ML19326A623

Motion for Order Staying,Pendente Lite,Attachment of Antitrust Conditions.Certificate of Svc & Applicants' Proposed License Conditions Encl

ML19326A623
Person / Time
Site:	Davis Besse, Perry
Issue date:	01/14/1977
From:	Reynolds W CLEVELAND ELECTRIC ILLUMINATING CO., GOLDBERG, FIELDMAN & HJELMFELT, TOLEDO EDISON CO.
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
NUDOCS 8002250932
Download: ML19326A623 (29)

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the. Matter of )

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THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. S M 46A)

COMPANY ) /

_(Davis-Besse Nuclear Power Station, )

. Unit 1) )

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THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A Units'l and 2) )

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THE TOLEDO EDISON COMPANY, ET AL. )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A s-/U-7f MOTION FOR AN ORDER STAYING, PENDENTE LITE, THE ATTACHMENT OF ANTITRUST CONDITIONS

1. With the announcement on January 6, 1977 of the Initial Decision in this antitrust proceeding, the way has been cleared for issuance of the requested operating licenses and construction permits for the subject Davis-Besse and Perry units upon completion of the remaining environmental i and safety hearings pertaining thereto. While Applicants rec-ognize that there is authority for imposing the proposed anti-trust conditions on such licenses or permits notwithstanding i

the pendency of an appeal (see 42 U.S.C. S 2133; 10 C.F.R. '

S 50.50), we believe that it is well within the Commission's power as a proper exercise of its discretion to issue the

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operating licenses or construction permits now but stay the imposition of the antitrust conditions until the Atomic Safety and Licensing Appeal Board (" Appeal Board") has heard and decided all exceptions to the Initial Decision. Cf. Omm=94 dated Edison Company of New York, Inc., et al. (Indian Point Station, Units 1, 2 and 3), ALAB-357 (November 10, 1976) (Slip Opinion) .

2. Accordingly, pursuant to Section 2.764 of the

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Commission's Rules of Practice (10 C.F.R. S 2.764) and the authority of the Appeal Board to entertain such motions (see Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), ALAB-338, NRCI-76/7 10, 12 (July 14, 1976);

1 Northern Indiana Public Service Company (Bailly Generation Sta-

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tion, Nuclear 1), ALAB-192, 7 A.E.C. 420 (1974)),-1/ Applicants i

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1/ Applicants candidly admit that they are requesting this Board to grant a stay, rather than filing their motion with the Licensing Board, because they believe the latter body has necessarily decided (albeit erroneously in our view) the rel-evant questions to be answered in this context adversely to Applicants. It can hardly be expected, for example, that the Licensing Board will recognize that its Initial Decision is

.in error both as to certain findings of fact and as to certain conclusions of 1aw. Nor do we believe it is realistic to think that the Licensing Board, in light of the Initial De-l cision, can-appreciate the nature of the harm to Applicants

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if antitrust conditions are imposed during the pendency of an

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appeal, or will admit to the absence of any material harm to non-Applicant entities if a stay should be granted. And fhmily, we see no. hope of receiving an objective evaluation from the Licensing Board of the public interest factor in this context, since it has already decided that the public interest requires the' attachment of the proposed license conditions.

'For these' reasons, Applicants believe it is essential that they seek a stay from this Board, which is not already

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hereby move the Appeal Board to stay the effectiveness, pendente lite, of the Initial Decision of the Atomic Safety and Licensing Board (" Licensing Board") insofar as it orders the attachment of specified conditions to the licenses for the Davis-Besse and Perry facilities. As set out more BBly below, good cause does exist fdr l'ssuing the requested stay; the four criteria by which to measure whether an adequate showing for such relief has been made, as enumerated by the United States Court of Appeals for the District of Columbia Circuit in Virginia Petroleum Jobbers Association v FPC, 259 F.2d 921, 925 (1958), are satisfied in the present case.

3. Proceedings in this consolidated docket were initiated on July 6, 1971, when the City of Cleveland filed a petition to intervene. On March 15, 1974, the Licensing Board granted that intervention petition and consolidated the Davis-Besse Unit 1 and Perry proceedings; the Davis-Besse Units 2 and 3 proceeding was subsequently consolidated by order of July 30, 1975. The evidentiary hearing began on December 8, 1975, and continued until the close of the record on July 2, 1976.-2/ The Licensing Board's Initial Decision was issued on Januarp 6, 1977.

4. In its Initial Decision the Licensing Boar. fo rd, inter alia, that " issuance of licenses for the nuclear units 2/ The record was left open for the limited purpose of concluding certain specified matters identified by the Licensing Board at the hearing on July 2, 1976.

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involved in these proceedings without appropriate licenso conditions vill lead to the creation and maintenance of the proscribed situation inconsistent with the antitrust laws" (Slip Op. at 254) . Accordingly, the Licensing Board devised a sweeping, and in many respects novel, set of license con-ditions, and ordered _that they be attached to the five nu-clear licenses in question (Slip Op. at 255-64) .

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5. We have been advised by the NRC Staff that it is already in the process of amending the outstanding construc-tion permit issued for Davis-Besse Unit 1 to include the anti-trust conditions ordered by the Licensing Board. Moreover, construction of Davis-Besse Unit 1 is now essentially complete; issuance of an operating license for that facility so that fuel loading can begin is expected in February, 1977. Similarly,

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construction pursuant to limited work authorizations has been ongoing at the Perry Units 1 and 2 site; it is expected that the Perry construction permit can properly issue towards the

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end of the first quarter of 1977. Given.these plant schedules, it is clear that additional nuclear licenses will issue and, in the absence of a stay, that the Licensing Board's antitrust conditions will attach thereto prior to the time necessary for Applicants to secure review from the Appeal Board of'the Initial Decision. In such circumstances Applicants believe it appro-priate for the Appeal Board to issue an order staying the l

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effectiveness of the' proposed license conditions while Appli-cants challenge the validity of the underlying Initial Decision, as well as the propriety of the specific conditions proposed by the Licensing Board.

6. The Commission has previously cautioned that the "groundbreaking nature of the initial decisions in this new area of the Commission's responsibility" requires careful analysis of each case (see Louisiana Power & Light Company (Waterford Steam Electric Generating Station, Unit 3), CLI-73-7, 6 A.E.C. 48, 49 (1973)). As recently recognized by the Supreme Court of the United States, one should not jump too quickly to talismanic solutions when dealing with unique antitrust considerations involving business relationships not previously subjected to judicial scrutiny (see United States v Topco As-

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sociates, Inc., 405 U.S. 596, 607 (1972); White Motor Co. v United States, 372 U.S. 253, 263 (1962)). It hardly needs to be stated that the law to be applied in antitrust hearings under Section 105c of the Atomic Energy Act (42 U.S.C. S 2135(c))

still remains in its early gestation period. Aside from the present case, only one other contested antitrust proceeding i has advanced to the initial decision stage (see Consumers Power Company (Midland Plant, Units 1 and 2), LBP-75-39, 2 N.B.C. 29 (1975)). In that case the licensing board reached conclusions of law, and even.made findings of fact on similar matters,

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contrary to those reached here. In this relatively unsettled state of the law, it makes better sense, we believe, both in terms of the private and the public interests involved, ,

1 to defer imposition of the license conditions proposed here by the Licensing Board until this Appeal Board has had an op-portunity to examine fully the findings and conclusions chal-lenged by the parties (or any of them) as erroneous.

7. While the Licensing Board's decision permits immediate issuance of the requested license or permit (10 C.F.R.

S 2.764), the Commission's Rules of Practice explicitly rec-ognize that an initial decision is a non-final order of the Commission when a party aggrieved by the order files excep-tions (10 C.F.R. S 2.760(a); see also 10 C.F.R. SS 2.762,

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2.770(b)). Applicants fully intend to file exceptions to the January 6, 1977 antitrust decision. Given the very limited scope accorded by the rules to an initial decision on appeal and the groundbreaking nature of this proceeding, the present case is one where exercise of the Appeal Board's discretion to issue a. stay is, we submit, singularly appropriate. In this regard, this Board has adopted the criteria set forth in Virgbxbt Petroleum Jobbers, supra, as the standard by which a motion seeking a stay should be measured (Public Service Company of New Hampshire, supra, NRCI-76/7 at 13 and cases cited therein).

Thoseveriteria are discussed seriatim.

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A. Has the movant made a strong showing thati it is likely to prevail on the merits of .,

its appeal? I

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8. While it may well be difficult for the App al Board to gauge the extent to which the Initial Decision ren-dered by the Licensing Board is in error without making a de-tailed examination of the record below, Applicants believe there are sufficiently numerous errors of law and fact apparent even upon the most cursory reading of the Licensing Board's decision to indicate that Applicants are likely to prevail on the merits of their appeal. Some of the more glaring examples are listed belbw:

(a) The failure of the Licensing Board to take into account the significant economic and legal barriers to competition in the electric utility industry which requires

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evaluation of antitrust principles on other than the "procom-petitive presumption" relied upon below; (b) The failure of the Licensing Board to make any assessment as to whether competition between electric en-tities in the electric utility industry is in fact in the pub-lic interest; (c) The failure of the Licensing Board to folk i in a meaningful manner the direction of the Commission that there be a " substantial connection" between the alleged anti-competitive practices and the subject nuclear facilities, opting instead for a simplistic and overly-glib nexus standard that l

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,n bears no relation to the practicalities of the electric utility industry; (d). .The failure of the Licensing Board to find, and thereby apprise the. reviewer of fact, whether Applicants possess monopoly power in any relevant market or possess a degree of market power sufficient to suggest a dan-gerous probablility that they will acquire monopoly power in any relevant market; (e) The failure of the Licensing Board to

indicate if the conduct found to be inconsistent with the antitrust laws constituted monopolization, attempted monopo-lization, or, conspiracy to monopolize; (f) The failure-of the Licensing Board to in-dicate in which (if any) of the three product markets and six geographic markets it enumerated as relevant, the challenged conduct constituted monopolization, attempted monopolization,

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or conspiracy to monopolize; (g) The failure of the Licensing Board to de-termine "whether any of the alleged restraints cn1 alienation or alleged refusals to interconnect, wheel power, or of"er

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pool membership where unreasonable within the meaning of the antitrust laws; (h) .The inclusion of numerous findings of fac -

not supported by substantial evidence on the record considerec

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,m as a whole;-3/ and (i) The imposition of license conditions that exceed the jurisdictional authority of the Licensing Board and the Commission by, inter alia, requiring relief as to

" future" nuclear facilities not the subject of the present proceeding and requiring the provision of services that bear no relation to participation in, and operating arrangements of, the five specific nuclear facilities under consideration.

9. While the above list is by no means exhaustive, it is representative of the serious infirmities found through-4/

out the Initial Decision.- Moreover, it allows the Appeal Board to gauge, even at this incipient stage of the appellate 3/ Detailed consideration of this claim would require  !

thorough review of the record which is clearly impossible, l

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and most probably inappropriate, at this time. Applicants l will, of' course, fully apprise the Appeal Board of their po-sition on this question at a later date. For now, however, Applicants believe special note should be made of this claim, because, in our view, the errors are so numerous and deep-seated as to raise serious questions about the entire fact finding process. A measure of the error is evident from a reading of the Initial Decision. The consistent failure of the Licensing Board even to recognize, let alone grapple with .

and evaluate, most of the evidence introduced by Applicants during the course of the seven months of evidentiary hearings L'

bears particular note. Rather, the Licensing Board habitually bases its findings on the direct testimony of witnesses offered during the direct case of our adversaries, or on a clear mis-

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reading of documents, or, on numerous occasions, without any reference at all to the record.

4/ Applicants are, of course, still in the process of an-alyzing-the Initial Decision with a view toward filing excep-tions. As reflected in our Motion For An Extension Of Time, we are not yet close to being'in a position to articulate all I the errors, but can' simply highlight those which are obvious on the basis of our preliminary review-of the Licensing Board's opinion.

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process, the likelihood of Applicants' success on the merits (compare Public Service Company of New Hampshire, supra,

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NRCI-76/7 at 13-14). On this basis alone, the stay is warranted.

6 Moreover, even if such an assessment could not be so easily made, the three other criteria enumerated in Virginia Petro-leum Jobbers (pd. at 14-15)' would fully support the present motion.

B. Has the movant shown that, without.such relief, it will be irreparably injured?

10. If Applicants' request for a stay is denied, and Applicants are eventually successful on appeal, the premature implementation of the Licensing Board mandated license con-ditions will cause injury to these private utilities which is not only particularly unique and significant, but which also

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cannot be repaired in any meaningful scnse. Moreover, by re-fusing the stay, this Board will place Applicants in the un-tenable position of being forced to live with a set of con-ditions which they are challenging on very practical, as well

, as legal, grounds, as being in certain respects virtually im-possible to perform. Fundamental considerations of due process require'that Applicants.not be denied their opportunity to argue their position forcefully by reason of an implementation order that compels them in advance to do that which they cannot realistically do and should not in law or fact be re-quired to do.

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11. Most obviously, denial of the requested stay will have an unsettling impact on all relationships between

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Applicant and:non-Applicant entities. At the present time, those relationships are governed by various contractual commitments, all of which are on file with-the Federal Power CorAission ("FPC"). To change those commitments in any respect requires an amendment to the existing FPC-filed contracts or a filing with the FPC of new contracts. A flurry of such activity such as is likely to be touched off by the imposition of the referenced license conditions serves no legitimate purpose if at some date in the not-too-distant future those mmendments or filings will have to be redone be-cause the ground rules again have changed. Moreover, the costs and expenses involved in negotiating, and then renego-tiating, contracts with non-Applicant entities can be con-siderable, and it is, of course, the consumer of electricity, i.e., the public at large, who bears the brunt of this need-less expense.

12. There is an additional, and perhaps far more

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serious, financial injury to Applicants and the customers they serve throughcut Ohio::and Pennsylvania that will follow a denial of the requested stay. It seems clear to.Ap-plicants that the mandated license conditions give non-Applicant entities preferential. access to the assets of Applicants' systems.

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l This is most easily seen from the requirement that Applicants must make available up to 10% of the capacity of the Davis-Besse and Perry Units -(or 20% of future units) without regard 5/

to the size or the.needs of the requesting entities.- Ap-parently, such a. requirement is promised on a finding that preferential access is necessary to cure some situation (a l-though we are not advised which one) that the Licensing Board found to be inconsiste.t with the antitrust laws. If that finding is later reversec, or if it is determined that, even in the face of such a finding, the Commission is not autho-rized to require preferential access, immediate impcsition of conditions affording preferential access will result in irreparable financial loss to Applicants and their customers.

13. In this connection, we note that the uncontro-

• verted' evidence of record in this proceeding reflects that

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making available to requesting entities more than their pro-6/

portional share- is discriminatory and would constitute an i 5/ Applicants would point out that the last sent'ence of license condition 9a is totally ambiguous (Slip Op. at 263),

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. Though an absurd result, that provision could be read to mean that ten requesting entities (or five in the case of a future unit) could take all the power from Davis-Besse or Perry, using that which they needed for their own load and selling

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the rest _to entities outside the area. And even if that pro-vision is read to mean that all requesting entities, in toto,

- can-take only up to 10% of'the Davis-Besse or Perry output, 2

the Licensing Board has given no hint as to what should be done if entities request more than 10% thereof.

6/ Proportionate access was defined in the prepared testi-mony - of Dr. Pace ' (which the opposing parties did not contest

. in any respect) to mean that a " system seeking to share in the new (nuclear] unit would have to be limited to obtaining no

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greater proportion of~its requirement from the new unit than that which the constructing system would obtain" ( A-190 ,(Pace) 13-14).

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unacceptable preference for the customers of requesting en-tities to the distinct detriment of Applicants' customers (see A-190 (Pace) 9, 11-13, 14-18, 20). Since the Licensing Board appears to have adopted a position that the amount of participation a requesting entity desires in the nuclear units need bear no relationship to that entity's own system needs, it is likely that Applicants may now find their current eq? city plans wholly inadequate to meet the sudden demands on their systems. In light of the concededly long lead-times that are needed in order to plan for future capacity additions, the availability now to other entities of these antitrust condi-tions would require Applicants to make irretrievable commit-ments of resources and time to new facilities which could well prove to be entirely unnecessary after review by this Board.

The waste caused by such planning in response to an anticipated flood of " premature" requests will, of course, be passed dmzugh to Applicants' customers in the form of higher rates.

14. Moreover, Applicants conceivably could suffer this fate without the encities in the area receiving a direct benefit. Under the Licensing Board's proposed conditions, dwre is nothing to prevent entities within the so-called Combined CAPCO Companies Territory ("CCCT") from deliberately requesting an amount of' excess capacity for the purpose of transmitting that " extra" power out of the area to entities that cannot

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themselves obtain participation in the Davis-Besse and Perry nuclear facilities.. Undeniably, Applicants did not plan and construct these units on any such basis, and, therefore, re-quests of this nature would necessarily undermine the ability of Applicants to meet their own load requirements, thereby further increasing the cost of power to their customers. And, not insignificant 1y,.this very real prospect wil.' cause Ap-plicants and their customers to suffer irreparably not for the benefit of any entity within the area, but for the benefit of outside entities that even the Licensing Board decided were not entitled to participation. -

15. Finally, Applicants and their customers will suffer a similar harm as a result of the Licensing Board mmddbal wheeling condition if a stay is not granted. Pursuant to the wheeling condition, non-Applicant entities may be able to pre-empt capacity on Applicants' transmission facilities and even require reductions of 5%, and more, in the transmission capacity-allocations previously planned for use by Applicants. The requirement of reducing available transmission capacity either means a reduction in reliability for all systems in the area (and not - just Applicants' systems) or a need for the construc-tion of additional transmission capacity. Again, thi's latter alternative c6ntemplates the commitment-of resources and time during the course of this appeal that will later be wasted if

Applicants are successful on the merits.

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C. Would the issuance of a stay substantially harm other parties interested in the proceeding?

16. To the extent that Applicants will suffer ir-reparable injury if the requested stay is denied because non-Applicant entities would receive unjustified preferential treatment under the license conditions ordered by the Licens-ing Board, one could perhaps argue.that issuance of the stay might result in hamn to the non-Applicant entities by denying them such preferential treatment during this interim period.

Such an argument, however, does not address the sort of injury intended under the third criterion referenced in Virginia Petroleum Jobbers, supra. That injury is independent of the harm shown to exist in the event a stay is denied and centers around whether there is something unique about maintaining  ;

the status quo that would work to the disadvantage of parties  ;

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17. Assuming that the stay is granted, the only l

change in the. status quo that would result if the operating I license or construction permit were issued without antitrust ,

i conditions, pendente lite, would be the operation of the Davis- -

Besse Unit 1 facility, and the further construction of the )

. Perry Units 1 and 2 facility during the pendency of the appeal.

For an initial period of at least five months, Davis-Besse Unit 1 will not be put into commercial operation; instead, I

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fuel loading and low level power testing will take place.

Even after-the Davis-Besse plant commences generati n of commercially useful power, however, issuance of the stay h

will not prejudice the rights of any entity wishing to ob-tain access to the benefits of that nuclear power. Appli-cants long ago formally committed themselves to affording requesting entities within the CCCT reasonable participation l in Davis-Besse Unit 1, including necessary transmission ser-vices, reserve sharing arrangements, and replacement power and energy to meet emergency, maintenance or refueling needs (see Applicants Exhibit A-44). These commitments still stand; they allow entities participating in Davis-Besse Unit 1 to coordinate operation and development with respect to that unit (Mayben 7601 (4-8)). Thus, granting the stay for the period r of this appeal will not in any material way harm the interests of any other party with respect to the Davis-Besse Unit 1

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license.

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18. Obviously, the policy commitments of Applicants that support a conclusion of no harm from staying the attach-

• ment of conditions to the Davis-Besse license, also support i

a similar conclusion with respect to staying the attachment of license conditions to the Perry permit. In addition, how-i ever, it is clear that no power will actually be generated from the Perry units during the pendency of the appeal. Thus, there

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. n is no conceivable basis to argue that staying the Perry con-ditions will cause harm to other parties. And this conclusion would be equally true for the Davis-Besse Units 2 and 3 con-struction permits, even assuming that they were likely to issue during the pendency of this appeal.

D. Where lies the public interest?

19.. The finsi factor to be evaluated in passing on Applicants' request for a stay is a determination of what action is in the public interest. The fact that Applicants are IUmly to succeed on the merits of their appeal (see 11 8-9, supra),

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that in the absence of a stay Applicants and their customers will suffer irreparable harm (see 11 10-15, supra), and that the interests of other parties will not in any meaningful sense be harmed if the' stay is issued (see 5Y 16-18, supra) , are all demonstrative of an overriding public interest in favor of granting the instant motion.

20. There is, morever, one further factor that merits some consideration. The Commission and this Appeal Board can 1

no longer ignore the growing view in many quarters of the electric utility industry that the manner in which the Depart-ment of Justice, the Staff of the Commission, and Intervenors

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are implementing Section 105 (c) of the Atomic Energy Act, as 1

amended (42 U.S.C. 5 213 5 (c) ) , constitutes " nuclear blackmail" l and almost universally requires settlement so that plant schahdes

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are not _ disrupted (see Wall Street Journal, Feb. 5, 1976; 7/

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Weekly Energy Report, April 19, 1976). Given this lever-age already exercised by the other side, if applic=nts for nuclear licenses believed that during the time it .cok to appeal an initial antitrust decision, license conditions

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antitrust charges. It plainly is not in the public interest to encourage such a result.

21. Also not to be discounted is the fact that Com-

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mission antitrust review is being used as an excuse to conduct a full-blown antitrust inquiry into all aspects of an Appli-cant's business, with little or no regard for the nexus re-quirement. The far-reaching license conditions imposed in

'this proceeding underscores this approach. We would submit that the public interest is better served by refraining from 7/ Applicants anticipate that the opposing parties may respond that our motion for an extension of time reflects an intent on our part to delay unnecessarily the appeal process and thus forestall the imposition of the Licensing Board's conditions. This is not our intent; our motion for more time is made on the basis of a careful and good faith estimate of the time needed to evaluate the Initial Decision and to care-fully. formulate and present to thi^vBoard our exceptions

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thereto'and the reasons therefor.- We would note, moreover,

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that Applicants do not suggest during the pendency of the ap-peal that they operate Davis-Besse Unit 1 or construct Perry Units 1 and 2 without affording non-Applicant entities in the CCCT access to those plants. Rather, access to those'facil-ities is readily available to the other entities'during the pendency of this appeal in accordance-with Applicants' com-mitments set forth -in Exhibit A-44 (copy attached) .

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imposing on Applicants harsh penalities that may well be unjustified until this Board is. satisfied that a proper eval-

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'uation of the facts of record warrant such a result when as-sessed in light of the legal standards articulated by the 8/

Commission in its two Waterford decisions.~

WHEREFORE, Applicants request th'e Appeal Board to issue an order staying, pendente lite, attachment of the conditions mandated by the Initial Decision of the antitrust Licensing Board.

Respectfully submitted, SHAW, PITTMAN, POTTS & TROWBRIDGE By: _wkJ Wm. Bradford Reynolds

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. Robert E. Zahler Counsel for Applicants

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Dated: January 14, 1977.

8f See Louisiana Power & Light Company (Waterford Steam Generating Station, Unit No. 3), CLI-73-7, 6 A.E.C. 48 (1973)

(Waterford I); and CLI-73-25, 6 A.E.C. 619 (1973) (Wai.erford II).

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EXHIBIT. A -44 APPLICANTS' PROPOSED LICENSE CONDITIONS FOR DAVIS-BESSE NUCLEAR UNIT 1 AND PERRY NUCLEAR UNITS 1 AND 2 Definitions

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" Company" means- - / or any successor or assignee of this license and includes each present or future wholly-owned electric subsidiary and any

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successor thereto.

" Applicable area" means that area within or to which Company is presently providing retail or wholesale or transmission service on a regular basis and any area immedi-ately adjacent thereto within which Company could reasonably be expected to extend such service.

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" Participation power" means the bulk power gen-

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erated by the licensed nuclear generating unit, to which un1It an entity has a contractual right to a portion of the output thereof and/or the ownership of an interest therein. I i

" Unit power" means participation power withcut

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an ownership interest.

" Entity" means a financially responsible person.,

private or public corporation (other than Applicants for this license), governmental agency or authority, municipality,

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rural electric cooperative, joint stock association, busi-

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ness tru'st, or lawful association of the foregoing, owning, operating or proposing in good faith to own or operate fa-cilities for the generation, transmission or distribution of electricity, provided that, except for municipalities, governmental agencies or, authorities or rural electric co- -

operatives, entity is restricted to those which are or will be public utilities under the laws of the state in which the

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entity transacts or will transact business or under the Fed-eral Power Act, and are.or will be providing electric service

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under a contract or rate schedule on file with and subj ect to the regulation of a state regulatory commission or the Federal Power Commission.

',' Participating entity" means any entity which par-

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ticipates in the ownership of or power output from Davis-Besse  :

I Unit No. 1-[ Perry Units Nos. 1 and 2].

" Reserves" means the excess of the net capability

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of Company, or of a participating entity, after adjustment '

for firm purchases and sales, over'the maximum load require-ments (peak load as of any time) of Company", or of a par-ticipating entity.

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Commitments

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1. Company shall offer to entities in the ap-plicable area which have heretofore made a timely request therefor an opportunity to participate in Company's allo- , ,

cated share in Davis-Besse Unit No.1. [ Perry Units Nos.1 and 2]. Such participation shall be in reasonable amounts,

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and may be either by an ownership interest, by a contractual prepurchase of power arrangement, or by a unit power pur-chase, as mutually agreed upon by Company and the participating entity. Any entity heretofore making a request for partici-pation must enter into a firm commitment (the validity and enforceability of which shall be acceptable to independent counsel agreed upon by the Company and the entity) to par-ticipate in Davis-Besse Unit No. 1 prior to ,

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1975 [in Perry Units Nos. 1 and 2 prior to February 1, 1976).

2.. (a) Company shall interconnect, pursuant to agreement, with -any participating entity in the applicable

area which makes a reasonable request for such interconnection

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for one or more of the following purposes: ,

(1) to deliver participation power from Davis-Besse Unit No. 1 [ Perry Units Nos. 1 and 2];

(ii) to provide replacement power and replacement energy as necessary to carry i

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load up to an amount equal to the par-ticipat'ing entity's share of participa-tion power in Davis-Besse Unit No. 1

[ Perry Units Nos. 1-and 2] when the output of this nuclear unit is unavailable because of an emergency or by reasons

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of maintenance or refueling; or alter-natively,

.

(iii) at'the option of a participating entity, and on appropriate notice to Company, to transmit'or wheel power from an entity outside the applicable area to the participating entity wit'hin the ap-p11 cable area as necessary to carry

, load up to an amount equal to the partici-pating entity's share of participation power in Davis-Besse. Unit No. 1 [ Perry Units Nos. 1 and 2] when the output of this nuclear unit is unavailable because

, of an emergency or by reason of maintenance or refueling; (iv) to provide transmission services for the above.

Company shall provide to each participating entity that is a party to an interconnection agreement the above serviceu

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- to the extent that Company can do so without impairing ser-

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vice to its customers, including other electric systems to which it has firm commitments.

(b) Interconnections pursuant to this li-cense will not be limited to lower voltage's when higher voltages are requested and are economically and technically feasible. Interconnection agreements will not embody pro-visions which impose limitations upon thd use or resale of capacity and energy sold or exchanged pursuant to the agreement

,

except as m'ay be necessary to protect the reliability of Com- .

pany's system. The entry into an interconnection agreement hereunder will not prohibit the parties.thereto from entering into other interconnection or coordination agreements, but appropriate provisions may be included in interconnection agreements under this license to ensure that (i) Company r.e-

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• ceives adequate notice of such' additional interconnection or coordination, and (ii) the parties shall jointly consider and agree upon such measures, if any, as are Ieasonably necessary for safety.to protect the reliability of Company's system.

3 (a) Company and each participating entity shall

- enter into an arrangement for reserves which shall jointly establish the minimum reserve requirement to be installed and/or provided under contractual arrangements as necessary to maintain for each party a reserve margin sufficient to

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provide adequate reliability of power supply. The parties shall jointly establish criteria for determininh such mini-

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. mum' reserves- for each party, which criteria shall reflect

] t the relevant load and capacity characteristics of the re-spective parties, provided tha.t, if no agreement can be

$ reached on the crite'ria for determination of reserves, the

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participating entity's minimum reserve requirement shall be determined on the basis of.the smallest reserve require-ment which Company has agreed to under other similar reserve

,

arrangements then in effect, but in no event shall the par-ticipating entity's minimum reserve be less than its largest-

.

single block 'of nuclear capacity, whether from Davis-Besse

' Unit No. 1 [ Perry Units Nos. 1 and 2] or from some other

~

nuclear facility.

,

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(b) The parties to such a reserve arrangement

- shall provide such amounts of. operating (ready and spinning) 4

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reserve capacity as may be adequate to avoid the imposition of unreasonable demands'on the others in meeting the normal,

, contingencies of operating their' systems.

,

4. Company and participating entities are to be compensated, in accordance with effective agreements and rate schedules, for all facilities required and/or services ren-dered. The rate schedules may. recognize the extent to which mutuality.of such services is available to each participating

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entity. Rate schedules, as required to provide for the facilities and arrangements needed to implement the license conditions herein, including provisions as are reasonably necessary to protect the adequacy and reliability of the electrical system, are to be submitted by Company to the regulatory agency having jdrisdiction thereof. Company agrees to include a provision in new rate submissions asso-ciated with these license conditions, so that if the rates become effective prior to the resolution of the contested issues (associated with the rate schedules) and are there-after reduced in accordance.with the regulatory proceedings and findings, appropriate refunds (including interest) would be made to retroactively reflect the decrease. The cost of installing each connection and the cost of maintenance thereof

.

shall be shared on the basis of net benefits to be derived

• from the-interconnection by each party, as determined or accepted and approved by the appropriate regulatory author-ities.

5 The foregoing license conditions are to be implemented in a manner' consistent,with the provisions of the Federal Power Act.to-the extent applicable, and any ap- l 1

plicable State or local laws, and all rates, charges or practices in connection therewith are to be subject to the approval of regulatory agencies having jurisdiction over them.-

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UNITED STATES OF AMERICA-NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of ) r

)

THE TOLEDO. EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. 50-346A 1

'

COMPANY. )

(Davis-Besse Nuclear Power Station, )

Unit 1) )

)

'

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A 1

Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL.- )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing

. " Motion For An Order Staying, Pendente Lite, The Attachment

!

Of Antitrust Conditions" were served upon each of the persons

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listed on the attached Service List, by hand delivering copies to those persons in the Washington, D. C. area, and by mailing copies, postage prepaid, to all others, all on this 14th day of January, 1977.

d SHAW, PITTMAN, POTTS & TROWBRIDGE By: m ~ $L _C Wm.-Bradfo y Reynolds Counsel for Applicants

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UNITED STATES OF AMERICA NUCLEAR REGULATORY' COMMISSION Before the Atomic Safety and' Licensing Appeal Board

.

In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. 50-346A COMPANY )

(Davis-Besse Nuclear Power Station, )

Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING *)

• COMPANY, ET AL. .) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A SERVICE LIST Alan S. Rosenthal, Esq. Ivan W. Smith, Esq.

Chairman, Atomic Safety and Atomic Safety and Licensing Board Licensing Appeal Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555

. John M. Frysiak, Esq.

Jerome E. Sharfman, Esq. . Atomic Safety and Licensing Board

. Atomic Safety and Licensing U.S. Nuclear Regulatory Commission Appeal Board Washington, D. C. 20555 U.S. Nuclear Regulatory Commission Washington, D. C. 20555' Atomic Safety and Licensing Board Panel Richard S. Salzman, Esq. U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D. C. 20555 Appeal Board U.S. Nuclear Regulatory Commission . Docketing & Service Section Washington, D. C. 20555 Office of the Secretary U.S. Nuclear Regulatory Commission Atomic Safety and Li. censing Washington, D. C. 20006 Appeal Board Panel U.S. Nuclear Regulatory Commission Joseph Rutberg, Esq.

Washington,>D. C. 20555 Benjamin H. Vogler, Esq.

Douglas V. Rigler, Esq. Roy P. Lessy, Jr., Esq.

Chairman, Atomic Safety and Office of the Executive Licensing Board- Legal Director Foley, Lardner, Hollabaugh and'Jacobs U.S. Nuclear Regulatory Commission

-Chanin. Building - Suite 206 Washington, D. C. 2055s 815 Connecticut Avenue, N.W.

Washington,~D. C. 20006

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} $

.

I Joseph J.'Saunders, Esq. Terence H. Benbov, Esq.

Antitrust Division A. Edward Grashof, Esq.

D:partment of Justice Steven A. Berger, Esq.

WSshington, D. C.' 20530 Steven B. Peri, Esq.

Winthrop, Stimson, Putnam & Roberts M31 vin G. Berger, Esq. 40 Wall Street .

Janet R. Urban, Esq. New York, New York 10005 Antitrust Division P. O. Box 7513 Thomas J. Munsch, Esq.

Washington, D. C. 20044 General Attorney Duquesne Light Company

-RIuben,Goldberg, Esq.

• 435 Sixth Avenue David C. Hjehtfelt, Esq. Pittsburgh, PA 15219 Michael D. Oldak, Esq.

Goldberg, Fieldman-& Hjelmfelt David McNeil Olds, Esq.

Suite 550 Reed Smith Shaw & McClay 1700 Pennsylvania Ave.,-N.W. Union Trust Building Washington, D. C. 20006 ,

Box 2009 i

Pittsburgh, PA 15230 Vincent C. Campanella, Esq..

Director of Law Lee A. Rau, Esq.

! Robert D. Hart,.Esq. Joseph A. Rieser, Jr., Esq.

I lst Ass't Director of Law Reed Smith Shaw & McClay

. City of Cleveland Suite 900 J 213 City Hall 1150 Connecticut Avenue, N.W.

-Cleveland, Ohio 44114 Washington, D. C. 20036 Frank R. Clokey, Esq. James R. Edgerly, Esq.

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Special Ass't Attorney General Secretary and General Counsel Room,219 Pennsylvania Power Company Towne House Apartments One East Washington Street

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Harrisburg, PA 17105 New Castle,.PA 16103 Donald H. Hauser, Esq. John Lansdale, Esq.

Victor F. Greenslade, Jr., Esq. Cox, Langford & Brown William J. Kerner, Esq. 21 Dupont Circle, N.W.

The Cleveland ~ Electric' Washington, D. C. 20036 Illuminating Company 55 Public: Square Alan P. Buchmann, Esq.

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-Cleveland, Ohio 44101 Squire, Sanders & Dempsey 1800 Union Commerce Building Michael'M. Briley, Esq. Cleveland, Ohio 44115 Paul M. Smart, Esq.

Fuller, Henry, Hodge & Snyder Edward A. Matto, Esq.

P. O. Box 2088 Richard M. Firestone, Esq.

Toledo, Ohio 43603 Karen H. Adkins, Esq.

Antitrust Section Russell J. Spetrino, Esq. 30 E. Broad Street, 15th Floor Thomas A. Kayuha, Esq. Columbus, Ohio 43215 Ohio Edison Company. Christopher R. Schraff, Esq.

47 North Main Street Assistant Attorney General Akron,! Ohio 44308

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Environmental Law Section 361 E. Broad Street, 8th Floor-Columbus, Ohio 43215 l-i-

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