ML19317E807

Cities of High Point,Et Al Response to Applicant'S Motion to Amend Prehearing Order 2.Requests Denial.App a & Certificate of Svc Encl

ML19317E807
Person / Time
Site:	Oconee, McGuire, Mcguire
Issue date:	07/25/1973
From:	Bouknight J TALLY, TALLY & BOUKNIGHT
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912180996
Download: ML19317E807 (8)

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UNITED STATES OF AMERICA

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BEFORE THE ATOMIC ENERGY COMMISSION In the Matter of DUKE POWER COMPANY ) Docket Nos. 0-270A

) 50-287A s (0conee Units 1, 2 & 3, ) 50-369A, 50-370A McGuire Units 1 & 2 )

ANSWER OF THE CITIES OF HIGH POINT, LEXINGTON, MONR0E, SHELBY, ALBEMARLE, LANDIS AND LINCOLNTON, NORTH CAROLINA TO APPLICANT'S MOTION TO AMEND PARAGRAPH B (2) (b) 0F PREHEARING ORDER NUMBER TWO To the Atomic Safety and Licensing Board:

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The Cities of High Point, Lexington, Monroe, Shelby, Albemarle, Landis, and Lincolnton, North Carolina (Cities), answering Applicant's Motion dated 18 June, respectfully request that Applicant's Motion be denied.

Paragraph 5 (f) of the First Joint Request of the Department of Jt.stice, AEC Regulatory Staff and Intervenors for Production of Documents by Applicant, which is attached hereto as Appendix A, is not a general inquiry about Duke's cc:=unications with elected officials. It concerns only " inquiries, invitations, negotiations, (etc.)" concerning the

" acquisition of electric power facilities of municipalities."

At the heart of this case is the survival of municipally-owned electric systems as independent competitors with Duke in retail markets.

No acts could be more deletericus to that competition than attempts by Duke to acquire these competing systems. Municipal electric systems are con-trolled by " elected officials, councils and boards." Any attempt to

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acquire a municipally-owned electric system must ba manifested through "comunications to or about elected officials, councils and boards."

There are two reasons why Cities should be pemitted to dis-cover the documents in issue:

1. Applicant relies on the Kaerr-Penningtoni doctrine and cites its right to participate in the political process. The'Noerr and Pennington cases involved conflicts between groups of competitors, each of which solicited favorable " governmental action" (365 U.S. at 139) from disinterested government agencies and officials. In both cases, the defending parties appealled to government in its governmental capacity.

In the instant case, the municipal governments in issue direct electric systems owned by the municipalities acting in their proprietary capacities under North Carolina law. If Cities were private corporations instead of municipalities, the requested discovery would unquestionably be '

pemitted. Cities' character as municipal, instead of private, corporations should not serve as an artificial device to shield Duke's anti-competitive conduct. Duke was not seeking favorable action from government; it was approaching the management of competitors with the intention of buying them out. ~ -

Municipalities that own electric systems are both governmental entities and proprietors of a business enterprise. Duke is both a business enterprise and a corporate citizen. Some reasonable balance must be struck between Duke's right to participate in the political process and the rights of municipalities to the protection of the antitrust laws in the proprietary operation of electric systems. The comunications here in question are

'lUnited Mine Workers v. pennington, 381 U.S. 657 (1965); -Eas tern l Railroad Presidents Conference v. Noerr Motor Freight,'Inc. 365 U.S T27-~~

(1961).

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clearly between competing business enterprises, not between municipal government and a corporate citizen of the municipality. l

2. Noerr and'Pennington held that efforts to influence gove~rnmental action l

are not illegcl under the Sherman Act. In the~Pennington decision, the Court said, in footnote 3:

It would of course still be within the province of the trial judge to admit this evidence, if he deemed it probative and not unduly prejudicial, under the " established judicial rule of evidence that testimony of prior or subsequent transactions, which for some reason are barred from fonnirg the basis for a suit, may nevertheless be introduced if it tends reasonably to show the purpose and character of the particular transactions under scrutiny. Standard Oil Co. v. United States, 221 U.S. 1, 46-47, [55 L ed 619, 639, 640, 31 S Ct 502, 34 LRA NS 834J;

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United States v. Reading Co. 253 U.S. 26, 43-44, [64 L ed 760, 773, 40 S Ct 425J."

Cities' antitrust contentions are independently grounded and include allegations of monopolization at the wholesale level of the industry and monopolization in retail markets through imposition of a price squeeze on independent distributors. The evidence now sought might shed considerable light on the intent or design which underlies these other alleged actions.

If Duke's purpose is to eliminate competing distributors, it might logically begin by assuring their total dependence on Duke for wholesale power supply; I

a next log: cal step is to weaken the independent distributors by imposition of a price squeeze; the final step would be acquisition of the weakened t

l competi tors. Evidence that Duke is proceeding to the final step would strongly suggest that such a thoughtful pattern motivated the earlier steps.

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Thus Noerr and Pennington are no bar to introduction of the evi-dence sought, much less to its discovery.

Applicant refers, without citation other than to Noerr and Pennington, to a claim under the First Amendment of the United States Constitution. (Applicant's Motion, p. 3). Noerr and Pennington were not First Amendment cases; they dealt with liability under the Sherman Act.

The discovery request in issue is not a broad request which might elicit.

much irrelevant, but embarrassing, material. It is directed only to Applicant's communications and activities relating to acquisition, or plans or efforts toward acquisition, of competing distributors. The possibility of such discovery " chilling" Applicant's myriad of other communications to and about officials and agencies of government is not present.

WHEREFORE, Cities request that Applicant's Motion be denied and that it be directed to respond to Request item 6 (f) (2).

Respectfully submitted.

• TALLY, TALLY & B0VKNIGHT By: Ma - m -

f J. A. Bouknignt.

PostN0ffice Box 1660 Fayetteville, North Carolina 28302 and S 311, 429 N Street, S.W.

Washington, D.C. 20024

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Attorneys for High Point, Lexington,

. Monroe, Shelby, Albemarle, Landis and Lincolnton, North Carolina Fayetteville, North Carolina this 25th day of July 1973.

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APPE. IX A

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(i) Piedmont Electric Cities Association (PECA); EPIC, Inc.; Electricities of North Carolina; (j) purchase by Company of land on the Green River

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comprising a part of the proposed site of FPC Project No. 2700;

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(k) consideration of the request of intervenor to participate, through ownership of an entitlement share or otherwise, in the present units; (1) litigation, actual and considered, before courts or agencies in opposition to construction of competing generation or transmission facilities, including but not

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limited to FPC Project No. 2700.

5. Minutes of meetings and reports of each committee

,cstablished .under pooling or coordination agreements to which  !

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Company is a party,, those of each subcommittee or task force thereof, and doc,uments relating thereto prepared or circulated within the  ;

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Company.

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6. Documents relating to the following: , .

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. (a) new electrical-loads, area growth or development and locations available for sites for commercial or industrial development in areas in whb h such electrical loads might be

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l served by electric utilitic.s other than Company; '

(b) electric service franchiscs for service by Company

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at retai1, an'd any applications, renewals or terminations

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(c) action, or contemplated action, by Company in j response to failure by any municipality to renew any l

electric service franchise; l

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(d) franchises held by any other supplier of electric service within the Company's general service arca;

- (e) policies or practices, understandings or arrange-ments with other electric utilities as to allocation of wholesale or retail service areas;

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(f) inquiries , invitations , negotia tions , evaluations and proposals for the acquisition of electric power facilitics of municipalities, etectric cooperativas or other electric

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utilities including (1) offers .to serve at wholesale; (2) communications .to or about elected officials , councils ,

,, and boards; and (3) sponsorship, support or opposition by the Company of activities of citizen or taxpayer committees,

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community advisory councils, or the like; (g) acquisition of Company facilities by purch'ase or condemnatio: .; -

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(h) cost analyses or estimates of other Morth Carolina and South Carolina electric .utilitics ' (present or proposed)

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system operatiens; comparisons ~ of costs, rates or s.ervices of the Company vis-a-vis other electric utilitics serving or able to serve i'n contiguous areas of iforth Carolina. and

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South Carolin'a at wholesale or retail; ..

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CERTIFICATE OF SERVICE I hereby certify that copies of the attached Answer, dated 25 July 1972, have been served on the following by deposit in the United States mail, first class or air mail, this 25th day of July 1973.

Honorable Waltcr W. K. Bennett Troy B. Conner, Esquire Chairman, Atomic Safety and Reid & Priest Licensing Board 1701 K Street, N.W.

Post Office Box 185 Washington, D.C. 20006 Pinehurst, North Carolina 28374 Honorable Joseph F. Tubridy Carl Horn, Esquire 4100 Cathedral Avenue, N.W. President Washington, D.C. 20016 Duke Power Company Charlot'te, N.C. 28200 Honorable John B. Farmakaides William H. Grigg, Esquire Atomic Safety and Licensing Vice President and Board Panel General Counsel U.S. Atomic Energy Commission Duke Power Company Washington, D.C. 20545 422 Church Street Charlotte, N.C. 28201 William Warfield Ross, Esquire W. L. Porter George A. Avery, Esquire Duke Power Company Keith Watson, Escuire 422 South Church Street Toni K. Golden, Esquire Charlotte, N.C. 28201 Wald, Harkrader & Ross 1320 Nineteenth Street, N.W.

Washington, D.C.

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Atomic Safety and Licensing Mr. Frank W. Karas, Chief Board Panel Public Proceedings Branch U.S. Atomic Energy Commission Office of the Secretary of the Washington, D.C. 20545 Commission U.S. Atomic Energy Commission

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Washington, D.C. 20545

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Joseph Rutberg, Esquire Chairman, Atomic Safety and Benjamin H. Vogler, Esquire . Licensing Appeals Board Antitrust Counsel for AEC U.S. Atomic Energy Commission  !

Regulatory Staff Washington, D.C. 20545 U.S. Atomic Energy Commission Washington, H.C. 20545 Mr. Abraham Braitman, Chief Wallace E. Brand, Esquire Office of Antitrust and Antitrust Division Indemnity Department of Justice U.S. Atomic Energy Commission Post Office Box 7513 Washington, D.C. 20545 Washington, D.C. 20044

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TALLY, TALLY & BOUKNIGHT pn i ula e r . .-

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