSLetterof'0-26-76fromR.Gadner.Letterof10-21.-76fromR..A.JablontoTracyDaneseLetterof3-30-76fromTracyDanese.toC.Blaisdel'1Letterof4-14-76fromGeorgeSoiegel,toTracvDaneseLete-of4-29-76from'racy-DanesetoGeorgeSpiegelLetterof5-6-76fromGeorgeSpiegeltoTracyDaneseLetterof7-8-76fromRobet.ZablontoTracyDanese.Letteof7-13-76from,EarryalrighttoR.A.Jabloneit"of7-21-76fromR.A.Jablon,toTracyDaneseLette.ofLetterof7-28-76fromR.GardnertoR.A,Jablon8-3-Z6'romJT.BlounttoR.A.JablonLettero10'-15-76fom-E.N.FrighttoTracyDaneseLetterof9-4-76fromR.G..MulhollandtoVeoBeachresidents
~~II55ORO55RISQSI.ROSSRTCMCQI*4MIQ.5AHQRA*5TR55dlROSCRl'JAdtA7HJAMCSH.IIORWOOQALANJ.ROTMIIRAHC555,RRAHCI5QAHISII,QAVIQ5ONTIIOMA5H.MC?IVON.JR.LLWORFlCKSSPfEGEL.&McDI*BMID2500VIRCIKIAAV5KU5.K.W.WASKIKCTOK.Q.C.2OO57Td!A~NCl202l$55WCOODecember16,1976PCTER'K.MATTQAHISI*QUTTMAH8CIINtls.SLAIRJAlleSckRLPOILCICICRobe~J.GardnerFloridaPoweraLightCompanyP.O.3ox013100Mia~,Florida33101Re:.FP&L'sProaosed'ointVenture'r'o'ect
DearBob:
Th'sletter'sinresponsetoyourNovember16,1976,lettertoEaryLuff.AsChai~oftheSteeringGroupofMunicipalZntervenorsinP-636-A,EarryLuffreferredyourlettetome.ZndividuaZ.systemsmaysupplementthisresponse.ThisletterdealswithFPaL'sjointparticipationproposaltomanageasitingstudytoevaluateelectricpowergeneratingsitessuitablefortheconstruct'onofoneormorenuclearunitsinwhichFPSLwouldhavenoownershipinterest.FPGLfirstsuggesteds'uch"jointdevelopmentofanuclear'roject"inaletterfromTracyDanese,March30,1976.ZnGeorgeSpiegel'sletterofApril14,1976,hesetforthasa'redicatetothejointventuretheneedforlegislationtoallowforjointmunicipalf'nanc'ngandforanintegratedpowerpool,includingtransmission.YourleterofNovember16setsforthyourfirstwritenstatementofFP&L'spositionconcerninglegislationpowerpoolingandrelatedmatters.You=position.isthatyouwillmanagetheunitforaee,but,exceptforthepu-chaseofnom'nalamountsofpower,.'youareunwillingtopat'cipateinit.Asapreliminarymat.er,youauestiontherelationshipbetweentheareas=ofconcernraisedbyStanLivengcodandthoseraisedinmyOctober21andNovembe12letters.StanandEbothhaveexpressedsimilarconcerns.StanreauestedtheNovember4thmeet'ngbecauseyouhadnotrespondedtotheCities'reviousreauestsforagre.entonpartic'pat'on,leg'slation,poweraoolingtransmissionandotherstatdmatterssetforthinmyNovember4thlette Mr.RobertJ.GardnexDecember16,1976ZnyourNovember;16Letteryou,state,first,thattheitemsofconcerninmyOctober2landNovember12lettersaenot"germanetoconductingasitestudyandproceedingaheadtodevelopajoint.nuclearpowexprojectassoonaspossible"(pages1-2);second,thatPPGXhas-offeredsufficientresouxcestojustifyaffirmativemunicipaldecisionsregarding.theproposedjointventure(page5,lastparagaph);andthird,thatthejointventurecanprovideequivalentcapacityto.SouthDade(page-4,lashparagraph).YourletterrejectsCit'es'equestsforfavorableconsiderationofmost,ifnotall,,ofthesubstantiveconcernsthattheyhaveraisedaboutgoingforwardwiththejointventureproject.The-majorthrushofyourletterappearstobethat.thejointventureprojectshouldproceedbeforeagxeementontheitems.ofconcernraised'ytheCities..Youstate(page1),"Zremaininastateofconfusionaboutthestatusofthesemattersinrelationshiptoouxoffertoconductasitingstudy."AsStanLivengoodexpressed,specificindividualitemswouldbemoreimportant.tosomesystemsthanothersdependingupontheirindividualcircumstances.Whilefinalagreementsonallmattersarenotnecessa~toproceed,theremustbe.agreementsinprinciplewithsuffi'cientspecificitytosatisfysystemsthatdollarscommittedtothesitingsurveycanresultinaneconomicpxoject.Theseagreementsmustprovidesufficientassurancthatthere's-acommonalityofpurposeonimportantmatterstopermitasufficientnumberofsystemstoinvestfoxtheprojecttobeeconomicallyviabLe.FromthetimeofH'al.'sfirstsuggestionthatthereshouldbeajointventure,IandthesystemsthatXrepresenthavebeenattemptingtoobtainaffirmativeanswersconcerningmattersofcen~a3.importancetotheCities.YourcormnentsattheNovember4thmeetingandyourNovember16thletterprovidesPP&L'sfirstresponse.TheSubcommitteeinchargeofdraftingajointparticipationagreementcouldnotgoforwardabsentagreementonwhattodraftandPPGThasbeenreluctanttostatepositionsatall,muchLesstoconsiderseriouslythe~Citiesconcerns.AmajormisunderstandingoftheCitiesproblemsisimplicitinyoursentence(page2):"...[WJedonotfeelthatthesubjectmatterofthevariouspointsdiscussedisgexmanetoconductingasitestudyan'dproceedingaheadtodevelopa,jointnuclearpowerprojectassoonaspossible."
Mr.RobertZ.GardnerDecember16,1976Thissentenceimplies.thattheC'tiesshouldinvestpublicfundsinaprojectheforehavinganycommitmentfrompuef,concerningitemsnecessaryfortheirparticipation.Citiescannotspendmonyinsuchamanner.Concerningyour,secondpoint,sincePP&Lrefuses.toaddressprerecuisitestothejointventureunit,theCitiessimplydisagreethat.yourNovember16responseprovidesasufficientbasisfortheirgoingfoxwardabsentfurtheragreement.'Ihavesuggestedthatifthejointventureprojectunit(s)couldbereasonablyantic'patedtobecomparable~v'ostsandtimingtotheSouthDadeUnits,thereisobviousadvantage'nsystems'haringcapacityandcoordinatingdevelopmentinboththeSouthDadeand,joint.ventureunits.Suchsharingwouldmitigateisisandallowsystemsgreaterflexibilityinaddingincrementsofcapacity.Apparently,t.'.eparagraphbeginningatthebottomozpage4ozyourletteraddressesthesequestions.Youimplythatthetwoadd'tionalWestinghouseunitsdoprovideequivalentcapacitytoSouthDade.However,ifthisisthecase,Istilldonotun'derstandwhyPP&Lrefusestotreattheunitsasoneproject,whyitisapparentlyunwillingtouseSouthPloridasitesforadditionalunitsandwhyitisunwillingtopoolfuelresources,amajoritemofcostanduncertaintyofnuclearunits.Promtheinceptionofdiscussionswehaveraisedconcernsthatmanysystemswouldnot.beabletosubscribetothejointventureprojec"absentagreementonPP&Lpaticipat'on,coordination,transmission,legislationtoallowjointmunicipalfinancingandotherstatedmatters.PP&Lhastreatedtheseconcernsasperipheral.IfyourNovember16letterisarefusaltoattempttoreach.agreementonthesematters,therecanbenofurtherdiscussions.However,ifitismeanttoimplypossibleagxeement,Ishallbepleasedtosubmitanagendaforseriousnegotiationsconcerningthesepoints.IfPP&Lisnotinterestedinreachingsuchagreements,itispurposelesstospendtimeandeffortinnegotiationsthatcannotbefruitful.Iaddressbelowsomeof'ourspecixicresponsestoCitiesconcerns.intheorderstatedbyyou:l.Transmission:YousatethatPP&Lwould"negotiateatransmissionserviceagreement"totransmitanypartic'pant's"shareofpowerfromanyjointprojecweagreeon."Inview RobertZ.Qardner.December18,,1976ofthelargecapacitycostsassoci.atedwith.mxclearunits,systems.shouldbeassuredof.theabili.tytointegratepowergeneratedasaresult:oftheirnuclearinvestmentswiththeirotherpowerresources(bothonandoffsystem)tomeettheirsystemloadsinthemostoptimalmanner.Theyneedtobeassuredoftransmission.ofbackuppower.andtheabilitytobuy,sellandexchangepowerresourcesamongotherutili.ties.Yourlettestatesonlythatitwilltransmitpowerfromanyjointprojectforaparticipatingutility.Areyou'willingtocommittotransmitpowerresourcesgenerallyforutilsinFloridaun'der"individually.negotiatedtransmissionserv'cecontracts?"Youstatethat:Refeelthatindividuallynegotiatedtransmissionservicecontracsarethemostequitablekindsofarrangementsinthattheycancomprehensivelyreflectalloftheconditionsandparticularcircumstancesthateachpartyfindsthemselfin.Ageneral.wheelingtariffcouldresultininequitiestooneofyourutilitiesorFPL.Youcouldpaymorefortransmissionunderanacross-the-boardtariffthanunderatransmissionserviceagreementin.somecircumstances."Towhatspecif'cinequitiesdoyourefer?Ifyouaresuggestingthatundercerta'nsituations,ifitwerebeneficialtootherutilities,youwouldagreetopoint-to-pointpricingfortransmissionserviceorinvestmentownershipinLines,filedtransmissiontar'ffsattheFPCdonotprecludesuchparticularizedarrangements.Inanyevent,thereareareasconcerningrates,termsandcondi.tions.fors'erviceswhichcanbeworkedoutnowingeneraltermstoassurethattheservicewillbeprovidedonaneconomicbasis.2.Legislation:Theabsenceof-legislationtoallowmunicipalstojointfinancelimitsthefeasib'lityofparticipationforsomesystemsandincreasescoststoothers.ThefactthatsomesystemscouldparticipateinCrystalRiverNuclearUnitNo.3attsstotheimportance.ofnuclearavailabilitytothosesystems;itdoesnotjustifyFPaL'spositioninoppositiontosuchlegisLation.Iacceptyourstatementthatyouare"simplyignorantofthetechnicalities,complexities,requirements,issuesandpracticesofmunicipalfinance."Eowever,thesestatementscouldnotapplytoDickJonesandTracyDanesewhoarethoroughlyfamiliarwiththemunic'palseffortstoobtainjointfinancinglegislationand,who(I.aminformed.byQseeFaganandothers)'
Mr.RobertZ.Gaxdner'ecember16,197&vehementlyinsisted.at:PCGmeetingsthatjointf'nancingbedeleted.from1975'ointventuralegislation.TracyDanesewould,.of'ourse,befamiliarwithmunicipal.needsxor.suchlegis3.ation.<</3.Power.Pooling:Xamp1.eased-thatyouappeartorecognize.theexistenceof.apowerpoolinPlorida.ZnPP&L'sbrieftothe,UnitedStatesSupremeCourtinthejurisdictioncase,(FederalPowerCommissionv.PloridaPower&Light,404U.S.453(1972)),PP&Lstated:"ThePloridaQpexatingCommitteeinterchangesenergyamongthemselvesfoxa3.imitedpurpose.,".-..(Taheconnections.amongthemembersoftheOperating-.Committeedonotexistso,thattheseutilitiesmayassisteachotheri"..meetingtheanticipatedloadrecpxixements,butonlyemergencyortemporaryneeds..."ThismeansthattheFlorida,OperatingCommitteeisnota'powerpool'stheCourtbelo~sostated(App373.)andas-theCommissionrecognizesin,its'rief(CommBriefp.5fn2).."YourecognizethatFlorida'spower,pool"couldbeimproved,.However,XaminformedbyHarryLuffthatFP&L'asevenrefusedtoputinwritingtheagreementsto-committothet~es.oftransactionsthatarenowtakingplace.PP&LhasrefusedtoparticipateinthepoolingtaskforceoftheTechnicalAdvisoryGroup'togenerateaproposed,powerpooland,hasstillnotagreedtothereleaseoftheTAGpowerpoolingstudv.Thus,consideringPP&L'slackofsupportforaprogressivesatew'de.poolingaqreemenwithin=CG,Xamnotcertainof'hebasisforyourstatement,"ThePCGstructureprovidesabasisforcontinuouschangeandimprovement."Ultimately,thelackofanintegatedpowepoolpreventstheleasexpensiveavai3.ab3.ecapac'yinthestatebeing'usedtomeeteachincxementa3.needforpower.Thus,~/Youstatethatyoudidnotxeceivea'copyof'yOctober21lettertoTracyDaneseofPP&L.Xapologizeforanydiscourtesy,butassumedthatFP&LcooXdinatedmattersinternallyconcerningthejointventureproject.Xfyouletmeknowwhoshou'd,receivecopiesof'uturecorrespondence,Xshall.markcopiesforeachnamedperson..
Mr.RobertZ.GaxdnexDecember16,1976forexample,VeroBeachandothershaveavailablecapaci,tythatFP&Iiswillingtopurchaseinconjunctionwithacquiringsuchsystems.Underanintegratedpoolarangementsuchcapacitycanbeusedeconomicallytothebenefitofboththemun'cipalsystemsandFP&Zanditsratepayers.Inconjunctionwithexpensivenuclearcapacityinvestments,theremustbesufficientlysophisticatedpoolingtoutilizeavailableintermediateandpeakingcapacity,therebyavoidingunnecessaryadditionalcapacityinvestmentsandachievingefficientuseor.'xistingcapacity.4.Location:YourefuseuseoftheSauthDadesites.Myund'erstandingisthatpowerinFloridatendstoflowtowardsMiamimakingasouthFloridasitefornewcapacityelectricallyadvantageous.Yourletterappears.toimplyFP&Lwould'upporconst~ctingtheunitsatalessadvantageouslocationfromanengineeringstandpointtoavoidenteringintonecessarytransmiss'onandpoolingageements.IamconformedthatFloridaPowerCorporationhasdoneextensiveworkinlocatingsitesinnorthern-Florida.5.Participation:Fxceptfor"nominalamountsofpoweronatake-or-paybasis",yourejectFP&Zpartcipationinthejointproject.TheneedforFP&Lparticipationisnot"asaperformancbondfor[y]ourgoodfa'th"orbecauseyou"can'tbetrusted."Eowever,whex'etheremaybeconflictsofinterestinvolved,Citiesquestiontheappropr'atenessofFP&L'smanagingtheirinvestmentswithoutitshavinganinterestinthoseinvestments.FP&Lshouldbereimbursedforservicesitpx'ovides,asshouldanyjointventurepart'ipant,butIquestiontheappropriatenessofa"managementfee,"therebyincreasingthecostsofmunicipalnucleacapacity.IhavenotmadethestatementsyouattibutetomethatFP&L"can'tbetwstedbecausewea=eincompet'tion"orthatmy"objectiveistoel~atecompetition."
Hx.Rober~J.GardnexDecemhex,16>1976Enconclusion,assumingyourwi11ingnesstodoso,ZsuggestthatseriousnegotiationsbeginconcerningNe.itemsListedinmyOctober.21andNovember12letters.Neaxe,ofcouxse,willingtoconsideranyconcernsMat.youmayhave.Sincerely,RohertA..JahlonM:mmmcc:TracyDaneseRichard,Jones eaueWgT4H.teIJleytgeggf9$%)PCStDgŽ'Q(yI~February21I197'7Stat'ementreleasedbyih.Harshal3;HcGonal;presidentandchiefexecutiveoficeofFloridaPowe4LightCompany,"3.at'vetothedec'sionannouncedinT>>lahasseebythePloidaPub3.icServ'cCommission."Myreactionis'neofcompletedisrmy,"'arshallHcDona3d,oresidentofFloridaPoweraZdghtCompanysaidtoday."Thedecisionnottogant:-PLfullinteimratereliefapparentlywasnotbasedonthesameaccepted(makewhole)ormulausedprev'ous3.ybythCommission.Cucurentratesaebasedonou=costsof4<eeyearsagoeventhoughintheinterveningtimeinflati.onhasincreased.morethan20percent,"hesaid."E"justdoesn'tfi"theoract'calitiesofsoundbusinessprinciples."FloridaPowe6LightCompanyhad.asked'rinterimatere3.iefintheamounof$235millionwh:chrepresentspatofafu3.1ratereaestof$349millionnowbeingconsidered."The$235millioninterimwouldhavebroughtuson'ytothe.3.ow&strate"ofreturnaut3sri"edbasedon1974figures,"HcQonaldsa'd."HadtheCommissiongantedthereouested$235mill'o,.theconsumewouldhavebeencompletelyprotectedsincetheamountwouldhavebeencollectedsubjec"torefundpend'ngtheCommission'sfinalorder-"Previously,Ihavevoicedthtselectedservicesandprojectswouldhavetobeterminatedopostponediwereceivednore3.ief.Today'sannouncement,whichhasshaRenmyconfidencethatthefull$349miU.ionre3.iefvillbeganted-inJune,meansthattheCompanymustta3cehanediateactiontoadjusttothisdisappoin"'ngorder,"McDonaldstated.TheCompanyhasinitiatedsteostoaccozp3.ishthefolloving:+"Can=&auzpraaasedtuasauthDadenualeazgeneratingunits,end+"Sellthefuelenrichmentcontractsforthesetwounits;+"Ermdiatelyreducetreet=i~g,buildingandgroundsmaintenancepesonnel;+"Reduceallroutinemaintenanceexceptthatreruiredforsafety;and c+"Cutbackonservicerelatedactivitieswhichwouldaffectesponsetimeontelephone~eric,'roublezestorat'onandnewserviceconnections.~a4"Myestimateisthattheseactionswillaffectseveralhundredpositionswi~&inFPLinthenearfuture."Noneofthesereductionsareinthelong-termbeskinterestof'urcustomes,"\HcDonaldsaid,adding;"butifthemoneyisnottherethenthenecessarywork~~simplycannotbe.:::~.!~ed."Iw\4McDonaldsaid;'letheSeniorManagementCcmmitteehad'eeninstmctedtocontinuetosearchdiligentlyforadditionalcons~ctionandservicereduct'onsbasedonthemoniesavailable.InadditiontoFPLpositionsbeingel~ated,cancellationoftheSouthDadeunitmeansthat,approximately3,000constructionjobs,notbecomeavailable.tohelpalleviatethehigherthan4*inDadeCounty.atmaximizeemployment,wiU.nationalaverageunemployment"Wewilldevelopa'waitandsee'ttitudeonthefullratereliefre~estbeforefollowingthroughon,add'tionalcontingencyplanswhichwouldfurthedrasticallyreducepresentandfuturesezvicetoourcustomers,"McDonaldsaidA~~NOTETOEDITORS:AdditionalmanagementactionswhichcouldbetakenbyFPLaeincludedintheenclosedleafletpreviouslypublishedintheeventnointerimratereliefwasoffered;thegrantingofanamountabove"zero"butlessthanthatrequestedwillmeantheSeniorManagementCommitteeoftheCompanymustweighpossiblealternatives. 76~SRS~tupc>>czp~c~~s~gp~'\~~~~e=v~=c".;Raaist'es,g.)~<<ZLQMRR~$t'~~~oIeeoo~'~~~Pr~o~~~~~'4er~.o~~~or~er~'~~~~~e~~~~~r.'r.'~o'~~~~~~oeo'j,~er~~~>>r'~o~~~oS~~o~o~o*~~'~,~~o%o,'\"~o.~o~~<<~~~.Cocpezct~v'eNues~'c=-e-DXz"t1,~Qeeoc~~r~I'~~e~~~~~~~'*~~'r~~CS>>e.us>>'beM.C;taCiSOL.t~~oeLO~~.'T.=z..c=zo~~~~'e~~~~~~eI'~~~'~~e~~~At.ht.~<<a.$ieztc'TNto+RLsac<<e,0<<.r~o*~o~~~~:~-"-Dlc="c~snD(seate=7'e~mrcauce~oee~~~~~o'~~UIee<<rere<<~o~\~~~~~~eoo~~~WN>>~~e<<Sa'..'-.':;,b'."ves"tshcuXCbe'sth~~c.~ssa-"o~~r~IDei~-:"heDw>at.Cu~uttaDeext=t,<<eye~ype-'~e~r~e~~~-Cgeca66buyuDta',Ua~theoutput"scante~~'rye1>>raP"'or~'Ie~~r>>'cab'.eZS='escu=wcc"Da<<~='chic"~.CDp~r'I~o~'Io~4~'<<4ree>><<<<4<<<<eeoc~o"'..Ve'3~.hcveta.'west"=atethe-.es='"=crs'c"~~~~j~~~'~f'rf~usfz:jc'pa~~a.c~thesc8ca-op'ssic=a.<<\'~~;X~"a~M'"~eszr.,~.C'o,.%stp'uu-tz~z-thet~=.e't'sspea"~o=.'~~~~iJ~eeo<<>>o~~
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~~I~~~~'~~P~~0~~~~~~~~~PJ~~~J5~~~P~~~~~0P~~Ji'~~A~~~~0~hJJ~~S~g~PP'JQQQBQP)~~.cas"szu6ave=heals)tac~e-..sator=esou=ces8ve"te~~~~~~~P~P-'-"&~~Lbus~~ess.:L.suktzbIefee-~ghtbe2Xofoopec<<~'~,P~I~J~~~~~P~~.~J~~~OJ04P~4~0~~~0>>~~~<t~~~~~~P~~~~~~J>>~P~\~~~~"P~~~~.7."XtvouIP.bep'robablySebestQcHLQP.iothzv.caya'=e=sh~j~~~"JPJ~~~~>>~~~'~~~~~~~~~'~'+~~>>~h~~~0~~1~~:t.z.Zy-otbd=g~'c=e;K,~sfu=the=p='ote"e'6=a='.'~~~0P~P~~~~~~~~~:".:-':Zuy~~o~~"tyor.,r~skca"etedt"thep~'a=t-.~~~~~~~bIfwe~~>>>>-eesz-uozs.a~ega~ecity(such'zs~~~0~~JJ~~~~~a"ego=a>>a~gc~a-v)~L.-~26oecc=e.Sub)ect-'othe.'.~J1J~P~~P~~P~~~~~~~~~0~~~~EOM~gCC~OZVAC>>ZSZZi>>Wee~~'i~~P'h~~..4BJP~t,'~~0~~~'~J~~Q.)Lc&ep3.a=--eresetuo.asza~~~'-co~a~tedP~~~~~\~~~JgoMtverure~"~""e-a~eshz~gu~~~-~~~~~~~~~~',~.'*.':.."~-.~.'LotputZo~>>8ethe-d~gCo>>zc~AcPJ~0(Z)rutgo=-v~tu-e==~~abe~pzrtoe=stofezcesmceeachparwe=.vms~~h~-.eocaseuowithias~a=eo"~e=aney'~~~~~~~~~~~..'~.~.'..'ough~o>>>>resourestsoves>>ocpooze~>>expectthe1pa-~c~p~s-~~nee6tosett~a=~.-.'.zxe"~~suchage"erzt~-gc="zny~"h~ts'o-a~~.P~P~~...,,~J~C4'h'gJ~.,.f~zuc~gcapa>>~~~~~',J,0~~'P0~~P0~~0t0e'c4'..'v4~JP~~~~~n~~0tr"~h BEFORETHEUNITEDSTATESNUCLEARREGULATORYCOMMISSIONBEFORETHEATOMICSAFETYANDLICENSINGBOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389ACERTIFICATE,OFSERVICEIherebycertifythatcopiesoftheforegoinghavebeenservedonthefollowingbydepositintheUnitedStatesmail,firstclass,postageprepaid,this8thdayofJanuary,1981.IvanW.Smith,Esq.,ChairmanAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555MichaelA.Duggan,Esq.CollegeofBusinessAdministrationUniversityofTexasAustin,Texas78172RobertM.Lazo,Esq.,MemberAtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555JeromeSaltzman,ChiefUtilityFinanceBranchNuclearRegulatoryCommissionWashington,D.C.20555ThomasGurney,Sr.,Esq.203NorthMagnoliaAVenueOrlando,Florida32802J.A.Bouknight,Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein,Newman,Reis,Axelrad&Toll1025ConnecticutAvenue,N.W.Washington,D.C.20036AtomicSafety&LicensingBoardNuclearRegulatoryCommissionWashington,D.C.20555TracyDanese,Esq.VicePresidentforPublicAffairsFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101JackW.Shaw,Jr.,Esq.JohnE.Mathews,Jr.,Esp.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg.llEastForsythStreetJacksonville,Florida32202WilliamH.Chandler,Esp.Chandler,O'Neal,Avera,Gray/Land&StriplingP.O.Drawer0Gainesville,Florida32602RobertE.BathenFredSafferR.W.Beck&AssociatesP.O.Box6817Orlando,Florida32803 WilliamC.Wise120018thStreet,N.W.Suite500Washington,D.C.20036PeterG.Crane,Esq.OfficeoftheGeneralCounselNuclearReuglatoryCommissionWashington,D.C.20555DanielM.GribbonHerbertDymJoanneB.GrossmanCovington&Burling88816thStreet,N.W.Washington,D.C.20006DonaldA.Kaplan,Esq.JanetR.Urban,Esq.JohnS.Caragozian,Esq.RobertFabrikant,Esq.GeorgeM.Pond,Esq.DepartmentofJusticeP.O.Box14141Washington,D.C.20044obertA.ablonAttorneyortheLakeWorthUtilitiesAuthority,NewSmyrnaBeachUtilitiesCommission,SebringUtilitiesCommission,GainesvilleRegionalUtilitiesandtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry,St.CloudandTallahassee,FloridaandtheFloridaMunicipalUtilitiesAssociation