ML19312C566
| ML19312C566 | |
| Person / Time | |
|---|---|
| Site: | Oconee  |
| Issue date: | 09/08/1967 |
| From: | Grigg R, Horn C, Bryan Parker DUKE POWER CO. |
| To: | US ATOMIC ENERGY COMMISSION (AEC) |
| References | |
| NUDOCS 7912160132 | |
| Download: ML19312C566 (13) | |
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DUKE POWER COMPANY ) DOCKET NOS. 50-269
) 50-270 (Oconce Nuc1 car Station, ) 50-287 Units 1, 2 and 3) )
ANSWER OF' DUKE POWER COMPANY TO MOTION OF PIEDMONT CITIES POWER SUPPLY, INC.
AND ELEVEN PIEDMONT CITIES FOR AN ORDER TO CERTIFY ATOMIC SAFETY AND LICENSING BOARD'S DENIAL OF RIGHT OF PIEDMONT CITIES POWER SUPPLY, INC.
TO PARTICIPATE IN THIS PROCEEDING
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By Order issued on August 28, 1967 the Atomic Safety and Licensing Board in this proceeding denied the Pctition of Piedmont Cities Power Supply,
.Inc. (Piedmont), an alleged non-profit corporation of the State of North Carolina, to intervene in opposition to the granting of provisional construct-ion permits to Duke Power Company (Duke) for the reason that Piedmont had not shown sufficient interest in the proceeding to be afforded participation as a party. By Motion dated September 5,1967, Piedmont moved that the Commission order the' Chairman of the Atomic Safety and Licensing Board to certify the question of the Board's Order to the Commission and that said Order be reversed. ,
Applicant Duke Power Company, answering said Motion of Piedmont, alleges:
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k (1) The allegations contained in Section 1 of the Motion are untrue and are irrelevant to this proceeding _.
'Section 1 of the Motion is concerned solely with a totally untrue allegation, either in fact or law, that "the A.E.C. found five times before Duke's application for a research and development license for two pressurized water type reactors was filed, and nine times befcre Duke's application for a research and development license for a third pressurized water type reactor was filed, that the pressurized water type reactor has practical value for commercial use" . Piedmont contends tilat the licensing of nine pressurized water reactors
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Act) constitutes "in law, both indiv'i dually and collectively, a finding of practical value of the pressurized water type of reactor for commercial use".
Picdmont therefore concludes that Duke's application, which is also under Section 104b, must be dismissed.
Among the nine reactors cited by Piedmont, only the three listed on page 2 of their Motion have experienced regular operating service. Reports of operating experience on these three reactors issued by the Federal Power Commission show that the generating cost per Kwh by these reactors, in-cluding production expense and fixed charges on investment, is substantially greater than the generating cost of any existing Duke Power generating plant,
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- Indian Point Station, Unit 1; San Onofre Nuclear Generating Station; Yankee Nuclear Power Station; H. B. Rcbinson Unit No. 2; Indian Point Station, Unit 2; Palisades Nuclear Power Station; Turkey Point Station, Unit 3: Turkey Point Station, Unit 4; and Robert Emmett
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Ginna Plant, Unit 1.
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and further is greater than the revenue per Kwh received by Duke from the Eleven Piedmont Cities for electricity sold to them on a delivered basis.
Thus neither the largest reactors now in service nor any reactors have demonstrated competitivo economics leading to a finding of practical value, and the three Oconce pressurized water reactors are properly con-sidered under Section 104b as " leading to the demonstration of the practi-cal value of such facilitics for industrial or,commcrcial purposos". Some of the other reactors cited by Picdmont, although not yet in service, are scheduled for operation before Oconee. However, Oconce Units 1, 2 anli 3, if built in time t'o meet the electric demand on Duke's system, will be in advanced stages of construction before any of the other six reactors cited have operated and demonstrated their economics. -
Not only has the Atomic Energy Commission made no finding of
" practical value" with respect to pressurized water reactors, it expressly refused to do so as recently as December 21,1966. when, in Docket No.
PRM-102-B, it said in part:
"Pending the completion of scaled-up plants, and the information to be obtained from their operation, the Commission remains of the view that there has not yet been sufficient demon-stration of the cost of construction and operatica of light water, nuclear electric plants to warrant making a statutory finding that any types of such facilities have been sufficiently developed to be of practical value within the meaning of section 102 of the Act."
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Each of the pressurized water reactors referred to by Piedmont in its Motion has been issued a constnaction parmit and/or operating license ,
under Section 104b of the Act, the only section under which they were licensable absent a statutory finding of " practical value" in writing by
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the Commission under Section 102 of the Act. The largest pressurized 1 water,typc powcr reactor using no fossil fuel supplomont on which there is operating data availabic today is the Yankec-Rowo Nuclear Power Station. Its capacity it, about 185 Mwo. Each of the Oconco Units is more than four times this size. Clearly., the Commission has been jus-tified in deferring a discretionary finding under Section 102 until such time as the technical feasibility and the economic feasibility of the Oconee type of reactor has been actually demonstrated by operating ex-perience.
In fact, the 1cgislative history of the Act indicates that Congress intended actual economically competitive operation of a specific reactor type as a prereduisite to the making of a finding of " practical value" for thattypc. During debates prior to enactment of the Act, Representative Cole, then Chairman of the Joint Congressional Committee on Atomic Energy, stated:
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. . . After a reactor has been tested out under section 104(b) and its practicability as an atomic reactor hss been established, and after it has been demonstrated that this force can be used economically competitively, the Commission then makes a determination that such a reactor as a type does have commercial utility . . ."* (emphasis added)
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The matters set forth in Section 1 of the Motion amount to a collat-eral attack upon the Commission's rule-making authority prescribed by Section 102 of the Act. Such an attack is not permitted by the Act or
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100 Cong. Rec.11-23 (Daily Edition); 111 Leg. Hist. 2875.
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regulations issued thereunder,by the legislative history of the Act, by prior decisions of the Commission, er by the present stage of development of the ,
nuclear power industry. Certainly any reference to reactors licensed under Section 104b of the Act which are either non-operational or several times smaller than the Oconce reactors is irrelevant to any consideration of the .
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question as to whether or not a finding of " practical value" with respect to reactors of the Oconee size and type should be made.
(2) The statement contained in Section 2 of the Motien is irrelevant and immaterial to this proceeding, as Piedmont has no right or authority to file a competing application for a license for Oconee Nuclear Statica, .
Units 1, 2 and 3.
Section 24-1 of The Ccde of Laws of South Carolina,1962, defines "clectrical utility" as including:
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. . . municipalities to the extent of their business , property, rates, transactions and operations without the corporate limits of the municipality, persons and corporatior.s, their lessees, assignees, trustees, receivers or other successors in interest owning or operating in this State equipment or facilities for generating, transmitting, delivering er furnishing electricity for street railway or other public uses, or for the prcduction of light, heat or power to or for the public for compensation, but it shall not include a person, corporation or municipality furnishing electricity only to himself or itself, their residents , ,
employees or tenants when such current is not resold or used by othere" .
Piedmont is clearly an " electrical utility" within the meaning of that section.
Section 21-63 of The Ccde of Laws of South Carolina,1962 provides -
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In part as fo'llows:
"No electrical utility, except a municipality within its corporate limits, shall hereafter begin the construction or operation of any
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clectrical utility plant or system or of any extension thereof, except those ordered by the Commission under the provisions of Section 24-61, without first cbtaining from the Commission ..
a certificate that public convenience and necessity require or will require such construction or operation".
Duke Power Company is advised, b'elieves and so alleges that Piedmont
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has not applied for nor obtained a certificate of convenience and~ necessity pursuant to Section 24-G3 which would permit it to own or operato the Oconce Nuc1ccr Station or any other clectrical utility plant or system !
in the State -of South Carolina. Any application for such a certificato of convenience an.d necessity with respect to the ownership of any part of the Oconee Nuclear Station will be opposed by Duke Power Company.
Piedmont, as the instrument of the eleven North Carolina munici-palities which have been permitted to intervene in this case, is in fact prohibited under the laws of the State of North Carolina from owning an electric generating fa.:llity in the State of South Carolina. In the case of McGuinn vs. High Point, 217 N.C. 449, 8 S.E. 2d 462 (1940) it was held that the City of High Point, a North Carolina municipality, was without authority to accept a license issued by the Federal Power Commission for the construction, operation and maintenance of a hydroelectric project proposed to be located sc.ne twenty-five miles from its corporate limits.
The development of a hydroelectric project was deemed by the Court to be beyond the scope of the municipality's charter and in excess of the powers .
granted to it by the General Assembly of North Carolina. ,
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! - Piedmont is a creature of the eleven intervening municipalities, which l can delegate to it no greater. power or authority than they individually possess. 4 l
i No authority, either express or implied, is granted a municipality by the '
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I General Statutes of North Carolina to apply for or accept a construction -
permit and operating license for a nuclear generating facility or to own or operato an electric generating facility in interstate commerce.
(3) Even if Picdmont were authorized to own and operato a nuclear generat-ing facility, such authority would give it no prior right to a license for the ,-
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Oconce Nuc1 car Station.
It is cicar from its Motion and other documents filed in the case that Picdmont belicvcs that a competing applicction by it for a licensc for tho - -
Oconce Station would be given preferred consideration if Duke's applicction were filed under Section 103 of the Act. This belief must be based upon an interpretation of Section 182d of the Act, which provides as follows:
"The Commission, in issuing any licenso for a utilization
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or production fccility for the generation of commercial powcr under section '103, shall give preferred consideration to appli- .
- - cations for such facilitics which will be located in high cost l power areas in the Uniced States if there are conflicting appli-cations for a limited opportunity for such license. Where such conflicting applications resulting from limited oppo:tunity for such licenso include those submitted by public or cooperative -
bodies such applications shall be given preferred consideration" .
(emphasis added)
In a Commission Stoff Memorandum filed with and made a part of the Commission's decision in Docket Nos. RM-102-1 and PRM-102-A the fol-lowing sta.tement is made concerning a finding of ' practical value" which j presumably would require licensing under Section 103: ,
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"In order to view in proper perspective the significance
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of a statutory finding of practical value, it is important to
- remember the principal purposes served by the making of a .
finding . The legislative history of the pertinent sections of the Act shows that the statutory distinction netween develop- l
- mental and commercial licenses arose when a scarcity of the I special nuclear material which serves as fuel for nuclean -
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reactors was anticipated. Once a statutcry finding was made for a reactor type, such reactors would be authorized only after consideration of the effects on the total supply of special -
nuclear material. There is no longer any such scarcity".
Inasmuch as there is no longer any scarcity of special nuclear material, there is no " limited opportunitf for licenses as was contemplated by the preferenco provision of Section 182d. There is certainly nothing in the Act ;
or Regulations which would give public or cooperative bodies the right to prccmpt a site acquired by an investor-owned utility for the purpose of constructing and operating a nuclear generating facility. As stated in its Application, Duke Power Company owns cr has control over all property within a one milo radius of the proposed site of the Oconee Station. In ad-dition, it owns substantially all of the property to be included in the reservoir of the nearby Lake Keowee which will provide cooling waters for the Oconee Station. It has obtained a license from the Federal Power Commission for the Keowee-Toxaway project, of which the Oconee Station is a part. Substantial sums have been expended in site preparation for the Oconee Station and in clearing the reservoir of proposed Lake Keowee. This project is the result of years of planning and preparation. The licensing process for the Oconee Station alone has consumed over ninc months and has involved the expenditure of hundreds' of thousands of dollars. To permit Piedmont to file a competing application for a license for the Oconee Station would require reading the words "resulting from limited opportunity" out of Section 182d. It would
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create a result clearly not intended by Congress and would seriously jeopardisc the development of nuclear power by the private secter of industry.
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(4) The contention in Section 3 of the Motion that Piedmont may have an .
interest which may be affected by this croceeding so as to recuire its ad-mission as a party denied.
In its Order of August 28, 1967, the Atomic Safety and' Licensing Board ruled that Picdmont does not have an interest in this proceed.5g within the -
meaning of Section 189 of the Act. It is submitted that this ruling is corrcct.
For the reasons hereinbefore stated, this proceeding is properly under Section 104b of the Act. In a proceeding under that section, the regulatory authority of the Commission is expressly limited (by Section 104 and Section 189) to aspects of radiological safety and matters of common defense and security. The issues prescribed by the Commission in its Notice of Hearing portain only to such matters; and Appendix A to 10 CFR Part 2, the Statement of General Policy for the Conduct of Proceedings, makes it perfectly cicar that intervention can in no way enlarge the issues in a proceeding to include matters beyond the. jurisdiction of the Commission (Appendix A, III (a)(4)) and that matters irrelevant to the issues in a case should be excluded (Appendix A, III (c)(7)) . *
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In its Motion, Piedmont alleges as an interest in this proceeding its intention to file a competing Application for a license for Oconee Nuclear
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Station, Units 1, 2 and 3 appropriate to its interests and capabilities. No , .
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provision is made in the Act or elsewhere for the filing of a competing appli-cationfor a license under Section 104b of the Act or, as shcwn above, unhier ,
Saction 103.
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The good faith of Piedmont in filing a competing application for a license for Oconce Nuclear Station is open to scrious question on this record . As a part of the Opening Statement of Attorneys for the eleven .
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North. Carolina municipalities at the August 29 - 30, 1967 public hearing i
j conducted by the Atomic Safety and Licensing Board, Attorney Spencer W.
i i Recdcr stated:
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"Now we do not say that we are entitled to a licenso
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! to operate or to a license to construct any part of this Oconec l' Nuclear Station, Units 1, 2 and 3. All we say is that we are entitled to a license to acquire a part ownership in this l
system as tenants in common . . ." (Transcript, page 220) .
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This statomont, plus the obvious lack of financial and technical
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qualifications of the eleven cities and of Piedmont to be a licensee of a -
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i large nuclear power plant, plus their lack of legal authority to own an out-1 of-state generating plant, can lead to only one conclusion: that the motion
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to certify, and their announced competing application for license, amount ~ >
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to no more than dilatory tactics, designed to delay the issuance of provisional construction permits to Duke until Duke's construction schedule is endangered, ,
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so that it might thereby be coerced into granting the rate reduction it has re-
> fused to make. It is submitted that neither an Atomic Safety and Licensing
i Board nor the Commission should permit the Commission's administrative pro-
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! cedures to be used for such a purpose.
I Furthermore, this " paper corporation", Piedmont Cities Power Supply,--
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Inc. formed on tne eve of hearing, can have no greater rights than its eleven.
l f creators, who have already been permitted to intervene and.been given a full i
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hearing.
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i The rescr: of this proceedi tg, (including the Protest filed by the eleven intervening municipalities on July 25, 1967, the Joint Pctition of Pied.mor.t and th'e eleven intervening cities and their Motion to Dismiss filed on Aug-ust 11,1957, and the Motion filed under date of September 5,1967), con-clusively shows that the true purpose of P%mont and the eleven municipali- ,-
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ties is to obtain a discriminatory access to low cost power at the expense of Duke Power Company's other customers. To permit any customer, or class of customers, to single out Duko's most modern and most officient generating plant and purchasc an interest in it or powcr from it at cost, thus leaving the company's remaining customers to bear the greater cxpense of opcrating the oldor, less efficient plants of its' system, would be to grant an unfair preference to the customers sing 1cd out for such treatment. Under vigilant rate regulation by t.he Federal Power Commission of wholesale rates, and by the North Carolina Utilities Commission and the Public Service Commission.
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of South Carolina of residential, general service and industrial rates, the savings resulting from large scale generation, including those which, although not demonstrated, are expected to result from operation of the Oconee Station, will be shared by all customers of Duke Power Company, and not just a pre-ferred fow. .
In any ' event, any economic effect upon Piedmont from Duke Power Com-
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pany's proposed Oconee project would only result from the sale of the output. -
of the plant and not from any aspect of the construction or plant operation ..
which is before the Commission in this proceeding. Clearly, any possible ,
a l cconomic effect upon Piedmont as a resul't of this proceeding is too remote and speculative to justify intervention. The Gecd Music Station, 6 Ad. L (2d)
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930, 930-932 (F.C.C.1957). Likewise, the relationship of the eleven.
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intervening citics as customers of Duke Power Company is not adequate grounds for permitting the intervention of Picdmont, such a relationship having been specifically rejected as a justification for intervention in Matter of Yankee Atomic Electric Company, 1 AEC 296 (1960).
WHEREFORE, having answered the allegations and statements con-tained in the Motion, Duke Power Company, as Applicant in the captioned proceeding, submits that said allegations and statements are without merit and for the reasons set forth herein requests that the Motion and the relief
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requested theroin bc denied.
This 8th day of Septembe'r,1967.
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Respectfully submitted, DUKE ?OWER COMPANY By ?
' B. B. Parker
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q Executive Vice President
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Carl Horn, Jr f/ '
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lY.dh0A0 William H. Ciri'g5
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.Roy B. Snapp r
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Attorney $)for Duke Power Company
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STATE OF NORTH CAROLINA )
- AFTIDAVIT ,
COUNTY OF MECKLENBURG )
Personally appeared before me, 3. B. Parker, who being duly sworn, says that ho is an officer of Duke Power Company, to wit, its Executive Vice President; that he has read and is authorized to sign the foregoing Answer; and that the statements contained therein are true to the best of his knowledge, information and belief.
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B. B. Parker Sworn to and subscribed before me this 8th day of September,1967
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My Commission expires:
Tune 12,1969 ,
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' UNITED STATES OF AMERICA
- 1 ATOMIC ENERGY COMMISSION In the Matter of )
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DUKE POWER COMPANY ) DOCKET NOS. 50-269 (Unit 1)
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) 50-270 (Unit 2)
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(Cconce Nuclear Station, ) 50-287 (Unit 3) i Units 1, 2 and 3) )
CERTIFICATE OP SERVICE i
I hereby certify that copics of the " Answer of Duke Power Company to-Motion of Piedmont Cities Powcr Supply, Inc. and Eleven Picdmont Cities
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for an Order to Certify Atomic Safety and Licensing Scard's Denial of Right l
cf Picdmont Cities Powcr Supply, Inc. to Participate in this Proceeding" dated September 8,1967, in the captioned matter, were served upon the following by deposit in the United States mail, first class or air mail, this lith day of September,1967:
Samuci W. Jensch, Esq. Thomas F. Engelhardt, Esq. ~
i U. S. Atomic Energy Commission Trial Counsc1, Regulatory Staff Washington, D.C. 20545 U. S. Atomic Energy Commission Washington, D.C. 20545 Dr. Ichn Henry Buck The Budd Company Stanley T. Robinson, Jr.
Phoenixville, Pennsylvania Office of the Secretary U. S. Atomic Energy Commission Dr. Hugh Paxton Washington,' D.C. 2054 5 Los Alamos Scientific Laboratory Los Alamos, New Mexico Jack R. Harris
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Suite 207
! Dr. Clarke Williams Stimpson-Wagner Building Deputy Director Statesville, North Carolina v .
4 Brookhaven National Laboratory
- Upton, Long Island, New York J. O. Tally, Jr.
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- P. O. Drawer 1660 .
i A. A. Wells , Esq. Fayetteville, North Carolina i Chairman, Atomic Safety and Licensing Board Spencer W. Reeder U.S. Atomic Energy Commission Spencer Building '
Washington, D.C. 20545 St. Michaels, Maryland
- Honorable Rchert E. McNair Reese A. Hubbard
- Governor, State of Scuth Carolina County Supervisor ~
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The State House Oconec County
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Columbia, South Carolina Walhalla, South Carolina -
1 Harry M. Lightsey, Jr.
! Assistant A-torney General .
State cf South Carolina .
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Columbia, South Carolina d' O27 Mhd4M1 William H.'z[
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Assistant Genc 4Cour.sel
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'- Duke Powe. Compar.y
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