ML20010C253

Answer Opposing AL Power Co 810727 Petition for Review. Commission Review of ALAB-646 Should Be Limited to Issues Raised in Municipal Electric Util Association Petition for Review.Certificate of Svc Encl

ML20010C253
Person / Time
Site:	Farley
Issue date:	08/11/1981
From:	Marilyn Evans DEBEVOISE & PLIMPTON, MUNICIPAL ELECTRIC UTILITY ASSOCIATION, ALABAMA
To:	NRC COMMISSION (OCM)
References
ALAB-646, ISSUANCES-A, NUDOCS 8108190286
Download: ML20010C253 (11)

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1 BEFORE THE - ,

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NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C.

!O In the Matter of Docket Nos. 50-348A

O 50-364A ALABAMA POWER COMPAh"I (Joseph M. Farley Nuclear Plant, Units 1 and 2) <a-

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OPPOSITION OF k;,. 8, , i 9

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MUNICIPAL ELECTRIC UTILITY ASSOCIATION -

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TO ALABAMA POWER COMPANY'S O

PETITION FOR REVIEW Martin Frederic Evans, Esq.

DEBEVOISE, PLIMPTON, LYONS & GATES O 299 Park Avenue New York, New York 10171 (212) 752-6LO0 and O David C. Hjelmfelt, Esq.

DAVID C. HJELMFELT, P.C.

634 South Mason St. Collins, Colorado 80524 (303) 493-1789 O

August 11, 1981 gog Attorneys for Municipal E Electric Utility Association of Alabama / [

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O BEFORE THE fajg I d l96l 3 NUCLEAR REGULATORY C0:011SSION WASHINGTON, D.C.

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• In the Matter of Docket Nos. 50-348A

50-364A ALABAMA POWER COMPANY (Joseph M. Farley Nuclear Plant, O Units 1 and 2)  :

O OPPOSITION OF MUNICIPAL ELECTRIC UTILITY ASSOCIATION OF ALA9AMA TO ALABAMA P01ER COMPAtW'S PETITION FOR REVIEW O

The Municipal Electric Utility Association of Alabama ("MEUA") re.spectfully submits that the July 27, 1981 O

Petition for Review of ALAB-646 submitted by the Alabama Power Company ("APC") should be denied.

The APC Petition seeks review of the June 30, 1981 O

decision of the Atomic Safety and Licensing Review Board (the "ALAB") which imposed certain conditions upon the license granted to APC for the construction and operation of the Joseph M. Farley Nuclear Plant, UO.its 1 and 2 (the "Farley Plant"). 1

) l The ALAB found that granting APC an unconditional license with l O

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respect to the Farley Plant would create or maintain a O situation inconsistent with the antitrust laws within the meaning of Section 105c of the Atomic Energy Act, 42 U.S.C.

$2135(c). The APC Petition seeks review of numerous of the jO ALAB's factual and legal determinations; it fails, however, to demonstrate that any of its appeal issues satisfies any 4 of the criteria for review set forth in the Commission's

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• regulations. The APC Petition raises no important antitrust or public policy questiens or procedural issues and fails to assert that any factual finding below was clearly erroneous.

O MEUA has also filed a Petition for Review (the "MEUA Petition") reque~ sting that the Commission reopen the remedial stage of these proceedings for consideration of the

-O impact of recent events materially affecting the competitive i

• 10.C.F.R. 52.786(b)(4) sets forth the criteria for

O Commission review of an ALAB decision, in pertinent part, as follows:

"(4) The grant or deniul of a petition for review is within the discretion of the Commission, except that:

(1) A petition for review of matters MD of law or policy will not ordinarily be granted unless it appears the case involves an important matter that could significantly affect the environment, the public health and safety, or the common defense and security, constitutes an important antitrust question,

,O involves an important procedural issue , or otherwise raises important quescions of public policy; (ii) A petition for review of matters of fact will not be granted unless it appears that the Atomic Safety and Licensing Appeal O Board has resolved a factual issue necessary for decision in a clearly erroneous manner contrary to the resolution of that same issue by the Atomic Safety and Licensing Board;"

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,- structure of the retail electric power carket in Alabama.

O MEUA respectfully submits that the MEUA Petition, unlike the APC Petition, raises an issue which satisfies the Commission's i

criteria for review and that the Commission's review of the 13 'ALAB Decision should be limited to the issue raised in the MEUA Petition.

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The APC Petition sets forth five general areas in

which it alleges that the ALAB erred and asserts specific assign-

O ments of alleged error within the general areas. The five general assignments of error in the APC Petition are that

10 1. the ALAB refused to limit the scope of review of APC's past conduct and considered activities of APC during the period 1941 to the present in reachir.g its determination that granting APC an unrestricted license with respect to the Farley Plant would create or maintain a

O situation inconsistent with the antitrust laws;

2. the ALAB erred in defining the relevant

product and geographic markets; 1 3. the ALAB erred in concluding that APC O has monopoly power in the relevant markets;

4. the ALAB ignored the fact that APC is a regulated utility in reaching its conclusion regarding APC's monopoly power; and jD 5. the ALAB erred in failing to make adequate

findings that the conditions imposed upon APC's license with respect to the Farley Plant are nec-essary to protect the public interest and in basing such conditions upon inadequate findings of lia-bility on the part of APC.

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When viewed in the light of the restrictive stand-O grd for Cc= mission review and the extensive consideration of these issues by the ALAB, these assignments of error should be seen as ordinary attempts for reconsideration of issues O already properly and conclusively decided against APC, and the APC Petition accordingly should be denied.

In the face of the extensive record on which the

O ALAB Decision was based, it cannot be disputed that APC enjoys monopoly power in the various markets in which it operates. Even APC concedes that it is a " natural monopoly".

13 (APC Petition at 61) Thus, it is irrelevant whether the ALAB limited its examination and findings to the present market context, as APC contends it should have, or considered APC's O vell documented history of exclusionary and anti-competitive activities over the last 40 years. The conclusion of the ALAB that APC has monopoly power in the relevant markets today is O plainly correct and amply supported by the record herein (ALAB Dec. at 74-85), and the exclusionary practices whtch justify the license limitations--e.g. , APC's refusal to O

offer shared ownership of the Farley Plant--represent cur-rent, ongoing anticompetitive acts. (ALAB Dec. at 86-111.)

Moreover, the ALAB's findings with regard to the relevant

O product and geographic markets are fully supported by the record and are not clearly erroneous. (ALAB Dec. at 30-73.)

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• The ALAB also gave full consideration below to -

O APC's contention that the various state and federal regulations to which it is subj ect preclude a finding of liability and properly rej ected that argument. (ALAB Dec. at 14-21.)

0 -With respect to the remedial portion of the ALAB Decision, MEUA agrees with APC that certain aspects of the remedial proceedings should be reviewed--but not for the reasons O set forth in the APC Petition. MEUA submits that the ALAB had a more than adequate basis for finding liability on the part of APC and with one exception--i.e., the improper exclusion O

of MEUA from the remedial proceedings--fully and properly con-sidered all the relevant and necessary facts then in the record bearing upon the conditions to be imposed upon APC's license

'O for the Farley Plant. The ALAB properly found that the con-ditions it imposed are required "as a minimum" to achieve the purposes of the Atomic Energy Act.* (ALAB Dec. at 145-63.)

'O In short, the APC Petition does not raise any important antitrust questions or public policy issues, does not assert that any factual findings below were clearly er-lD -

roneous, and does not put forward any other valid basis for Commission review of APC's purported assignments of error.

The only ground APC asserts for Commission review here is that the Commission has never before reviewed an ALAB decision

• The sole error of excluding MEUA from the remedial stage does not, of course, afford APC a basis for seeking review

O by the Commission.

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,gi regarding the antitrust implications of licensing actions.

O (APC Petition at 9-10.) This ground is adequate in that absence of an issue that falls within one of the criteria set forth in the regulaticas. Accordingly, the APC Petition should be denied.

O II.

MEUA submits, however, that the remedial portion of lo the proceedings below should be reopened for the limited and exclusiv'e purpose of considering recent developments which

O could not have been considered either by the Licensing Board or by the ALAB and which materially alter the competitive structure of the relevant wholesale electric power market 9D as determined by the ALAB. More specifically, as set forth in the MEUA Petition, an Alabama Municipal Electric Authority .

(the " Authority") is currently being established pursuant

13 to an Act passed by the Alabama legislature on May 18, 1981.

The Authority will enable municipal electric systems (i.e.,

MEUA's members) to engage in the wholesale electric power market lO~ through the acquisition, funding and operation of generation facilities. Thus, it is clear that MEUA and its members are now potential competitors in the wholesale market (contrary to 13 findings of the ALAB) and face from APC precisely the sort I of exclusionary, monopolistic practices which can only be recedied by mandatory ownership access to the Farley Plant ,

O such as was granted to the Alabama Electric Cooperative'("AEC")

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tr the ALAB Decision. MEUA submits that the effect of creation O of the Authority on the wholesale market " constitutes an imper-tant antitrust question" and also " raises important questions of public policy" within the meaning of 10 C.F.R. 52. 786 (b) (4) (1)

O which the ALAB did not have the opportunity to consider.

Moreover, the creation of the Authority renders the ALAB's finding that MEUA and its members are not potential O

entrants into the wholesale market " clearly erroneous" even if this finding may have been correct (which it was not) based

'O UPon the record available to the ALAB at the time of its decision.* 10. C.F.R. 52. 786 (b) (4) (ii) .

Given the fact that the Authority, and through it O MEUA and its members, are now patcntial entrants into the whole-sale electric power market, a failure to reopen the remedial stage of these proceedings would fundamentally subvert the very O purpose of the 1970 amendments to the Atomic Energy Act which imposed upon the Commission the responsibility to consider the antitrust implications of its licensing decisions and to shape

'O its licensing actions to promote the purposes of the antitrust

• Furthermore, the second ground for MEUA's Petition for Review--

o that MEUA was denied its due process right to participate in the remedial proceedings before the Licensing Board -

" involves an important procedural issue" which the Commission should review. 10 C.F.R. 2. 786 (b) (4) (i) .

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l laws. The ALAB discussed the purposes of the 1970 amend-

.: 0 ments in the Midland decision, CCH Nuclear Reg. Rep., 1975-78 Tr. Brinder, 130, 263, as follows:

"As the Commission has reiterated, the Atomic

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Energy Act's antitrust provisions reflect 'a basic Congressional concern over access to power.

produced by nuclear facilities' and represent legislative recognition 'that the nuclear industry originated as a Government monopoly and is in great O measure the product of public funds [which] should not be permitted to develop into a private monopoly via the [NRC] licensing process. . . .'" Id. at p. 28,360.

1 To ignore the creation of the Authority and to refuse

'O to reopen the remedial stage of these proceedings and permit 4 consideration of the effect of this recent material change in the wholesale power market would be a complete abdication of O

the Commiss_on's duties under the 1970 amendments. The in-evitable result of such an abdication by the Commission would

) be to sanction officially the continuation of APC's admitted-iO monopoly power through the sole access to nuclear power to the detriment of the Authority, MEUA and its members, and the l public at large--i.e., those whom the antitrust laws (and the HD .

Atomic Energy Act) are specifically designed to protect. It j cannot be disputed, therefore, that the creation of the Auth-ority raises both important antitrust questions and important

,'O public policy issues which the Licensing Board and the ALAB

, had no opportunity to consider and which the Commission is 4

mandated to take into account in its licensing decisions.

10 Thus, the only issues which satisfy the Commission's standards O

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for granting review of an'ALAB Decision are those raised.by iO the MEUA Petition regarding the access of MEUA and its' members, through the newly created Authority, to tiie wholesale electric '

i power market by means of an ownership interest in the Farley lO Plant similar to that granted to AEC.

i CONCLUSION

O Accordingly, for the reasons set forth above, MEUA respectfully submits that the Commission's review of ch'e ALAB Decision should be limited to those issues raised by O the MEUA Petition and that, to the extent the APC Petition

! seeks to raise other issues, the APC Petition should be denied.

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Dated: New York, New York Respectfully submitted,

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August 11, 1981 DEBEVOISE,PLIMi) TON,.LYONS Of Counsel: ,

James A. Reaves l

Martin FrederlT Evans Nicole A. Gordon 299 Park Avenue New York, New York 10171 jO (212) 752-6400 and 1

DAVID C. HJELMFELT, P.C.

634 South Mason

. Ft. Collins, Colorado 80524

.O (303) (493-1789)

Attorneys for Municipal Electric Utility Association of Alabama l0

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l CERTIFICATE OF SERVICE

' I I certify that I have this date duly served by O mail, postage prepaid, the foregoing Opposition of the Mun-icipal Electric Utility Association of Alabama to the A'.a-

bama Power Company's Petition for Review upon the attorneys

O for all parties to this proceeding at the addresses set forth below, t

Nuclear Regulatory Commission: Terrence H. Benbow, Esq.

h3 Mr. Nunzio J. Palladino, Chairman Winthrop, Stimson, Putnam Nuclear Regulatory Commission & Roberts 1717 H Street, N.W. 40 Wall Street Washington, D.C. 20555 New York, New York 10005 S. Eason Balch, Sr., Esq. Joseph Rutberg, Esq.

O Balch, Bingham, Baker, Hawthorne Staff Counsel  ;

Williams & Ward Nuclear Regulatory Commission 600 North 18th Street 1717 H. Street Northwest P.O. Box 306 Washington, D.C. '20530 Birmingham, Alabama 35201 John D. Whitler, Esq.

50 D. Baird MacGuineas, Esq. Department of Justice Volpe, Bosky and Lyons Antitrust Division

, World Center Buildings Tenth and Constitution 918 16th Street Northwest Streets Northwest Washington, D.C. 20006 Washington, D.C. 20530 O

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T James A. Reaves August 11, 1981 1

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