ML20126D476

Alabama Electric Cooperative Answer to Applicants Petitions for Review.* Applicants 921208 Petitions for Review Should Be Denied.W/Certificate of Svc

ML20126D476
Person / Time
Site:	Davis Besse, Perry
Issue date:	12/22/1992
From:	Boskey B ALABAMA ELECTRIC COOPERATIVE, INC., VOLPE, BOSKEY & LYONS
To:	NRC COMMISSION (OCM)
References
CON-#492-13478 91-644-01-A, 91-644-1-A, A, NUDOCS 9212280006
Download: ML20126D476 (14)

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NUCLEAR REGULATORY COMMISSION {Q~:o (c.q 'l f ,- -

BEFORE THE COMMISSION

.Q, In the Matter of )

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OHIO EDISON COMPANY )

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(Perry Nuclear Power Plant, )

Unit 1) )

and ) Docket Nos. 50-346A

) 50-440A THE CLEVELAND ELECTRIC )

ILLUMINATING COMPANY )

THE TOLEDO' EDISON COMPANY )

)

(Perry Nuclear Power Plant, ) (Applications for Unit 1, and Davis-Besse ) Suspension of Nuclear Power Station, ) Antitrust Conditions):

Unit 1) ) ASLBP No. 91-644-01-A ALABAMA ELECTRIC COOPERATIVE'S ANSWER TO APPLICANTS' PETITIONS FOR REVIE3 Pursuant to the Commission Order of December 10, 1992 in this Docket and to 10 C.F.R. 52.786 (1992),- Alabama Electric Cooperative (AEC), a party to this proceeding,_

submits its Answer to the Petitions for Review filed on December 8, 1992 by Applicants, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Ohio Edison Company.

Applicants' Petitions for Review challenge the legal conclusions of the Licensing Board's Decision, LBP-92-32 (November 18, 1992). Alabama Electric Cooperative submits 9212280006 921222 PDR ADOCK 05000346 g M PDR

that the Applicants' contentions themselves are clearly erroneous on the merits, that the Petitions have failed to identify any error, or any question on which there is a significant possibility of error, in the legal conclusions of the Board's Decision, and have raised no substantial and important question of law, or any other matter encompassed within 10 C.F.R. 52.786(b)(4)(1992). For_these reasons, the Commission should deny Applicants' Petitions for Review.

The two Petitions for Review filed by the Applicants raise the same contention -- that pursuant to Section 105 of the Atomic Energy Act, the Commission loses jurisdic-tional authority to retain previously-imposed antitrust license conditions with respect to a nuclear unit if it can be shown that the power produced by the unit is more costly than that available from an alternative source. Ohio Edison Petition at 3-4; CEI/TECo Petition at 3-4. Thus,-

Applicants would have the Commission's antitrust jurisdic-tion dependent on a day-to-day basis upon the comparative cost of the output of the particular unit.

The Licensing Board's Decision rejected Applicants' fanciful statutory interpretation on the incontestable i ground that such a contention lacked a modicum of support l

l (1) in the plain meaning of the statute; (2) in the 2

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-legislative: history of the statute;-(3) or in any relevant precedent. -LBP-92-321at 21-61. Applicants'-Petitions-simply do not fairly or reasonably accurately' state the actual' bases for the Board's' decision, and hence the -

Petitions fail to-call in question the Board's conclusions.-  !

Compare, Ohio Edison Petition at 5-7-and CEI/TECo Petition--

at 4-6 with LBP-92-32 at 21-61.

The Licensing Board'did not base-its decision on the

" position that the addition of a-high cost facility may be competitively advantageous to an operator," as the-Appli-cants claim. Ohio Edison Petition at 5;.CEI/TECo Petition-at 4-5. Rather, the Board determined, inter alia,;that:-

"The Applicants thus are incorrect in their' assertion that the comparative high coct'asso-ciated with a nuclear facility that a utility-chooses-to construct (or continue to operate) is an initial and potentially dispositive factor in any Commission analysis-under-section 105c.

Instead, that provision directs that the focus lof-the Commission's-consideration must be whether, considering a variety of factors, a nuclear-utility has market-dominance and,Dif~so,Jgiven its past (and predicted) competitive behavior, whether it'can and will use thatfmarket-power-in-its activities relating:to1the operation.of its licensed facility to affect adversely the, competitive. situation'in the relevant market.

Accordingly, because it;is not in accord with the established. antitrust regulatory scheme that the Congress placed-in section 105c, we must reject:

the. Applicants' ' cost comparison'-interpretation; of that provision, as embodied in the ' bedrock' legal issue."

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LBP-92-32 at 46.(footnotes' omitted). Applicants' Petitions

-for Review must be denied, because they are premised on a wholly inaccurate characterization of the bases of the Board's decision.

Applicants are clearly in error when claiming that "the Licensing Board was mistaken when it applied a ' market power' test rather than the cost-based test (claimed-to be) applicable to Section 105(c)." Ohio Edison Petition at 6; CEI/TECo Petition at 5 (footnote omitted). The Board correctly read the controlling statutory language, its history and authoritative interpretations,-and necessarily_

concluded: ,

"As we have seen, in-delineating the basis for the Commission's antitrust remedial authority, the language of section 105c makes reference only to any.' situation inconsistent with the antitrust laws.' The: antitrust laws, in-turn, incorporate a market: power analysis that is not dependent. solely:upon a determination about-the cost of doing business'or a ' cost comparison' analysis of competitors.- As a consequence,1under any ' logical'~ reading ofLthis provision, to accept the Applicants' position-weiwouldlhave to superimpose their ' cost comparison' analysis onto-an otherwise. unambiguous statute that on its face,'does not incorporate that analysis. We cannot do this consistent with established principles'of statutory interpretation.":

LBP-92-32 at 39-40. Applicants' bizarre theory 1s. wholly unpersuasive and is conclusively rebutted by the Licensing Board's thoroughgoing analysis of-the statute _and-its.

history.

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That the Licensing Board's reading of Section 105c is eminently correct is amply confirmed by the Eleventh Circuit's earlier decision in Alabama Power Co. v. N.R.C.d/

The court emphasized that the "statuto clearly calls for a broad inquiry and common aense does not allow interpreta-tions to the contrary."2/ Based on the clear meaning of the statute, the Court of Appeals rejected Alabama Power's contention that a proper NRC antitrust review should focus narrowly on the economics of the nuclear plant. The court dismissed Alabama Power's claim that "the NRC overstepped its authority in looking past the direct effects of the nuclear plant on the present or prospective competitive situation . . . ."2/ The contention which the court rejected on the basis of the language of the statute, was that " Congress undoubtedly intended for NRC to assess solely the impact of the economics of power from the nuclear facility upon the power generation cost situation existing at the time the license was granted and that would 1/blabama Power Co. v. N.R.C., 692 F.2d 1362 at 1367 (Lith Cir. 1982) cert. denied, 464 U.S. 816 (1983). This is the only judicial review on the merits of an NRC antitrust review.

2/Id. at 1368.

2/Id. at 1367.

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exist thereafter.1/ Applicants' effort here to resurrect this same discredited contention was properly dismissed by this Licensing Board, as it was originally rejected by the Court of Appeals in Alabama Power.

The Eleventh Circuit firmly rejected the effort to keep the NRC's antitrust review shackled by a myopic focus on the economics of power from the nuclear facility. The court strongly emphasized the broad delegated discretion inherent in the statutory mandate to the Commission to The conduct antitrust reviews. 692 F.2d at 1368-1370.

court recognized that the Congress had di'tected the Commission to look to potential, as well as actual, anticompetitive situations and to condition licenses even in situations "which would not if left to fruition, in fact violate any antitrust law." Id. at 1368. Plainly, the possibility of evolving and changing economic circumstances was contemplated by Congress, which had determined that for-NRC antitrust review purposes "a traditional antitrust enforcement scheme is not envisioned, and a wider one-is put in its place." Id. In affirming the license condi-tions in the Alabama Power case, the Court of Appeals 1/ Brief of Petitioner Alabama Power Company in Alabama Eower Co. v. N.R.C., supra, at 38. This rejected conten-tion had been reiterated in Alabama Power Company's Reply Brief in the Eleventh Circuit at 7-9.

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4 concluded that they "are specifically fashioned to address the anticompetitive situation which could arise from an unconditional license grant." (Emphasis added.) Id2 at 1367. The court recognized that Congress had conferred on the NRC " wide powers." Id. at 1369-1370. Applicants claim here that the core of Section 105c of the Act is a review of the economics of the power produced by the nuclear unit is wholly contradicted by the scope and breadth of the Commission's antitrust reviews as required by Section 105c and as affirmed by the court of appeals, whose decision in Alabama Power also requires rejection of the grounds advanced in the Applicants' Petitions now before the-Commission.

Applicants' equal protection and alleged Staff bias contentions (see Ohio Edison Petition at 7-8; CEI/TECo Petition at 6-7) are wholly frivolous and merit no review by the Commission. Applicants argue that the economics of power from nuclear units is the only rational Congressional basis for NRC antitrust reviews, and unless a nuclear unit is shown to produce relatively cheap power, then owners of such units are unconstitutionally discriminated against vis a vis other electric power producers. This argument is frivolous. It grossly misstates the legislative concerns leading to the requirement of antitrust review, as the 7

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LBP-92-32 at 61-65. Also, the Licensing Board made clear.

Board's recognition that in light of its legal determina-tion on the merits, Applicants claims of Staff bias are immaterial is clearly correct. LBP-92-32 at 65-68.

The Licensing Board's analysis is exceptionally thorough and persuasive. Further review on the merits by the Conaission itself is_ plainly not warranted under applicable critoria. Nor would adding such an additional and unnecessary stage to this proceeding contribute in any way to the interests of fairness and justice. The Commis-sion should reserve its limited time and attention resources for more deserving matters.

CONCLUSION The Applicants' requests for Commission review are based on the same defective premise -- that Congress intended the Section 105c antitrust review to be contingent upon a finding as to the economics of power from the subject nuclear facility. As has been amply demonstrated in the Licensing Board's decision, that is a false assump-tion as to the meaning and purposes of the antitrust' t

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m provisions of'the Atomic Energy.Act.= Applicants.-requests for-review should be: denied.

Respectfully submitted, M ,

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D.'Biard MacGuit e a.

Bennett Boskey Volpe, Boskey and Lyons 918 16th Street, N.W.

Suite: 602-Washington,-DC 20006

' Telephone: (202).737-6580~

December 22, 1992 Attorneys for. Alabama- ,

Electric Cooperative,-lInc.

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UNITED STATES OF AMERICA i

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NUCLEAR REGULATORY COMMISSION g BEFORE THE COMMISSIQN

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In the Matter oi )

)

OHIO EDISON COMPANY )

)

(Perry Nuclear Power Plant, )

Unit 1) )

and ) Docket Nos. 50-346A

) 50-440A THE CLEVELAND ELECTRIC )

ILLUMINATING COMPANY )

THE TOLEDO EDISON COMPANY )

)

(Perry Nuclear Power Plant, ) (Applications for Unit 1, and Davis-Besse ) Suspension of Nuclear Power Station, ) Antitrust Conditions):

Unit 1) ) ASLBP No. 91-644-01-A CERTIFICATE OF SERVICE I hereby certify that copies of the Alabama Electric Cooperative's Answer to Applicants' Petitions for Review in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, or, as indicated by an asterisk, through deposit in the Nuclear Regulatory Commission's internal mail system this 22nd day of December, 1992.

• Office of Commission Appellate Adjudication U.S. Nuclear Regulatory Commission Washington, D.C. 20555

• Administrative Judge Marshall E. Miller, Chairman Atomic Safety and Licensing Board 1920 South Creek Boulevard Spruce Creek Fly-In Daytona Beach, Florida 32124 l

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• Administrative Judge Charles Bechhoefer Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Mail Stop EW 439 Washington, D.C. 20555

• Administrative Judge G. Paul Bollwerk, III Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Mail Stop EW 439 Washington, D.C. 20555

• Samuel J. Chilk, Secretary Office of the Secretary U.S. Nuclear Regulatory Commission Mail Stop OWFN 16G15 Washington, D.C. 20555

• Office of the General Counsel U.S. Nuclear Regulatory Commission Mail Stop EW 439 Washington, D.C. 20555

• B. Paul Cotter, Jr.

Chief Administrative Judge Atomic Safety and Licensing Board Panel West Towers Building.

l 4350 East West Highway, Fourth I Daor Bethesda, Maryland 20814 L

• Joseph Rutberg l

Sherwin E. Turk

' Steven R. Hom Office of the General Counsel U.S. Nuclear Regulatory Commission

! Mail Stop OWFN 15B18 i Washington, D.C. 20555 i

• Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop OWFN 12G18 Washington, D.C. 20555 2

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- Mark C. Schechter, Chiefi Transportation,'Energyz andl Agriculture Section; U.S.-Department-of Justice, Antitrust Division' Judiciary Center: Building :

555 Fourth Street,-N.W.-

Washington,.D.C.-20001 Janet Urb'an >

U.S. Department of Justice, Antitrust Division .

i

-555-Fourth Street, N.W., Room 9816 JCB

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Washington, D.C. 20001 Kenneth L. Hegemann, P.E.

President- '

.American-Municipal Ptaar-Ohio, Inc. -

601 Dempsey Road, P.o. Box 549 Westerville, OH 43081 David R. Straus Spiegel & McDiarmid 1350 New York Avenue, N.W., Suite 1100-Washington, D.C. 20005 Philip N Overholt Office of Nuclear Plant-Performance:

Office of Nuclear Energy.

U.S. Department.of Energy,-NE-44' Washington, D.C.-20585 Anthony;J. Alexander-Vice-PresidentLand General Counsel Ohio Edison Company:

76 South" Main Street- =

Akron, Ohio 44305;- ,

Michael-D. Lyster Vice. President, Nuclear _ -_ Perry; Cleveland ElectricEIlluminating' Company ~

10 Center Road Perry, Ohio 44081" 3

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Donald C. Shelton Vice President, Nuclear - Davis-Besse Centerior Service Company Toledo Edison Company 300 Madison Avenue Toledo, Ohio 43652 James P. Murphy Colleen Conry Squire, Sanders & Dempsey 1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20044 Craig S. Miller, Director of Law June W. Weiner, Chief Assistant Director of Law William M. Ondrey Gruber, Assistant Director of Law City Hall, 601 Lakeside Avenue, Room 106 Cleveland, Ohio 44115 Reuben Goldberg Channing D. Strother, Jr.

Goldberg, Fieldman & Letham, P.C.

1100 Fifteenth Street, N.W.

Washington, D.C. 20005 Gerald Charnoff Deborah B. Charnoff Margaret S. Spencer Mark A. Singley Shaw, Pittman, Potts & Trowbridge 2300 N Street, N.W.

Washington, D.C. 20037-John P. Coyle Gregg D. Ottinger Duncan & Allen 1575 Eye Street, N.W., Suite 300 Washington, D.C. 20510 4

d Anne Marie Biggons American Public Power Association 2301 M Street, N.W.

Third Floor Washington, D.C. 20037 I / mmc D.' Blard MacGuineas Volpe, Boskey and Lyons 918 16th Street, N.W., #602 Washington, D.C. 20006 Tele.: (202) 737-6580 December 22, 1992 Attorneys for Alabama Electric Cooperative, Inc.

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