ML20135C963

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Updated Finding of No Significant Antitrust Changes
ML20135C963
Person / Time
Site: Clinton Constellation icon.png
Issue date: 09/09/1985
From:
NRC
To:
Shared Package
ML20135C946 List:
References
A, NUDOCS 8509130191
Download: ML20135C963 (25)
v • d • e


Text

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CLINTON NUCLEAR POWER STATION, UNIT 1 ILLIN0IS POWER COMPANY, 50YLAND POWER COOPERATIVE, INC. AND WESTERN ILLINOIS POWER COOPERATIVE, INC.

DOCKET NO. 50-461 UPDATED FINDING OF NO SIGNIFICANT ANTITRUST CHANGES P

O e e

8509130191 850910 DR ADOCK 05 1 s

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CONTENTS I. Introduction II. Structure of the Electric Power Industry in Illinois A. Applicant Systems III. Previous Antitrust Reviews of Clinton A. Construction Perinit Review B. Operating License Review C. Monitoring Review IV. Changes Since the Initial Operating License Review

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A. Interconnections B. Wholesale Power Developments L, . Proposed Mergers and Acquisition Involving Applicant Systems D. Miscellaneous Changes V. Susunary and Conclusion Appendices: -

A. Clinton Nuclear Power Station Unit 1 -- Finding of No Significant Antitrust Changes.

B. .Clinton Nuclear Plant Unit 1 -- OL Monitoring Review.

C. Letter dated February 21, 1985 Pursuant to Updated Regulatory Guide 9.3 Inforination from Fc A. Spangenberg;-iHrector-of-Nuclear-ticensirrg and-~~~~7

) Configuration Illinois Power Co., to Wm. H. Regan, Chief. Site Analysis  ;

Branch, Nuclear Regulatory Comunission, i D. Letter dated January 29, 1985 Pursuant to the Proposed Merger of Soyland l i

Power Cooperative and Western Illinois Power Cooperative from John T.

Ward, of Wasker, Sullivan & Ward to Sheldon A. Zabel, of Schiff,  ;

Hardin & Waite. '

l E. Coordination and Operation Agreement Between Soyland Power Cooperative i and Western Illinois Power Cooperative, dated July 24, 1984. t

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I. Introduction A prospective operating licensee is not required to undergo a formal anti-trust review unless the Nuclear Regulatory Comission (NRC or Comission)*

detemines that there have been "significant changes" in the licensee's activities or proposed activities subsequent to the review by the Attorney General and the Comission at the construction pemit (CP) stage. Concen-tration on changes in the applicant's activities since the previous antitrust review expedites and focuses the review on areas of possible competitive con-flict heretofore not analyzed by the Attorney General or the Comission.

In its Sumer decision ** the Comission has provided the staff *** with a set of criteria to be used in making the significant change detemination for

operatinglicense(OL) applicants:

l "The statute contemplates that the change or changes (1) have -

i

~~ ~ ' ~

occurred since .the. prev.ious antitrustoreview eMW11censee(s),

(2) are reasonably attributable to the licensee (s); and (3) have antitrust implications that would most likely warrant some Comission remedy."****

  • The Comission has delegated the tesponsibility for making a significant change detemination to the Director of Nuclear Reactor Regulation.
    • Virgil C. Sumer Nuclear Station Unit 1. Docket No. 50-395A, June 26, '

1981at13NRC862(1981). , ,

      • " Staff" hereinafter refers to the antitrust staffs of the Office of Nuclear Reactor Regulation and the Executive Legal Director., l
        • Commission Memorandum and O dr er, p. 7 dated June 30,1980(CLI-80-28).

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- 2-To warrant a significant change finding, i.e., to trigger a foIsal OL antitrustreview,theparticularchange(s)mustmeetallthreeofthese criteria.

On February 23, 1982, the Director of the Office of Nuclear Reactor Regulation issued a finding pursuant to the antitrust operating license review for Unit 1 of the Clinton Nuclear Power Station (hereinafter Clinton),

reconnending that no formal operating license antitrust review was required for Clinton.* Since the Director's initial finding in 1982, the fuel load date for Clinton was changed twice, from January of 1983 to January of 1984 and from January 1984 to January 1986.

The original change in the fuel load date created a gap in staff's antitrust operating license review and antiquate 1

mch of the data used by staff in its original review procedure. Consequently, i

staff initiated a " monitoring review" of Clinton which was completed in January of 1983.**

~

Staff'smonitoringreview"foundnoreaIontoamendits

'no significant change' detemination pursuant to Unit 1 of the Clinton Nuclear Station."*** -

As a result of the change to the most recent fuel load date, i.e., January i

i of1986, applicant'soriginal(andmostcomprehensive)datasubmissionwould be almost six years old at the time of fuel load and staff felt not an ade-quate reflection of the current status of applicants' activities in central

  • Clinton Changes.Nuclear Power Station, Unit 1 - Finding of No Significant Antitrust Hereinafter,"NoSignificantChangeFinding."(AttachedasAppendixA.{

l ** Clinton Review."Nuclear Plant Unit 1 - OL Monitoring Review. Hereinafter, " Monitor (AttachedasAppendix8.)

      • lbjd. , p. 5.

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- 3-4 and southern Illinois. For this reason staff requested updated data i

responses from all applicants pursuant to changed activity since the original OL antitrust data response in May of 1980. After reviewing these ,

, data and after contact with members of the electric power industry in i

i Illinois, staff recommends that no affirmative significant change finding l be made pursuant to Unit 1 of the Clinton Nuclear Power Station.

II. Structure of the Electric Power Industry in Illinois l

(

4 l The basic structure of the electric power industry in Illinois has not l l l changed since staff's original significant change review. The state is l l  !

j still separated into Chicago area and non-Chicago area components with i

! 1 large investor owned utilities dominating each segment. The Chicago area l

t 1s served by one of the largest domestic electric power companies Conson-  !

i l wealth Edison Company. The remainder of the state, from the north central I l

l portion to the southern tip of the state, is served by a group of power i

l i

l companies including municipal, cooperative and private power companies. , j i

I l The relevant marketing area for the Clinton power station focuses on the I 1 l l central and southern portions of the State of Illinois, i.e., the area in {'

i j which the incidence of any anticompetitive practices associated with the i

activities of the owners of Clinton will have the greatest impact. This lI.

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is the area in which the three applic, ants serve and the area where the l use of the power and energy generated by the Clinton plant will be most  !

J concentrated, i

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A. Applicant Systems -

Illinois Power Company, with approximately 82% ownership of the plant, is the lead applicant responsible for construction and operation of the plant.

The remaining 18% of the plant is owned by two cooperative power systems, Western Illinois Power Cooperative (WIPCO) and Soyland Power Cooperative (Soyland).

Illinois Power Company is a fully integrated power system (i.e., engaged in generation, transmission and distribution of electric power and energy) serving primarily the central and southern portions of the State of Illinois.

Western Illinois Power Cooperative is a G1T cooperative -- engaged primarily ,

in the generation and transmission of electric power and energy serving distribution cooperative members in the west central portion of the state.

Scyland Power Cooperative was established by a group of 15 distribution cooperatives specifically to acquire an ownership interest in Clinton. The members currently provide service to retail loads in central and southern' .

portions of Illinois. (See Appendix A for a more detailed description of '

applicant systems.)

III. Previous Antitrust Reviews of Clinton l I

A. Construction Permit Review .

I I

The initial antitrust review of Clinton was conducted by the Department lt i

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i of Justice (Department or DOJ) and the Commission at the construction per- f i

mit(CP)stageintheearly1970's. During the construction permit review, j i

... the staffs of the Department of Justice (DOJ) and the AEC/NRC f became aware of certain allegations of misconduct by Illinois Power .

in conjunction with its dealings with cooperative and municipal I power systems in or adjacent to Illinois Power's service area."*

i After additional data was collected and the anticompetitive concerns were fully aired, the applicant agreed to a set of policy comitments intended to prohibit any future refusals to deal or similar anticompetitive conduct

, by Illinois Power Co. in its dealings with other power entities in or I adjacent to its service area. These policy casunitments later became license conditions that were attached to the Clinton construction permits.** Based-t upon the policy comunitments agreed to by Illinois Power and the inclusion . i of these casunitments as license conditions to the Clinton construction per- i mits, the Department issued an advice letter to the Commission dated l

. April 29, 1974 recomunending no hearing. No petitions to intervene.were _ _ (

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f received and the CP antitrust review was effectively completed with the publication of the advice letter in the Federal Register in May of 1974. f h

  • No Significant Change Finding, p. 7. I

) ** Illinois Power received construction permits for both Units 1 and 2. i

{ Unit 2 has since been cancelled. ,  !

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B. Operating License Review ~ l i

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i As indicated supra, the Comission's operating license review focuses only  ;

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i on changes in the applicants' activities since the antitrust review at the '

construction permit review stage. After reviewing the data submitted by the applicants pursuant to changes since the CP review, talking to members i

in the industry and reviewing various public documents, i

" Staff identified a number of changes that. (1) have occurred since {

the construction permit antitrust review, and (2) are reasonably attributable to the licensee (s). [Thereby meeting two of the Sumer criteria necessary for a "significant change."] However.asny of  ;

these changes are in conformance with the' construction permit anti- '

i trust license conditions and have had positive performance effects on the availability of bulk power supply and on coepetition in the area generally. Other changes which have occurred have not had  !

i significant negative antitrust implications that would warrant a j Commission remedy, and therefore do not warrant a significant change  ;

finding.=* t i

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} Staff completed its initial operating license review in February of 1982

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i and found no reason to recomend that the Director of NRR issue a signifi - l l

cant change finding. The review concluded that,  ;

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" Based upon the successful implementation of CP license conditions f i

and the lack of any detrimental conduct or activity.... staff  !

recomends that no affirmative significant change determination be  !

made pursuant to the application for an operating license for l

Unit 1 of the Clinton Nuclear Power Station."**

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  • No Significant Change Finding, p. 17 4

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    • Ibid.

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C. Monitoring Review -

I Subsequent to staff's initial significant change analysis in February of 1982, the fuel load date for Clinton was changed from January of 1983 to January of 1984.

Staff felt such a development necessitated a " fresh look" 1 at the Illinois electric bulk power industry and any changes in the activi-I ties of the Clinton applicants in particular. The staff monitoring review was not intended as an in depth significant change analysis, but more of a flash review, intended to pick up flegrant changes in conduct or particular i

complaints from affected parties engaged in or interested in the Illinois electric power industry. (The formality and extensive date requests that I

characterize the significant change analysis are not a part of the monitor reviewprocess.) Staff's monitoring review for Clinton was completed in January of 1983. The review concluded, '

i "In sum:

Because of a delay in issuing the Clinton Unit 1 OL,

. staff has reviewed Illinois Power's activities since last con-i ducting its significant change analysis approximately a year ago.

! No one has come forth to re .

i cant change detemination;~ quest reevaluation of staff's signifi . .. .

ndf la W thfre'been any submissions of

complaints February 1982.or views of affected parties during the interim since ,

, After reviewing industry trade journals and l initiating contact with power entities in the relevant areas,

staff, as of this date, has found no reason to amend its 'no

! significant change' detemination pursuant to Unit 1 of the

! Clinton Nuclear $tation."*

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! Both the initial significant change analysis and staff's monitoring review concludedthattherehavebeennosignificandchangesintheapplicants' l

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  • Monitoring Review, p. 5.

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activities since the antitrust construction permit review that~would warrant a hearing reconenendation pursuant to the applicants' application for.an operating license for Clinton.

IV. Changes Since the Initial Operating License Review 4

i Considering the most recent delay in fuel loading from January of 1984 to

! January of 1986, and the fact that staff's broad data base of the Illinois '

electric power industry is based upon dated information. i.e., that pro-4 i vided by the applicant in 1980, staff decided to request updated responses to Regulatory Guide 9.3* from the applicants and conduct a supplemental significant change analysis, focusing on those changes which have taken place since the initial operating license review was completed in 1982.

This supplemental significant change review, in conjunction with staff's 1982 and 1983 reviews, encompasses all of applicants' changed activity

! ,* (withcompetitiveimplications)sincetheantitrustreviewattheconstruc-tion pemit stage. ~

From the applicants' updated responses to Regulatory Guide 9.3** and infor-nation gathered from public print sources as well as contacts with govern-mental agencies and members of the electric power industry, staff has  ;

  • "Information Needed by the AEC Regulatory Staff in Connection with its Antitrust Review of Operating License Applications for Nuclear Power Plants." October 1974.

Data submitted by letter dated March 12, 1984.

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_g-identified several changes associated with the applicants' conduct and '

activity since the initial significant change review.

Among the three applicant systems, Illinois Power Company has experienced the greatest number of changes (with possible competitive implications) since the initial OL review. As evidenced during the original OL review, these changes have come about largely through new interconnections and sales of wholesale power by Illinois Power Company to smaller power systems in Illinois.

A. Interconnections The trend toward new interconnections involving all applicant systems and particularly Illinois Power evidenced during the initial OL review has 5

continued.

Illinois Power has consummated a number of interconnections, i

, with both large and small systems, since 1982.

1.

Illinois Power Co./ Southern Illinois Power Coop. -- In i

September of 1984 Illinois Power energized a 138 kV interconnection withtheSouthernIllinoisPowerCooperative(SIPC). Representatives-l of both parties began discussions pursuant to the feasibility of an t interconnection between the two systems that, according to SIPC, I

would eliminate the need for SIPC to construct approximately 16 i

miles of 69 kV line. The two systems are presently interchanging i

short term and economy power over the intertie and according to l

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l SIPC, the interconnection agreement also includes provisions for wheeling over Illinois Power's lines, but the coop has not had a '

need to activate that provision of the agreement to date.

2. . Illinois Power Co./ Western Illinois Power Coop. -- On June 25, 1982 a 138 kV interconnection between Illinois Power and l one of its co-applicant systems in the Clinton project. Western Illinois Power Cooperative (WIPCO), was cogleted. The interconnec-tion was initiated by WIPC0 primarily to serve one of its customers, a coal company.  !

Another 138 kV interconnection between Illinois Power and WIPCO was 1 completed on August 30, 1982. The interconnection was initiated by l

WIPC0 according to Illinois Power "in drder to igrove service to the 69 kV system in the area."

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3. IllinoisPowerCo./Kentucki-UtilitiesCo.--Byagreentnt i

j dated January 1, 1983. Illinois Power entered into an interconnection agreement with the Kentucky-Utilities 5 . The agreement provides for i

various power transactions between the parties.

i

' - 4.

Illinois Power Co./ Central Illinois Public Service Co. -- l 1

, A 345 kV interconnection was energized on October 25, 1983 between Central Illinois Pub 11c'5ervice Co.'s Kansas substation and Illinois  !

Power's Sidney substation. t l

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5. Illinois Power Co./ Farmer City -- An interconnection to provide wholesale power service to the Farmer City electric system was energized in October of 1984.

Illinois Power Co. has energized numerous interconnections since the initial

  • i OL antitrust review in 1982. New agreements have been consumated with both large, fully integrated power systems as well as smaller municipal and I cooperative power systems. The new interconnections identified by staff 4

represent a continuation of a trend toward interconnection which was stimu-lated by the antitrust license conditions attached to the Clinton construc-tion pennit as well.as general reliability and service requirements imposed

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upon a large public utility system. It is staff's view that applicants' interconnections since the CP antitrust review have had a procompetitive  !

effect upon the bulk power services market in central and southern Illinois. i i

To the extent that new interconnections have increased reliability of par-  ;

~ I ticipating power systems and broadened access to power supply alternatives l for Illinois power entities, staff would encourage applicants to continue -

l the development of new interconnections and interconnection agreements  !-

l evidenced since the completion of the construction permit review. i i

r B. Wholesale Power Developments I i

i The applicants, principally Illinois Power Co., have been responsible for a series of power supply developments at the wholesale level since the CP  !,

antitrust review.  !

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1. During the period 1981-82, the City of Flora Illinois expressed an interest in purchasing wholesale for resale power from l j

Illinois Power. According to a representative of the City Illinois Power offered to supply the C'ty; however, the City managed to l

negotiate a more favorable agreement with another bulk power supplier.

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2. As a result of the newly energized interconnection between i' Illinois Power and Farmer City, Illinois (see " Interconnections"), the 4

City requested and received full requirements wholesale power from Illinois Power beginning on October 4,1984.

4

, 3. According to Illinois Power's Regulatory Guide 9.3 response, l t

the City of Red Bud, Illinois expressed interest in obtaining wholesale

. service from Illinois Power. When contacted, the City representative  !

stated that Red Bud had no interest in service from Illinois Power. t l

4. The Mt. Carmel Public Utility Co. began taking partial .

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requirements wholesale service from~ Illinois'Pinier on' January 1,1983.

i Illinois Power delivered power under this Purchase Power Agreement to l Central Illinois Public Service Co., which in turn provided trans- i t

i mission service for delivery of the power to Mt. Carmel. Effective  !

t January 1,1984. Mt. Carinel transferred to a full requirements whole-

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sale Purchase Power Agreement and. began taking all of its power require-l ments from Illinois Power Co. over the transmission lines of Central Illinois Public Service Co. '

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5.

Once the interconnection between Illinois Power ~and the Southern Illinois Power Cooperative was energized in September of 1984 (see " Interconnections"), the coop began purchasing blocks of short term wholesale power from Illinois power, reportedly utilizing the full 40 MW capacity of the intertie.

6. The Wabash Valley Power Association was involved in dis-

] cussions with Illinois Power in the spring / summer of 1984 pursuant >

i to the purchase of a large block of short term power. The generation l

and transmission cooperative did not consumate a power purchase agree-ment with Illinois Power because Wabash was able to negotiate a more i

favorable purchase agreement with another supplier.

l

7. On May 24, 1983, Western 11'linois Power Cooperative entered into a new three year agreement for purchase of power from Illinois Power Co. The agreement will terminate upon comercial operation of j

the Clinton nuclear plant. The agreement provides supplemental power.  !

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to WIPCO until such time that WIPCO a co-owner of the Clinton nuclear

,' plant, can begin taking power from the plant once it begins to produce commercial electric power.

1,

8. The Western Illinois Power Cooperative has anticipated various power shortages through 1993 and. plans to meet any de'ficiencies with new generation (i.e. Clinton) and power purchases through its interchange agreements with Illinois Power and the Springfield (Illinois) City Water, j Light and Power electric system.

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9. As part of a FERC rate settlement reached with~its wholesale i

power customers on November 18, 1983 Illinois Power agreed to a Short Term Energy Transmission Agreement and a long term Electric Transporta-

' tion Service Agreement. These particular service agreements now allow I

) Illinois Power's smaller wholesale customers to more effectively shop t

l i

for competitively priced power in both the market for " spot" or short i

' i term economy and diversity power and energy, as well as longer term i

(more than 5 years) power from various power suppliers interconnected with the Illinois Power system. These two transmission agreements l t

complement agreements reached earlier between Illinois Power and its wholesale customers that enabled these customers to take partial requirements power from Illinois Power. (See Appendix F of the initial antitrust operating license review.) The a two transmission I

! agreements represent positive, proconipetitive developments since the j j I earlier OL antitrust review, allowing smaller power sfstems to com- i i

pete more effectively with the larger, fully integrated power systems  !

i for the most efficient sources of power and energy in and adjacent to.  !

the Illinois bulk power market. i l l i

i l Those changes attributable to the applicants which have taken place in I i

the Illinois wholesale power market since the initial Clinton operating license review have for the most part been representative of a continuum

  • which began after the completion of the antitrust construction permit review. Power systems, both large and small, have continued their  !

efforts to minimize costs by " shopping" for the most cost efficient

~= _ ._...- , .. .. . ..m .-_ . . . . , .

source of power to meet their individual loads. The Wabash' Valley Power Cooperative and the City of Flora expressed interest in purchasing whole-sale power from Illinois Power but managed to negotiate more favorable agreements with other suppliers. The Mt. Carmel Public Utility Co. (a privatepowercompanylocatedinMt.Carmel. Illinois),theSouthern

Illinois Power Cooperative and the Famer City electric system all have 1

begun taking wholesale power from Illinois Power since the original OL review. Moreover, the Western Illinois Power Cooperative has negotiated new interconnection and wholesale power agreements with Illinois Power

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i that will enable WIPCO to meet anticipated load deficiencies until Clinton i

comes on line.

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! All of these developments in the Illinois wholesale bulk power market i

point toward the continuation of increased coordination and competition among industry members evidenced during the initial operating license j , antitrust review. Staff encourages industry members to continue to l

" test the market" and explore new alternative sources of power supply. .

The wholesale power developments identified since the original OL anti-4 trust review have come about largely as a result of the antitrust license conditions attached to the Clinton construction pemit and for the most

{ part have resulted from procompetitive forces at work in the Illinois wholesale bulk power market.

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C. Mergers and Acquisition Involving Applicant Systerns ,

r Since the initial OL antitrust review was completed in 1982, staff has i identified two proposed me gers and one acquisition involving applicant systems.

1. Early in 1981, Illinois Power Company began discussions with the Cedar Point Light & Power Company regarding a merger of I i'

the two systems. On March 29, 1985, Illinois Power purchased the assets of Cedar Point Light & Power. Cedar Point was a privately owned electric distribution system serving approximately 180 custo-mers in the Illinois town bearing the same name. Prior to the <

l acquisition, Cedar Point purchased 100% of its power requirements

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from the Illinois Power Company.

2. Illinois Power and the Mt. Carmel Public Utility Company l

! t executed a stock exchange merger agreement late in 1981. The companies

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are presently awaiting federal and state regulatory approval before j proceeding with the merger.* ,

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  • I!!ir. cts Power and the Mt. Camel Public Utility Company filed the merger agreement with the Illinois Commerce Connission (ICC) on December 7,1981.

i The Central Illinois Public Service Co. intervened and protested the proposed merger. i The ICC initially ruled against the Illinois Power /Mt. Carmel merger, i

' indicating that greater cost efficiencies would result from a Mt. Carmel/ Central i Illinois Public Service Co. merger. The case was introduced into the judicial  !

system at the circuit court level where the ICC ruling was upheld--ruling against l the Illinois Power /Mt. Carmel merger. Both Illinois Power and Mt. Carmel appealed j 2 the decision which was overruled by the appellate court. The State of Illinois appealed the appeals court ruling to the State Supreme Court where the case is i now pending.

The Illinois Power /Mt. Carmel merger is also awaiting approval before the Federal Energy Regulatory Commission (FERC) Docket No. EC82-4-00. At the request of Illinois Power Company, the FERC delayed a tuling on the merger  !

pending a resolution at the State level; however, the FERC has recently i

decided to proceed with its own hearings and not wait for the ruling by the  !

Illinois state Supreme Court.

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3. By letter dated February 21, 1985,* Illinois Power acting l

as agent for the owners of the Clinton nuclear plant, forwarded infor-  !

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mation pertaining to the planned merger of Western Illinois Power i i

Cooperative and Soyland Power Cooperative. A copy of a " Coordination and Operation Agreement" between Soyland and WIPC0 dated July 25, 1984 t i i was included along with the February 21 letter. According to the l

" General Provisions" of the Agreement, )

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"As of January 1,1985, Soyland Power Cooperative (Soyland) i l

1 andWesternIllinoisPowerCooperative(WIPCO[)]will' pool' l all electric power and energy and transmission capacity avail- k i

able from their respective facilities so that the electric power i and energy and transmission capacity will be utilized as though j the two cooperatives were merged as of January 1, 1985. The  !

Agreement goes on to provide that a plan of merger will be pre-  !

pared, and that the formal merger under Illinois law will take  !

, place effective as of July 1, 1986."**

j Staff does not believe that the Cedar Point acquisition or the proposed  !

l Mt. Carmel merger pose significant anticompetitive problems in the Illinois bulk power market. Both systems serve small municipalities and were wholesale customers of Illinois Power prior to being acquired. (The l l

Mt. Carmel/ Illinois Power merger is still pending.)- The proposed Scylanif/~~~~~g l i WIPC0 merger represents a marriage of convenience and appears to provide the surviving system significant operating economies not evailable to I

'

  • Letter to Wm. H. Regan, Chief, Site Analysis Branch (NRC) from F. A. Span Power Co.)genberg, (Attached Director, Nuclear as Appendix Engineering C.) This letter was and Cor. figuration precipitated by(Illinois a

1 letter from Wm. H. Regan, dated January 16, 1985, requesting all information i pertaining to the merger or proposed merger between Soyland and WIPCO.

i

    • Jr,hn CitedT.from Wardletter to Sheldon- A. Zabel (counsel for Illinois Power) from  !

29, 1985. (Attachedas Appendix D.) (counsel for Soyland) dated January i I

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i either system standing alone. For example, the Coordination and Operation l

Agreement between Soyland and WIPC0 provides for a joint pooling of the resources of each system, i

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" i

... in order that adequate supplies of electric power and energy i be delivered to load centers of the distribution cooperative  !

member-consumers of Soyland and WIPC0 on a cooperative not-l i for-profit basis at the lowest feasible cost through the coordi-  !

nation and use of the facilities and capabilities of both Soyland and WIPCO acting as a single entity."* l t

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i Soyland's member systems are located primarily in central and southern i Illinois, while WIPCO's member systems primarily serve the western counties of Illinois. The combination of the two systems should result in cost efficiencies normally associated with membership in an operating

pool once Soyland becomes a generating entity, i.e., when Clinton comes ,

i on line. The more efficient Soyland/WIPCO has the potential to provide l t stronger competition in the Illinois bulk power industry, particularly }

, l

' in its dealings with larger more fully integrated power systems.**

  • h Staff sees no significant anticompetitive effects befalling the Illinoit bulk power market as a result of the acquisition or proposed mergers which i

l have occurred since the original OL antitrust review.

}

t i

  • Coordination and Operation Agreement between Soyland and WIPC0 dated July 24, 1984, page 3. (Attachedas,AppendixE.) -
    • A possible extension of the Soyland/WIPC0 Pool involves a recent power supply study by the combined cooperative pursuant to the benefits, if any.

associated with joint participation in any of Illinois Power's existing (

fossil-fired generating units. i i

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i D. Miscellaneous Changes

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Staff has identified additional, unrelated, changes in applicants' conduct ,

I and activity since the initial OL review, none of which have resulted in i t

significant negative competitive impact upon the Illinois bulk power industry. f!

i

1. Co-owners Soyland Power Cooperative and Western Illinois e

i Power Cooperative initially agreed to a combined 20%. ownership share  ;

in the Clinton nuclear plant. Due to cost overruns associated with  !

the construction of the plant, Soyland and WIPCO have placed a dollar limit on their participation in the plant of-$450 n.1111on. According f h

to Illinois Power, this sum now amounts to an ownershipsinterest of '

approximately 18%.

2. During 1983 Illinois Power Co. entered into discussions with

, , i the City of Peru Illinois pursuant to a request by the City to trans .

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port energy for the City from its proposed Starved Rock Hydro Plant to I r

the City's distribution facilities. Illinois Power made a proposal to j transport the power, however, the City cancelled its plans to build the hydro facility and consequently no transmission agreement was' consumated  !

with Illinois Power.

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3. Effective June 8, 1983, eight members of the Soyland Power ,

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Cooperative, which had been purchasing their wholesale power require-ments directly from Illinois Power Co., had-their wholesale power .! .

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contracts assigned to Soyland (at Soyland's request). Subsequent to this date, these eight distribution coop members have been served directly through the parent, Soyland. The rationale for this change-over, according to Soyland, was to realize administrative efficiencies i

associated with a more closely monitored power supply for all of its

member systems. (Presumably, these administrative efficiencies would become operating efficiencies once Soyland became a generating entity with the connercial operation of the Clinton power station.)

None of these miscellaneous changes have had any significant negative impact on tne alI1nois bulk power market. Co-owners Soyland and WIPCO have assessed their commitment and ability to financially participate in the Clinton project and have reached a business decision to limit their participation in the plant to $450 million. Though Illinois Power wi11 retain any ownership rights over and above the Soyland/WIPCO commitment, staff believes that the co-owners made a business decision based upon their ability to pay for their share of the plant and were not pressured into giving up a portion of the plant to Illinois Power.

Moreover, the decision by Scyland to consolidate its wholesale power contracts and the decision by the City of Peru not to build a hydro facility have not had significant detrimental effects upon the Illinois bulk power industry.

V. Summary and Conclusion 4

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Staff completed its initial antitrust operating license review of the Clinton Nuclear Power Station (Clinton) in February of 1982. Several changes in the t

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k applicants' activities since the original construction permit (CP) review in i 1974 were identified; however, staff concluded that, I l

" Based upon the successful implementation of CP license conditions li and the lack of any detrimental conduct or activity (to the competitive i process in central and southern Illinois) on the part of Illinois Power Company, Soyland Power Cooperative or Western Illinois Power l

Cooperative, staff reconnends that no affirmative significant
change determination be made pursuant to the application for an l'

operating license for Unit 1 of the Clinton Nuclear Power Station."

(Clinton " Finding of No Significant Antitrust Changes," March 11, 1982, Federal Register, p. 10655.)

i Since the staff completed its initial antitrust operating license review in

February of 1982, there have been construction delays necessitating changes in scheduled fuel load dates for the Clinton plant. Fuel loading is now
scheduled for January of 1986, approximately four years after the staff com-4 plated its initial antitrust review. Staff felt this four year period created l a " review vacuum" and requested updated information from the applicants

- pursuant to any changed activity since the initial antitrust operating {

license review. I l

After reviewing the updated Regulatory Guide 9.3 information and contr.cting i

various electric utility representatives in Illinois and other interested  !

parties, staff identified several changes in the applicants' activities (principally those of Illinois Power Company) since the initial operating license review. Many of the changes, e.g., new interconnections and partial i l

t requirements wholesale power sa'les, by' Illinois Power Company, represented ,

extensions of those changes identified in the original operating license l t

review and have provided additional procompetitive stimuli to the Illinois  !

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industry. Smaller power systems in Illinois have been able to successfully " shop" for alternative sources of power and energy." Applicants Illinois Power Company, Soyland Power Cooperative. Inc. and Western Illinois

Electric Power Cooperative Inc. have initiated a study to determine whether or not future jointly owned generating facilities would be economically feasible.  !
New transmission agreements have been consummated between Illinois Power and its wholesale power customers that provide these smaller power systems

, with the means'to take advantage of the benefits normally associated with larger. '911y integrated power systems, e.g., access to short term economy and diver.C ty rower and energy sales and access to transmission for long term block purchates of power and energy from a number *of different power suppliers.

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Increased <.w rdination,between those fully integrated power systems and the

smaller, less diversified power systems has led to greater competition in the i

Illinois bulk power' industry. This trend toward greater coordination among industry participants began with the institution'of antitrust license condi-

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l tions at the construction permit review stage.

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j The changes that have been identified sin:e the construction permit review have by and large provided momentum for grea'ter coordination, and consequently '

increased competition, between all groups of power supply systems in central ,

and southern Illinois. Staff observed this trend toward increased competition l

[ among b'ulk power suppliers in its initial antitrust operating license analysis. f This trend has continued since 1982 and co1 sea,uently staff sees no reason to i

. . t change its recommendation that "no affirmative significant change determina-  !

tion be made pursuant to the application fer an operating license for Unit 1 l

' i of the Clinton Nuclear power Station."

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APPENDIX A D

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