ML18088A577

Letter Enclosing a Corrected Copy of the Motion to Lodge Documents

ML18088A577
Person / Time
Site:	Saint Lucie, Turkey Point
Issue date:	10/26/1977
From:	Jablon R Florida Cities, Spiegel & McDiarmid
To:	Chilk S NRC/SECY
References
Download: ML18088A577 (14)

Text

c>> LAW OFFICES SPIEGEL 85 MCDIARMID 2600 VIRGINIAAVENUE. N. W.

WASHINGTON, D. C. 20037 TELEPHONE (202) 333.4500 GEORGE SPIEGEL PETER K. MATT ROBERT C. MCDIARMID DANIELJ. GUTTMAN SANDRA J. STREBEL DAVID R. STRAVS ROBERT A. JABLON BONNIE S. BLAIR JAMES N. HORWOOD DAVID A. GIACALONE ALAN J. ROTH ROBERT HARLEY BEAR FRANCES E. FRANCIS Octob DANIEL I. DAVIDSON JAMES CARL POLLOCK THOMAS N. MCHVGH, JR.

Samuel J. Chilk Secretary Nuclear Regulatory Commission Washington, D.C. 20555 Re: Florida Power & Li ht Com an (St.

Lucie Plant, Units No. 1 & 2),

Docket Nos. 50-335A and 50-389A; Florida Power & Li ht Com an (Turkey Point Plant, Units No. 3 & 4),

Docket Nos. 50-250A and 50-251A.

Dear Nr. Chilk:

In the motion filed yesterday on behalf of Florida Cities there were certain errors and omissions. I enclose a corrected copy of the motion and request that it be substituted.

I regret any inconvenience this may cause.

Respectfully submitted, Robert A. Jablon Attorney for the Ft. Pierce Utility Authority of the City of Ft. Pierce, the Gainesville-Alachua County Regional Electric Mater and Sewer Utilities, the Lake Worth Utilities Commission, the Utilities Commission of the City of New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Ft. Meade, Key West, Mount Dora, Newberry, St. Cloud and Tallahassee, Florida, and the Florida Municipal Utilities Association RAJ: tb Enclosure cc: All parties to these proceedings

UizllTED STATES OF AFRICA BEFORE THE NiUCLEAR REGULATORY COMMISSION

.In the Matter of:

Florida Power & Light Company, ) Docket Nos. 50-335A (St'. Lucie Plant, Unit Nos. 1 & 2) ) 50-389A

)

Florida Power & Light Company, ) Docket Nos. 50-250A (Turkey Point Plant, Unit Nos. 3 &4) ) 50-251A

)

iMOTION TO LODGE DOC%i'NTS r

Pursuan,t to Rules 2.701, 2.714, 2.730 and 2.206 of the Commission's Rules of Practice and Procedure, the Ft. Pierce Utilities Authority of the City of Ft. Pierce, the Gainesville-Alachua County Regional Electric Hater and Sewer Utilities, the Lake North Utilities Authority, the Utilities Commission of the City of New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utili"ies Commission, and the Cities of Alachua, Bartow, t. ~feade, "."

Key Hest, Mount Dora, Newberry, St. Cloud and Tallahassee, Florida, and the Florida Hunicipal Utilities Association ("Cities" ), intervenors in the above-captioned proceedings, respectfully request that certain documents be permitted to be lodged with'the Commission and made part of the decisional, record.

On behalf of this Notion, Cities state as follows:

At least since August 9, 1976, 1/ when they filed intervention defiled 1/ In the context of the South Dade units (Florida Power & Light Comoan (South Dade Plant), Docket No, P-636-A), these factual allegations were raised ~

earlier (April 14,. 1976). Relief was requested relating to these plants.

However, Florida Cities hoped for some sort of preliminary settlement discussions before seeking further formal Commission action. "Joint Petition of Florida Cities For Leave to Intervene and.Request for Conference and Hearing," Docket No. P-636-A, pp. 69-73. It was requested that this 5oint petition be in both Docket Nos.

P-636-A and 50-389A.

petitions, Florida Cities have raised issues of serious antitrust abuse by FP&L in the above dockets. Tn Docket No. 50-389A, a licensing board has granted late intervention, but denied intervention in Docket Nos.

50-335A, 50-250A and 50-25M on grounds of want of authority. These rulings were affirmed by the Appeals Boards and are before the Commission on petitions foz revi w. 1/ The fact is that serious claims of .antitrust abuse of i'icenses (oz potential abuse of proposed HRC licenses) made well over a'ear ago still have not been addressed on their merits, Florida Cities believe it would serve no useful purpose to attempt to generally supplement the zecord at this time to include a.detailing of continued'efusals to deal by FP&L.

However, on or,l about October 14, 1977, FP&L filed proposed wholesale rate tarifzs at the Federal Energy Regulatory Commission, which they are obligated to call to the attention oz the Commission. The tariff states 1/ Florida Cities do not cite the full procedural record. The petitions before the Commission for review weze filed in Docket No. 50-389A by FP&L on July 25, 1977, and in Docket Nos. 50-335A; et al. by Florida Cities on September 8, 1977.

The petition in Docket iso. 50-389A was granted by Order, October 19, 1977.

as follows:

"Sale for Resale Florida Power & Light Total Requirements Company, FPC Electric Rate Schedule SR-2 Tariff, Original Volume No.', Fourth Revised AVAILABLE: Sheet No. 5.

To electric service presently being supplied at point(s) of delivery for total power requirements of electric utility systems for their own use or for resale. Such electric utility systems are Clay Electric Cooperative, Inc., Glades Electric Cooperative, Inc., Lee County Electric Cooperative, Inc.,

Okefenoke Rural Electric Membership Corporation, Peace River Electric Cooperative, Inc. and Suwannee Valley Electric Cooperative, Inc. This schedule shall not apply as substitute or replacement Dower to a enerati utilit s stem'for which intercha ~e power agreements are available or to which Sale for Resale Partial Requirements Rate Schedules PR is applicabl'e." (Emphasis supplied).

"Sale for Resale Second Revised Sheet Total Requirements No. 7.

Rate Schedule PR AVAILABLE:

To electric service supplied to electric utility systems zor their partial power requirements at any point of delivery to'com lement the insufzicient eneratin canacit and/or firm oower purchases of such systems for their own use o" for resale. Such systems are Florida Keys Electric Cooperative Association, Inc., Utilities Commission o the City of New Smyrna Beach, Florida, and the City of Starke, Florida. nis schedule shall not apply as substitute or re lacement ower to a generatin~ utilit s stem for which full service'nterchange power agreements are a nlicable." (>~basis supplied).

Whatever the legality or acceptability of these proposed tariffs may be under the Federal Power Act, they conclusively show the following zacts:

1) . FP&L refuses to sell total requirements wholesale power to new customers.

2) FP&L refuses to sell wholesale power to systems naving genera-tion except to replace "insuzficient capacity;" and

3) FP&L will not permit a "full service interchange power agreement" for systems purchasing wholesale power.

These. tariff changes would prevent the potential sale of

0 ~

wholesale electricity to nearly every municipal system in Florida.

For reasons stated in Cities'etitions to intervene, such refusals to deal plainly violate antitrust law and policy as well as historic service obligations. E.g., Otter Tail Power Co. v. United States, 410 U.S. 366 (1973).

They. present immediate concerns with regard to the responsibilities of the nuclear Regulatory Commission. Under normal circumstances, it would be presumed that a licensee or proposed licensee of this Commission would at the very least disseminate the benefits of nuclear power through normal sales of electricity. See Atomic Energy Act, 53, 42 U.S.C. 52013. FP&L ~ould deny such benefits to residents of municipal systems. Other documents demonstrate FP&L's policy is to sell rirm power onl where it can sell at retail, plainly an act of monopolization as well as an unlawful tie-in sale.

FP&L is using the economic advantages from its licensed and proposed nuclear plants to retain and ezpand its retail service market.

Based upon its nuclear advantage, it actively seeks to take over the Vero Beach electric system, independent since 1922, and has suggested the sale of other systems, Yet by its FERC fil'ng it would deny the sale o" wholesa' power, with the inevitable result of encouraging others to sell their systems as the only way to participate in nuclear benefits.

This issue is not abstract. The Ft. Pierce Utilities Author'ty has requested to purcnase wholesale power at potentially great cost savings.

FP&L refuses. Ft. Pierce, located adjacent to Vero Beach, has had discussions with FP&L concerning FP&L's purchase of its system. Moreover, the intervenor group has specifically requested the right to purchase wholesale po~er as part of a settlement proposal (which includes other terms).

Apart from any other allegations, intervenors respectfully submit that this new refusal to deal in basic services mandates Commission action.

Additional= documents not previously available have come to light demonstrating FP&L's awareness that deprivation of nuclear availability to Florida Cities is hurt"ul to the Cities. In the context of Florida Power

& Li ht Comnan, Federal Energy Regulatory Commission Docket No. E-9574, Florida Power & Light Company, applicant here, has made ava'lable to staff and parties certain documents relating to that proceeding, some of which have been proposed as eWibits. The documents show motivation by FP&L to limit Florida Cities 'ompetitive opportunities, including access to nuclear power.

Florida Cities believe that they have fully'supported a grant of i.ntervention and hearing. They therezore request that the Commission review the proposed supplementary evidence only iz it were inclined to deny intervent.'on and hear.'ng. They do believe that the abuse o" hRC 1-'censes and antitrust principles shown by these documents are so pla'n that the Commission must cons'der these documents and take ameliorat" ve action as a result oz this evidence, even it it were inclined otherwise to ule agains" Flor" da C'ties.

Florida Cities gave FP&L advance notice oz tnis motion. Florida Cities were requested not to lodge the documents referred to with the motion.

Although Florida Cities know oz no basis for FP&L's request, they refrain from lodging th~~, so as to allow time for Commission ruling, but respectfully request that the Commission allow the document to be lodged and made part of the record. Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608 (2d Cir. 1965), cert. den. sub nom. Consolidated Edison Company of Hew York v.

Scenic Hudson Preservation Conference, 384 U.S. 941 (1966).

Examples of such documents .include:

Document /3280954, et. sea. This document provides an April 8, 1976 summary of major financial considerations for FPL in the development of cooperative nuclear power plants, showing anticompetitive intent. These considerations include the proposition that it would probably be best if FPL did not have any ownership interest in the plant. 1/

Document 8280958, et. sea. apparently prepared in July, 1976, in relat'on to an FPL management meeting on implications zor F-L of recant developments in competitive relations. As stated at page FPL contemplated that'a shift to coal would eliminate the Atomic ~ nergy Act as a route to municipals'nvestment in generation.

1/ The document should be read in conjunction with FP&L's contemporaneous i~.'arch 30, 1977 letter refusing Florida Cities'articipation in the proposed FP&L South Dade ';nuclear Unit, but stating FP&L "would consider being part of a joint venture to construct a nuclear facility somewhere in the Cent al Florida area so as to be conveniently 'ocated for pote..t'al part" c'pants.

Such a project would be a true joint venture from i"s initial inception through completion and would require fuU. commitments o" all participants commencing with the planning stages." irony Cities considered such project in good faith, but FP&L ultimately requested public funds be spent on the project wi&out its being willing to consider or agree to discuss provision arrangements crucial to the economics of the unit, even includ'ng provision oz nuclear fuel, transmission and back-up. Document fr'280954 indicates that from its incept'on, FP&L recognized the jo"'nt venture form of the proposal would ma¹ the pro j ect dizf icult to f inance for the municipals, but it"-or a proposed that form anyway, while resisting support for legislation to allow joint agency.

thereby underscoring the major thrust of the document: that municipals should be prevented or limited from achieving practical access to nuclear generation. FP&L further designates 'the municipals-co-operative strategy to obtain statewide generation, planning, multiple-unit sharing, and full coordination. FP&L's response: FPL ma not be able to comaete if municipals and co-.operatives can gain access to generation investment with their low-cost capital. iMunicipals presently having franchises with FPL will be encouraged to go public, showing'its intent to limit competition.

Document /r'242627, a February, 1974 memorandum indicating z desire to limit wheeling access to the proposed 500 Kv 1'ne (between Florida and Georgia) to systems fully regulated by the FPSC (Florida Public Service Commission), thereby preventing or limiting transmission access to municipals.

Document ii254384, et. sea., relating to interconnection negotiations between F?&L and Homestead 'n 1973. These documents reveal FP&L's desire to offset the demand for wheeling as well as avoid a long-term Power cor~tment. (Document /r'270832) .

Document fr'281505, et. sea., entitled S trategic Planning Department, Po>>cy Planning Background Paper, Str tegic ssues in Inter-Utility Relations. Pages 13-14 of this document bear the headings Strategic Summary Interconnections Joint Ventures. It shows specific intent to avoid the sale of wholesale power, thereby restricting nuclear benef its. 1/

1/ As stated above, FP&L has, for example, most recently responded negatively to proposals to purchase wholesale power by the Ft. Pierce Utility Authority.

Document /3273006, a December 5, 1975 memorandum from FP&L Vice President E.L. Bivans to FP&L official K.'S. Buchanan. The memo egresses Mi. Bivan's concern that proposed interconnections with Tampa Electric Company and Florida Power Corporation provide for wheeling power at 'universal postage stamp rates.

8212164,

'ocument et. sea,, entitled Guidelines for Power Generation from Municipal Haste Systems. The principal value in FP&L's participation is said to include deter the competitive threat of municipal generation.

In prepared testimony filed on August 5, 1977, after reviewing tne above-.referenced. documents, among others,'n.'Florida Power"&:Light'Co;, FERC Docket No. E-9574, Dr. Gordon Taylor, Chief of the Division oz Economic Stud'es in the Ofzice of Policy 9nalysis of FERC, subjected FP&L's compet tive practices to detailed analysis. Dr. Taylor summarized his conclusions as zollowso "1. FP&L nas generally refused to sall firm bulk power to munic-pals; now FP&L does not outright refuse but rather makes it eztremely difzicult for municipals to gain these types of services; FP&L has refused the request of Vero Beach to purchase firm bulk power.

2. FP&L has refused to wheel third party power and in fact has ezplicitly denied a request by the City of Vero Beach to obtain wheeling wnen the City wanted to bring power in zrom the Orlando Utilities Comission.

3. FP&L, although it says that it will wheel power, refuses it to file general wheeling tariff thereby making a extremely difzicult, ezpensive, and time-consuming for any utility desiring wheeling to obtain service. This type of anti competitive conduct by FP&L increases the transfer costs of customers attempting to obtain transmission services and is as effective as an outright refusal to wheel.

4. FP&L has refused in general to grant access to its nuclear power plants. How FP&L finally is granting access to its fourth I

unit, St. Lucie II nuclear plant. FP&L, however, is not offering an equitable share to Hew Smyrna Beach and Homestead, the only systems offered an ownership share of the several that applied.

5. FP&L has insisted on territorial agreements before entering into any kind of bulk power marketing arrangements. Such tying agreements or conditions on sales are an example of the exercise of market power.

6. FP&L has insisted on a thirty year franchise agreements to those municipalities which it serves at retail. The effect of such long term franchises is to foreclose the retail market to other potential competitors.

7. FP&L has attempted to force the municipals to maintain an inefficiently large amount of generating capacity by insisting on interchange agreements rather than willingly selling firm wholesale bulk power.

8. F?&L has discriminated between the REA. Co-ops and the municipals with regard to selling firm wholesale bulk power.

Although r?&L is selling firm wholesale bulk power to the co-ops it has resisted doing the same to municipals. FP&L is in the wholesale bulk power business, but discriminates between customers it is willing to serve. I interpret this to mean that F?&L sees the potent" al competition from zuni-cipals to be much greater than from the REA Co-ops in the competition to serve at retail.

In summary, I conclude that FP& has engaged 'n a series of anti-competitive acts demonstrating that it has market power and is willing to exerc'se it."

CONCLUS ION:

In view of tne passage of time and new evidence of anti-competitive activities, Florida Cities request permission to supplement their petition to intervene: Specifically, they request that this motion be considered. as part of the records in these cases and that they be allowed to file- l) the above-referred to documents, including correspondence concerning

the Central Florida unit, refusals to deal with Ft. Pierce, and possible settlement, and 2) the testimony of Dr. Gordon Taylor.

Respectfully submitted, Robert A. Jablon Daniel Guttman Attorneys for the Ft. Pierce Ut'lity Authority of the City of Ft. Pierce, the Gainesville-Alachua County Regional Electric Mater and Sever Utilities, the Lake North Utilities Commission, the Utilities Commission of the City of Hex Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and tne Cities of Alachua, Bartow, Ft. Heade, Key Nest, ~ifount Dora, dewberry, S t. Cloud and Tallahassee, Florida, and the Florida ~funicipal Uti>> ties Association October 26, 1977 Law Offices of:

Spiegel & NcDiarmid 2600 Virginia Avenue, N.M.

Mashington, D.C. 20037 202-333-4500

CERTIFICATE OF SERVICE I hereby certify that I have this 'day caused the foregoing document to be served upon the following persons:

BY HAND: William C., Wise, Esquire Linda L. Hodge, Esquire Robert Weinberg, Esquire Lowenstein, Newman, Reis Suite 200 & Axelrad 1019 19th Street, N.W. 1025 Connecticut Avenue, N.W.

Washington, D. C. 20036 Washington, D.C. 20036 William H. Chandler, Esquire BY HAND: Lee Scott Dewey, Esquire Chandler, O'Neal, Avera, Gray, Office of Executive Legal Director Lang & Stripling Nuclear Regulatory Commission P.O. Drawer 0 Washington, D.C. 20555 Gainesville, Florida 32601 Chief, Docketing and Service David A. Leckie, Esquire Section Antitrus t Division Office of the Secretary Department of Jus tice Nuclear Regulatory Commission 1101 Pennsylvania Avenue, N.W. Washington, D.C. 20555 Washington, D.C. 20530 Ivan W. Smith, Esquire Robert H. Gulp, Esquire Atomic Safety & Licensing Board Lowenstein, Newman, Reis Panel

& Axelrad Nuclear Regulatory Commission 1025 Connecticut Avenue, N.W. Washington, D.C. 20555 Washington, D.C. 20036 John M. Frysiak, Esquire Tracy Danese, Esquire Atomic Safety & Licensing Board Vice President, P'ublic Affairs Panel Florida Power & Light Company Nuclear Regulatory Commission P.O. Box 013100 Washington, D.C. 20555 Miami, Florida 33101 Robert M. Lazo, Esquire John E. Mathews, Jr., Esquire Atomic Safety & Licensing Board Mathews, Osborne, Ehrlich, Panel McNatt, Gobelman & Cobb Nuclear Regulatory Commission 1500 American Heritage L'ife Bldg. Washington, D.C. 20555 Jacksonville, Florida 32202 Chief, Antitrust/Indemnity Group BY HAND: J.A. Bouknight, Jr., Esquire Office of Nuclear Reactor Regulation Lowenstein, Newman, Reis & Nuclear Regulatory Commission Axelrad Washington, D.C. 20555 1025 Connecticut Avenue, N.W.

Washington, D.C. 20036 Dated at Washington, D.C. this 26th day of October, 1977.

Robert A. Jablon&

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