ML20235U349
| ML20235U349 | |
| Person / Time | |
|---|---|
| Site: | Vogtle  |
| Issue date: | 03/02/1989 |
| From: | Thomas C Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20235U340 | List: |
| References | |
| A, NUDOCS 8903090165 | |
| Download: ML20235U349 (60) | |
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1 T 7590-01 NUCLEAR REGULATORY COMMISSION DOCKET NO. 50-425A GEORGIA POWER COMPANY. ET AL NOTICE OF ND SIGNIFICANT ANTITRU5T CHANGES-AND TIllE FOR FILING REQUESTS FOR REEVALUATION The Director of the Office of Nuclear Reactor Regulation has made a finding in accordance with Section 105c(2) of the Atomic Energy Act of 1954, as amended, thatnosignificant(antitrust)changesinthelicensees'activitiesor proposed activities have occurred subsequent to the previous antitrust operating license review of Unit 1 of Plant Vogtle by the Attorney General and the Comission. The finding is as follows:
"Section 105c(2) of the Atomic Energy Act of 1954, as amended, provides for an antitrust review of an application for an operating license if the Commission determines that significant changes in the licensee's activities or proposed activities have occurred subsequent to the previous construction permit review. The Comission has delegated the authority to make the
'significant change' determination to the Director, Office of Nuclear Reactor Regulation. Based upon an examination of the events since the issuance of the Plant Vogtle 1 operating license to Georgia Power Company, ej al., the staffs of the Policy Development and Technical Support Branch, Office of Nuclear Reactor Regulation and the Office of the General Counsel, hereafter referred to as " staff," have jointly concluded, after consultation with the Department of Justice, that the changes that have occurred since the Plant Vogtle Unit I antitrust operating license review are rnot of the nature to require a second antitrust review at the operating license stage of the application.
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2 "In reaching this conclusion, the sta'ff considered the structure of the electric utility industry in Georgia, the events relevant to the Plant Vogtle Unit 1 operating license review, as well as the events that have occurred subsequent to the Plant Vogtle Unit 1 operating license review.
"The conclusion of the staff's analysis is as follows:
l "Section 105c of the Atomic Energy Act of 1954, as amended, provides for
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l pre-licensing antitrust reviews of commercial power reactors at the construction permit and operating license stages of the licensing process.
The antitrust operating license review is not intended as a g novo review I
but is focused only on those activities of the licensee (s) that have occurred since the completion of the construction permit review.
"This concept of reviewing only significant changes in the licensee's activities.at the operating license stage has been applied by the staff to reviews of multiunit plant applications. For those plants with multiple reactor licenses, the staff c.onducts separate antitrust reviews for each reactor when the reactors are licensed on a delayed or staggered schedule, i.e., when the reactors are scheduled to be licensed eighteen months or I more apart.
"As indicated supra, the antitrust operating license review of Nnit 1 of Plant Yogtle was completed in November of 1986 and the reactor was licensed in. March of 1987. Unit 2 of Plant Vogtle is scheduled to be licensed in
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March of 1989 and in light of the two-year lapse since the previous review of the licensees, the staff initiated a separate antitrust review of Unit 2 -- with the focus of the review on any significant changes in the licensees' activities since the completion of the previous review in f 1986.
"The changes in the licensees' activities since the previous antitrust review have been largely the result of policies and agreements that were
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intitiated as a result of license conditions placed upon the principal licensee, Georgia Power Company, during the antitrust construction permit review. The staff noted in its operating license review of Unit 1 of !
Plant Vogtle, that the competitive process in the Georgia electric bulk power industry had improved markedly. Moreover, the staff attributed this positive change to the successful implementation of the antitrust license conditions imposed by the Commission. It was also noted that power systems throughout Georgia and adjacent states were better able to control i their own power supply destinies by taking advantage of new power supply options and alternatives made available by a more competitive bulk power supply system.
"The staff's review of changes in the licensees' activities since 1986 1
indicates that the procompetitive effects identified during the Votgle 1 1 OL review are continuing. Various energy exchange agreements imong industry players have been entered into and activated, thereby stimulating more efficient operations among a wide variety of industry players throughout
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the southeastern portion of the count'ry. Georgia Power Company is providing power and energy transactions to various power systems in Georgia as well as Florida. The integrated transmission system that emerged'from the Comission's entitrust construction permit review of Plant Vogtle in the mid-1970's allows for ownership of portions of the Georgia transmission grid by all power systems in the state and this transmission arrangement has been cited by industry observers as a model for joint transmission agreements in other areas of the country.
"The staff believes the competitive stimuli introduced during the antitrust construction permit review are continuing to promote competition and enhance the competitive process throughout the Georgia electric bulk power market.
The staff does not believe that there have been any 'significant changes' in the Itcensees' activities since the previous antitrust review and recomends that no affirmative significant change determination be made pursuant to the operating license for Unit 2 of Plant Vogtle.
" Based upon the staff's analysis, it is my finding that there have been no
'significant changes' in the licensees' activities or proposed activities since the completion of the previous antitrust review."
Signed on February 28, 1989 by Thomas E. Murley, Director of the Office of Nuclear Reactor Regulation. r 6
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Although the Atomic Energy Act of 1954, as' amended, does not address a specific period for public coments pursuant to reevaluation of the Director's Finding, the Comission has adopted rules that normally allow for a 30 day comment period. The staff has determined that in the instant proceeding an exemption from the coment period from 30 days to 15 days should be granted to avoid delay in the issuance of the operating license for Plant Vogtle Unit 2. Moreover, the staff has determined that this exemp-tion will not present an undue risk to the public health and safety nor
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adversely affect any potential interested party's ability to provide coments to the Comission.
Any person whose interest may be affected by this finding, may file, with full particulars, a request for reevaluation with the Director of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Comission, Washington, D.C. 20555 within 15 days of the initial publication of this notice in the Federal Register. Requests for a reevaluation of the no sigr.ificant changes determi-nation shall be accepted after the date when the Director's finding becomes final, but before the issuance of the OL, only if they contain new information, such as information about facts or events of antitrust significance that have r
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FOR THE NUCLEAR REGULATORY COMMISSION 0s / 0.
Cecil 0. Thomas, Chief Policy Development, and Technical Support Branch Program Management, Policy Development and Analysis Staff _
Office of Nuclear Reactor Regulation F
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4 PLANY V0GTLE, UNIT 2 GEORGIA POWER COMPANY, ET AL DOCKET NO. 50-425A FINDING OF NO SIGNIFICANT ANTITRUST CHANGES
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l I. Introduction . . . . . . . . . . . . . . . . Page 1 II. Georgia Electric Power Industry . . . . . . . . .. . 3 III. Previous Antitrust Reviews . . . . . .. . . . . . .. 4 IV. Changes Since the Vogtle 1 OL Antitrust Review . . . . . . 5 A. Wholesale Power Developments
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V.- Sumary and Conclusions . . . .. . . . . . . . . . . 7 Appendix A. Vogtle 1 " Finding of No Significant Antitrust Changes" S
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. I. Introduction A prospective operating licensee is not required to undergo a formal antitrust review unless the Nuclear Regulatory Commission (NRC or Commission)1 determines that there have been "significant changes" in the licensee's activities or l
proposed activities subsequent to the review by the Attorney General and the Commission at the construction permit (CP) stage. Concentration on changes in the licensee's activities since the previous antitrust review expedites and focuses the review on areas of possible competitive conflict heretofore not I analyzed by the Attorney General or the Commission.
10 its Summer decision,2 the Commission has provided the staff 3 with a
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set of criteria to be used in making the significant change determination for operating license (OL) applicants.
"The statute contemplates the change or changes (1) have occurred since the previous antitrust review of the licensee (s); (2) are reasonably attributable to the licensee (s); and (3) have antitrust implications that would most likely warrant some Commission remedy.
1The Commission has delegated the responsibility for making a significant change determination to the Director of the Office of Nuclear Reactor Regulation.
2 Virgil C. Summer Nuclear Station Unit 1 Docket No. 50-395A, June 26,1981 at 13 NRC B62 (1981). I 8" Staff", hereinafter refers to the Policy Development and Technical Support Branch of the Office of Nuclear Reactor Regulation and the Office of the General Counsel.
4 Commission Memorandum and Order, p. 7, dated June 30, 1980 (CLI-80-28).
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. 2 To warrant a significant change finding, the particular change (s) must meet all three of these criteria.
The staff conducts separate antitrust operating license reviews of multiunit nuclear production facilities when the second or successive unit is scheduled to be licensed eighteen months after the previous unit has been licensed.5 The antitrust operating license review of Unit 1 of P.lant Vogtle was completed on November 21, 1986 and the operating license was issued on March 16, 1987. The issuance of an operating license for Unit 2 of Plant Vogtle is scheduled for March 31, 1989 -- more than two years after licensing of Unit 1. As a result of this lapse of time, the staff " conducted a separate antitrust operating license or "significant change" review for Unit 2 of Plant Vogtle.
The staff requested updated Regulatory Guide 9.3 information from all of the licensees and reviewed the data submitted in conjunction with previous antitrust reviews of nuclear plants owned by Georgia Power Company, i.e.,
Hatch 2 and Vogtle 1 construction permit and operating license reviews.
After reviewing these and other pertinent data, the staff has determined that none of the changes that were identified were significant in an antitrust context. Consequently, the staff is not recommending that an affirmative "significant change" finding be made pursuant to the antitrust operating license review of Unit 2 of Plant Vogtle.
l SCf., " Procedures for Meeting NRC Antitrust Responsibilities" NUREG-0970,
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. 3 II. Georgia Electric Power Industry The elect'ric 'bulk power industry in the state of Georgia has not changed significantly since the staff conducted its operating license review of Unit 1 of Plant Vogtle in 1986. Electric bulk power supply is still largely the responsibility of the principal licensee, Georgia Power Company (GPCo). The acquisition of the Savannah Electric & Power Company (SEPCO) on March 3, 1988 by The Southern Company, Georgia Power Company's parent holding company, has reduced the number of players in the Georgia electric bulk power market, but :
has not significantly affected competition in the state as SEPCO's marketing area is concentrated primarily in'the City of Savannah, Georgia.s Three of the principal power supply systems in the state are co-owners of Plant Vogtle -- GPCo with 45.7%, Oglethorpe Power Corporation (Oglethorpe) 30%, and the Municipal Electric Authority of Georgia (MEAG) 22.7%.7 With the exception of normal growth, the size and scope of operation of each of the licensees has ' changed little since the Vogtle 1 OL review.s GPCo is still the largest licensee in terms of customers served, generating capability and most other statistical operating indicators. Oglethorpe, though still purchasing anywhere from 30-40 percent of its system load requirements from GPCo, is showing sSavannah Electric & Power Company had generating capability of slightly over 650MW in 1987 with a peak load of 565MW. SEPCO serves primarily the City of Savannah, Georgia -- representing 94 percent of its customer base -- and smaller surrounding cities in the southeastern part of the state.
7The City of Dalton, Georgia owns the remaining 1.6 percent.
sCf., Vogtle 1 " Finding of No Significant Antitrust Changes", attached as Appendix A.
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. 4 signs of attaining its goal of generating self-sufficiency by the early 1990's.
MEAG still serves its 47 wholesale power customers (46 of which are municipal distribution ' systems) in much the same manner as Oglethorpe, i.e., purchasing power and energy and reselling it to its wholesale member customers, and with the commercial operation of Vogtle 1, the City of Dalton has decreased its '
reliance on power purchases from GPCo and the Southeastern Power Administration.
III. Previous Antitrust Reviews Georgia Power Company underwent antitrust reviews in conjunction with its CP and OL applications for Unit 2:of Plant Hatch, its CP for Plant Vogtle (all units) and most recently an operating license review of Unit 1 of Plant Vogtle which was completed in November 1986.
2 During the CP reviews of Plant Hatch and Plant Vogtle, the staffs of both the Department of Justice and the Atomic Energy Commission identified several instances of anticompetitive activity by GPCo.
"The Department's advice letters in Hatch and Vogtle expressed concern over Georgia Power's dominance in generation and transmission capabilities in the state of Georgia and the apparent abuse of this market power at the expense of and to the detriment of smaller power systems and the competitive process in the l Georgia electric bulk power supply industry."0 l
eVogtle 1 " Finding of No Significant Antitrust Changes", Appendix A, p. 8.
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5 Extensive negotiations invo'1ving GPCo interveners and the staffs of the Department of Justice and the AEC resulted in a settlement agreement and a broad set of li' ens' c conditions designed to mitigate GPCo's anticompetitive conduct.
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The Plant Vogtle Unit 1 operating license antitrust review identified several l groups of changes that were attributed to GPCo since the previous antitrust review; however, as stated by the staff in its Vogtle 1 OL review,
. . . these changes have largely been procompetitive and do not warrant remedial action by the Commission. The vast majority of these changes have materialized through the implementation of the antitrust license conditions attached to the Plant Vbgtle and Plant Hatch Unit 2 construction permits."10 The staff identified several groups of changed activity by GPCo that provided procompetitive stimuli to the Georgia bulk power market. Moreover, staff did not identify any significant negative competitive activities by the licensees since the last antitrust review of GPCo and for these reasons recommended that no significant antitrust changes had occurred since the previous antitrust review of GPCo.
IV. Changes Since the Voatle 1 OL Antitrust Review There have been few changes (with competitive significance) in the Georgia electric bulk power industry since the staff last reviewed the licensees' activities during the Vogtle 1 operating license review in 1986. The changes l
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that have been identified by the staff have once again been largely procompetitive and represent the culmination of proposals or agreements discussed by the licensees in respon'se to the Regulatory Guide 9.3 request dated February 24, 1986 in conjunction with the Vogtle 1 OL antitrust review. These changes have involved allocation and transport of wholesale power and energy throughout the state of Georgia and adjacent states.12 A. Wholesale Power Developments ;
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- 1) An energy exchange agreement (EEA) between Oglethorpe and the Seminole Electric Cooperative (Seminole) ehabling Oglethorpe to deliver power and energy from the Tennessee Valley Authority control area to the state of Florida was activated. GPCo filed the necessary service tariffs at the Federal Energy j Regulatory Commission (FERC) and now acts as the scheduling agent for trans-actions under this agreement, providing the necessary transmission facilities to accommodate the power flows from Oglethorpe to Seminole.
- 2) A similar EEA between Alabama Electric Cooperative and the South Mississippi Electric Power Association, though in place, has not been activated, i.e. ,
11The acquisition of SEPCO by GPCo's holding company parent, The Southern Company, eliminated SEPCO as an independent force in the Georgia electric bulk power market. As indicated supra, SEPCO's marketing area is concentrated in and .
around the City of Savannah, Ga. with over 650MW of generating capability and l approximately 285 circuit miles of transmission line. The staff does not believe this acquisition significantly affects bulk power supply in the state of Georgia; moreover, the acquisition is not an activity that can be directly attributed to any of the licensees. The acquisition is noted herein only to provide insight into the changes in the Georgia bulk power industry.
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. of the parties to the agreement.
3)GPCoalsointendstoparticipateinanadditional98MWofunitpowersales to Florida utilities. The sales to these utilities were initially referenced in the 1986 submittal to Regulatory Guide 9.3 and the 98MW represent increases to existing customers under GPCo's unit power sales agreements.
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- 4) Oglethorpe purchased a majority interest in the Rocky Mountain Fumped Storage Project owned by GPCo. This hydroelectric facility is rated at 636MW and will help Oglethorpe meet its goal ~of generating self-sufficiency for the early 1990's. (As a means to furthering this goal, Oglethorpe is also proceeding with plans to add up to 240MW of combustion turbine capacity as early as 1992.)
V. Sumary and Conclusions Section 105c of'the Atomic Energy Act of 1954, as amended, provides for pre-licensing antitrust reviews of commercial power reactors at the construction permit and operating license stages of the licensing process. The antitrust operating license review is not intended as a g novo review but is focused only on those activities of the licensee (s) that have occurred since the completion of the construction permit review.
This concept of reviewing only significant changes in the licensee's activities at the operating license stage has been applied by the staff to reviews of multiunit plant applications. For those plants with multiple reactor licenses, 4
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the staff conducts separate antitrust reviews for each reactor when the reactors l are licensed on a delayed or staggered schedule, i.e., when the reactors are j scheduled'to be licensed eighteen months or more apart.
As indicated supra, the antitrust operating license review of Unit 1 of Plant Vogtle was completed in November of 1986 and the reactor was licensed in March of 1987. Unit 2 of Plant Vogtle is scheduled to be licensed in March of 1989 and in light of the two year lapse since the previous review of the licensees, the staff initiated a separate antitrust review of Unit 2 -- with the focus of the review on any significant changes in the licensees' activities since the completion of the previous review'in 1986.
The changes in the licensees' activities since the previous antitrust review have been largely the result of policies and agreements that were initiated as a result of license conditions placed upon the principal licensee, Georgia Power Company, during the antitrust construction permit review. The staff noted in its o'perating license review of Unit 1 of Plant Vogtle, that the competitive process in the Georgia electric bulk power industry had improved markedly. Moreover, the staff attributed this positive change to the successful implementation of the antitrust license conditions imposed by the Commission.
It was also noted that power systems throughout Georgia and adjacent states were better able to control their own power supply destinies by taking advantage of l new power supply options and alternatives made available by a more competitive bulk power supply system.
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9 The staff's review of changes in the licensees' activities since 1986 indicates that the procompetitive effects identified during the Vogtle 1 OL review are continuing. Various energy exchange agreements among industry players have been entered into and activated, thereby stimulating more efficient operations among a wide variety of industry players throughout the southeastern portion of I
the country. Georgia Power Company is providing power and energy transactions to various power systems in Georgia as well as Florida. The integrated trans-mission system that emerged from the Commission's antitrust construction permit review of Plant Vogtle in the mid-1970's allows for ownership of portions of the Georgia transmission grid by all power systems in the state and this ,
transmission arrangement has been cited by industry observers as a model for joint transmission agreements in other areas of the country.
The staff believes the competitive stimuli introduced during the antitrust construction permit review are continuing to promote competition and enhance the competitive pr,ocess throughout the Georgia electric bulk power market. The staff does not believe that there have been any "significant changes" in the licensees' activities since the previous antitrust review and recommends that no affirmative significant change determination be made pursuant to the operating license for Unit 2 of Plant Vogtle. , 3 9
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APPENDIX A O
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PLANT V0GTLE, UNIT 1 GEORGIA POWER COMPANY, ET AL DOCKET NO. 50-424A FINDING OF NO SIGNIFICANT ANTITRUST CHANGES l
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i CONTENTS I. Introduction..................................Page 1 II. Georaia Electric Power Industry. . . . . . . . . . . . . . . . . . . 2 III. Previous Antitrust Reviews........................ 4 A. Plant Hatch CP Review
. B. Plant Vogtle CP Review C. Hatch /Vogtle Settlement D. Oglethorpe, MEAG and Dalton CP Review E. Hatch Unit 2 OL-Review IV. Changes Since the Voatle CP Antitrust Review..... 12 A. Formation of Joint Action Groups B. Generation-Dwnership Changes.
C. Transmission-Ownership Changes D. Formation of a " Joint Committee" E. Interconnections F. Wholesale Power Developments i G. ReductionsinProjectedLoadGrowth V. Summary and Conclusions.......................... 21 Appendices A. Department of Justice Advice Letter Dated May 1,1974.
B. Department of Justice Advice Letter Dated April 9,1976 1
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I. Introduction A prospective operating licensee is not required to undergo a formal anti-trust review unless the Nuclear Regulatory Commission (NRC or Commission) determines that there have been "significant changes" in the licensee's
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activities or proposed activities subsequent to the review by the Attorney General and the Commission at the construction permit (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 conflict heretofore not analyzed by the Attorney General or the Commission. .
In its Summer decision, the Commission has provided the staff with a set of criteria to be used in making the significant change determination for operating license (OL) applicants.
"The statute contemplates the change or changes (1) have occurred since the previous antitrust review of the licensee (s);
(2) are reasonably attributable to the licensee (s); and (3) have antitrust implicatippi that would most likely warrant some Commission remedy."
- The Commission has delegated the responsibility for making a significant ma change determination to the Director of Nuclear Reactor Regulation.
Virgil C. Summer Nuclear Station Unit 1, Docket No. 50-395A, June 26,
.. 1981 at 13 NRC 862 (1981).
" Staff" hereinafter refers to the Planning and Resource Analysis Branch of the Office of. Nuclear Reactor Regulation and the Office of the General
.... Counsel.
Commission Memorandum and Order, p. 7, dated June 30, 1980 (CLI-80-28).
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2-To warrant a significant change finding, the particular change (s) must meet all three of these criteria. Staff has received data submitted by the licensees in connection with Georgia Power Company's Plant Hatch and Plant Vogtle construction permits as well as data pertaining to any changed circumstances since the completion of the Hatch and Vogtle review. After reviewing these and other ep'rtinent data, staff has determined that none of the changes that were identified were significant in an antitrust context, and consequently, staff is not recommending that a "significant change" finding be made pursuant to the antitrust operating license review of Plant Vogt1e, Unit 1.
. II. Georgia Electric Power Industry Electric power in the state of Georgia is supplied largely by: two investor-owned utilities, Georgia Power Company (GPCo) and the Savannah Electric and Power Co.; a generation and transmission cooperative,
! . Oglethorpe Power Corporation (Oglethorpe or OPC); the U.S. Army Corps of Engineers through the Southeastern Power Administration (SEPA); and a municipal joint action agency, the Municipal Electric Authority of Georgia (MEAG). '(Three of the principal power supply systems in the state are co-owners of Plant Vogtle and Plant Hatch.)
A Georgia Power Co. is the lead licensee, responsible for construction and operation of both Plant Hatch and Plant Vogtle.
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A. Applicant Power Systems Plant Vogtle is a two unit (1,100 MW each) power plant located on the Savannah River in Burke, County Georgia. The plant is jointly owned by the Georgia Power Co. (45.7%), Oglethorpe Power Corp. (30%), the Municipal Electric Authority of Georgia (22.7%) and the City of Dalton, Georgia (1.6%).
Georgia Power is an operating subsidiary of the Southern Company, a hold'ing company organized under the Public Utility Holding Company Act of 1935. GPCo is the largest of the applicant systems (and the largest
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power supplier in the state) with over 11,500 MW in generating capability in 1985. GPCo's service area extends over 57,000 square miles, serving over 600 cities and towns and over five million in population.
Oglethorpe Power Corp. is a generation and transmission (G&T) power cooperative organized in 1975 principally to furnish power and energy to j 39 electric distribution cooperatives. Since its inception, OPC has
{. acquired ownership shares in various baseload generating plants that presently account for over 1,900 MW of generating capability. The 39 membership customers serve primarily rural areas throughout the state, covering 71 perce' nt of the land area in the state of Georgia. Except for power received under individual member contracts with the Southeastern Power Administration, Oglethorpe acts as the sole supplier to its distribution cooperative members under a wholesale power supply contract lasting until the year 2022.
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. The remaining Southern Company operating subsidiaries include: Alabama Power Co., Gulf Power Co. and Mississippi Power Co.
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4 The Municipal Electric Authority of Georgia was created by the Georgia legislature in 1975,
...for the purpose of acquiring, constructing, owning, operating and maintaining electric generation and transmission facilities to supply bulk electric power and energy to political subdivisions of the State whigh owned and operated electric distribution systems...."
MEAG serves its customers (46 municipalities and one county power 1
commission) in much the same manner as Oglethorpe serves its distribution cooperatives. Since its inception, MEAG has acquired ownership in various baseload power plants totaling over 1,000 MW of generating capability. MEAG participants, formerly total requirements wholesale customers of GPCo, have begun supplying the needs of its members through purchase of interests in generating plants and partial requirements purchases from GPCo.
III. Previous Antitrust Reviews Georgia Power Company has undergone antitrust reviews in conjunction with its CP and OL applications for Unit 2 of Plant Hatch and at the construction permit stage for Plant Vogtle.
A na MEAG response to Regulatory Guide 9.3 dated October 14, 1983, p. 2.
The Crisp County Power Commission, a MEAG participant, generates its own power requirements; however, Crisp County still engages in certain interchange service with GPCo.
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. an important factor in the smaller power systems' quests to actively enter the bulk power services market in Georgia.
"With control over all transmission, Applicant Georgia Power Company has been in a position to grant or deny access to coordination to actual or potential competitors at wholesale or at retail in most of the State of Georgia. It has in fact
, used that monopoly control so as to prevent or impede Me development of competitive bulk power supply systems."
i The Department issued its initial advice letter in the Plant Hatch, Unit 2 CP proceeding on December 7,1971, indicating that interested parties in the proceeding were involved in negotiations aimed at resolving outstanding competitive issues and that another advice letter would be forthcoming in the near future.
Department of Justice advice letter dated August 2, 1972, p. 3'.
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6-The Department suggested in its advice letter that any license to construct Unit 2 of Plant Hatch be conditioned to provide relief from the following anticompetitive activities:
"(1) refusal to transfer wholesale power except at relatively low voltages, in order to preclude competition from existing wholesale customers for large industrial loads, and to prevent the development and expansion of coordinated subtransmission systems among wholesale customers; (2) territorial allocation schemes with adjacent utilities (including Georgia Power's affiliates) in other states who might otherwise be available as alternative sources of bulk power supply; (3) territorial restrictions, customer restrictions on the resale of power delivered by Georgia Power under its wholesale contracts; (4) requiring of excessive reserves as a condition for interconnection between Georgia Power and other electric utilities; and (5) inclusion of unreasonable restrictions in SEPA power contracts in order to forestall develop nt of new
-generation by other electric utilities.p' B. Plant Vogtle CP Review 1
The Commission received Georgia Power's construction permit application for Plant Vogtle, Units 1-4 on August 1,1972. On May 9, 1973, the A
Ibid., pp. 11-12.
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Department issued another advice letter to the AEC pursuant to the Vogtle CP application, again recommending that a hearing be held to determine whether or not Georgia Power's activities would create or maintain a situation inconsistent with the antitrust laws.
The applicant and affected parties were the same in both the Hatch and Vogtle proceedings and as a result, the Department's Vogtle advice letter referenced the Hatch CP advice letter, indicating that the industry structure and Georgia Power's conduct with respect to smaller power
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systems in the state of Georgia was unchanged since its lar.t letter of advice to the AEC.
"Accordingly, the facts upon which our advice regarding the Vogtle units must be based, are identical to those stated in our letter on the earlier application [ Hatch]
except that changes in the fossil fuel supplies appear to increase the importance of nuglear power generation as a source of bulk power supply."
The Department concluded its Vogtle advice letter by suggesting that the similarities of issues and parties in both the Hatch and Vogtle proceedings warranted consolidation of the two proceedings for purposes of conducting an evidentiary hearing before the Atomic Energy Commission. The AEC staff agreed with the Department and filed a motion before the Commission on September 25, 1973 to consolidate the Vogtle and Hatch proceedings.
Department of Justice advice letter dated May 9,1973, p.1.
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C. Hatch /Vogtle Settlement The AEC staff, the Department, the applicant and several interveners conducted extended negotiations aimed at resolving the competitive concerns raised by the Department in its August 2,1972 Hatch advice letter. In April of 1974, the parties agreed to a settlement agreement
, that contained a set of proposed license conditions to the Hatch (Unit 2) and Vogtle nuclear units designed to remedy the applicant's alleged misuse of its dominant position in the Georgia electric bulk power industry.
The Department's advice letters in Hatch and Vogtle expressed concern over Georgia Power's dominance in generation and transmission capabilities in the state of Georgia and the apparent abuse of this
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market power at the expense of and to the detriment of smaller power systems and the competitive process in the Georgia electric bulk power supply industry. The license conditions proposed in the settlement agreement provided many new competitive alternatives and options to power systems which had heretofore been dependent upon Georgia Power for all of their electric power supply needs. Georgia Power agreed to AA sell full and partial requirements power to any " entity" Subse!uent to publication Feder 1 Register, the AECofreceived the Hatch petitions and Vogtle advice in to intervene letters bothin the proceedings representing both municipal and cooperative power interests in the state of Georgia. (The Georgia Municipal Association and the City of Acworth, Ga., in both proceedings and the Georgia Electric Membership -
Corp., the City of Dalton, Ga., and the Mitchell County Electric Membership Corp. in the Hatch proceedings.)
~
Entity is specifically defined in the license conditions.
l
- 9. ___ _ __-___ ____-_____--_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
[. . .
in the state, to transmit bulk power over its system to entities it is connected to, to interconnect with entities and offer ownership interest
.in Unit 2'of Plant Hatch and Plant Vogtle Units 1-4.
As a result of the settlement agreed upon by Georgia Power and the interveners, the Department of Justice iss'ued another advice letter dated May 1, 1974 to the AEC pursuant to both the Hatch and Vogtle l construction permit proceedings. The Department concluded in its advice letter that the licensing commitments agreed upon by Georgia Power would provide competitors and potential competitors of Georgia Power the means to effectively compete in the Georgia bulk power
. services market.
"On the strength of these commitments and with the expectation that the Commission will include them as conditions to the licenses involved here, we conclude that it will not be necessary to proceed with antitrust hearings on the instant applic proceeding may be terminated."Ation and that the existing Subsequent to the settlement and the 1974 advice letter of the Department recommending that the Hatch and Vogtle proceedings be terminated, the AEC Department of Justice advice letter dated May 1,1974, unnumbered p. 2.
Attached as Appendix A.
8
[ _ _ _ _ _ _ _ - - - - - _
, staff filed a motion before the Commission in June of 1974 requesting dismissal of the Vogtle proceeding. A similar pleading was filed before ,
the relevant Atomic Safety and Licensing Board (established to rule on the Hatch proceeding) to terminate the parallel Hatch proceeding which A
had entered the early stages of the hearing process.
D. Oglethorpe, MEAG and Dalton CP Review The license conditions agreed upon by Georgia Power provided for access to all of the Vogtle nuclear units and Unit 2 of Plant Hatch.
Oglethorpe, MEAG and the City of Dalton all opted to exercise their options to purchase a portion of Vogtle and Hatch and as new owners had to undergo an antitrust review at the construction permit stage of review.
On April 9, 1976, the Department of Justice provided the Nuclear man
~. Regulatory Commission with advice pursuant to the addition of Oglethorpe, HEAG and Dalton as prospective new owners in Unit 2 RAAA of Plant Hatch and Units 1 and 2 of Plant Vogtle. The Department A
The dismissal of the two proceedings mooted staff's request for na consolidation.
Certain smaller (de minimis) power systems are no longer required to undergo the same stringent antitrust review procedure required of the
... large fully integrated prospective licensees.
,$an The Department's April 9,1976 advice letter is attached as an Appendix B.
Units 3 and 4 of Plant Vogtle had been cancelled since the 1974 commitments were agreed upon.
"[_ _ _ _ _ ? ~ _ _- ----
Department concluded that the addition of these three new co-owners was the result of extensive settlement negotiations between Georgia Power and the representatives of small competing systems throughout the state of Georgia. ,
...the addition of MEAG Oglethorpe and the City of Dalton as partial owne,rs of the Hatch unit and the Vogtle units will not create or maintain.a situation inconsistent with the antitrust laws."
Through Oglethorpe and MEAG, any interested electric cooperative or municipal electric system may participate in the ownership of Plants Hatch and Vogtle. Moreover, Georgia Power provided small electric systems direct ownership in these units (note the City of Dalton's I
participation) should they prefer not to participate through a joint brokering agreement..' The new co owners were also offered ownership in portions of Georgia Power's high voltage transmission system- previously owned and controlled exclusively by. Georgia Power. The smaller power systems now have the capability to seek out alternative power supply sources, a competitive option virtually foreclosed to them before the consummation of the settlement agreement.
E. Hatch Unit 2 OL Review Georgja Power filed its operating license for Unit 2 of Plant Hatch in the fall of 1975 and submitted information responding to the Commission's o
o Department of Justice advice letter dated April 9, 1976, p. 3.
t
_ _ _ _ _ _ _ _ . . _________--- - ----- - --- - --~ - ~
Regulatory Guide 9.3 (identifying changes in the applicants' activities since the CP review) in January of 1976. The bulk of the licensees' response described changes in Georgia Power's activities which were directly associated with and resulted largely from the 1974 settlement agreement between Georgia Power and the municipal and cooperative power systems in Georgia. The review indicated that there were several rate proceedings before the Federal Power Commission (FPC) pursuant to rates for wholesale customers involving price squeeze issues. The review found that the bulk of the changes in the licensees' activities were attributed ;
to the settlement agreement and were procompetitive in nature and that the rate or price squeeze iss'ues were under the jurisdiction of the FPC.
The significant change review concluded that the changes in the licensees'
. activities since the CP antitrust review were not of a nature to require an operating license antitrust review. ,
IV. Changes Since the Vogtle CP Antitrust Review j As indicated supra, the Commission does not initiate a formal antitrust review at the operating license state unless "significant changes" in the licensee's activities have taken place since the completion of the construction permit antitrust review. The Commission's antitrust review at the CP review stage for Plant Vogtle (and Plant Hatch) was effectively completed when the Commission terminated the proceeding on Jun,e 28, 1974. Staff has identified several groups of changes (with potential competitive significance) since the completion of the Vogtle CP review.
h . . _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ -m
. A. Formation of Joint Action Groups During the Hatch and Vogtle CP review, many different municipal electric and cooperative power systems in Georgia raised concerns over Georgia Power's competitive practices involving bulk power supply through-out the state. As these concerns surfaced and many of the municipal and cooperative systems realized they had a commonality of interests, they ultimately joined together to form two large joint action agencies --
Oglethorpe Power Corporation and the Municipal Electric Authority of Georgia.
Oglethorpe was formed in August of 1974 and ccts as the power broker for its 39 electric distribution cooperative members. None of Oglethorpe's members actually owns generating facilities. Oglethorpe has been empowered by its members to seek out the most cost effective source o'!
power supply (either through ownership of generating capacity 1tself or through purchase of power and energy) for its members and has set a goal
. of self-sufficiency in baseload generation for the 1990's.
HEAG serves its municipal electric " participants" in much the same manner as Oglethorpe does its cooperative distribution systems. Prior to its formation in 1975 and up until 1977, all of the MEAG participants were dependent upon Georgia Power Company for all power and energy needs not supplied by the federally-owned Southeastern Power Administration A
Crisp County Power Commission supplies much of its own power requirements through its own generating facilities and also engages in certain inter-
. change service with Georgia Power Co.
7 8T w _ __- -- _ _ . . . . _
"Since 1977, MEAG has furnished all of the Participants'
' requirements formerly supplied by GPC, except for certain interchange service which GPC continues to provide Crisp County. MEAG has done so through a combination of ownArship interests in generating units and purchases from GPC."
The creation of Oglethorpe and MEAG enabled many smaller electric power
., systems in the state of Georgia to participate in the benefits associated with baseload generation and transmission.
B. Generation - Ownership Changes Since the completion of the Vogtle CP review, Georgia Power has sold substantial portions of its base!oad generating capability, both nuclear and non-nuclear, to Oglethorpe, MEAG and the City of Dalton, Georgia.
The following ownership shares have been sold to these three power entities: ,
MEAG OPC DALTON Plant Hatch (nuclear) 17.M 30.0% 2.2%
Plant Vogtle (nuclear) 22. 3 30.0% 1.6%
Plant Wansley (fossil) 15.1% 30.0% 1.4%
4 PlantScherer(fossil) 30.2% 60.0% 1.4%
Units 1 and 2 g
La em MEAG response to Regulatory Guide 9.3 dated October 14, 1983, p.2.
Georgia Power has agreed to buy back specific portions of the output from portions of Plant Vogtle sold to MEAG and OPC. The buy back arrangements were intented to provide the new owners the opportunity to purchase portions of large generating facilities at one point in time, yet receive the output from their ownership shares on a schedule commensurate with the gradual increase projected in their respective load requirements.
l l
_ _ _ .m~.n- m--_-m ~ --
These shares represent substantial portions of Georgia Power's baseload capacity additions since 1975.
C. Transmission - Ownership Changes As a result of the settlement agreement in 1974, Georgia Power made -
available portions of its transmission system to power entities in -
,, Georgia that wished to take equity positions'in Georgia Power's existing transmission grid as well as planned future additions ~ to the transmission grid. To facilitate the movement of power and energy from its jointly owned generating plants and at the same time provide the means to shop for alternative power supply' sources, an Integrated Transmission System l (ITS) was formed (in 1975-76) among Georgia Power, MEAG, OPC and Dalton.
As the ITS is envisioned, each participating entity has an investment i
i responsibility in t.he total Georgia territorial transmission system relative to its expected use of the transmission system. Prior to the
' formation of the ITS agreement,
... there were numerous electric membership corporations and municipalities in Georgia taking full requirements
. electric service from the Company. Now only Acworth and Hampton municipal systems take full requirements service while participants in the ITS use that system for delivery of power from the Company and power generated from self-owned resources, and can use the ITS for off-system transactions.... Members of the Integrated Transmission System are required to maintain investment parity in the system and this is accomplished primarily a by the construction or purchase of transmission facilities.
m Georgia Power Company response to Regulatory Guide 9.3 dated October 14, 1983, pp. 16-17.
4
An example of off-system usage of the ITS involves a proposal by Oglethorpe to transfer energy to the Seminole Electri c Cooperative, Inc.
(Florida) from Plant Scherer.
Although this agreement has not been finalized,' Georgia Power has agreed to schedule Ogleth orpe's energy to the Georgia-Florida border where Florida Power Corp transmit the energy to Seminole. oration will in turn This type of. transaction was not a competitive option open to Oglethorpe prioragreement to the settlement and the accompanying ITS agreement.
D. Formation of a " Joint Comittee" As a direct result of the participation by Oglethorpe MEAG and the City of Dalton in the Hatch and Vogtle nuclear a plants and the G Integrated Transmission System, a Jointmed Committee by these was for three power entities and the Georgia Power Co .
Though not a power pool per se, the joint committee acts like and affords ny its participant
-- of the benefits associated with power pool .
The Joint membership Comittee was formed to implement and administer the ag reements and contracts between Oglethorpe, MEAG, Dalton a ave and Georgia P evolved with joint ownership of generation and es transmission, since the antitrust settlement agreement in 1974.
"An important function of the Joint Comittee is the system planning by the parties to the Joint Comitte Agreement.
Accordingly, the four parties to the Agreement i
~
i exchange. load forecasts, future generation and transmission expansion plans, and all other available data regarding specific planned facilities."
The formation of this Joint Committee is an example of Georgia Power's willingness to afford greater participation in the planning of future generation and transmission facilities, an option crucial to newly emerging power systems.
E. Interconnections Georgia Power has participated in regional reliability studies that from time-to-time have required interconnections to the ITS whenever needed.
Connections to the ITS provided by Georgia Power since 1974 include the following:
(1) Connections for federal hydroelectric projects in 1974 and 1975 (9 115 and 230 kV respectively);
1 (2) An interconnection (9 230 kV) with the Savannah Electric and Power Co. in 1975; (3) An interconnection with the South Carolina Electric and Gas Co. (9115 kV) in 1975; (4) An interconnection with Duke Power Co. (9 500 kV) in 1977; .
m Georgia Power response to Regulatory Guide 9.3 dated October 14, 1983, pp. I 13-14 1
I
?
9 !
L __ _ _ - - _ _ _ _ - - - - - - - - - _ - _ - _ - - - - - - - - - - - - - - - - -- - - - -
(5) An interconnection with Florida Power and Light Co.
(@ 230 kV) in 1979; (6) Two interconnections (each 9 500 kV) with Florida Power and Light Co. and the Jacksonville (Fla.)
Electric Authority in 1982; (7) An interconnection with the City of Tallahassee, Fla.
(9 230 kV) in 1983; and (8) An interconnection with the South Carolina Gas & Electric Co. (9 230 kV) in 1986.
Oglethorpe Power Corp. has also entered into bilateral agreements with the Alabama Electric Cooperative and the South Mississippi Electric j Power Association. The service schedules attached to the agreements provide for a wide range of power and energy options including, emergency, economy and maintenance energy, wheeling services and short-term power and energy exchanges.
Georgia Power Co. has also entered into new interconnection agreements with other affiliates of the Southern Company system and has been involved in discussions concerning power and energy exchanges with l
electric systems in surrounding states. These new interconnections together with those involving Georgia Power and smaller competing power systems in Georgia have enhanced the reliability of the transmission grid in Georgia and stimulated the competitive process in bulk power supply throughout the state of Georgia.
l 1
. ________________-___--_ - - - - - - i
19 1
I F. Wholesale Power Developments '
Subsequent to the settlement agreement in 1974, Georgia Power filed rate schedules with the Federal Power Commission that allowed its wholesale customers to take partial requirements power. As a result of the filing, the smaller competing power systems in Georgia, which heretofore had been
~
full requirements wholesale customers of Georgia Power, can now more effectively shop for alternative power sources in Georgia and surrounding states. The institution of the partial requirements rate by Georgia Power coupled with the opening up of access to Georgia Power's transmission grid and baseload generation has enabled these smaller systems to move away
, from being full requirements customers of and fully dependent upon the Georgia Power Co.
Since July 1,1980, MEAG has been providing supplemental power to the
~
Crisp County Power Commission. Prior to July 1,1980, Crisp County (a MEAG participant) had been taking its supplemental power requirements from Georgia Power.
Georgia Power Co'. has also began serving new wholesale loads, largely through the allocation procedure scheduled by the Southern Company system.
A Oglethorpe Power Corp. converted to Georgia Power's partial requirements (PR) rate on July 1,1975; MEAG, in February of 1977; and the City of Dalton on June 1, 1977.
i 2m =___r_. . . - - - - = _* ' ' ' ~ ~ ~ " " * " ~ ' ' * '" ~
. l
, l "Several new. wholesale customers situated outside of the Georgia. territorial service area have been added ;
'through contracts for dedicated unit sales (" Unit Power Sales") and interruptible sales.. The' contracts-were negotiated by the operating subsidiaries of the Southern Company and Southern Company Services, Inc.
Georgia Power Company has a resulting assigned load ratio' share of interruptible sales and specific capacity allocations of dedicated unit sales. The Company's new wholesale customers under interruptible sales contracts are:
Florida Power and Light Company; Jacksonville Electric Authority; Florida Power Corporation;.the City of Tallahassee, Florida; Savannah Electric and Power Company; and Mississippi Power and Light Company. Customers added by dedicated unit sales contracts are Florida Power and Light Company, Jacksonville Electric Authority, end Gulf )t States Utilities (beginning in 1984)."
1 Georgia Power has not only provided partial requirements wholesale !
service to in-state, competing power systems, but has responded to requests from out-of-state systems with rate schedules for supplemental power and energy needs as well.
i G. Reductions in Projected Load Growth !
i l
. System load requirements in the state of Georgia have not met the projections reported by Georgia Power during the antitrust construction I pemit review for Plants Hatch and Vogtle. Georgia Power has experienced 1
I a declining rate of increase for power and energy in its service territory
]
since the mid-1970's. Georgia Power projected a territorial peak demand for 1987 of slightly over 34,000 MW in 1974. In its 1986 Regulatory Guide 9.3 update, Georgia Power projected a 1987 territorial peak demand of a
Georgia Power response to Regulatory Guide 9.3 dated October 14, 1983, pp.
. 28-29.
,L-E_ ___.__________._u_____ ___________ _ __ _.
W i
slightly more than 13,300 MW. Though Georgia Power's load has increased since 1974, it certainly has not grown as rapidly as anticipated in the mid-1970's. (These demand projections include the operations of MEAG, Oglethorpe, Dalton and Georgia Power's two full requirements customers, all of which have experienced similar reductions in the rates of growth of their systems.) As a result of these load growth projections, Georgia Power has had to curtail its expansion in generating capacity plans since the mid-1970's. The reduction in planned capacity additions was achieved in part by cancellation of the Vogtle 3 and 4 nuclear units as well as various coal-fired units, the deferral of other baseload capacity, changes in ratings of existing generating capacity, additional sales of unit
. capacity from existing plants and adjustments in contracted exchanges
- a with wholesale customers. The cancellation and deferral of new baseload generating facilities has made access to existing generation and transmission facilities all the more meaningful to smaller competing power systems in Georgia Power's service area.
V. Summary and Conclusions The generation and transmission of bulk power and energy in the state of Georgia has for many years been dominated by the Georgia Power Company.
A "In Addition to reductions in installed capacity, the Company (through its parent, The Southern Company) is marketing bulk power from available capacity to neighboring electric systems. For example, the company has agreed to sell the output from approximately 1,500 MW of its capacity in 1987 in connection with output sales from other Southern Company power plants." (Georgia Power response to Regulatory Guide 9.3 dated October 14, 1983, p. 8.)
S i
b ____________m_____._, t._--__m~_m-_w-r_____~
- - - - - ~ ~ - ' " - "
e
, I During the construction permit review of Plant Hatch and Plant Vogtis, the staffs of the Department of Justice and the Atomic Energy Commission identified several instances where Georgia Power Company abused its market position and its market power at the expense of smaller competing power systems in Georgia. Georgia Power's n'etivities had a stifling l
effect upon the competitive process in bulk power supply in Georgia and severely hampered the ability of competing municipal and cooperative electric systems to supply their customers with the most cost effective sources of power and energy available. After extensive negotiations involving Georgia Power, intervening power systems and the stafft of the Department of Justice and the Atomic Energy Commission, Georgia Power ;
agtted to a settlement agreement which included in the Hatch and Vogtle licenses a set of conditions designed to stimulate the competitive !
process in the Georgia bulk power services market. l t
.~
. The license conditions provided municipal and cooperative electric power systems, individually and through their broker representatives, ownership participation in Plant Vogtle and Unit 2 of Plant Hatch as well as ownership in the integrated transmission grid running throughout most of Georgia--heretofore controlled solely by Georgia Power Co. Moreover, the license conditions provided these competing power systems the means to I
effectively implement their newly acquired power and energy options by requiring Georgia Power to: (1) file partial requirements rates with l
L~ . . .. m-- -__ %-- - - - - - - -
b the Federal Power Commission; (2) coordinate and share energy reserves; (3) interconnect with qualifying Georgia power entities; (4) transmit bulk power over its transmission system, and generally treat all power systems in the state more equally.
The operating license antitrust review is concerned with changes in the licensee's activities since the construction permit review that may create or maintain a situation inconsistent with the antitrust laws.
Staff has identified several groups of changes that have occurred since the construction permit review which are attributable to the licensees; however, these changes have largely been procompetitive and do not warrant remedial action by the Commission. Thevastmajorityofthesechanges have materialized through the implementation of the antitrust license conditions attached to the Plant Vogtle and Plant Hatch Unit 2 construction permits. Through their purchases in portions of Plant Hatch and Plant Vogtle (and portions of Unit 1 of Plant Hatch and
. various Georgia Power Co. fossil fueled plants which were not subject to the licensing commitments), as well as participation in the Georgia transmission grid, the municipal and cooperative power systems in Georgia are now active players in the Georgia bulk power market. Georgia Power has provided these systems with ownership in existing and planned future transmission facilities based upon each system's expected use of the transmission grid. Georgia Power has also provided interconnections and filed partial requirements power rates allowing newly emerging power systems to shop for power supply alternatives within and outside of the j Georgia Power territorial service area. An example of this new found
. h =- - . = = = m -
- ~ ~ ~ ~ ~ '~
4 i
independence is Oglethorpe Power Corporation's (Oglethorpe) energy exchange agreements with the Alabama Electric Cooperative and the South l Mississip;ii Electric Power Association. Oglethorpe has also entered into negotiations to sell a portion of its Plant Scherer capacity to the Seminole Electric Cooperative of Florida. Both Oglethorpe and the Municipal Electric Authority of Georgia (MEAG) have set goals of generating self-sufficiency and are capable of achieving these goals in the near future given the marketing tools provided by the settlement agreement and the emergence of competitive alternatives in the f. tate of Georgia since the completion of the Vogtle construction permit review.
The formation of Oglethorpe and MEAG in 1974 and 1975 coupled with the successful implementation of the antitrust license conditions has resulted in a vastly different Georgia bulk power market than was apparent during the construction permit review in Plant Hatch and Plant Vogtle. The changes which have taken place in this market have largely
. been procompetitive, allowing smaller competitors to mature and contribute to the competitive process on going in the Georgia bulk power services market. Based upon the successful implementation of the antitrust license conditions to date and the lack of any significant negative competitive activities by the licensees since the antitrust review at the construction permit stage, staff recommends that no affirmative significant change determination be made pursuant to the application for an operating license for Unit 1 of Plant Vogtle.
I t
_..-.--_-___=_.___.._____T__~_~~*_
__ - _~_ _T
~
- f--
~ ~
?_-
h n
e APPENDIX A i
) -
9 O
O h
l i
- v. ..
.. . l 4.v.m =4 m. . . -
- - Asem nvr asy m
[rpurimerti of $ustice panynsi,=,PA zosu ..
~ '
i I
, NAY 1 19N-[ ;
Howard K. Shapar, Esquire .
Associate General Counsel -
U. S. Atomic Energy Commission
- Washington, D. C. 20445 Re: Georgia Power Company .
Hatch Nuclear Plant - Unit No. 2 .
AEC Docket No. 50-366A
. Department of Justice File 60-415-37 .
Georgia. Power Company Vogtle Nuclear Plant - Units 1-4 AEC Docket Nos. 50-424A,' 50-425A, '
50-426A,,50~-427A
. Department of Justice File 60-415-60 ,
Dear Mr. Shapar:
s This has further reference to your request for :
W l antitrust
,105 of theadvice Atomicpursuant Energy Actto the hrovisions of 154, of Section as amended, in i regard to the above-captioned applications. ,
. By letters dated August 2,1972 for the Hatch unit .
and May 9, 1973 for the Vogt17 units we advised you of :
our conclusion that Ap:>1icant s market power and use of .
, that power indicated tsat a situation inconsistent with !
. s. the antitrust laws would be created or maintained by
'.- the issuance of unconditioned licenses for the construc- .
tion and operation of these units. Accordingly, we rec- -
ommended that the applications be made the subject of evidentiary hearings. The Hatch ap:>1ication is the subject of an existing proceeding t sat has proceeded
.. partially through prehearing discovery. The Vogtle ap- I plication is awaiting Commission action on an AEC staff l recommendation that it be consolidated for hearing with the Hatch application.
Several months ago negotiations lookini; to a possi- "
ble resolution of the antitrust issues without hearing '
were commenced among the Applicant, the interveners, e
e e
. 8
. ~, .
l Commiss' ion staff and representatives of the Depar kent of Justice. As a result of these negotiations, the Applicant has agreed to the inclusion in the Hatch and Vogtle licenses of conditions providing for, among other things other n,uclear generating units scheduled to commenceaccess to the Hatch commercial operation prior to January 1 1989 coordina-tionandsharingofreserves;transmissIonser;vicesover Applicant's facilities; sales of partial requirements; and sales of power at voltages appropriate for the load
. to be served. A copy of the proposed license conditions I
is attached. .
l .
- In our opinion, these commitments should provide com-
~
I petitors and f competitive, potential. competitors. of the Applicant withalternative, pow
' enable them to effectively compete with Georgia Power.
. On the strength of these commitments and with the expecta-tion that.the Commission will include them as' conditions to the licenses invoIved here, we conclude that it will
~ not be necessary to proceed with antitrust hearings on
"'"* the instant applications and that the existing proceeding
- may be terminated. ,
j , sincerely yours, -
'l' .
g
- TH0!$ E. UPE
-j i Assistant Attorney G neral
, Antitrust Division e
w 1
5- g
) .
l L _ _ - - _ - - - - - _
4 PROPOSED LICE"SE CONDITIONS - -
AEC DOCKET UDS. 50-366A, 50-424A,
~
50-425A, 50-426A. AND 50-427A
, 1. As used herein: -
s* -
(a) " Entity" means any financially responsible
.. person, private or public corporation, municipality, count,y,.
cooperative, association, joint stock association or business
. 4 _
trust, owning, operating or proposing'to own or operate equip-
?'
=
ment or' facilities g within the State of Georgia (other than .. .
Chatham, Effingham, Fannin, Towns and Union Counties) fo'r the .
t . .
generation', transmission or distribution of electricity, .
i -
provided that, except for, municipalities, counties, or rural electric cooperatives, " entity" is restricted to those which are or will be public utilities under the laws of the Secte of M - Georgia or under the laws of the United States, and are or j will'be providing retail electric service under a contract or rat.e schedule on file with and subjeci: to the regulation of
- l. , the Public Service Con:nission of the State of Georgia or any
.) regulatory agency of the United States, and, provided further, -
. that as to municipalities, counties or rural electric co-operatives, "antity'! is restricted to those which provide ,
electricity to the public at retail within the State of Georgia (other then Chatham, Effingham, Fannin, Towns and Union Counties) or to responsible and Icgally qualified or- ,
ganizations of such municipalities, counties and/or coopera. ~
.g .
. . . ~
a .
A _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
....n...
.. , r, . .- . , , . - ,
J
- j. . ,
~'...tives~in th'e State of Georgia (other than Chatham, Effingham,
' Fannin, Towns and Union Counties) to the extent they may bind . l
- their members. ,
. 4-(( , ,
'p , . . , . (b) " Applicant" means Georgia ~ Power Company, any -
', .successos, assignee of this license, or assignee of all er
^'
'substantially all of Georgia Power Company's assets, and any
, l l . . aff.iliate or subsidiary of Georgia Power'Co=pany to the extent
- .
- it: edgages in the ownership of any bulk power supply genera-
- l 3.q. s . tion or transmission resource in the State of Georgia (but , ,
'i.
. ,.specifically not including (1) flood rights and other land rights j...$. acquired in the State'of Georgia incidental to hydroelectric I,; y generation facilities logated in another state arid ('2) facilities b i *.'. located west of the thread of the stream on that part of the p,,l '...",,"* k:hattahoochee River servin'g as the boundary,between the! States i . . . ..
2.. . of' Georgia an4 Alabama). ,
2.. " Applicant recognizes that it is often in the
- ~
l
,public interest for those engaging in bulk power supply 'and ^
8
~l , purchases to interconnected coordinate for reliability and economy, and engage in bulk power s.upply transactions in order i to increase interconnected system reliability and reduce the
, . costs of electric power. Such arrangements must' provide for Applicant's costs (including a reasonable return) in con-
~ '
,mection therewith and allow other. participating. entities full access to the benefits available from interconnected bulk
. . s C ' . . -
_ _m
l . .. . .
power supply operations and must provide net benefits to Applicant. In entering into such arrangements neither Appli-
. cant nor any other participant should be required to violate
- the principles of sound engineering practice or foregera
, reasonably contemporaneous alternative arrangement with
~~ ] ' another, developed in good faith in arms length negotiations
', (>,ut not including arrangements between Applicant and its ,
. .' affilintes or subsidiaries which impair entities' rights '
. hereunder pore than they would be impaired were such arrange- -
.. ments made in good faith between Applicant and a non-affiliate 0 or he'n-subsidiary) which affords it greater benefits.. Any
. r .
!. such arrangement must provide for adequa'te notice and joint
.,$,,'jiPanningproceduresconsistentwithsoundengineeringpractice, l
I h]. .' . *:and must relieve Applicant froin obligations undertaken by it
.. in the event such procedures are not followed by any partici-
'~)ating entity.' .
,' ., Applicant recognizes that each entity may acquire some or all of its bulk power supply from sources other than
- i ,
, Applicant. .
In the implementation of the obligations stated in
.. the succeeding pa'ragraphs, Applicant and entities shall act in accordance with the foregoing principles, and these principles are conditions to each of Applicant's obligations here.in
~
undertaken.- . ,
~
,3. Applicant shall interconnect with rqy entity
. 3 .
s* e
l .- . *
,,.~- *
. ,. which provides, or which has undertaken firm contractual
, . " . "- '. obligations to provide, some or all of its bulk power supply n
from sources other than Applicant on terms to be included in
.an interconnection agreement which shall provide for appro- ,
.5 ry priate all' ocation of the costs of interconnection facilities;
' r, . provided, however, that if an entity undertakes to negotiate
~.s such a firm contractual obligation, the Applicant shall, in
. .. j,.- ,
g6od faith, negotiate with such entity concerning any proposed
. interconnection. Such interconnection agreement shall pro-l ~~ ~
vide, with*out undue preference or discrimination, for the .
.':..;. '.following, a=ong other things,. insofar as consistent with the l . :. operating necessities of Applicant's and any participating entity's systems:
'~
t, " " " . ' . -
~'
. .(m)' an Euteunuce and. cuor07.umi.iun of re==1 v== ,
a :.: .. . .
including, where appropriate, the purchase and
- y. .
~
- i. ,
sale thereof, -
. ,' (b) emergency support, .
l~ ~
(c) maintenance support,
~
~
, (d) economy energy exchanges, ,
v-(e) purchase and sale of firm and non-firm capacity
~~
and energy, -
(f) economic dispatch of power. resources within the ,
State of Georgia, p'rovided, however, that in no event shall such. arrang'emen.ts ,
impose a hig"her percentage of reserve requirements on the * .
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i participating entity than that maintained by Applicant for similar resources. .
. ! 4. Applicant s. hall sell full requirements; power to i ,,
ankentity. Applicant shall sell partial requirements power 1 .
to:any entity. Such sales shall be made pursuant to rates on
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l fi:.e with the Federal Power Commission, or any successor rer,ulatory agency, and subject to reasonable terms and con-
.- l -
- 8tions. >
,, 5. (a) Applicant shall transmit ("transmiss.l.on ,
service")# bulk power over its system to any entity or entities wi;h which it is interconnected, pursuant to rate schedules on l
. file with the Federal Power Commis'sion which vill fully com-
.,, ,pensate Applicant for thh use of its system, ,to the extent
,, . . , . . l "
- d. th,tt such arrangements can ce accommoosten zrom a funcrional .
,; engineering standpoint and to the extent that Applicant has
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,l. . surplus line capacity or reasonabiy available funds to finance ,
To the extent' the entity me yconstructionforthispurpose.
- cr antities are able, theya shall reciprocally provide trans-
. niasion service to Applicant. Transmission service will be .
pr6vided under this subparagraph for the delivery of power to
.. an entity for its or its members' consumption and retail
' di stribution er for casual resale to another eritity for (1) -
it s consumption or (2) its s. call distribution. Nothing I
1 co stained herein shall require the Applicant tY transmit bulk 5
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t howersoastohavetheeffectofmakingtheTennesnee
.. I Valley Authority. ("TVA") or its distributors, directly or j I
indirectly, a source of power supply outside the area: deter-
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mined by the TVA Board of Directors by. resolution of May 16, .
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1966 to be the area for which the TVA or its distributors were
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the primary source of power supply on July 1,1957, the date '
'specified in the Revenue Bond Act of 1959, 16 USC 831 n-4.
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('b) Applicant shall transmit over its system from any entity or entities with which it is interconnected, pur-suant to rate schedules on file with the Federal Power Commis- '
sion which will fully compensate Applicant for the use of its .
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system, bulk power which results from any such entity having i
... .axcess capacity available from self-owned gen'erating resources l
y in the State of- Georgia, to the extent such excess necessarily' ww - -
'results from econo =ic unit sizing or from failure to forecast !
1 I load accurately or from such generating resources becoming opera-tional earlier than 16e planned in-service date', to the extent I
that such arrangements can be' accommodated from'a functional '
. engineering standpoint, and to the extent Applicant has surplus line capacity available.
Upon request, Applicant shall provide service 6.
to any entity purchasing partial requirements service, full requirements service or transmission service from Applicant at i a' delivery voltage appropriate for loads served by such entity, I
commensurate with Applicant's available transmission facilit-ies. Sales of such service shall be made pursuant to rates O
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- on file with the Federal Power Commission or any successor 3 regulatory agency, and subject to reasonable terms and condi- .
tions.
l
- 7. UponreasonablenoticeApplicant'shalh.g' rant ' '
any entity.the opportunity to purchase a'n appropriate share in
. . U- the ownership of, or, at the option of the entity,, to purchase ap appropriate, share of unit power from, each of the follow- .
ing huclear generating unit's at Applicant's costs, to the
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'3 . extent the same are constr'ucted and operated: Hatch 2,.Vogtle
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. 1, Vogtle 2, Vogtle 3, Vogtle 4, and any other nuclear genera-
.' ting unit constructed by Applicant in.the State of Georgia ,
which, in the applicati6n filed with the USAEC or its succes- *
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sor sger.cy, i: ::heduled,fer eg. rei:1 eper:tici prier te
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-e January 1, 1989. -
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]~ _- An entity's request for's share must have regard for the economic size of such nuclear unit (s), for the entity's ,
- load size, growth and characteristics, and for dema'nds upon j i
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i Applicant's system from other entities and Applicant's retail !
. . s
-I customers, all in accordance with sound engineering praetice.
Executory agreements to accomplish the foregoing shall contain
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provisions reasonably specified by Applicant requiring the .
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entity to consu=nate and pay, for such purchase by an early date or dates certain. For purposes of this provision, " unit power" shall mean capacity and associated energy from'a ,
specified generating unit. . . . .
s .
", i- ..- 8. . To effect the foregoing conditions, the follow- l
. ing steps shall be taken: - -
Applicant shall file with"the appropriate regulatory (a.)
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' . authorities and thereafter maintain in force as
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. . needed an appropriate transmis'sion tariff available
., to any entity; . ..
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Applicant shall file with the appropriate regulatory
-(b)
- authorities and thereafter maintain in fore.e as
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,,- needed ari appropriate partial requirements tariff. -
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j available to any entity; Applicant shall havs its
, liability limited'to the partial requirements service "y'
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_ ; .c actually contracted for and the entity shall be made responsible for the security of t'he bulk power i
. . . , , . ,' . supply resources' acqhired by the entity from sources !
' other tha'n the Applicant;
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(c) Applicant shall amend the general terms and condi-
.~ . .
tions of 'its current Federal Power Con: mission tariff
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and thereafter maintain in force as needed provis-1 I .
i .
ions to enable any entity to receive bulk power at .
i transmission voltage at appropriate rates;
- (d) Applicant.shall not have the unilateral right to
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defeat the intended access by each entity to alter-native sources of bulk power supply provided by the conditions to this License; but Applicant shall
', retain the right to seek regulatory approval of ' '
-s-
changes in its tariffs to the end that it be ad'equ-ately compensated for services it provides, specifi-
, cally including, but not limited to, the profisions of Section 205 of the Federal Power Act; -
.. ,. (e)' Applicant shall use its best efforts to amend any .
outstanding contract to which it is a party that t
s.
f t.
contains provisions which are inconsistent with the 8
conditions of this license; .
'(f) ppplicant. affirms that no consents' are or will be-
- f. .
3
.. . come necessary from Applicant's parent, affiliates j;
or subsidiaries'to enable, Applicant to carry out it s obligations bergunder or to enable the entities to
- .'~ .--- . eni.o.v their richts hereunder:
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(g) All provisions of these conditions shall be subject to and implemented in accordance with the laws of the United States and of the State of Georgia, as applicable,'and with rules, regulations and orders 4
-1 of. agencies of boph, as applicable. , ,
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p 9 APPENDIX B e
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i-7 .,
.. A g, 3 sta? ATT(198dEY GDdCAAL
, r ssowst omsiou
[rpitr$111f1ti Ed h115}iCC l
pasljhtgicat,p.6. 20530 l
!.i.? 9m a:-
Howard K. Shapar, Esquire ~
. Executive Legal Director Nuclear Regulatory Commission -
WashinDton, D. C. 20555 Re Alvin W. Vogtle Nuclear Power Plant Units 1 &
2, NRC Docket Nos. 50-424-A and 50-425-A I Edwin I. Batch Nuclear Power Plant Unit No. 2 NRC Docket No. 50-366-A Dear Mr. Shapart f, You have requested our advice pursuant to the provisions y of Section 105c. of t)e
- Atomic Energy Act of 1954, as amended,
.; in regard to amendments to the applications in the above-cited -
dockets, 'which would expand the ownership of the units to include Oglethorpe Electric Hembership Corporation (Oglethorpe), Municipal
'* Electric Authority of Georgia (MEAG), and' the City of Dalton, Georgia.
You will recall that the Department of Justice initially recommended an antitrust hearing with respect to these appli-cations (Department's letter of August 2, 1972, concerning
' the Batch units and letter of May 1,1973, concerning the Vogtle units). . Subsequent to our rendition of such advice, Georgia Power Company, the interveners, your predecessor Commission's Staff and representatives of the Department of Justice negotiated. license conditions which, in our opinion, obviated the necessity of continuing the- antitrust hearing proceedings.
As a result, we concluded, in our Hay 1, 1974, letter to your predecessor Commission, "In our opinion the commitments should
- provide competitors and potential competitors of [ Georgia with competitive, alternative power supply Power sources, Company)houldand s enable them to effectively compete with
' Georgia Power." The pending amendments are the fruition of negotiations between Aeorgia Power Company and other systems which were commenced pursuant to the license conditions. The pending amendments to the applications provide for participa-tion by the other systems in the Batch unit and Vogtle units.
The systems which will become part owners of the instant units if the proposed amendments are approved by the Commission are with minor difference the interveners in the antitrust
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proceeding which resulted from our initial advice letters.
MEAG was created pursuant to a law passed in 1975 by the State Legislature of Georgia. 1/ Its membership consists of 48 political subdivisions in Georgia, including.'the Crisp County Power Commission, all of which were intervepors in the antitrust proceeding. 2/ oglethorpe was incorporated in August, 1974, and is presently composed of 39 distribution cooperatives located in the State of Georgia. 3/
~~~
Hembership in MEAG is open to any political subdivision owning and operating an electrical distribution system in Georgia on the date the law was passed. 4/ Membership in Oglethorpe is open to any electric membership corporation
. . organized under the Electric Membership Corporation Act of Georgia. 5/ State law and the Bylaws of Oglethorpe set I
objective membership requirements. It thus appears that any' existing electric system owned by a political subdivision of the State of Georgia interested in participating in HEAG
[ has been afforded a reasonable opportunity to join that I entity and, likewise, that any interested Georgia electric '
e cooperative has had the' opportunity to join Oglethorpe.
Furthermore, representatives of MEAG and of Oglethorpe have stated that all such distribution systems which have expressed l
. an interest in participating have become members. We note also
'e -
M un w 1/ 1975 Session of the General Assembly of the State of Georgia, I Ga. L.1975, p.107 et sec.; Ga; Code Ann. Section 34B-401,
.i t,i s,,e,g .
2/ The' municipal systems participated as a unit through the Deorgia Municipal Association; Crisp County Power Commission intervened individually. Two municipal systems which were mem-
-; bers of intervenor Georgia Municipal Association chose not to participate in MEAG.
jb/ One cooperative, Oksfenoke Rural Electric Membership Corpor-ation, renders service in both Georgia and Florida.
4/ Georgia Code Ann. Section 34B-427.
5/ Bylaws of Ogletnorpe Electric Membership Corporation, Article 7, Section 1 (filed with the Rural Electric Administration in August, 1974). Distribution cooperatives are organized under the Electric Membership Corporation Act, Georgia Laws of 1937, pa;e 644, et. seq.; Ga. Code Ann., Section 34B-1, et seq.
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s thatsmallelectricsystemsweregiventheopportuni(yto participate directly in the instant. nuclear units, rather than through MEAG or Oglethorpe; the City of Dalton chose to accept this opportunity. 2; MEAG and Oglethorpe, in addition to. the purchase of
- ownership in the Hatch unit and Vogtle units, will purchase partial ownership of and the use of the high voltage trans-
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mission grid'previously owned and controlled exclusively by the Georgia Power Company. As a result, they will have the capability of' entering into bulk power supply arrangements with other electric systems. In addition, this immediate
- l, access to the transmission grid will provide alternative sources for wheeling arrangements for electric systems in
I In our opinion, the addition of HEAG, Oglethorpe and the j City of Dalton as partial owners of the Hatch unit and the
- Vogtle units wi'.1 not create or maintain a situation incon-I s
sistent with the antitrest' laws. .
sincerely yours,
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N $Un4 c.
THOMAS E. AUPE i Assistant Attorney eneral i Antitrust Division i
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