ML20203H608

Notice of No Significant Antitrust Changes & Time for Filing Requests for Reevaluation

ML20203H608
Person / Time
Site:	South Texas
Issue date:	07/29/1986
From:	Funches J Office of Nuclear Reactor Regulation
To:
Shared Package
ML20203H599	List: ML20203H593 ML20203H608
References
A, NUDOCS 8608050039
Download: ML20203H608 (7)

Text

7590-01 NUCLEAR REGULATORY COMMISSION DOCKET NO. 50-498A HOUSTON LIGHTING AND POWER COMPANY, ET AL NOTICE OF NO SIGNIFICANT ANTITRUST CHANGES AND TIME FOR FILING REQUESTS FOR REEVALUATION The Director of the Office of Nuclear Reactor Regulation has made a finding in accordance with Section 105c(2) of the Atomic Energy Act of 1954, as amended, that no significant (antitrust) changes in the licensees' activities or proposed activities have occurred subsequent to the construction permit review of Unit 1 of the South Texas Project by the Attorney General and the Commission. The finding is as follows:

"Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an application for an operating license if the Commission determines that significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous construction permit review.

The Commission has delegated the authority to make the 'significant change' determination to the Director, Office of Nuclear Reactor Regulation. Based upon an examination of the events since the issuance of the South Texas construction permits to Houston Lighting and Power Company, et al. and the consummation of the settlement agreement before the Commission, the staffs of the Planning and Resource Analysis Branch, Office of Nuclear Reactor Regulation and the Office of the General Counsel, hereafter referred to as " staff", have jointly concluded, after consultation with the Department of Justice, that the changes that have occurred since the construction permit review are not of the nature to require a 8608050039 860729 PDR ADOCK 05000498 M PDR

7590-01 a second antitrust review at the operating license stage of the application.

"In reaching this conclusion, the staff considered the structure of the electric utility industry in east Texas, the events relevant to the South Texas construction permit review and the antitrust settlement subsequent to the construction permit review.

"The conclusion of the r,taff's analysis is as follows:

' Prior to the antitrust settlement agreement before the Nuclear Regulatory Commission (NRC), competition for the purchase or sale of power and energy and related ancillary services in the Texas bulk power market was primarily limited to intrastate power transactions. This intrastate power network has remained in tact for many years--notwithstanding the fact that some power entities doing business on the

, perimeter of the state of Texas as well as some systems within the state have expressed interest in interstate bulk power transactions for quite some time. Although the Texas bulk power market has remained primarily intrastate in nature, there have been several changes since the NRC l

settlement in 1980 that have provided competitive stimuli i

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1 7590-01 to this market- particularly in the areas served by the applicant systems.

'The change that has had the greatest impact in the Texas bulk power market has been the implementation of the settlement agreement. Although both direct current (DC) transmission ties with the Southwest Power Pool (SWPP) have not been completed and DC wheeling rates not finalized, the North tie has been completed and the Central and South West operating systems are exchanging power and energy over this tie. Plans have been developed to expand the North tie (as contemplated in the settlement agreement) to accommodate a significant power transfer by a Texas co generating entity.

Capacity (15%) in both DC interties has been reserved for firm power transactions for power systems wishing to buy or sell in the interstate market. Moreover, wheeling to, from or over the DC interties is now available to any system wishing to access the DC interties.

'To remedy a growing need to redistribute power from co generators concentrated in industrialized pockets in the state, the Texas Public Utility Commission promulgated rules requirirg mandatory transmission or wheeling of co generated power in Texas.

7590-01

~4-These rules have enabled corporate entities, heretofore spectators on the fringes of the Texas bulk power market, to market their by product power and energy and become players in the market, i.e. , barriers to entry into the production and sale of bulk power in Texas have been lowered as a result of the newly adopted wheeling rules.

' Increased coordina' tion and cooperation among bulk power suppliers has resulted in a more open market in the state of Texas over the past five years. Houston Lighting & Power Co. (HLP) has increased and extended a power purchase agreement with the City of Austin and entered into a wholesale power purchase agreement with the Public Service Board of the City of San Antonio. A computer controlled bulletin board, advising all members of the Electric Reliability Council of Texas (ERCOT) of available power and energy in the l state is now in place, making " shopping" for power and energy easier for all systems in the state and enabling power systems to better meet the individual needs of their systems.

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'All types of power entities in Texas, municipal, cooperative and investor owned, are beginning to explore joint generation projects both within and outside the state. The concept of interstate planning and participation in interstate power

7590-01 projects is a new one for most Texas power entities. Although the movement to interstate cooperation and competition is still in its embryonic stages in Texas, this movement was contemplated by and provided for in the antitrust settlement agreement before both the NRC and the Federal Energy Regulatory Commission.

(The settlement agreement provides for requests for capacity increases and ownership purchases in the DC interties at intervals of every three years beginning in June of 1986 and lasting until June of 2004.) It is anticipated that this movement toward increased cooperation and competition will continue among intrastate power systems within Texas and also between intrastate power systems wishing to engage in joint power supply planning and power supply transactions across state borders.

' Staff's analysis of the changes in the licensees' activities since the antitrust settlement, has not identified any significant negative activities which have adversely impacted the competitive process on going in the Texas bulk power market. Although there are still physical impediments to complete synchronous operations between most Texas power entities and systems outside of Texas, i.e., there are no major alternating current interconnections between ERCOT and the SWPP, the settlement agreement provided power systems inside of Texas as well as in surrounding states the opportunity to exchange power and energy and engage in bulk power transactions. Staff views the settlement agreement as a

. 7590-01 major first step in opening up power supply options to all power entities in ERCOT and the SWPP. Based upon the successful  :

implementation of the settlement agreement to date and the lack of any significant negative competitive activities by the licensees since the settlement agreement, staff recommends that a no significant change determination be made pursuant to the application for an operating license for Unit 1 of the South Texas Project.'

" Based upon the staff's analysis, it is my finding that there have been no 'significant changes' in the licensees' activities or proposed activities since the completion of the previous antitrust review in connection with the construction permit."

Signed on July 25, 1986, by Harold R. Denton, Director of the Office of Nuclear Reactor Regulation.

Any person whose interest may be affected by this finding, may file, with full particulars, a request for reevaluation with the Director of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, D.C.

20555 within 30 days of the initial publication of this notice in the Federal Register. Requests for a reevaluation of the no significant changes determination shall be accepted after the date when the Director's finding becomes final, but before the issuance of the OL, only if they contain new information, such as information about facts or

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. 7590-01

_7 events of antitrust significance that have occurred since that date, or information that could not reasonably have been submitted prior to that date.

FOR THE NUCLEAR REGULATORY COMMISSION Jesse L Funches, Director Planning and Program Analysis Staff Office of Nuclear Reactor Regulation Distribution Docket File No. 50-498A PRAB r/f & s/f WLambe LSolander JFunches BVogler, OGC Kadambi, PM NRCPDR LPDR n

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