ML17209B114
ML17209B114 | |
Person / Time | |
---|---|
Site: | Saint Lucie ![]() |
Issue date: | 05/27/1981 |
From: | JABLON R A FLORIDA CITIES (FLORIDA MUNICIPAL UTILITIES ASSOCIATE, SPIEGEL & MCDIARMID |
To: | Atomic Safety and Licensing Board Panel |
Shared Package | |
ML17209B115 | List: |
References | |
ISSUANCES-A, NUDOCS 8105290149 | |
Download: ML17209B114 (161) | |
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QiBEFORETHEUNXTEDSTATESNUCLEARREGULATORY COMMZSSIONBEFORETHEATOMICSAFETYANDLZCENSING BOARDInTheMatterOfPloridaPower6LightCompany(St.LuciePlant,UnitNo.2))))DocketNo.50-389A)))~MOTIONTOESTABLISH PROCEDURES, FORADECLARATION THATASXTUATXON INCONSXSTENT WITHTHEANTITRUST LAWSPRESENTLY EXISTSANDFORRELATEDRELZEPRobertA.JablonAlanJ.RothDanielGuttmanbOCfQ7EbZItiSNRrMAY27)98) t0OfficeoftheSecreta'ocketfog g$<+>ceBranchCOCPSPXEGEL5McDIARMXD Suite3122600VirginiaAvenueN.W.Washington, D.C.20037Attorneys fortheGainesville RegionalUtilities, theLakeWorthUtilities Authority, theUtilities Commission ofNewSmyrnaBeach,theSebringUtilities Commission, andtheCitiesofAlachua,Bartow,PortMeade,KeyWest,LakeHelen,Mount.Dora,Newberry, St.Cloud,andTallahassee, FloridaandtheFloridaMunicipal Utilities Association May27,1981I TABLEOFCONTENTSPacaeINTRODUCTION (1)-Immediate Procedures (2)Discovery toDate(3)BasisforFindingsofa"situation inconsistent" withtheantitrust laws(4)Separating theIssueofRelief(5)BasisforlimitingissuesI.SUMMARYOFPRINCIPAL LEGALARGUMENTS 1017A.B~RefusalsByFPLToDealWithSomeCitiesinFloridaPowerCorporation's RetailServiceAreaAreIllegalFPL'sDealingWithSomeCitiesButNotOthersConstitutes ACombination InRestraint OfTrade1720C~FPL'sRefusalsToDealWithFloridaCitiesAreDirectlyContraryToTheTeachings OfOtterTailAndConsumers Power23STATEMENT OFFACTS24I.FPL'sPlanning, Construction andOperation OfItsNuclearFacilities HasBenefitted FromCoordination WithOtherFloridaUtilities 2420Sincethe1950'sFPLengagedinjointnuclearactivities withTECOandFloridaPowerCorporation Throughout the1960'sFPLengagedincoordinated planningandoperations throughtheFloridaOperating Committee/Florida PoolbutwithouttheCities2630 3.FPLreliedoncoordination withtheFloridaOperating Committee inconstructing itsnuclearunits34II~FPLHASLONGDENIEDCITIESACCESSTOTHEECONOMIES OFCOORDINATION ANDSCALEgINCLUDING NUCLEARPOWER........oo....o.oo...oooo.....oo.....
43A.FPLWasOnNoticeThatSmallerSystems,SuchAsCities,'equired AccessToEconomies OfSizeAndCoordination, Including AccesstoNuclear,InOrderToCompeteEffectively 441.Smallersystemsrequirecoordination tobuildlargeunits2.FPLknewthatcoordination andlargeunitsareessential toparticipation innuclearpower463~Fromthestart,FPLsoughttouseitssize-based monopolyofnucleargeneration asalevertoacquiresmallersystems47B~FPLRefusedToDealWithCities,AndDeniedThemTheMeansOfDealingWiththers~~~~o~~~~~~~~~~~~o~~~~~~~~~~~~~~~~~~~~~054C.AlthoughFPLXtselfRefusedToDeal,CitiesStillSoughtTheBenefitsOfCoordination,'ncluding TheAbilityToShareInNuclearnits~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~U74l~2~Studyanddiscussion ofpossiblepoolingarrangements amongsmallersystemso~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~FMUAcommittees 763.TheGainesville litigation 4.TheTallahassee experience 7980D~FPLCouldHaveBuiltLarge,MoreEconomical PlantsAndSharedThemWithCities PacaeARGUMENTINTRODUCT ION~~~~~~~~~~~~~~~o~~~~~~~~o~~~~~~~~~~~~~~~~I~FPLCANNOTLAWFULLYRESTRICTRELIEFTO"INSIDE"CITXES;THERESTRICTXON CONSTITUTES ANUNLAWFULCOMBINATION ZNRESTRAINT OFTRADEANDAPERPETUATION OFAMARKETDXVISION9093II.THECASELAWCONCERNING ANTITRUST ABUSESBYELECTRICUTILITIES CONFIRMSTHEUNLAWFULNATUREOFFPL'SREFUSALSTODEALWITHFLORIDACITIES~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~99III.STATEMENT CONCERNING RELIEF.................
~..115CONCLUSION~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~118Attachments 1-5Appendices, VolumesI-III(separately bound)
TABLEOFAUTHORITIES PacaeCOURTCASESAdmiralTheatreCor.v.DoulasTheatre~Cor,585F.2d8778thCir.1978AmericanTruckinAssociation, Inc.v.Atchison, ToekaandSantaFeRailwaCo.,387U.S.397196797AnsulCo.v.Uniroal,Inc.,448F.2d1018(1972)e.s.e..ee..........ee......e.e....see.e 115Associated Pressv.UnitedStates,326U.S.11945~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~19,93,94,110Baltimore andOhioRailroadCo.v.UnitedStates,"ChicagoJunctionCase"264U.S.258(1924)114BellTelehoneCo.ofPennslvaniav.FCC,503F.2d12503dCir.1974),cert.denied,422U.S.1026(1975).....,..........
110BerkePhoto,Inc.v.EastmanKodakCo.,603F.2d2632dCir~1979,cert.denied,444U.S.1093(1980)BorouhofEllwoodCitv.PennslvaniaPowerCo.,D.C.Pa.1979462F.Supp.1343~~~~~~~~~~~~~e~~~~~e~~~~~~~~~~~~~~~~~~~~~~~~~~103Brulottev.ThsCo.,379U.S.29(1964)..............
115California v.FPC,369U.S.482(1962).~~~~..~~~~~~~~~12CitofAnaheimv.SouthernCalifornia EdisonCo.,C.D.Cal.No.CV-78-810-MML May19,1981)............;.........................
12CitofBartowv.FloridaPowerCororation19CitofLaafette,La.v.SEC,454F.2d941D.C.Cir.1971),affirmed, subncm.GulfStates,infra108iv CitofMishawaka, Indianav.AmericanElectricPowerCo.,Inc.,560F.2d13147thCir.1977,cert.denied,436U.S.922(1978)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Pacae109ConwaCororationv.FPC,426U.ST271(1976)112EastmanKodakCo.v.SouthernPhotoMaterials Co.,273U.S.359,47S.Ct.400,71L.Ed684(1927)~~~~e~~~~4~~~~~~~~~~~~~~~~~~~~~~~~~~~e~~100FashionOriinators'uild ofAmericav.FederalTradeCommission, 312U.S.457941~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~193FTCv.NationalLeadCo.,350U.S.419(1956.)100FloridaPower6LihtComan,OpinionNo.517,DocketNo.E-760,37FPC544(1967),reversed430F.2d1377(5thCir.1970),reversed, Floridapower5LihtComanv.FPC,404U.S531972~~~~~~~~~~~~~~~~~~~~~~e~~~~~~~~~~~~22,34,48,55,56,92FloridaPower6LihtCo.v.FERC,CA5No.80-5259April4,1980Ft.PierceUtilities AuthoritoftheCitofFt.Piercev.UnitedStatesNuclearReulatorCommission, D.C.Cir.No.0>>1099~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~e~~~~~~859,103116Gainesville ReionalUtilities, etal.v.FloridaPower6LihtComan,U.S.DistrictCourtfortheSouthernDistrictofFlorida,No.79-5101-CIV-JLK t:October 31,1979])Gainesville Utilities
Deartmentv.FloridapowerSLihtComan,
573F.2d2925thCir.,cert.denied,439U.S.966(1978)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4,83Gainesville Utilities Det.andCitofGainesville, Floridav.FloridaPower~Car.,402PPC12271968,affirmed, 402U~S~515(1971)~~~~~~~~~~~~~~~~~~~~~~~~~e~~~~~55,107Gamco,Inc.v.Providence FruitProduceBuildin,Inc.,194F.2d4841stCircert.denied,344U.S.817(1952)19,93-94,95 PacaeGulfStatesUtilities Co.v.FPC,411U.S.7471973~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~108Hechtv.Pro-Football, Inc.,570F.2d982(197cert.denied,436U.S.956(1976)7)F~~~~~~~~~110International BusinessMachinesv.UnitedStates,298U.S.1311936.......................
113ICCv.DelawareLackawana 8WesternRailroadCo.,220U.S.235191197International RailwasofCentralAmericav.UnitedBrands,532F.2d231certiorari denied,50L.Ed.2d100(1967).....................
106International SaltCo.v.UnitedStates,332U.S.3921947...............................
113JerseCentralCo.v.FPC,319U.S.61,67681943~~~~~~~~~~~~~e~~~~~~~~~~~~~~~~~~~~~~~~108Klor's,Inc.v.Broadwa-HaleStores,Inc.,359U.S.207195993Koninkli'ke Luchtuaart Maatschapi'.V.K.LM v.Tuller,292F.2d775D.C.Cir.1961,BurgerJ.)15LorainJournalCo.v.UnitedStates,342U.S.14372S.Ct..181,96LEd162(1951)100F110F112Louisville andNashville RailroadCo.v.UnitedStates,238U.S.1191597MissouriPacificRailwaCo.v.LarabeeFlourMillsCo.,211U.S.612221909 Montaue&.Co.v.Lowr,193U.S.38(1904)~~~~9797Mullisv.ArcoPetroleum Cor.,502F.2d290~7thCir.1974perStevens,Cir.J.)106MunicialElectric.Association ofMassachusetts v.SEC,413F.2d1052D.C.Cir.1969106,113MunicialLihtBoardsofReadinandWakefield Mass.v.FPC,450F.2d1341D.C.Cir.1971Vi 0
PacaeNationalAirCarrierAssoc.v.CAB,436F.2d185D.C.Cir.197016NorthAmericanCo.v.SEC,327U.S.686(1946).~~~~~~~108NorthernPacificRailroadCo.v.UnitedStates,365U.S.11958.......oo......o..ooo.oo.o.....o.
113OtterTailPowerCo.v.UnitedStates,410U.S.3661973)6,110PackaedProrams,Inc.v.WestinhouseBroadcastin Co.,255F.2d7083dCir.1958~~~~~~~~~~~~~~~~~~~~~~~~~~~o~~~~~~~~~~~~~~~~~101PeelersCo.v.Wendt,260F.Supp.193W.D.Nash.1966).................................
115PosterExchane,Inc.v.NationalScreenServ.,431F.2d334(5thCir.1970cert.denied,401U.S.912(1971)....~~~.~~~~~~~~~105RadiantBurnersv.PeoplesGasLiCo.,364U.S.6561961ht6Coke93Silverv.NewYorkStockExchane3411963~~~~~~~~~~~~~~~~~~373U.S.19,93,110,SixTwent-NineProductions, InesTelecastin
,Inc.,365F.2d4v.Rollins78(5thCir.1966"~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~101Stronv.GeneralElectricCo.,305F.Supp1084N.D.Ga.1969,affirmedercuriam,434F.2d10425thCir.1970),cert.denied,403U.S.906(1971)~~~~~~~~~~o~~115UnionCarbideRCarbonCor.v.Nisle300F.2d56110thCir.1962,~aealdismissed, 371U.S-801(1963)............
114UnitedStatesv.AluminumCo.ofAmerica,148F.2d4162dCir.1945........................
90,112,114UnitedStatesv.AmericanTelehoneSTelegrahCo.,83FRD323D.D.C.1979~~~~~~~~~~~~~~~~~~~~~~~~~~~~o~~~o~~~~~~~~~~~~o50UnitedStatesv.CaitalTransitCo.,325U~ST357(1945~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~vl.3.97 PacaeUnitedStatesv.FloridaPowerCororationandTamaElectricComany,CIVNo.68-297-TUnitedStatesv.Griffith, 334U.S.10019101F110UnitedStatesv.GrinnellCor.,384'.S.563(1966)99UnitedStatesv.Klearflax LinenLooms,63F.Supp.32DeMinn.1945105UnitedStatesv.Loew's,Inc.,371U.S.381962~~4~~~~~~~~~~~~4~e~~~~~~~~~~~~~~~~~~~~~~~112,113UnitedStatesv.NationalLeadCo.,332U~ST3191947)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'~~~~114UnitedStatesv.OtterTail-PowerCo.,331F.Supp~~~~~~~~~~100UnitedStatesv.ReadinCo.,253U.S.261920~~~~~~~~~~~~~~~~~~~~~~~~~~'a~~~~~~~~~~~~~~~~e114UnitedStatesv.TerminalR.R.Ass'n.ofSt.Louis,224U.S.383191293,101,110UnitedStatesv.UnitedShoeMachiner~Cor~sura,110F.Supp.at346United,Statesv.UtahConstruction S10612UnitedStatesv.YellowCabCo.,332U.S.2181947~~~~~~~~~~~~~~~\~~~~~~~~~~~~~~~~~~~~~~~~114WoodsExloration8ProducinCo.v.AluminumCo.ofAmerica,438F.2d1286(5thCir.105ZenithRadioCor.v.Hazeltine
- Research, Inc.,395U.S.1001969115viii
PacaeAGENCYCASESConsumers PowerComan(MidlandUnits1and2(ALAB-468' NRC465(1978)Consumers PowerComan(MidlandUnits1and2,ALAB-452, 6NRC892(1977)FloridaPower5LihtComan,OpinionNo.57,32PUR4th313Aug.3,1979),~a~pealdismissed, FloridaPower6LihtComanv.'ERC,D.C.iCir.No.79-2414April25,1980)FloridaPowerSLihtCo.(St.LuciePlant,UnitNo.2,Prehearing Conference OrderNo.1(July29,1976)FloridaPowerRLihtComany(SouthDadePlant,NRCDocketNo.P-636-AFloridaPowerSLihtComan,FERCDocketNo.ER78-19,etal.,PhaseI,Tr.843-44)~~~~~~~~~97-8P1134,103133841QFloridaPowerSLihtCo.,DocketNo.50-389AALAB-420, July12,1977)GulfStatesUtilities Co.(RiverBendStation,Units1and2),7513NRC246(Licensing BoardPanel1975,denyingsummarydisposition)
~~~~~~~~~89HoustonLihtinSPowerCo.(SouthTexasProject,UnitNos.1and2,CCl-l-77-13, 5NRC1303(1977)..................................
IndianaaMichianElectricCcman,~sura33FPC7391966~e~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1234PublicServiceCo.ofNewHamshire(Seabrook Station,Units1and2,7NRC1,(CommissDecision1978)PublicServiceCo.ofNewHamshire(Seabrook
,Station, Units1and2,6NRC33(AppealBoardDecision1977)TamaElectricComan,FederalPowerCommission DocketNo.77-549,etal.won131340ix PacaeToledoEdisonCo.,etal.(Davis-Besse NuclearPowerStation,Units1,2,and3),5NRC557(Commission Decision1977)ToledoEdisonComan(.DavisBessePlant,Units1and2and3),ALAB-560, 10NRC265(1979)ViriniaElectric&PowerCo.(NorthAnnaNuclearPowerStation,Units1and2),ALAB-584, llNRC451(1980)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~14,408,19,94STATUTESANDREGULATIONS AtomicEnergyActSection1,42U.S.C.$2011Section2,42U.S.C.$2012Section3,42U.S.C.$2013Section105,42U.S.C.$2135FederalPowerAct919Section202,16U.S.C.824(b)Section204,16U.S.C.$824cFederalRulesofCivilProcedure, Rule56FederalRulesofEvidence, Rule801(d)(2)(D)
FederalTradeCommission Act1810815Section593PublicUtilityHoldingCompanyAct,Section10@15UNSICK$797~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~49Stat.803-804,847-848107108 PacaeMISCELLANEOUS HER.Rep.No.91-1470toHER.18679AtomicEnergyActof1954,91stCong.,2dSess.(1970)12H.R.Rep.No.1318,74thCong.,1stSess.,3p78~~~~~~~~~~~~~~~~~~~~~~~~4~~~~~~~~~~~~~~~~~~108S.Rep.No~91-124712S.Rep.No.621,74thCong.,1stSess.,14,17~20~~~~~~~~~~s~~e~~~~~~4~~~e~~~~~~~~~~~~~~~~~~~~108Deposition ofRichardC.Fullerton, Gainesville Utilities Det.v.FloridaPower6LihtCo.,M.D.Fla.No.68-305-CIV-T 83FederalPowerCommission's 1964NationalPowerSurvey\~~~s~~~~~~e~4~~~~~~~~~~~~~~~~~~~~~~~~ReortoftheNationalCommission fortheReviewofAntitrust Lawsandrocedures P1Moore'sFederalPractice, PartElManualforComplexLitigation)
.....................
5Antitrust LawDeveloments(American BarAssociation 1975),p.328.......................
~.114Note,RefusalstoDealbVerticall InteratedFloridaPower6Light,Company1979AnnualReort,page1437.FloridaPoweraLightCompany1980Annual~Reore,pages8,14-15FloridaOperating Committee report,"Coordinated Planforthe1970Generation andTransmission Reuirements fortheElectricUtilities ofFloridaApril19603722-23Xi BEFORETHEUNITEDSTATESNUCLEARREGULATORY COMMISSION BEFORETHEATOMXCSAFETYANDLICENSXNG BOARDInTheMatterOfFloridaPower&LightCompany(St.LuciePlant,UnitNo.2))))DocketNo.50-389A))MOTIONTOESTABLISH PROCEDURES'OR ADECLARATION THATASITUATXON INCONSXSTENT WITHTHEANTITRUST LAWSPRESENTLY EXISTSANDFORRELATEDRELIEFINTRODUCTION OnApril27,1981,thisBoardapprovedasettlement ofantitrust issuesbetweenFloridaPower8LightCompany("FPL")andthegovernment parties.Citiescontendthatthelicensecon-ditionsdonotcureoradequately remedytheallegedsituations inconsistent withtheantitrust laws.TheBoard'sOrderofApril27,1981providesthatCitiesshouldmakeappropriate motionswiththeBoardforfurtherproceedings.
Citiesfilethismotionforfurtherprocedures andforotherrelief.
(1)Immediate Procedures.
Fl'oridaCitiessetfortnhereintheprincipal factualandlegalbasesfortheirbeliefthatthereisasituation incon-sistent.1/Theyalsosetforth(Attachment 2)areportondiscovery todate.Opposingpartiesshouldrespondasto(1)factualissuesthataregenuinely incontroversy, (2)legaldefenses, and(3)identification ofanyfurtherdiscovery needed.Inthismanner,ifadditional "discovery iswarranted, itcanbeordered;ifmattersareripefordecision, theycanbedecided;andifhearingsarerequired, theycanbeheldwithdispatchastoissuesgenuinely incontroversy.
TheCitiesdemonstrate belowthatsummarydisposition isappropriate astowhetherthereisa"situation inconsistent withtheantitrust laws".Partieshavehadextensive discovery againsteachotheroveracourseofyears.Pullevidentiary
- hearings, involving similarissuesandvirtually thesamepartieshavebeenheldinotherdockets,resulting inopinionsandorders,whichhaveestablished factswhicharebindinghereunderthedoctrines o8resjudicataandcollateral estoppel.
InternalPPLandpublicdocuments, aswellasdeposition testimony, furtherestablish abasisforsummaryfindings, unlessFPLorotherpartiescan"setforthspecificfactsshowingthatthereisagenuineissueoffact".HuclearRegulatory Commission Regulations, 10C.F.R.$2.749(b).
1Thebulkofthefactualmaterials areinaseparateappendixandreferenced toAppendixpageswithletterprefixes.
IftheBoardshouldrulethatevidentiary hearingsarerequired, theyshouldbelimited.Additional discovery, ifnecessary, shouldbebaseduponashowingofneedinlightofthediscovery thathasbeenprovidedandthefactsstillincontroversy.
Withinreasonable limits,partiesshouldhavethetimetheydeemnecessary torespondtothispleading, orsuchtimeastheBoarddeemsreasonable.
Theyshouldrespondastospecificissuesthattheybelieverequiretrial.Becausetheycannotanticipate defensesorcounter-arguments thatmayberaised,FloridaCitiesrequesttimetorespondtoanswering pleadings.
Becausetheoutcomeofthesepleadings willshapeallfutureproceedings, theyalsorequestaconference beforetheBoardastosuchfutureprocedures.
Afterrulingsonprocedures andthescopeoftheissuesthatneedtobetriedandafterconsultation withtheparties,theBoardmaywishtoorderthepartiestodiscusssettlement andtoreport,toitafter30daysoftheprogressandlikelihood ofreachingagreement orpartialagreement.
UndertheCommission's rules,10CFR52.759(andasamatterofcommonsense),settlements aretobeencouraged.
Settlement wouldbeencouraged iftheBoardeitherrulesonsummaryjudgmentorguidesthepartiesbystatingitspreliminary viewastowhethera"situation inconsistent" exists.Ifthereappearstobenohopeofsettlement, theBoardshouldnoworderascheduleforanydiscovery andhearingsthatmayberequired.
(2)DiscovetoDate.TheCitiesandFPLhaveeachhadanimmenseamountofdisco-veryagainsteachother.Thiscasecommenced in1976,althoughdiscovery wasintermittent duetoappealsandsettlement discussions.
However,discovery intheMiamiDistrictCourtcasebeganinlateNovember1979(Gainesville ReionalUtilities, etal.v.FloridaPower&LihtComan,U.S.DistrictCourtfortheSouthernDistrictofFlorida,No.79-5101-CZV-JLK I.October 31,1979]);theoverlapofrequestsinthatdocketwiththoseinthiscaseisvirtually complete.
Withperhapslimitedexceptions, Citieshavecompliedwithdocumentrequests.
Thepartieshavehadnearlytwoyearsofintensive discovery.
FPLhashadanopportunity forcomprehensive discovery ofthecitiesofHomestead, NewSmyrnaBeachandStarkeinFederalEnergyRegulatory Commission DocketNo.ER78-191/andhasusedFlorida's PublicRecordsActtoinspect,cityfilesinLakeWorth,NewSmyrnaBeach,Gainesville andpossiblyothercities.FPLandGainesville havehaddiscovery intheGainesville DistrictCourtcase(Gainesville Utilities
Deartmentv.FloridaPower8U.S.966(1978)).1SeeFloridaPower6LihtComan,
OpinionNos.57and57-A,32PUR4tgFeeraEnergyRegulatory Commission, 1979).Fortheconvenience oftheBoard,Opinions57and57-AareAttachment
- 3.
TheAntitrust Commission Reortrecommends thatCourts"establish amaximumof24monthsforthecompletion ofpre-trial, notasanormandextendable onlyintrulyextraor-dinarycases."80FRDat5l6.Discovery relatedtotheantitrust issuesinthisproceeding haslastedforyears.Itistimetoclosediscovery.
1/(3)BasisforFindinsofa"situation inconsistent" withtheantitrust laws.Inthispleading, Citiesshowthata"situation inconsistent withtheantitrust, laws"exists,baseduponFPL'shistoricandCourtsancommentators areencouraging judicialbodiestotakeanactiveroleinsupervising discovery andotherprehearing procedures, astheNRCboards,aidedbytheStaffandparties,oftendo.Indeed,.itisnowalmostuniversally acknowledged thattheabsenceofjudicialintervention duringdiscovery, andpre-trialprocedures isinappropriate incomplexantitrust litigation.
UnitedStatesv.AmericanTelehone&TelegrahCo.,83FRD323,327,n.1D.D.C.1979cxtz.ngboththeReportoftheNationalCommission fortheReviewofAntitrust LawsandProcedures
("NationalCommission Report:)andtheManualforComlexLitiation).Thisisbecause"Perhapsthemostsignificant problemwithantitrust litigation incomplexcasesisdelay....A,principal causeofunnecessary delayinantitrust andothercomplexlitigation istheabsenceofjudicialmanagement andcontrol....'I.T]heabsenceofstrongjudicialcontrolpermitsdiscovery tomushroomandissuestogounfocused; delayandobfuscation aremorelikelytobeadoptedaslitigation tactics;...Asaresult,excessive motionpracticeandotherexamplesofdilatoryandoverlylitigousconductproliferate, whileincen-tivesforstipulation andotherpotentially expediting typesofbehaviorarereduced.'"
UnitedStatesv.ATILT,83FRDat326-327(quotingfromNationalCommxssxon Reportcitations omitted);
AdmiralTheatreCor.v.DoulasTheatreCor,585F.2d877,889~8thCir.1978.Indeed,initspretrialmemorandum fortheparallelcivilcaseinwhichCitiesseekrelieffromFPL,Gainesville ReionalUtilities v.1980)hadbeencomprehensive (p.3ofMemorandum, attachedasAttachment 4),althoughitstatedthatitneededadditional discovery, butthatit.intendedtoproceed"expeditiously".
continuing anticompetitive actsandpractices.
Thefactualbasesfortheseconclusions, asmorefullydescribed below,arederivedfrom(1)FERCOpinionNo.57andcertainotherfindingsandrulingsbyFERC;(2)theFifthCircuitdecisioninGainesville 292(5thCir.),cert.denied,439U.S.966(1978);(3)internalFPLdocuments (and/ordocuments transmitted toFPL),pluscertainFloridaPowerCorporation documents attributable toFPL;(4)publicdocuments; and(5)sworntestimony offeredinhearingsordepositions.
Amongotherthings,FloridaCitiescontendthatFPLhasunlawfully restrained tradebydividingwholesale marketsinaFlorida.Thisfacthasbeendetermined bytheUnitedStatesCourtofAppealsfortheFifthCircuit.Gainesville Utilities Cir.),cert.denied,439U.S.966(1978).TheCourt'sfindingisbinding.FloridaPowerCorporation mayhaveabandoned theconspiracy, whenitenteredintosettlements withthecitiesintheearly1970's.However,FPLhascontinued torefusetodealinimpor-tantwholesale powerserviceswithCitiesoutsidetheperimeter ofitsretailservicearea,therebyperpetuating traderestraints againstthoseCities.FloridaCitiesalsocontendthatFPLhasrefusedtodealinessential productsandservicescontarytotherequirements ofOtterTailPowerCo.v.UnitedStates,410U.S.366(1973).AsthisBoardknows,untilFPL'ssettlements withtheGovernment partiesinthiscase,FPLhadrefusedtodealwithCitiesin nuclearpower.Ithasalonghistoryofrefusingtodealintransmission andcoordination
- services, asisdiscussed, infra.Ithasrefusedtosellwholesale powertogenerating Citiesat.thesametimeitwasseekingtoacquiresuchCitiesandservetheirloadsatretail.1/Thus,theCompanywouldsellwholesale power(generation andtransmission services)
~onlifitcouldselldistribution
- services, aswell.Itisalsodemonstrable thatwhileFPLwasrefusingtodealwithCities,itwasengaginginbeneficial powersupplycoordination withFloridaPowerCorporation
("FPC")andTampaElectricCompany("TECO"),
thesecondandthirdlargestelectricsystemsinFlorida'.
Thesefactsareshownbyjointlyfileddocuments andpublicstatements.
Underthestandardcontained in$105oftheAtomicEnergyActauthorizing thisCommission tocorrect"situations inconsistent withtheantitrust laws",andinaccordance withsubstantive antitrust standards forcertainoffenses, anticompetitive motiveor"specific intent"neednotalwaysbeproven.However,thereisabundantevidencethatFPLhasbeenmotivated initsdealingswithCitiestoweakencompetition inordertopreserveandexpanditsretailmonopolyanditsdominantpositioninwholesale powermarkets.FPLfilingsanddocuments showthatFPLlookstoPeninsular Floridaforpowersupplyinterchange andbackuparrangements.
Thecontrolling antitrust standards forthisagencyhavebeenestablished inConsumers andToledoEdison.Consumers Power1Alternatively, it.hassoughttocondition
- dealings, withaCityonitscoordination ofFPLacquisition.
~Coman(MidlandUnits1and2),ALAR-462, 6HRC892(1977);ToledoEdisonComan(DavisBessePlant,Units1,2and3),ALAB-560, 10NRC265(1979).Cities'llegations herearelikethoseadjudicated inMidlandandDavisBassaandcanheassessedbyapplication.
ofthestandards setforthinthoseopinions.
TheCommission hasrecentlynoticedaproceeding toadoptregulations tolimitunnecessary complexity inlicensing proceedings.
46Ped.Reg.17216(March18,1981).TheCommission's goalisconsistent withthepurposesofadministrative agenciesingeneraltoprovideapractical meansofresolving problems.
AsisnodoubtobvioustotheBoard,however,inspiteofthesettlement betweentheNRCStaff,theDepartment ofJusticeandFPL,thereremainsasubstantial disputebetweentheCitiesandFPL.FPLhastakenthepositionthatitisnotwillingtograntfurtherrelieftotheCitiesunlesscompelled byaBoardorderandthattheBoardhasnolegalauthority toissuesuchorderwithoutmakingafindingthatasituation inconsistent withtheantitrust lawsexists.Apartfromthequestionwhethera"situation inconsistent" existsatall,therewouldappeartobetwobasicunresolved issuesdividingtheparties:First,whetherFPLhasanyobligations todealwithmunicipally ownedutilities inPeninsular FloridaotherthanthosenamedintheNRClicenseconditions; second,theextentofFPL'sobligations todealinpowersupplyserviceswithsmallercities.Thereareotherimportant questions 1/;however,iftheseissuescouldberesolved, theothersshouldbelessdifficult.
(4)SegratintheIssueofRelief.Assumingthatreliefisjustified, thenatureofthereliefwillnecessarily requireabalancing ofinterests.
SeeAtomicEnergyAct,$105(c)(6),
42U.S.C.2135(c)(6).
Further,thecostsandbenefitsassociated withspecificareasofreliefnecessarily raisefactualquestions ofparties'pecific needs,whichmaybeaffectedbyaspectrumofconsiderations.
Itispreferable thatreliefbenegotiated amongaffectedparties.FloridaCitiesbelievethat.itislikelythatifrulingsorten-tativerulingscouldbemadeonissuesastoFPL'sobligations tooutsidecitiesanduponitsobligations todealinpowersupplymatters,oriflimitedhearingscouldbeheldastothesematters,settlement ontheissueofreliefwouldbeencouraged.
Theissueofreliefshouldtherefore bedeferreduntilafterpre-trial rulingsorafterrequiredhearings2/Citiessetforththeir1AmongtheseareissueswhetherFPLhasactedtoundulyrestrictFloridaCities'ability tobuyandsellpowerorpowersupply(e.g.,throughactualorproposedresalerestrictions onwholesale power);whetherithasunlawfully tiedpowersupplyservices; whetherthelicenseconditions themselves areanticompetitive; andappropriate relicf.2/Theprocedures suggested areconsistent withMidland.Consumers PowerComan(MidlandUnitsland2),~sura,6NRCat1098-1100, wheretheAppealBoarddetermined issuesrelatingtoliability butremandedtopermitthefashioning ofremedies.
AftertheCommission deniedcertiorari review,thepartiesdetermined toopensettlement dz.scussxons, whichultima-telyprovedsuccessful.
Onceissuesofliability aredetermined ornarrowed, settlement astoreliefisfacilitated.
SeeConsumers PowerComan(MidlandUnits1and2),ALAB-468, 7NRC4651978 10basiccaseonthesematterstopermitthepartiestofocusontheseissues.However,subjecttoscheduling, FloridaCitiesarenowpreparedtogotohearingeitheronlimitedissuesoronthefullcase,including relief.(5)Basisforlimitinissues.ThecoreconcernofCongressinpassingtheantitrust provi-sionsoftheAtomicEnergyActwastopreventlicensees, suchasFloridaPowerRLightCompany,fromrestraining tradebyusingtheeconomicadvantages ofnuclear.powertoplacesmallersystemsatcomPetitive disadvantage.
ZntheGainesville case,~sura,FloridaPowerSLighthasbeenspecifically foundtohavebeen"partofaconspiracy withFloridaPowerCorporation (Floridapower)todividethewholesale powermarketinFlorida".
573F.2dat294.TheCompanyhasbeenfurtherfoundtohaveanticom-petitively restricted orsoughttohaverestricted theavailabi-lityofwholesale powerandotherpowersupplyservices.
FloridaPower5LihtComan,OpinionNo.57,32PUR4th313(August3,1979),~aealdismissed, FloridapoweraLihtCo.'.FERC,D.C.CircuitNo.79-2414(April25,1980)andFloridaPowerandLihtCo.,OpinionNo.57-A(October4,1979).TheCompanyhasmadewrittenproposals toacquireindependent electricsystemsandtorenewfranchises, citingtheadvantages ofitsnucleargeneration andcoordination (withotherlargeutilities),
whileatthesametimerefusingtosellthecitywholesale powerandtransmission ortoengagewithitincoordination.
FPLhassteadfastly refusedtodealwithCitiesineithercapacityorunitpowersalesfromitsoperating nuclearunits.Ithas offeredSt.Lucis2capacitytosomeCitiesonlyunderthepressureofGovernment litigation.
1/Ttstillrefusestodealwithothers.Thesefactsestablish thatthereis,at.theleast,licensewould"createormaintainasituation inconsistent withtheantitrust laws".Consumers Power,~sura,6NRCat'907-909.
Summaryjudgmentprocedures are,ofcourse,available beforecourtsandthisCommission, wheretherearenogenuinefactualissuestobetriedorwhenotherequitable doctrines sowarrant.NuclearRegulatory Commission Regulations, 10CFR$2.749(b);
FederalRulesofCivilProcedure, Rule56;MunicialLihtBoardsofReadinandWakefield Mass.v.FPC,450F.2d1341,1345-1346(D.C.Cir.
1971);VirginiaElectric6PowerCo.(NorthAnnaNuclearPowerStation,Units1and2),ALAB-584, 11NRC451(1980).2/Suchobjectives areespecially tobeencouraged beforetheNuclearRegulatory Commission inantitrust cases,1Thesettlement withtheGovernment, ofcourse,cannotbetakenasanadmission ofliability byFPL.Ontheotherhand,itdoesrepresent FPL'statement ofwhatitwilldo.FPLmaynotusethesettlement orchangedpoliciestodenya"situation inconsistent" thatotherwise exists.Forexample,inConsumers, theLicensing BoardrejectedaConsumers Powerstatement ofpolicyduringthemiddleofaproceeding, asjustification foravoidinganadversefindingorforlimitation ofrelief.Consumers PowerCo.(MidlandUnits1and2),LBP-75-39, 2NRC29,91-92(1975);reversedonothergrounds,~sura6NR,C892;See6NRC1036,n.537.Otherwise, anyapplicant couldbypasstheauthority oftheCommission toimposereasonable conditions throughrelianceuponsettlements orstatements ofposition.
2/Accord,GulfStatesUtilities Co.(RiverBendStation,Units,1and2),LBP-75-10, 753NRCX246,248(1975)(denyingsummarydisposition):
Onecannotavoidsummarydisposition onthemerehopethatattrialhewillbeabletodiscredit movants'vidence
....Onecannot'gototrialonthevaguesupposition thatsomething mayturnup.'"
12whereCongresshasspecifically refusedtoapplythestricterstandards applicable toajudicialgrantofantitrust relief,buthasgiventheCommission theauthority tocorrectprobable, inci-pientharm.HoustonLihtinSPowerCo.(SouthTexasProject,UnitNos.1and2),CCI-1-77-13, 5NRC1303,1314-1316 (1977).Cf.California v.FPC,369U.S.482,488-490(1962).AstheAppealBoardheldinConsumers:
"ThemembersoftheJointCommittee agreedthatproofofconditions whichrancountertothe~oliciesunderlying thoseLantitrustj laws,evenwherenoactualviolation ofstatuteswasmadeout',wouldwarrantremediallicenseconditions underSection105(c)"Accord,S.Rep.No.91-1247andH.R.Rep.No.91-1470,91stCong.,2ndSess.,14-15(1970)("JointCommittee Report")andseeauthorities collected atConsumers,
~surad,NRCat908.Itisacceptedfederallawthatcourtsmaybindalitiganttotheprioradjudication ofissueslitigated anddetermined inthepreviousforum.Itisnowbeyonddoubtthatpriordeterminations byanadministrative agencymayestopthepartiesfromre-litigating issuesresolvedearlier."Whenanadministrative agencyisactinginajudicialcapacityandresolvesdisputedissuesoffactthatareproperlybeforeitwhichthepartieshavehadanadequateopportunity tolitigate, thecourts'havenot,hesitated toenforcerepose."UnitedStatesv.UtahConstruction
&MininCo.,384U.S.394,422(1966)(footnotes omitted).
CitofAnaheimv.SouthernCalifornia EdisonCo.,C.D.Cal.No.CV-78-810-MML (May19,1981,pp.4-5ofSlipOpinion).
Attachment
- 5.
13ItisclearthatFPLhashadampleopportunity tomakeitsOcasebefore,e.g.,FERCandtheFifthCircuit.Ithashadeveryincentive tolitigate, andhasnotignoreditsopportunities tocontestclaims.Afortiori, ifagencyadjudication isenforceable byacourtwithbroadremedialpowers,itshouldbindFPLbeforeanotheragencyforum.TheNRChasappliedthisprinciple toitsownproceedings.
PublicServiceCo.ofNewHamshire(Seabrook Station,Units1and2),ALAR-422, 6NRC33,70(1977)(~citinUnitedStatesv.UtahConstruction andMininCo.,384U.S.394,421-22(1966);PublicServiceCo.ofNewHamshire(Seabrook Station,Units1and2),CLI-78-1, 7NRC1,23-28Accord,FloridaPowerSLightCo.(St.LuciePlant,UnitNo.2),Prehearing Conference OrderNo.1(July29,1976),pp.3-6:"ToprevailintheGainesville case,thecomplainant wasrequiredtoproveanexplicitviolation ofSection1oftheShermanAct.Here,ofcourse,theStaffandCitiesfacethelesserrequirement ofestablishing.
under$105oftheAtomicEnergyActthattheactivities underthelicensewouldcreateormaintainasituation inconsistent withtheantitrust laws,including Section5oftheFederalTradeCommission Act."TnPublicServiceofNewHamshiretheCommission stateditsreasonsforbindingitselftothefactualdeterminations pre-viouslymadebytheEPA:Butperhapsthestrongest, reasonforaccepting asconclusive theEPAdeterminations ofaquaticimpactistoavoidprotracted relitigations ofthesefactualissues.Wherelitigants haveonefullandfairopportunity tocontestaparticular issue,theyneednotbegivenasecondopportunity toreopenthematterbeforeanothertribunalwherethesameissueisrelevant.
147NRCat26.SeealsoToledoEdisonCo.,etal.(Davis-Besse NuclearPowerStation,Units1,2,and3),ALAB-378, 5NRC557(1977):[A]sageneralmatter,ajudicialdecisionisentitledtoprecisely thesamecollateral estoppaleffectinalateradministrative proceeding asitwouldbeaccordedinasubsequent judicialproceeding.
5NRCat561.ItisthusclearthattheBoardcanandshouldexpeditethiscasebyadoptingfindingsoffactmadebyasisteragency,FERC,inOpinionNo.57,andbytheFifthCircuitCourtofAppeals,inGainesville.
Further,FPLmust,betakentobebound,asamatteroflaw,byitspublicpositions anddocuments.
Forexample,FPLpublished anadvertisement intheVeroBeachPressJournal(September 5,1976)addressed "AnopenlettertoeveryVeroBeachresident..."justbeforeapublicvoteonsaleofthesystem.Thatadvertisement comparedFPLandVeroBeach'sprospective rates,stating:"Weexpecttohaveanewnucleargenerating unitatSt.Lucieinserviceinthenearfuture.Thisshouldbringannualfuelsavingsofmorethan$100millionthatwillbepasseddirectlytoourcustomers throughareduction inthefueladjustment, whichhasbeenreflected above""Wesincerely believethattheproposedsalewillbeagoodthing-goodforVeroBeachelectriccustomers andgoodfortheCityitself.Ifitisapproved, wepledgetodeliveryoureliableelectricserviceatthelowestpossiblecost.Wehopeyouwillgiveustheopportunity tokeepthispromise."
- Appendix, p-D12~Thus,FPLuseditscontrolovernuclearfacilities totrytoextenditsretailmarket,simultaneously refusingtosellany partofitsnucleargenerated powertoVeroBeachorothersthroughwholesale sales.Unlessarulewereestablished thatFPLisnotboundbythenecessary consequences ofitsacts,theremustbeafindingthatFPLwasseekingapprovalofthesaleoftheVeroBeachsystemonthebasisofFPL'snuclearadvantage.
Similarly, whenFPLentersintosettlements thatcontinuetodenynuclearaccesstosome,itcannotdenythatitisrefusingtodldeal.Moreover, thesheercumulation ofevidencefromFPL'sowninternaldocuments ofitsanticompetitive activities, coupledwithitsexternalacts,supportasummaryjudgmentfindingthatasituation isinconsistent withtheantitrust laws.internaldocuments ofapartyopponentareadmissible underRule801(d)(2)(D) oftheFederalRulesofEvidence.
UnitedStatesv.AmericanTelehoneandTelerahCo.,CCH1981-1TradeCases,'K63,938(D.D.C.1981).8eealeeKcninkli'ke Luchtuaart Maatschai'.v.ELMv.Tuller,292F.2d775,782(D.C.Cir.
1961,BurgerJ.).TheCourtinAmericanTelehoneGTelerahCo.notedtheenormouscostandburdenofidentifying theauthorsofsuchdocuments andotherwise layingafoundation.
TheCourtalsonotedthatcontrolovertherelevantfoundational infor-mationremainedwiththeopponentparty.TheCourtheldthatsuchevidencewaspresumptively admissible, butallowedtheopposingpartyto,rebutthepresumption ofadmissibility.
XfFPLwishestodenytheauthenticity orveracityofsuchdocuments, themeanstodosoarewithinitspower.Otherwise, documents fromitsownfilesstandasadmissions bytheCompanyofmattersstatedinthedocuments.
AmericanTelehone8TelerahCo.,~sura.InarecentorderofMay19,1981,inCitiesofAnaheimv.SouthernCalifornia Edison,~sura,(Attachment 5),JudgeLucasdetermined certainfactstobe"withoutsubstantial controversy anddeemedestablished forpurposesofthisaction,"determined thatcertain"principles oflawareapplicable tothisaction",collaterally estoppedSouthernCalifornia Edisonfromdisputing factualissuesdetermined inFERCproceedings, andrestricted discovery toissuesremaining incontroversy; buttheCourtdeniedafurtherlimitation "withoutprejudice" andorderedfurtherbriefingandconference astoissuesfortrial.FloridaCitiesbelievethatasimilarorderwillbeappropriate here.Intheremainder ofthispleading, FloridaCitiesplacebeforetheBoard,courtandadministrative agencyfindincis thatFPLhasviolatedtheantitrust laworpolicyorhasactedinconsistently withthem.Attachment.
1,Citiesprovideastatement offactswhichtheybelievearenotgenuinely indispute.FloridaCitiessubmitthatthejudicialandadministrative findingsaredeterminitive that,a"situation inconsistent" doesexist.Indeed,itisvirtually inconceivable thattheCommission couldlawfullyfinda"situation 17inconsistent" doesnotexistinlightofthesefindings.
Theyrecognize, however,thatFPLwilldisagree.
IfFPLcannotpro-videafactualbasistodenya"situation inconsistent" existsortocontestthefactswhereFPLisnotestoppedfromcontesting them,thentheissuesareripefordetermination.
IfFPLdoesprovideabasisforcontroverting materialfactsorraisesappli-cabledefenses, thereshouldbeahearing.Ahearingwillberequiredastcrelief..Seepp.115-17,indra.I8specificaddi-tionaldiscovery isrequired, FloridaCitieswillcooperate inordertoprovideabasisforspeedyresolution ofthecase.However,FPLshouldsetforthwhatfactsremainincontroversy topermittheirearlyresolution.
I.SUMMARYOFPRINCIPAL LEGALARGUMENTS A.RefusalsByFPLToDealWithSomeCitiesinFloridaPowerCorporation's RetailServiceAreaPerpetuate AnIllealMarketDivision.
FPLrefusestodealinvariouspowersupplyresources withcertaincitiesinFloridaPowerCorporation's retailservicearea("outsidecities"),
evenwhereitiswillingtodealwithothersinthesameorsimilarmatters.Ifthereisanyquestionregarding thematter,FPLneedmerelystateitswillingness todealwithsuchcities.,Thisrefusalconstitutes adirectviola-tionoftheantitrust laws;evenifFPLhastechnical defensestoaShermanActclaim,itsconductisinconsistent withthoselaws.Inthesedockets,astheBoardisaware,FloridaCitieshavebeenseekingrightsofaccesstoFPL'snucleargenerated power,transmission, wholesale powerandpooling,amongotherthings.
18PPL'settlement.
licenseconditions expressly limitrelieftocertaindesignated "inandnear"cities(i.e.,withinorneartheperimeter ofFPL'sretailservicearea).PPLrefusestodealwiththeexcludedcities.Moreover, evenifthesettlement werenotconsidered, PPL'spolicyisthesame.Theonlyquestionisthelegalityofsuchrefusals.
Thefacts,asaresetforthbelow,plainlydemonstrate thatPPLenteredintoaterritorial agreement withFloridaPowertodividewholesale powermarketsinFlorida,Gainesville Utilities
Deartmentv.FloridaPoweraLihtComan,
~sura57,3F.2d292;that,thisconspiracy wasineffectatthetimeFPL'snucleargeneration wasplanned;andthatFPLhasofferedSt.Lucie2capacitytoatleastthreecitiesoutsideitsretailservicearea-Gainesville, LakeHelenandOrlandoUtilities Commission.
- Moreover, FPLhasplanned,constructed andoperateditsnucleargeneration inthecontextofelectrical coordination withFloridaPower,TampaElectricandtoalesserextentOrlandoandJacksonville; otherCities-Citiesingeneral-havebeenexcludedfromequivalent coordination; FPLknowsthatsuchcoor-dinationisimportant tobothFPLandthesmallercities;andthepurposeandeffectofsuchexclusion wastolimitpowersupplyopportunities ofsmallersystems,therebyreinforcing FPL'seco-nomicpowerinretailandwholesale markets.Coordinated activityintheelectricpowerindustryisnotonlylegal,butisencouraged.
E.g.,FederalPowerAct,$202,16U.S.C.824(b).However,wherejointactionisexclusionary, it 19iscondemned.
CasessuchasAssociated Pressv.UnitedStates,326U.S.1(1945);Silverv.NewYorkStockExchane,373U.S.341(1963);Gamco,Inc.v.Providence FruitproduceBuildinInc.,194F.2d484(1stCir.),cert.denied,344U.B.817(1952);andtheCommission's ownDavisBessedecision(ToledoEdison~Coman(DavisBessePlant,Units1,2and3),ALAB56-0,10NRC265(1979)establish thatcompanies suchasFPLcannotlegallyjointogetherwithotherutilities formutualadvantage, totheexclusion ofothersmallerutilities inthesamegeographic area.Moreover, FPLandFloridapower,whoalongwithTampaElectric, dominateelectricgeneration andtransmission inPenin-sularFloridahavebeenfoundguiltyofamarketconspiracy intheGainesville case,~sura.1/Thus,itwasheldthatFPLandFloridaPowercouldnotlawfullyagreetodividewholesale powermarketsinFlorida.Intheearly1970'sFloridapowersettledtheGainesville caseitselfandothercasesalleginganticom-petitiveactivities.
Certainly, however,itisinconsistent withtheantitrust lawsforFPLtocontinuepoliciesof"territoriality",
whichhavethesameeffectasiftherewereaformalagreement.
2/Moreover, sincetheusefullifeofgenera-tionisfordecades,theeffect,oftheGainesville conspiracy can1FloridapowerandTampaElectricsettledacasebrought,bytheDepartment ofJusticealleginganillegalmarketdivisionUnitedStatesv.FloridaPowerCororationandTamaElectric~Coman,CXVHo.68-297-T.
Thepartiesagreednottoagreetoorenforceterritorial ormarketlimitations ofthesaleforresaleofbulkpower.AppendixI148-I153.
2/Aterritorial agreement betweenthecompanies whichwasactuallywritten,butnotsigned,isattachedasAppendixI89-I110-20hardlybesaidtohaveended,Forexample,FPL'soperating nuclearunitswereplannedduringthemid-1960's 1/heydayoftheterritorial "conspiracy" foundinGainesville.
B.FPL'sDealingWithSomeCitiesButNotOthersConstitutes ACombination InRestraint OfTrade.FPLagreestograntsomenuclearaccessandotherrelieftocertaindesignated cities,butnottoothers.tagorespecifically, FPLoffersnuclearaccess-atleasttoSt.Lucie2-whole-salepower,andlimitedtransmission toCitieswithinitsretailserviceareaandofferssomerelieftotheOrlandoUtilities Commission, Gainesville andLake-Helen,whicharenearbutnotwithinFPL'sretailservicearea.LakeHelenpurchases wholesale powerfromFloridaPowerCorporation.
Orlandoisoneofthelargestmunicipal generating cities.Inthiscase,,theCommission hasfoundthatOrlandowas"misled"asaresultofactionsbyFPL-Gainesville, ofcourse,wontheFifthCircuitterritorial marketdivisioncase.TheFifthCircuitalsoreferredtoLakeHelenbyname,withregardtotheterritorial conspiracy.
573F.2dat,298.WhileFPLmayhavebusinessorothermotivations forofferingSt.Lucie2tosome,havingdoneso,itcannotrightlyexcludeotherssimilarly situatedinPeninsular Florida.Ofcourse,FPLhadthechoicetostandfirmandnotofferSt.Lucie2toany-1Deposit>.on ofRobertJ.Gardner,pp.90-94,98-108.AppendixA.Affidavit andexhibitreferences aretoaffida-vitsordeposition exhibitsinGainesville ReionalUtilities, etal.v.FloridaPowerSLihtComan,S.D.Fla.No.
21bodyortoseektolimitittonon-generating systemsorsomeotherlimitedclass.Indoingso,itmighthavetakenunaccep-tablelitigation risks.TheFERCrejectedFPL'spositionthatitshouldnotberequiredtosellwholesale powertogenerating systemsexcepttosupplement theirgenerating capacity; theFERCfoundsuchrefusalsillegalundertheFederalPowerAct,prin-cipallybecauseof"anticompetitive" effects.FloridaPower8LightComan,OpinionNos.57,57-A,~sura.However,havingmadethechoicetoofferSt.Lucietosomesystems,whichwillhelpfinancetheplantandprovideamarketforitspower,including systemsinFloridaPower'sretail"territory",
FPLcan-notlawfullyexcludeothers.Failuretooffersimilar.rightsandbenefitstoothersconstitutes agroupboycott,condemned underSection1oftheShermanAct.Seecasescitedatpp.93-94.EvenassumingthepossiblevalidityofFPL'srefusalstodealinnuclearpowerunderSection2,thecasesareabundantly clearthatjointexclusionary actioniscondemned.
WhenadominantcompanysuchasFPL,whichcontrolssubstantial nuclear,transmission andotherpowersupplyfacilities combineswithothers,therebycombining economicstrengths, itcannotexcludesomedisfavored utilities.
1/Havingbeenfoundguiltyofaterritorial conspiracy todividewholesale powermarketswithFloridaPowerinthe1ThisCommission hasconsidered indepththe'onsequences ofexclusion ofsmallersystemsfromcoordination arrangements.
Ofcourse,afavoredsmallersystemhaslittlechoicebuttopreferanopportunity tocoordinate withaverylargesystemasopposedtosmallerones.Theinevitable result,however,istoweaken~sura,6NRCat945-977,997-1009, 1046,1047-1090; ToledoEdison,~sura10NRC,at334-358.
22Gainesville case,~sura,573F.2dat299,303,FPLhasnobasisforanargumenteitherthatitdidnotbenefitfromtheconspiracy orthatitsactionsdidnotinjureCitieswithinFloridaPower'retailarea.AsthetextofthedecisioninGainesville illustrates, thecondemned conductdidnottakeplaceinavacuum,butwasforthepurposeofrestraining competition bysmallersystems.Thus,bythesametoken,FPLhasobligations todealwithsuchsystemsinwhattheFifthCircuitcalled"wholesale powermarkets".
Accord,OpinionNos.57and57-A,Attachment 3.Aswesetforthextensively intheStatement ofFacts,theFifthCircuitfindingofconspiracy isbuttressed andsupported byproofofjointactionamongFlorida's threemajorinvestor-owned utilities totheexclusion ofmunicipal systems.FPLplanned,constructed andoperateditsnuclearunitsinthecontextofbeneficial coordination withFlorida's otherutilities.
AstheFederalPowerCommission specifically foundin1967,inrejecting FPL'sclaimthatitplannedandoperatedindependently:
"FPLisdirectlyinterconnected withfourotherFloridaelectricsystems,asfollows:FloridaPowerCorporation (Corp),TampaElectricCompany(Tampa),OrlandoUtilities Commission (Orlando),
andthecityofJacksonville (Jacksonville
).FPL,Corp,andTampaformtheFloridaOperating Committee (FloridaPool)withJacksonville andOrlandoasassociate members.Opinion-No.517,FloridaPowerkLihtComan,DocketNo.5-760,37FPC544,547-548(1967),reversed, 430F.2d1377(5thCir1970.),reversedFlor,ada Power&LihtComanv.FPC,404U.~S.4531972.OpinionNo.517isAttachment 3.Thethreecompanies themselves admit,inaletterintroducing an\April1960,FloridaOperating Committee report."Coordinated Planforthe1970Generation andTransmission Reuirements forthe 23ElectricUtilities ofFlorida"(emphasis added)(App.B106):treatedasifitwereservedb~one~fullintegrated electric~cornan"Thiscommittee, thoughslowingettingoutareport,feelsthatmuchhasbeenaccomplished; thatthisisabasic~stetoward~reducinthecostofelectricserviceinthisarea.'hus, thecompanies jointlyrecognize thattheytreatedPeninsular Floridaasasingleintegrated area.And,indeed,FPLciteditscompetitive advantage overmunicipal systems,whichresultedfromsuchcoordination.
Seetext,pages48-51.Frankly,wearemystified howFPLcanpossiblyargue,asitapparently intends,thatreliefisjustified forLakeHelen,whichpurchases wholesale powerfromFloridaPowerCorporation, butnotforothersmallgenerating systems,whodothesame;orthatreliefjustified forGainesville, butnotsmallerAlachuaorDewberry, locatedinthesamecounty;orforOrlando,butnotKissimmee andSt.Cloud-Citiesthataresmaller,butgeographically andelectrically notfarfromeitherOrlandoorFPLC.FPL'sRefusalsToDealWithFloridaCitiesAreDirectlyContraryToTheTeachings OfOtterTailAndConsumers Power.Byanytest,itisplainthatFPLdominates alargeretailpowersupplymarketineasternandsouthernFlorida,thatitcontrolsessential transmission facilities fortransactions among 24variousFloridaCitiesandthattogetherwithFloridaPoweritcontrolsmosthighvoltagetransmission inPeninsular Florida.Further,itownsthreeofFlorida's fouroperating nuclearunitsandhastheonlyadditional plannedunitunderconstruction.
NorcantherebeanyrealquestionthatFPLhasrefusedtodealwithsmallercities.TheGainesville case,~sura,establishes FPL'refusalstodealwithsystemsinFloridaPower's"territory";
iftherewereanydoubt,theNRClicenseconditions confirmthisfact.InOpinionNo.57theFERCfoundthatFPLhadengagedinvariousspecificrefusalstodealwithmunicipal systemsinitsretailservicearea.32PUR4that317-318,327-335.Underthestandards ofOtterTailandConsumers Power~Coman,suchrefusalsmandateafindingthata"situation inconsistent" exists.Thesettlement isa~artialcureodthe"situation inconsistent",
forthefavoredCities.Moreisneededforthem,andmuchmorefortheexcludedCities.STATEMENT OFFACTS1/I~FPLSPLANNINGgCONSTRUCTION ANDOPERATION OFITSNUCLEARFACILITIES HASBENEFITTED FROMCOORDINATION WITHOTHERFLORIDAUTILITIES.
Asmorefullydemonstrated below,1Thefactsinthissection(exceptforafewadditions here)werepresented totheDistrictCourtinGainesville ReionalUtilities, etal.v.FloridaPowerSLihtComan,S.D.Fla.No.79-5101-CIV-JLK, in"FloridaCities'nswer to'MotionofFPLForSummaryJudgmentofCityofTallahassee's NuclearAccessClaim'"onMay15,1981.
25'-a.Thefactsshowthatfromabout1955to1965FPLsoughttodevelopnuclearpowerinFloridathroughjointactionwithTampaElectricCompanyandFloridaPowerCorporation (buttotheexclusion ofmunicipal systemsincluding, asdiscussed below,othersthatFPLknewtobeinterested innuclearpower).Inadditiontorelyingontaxpayers, government contractors andequipment vendors,FPLalsoreliedonotherutilities inFloridaduringtheplanningandconstruction ofitsnuclearunits.FPLalsobenefitted frommembership inbroaderindustrygroups,fromwhichCitieswereexcluded, suchasEdisonElectricInstitute committees onatomicpower.Initsapplication totheAECtobuildtheTurkeyPointunits(App.C32-C44),
FPLexpressly andsolelyreliedonthesejointactivities asevidenceofitstechnical experience (App.C39-C40).
b.Thefactsshowthatfromatleast1959FPL,TampaElectricCompany("TECO"),
andFloridaPowerCorporation, withtheoccasional participation oftheOrlandoandJacksonville municipal systems(buttotheexclusion ofTallahassee andtheotherintervenors) wereengagedinjointandcooperative planningandcoordinated theiroperations soastoachieveefficiencies thatwouldnototherwise beavailable.
Thiscooperation specifically includedjointstudyofnucleargeneration, aswellasothermatters.rFurthermore, FPLreliedonthepurchaseofpowerfrom,andthesharingofreserveswith,othermembersofthe"Florida Operating Committee",
whichincludedthesesystems,duringtheentireperiodinwhichitsnuclearunitswereplannedandunderconstruction.
1.Sincethe1950'sFPLengagedinjointnuclearactivities withTECOandFloridaPowerCorporation.
WhenFPLappliedfortheTurkeyPointnuclearlicensesinMarch1966,itsparticipation injointactivities wasthesoleevidenceofits"technical qualifications."
Asstatedatpages7-8oftheapplication (App.C39-C40):
"Beginning sometenyearsago,Applicant
[FPL]participated withFloridaPowerCorporation andTampaElectricCompanyinanuclearpowerplantstudygroup,andhasworkedwithothersinthenuclearfield.Theobjective wastobeinapositiontoconstruct anuclearplantwhenjustified.
"Mr.GeorgeKinsman,VicePresident inchargeofengineering andpowerplantconstruction,.
servedasafoundingmemberoftheSouthernInterstate NuclearBoardrepresenting thepowerindustry.
Currently heistheBoardMemberrepresenting theStateofFlorida.HehasbeenamemberoftheFloridaNuclearandSpaceCommission since1956andalsoservesonAtomicIndustrial Forum,EdisonElectricInstitute, andSoutheastern ElectricExchangecommittees."
AsFPLdiscovery documents show,FPLengagedinanumberofnuclearactivities withTampaElectricCompany("TECO")andFloridaPowerCorporation inthedecadebeforeitdetermined to 27buildtheTurkeyPointnuclearplants.1/TheseincludedaCommission, an"atomicpowercommittee" comprised ofrepresenta-tivesofthethreecompanies, formedinoraboutlate1961(GardnerExh.4,5,App.B73-B76)andperhapsotherprojects(GardnerExh.8,App.B77-B78).1ThereisnoevidencethatanyCitieswereinvitedtoparticipate inanyofthesegroups,eventhoughFPLwasawarethatbothmunicipals andcooperative systemsinFloridawerethenexpressing interestinnuclearpower(seeKinsmanExhibitNos.28-32,App.G8-G32,andKinsmandeposition in~citofGainesville v.FloridaPowerSLihtComan,S.D.Fla.No.79-5101-CIV-JLK at101-111.Theinitial1956agreement amongthethreecompanies providedthat"Thereports,proposals, documents orotherdatarelatingtotheprojectshallnotbedisclosed withouttheunanimous approvalofthepartiestothisagreement norshallanypressorpublicity releaserelatingtothisagreement ortheprojectbeissuedwithoutsuchapproval."
(KinsmanExh.3,at2,App.G2)Bycontrast, theevidenceisthatCitieswereaffirmatively excludedfromthejoint,activities ofFPL,FloridaPowerandTECO.Mostsignificantly, asdiscussed above,from1959untiltheearly1970'sCitieswereexcludedfromtheFloridaOperating Committee whichsoughttooperatethesystemsofitsmembersas"onesystem."FPLdocuments showtheexclusion ofCitieswassystematic andconscious.
Forexample,in1957,FPLwasaskedbyapromoterofcoaltoputtogetheragroupofutilities tolearnaboutcoal.FPLdocuments showthatwhilethepromoters wishedthatsomeCitiesbeincludedinthegroup,FPLdidnotwanttoincludeanymunicipal systemsandarrangedameetingthatincludedFPL,FloridaPower,andTECOalone(seeKinsmandeposition at159-165;KinsmanExh.45-48,App.957-961).
28Furtherdiscovery documents showthataboveandbeyondcom-munications concerning theirownjointactivities, FPLandFloridaPowerCorp.officials keptoneanotherinformedoftheircommunications withothersregarding competitive developments innuclearpower.Forexample,asshownatApp.C45-C46,whenruralelectriccooperatives appliedtotheFederalgovernment foragranttobuildanuclearunitintheearly1950's,theyevi-dentlyaskedFloridaPowerCorporation toprovidethebackupneededtoconstruct theunit.FloridaPowerCorporation deniedtherequestandsent,ablindcopyofthedenialtoFPLofficials.
1/Ironically, asevidenced byFPL's50-yearcorporate history,thejointeffortsneverborefruitbecausethecom-panieswereaversetotherisks.2/1Similarly, whenFPLPresident.
RobertFitesenta1959lettertotheSouthernCompanystatingFPL'sviewthatitdidnotbelievenuclearpowertobecompetitive withconventional plants,copiesweresenttoexecutives ofotherprivateutilities inFlorida,althoughnottocityofficials (GardnerExh.16todeposition inGainesville ReionalUtilities, etal.v.FloridaPower5Lihtcoman,S.D.Pla.No.79-5101-CIV-JLK,
~suraApp.B79-BSO.TheCourtofAppealsinGainesville,
~sura,relieduponsuch"routine" exchangeofletterstosupportafindingofillegalconspiracy withoutremandinforatrialhearin.573F.2dat295-297.2/"AHalfCenturyofPeopleServingPeople"at94-95,App.Bl-B9.Following thedeathofthisproposalTampaandFloridaPowerCorp.continued theirresearch, andattempted anotherpro-posalin1967(whichwasalsorejected).
FPL,however,didnotparticipate (Kinsmandeposition, KinsmanTr.44-45).
29In1961-62whenFPL,TECOandFloridaPowerformedan"atomicpowercommittee,"
thereleaseannouncing theCommittee statedthethreewould"carryoncontinuing studiesofnuclearreactortypes"(KinsmanExh.17,App.G4-G7,andKinsmandeposition, Tr.20-21).1/AsMr.Kinsmanexplained, however,nostudiesweredone.1Aszntheearlierventure,asamemberofthe"atomicpowercommittee,"
FPLactivelysoughttoshareinformation withtheotherlargeutilities inFlorida,butnotCities.AsMr.Kinsman,FPL'srepresentative totheCommittee, testified (Kinsmandeposition, 56-57):"Q.Ifamanufacturer cametoFPL,wouldyousharethatinformation?
"A.Yes."Q..Whodidyoushareitwith?"A....Iftheycalledonus,Iwouldmakesuretheycalledonthem[TampaandFloridaPower]too."Q.WouldyoumakesuretheycalledonOrlando?"A.Yes-"Q.WhataboutGainesville?
"A.Idon'tknow."Q.Tallahassee?
"A.AsfarasIknow,noneofthemwereinterested innuclearpower."Q.WhataboutFt.Pierce?"A.Idon'tsuspecttheywereinterested.
Ididn'tknowtheywere"Q.Isitfairtosaythatyouwerefollowing whatwasgoingonoutthere,asopposedtodoingyourownresearch?
Exactly.Ohyes."(Kinsmandeposition, Tr.55).Infact,asshownbyKinsmanExhibitV~os.28-32,smallsystemswereinterested innuclearpowerinthefiftiesandearlysixties.Withtheexception ofExhibit29,anAtomicEnergyCommission pressrelease,allwereobtainedfromFPLindiscovery.
WhileMr.KinsmandidnotrecallExhibits28,and30-32,App.GS-G32,hetestified that"I'msureIsaw"Exhibit29(Kinsman, Tr.101-110).
302.Throughout the1960'sFPLengagedincoordinated planningandoperations throughtheFloridaOperating Committee/Florida PoolbutwithouttheCities.In1959FPLjoinedwithFloridaPowerCorporation andTECO,1/utilities towhichitwasthenandisnowelectrically interconnected, toformagroupthattheparticipants referredtoasthe"FloridaOperating Committee" orthe"FloridaPool."Thisgrouppermitted itsmemberstoobtain,andplanfor,greaterreliability thanifeachsystemhadactedalone.AsR.H.Fite,FPLPresident, explained toFPLstockholders onHay15,1961(GardnerExh.28,App.B103-B105)
(emphasis added):"Backin1959.wejoinedwiththeTampaElectricCompanyandFloridaPowerCorporation informingtheFloridaOperating Committee forthepurposeofplanningthemosteiticzent andeconomical results.Bycoordinating ourschedules ofplantshutdowns foroverhaulandthroughsharingthespinningreserverequirements oftheindividual companies, wearealreadyeffecting important operating economies plusproviding greaterprotection tocontinuity ofservicebythegreaterdiversity ofbackupreserves.
Copingefficiently withemergency situations, suchunit,isonlyoneofthemanyadvantages tohegaanedPromourcoordination plans.Coordination oKdailyoperations forgreatereconomyandefficiency foreachparticipant isamajorobjective e-dual~sstemsandfacilities asthoughthewereone1OrlandoandJacksonville werealsoinvitedtoparticipate inthegroup'sactivities.
Itwasnotuntiltheearly1970'sthatCitieswerepermitted tojoin.
31Thisincludescoordination ofanindividual plant~me"'othinlowercosts~erKwfor~lantaddations andthee-"InApril1960,theFloridaOperating Committee issueda"Coordinated Planforthe1970Generation andTransmission Requirements fortheElectricUtilities ofFlorida."
(emphasis added)(GardnerExh.29,App.B106-B220).
Inintroducing theplanpreparedbyFPL,TECOandFloridaPowerCorp.,theplanningcommittee stated(App.B106)(emphasis added):"TheentirestateeastoftheAalachicola Riveriselectric~cornanInshort,FPL,andtheotherswereplanningfortheentirepeninsula FloridaareaservedbyCities,butexcluding themfromtheplanning.
1/InJune1961theOperating Committee, withthecooperation oftheOrlandoUtilities Commission, prepareda"JointPlanningStudy1964-65."
(GardnerExh.31,App.B237-B388).
Astheplanexplains, (App.B241)it.was:originally initiated
...todetermine thetransmission systemwhichwouldbest,serve,asoftheendof1963,theindividual andtotalneedsoftheFloridaPowerCorporation, FloridaPower&LightCompanyandTampaElectricCompany-including, ofcourse,newgenerating capacitythenplannedorcontracted....
Inamemorandum toMarshallMcDonald, FPL'sChairmanoftheBoardofDirectors andChiefExecutive Officer,and17othertopofficials ofFPL,VicePresident.
RobertJ.Gardnerrecognized:
FOOTNOTECONTINUED ONNEXTPAGE 32Thesubsequent firmingofadditional projectsofeachofthethreecompanies andtheproposedintegration ofOrlandoUtilities Commission intothe230kvgridrequiredchangesinthestudy.ThisreportshowshowtheOUC[Orlando]
facilities couldfitintotheintegrated systemplannedfor1964."Ina1963reportpreparedbyFPL,FloridaPowerandTECO1/fortheFederalPowerCommission's "National PowerSurvey,"thethreelargeutilities explained (App.B222-B223):
"Coordinated planningofthegenerating andtransmission facilities ofthefourmajorutliities
[evidently OrlandoaswellasFPL,TECO,andFloridaPowerCorporation]
inthestudyareahasbeencarriedonbyplanningcommittees madeupofpersonnel fromFloridaPowerSLightCompany,FloridaPowerCorporation andTampaElectricCompany.Atthepresent,thereisageneralplanineffectwhichisservingasaguideforexpansion uptotheyear1970.Thisplanisbasedupona"singlesystem"approach, takingintoconsideration factorssuchaspoolingofreserves, thesharingofunits,areaprotection withinter-area transmission tiessothattheexpansion patternwouldbeonethatiswellcoordinated amongtheparticipating companies."
FOOTNOTECONTINUED FROMNEXTPAGE"ThePublicServiceCommission hasmadeitclearthatitfeelsthereisanadvantage totheStateinrequiring planningonastatewide basis.Thisfeelingandtheintenttofollowthroughonitisreflected inthewordingofthePowerPlantSitingAct,theGridBill,commentsfromthestaffontheten-yearsiteplans,andmostrecent,inanorderinstituting aninvestigation intoandrequiring publichearingsonthesubjectofjointstateplanning."
Attachment Illl-127-1/GardnerDeposition Exh.30,App.B221-B236.
ThereportwastocoverFederalPowerCommission StudyArea24,whichincludedallofPeninsular Florida.Thereportnotesthat"contacts weremadewithrepresentatives oftheOrlandoUtilities Commission, theCityofTallahassee andtheCityofLakeland'forobtaining theirplansforthestudyperiod."(App.B222).Thus,suchcities'ctions wererelevantforthereport,butnotforinclusion inthecoordinated planning.
33In1964,FPL,alongwithOrlandoandJacksonville, aswellasTampaandFloridaPowerCorporation embarkedonanother"longrangepowersupplystudytobeusedasaguideforgenerating andtransmission additions, aswegrowwithFloridaItwilldevelopthetransmission systemrequiredtocoordinate tomutualadvantage, thepresentandprojected plansofeachparticipant forgenerating unitadditions, andwillpointthewayforlicensedreservesandresultant savingsincapitalcosts."(GardnerExh.32App.B390)~Thisstudy,conducted duringtheperiod.inwhich,according toMr.Gardner,FPLbegantoconsidernuclearunits,evaluated bothnuclearandfossilunits.TheJuly,1966"InterimReport"considered investments inarangeofnuclearunits(GardnerExh.33,App.B392-B426).
Tosummarize, intheperiodimmediately priortoandincluding thatinwhichFPLdetermined tobuilditsnuclear'Iunits,FPLwasengagedin"joint"and"coordinated" planningofthe"statewide" systemwiththeothermajorutilities inthestate.Indeed,inits1967decisionfindingFPLsubject,toitsjurisdiction, theFederalPowerCommission (predecessor totheFederalEnergyRegulatory Commission) found:"FPLisdirectlyinterconnected withfourotherFloridaelectricsystems,asfollows:FloridaPowerCorporation (Corp),TampaElectricCompany(Tampa),OrlandoUtilities Commission (Orlando),
andthecityofJacksonville (Jacksonville).
FPL,Corp,andTampaformtheFloridaOperating Committee (Floridapool)withJacksonville andOrlandoasassociate members.Significantly, inrejectingFPL'claimthaitactedindependently, theFederalPowerCommission foundin1967:
"Consideration hasbeengiventoFPL'sassertion thatbecauseoftheuniquepeninsular natureofitsserviceareaitplanneditssystemtobeself-sufficient, andthatitpossesses sufficient generating capacityofitsowntomeetitsloadswithoutanydependence uponthespinningreservesoremergency powerofotherFloridaorout-of-state systems.Wedonotfindthisassertion persuasive.
ThefactthatFPLcouldoperateasaself-sufficient.
utilityisnotcontrolling becauseFPLsimplydoesnotoperateitssysteminthatmanner.Therecordinthisproceeding makesitplainthatFPLreceivessubstantial benefitsfromitsparticipation intheFloridaPoolinthecoordination ofspinningreserves, thearrangement ofplantmaintenance schedules, andtheassurance ofreliability offrequency controlandfromboththeFloridaPoolandISGintheformofautomatic assistance inthecaseofemergencies.
AswestatedinouropinioninIndiana&MichianElectricCcman,~eura,L33FPC739(1966]itisthesystem'sactualmodeofoperation, nothowthesystemcouldoperate,thatisimportant.
- Moreover, theparticular operating patternactuallyusedbyFPLisconsistent withsoundoperating practices andwiththeprinciples enunciated intheCommission's NationalPowerSurveyissuedinDecember1964inwhichallsegmentsoftheelectricpowerindustryparticipated fullyandcooperatively."
FloridaPower&LihtComan,37FPC544,551-552(1967),affirmed, FloridaPowerSLihtComanv.FPC,404U.S.453(1972).3.FPLreliedoncoordination withtheFloridaOperating Committee inconstructing itsnuclearunits.FPL'smembership intheFloridaOperating Committee permitted ittomaximizeeconomies inconstructing itsownunits.1/1Cz.trescannotstatethespecificcoordination assumptions actuallyemployedbyFPLinconstructing itsnuclearunitsbecauseasevidenced bytheGardnerdeposition, FPLhaseitherlostunderlying planningdocuments, orneverputfinalplansandassumptions relatingtotheunitsonpaper(Appendix A,Tr.106-108;Tr.8,17)~Ingeneral,asdiscussed intheFloridaOperating Committee documents citedabove,interconnections, asexistedamongFloridaOperating Committee members,permitavarietyoftypesofFOOTNOTECONTINUED ONNEXTPAGE 35Forexample,asstatedabove,membersoftheFloridaOperating Committee engagedinthesharingofreserves.
Asexplained bytheFederalPowerCommission's 1964NationalPowerSurvey(at170,App.D310emphasisadded):"Bysharingreservesthroughinterconnections, agroupofsystemscanreducethecombinedreserveforunscheduled outages,sinceitisunlikelythatmaximumoutagesofunitsonallsystemswilloccuratprecisely thesametimes.Tha~polingofreservesisbasedontheThus,FPL,intheperiodwhenitplannedandbuiltitsnuclearunits,andtoday,hasactedinrelianceonrisksharingarrangements withotherutilities.
FOOTNOTECONTINUED FROMPREVIOUSPAGE:economies.
Thecloseworkingrelationships, however,areshownbydocuments inAppendixI'orexample,inanAugust1,1962letterfromFPLChiefExecutive MacGregor SmithtoFloridaPowerPresident W.J.Clapp(Appendix I133-I134).,
regarding theneedforaninterconnection tosupportFPL'splannedCanaveral Plant,Mr.Smithexplained:
OneofthemainreasonsforputtinginaplantatCanaveral istobeabletocontribute moretoyouandTampaElectricinreturnforwhatwewouldhopetoget.iMyfeelingalwayshasbeenthatifwehadanypower,wewouldmakeitavailable toanyofourneighbors andwehavealwaysfoundyouandTampaElectrictobeequallyagreeable.
Ihaveneverbeenparticularly concerned withtherate'wewouldchargeorpayforsuchemergency help.Anyfirmpowercouldbenegotiated inamountsandforthetermcontemplated Foritspart,asstatedinaJuly24,1964letterfromMr.ClapptoFPLPresident Fite(Appendix I135),FloridaPowerbelievedthatitsoperations includedactivities thatweresolelyforFPL'sbenefit.AsMr.Clappwrote:"Foranumberofyearsnowwehavebeenmaintaining a66,000volttiewithyouatFt.White.Thistiehasbeenoperatedopen,andclosedinatyourconvenience.
Thistieisofnovaluetous,buthasbeenhelpfultoyouonnumerousoccasions becausewemaintainamajorsourceofsupplyinthearea."
-'36AsMr.Kinsman,theFPLVicePresident inchargeofoverseeing nucleardevelopments, putit,TampaElectric, FloridaPowerandFPLoperatedtheirsystemsduringthe1960'sas"onesystem."(KinsmanTr.293-294);.
(emphasis added)."Q.WereyousharingreserveswithTampaandFloridaPowerin1965?Didyouhavereservesharingarrangements?
"A.Idon'tknowwhatyoumean'."Q.Ofcourse,youknowwhatgenerating electricreservesare."A.Well,we~oeratethethree~sstemsasoneIfwehad~owerand~theneededit,~theclotit.Andviceversa."Q.Thiswasinthe1960's?yesIntheperiodbetweenits(1965-1966) decisiontobuildnuclearunitsandtheDecember1972initialoperation dateofthefirst(Turkeypoint)units,FPLactivelyreliedonothersforsignificant amountsofpower,including thepowerthatFPLrequiredtoserveallitscustomers.
atthetimeofmaximum(peak)load.AsshownbyFPLForm12submissions totheFederalPowerCommission, forexample,in1970FPLreceived265Mwatthetimeofthe-FPLpeakfromTECO,FloridaPowerCorp.,andOrlando;in1971itreceived297MwatpeakfromTECO,FloridaPowerCorp.andJacksonville, andin1972itreceived310MwfromTECO,Jacksonville andVeroBeach.1/1SeeApp.C47-C49.ThefilingsalsoshowthatFPLdelivered powertotheotherlargeutilities atpeak,butinamountslessthanthatreceived.
37Thereiseveryreasontobelievethatsuchcoordination willcontinue.
Forexample,intheFloridaPowerkLightCompany1979~"inthedeferraloftwonew700Mwcoalunits"wasacontractsignedwithTampaElectricCo.topurchaseoutputfromthecoalunitnowunderconstruction atTampa'sBigBendPlant.Theagreement coverspurchaseof292Mw,208Mwand104Mwin1985,1986and1987,respectively."
Thereportcoversothergeneration andoperations coordination aswell.Accord,FloridaPowerSLight,Company1980AnnualReort,pages8("EnergyInterchange CutsCosts")(App.I137),14-15("Generation Expansion plan")(App.I138-139).
1/FPLhasactedwithoutreasonable basistovetopeninsular coordination effortsthatitbelievedwouldbenefitsmallersystems.Itdidsoinspiteofcredibleevidence-whichitdidnotreasonably challenge
-thattheeffortswereinFPL'sowninterestaswell.Intheearly1970'sforexample,the1InitsMemorandum inOpposition toPlaintiff's MotiontoDismissorforSummaryJudgment, filedinDocketHo.79-5101-CIV-JLK, onSeptember 30,1980,FPLhasdescribed theFloridaCoordinating Group,successor totheFloridaOperating Committee:
"TheFCGisanon-governmental association ofFloridaelectricutilities whichhavevoluntarily joinedtoensurereliablesuppliesofelectricpowerandtoengageinactivecoordination ofplanning, construction, andutilization ofgeneration andtransmission facilities inFlorida.TheFCGalsoservesasaliaisonbetweentheutilities andtheFloridaPublicServiceCommission.
Althoughnotagovernmental orquasi-governmental agency,theFCGisaninfluential organization forFloridautilities."
38FloridaCoordinating Groupformedapoolingtaskforce.Seepre-viousfootnote.
Thereport(App.C184-C298) ofthistaskforcefoundthatcentralized dispatchandjointgeneration andtransmission planninganddevelopment amongFloridautilities shouldprovideadditional benefits.
Asdetailedinanaffidavit ofMr.HarryLuffoftheOrlandoUtilities Commission, whichhadbeenfiledinFloridaPower8LightComan(SouthDadePlant),NRCDocketV~o.P-636-A(App.C299-C305),
FPLscuttledtheeffortsofthepoolingtaskforce.Inamemorandum responding tothisaffidavit, Mr.ErnestBivans,FPLVicePresident forSystemPlanning, admittedFPL'srole.MoreoverhestatedthatFPL'svetowasbasedonthepercep-tionthattheproposalwouldbeofbenefittosmallersystems,butnottoFPL(App-C308-C309):
"AttheOctober1975meeting,ithadbecomeevidentthatthePoolingTaskForce,chairedbyMr.Luff,wasintentonpursuingamoreformallystructured pool,leadingtocentralized dispatchandoperations, andcentralized planning.
WhileFPLcouldseethattheothersmallerutilities couldpossiblybenefitbysuchamoreformalpool,wedidnotthen,anddonotnow,envisionanybenefitsthatwouldaccruetoFPL'scustomers.
Infact,pooloperation withcentralized dispatchofpower,whilepossiblybenefiting thesmaller,lessefficient utilities, wouldprobablyresultinhighercostsforelectricpowertothecustomers ofFPL-FPLislargeenoughtoachievealloftheeconomyofscaleonitsownwithoutbecomingpartofalargermorestructured organization.
Therefore, attheOctober1975meeting,IstatedthatFPLwaswithdrawing fromanyfurtherefforttoforma"Statewide" poolforthereasonspreviously given.IfurtherstatedatthismeetingthatFPLwouldencourage theotherutilities toformasecondpoolwhichwould 39thenbeapproximately equalinsizetoFPL,andtheFPLwouldworkoutarrangements wherefeasibily
- possibly, forthosemunicipal systemsinitsterritory thatwouldbeisolatedfromtheproposedpool,tojoinandparticipate."
Documents obtainedlaterthroughdiscovery showthatFPL'spolicyofresistance topoolingcame,itnowappears,fromthehighestlevels.AsstatedinaFebruary20,1976FPLmemorandum fromPowerSupplyManagerN.E.CoetoH.L.Allen(SeniorVicePresident),
thepolicyreflected theinstructions toFPL'stopmanagement byFPLBoardChairmanMarshallMcDonald:
"Myunderstanding ofMr.McDonald's directions following theSeniorManagement PlanningCouncilmeetingonRegulatory ProblemswasthatPowerSupplywastosecureuniformbilateral interchange contracts asadeterrent towardsformalcolin."(App.0310)emphasissuppliedFPLtookthepositionthatpoolingandjointgeneration planningthatincludedsmallersystemswouldbeadversetotheCompanyanditscustomers:
TheFebruary1976presentation toCompanyseniormanagement referredtoatn.1,pp.31-32,~sura:"Ourfirstconcern(andprobablythemostimportant one)isthepossiblesevererestrictions whichGovernment mayplaceonourmanagement prerogatives.
Intheplanningarea,thiscouldmeanlegislating usintoapositionofhavingourplansimposedonus.Anti-trust problemsandtheFloridaPowerCorporation saleofCrystalRiver<<3,jeopardize ourrighttoourowngeneration facilities.
Thewheelingissuemaydrastically affectouropera-tionalpractices.
Alloftheseeffectscouldhavedetrimental impactonourcustomers'ost.
ofelectricty.
Thiswefeelwouldbeunjust,sinceourcustomers andinvestors havehadtheforesight toplanprogressively."
40Thesolutionwasto"study"theproblem(Appendix I124-I125):
p.9):"Earlier, Imentioned thattheissueof"pooling" isstillcurrentandthatwearenotinterested initatthistime.Unfortunately, whilewemayseenobenefitstous,thisdoesnotmeanthatotherutilities orgovernmental agenciesarenotinterested inhavingusbecomeamemberoftheirpool.Withthisinmind,webelievethatthroughthevehiclesofthejointgeneration/transmission studyandoureducational actionsweshould,atleastinhouse,becomeinstrumen-talinthedevelopment ofthe"pooling" issueforFlorida.Thiswaywewillbeinabetterpositiontodefine,establish, anddefendourposition."
Id.at13-4.Later,whenitenteredintobilateral interchange contracts withTampaElectricCompanyandFloridaPowerCorporation inTamaElectricComan,FederalPowerCommission DocketNo.77-549,etal.,FPLtookthepositionthattheFERChadnojuris-dictiontoorderpooling,andthat:"Inaddition, FPLisparticipating fullyintheFloridaElectricPowerCoordinating Group(FCG)coordination studies.Since1976,theTechnical AdvisoryGroupoftheFCGhasbeeninvolvedinthreemajorstudies:thePeninsular FloridaGeneration Expansion PlanningStudy,theCentralDispatchStudyandthePowerBrokerStudy.TheCompanyhassupported eachofthesestudies,andinfacttooktheinitiative instartingtheCentralDispatchstudy.Theseeffortsareyieldingpositiveresults;onMarch1,1978,thepowerbrokerconceptwasimplemented.
FPLmaintains thatconsideration ofaddi-tionalcoordinating arrangements isproperlybeforetheFCGandnotinthisproceeding."
June1,1978ReplyMemorandum ofFloridaPowerSLightCompany,TamaElectricCcman,~snra,AppendixZ85-X88.WhiletheCompanysoughtto"getourstoryacross"(Appendix I123,p.12),Mr.Bivanssubsequently testified thatFPLhadneverundertaken astudytotesttheassumption thatcentralized dispatchandjointplanningmeasuressoughtbysmallersystems 41wouldnotalsobebeneficial toFPL(seeBivanstestimony, FloridaPower8LihtComan,FERCDocketNo.ER78-19,etal.,PhaseI,Tr.843-44).(App.C311-C312).
Infact,FPL'sperception wasinerror.Asearlyas1960,thePlanningCommittee oftheFloridaOperating Committee concluded thatthepoolingofrisksbyFPLandotherswouldresultinsavings:TES)ubstantial savincasininvestment wouldresultone~astern~area'coo~~avoictn urcatronoffacilities.
However,fewoftheprojectsconsidered couldbeacceptedwithoutfurtherstudyinvolving alternate possibilities."
(Emphasis added.)GardnerExh.29,page3,App.Bill.throuhintegrated lanninandexansionundertheThe1974-1975 FCGstudyitself,whichwassubmitted by,interalia,FPLofficialK.S.Buchanan, specifically identifies FPLasabigwinnerfromcentralized dispatch.
TablesatApp.C294-C295 showthat,inthetwocasessummarized there,centra-lizeddispatchwouldpermitFPLtosave63,753MMBTUand116,064MMBTUona"typicalpeakloadday."Assuming, quiteconservatively,,oil pricesatapproximately
$2.00MMBTU,thiswouldtranslate into(peakloadday)dailysavingsinthe$130,000-$
250,000rangeforFPLalone.Therecentlyinstituted statewide PowerBrokerexperiment, whichisamodestformofcentralized
- dispatch, hasdemonstrably beenbeneficial toFPL.DuringFebruary1-April11,1979alone,forexample,FPLsaved$577,115.78 (App.C313)andFPL's1980AnnualReortat8(App.I137)proclaims thesavingsithasachieved:
42"Stillothersavingsareaccruingfromtheeconomyinterchange ofinterchange withthe14othergenerating utilities whichparticipate inFlorida's EnergyBrokerSystem.Thisautomated exchangesystemworkstotheultimatebenefitofconsumers byenablingparticipating utilities totakeadvantage ofthemosteconomical available generation."
Inarecentdeposition whichhasbeenrecessed, ChiefExecutive OfficerMarshallMcDonaldtestified thatinthe1972-1973 timeperiodFPLwas"soshortofgeneration thatwedidn'thaveapolicy[astoadequatereserves].
Wejusthadwha-teverhappenedtobethere."Tr.64.Hetestified further:A.Wedidn'thaveanyreserve.Myfirstexperience withthecompanywouldbetwodaysafterIgotherewasthatwegotacrossthepeakbyfourmegawatts afterweboughteverything wecouldlayourhandsonandafterwehadbeenontheradiotoaskeverybody togetoff.Wedidnothaveanyreserve.Q.Whodidyoubuyfromwhenyou-A.Anybodywhowasavailable toselluspower.Q.IntheentireStateofFlorida?A.Throughout ourinterconnections.
Q.ThatwouldbeTallahassee andLakeland-A.Whoever.Q.Doyourecallatthetimeyoucametothecompanyin19711-didtheyhaveapolicyonwhatreservewouldbetheappropriate reserveforplanningpurposes?
A.Mo.Tr.65.Healsostated(Tr.121-122):
Q.Wereyouactivelyseekingsuppliestobuyadditional capacityoradditional energysoyoucouldmeetyourload?Doyourecallthat?A.Therewasn'tanylong-term firmpowersourceavailable withintheStateduringthatperiodoftime.
Wepurchased poweraswecouldgetitdepending uponthecir-cumstances ofwhateverothersystemmighthaveaccessatthattime,butduringthatparticular periodoftime,therewerenosignificant sourcesofsurpluspoweravailable forthefirm.Q.Again,youmadeanefforttolookallovertheState2.A.IthinkthiswasknowntoMr.BivansandtheotherswhowereworkingwiththeFloridaOperating Committee becausetheyknewindependently theavailability ofallplantsandwhatthemaintenance schedules wereandwhatthedisposition ofthosecom-paniesweretowardsellingpowerforaperiodoftime.Q.Whataboutoutofstate'?Youmentioned withinthestate.A.Wedidn'thaveconnections thatwouldallowustogetanyfromoutofstate.Thus,FPLrejecting poolingwiththemunicipals (andcon-tinuestorejectfullpoolingwiththem),eventhoughitperceived thatitneededadditional
- capacity, whichmunicipal systemscouldhavesupplied.
II.FPLHASLONGDENIEDCITIESACCESSTOTHEECONOMIES OFCOORDINATION ANDSCALE,INCLUDING NUCLEARPOWER.AsshowninSectionI~sura,ppLhasreliedonotherutili-tiesinitsoperations, including thoserelatedtonuclearpower,duringtheperioditplannedandconstructed itsnuclearunits.Evenascoordination andcooperation wasvitaltoFPL,FPLwouldhavebeenwellawarethatitwasespecially vitaltosmallersystems,including Cities.Infact,FPLhadspecificactualnoticethatCitiessoughtaccesstotheeconomies ofsizeandcoordination onwhichFPLrelied.FPLbothrefusedtoprovidethesebenefitsitselftoCitiesandsimultaneously actedtoblocktheirabilitytogainthembyalternative means.
FPLWasOnNoticeThatSmallerSystems,SuchAsCities,RequiredAccessToEconomies OfSizeAndCoordination, Including AccesstoNuclear,InOrderToCompeteEffectivel Asshown.inPartI~sura,FPLformedtheFloridaOPerating Committee in1959forthebenefitsitwouldachievethroughinterconnected operations, including theabilitytobuildlargerunits.Ifthebenefitsofinterconnected operations wereevidentforlargesystemslikeFPL(andtheothermembersoftheFloridaOperating Committee),
itislikewiseevidentthatsmallersystems,suchasCities,neededthosebenefitstocompeteeffectively.
1.Smallersystemsrequirecoordination tobuildlargeunits.Bythe1960'sitwasgenerally understood thatthereweregreateconomies tobegainedbybuildinglargerunits,ofsizesinthehundredsofmegawatts.
TheCities(butnotFPL)werefartoosmalltojustifybuildingunitsofthesesizes.Theirtotalloads,inmostcases,1/werewellunder100megawatts.
Bycomparison, FPL's1965-1966 determination tobuilditsTurkey1Tallahassee, amongthelargestoftheCities,hadapeakloadofabout58megawatts in1962and97megawatts in1967.ItsMarch1968engineering reportprojected aloadof220megawatts in1975.Asdiscussed above,bytheearly1960'sitwasgenerally understood thatloadsofthissizecouldnotsustainacommercially viablenuclearunit.Indeed,since1962thesmallestnuclearunitannounced by~anutilityhasbeen330megawatts (theFortSt.Vrainunit,in1965).Thevastmajorityofunitshavebeenover500megawatts.
See,"U.S.CentralStationNuclearGenerating Units,"GardnerExh.1at2-20,App.B12-B30~
Pointnuclearunitsassumedpeakloadsofover5,000megawatts atthetimeoftheircompletion intheearly1970's(GardnerExh.1,Requisition, TurkeyPoint,Plant,App.B50-B51).
- Moreover, coordination permitssubstantial savingsinmeetingreliability-of-service needs.Utilities mustplanforthecapa-bilitytokeepthelightsonwhentheirlargestunitisoutofoperation (including bothscheduled outagesformaintenance andunscheduled outages).
Ifasystemweretoinvestinalargeunitinordertomaximizeeconomies, thatsystemwouldalsoneedacomparably large"reserve" unitorunits.Xtwaswellunderstood, asstated~sura,thatindividual ut.i-litiescouldreducetheirinvestment inreserves-andrenderlarger--unitspossible-byinterconnections thatpermitthesharingofreserveswithothersystems.AstheFederalPowerCommission's 1964NationalPowerSurveyexplains(at170):Theuseoflarge,economical unitsincreases theimportance ofreservepoolingbecauseeachsystemshouldhaveaccesstoareserveatleastaslargeasitslargestunit."(App.D310).Asshownpreviously, FPLthroughtheFloridaOperating Committee planneditsnuclearunitsinrelianceonthe"p'ooling ofrisks"engagedinbythatCommittee.
Asdiscussed below,however,atthesametime(i.e.the1960's)FPLandotherOperating Committee membersexcludedCitiesfromparticipation intheirgroup.Thus,fromthetechnical vantagealone,Citieswerefacedwithtwovastobstacles tobuildingnuclearunits:theirsmallsizeandtheirexclusion fromtheFloridaOperating Group.
462.FPLknewthatcoordination andlargeunitsareessential toparticipation innuclearpower.FPLwaswellawarethatsmallersystemsneededthebenefitsofinterconnections andsizeinordertobuildnuclearunits.In1955-1956 theSeminoleElectricCooperative (inFlorida)soughtbackupfromFloridaPowerCorporation inorderto'proceed withaproposaltothegovernment tobuildanuclearunit.InaDecember7,1955letter,withablindcopytoFPLPresident RobertH.Fite,FloridaPowerinformedSeminolethatitwouldnotprovidethebackup(App.C45).AsstatedbySeminole(inadocumentobtainedfromFPL'sfilesintheGainesville case)theinability toobtainbackupkilledtheproposal(App.C46).AsfurtherFPLdocuments show,FPLalsofollowedFt.Pierce's1959proposaltotheAECtobuildanuclearunit(App.'52-B55).
1/Thisproposalwasmadefollowing theAEC'sannoun-cementthat,itwouldsponsorseveral"small"nuclearprojects.
TheAEC,however,didnotmakeanyawardsbecause,asAECoffi-cialsexplained ina1961letter(App.D4):"Recentpotential ofplantsbasedeconomically highcapitalstudiesonthecurrentstatusandeconomicsmallsizenuclearpowerplants indicateon,existingtechnology currently arenotattractive tosmallutilities becauseofcostsandrestrictive sitingrequirements."
1Discovery documents showFPLfollowedtheearlyinterestofothersmallFloridamunicipal systemsaswell(App.Dl-D3)~
47By1966-1966, i.e.,whenPPLdecidedtobuilditsnuclearunits,theindustryknewthatlargeplantswereeconomically attractive, butnotsmallones.Thesmallestsizetheequipment.
vendorsofferedFPLin1965was800Mw.1/Indeed,intheperiodsinceFPLannounced itsunitsin1965,thesmallestunitcommitted toby~an~utilit(otherthantheexperimental ClinchRiverBreederReactor)hasbeen530Mw.'App.B25)Inthiscontext,theprivateutilityindustrywasgenerally awarethatsmallersystemslackedthesizeand/orcoordination theyneededanddesiredtobenefitfromnuclearpower,unlessanduntiljointparticipation withotherscouldbearranged.
Forexample,assummarized inaspeechtransmitted in1968bytheEdisonElectricInstitute tomembersofitsatomicpowercommittee, including FPLPresident RobertH.Fite(GardnerExh.47at3,App.B475):"Thesmallerutilities, principally thosepubliclyandcooperatively owned,wantapieceoftheaction-theywanttoparticipate intheeconomies ofscaleassociated withlarge-scale nuclearfacilities.
Inmanycasestheydon',havetheenergydemandsorcapitaltopermitconstruction andoperation oflargerplants,nuclearorconventional, andapparently insomecaseshavebeenrebuffedintheireffortstoobtainparticipation injointventuresbeingorganized forthispurposeintheirregion."3.Fromthestart,FPLsoughttouseitssize-based monopolyofnucleargeneration asalevertoacquiresmallersystems.Asdiscussed below,FPL'knewthatsmallersystemsinFloridawerespecifically interested ingainingaccesstoeconomies of1Bycontrast, thetotalloadofallnon-settling Cities~toda7sabout700-800Mw.Tallahassee's loadtodayisabout,240Mw;theothercities'oads aresmaller-somelessthan5Mw.
48scaleandcoordination, including accesstonuclearpower.FPLdidnotvolunteer toworkwiththosesystems,asitworkedwithFloridaPowerCorporation andTECO.1/Instead,itusedthepromiseofaccesstoFPL'seconomies ofscaleingeneralandnuclearpowerinparticular asaleverinitsrepeatedattemptstoacquiresmallersystems.Forexample,in1966,asshownbyFPLdiscovery documents, FPLturneddownHomestead's requestforaccesstotheTurkeyPoint,nuclearunits.(App.D7-DS)WhenHomestead in1967requested wholesale power,FPLcountered withanoffertoacquiretheHomestead system.(App.D10-Dll)AsaninternalFPLmemorandum ontheprosandconsofacquisition putit(GardnerIExh.35,at2,App.B442):"FpsLCo.canprovidelowerratesforthecitizens.
Massproduction anddiversities providegreatereconomy.Smallplantsarenotflexible~"Similarly, in1965,whentheCityofClewiston soughttobuywholesale powerdirectlyfromFPL,FPLrefused,andofferedtoacquirethesysteminstead.2/SeealsoOpinionNo.57at26-31,32PUR4that331-35.AninternalFPLdiscussion oftheFPLpurchaseproposallisted,asa"disadvantage" ofcontinued 1/Onthecontrary, theprovisions ofthe1956agreement amongTECO,FPL,andFloridaPowerCorp.providedthatinformation developed bythegroupcouldbedisclosed toothersonlyon"unanimous" approvalofthethreelargeutilities.
(Ondeposition, GeorgeKinsman,FPL'srepresentative tothegroup,saidthathedidnotknowwhythisprovision wasintheagreement.
KinsmanTr.27.)2/FPL'srefusaltodealPowerSLightComan.,37FloridaPower6LightCom1,reverseanremanwithClewiston wasdetailedinFloridaFPC544(1967)reversedsubnom.anv.FPC,430F.2d137~75thCir.e,U.S.453(1972).
municipal ownership (emphasis added)(GardnerExh.34,at12,App.B439):"TheCitymust,inthenearfuture,makedecisions onthecourseitwillfollow.toresolveitspowersupplyproblems.
Thecostofconstructing andoperating powergeneration facilities appearstobeprohibitive; thealternative ispurchasing powerasyouarepresently
~citareunthinkable whencomaredtotheeconomies oftheenormous~lants~beinbuxlt~b~ublicutilities.
Inthepasttwoyears,theFloridaPower8LightCompany~hasretiredasuneconomical twelveplantsrangingfrom12,000Kwto33,000Kwcapability."
Asan"advantage" ofsaletoFPL,FPLlisted(emphasis added)nuclearplants.In"AnOpenLettertoEveryVeroBeachResidentfromFloridaPowerSLightCompany's RalphMulhullond",
referredtoatp.~sura,published inthatcityin1976justbe'foreavoteontheproposedsaleoftheVeroBeachmunicipal electricsystem,FPLstated:"We~execttohaveanewnucleargenerating unitatSt.Lucieinserviceinthenearfuture.Thisshouldbringannualfuelsavingsofmorethan$100millionthatvillbepasseddirectlytoourcustomers throughareduction inthefueladjustment, whichhasbeenreflected above."VeroBeach,Florida,Press-Journal, September 4,1976(Emphasis supplied).
App.D12.Similarly, ina1974"financial presentation totheCommissioners ofViewSmyrnaBeach"(July5,1974)(App.D20),onbehalfofFPL'sproposaltoacquirethatsystem,FPLstated:
50"Nehaveawidediversification offuelsources.Wepresently useresidualoil;we,havenaturalgasunderfirmcontracts extending through1989;wehavenuclearunitsonlineatTurkeyPointandtwounitsunderconstruction atHutchinson IslandnearFt.Pierce;weusedistillate oil;andweareworkingonplanstoincludecoalasafuturefuelsource.Thesediversified fuelsourcesandtheabilitytouselargeefficient powerplantsresultinloweroverallprices."Whilecontinuing toassertthevalueofitsnuclearpowerinitstakeovercampaigns, FPLhasbeenacutelyawarethatCities'mall sizeprecludes theirbuildinglargeunits,including nuclear.InDecember1973,FPL'sfinancial planningofficepro-duceda"Comparative AnalysisofMunicipal andInvestorOwnedUtilities andtheBenefitstoTheirCustomers."
(App.D31-D33)Theanalysisconcluded that(App.D32):"Thesizeofmostmunicipal unitsis1imitedbythesizeofthecity.Thislimitonsizepreventsthesmallermunicipal utilities fromrealizing manyoftheeconomies ofscaleavailable tolargerutilities.
Thisfactwasclearlyrevealedintheanalysis.
Thesmaller,utilities hadlessefficient heatratesandhigherfuelandoperating costsperKwhofpowersold.Thesehighercostsappearedtobethemajorcontributing factorsinthehighcostofpowertotheircustomers."
Thedisadvantages ofmunicipal systemswerefurtherspelledoutbyFPLVicePresident RobertGardnerinaJuly30,1976docu-mententitled"Municipals andCo-operatives Situation Analysis."
Asthememorandum statedinteralia(App.D34),"Toosmalltoindividually addeconomical generation..."
"Fuelcostsrising-supplyinjeopardy..."
"Relyonoilandgasforfuel...""Cannotsupportplanning, project,procurement, nuclearorganizations..."
"Legalandprocedural limitations onfinancing."
SinceFPL'sentryintothenuclearbusiness, inshort,themessagehasbeenclear:Smallsystemscangainaccesstonucleargeneration (andothereconomies) bysellingouttoFPL,butnototherwise.
EvenifFPLdidnotseektoacquiremunicipal systemsinFloridaPower'sarea,astheGainesville caserecites(Gainesville Utilities Det.'v.FFL,~sura,573F.2d292),itactedtoaidFloridaPoweracquisition attemptsorfranchise efforts,byrefusingtodealinFloridaPower's"territory".
FPLthenciteditscostadvantage overallFloridamunicipalities inseekingacquisitions orfranchise renewalsinits"territory" and,ofcourse,through'ts transmission andcoordination poli-ciesotherwise prevented municipals inFloridaPower's"territory" fromservinginits"territory" andvice-versa.
Seep.54,infra.FPLhadadifferent messageforlargerutilities intheFloridaOperating Committee.
In1966,forexample,1/ArmourSCompanywrotetoFPLstatingthatitwishedtobuildalargeche-micalplantnearTampa,andthatitsconsultants hadsaidthechemicalplantwouldbefeasibleifservedbya"largenuclearpowerplant."FPLBoardChairmanSmithinaSeptember 16,1966letter(App.B488)informedArmourthattheproposedplantwouldbeinTampaElectric's territory, butthatFPLwouldhelpTampaElectricbuildthelargeplantneededtoserveTampa'scustomer.
1GardnerExh.49;App.B483-B487.
52AsSmithwrote(Id.):IcalledMr.MacInnes, President ofTampaElectricCompanyandtoldhimthatyoufolkswouldbegettingintouchwithhimtodiscussa400,000Kwloadinhisterritory.
ItoldMr.MacInnesofourmeetinganddevelopment that.theloadapparently wouldbeinTampaElectric's territory, andIexplained thatwewouldbewillingtoworkwithhimbyinvesting inajointplantorpurchasing alargeblocktohelpmaketheprojecteconomically feasible."
While.providing anunsolicited offertohelpTampabuildalargenuclearunit,FPLwasrefusingtodealwithsmallersystems,including Cities,asexemplified below.TheFPL/Florida Powerefforttopreventalternative genera-tionandtransmission systemsinFloridawasnotlimitedtotheprevention ofnuclearpower.Intheearly1950'sSeminolecon-sideredbuildingconventional plants.FPLworkedactivelytoopposethisproposal, eventhoughtheplantsevidently wouldhavebeenbuiltinFloridaPower'sterritory.
Forexample,anFPLofficialcalledoncitizensandpointedouttoallofthesepeoplethatthispro-posedpowerplantwillbeauselessexpenditure offederalfundssincethereisanabundance ofpowerintheareaatthepresenttime,andthatFloridaPower'snewSuwanneeRiverplantwillhavesufficient capacitytoservetheareaformanyyears.Itwasalsopointedoutthattherearetransmission linesinthisareaofsufficient capacitytotakecareofthedistribution ofthispowerandtobuildadditional transmission lineswouldbeaduplication offacilities
..."(Internal Memorandum, AppendixI71-74)InaMay8,1952lettertoSenatorSmathers(Citiesappeartohavebeenprovidedonlythesecondoftwopages),FPLVicePresident andGeneralManagerRobertFiteexplained:
53"Although theplansbeingsubmitted bySeminoleandSoutheastern PowerAdministration at,thistimedonotappeartoaffectFloridaPowerSLightCompanyoritscustomers
- directly, wearevitallyconcerned becausewebelieveifthesetwoagenciesgetstarteditwillbeonlyashorttimeuntilourterritory becomesinvolved."
Asfurther-FPLdiscovery documents show,FPLworkedactivelytopreventSeminolefromgettingofftheground.InaJanuary16,1953memotoFPLVicePresident Fullerton, FPLofficialClaudeSmithstated"IsuggestthatwedoallwecandotostoptheSeminolenow."Shortlythereafter FPLtoldatleastonecooperative servedbyFPLthatanewserviceagreement withFPLwouldbepossibleonlyifFloridaPowerreachedsuccessful agreement withtheREA'sitserved.AsaJune16,1953letterfromRobertFitetotheLeeCountyCooperative putit:"Inaccordance withtheunderstanding whichwearrivedatwhenyouwereinmiamionJunell,thisproposalisconditioned uponcompletion ofthenegotiations betweenFloridaPowerCroporation andtheco-opstheyserve.Assoonasthesenegotiations arecompleted andtheagreements fullyexecutedandapprovedembodying theproposedschedule, wewillimmediately putintoeffecttheproposalinthisletter."1/Thus,FPLactivelysoughttofrustrate effortsbysmallersystemstoobtaintheeconomies ofjointgeneration andtransmission, evenwherethoseeffortsadmittedly werenotdirectedimmediately atFPL'sownretail"serviceterritory."
1FPL'sproposaltoLeeCounty,toboot,contained aprovision prohibiting resaletomunicipal systems.
54B.FPLRefusedToDealWithCities,AndDeniedThemTheMeansOfDealingWithOthers.FPLhaslongrefusedtodealwithCities,orhasdealtwiththemonlyonunreasonable, restrictive terms.FPLlikewiseimpededtheiraccesstothemeansofdealingwithothers.FPL'sactivities maybegroupedintoseveralschemesthatoverlapintimeandfunction.
First,asfoundbytheFifthCircuitintheGainesville case,FPLconspired withFloridaPowerCorporation todividethewholesale powermarketinFlorida.Pursuanttothisconspiracy, FPLwouldnotdealwithsystemsthatwerewithinFloridaPowerCorporation's territory.
Second,FPL(a)refusedtoprovideanythingotherthanemergency power1/toCitieswithintheperimeter ofitsownretailterritory and(b)simultaneously refusedorendlessly delayedinterconnection aridtransmission arrangements whichwouldhavepermitted systemswithintheperimeter ofFPL'sretailterritory todealwithoneanotherorwithsystemsinFloridaPower'sterritory.
Whiledoingthis,moreover, FPLrepeatedly soughttobuyoutsystems,makingproposals to,atleast,Homestead, Ft.Pierce,HewSmyrnaBeach,Starke,Clewi'ston, VeroBeach,andLakeWorth.WhileFPL'smonopolistic intentremainedconstant, itwasforcedtomodifyitsmethodsbythe1972SupremeCourtdecisionthatfoundFPLtobesubjecttoFederalPowerCommission 1Whichwaspricedhigherthanwholesale powersoldbyFPLtotheREACooperatives (App.E76).Aswasgenerally knowninthemid-1960's, i.e.,thetimeatwhichFPLplannedandcommitted toitsfirstnuclearunits,FpLwasrefusingtoprovideanythingbutemergency powertomunicipal utilities withinitsownserviceterritory 8ee.App.040-058,pp.17-19;30-33,~sura.
55jurisdiction 1/anda1971SupremeCourtdecisionthatupheldtheFederalCommission's authority toorderFloridaPowerCorporation tointerconnect withGainesville.
2/Following theFPCjurisdictional case,FPLwascompelled tofileawholesale tariffwiththeFederalPowerCommission.
3/Evenso,in1976-1977 FPLrefusedFt.Pierce'srepeatedrequestsfortariffserviceandsoughttoabandonwholesale servicetoHomestead.
WhenFt.Piercepersisted initsrequests, FPLfiledanewwholesale tariffunderwhichforCitiesitproposedtolimitsuchservicetoNewSmryrnaBeachandStarkealone.Following ahearing,theFERCrejectedFPL'sproposalas"anticompetitive" andtheCompanywascompelled tocontinuetariffservicetoHomestead andFt.Pierce.OpinionNos.57and57-A,~sura.ArticleIXofFPL'ssettlement licenseconditions wouldrestrict"wholesale firmpowersales"tosystemsinornearitsretailservicearea.Further,contrarytoOpinionNo.57,4/theproposedlicenseconditions permitareduction inwholesale poweravailability, ifasystemobtainsSt.Luciecapacityor1ForzaPowerSLz.tCo.v.FederalPowerCommission, 404U.S.45319722/Gainesville Utilities Det.v.FloridaPowerCor.,402U.S.5151971)3/Xnthe1960'sFPLhadlimitedmunicipal systemstoemergency" power.Thispowerwas,bydefinition, notpoweronwhichCitiescouldplanand,washigherpricedthanthe"wholesale" powersoldtocooperatives onalongtermbasis.(App~E76)~4/32PUR4that339-40.
56capacityfromanysourcethatusesFPL'stransmission system,therebymakingthepriceofobtaining directnuclearaccessoruseoftransmission alossofwholesale powerrights.Further,resalerestrictions inArticleIX(b)couldeffectively limitelectricpowercoordination bysystemspurchasing wholesale power.1/TheCompany's policyofrefusingwholesale powertomunicipa-litiesisnot,new.Forexample,suchpolicywasdetailedpubliclybeforetheFederalPowerCommission in1965-67inapro-ceedingconcerning FPL'srefusaltosellwholesale toClewiston.
FloridaPower8LihtCo.,37FPC544(1967),orderreversed, 430F.2d1377(5thCir.1970),reversedandremanded, 404U.S.453(1972).ThedecisionoftheAdministrative LawJudge,approvedinpertinent.
partbytheCommission in1967,detailedFPL'srepeatedrefusalstosellwholesale toClewiston.
FPL'sexplana-tionwasthatthemakingofwholesale salestomunicipalities was"contrary topublicpolicy,thatitwouldnotselltoamunicipal atwholesale exceptinthecaseoffurnishing anemergency supply."1ArticleIXisunclear.Itisassumedthattheuseoftheword"required" inArticleIX(a)referstoaneighboring entity'sretailload.However,systemsactualorpotential loadsandreservesrequirements increasegradually andsystemsacquiregeneration tomeetfutureloads;reductions inpresentwholesale poweravailability basedupontheexerciseofgeneration optionscouldforceasystemtoeitherforegopresentoptionstomeetfutureneedsorlosevaluablewholesale powerrights.Apartfromlimitingcompetition inwholesale powermarkets,restraints onresaleofwholesale powercouldlimittheeconomicabilityofsystemstoobtainpowersupplytomeetfutureneeds.
57AsdetailedinCities'esponse toFPL'sInitialInterrogatory No.9,1/theFPLrefusalstodealwithClewiston werenotatypical.
ItwaswellknownamongFloridamunicipals thatFPLwouldnot,sellwholesale.
Forpurposeshere,itisexceedingly significant thatbothinthecaseofClewiston andthatoftheCitiesprotesting wholesale powerlimitations inthecontextofOpinionNo.57,therewasextremepressureforthemtoselltheirsystemstoFPL.SeeCities'esponse toInterrogatory No.21,App.D59-D87.FPL'sapplication totheFederalPowerCommission toacquiretheVeroBeachelectricsystemcontained areporttotheCitypreparedbyErnst6Ernst,whichappendedanexamination ofavailable powersupplyoptionstoVeroBeach.Thatreport,filedasart,ofFPL'salication, listedamongotherthingsthatno"wheeling" options(or,therefore, wholesale powersupplyoptions)wereavailable.
App.C403-C404.
FPLrepeatedly wroteNewSmyrnaBeachthatwholesale powerwouldnotbeavailable onalong-term basis:Forexample,inanAugust5,1959letterfromAlanB.Wright,VicePresident ofFPLtotheCity(PL-65),Mr.Wrightstates:"Inregardtoyourinquiryconcerning thesaleofwhole-salepoweronalong-term basis,thiswillconfirmourpreviousstatement inregardtothisquestion; namelythatwedonothaveanyarrangement tosellwholesale tomunicipalities onalong-term basisandwouldnotchangeourpolicyatthistime."1/ServedinGainesville ReionalUtilities, etal.v.FloridaPowerSLihtComan,S.D.Fla.No.79-5101-CIV-JLK.
App.D40-D58.
58InaNovember25,1970letterfromMr.WrighttoJ.T.BensleyNewSmyrnaBeach'sDirectorofUtilities, theCompanystatesthatitsprovisions ofpower"shouldnotbeinterpreted inanymannerasfirmpowerbutratherasstated,onthebasisofavailability."
AsissetforthinCities'esponse toFPLInterrogatory No.9(App.D40-D58),
varioustestimony oftopFPLofficials admittedthepolicy.TheCompanyevenwentsofarasimposingresalerestrictions inREAwholesale poweragreements topreventsalestomunicipals.
FPL'sChairmanoftheBoardofDirectors, Mr.RichardC.Fullerton, gaveoneexplanation forsuchpolicies:
"Andwewerenotourselves wholesaling tomunicipalities, sowhyshouldweselltosomebodyelseandlethimwholesale it.ImeanthatisasgoodareasonasIcanthinkofifyouwantmetothinkoneup."Deposition ofRichardC.Fullerton, Gainesville Utilities Det.v.FloridaPowerRLihtCo.,M.D-Fla.No.68-305-CIV-T, App.I79When,in1972-74FPLfinallyagreedtoafullinterconnection withHomestead, itconditioned theinterconnection onHomestead's agreement tobearthefullcostofinterconnection.
1/Then,whentheinterconnection wasphysically completed in1977,FPLsoughttousethecompletion oftheinterconnection asanexcusetoabandonwholesale service.Moreover, evenafteragreeingtointerconnections withHomestead andothers,itrefusedtoprovide"wheeling" ortransmission servicessothatCitiescouldusetheinterconnection todealwithothersthanFPL.WhileFPLhas1Onthetheorythem,eventhoughender'hem (i.e.,neededpowerasathatFPLwouldnotobtainanybenefitsfromFPLbenefitsfromeveryexchangeofpoweritmakesaprofitasaseller,orobtainsbuyer).
59finallyprovidedlimitedtransmission
- services, ithascon-tinuallyrefusedtofileatariffcommitment totheseservices.
1/Intheearly1970's,withtheforewarning oftheFloridaPower5Lightv.FPCjurisdictional caseandtheGainesville interconnection casescitedabove,p.,~sura,theFloridaOperating Committee wasexpandedtopermitCitiestojoin.Intheinterimsincethisexpansion, however,FPLhasresistedeffortsbyCitiesandotherutilities inFloridatoachievegreatereconomies throughfurther"pooling."
Insofarasithasofferedinterconnection andtransmission arrangements toCities,ithasconsciously donesoinhopesthatitcouldfend.off"pooling."
Forexample,asrecordedinthe1976memorandum fromFPL"powersupply"chiefW.E.CoetoFPLVicePresident H.L.Allen,atthedirection ofBoardChairmanMcDonald(App.C310),FPL"wastosecureuniformbilateral interchange contracts asadeterrent towardsformalpooling."
1UnderFERCorderFERCDocketNos.ER78-19etal.),FPLhasfinallyfiledatariffcoveringtransmission associated with"interchange" service.However,ithasappealedtherequirement thatitdosoonthejurisdictional groundsthat.theCommission hasnostatutory authority toorder"wheeling."
FloridaPowerSinthatcase,filedJuly28,1980stated,atpage20(App.0323):"Asexplained above,theorderrequiring thefilingoftoextendFPL'sobligation tovicebeyondthatwhichithasSuchanorderfarexceedstheauthority toorderFPLoranywheel."effectoftheCommission's atransmission tariffisprovidetransmission ser-voluntarily undertaken.
Commission's limitedotherelectricutilitytoFOOTNOTECONTINUED ONNEXTPAGE 60TheabovesummaryofFPL'sbehaviorissupported byvolumi-nousdocumentation (muchofitfromFPL'sownfiles)anddetailedcourtandagencydecisions.
Thisdocumentation includesthefollowing:
l.TheFifthCircuit's decisioninGainesville,
~sura,detailstheillegalterritorial divisionbetweenFPLandFloridaPowerCorp.AstheFifthCircuitheldat573F.2d294,"NeholdthattheevidencecompelsafindingthatFPLwaspartofaconspiracy 4/withFloridaPowerCorporation (FloridaPower)todividethewholesale powermarketinFlorida."
4/Section1oftheShermanActmakesevery"conspiracy inrestraint oftradeorcommerce" illegal(15USCA$1)eeeFOOTNOTECONTXNUED FROMPREVlOUSPAGE:FPLstatesfurther(pp.17,18):FPLwouldberequiredtoprovidetransmission serviceforanyutilitywhichqualifies forservicesunderthetariffcriteriaorderedbytheCommission....
[A]ttheveryleast,FPLisrequiredtoprovideserviceforadditional customers whichhavenotrequested transmission servicecontracts."
I.Forexample,thosewhodisagreewiththeirterms].Andatpp.19-20,theCompanystates:"Arguably, theCommission couldchangethoseprovisions onthegroundthatt'efiledprovisions are"unjust,,
unreasonable orunlawful,"
withtheresultthatFPLcouldberequiredtoprovideabroaderscopeofservicestoagreaternumberofpotential buyersthantheCompanyhadcontemplated whenitfileditsindividual transmission serviceagreements."
Regardless whetherFPLiscorrectontheFERCjurisdictional issue,itplainlyresiststransmission.
612.OpinionNos.57and57-AoftheFERC1/detailbothFPL's1976-1977 effortstolimitwholesale serviceandFPL'srelationship withHomestead andFt.Pierce,including itsacquisition practices andattemptsatrestrictive dealing.Indeed,theCompany's filinginthatdocketsoughttoeliminate theabilityofmunicipal systemshavinggeneration tobuywhole-salepowerinsteadofgenerating, wherewholesale powerpurchases wouldbecheaper.Thus,municipal systemswouldbeforcedtooperateoil-fired unitsratherthanpurchasewholesale power.Further,wholesale servicewasproposedtoberestricted toexistingcustomers; andthosewhocouldobtainwholesale power,undertheproposedfiling,weretobedisallowed fullcoor-dination.
2/1FPLwithdrewitsappealfromFERC'sdecision.
2/Theproposedtarifffilingwasasfollows:SaleforResaleTotalRequirements RateSchedule-SR-2AVAILABLE:
FloridaPower6LightCompany,FPCElectricTariff,OriginalVolumeNo.1,FourthRevisedSheetNo.5.deliveryfortotalpowerrequirements ofelectricutilitysystemsfortheirownuseorforresale.SuchelectricutilitysystemsareClayElectricCooperative, Inc.,GladesElectricCooperative, Inc.,LeeCountyElectricCooperative, Inc.,Okefenoke RuralElectricMembership Corporation, PeaceRiverElectricCooperative, Inc.andSuwanneeValleyElectricCooperative, Inc.Thisscheduleshallnota1assubstitute orreplacement owertoaenerating utilitysstemforwhichinterchan epowerareementsareavailable ortowhichSaleforResalePartialRequirements RateSchedules PRisapplicable."
(Emphasis supplied).
FOOTNOTECONTINUED ONNEXTPAGE 3.Cities'esponse toFPL'sinitialinterrogatory requestsintheDistrictCourtcase(DocketNo.79-5101-CIV-JLK,
~sura)detailsthedocumentation supporting thefollowing i/:FOOTNOTECONTINUED FROMPREVIOUSPAGE:"SaleforResaleTotalRequirements RateSchedule-PRSecondRevisedSheetNo.7.AVAILABLE:
Toelectricservicesuppliedtoelectricutilitysystemsfortheirpartialpowerrequirements atanypointofdeliverytocomlementtheinsufficient eneratincaacitand/orfirmower2"systemsareFloridaKeysElectricCooperative Association, Inc.,Utilities Commission oftheCityofNewSmyrnaBeach,Florida,andtheCityofStarke,Florida.Thisscheduleshallnota1assubstitute orreplacement owertoaeneratinutilitysstemforwhichfullserviceinterchan eowerareementsareTheproposedtariffsshowedthat:1)FPSLrefusedtoselltotalrequirements wholesale powertonewcustomers.
2)FPSLrefusedtosellwholesale powertosystemshavinggeneration excepttoreplace"insufficient capacity;"
and3)FPSLwouldnotpermita"fullserviceinterchange poweragxeement" forsystemspurchasing wholesale power.Thesetariffchangeswouldhaveprevented thepotential saleofwholesale electricity tonearlyeverymunicipal systeminFlorida.TheFERCrejectedthetariff,stating(32PUR4that339):"Theproposedrestrictive provisions areanticompetitive, wefindnocountervailing reasonsfortheirimplementation, andtheyaretobedeleted."
1/Citiesnotethatinthecurrentdiscovery, theyhaveobtainedmaterials fromFPLinadditiontothoseavailable atthetimeoftheinterrogatory responses.
63a.FPL'refusaltodealinwholesale power(seeCities'nswer toFPLinterrogatory no.9,App.D40-D58)1/;b.FPL'srefusaltointerconnect and/oreffortstounlawfully condition interconnection (seeCities'nswer toFPLinterrogatory no.11,App.C137-C165).
FPL'sactionsaresetforthintheinterrogatory responses.
Itsconductrestricting poolinganditsattemptstolimitcoordination availability, ifasystemisbuyingwholesale power,areevidenceofFPL'santicom-petitiveintent.Xtissignificant that,whileSection2ofthelicenseconditions requiresparallelinterconnection, nomentionismadeofanyrequirement that.FPLshareinthecostsonareasonable basis.c.FPL'shistoricrefusaltoprovide"wheeling" (transmission) anditsmorerecenteffortstounreasonably limitwheeling(seeCities'nswer toFPLinterrogatory 14,App.C166-C183);
asnotedPPLstillhasnotfiledaPERCtariffforrefusestograntCitiesreciprocal transmission rightsifthey1AninternalFPLmemorandum providedbyFPLindiscovery recordedameetingwithHomestead CityManager,OlafPearson:"Mr.PearsonagainI.illegible]
ifwewouldsellpowertoHomestead onceTurkeyPointwascompleted.
Ianswered"No,itisnotourpolicytosellpowerforMunicipal Distrib[ution]."
App.D7-DS.AndFPLspecifically refuseda1966requestofHomestead foraccesstotheTurkeyPointunits.Eee~sura.
64investintransmission; l/;d.FPL'shistoricandcontinuing effortstodenyCitiesaccesstothebenefitsofcoordination thatFPLhasobtainedbyvirtueofsizeandparticipation ingroupssuchastheFloridaOperating Committee (seeCities'nswer toFPLinterrogatory no.15,App.D59-087);
See,e.g.,pp.30-34,infra.e.FPL'refusaltoprovideCitiesaccesstoitsnuclearunits(seeCities'nswer tointerrogatory no.17,App.D88-D94);
Suchrefusalisaprimarysubjectmatterofthiscase.f.FPL'sattempts, oftenrepeated, toacquirevirtually allthemunicipal systemswithinitsretailserviceterritory.
(SeeCities'nswer toFPLInterrogatory No.21,App.D95-D121);
4.FPLinterfered withthegassupplyofseveralCities,asdetailedintheCrossMotionoftheCityofTallahassee, FloridaForSummaryJudgmentofTallahassee's NaturalGasClaims,andsupporting memorandum filedMarch2,1981,filedinGainesville RegionalUtilities, etal.v.FloridaPower&LihtComan,~eura,DocketNo.795101CI-VJLK--5.FPLhasevensoughttocapturenewtechnology inordertodetermunicipal competition.
Forexample,FPLhasundertaken toobtainthebenefitsofelectricity generated fromwaste,andiscurrently engagedinaventureinDadeCounty,1Largesystems,suchasFloridaPowerorTampaElectric, whicharedirectlyinterconnected witheachothergainautomatic useofeachsystem'slinesfortransactions becauseofthemutualinterconnection.
WithregardtoCities,however,FPLinsistsonseparate, individual interconnection agreements todeterformalpooling.SeeApp.C310~
Florida.Ina1973document, FPLVicePresident forStrategic PlanningRobertGardneroutlinedtheconsiderations involvedinFPL'sdetermination toinvolveitselfingeneration fromwaste.AstheGardnermemorandum explained inits"Guidelines=
forPowerGeneration fromMunicipal SolidWasteOperations" (App.D123)(emphasis added):"Theamountofdirectbenefitissmallbecausesolidwastecangenerateonlyasmallfractionofour2""'2-'"*'1s1.Augmentcommunity andcustomerresources bydisplaying corporate responsibilty inassisting thesolutionofapressinglocalproblem.2.Gainexperience andinsightintothepotential forprofitable futureincreased involvement inwasteprocessing.
1psanotherFPLinternaldocumentshows,FPL'sinterestincontrolling solidwaste,generation wasnotlimitedtoitsretailserviceterritory, butextended"throughout Florida."
(App.D127)SeealsoaMarch25,1974memorandum fromW.M.Klein,(currently anFPLVicePresident) toExecutive VicePresident F.E.Autrey.Thememorandum explained thatFPLhadtocontrolDadeCounty'ssolidwasteinamannerthatwouldpreventDadeCountyfromusingittogenerateelectricity.
Asthememorandum stated,inpart(App.D129):"Wealsofeelthatwecannotaffordnottopar-ticipate[intheDadeCountyproject]sincetheCountyrepresentatives seemdetermined thatthe'fuel'ortion ofthesolidwastebeused.Theyhaveonseveralocca-sionsmadereference tothefactthat'.ifFPLdoesn'usethisfuelorsteamfromthefuel,thentheywouldbuildandoperatetheirownpowerplant.'""InviewofthisattitudeonthepartofDadeCounty,FPLmustworkoutawaytoparticipate intheDadeCountyprocedure fordisposalofsolidwaste.Therefore, whileinsuringthatDadeCountyorthesuc-cessfulbidderdoesn'tgenerateelectricwemustatthesametimeavoidsettingaprecedence thatwouldbecompletely unacceptable elsewhere onthesystem."
FPL'refusalstodealwerepartofamoregeneralprogramwherebyFPLandFPCalsoconspired to(a)assurethatexistingorpotential municipal systemsinoneutility's territory wouldnotbeabletoobtainwholesale powerfromtheothersystem(b)assistoneanotherintheacquisition ofexistingmunicipal systems.1/Forexample,in1962R.C.Fullerton, Executive VicePresident ofFPLreceivedaletter(Appendix I37)fromacitizenofSebringregarding thepotential acquisition oftheSebringmuni-cipalsystembyFPL.Mr.Fullerton responded tothecitizenthat(Appendix I38):"ThanksforyournoteaboutelectricserviceinSebring.TheutilitycompanyservinginthatvicinityistheFloridaPowerCorporation ofSt.Petersburg.
Wehavetakenthelibertyofforwarding yourlettertothemforconsideration.
Iappreciate yourfineattitudeandthankyouforwriting.Inforwarding thecitizen's inquirytoaSeniorVicePresident ofFloridaPowerCorporation, Mr.Fullerton's coverletterstated:"(A)ttached correspondence isself-explanatory.
Whydon'tyougointhereandbuythisproperty?"
(Appendix I39).TheSebringexchange, inturn,appearstobearepetition ofanearlierexchangeregarding LakeHelen.(Appendix I40-I43).
InaJune23,1958"
DearBill"letterfrom"Bob,
"(anexchangebetweenFPL'sPresident andGeneralManagerRobertFiteandFloridaPowerCorporation's President WilliamClapp)2/"Bob"wrote:1TeocumentsquotedinthetextaboveincludessomeofthosecitedbytheGainesville court,'at573F.2d,297-299.s2/Asrecognized bytheGainesville court,at298.
"
DearBill:
Whenwediscussed theterritorial questioninBostontheotherday,youmentioned thatyouwereinterested inbuyingtheelectricfacilities inLakeHelen.Perhapsyouhaveforgotten butbackin1956wereceivedaninquiryfromLakeHelenandwrotethemthattheywerenotinourterritory andwehadnoproposaltomake.AlanB.Wrightsignedtheletterandsentyouablindcopy.Iamenclosing reproductions oftheselettersforyourinformation.
Here'shopingyougetLakeHelen.Bob"Thedivisionof"acquisition rights"wasaccompanied byrecognition thatneithersystemwouldprovidepowersupplyalter-nativesforanexistingfranchise thatwishedtoconsidermunici-palownership.
1/OnFebruary3,1956,(Appendix I46-I48)forexample,theCityofArcadiawrotetoFloridaPowerCorporation.
Itstatedthatitsfranchise withFPLwasexpiringandthattheCitywasconsidering thepurchaseoftheFPLdistribution system.Itaskedwhether"FloridaPowerCorporation wouldbeinterested indiscussing the1Ofspecialadditional noteisevidenceofearlyawareness ofthelikelihood ofprivateutilitymonopolyovernuclearpowerandthepossibility thattheexpressdenialofsmallersystems'ccess tonuclearpowerdatesbacknearlyaquarterofacentury.Byletter-ofDecember7,1955,FPLPresident ClappwroteSeminoleElectricCooperative President ParksE.BakerthatFPLwouldnotprovidebackupservicesfora40MWnuclearreactorwhichSeminoleproposedtobuildnearPerry,Florida.AblindcopyoftheletterwassenttoFPL'sRobertFite.SeeAppendixI44.Onearlymunicipal recognition oftheimportance ofatomicpower,seeAppendixI45,obtainedfromFPLintheGainesville case.Thz.sdocument, aneditorial applauding thedecisionofLakeCityvoterstorejectmunicipal ownership, recordsthatthelocalcitizens'ommittee stressedtwomainobjections topublicownership.
Thesecondwasthat"Asmallcity-owned plantcouldnotprovidedependable serviceandtherewasgravedangerthatitmightevenbecomeobsoleteinafewyearsduetoatomicpowerdevelopments."
wholesale ofelectriccurrenttotheCityofFlorida."
ByletterofFebruary7,1956(Appendix I46-I48)to"Bob"Fite,"Bill"ClappenclosedtheCity'sletterandwrotethat:"IamaskingMr.A.V.Benson,ourDivisionManagerinLakeWales,togobyandtalktotheauthoroftheattachedletter.Byanswering thisletterverbally, Ifigurewemightbeofsomeassistance inpointingouttotheCityAttorneytheerroroftheirways.Youmaybeassuredouransweristhatwehavenopowerfacilities withinthisarea.Mr.BensonwillpointouttotheCityAttorneythefactthatwhattheyhaveinmindcannotpossiblypaythemaswellastherenewalofyourfranchise.
hWewillgiveyouacompletereportofourcontact."
InresponsetotheFebruary7letterFitethankedClappforhishelpandstatedthat"Isurehopewehaveanopportunity torepayyou."(Appendix I46-X48).
Gainesville documents showthatFPLdidrepayFloridabyrefusingwholesale servicetoFloridaPowerfranchises.
In1962-63,forexample,theCityofWinterGardenwasconsidering thecreationofamunicipal system.InatelegramtoaCitizensCommittee (Appendix Z49)Mr.FitestatedthatFPLdidnotpro-videwholesale power,and,inanycase,wouldnotserveanentitynotinitsserviceterritory:
FLORIDAPOWER5:LIGHTCOMPANYHASNOFORMAL'ORINFORMALREQUESTTHATIKNOWOFTOSELLPOWERTOWINTERGARDEN.WEDONOTSUPPLYMUNXCXPAL SYSTEMSFIRMWHOLESALE POWERFORDISTRXBUTXON THROUGHAMUNICIPAL DISTRIBUTZON SYSTEM.WINTERGARDENISBEYONDTHELXMXTSOFOURECONOMICSERVICEAREAWHICH~INITSELF'OULD PRECLUDEASUPPLYFROMOURCOMPANYEVENIFTHEOTHERCONDXTIONS CXTEDABOVEDIDNOTPREVAIL.Asthediscovery documentshows,ablindcarboncopyofthetelegramwassenttoMr.Clapp.
TherecanbelittlequestionthatFPL/FPC's longstanding anticompetitive practices andpolicieswerewellknowntomunici-palsystems,andtocitiesconsidering formingmunicipal systems,throughout Florida.Thus,notonlywereexistingsystemsdeniedtheopportunity toobtainbenefitsfromwholesale purchases, butpotential systemsweredeterredfromconsidering entryintotheelectricbusiness(andtherebyfromproviding acompetitive sti-mulustoFPLandFPC).Thedeterrence effectofknowledge ofFPL/FPCpractices andpolicieswasevidenced, forexample,inHainesCity.There,in1967,citizensconsidered thepossibility ofreplacing theFloridaPowerCorporation franchise servicewithmunicipal service.Asa"FactFindingCommittee" reportedtotheCity(Appendix I50-I54):
"Extremely reliablesourcesleadustobelievethefollowing:"
2.Itwouldnotbefeasibleatthistimeforustocon-tact-another sourceofpowerintheeventwemovedtodistribute.
Duetotheinterconnecting systemsinexistence betweenthevariousdistributors andtheirreciprocal agreements forsupplying eachotherasrequiredduringemergency periodsandpeakloadincapacity, itcouldnotbeexpectedthatanysupplierwouldtransgress."
"Itshouldbestressedthatintheevent,itisdecidedthatanattemptbemadetodistribute and/orgenerateanddistribute, theCommission shouldprepareitselfforlengthylegalandpolitical negotiations toobtainanysuccessful conclusion.
Therewardsofthesaleofpoweraresuchthateveryendeavorbyexistingdistributors willbemadetoassuretheircontinuation inthisfield.Aprecedent wouldhavefarreachingeffectsonpowercompanies asregardsothermunicipalities intheeventwewereabletoacquirethelocalfacilities.
ItisbelievedthatPowercompanies wouldnot 70submittothiswithoutexhausting everymeanstoprecludeit.Thisstandhasbeenacknowledged byFloridaPower.Inlightoftheaboveandtheconsidered opinionfromseveralveryreliableareas,thecommittee suggeststhatcompleteunani-mityofopinionoftheCommission oftheutmostimportance.
The"FactFinding"reportspecifically notedthattheCommittee had"(I)nvestigated thoroughly therecentdecisionofWinterGardentograntafranchise ratherthanenterintomunici-paloperation."
There,ascitedabove,FPLhadrefusedtopro-videthecitywithapowersupplyalternative.
HainesCity'decisionnottoentertheelectricbusinesswasundoubtedly influenced byknowledge ofFPL's(unlawful) policy.Thus,inthecaseofHainesCity,aswellasWinterGarden,FPL'sunlawfulpolicyhelpedtopreventtheentryofnew-competitors
-andthestimulusofcompetition
--withintheFloridaPowerCorporation retailserviceterritory.
Insum,thejointactionofFPLandFPC-actionthattookplacethroughout boththeFPLaudFPCterritories
-activelyprecluded andeffectively deterredattemptstocreateviablepublicelectricsystems,andviablecompetitors toFPL(andFPC).Asitsactionsillustrate, FPL'sprogramwasnotlimitedtoaffecting municipal utilities withinitsretailservicearea,assumingsuchlimitation wouldhavebeenpossiblewheretherewaspeninsular-wide coordination.
FPL'srecentcampaigns togainrenewalofitsDaytonaBeachfranchise andtoacquiretheVeroBeachsystemprovidecompelling publictestimony toFPL'spercep-tionthatitisincompetition withpublicsystemsthroughout Florida.AsshownbyAppendixI55-I57,FPL'sadvertising 71campaigns focusedoncomparisons betweenFPLandmunicipal advertising providedthefollowing information:
"FloridaPower6LightCompany's billstraditionally areamongtheState'slowest,asdocumented byJacksonville ElectricAuthority's monthlysurveyof21Floridaelectricutilities.
IncludedintheJEAsurveyareinvestor-owned utilities, municipal systemsandruralelectriccooperatives."
AppendixI55-I57."Since1947,You'ehadoneofthelowestelectricratesinFlorida.Backin'47,astatewide surveyshowedthatFP&Lhadthesecondlowestratesamong23Floridaelectriccompanies.
Today,we'edoingevenbetter.Becausenow,according toanApril'77surveyamong20electricsuppliers, wehavethelowestrates.Andthatgroupincludedmunicipally-owned powerfacilities.
Infact,overthepast30years,DaytonaBeachhashadoneofthelowestelectricratesinthestate.Xn1947,costsaveragedabout3.9centsperkilowatthour.Today,it'sactuallyalittlelower,atabout3.5cents.Andifyou'ebeenwondering whytotalmonthlybillsarehighernow,it'smostlybecausetheaveragehomeusessixtimesmoreelectricity todaythanitdidthen.Inyourowninterests, rememberthesefactswhenyouvoteontheelectricfranchise issueinJune.Becauseit'sthetruth."(Appendix X55-I57)"DOCONSUMERS BENEFITFROMLOWERWHOLESALE RATESCHARGEDTOMUNXCIPAL UTILITIES2" "Themoneythatamunicipal utilitysavesbypayingwholesale ratesismorethanoffsetbythecostsofmaintaining andoperating thedistribution system,alongwiththelocalized costsofadministration, billingandotherfunctions.
The28non-hydro municipal utilities inFloridachargecustomers higherretailratesthanFPSLdoesbecausethelarger,investor-owned organization cangaingreatereconomies ofscaleinallfacetsofitsoperation."
(Id.)
72Inarevealing articleforElectrical World(Appendix I58-I59),
FPLCommunications Coordinator AnthonyP.X.Bothwelldwelledontheimportance ofstatewide ratecomparisons in"TheDaytonaCampaign."
AsMr.Bothwellexplained:
ThefactthatFPLbillsrankedamongthestate'slowestwasdeveloped inaseriesofadvertising messagesthathadsigni-ficantimpactevenaftertheargumentlostitsnewsvalue.Monthlybillcomparisons werepublished inadsstartinginDecemberandcontinuing throughMay.Reinforcement wasachievedbyairingacompanion radiospoteachtimeanewbilladwasplacedinthepaper."WhenafocusgroupofMiami,residents wasshownoneofthebill-comparison adsusedinDaytonaBeach,theirunanimous reactionwasthatFPLmusthavejuggledthefigures.Yetthroughrepetition andmutualreinforcement, DaytonaBeachresidents foundoutthefactsabouthowFPLbillscomparedtoothersinFlorida.Thereceptivity ofDaytonans tothemonthlybillcomparisons wasenhancedbyotherFPLmessagesonaperipheral issue.Althoughit'shardforconsumers tothinkofanelectricbillaslow.byanystandard, mostpeopledobelieveprivateenterprise performsservicesatalowercostthangovernment.
Thesuperior'performance ofprivateenterprise wasdeveloped bothexplicitly andimplicitly inFPLads,spots,andreleasesduringPhaseIIofthecampaign.
Througnwhatmightbecalledperipheral reinforcement, "cognitive dissonance" wasmadetoworkinfavorofFPLonthebillsissue."Insum,FPLhashistorically beenmotivated byadesiretoeliminate orrenderuneconomic publicsystemsthroughout Florida.FPLhasperceived thatthedenialofsmallsystems'ccess tothebenefitsofcoordination withotherutilities iscriticaltothiseffort.
73FPL'sdesiretopreserveitsdominance inbulkpowergenera-tionprovidesfurthermotivation foranticompetitive behaviorintheStatebulkpowermarket.FPLhascometorealizethatcontrolofthestatewide marketcanprovideanimportant, sourceofbusinessinitsownright.Asrecognized byFPLVicePresident forPlanningRobertGardnerinaJuly,1976memorandum (Appendix I64,page3),"[D]evelopments inourrelationships withotherutilities requirethatweviewourbusinessdifferently thanthetraditional and"official" way."Ratherthana"singletightlyintegrated busi-nessservingendusecustomers,"
Gardnerexplained, an"x-ray"ofFPL"revealstheexistence oftwoprincipal businesses:
abulkpowerbusinessandanelectricservicebusiness."
Asexplained byMr.Gardnerinafurthermemorandum (Appendix I72,page12),theformerconsistsofwholesale salesregulated bytherERC,whilethelatterconsistsofretailsalesregulated bytheStatePublicServiceCommission.
Mr.Gardner's memorandum waswrittencontemporaneously withaSystemPlanningDepartment report(Appendix Il-I12),thatanalyzedthestatewide bulkpowermarketforthe1977-1985 period.Asshowninthisdocument, 1/forexample,inJuly,1976FPL'sSystemPlanningDepartment undertook to"appraise thepotential marketforfirminterchange powerinFloridaduringtheperiodfrom1977to1985."TheanalysisrevealsFPL'sperception that1SeeasoAppendixI4,at3.
74generating systemstbrougbout peninsular Florida-publicandprivate-arepotential buyersandsellersinthebulkfirmpowermarket.Mostimportantly, forpresentpurposes, fourofthefivesystemssingledoutbytheanalysisascompetitors withFPELinthesaleofpoweraremunicipal systemslocatedoutsideofFP&L'sretailserviceterritory
-Tallahassee, Gainesville, LakelandandOrlando.(page3).Thus,FPLnotonlyrecognizes theexist.enceofastatewide marketforfirmbulkpower,butviewspublicsystemsinthenorthernpartofthestateasprimeIcompetition.
C.AlthoughFPLItselfRefusedToDeal,CitiesStillSoughtTheBenefitsOfCoordination, Including TheAbilityToShareInNuclearUnits.Rebuffedbythelargestutilities, Citiessearchedforcoor-dinationpossibilities amongthemselves inthe1960's.Evenso,FPLandco-conspirator FloridaPowerCorp.'spossession ofvir-tuallyalltransmission inpeninsular Floridameantthatthetwocompanies couldmakejointeffortsamongCitiesvirtually impossible bylimitingCities'ccesstothetransmission grid.Infact,FPLbothresistedinterconnection and,whereitdidinterconnect, refusedwheeling.
Itwasnotuntil1975thatFPLfirstprovidedevenlimitedwheelingforanyofCities,sothatNewSmyrnaBeachcouldgainaccesstoFloridaPowerCorp.'sCrystalRivernuclearunit.Thus,intheirsearchforalternatives, Citieswereforcedtoconsidertheconstruction ofanentirelynewelectricgrid,asanalternative tothegridoperatedbyFPL(andtheFlorida 75Operating Committee).
That.Citiesdidconsidersuchacostlyalternative isstrongtestimony toboththestrengthoftheirinterestincoordination andthestrengthoftheresistance theyfacedfromFPLtoparticipation withFPLandFloridaPowerCorp.AsCitiesproceeded, FPLwaswellawareofCities'earch fortheseeconomies.
Itspositionandthatofco-conspirator FloridaPowerCorp.wasoneofanxiousconcernanddeterrence, unliketheassistance theygaveeachother.Cities'fforts includedthefollowing:
1.Studyanddiscussion ofpossiblepoolingarrange-mentsamongsmallersystems.Beginning in1964,RobertE.Bathen,anengineering con-sultanttosomeCitiesadvisedtheformation ofamunicipal powerpool.(App.D131-D154)
FPLandFloridaPowerCorporation wereawareof,andconcerned about,thispossibility, evenwhilesuspecting thatamongthemselves CitiescouldnotcompetewiththeFloridaOperating Committee pool.InaJulyll,1967letter(App.D155),FloridaPowerCorporation President W.J.Clapptransmitted toFPLPresident R.H.Fiteandexecutives ofTECOandGulfPoweramapofthe"Potential FloridaMunicipal PowerPool".Inaddition,'he letterenclosedaFloridaPowerCorporation analysisthatshowedthatthemunicipal poolcouldnotachievetheeconomies ofscaletocompetewith"thepresently existingandrapidlygrowingFloridaPowerPool."(i.e.,theFloridaOperating Committee ofthelargestutilities).
(App.D156)In1971justashewasarrivingatFPL,currentBoardChairmanMarshallMcDonald receivedamemorandum fromFPLVicePresident H.W.Page0transmitting "apaperpresented byoneofthemunicipal con-sultantsadvocating aFloridamunicipal powerpool.Youmaynotwishtoreaditall,butthemapisamust."(App.D159)Inthelatterpartofthe1960'ssomeCitieswerealsoinvolvedintheYankee-Dixie project,whichproposedtolinksystemsinFloridawith"minemouth"coalplantsinAppalachia (App.D160-D205),
andthe"twelve-city" study(App.D206-D222),
whichconsidered thepossibility forjointactivities amongmuni-cipalsystemsprimarily receiving powerfromFloridaPowerCorporation.
FPLfollowedtheseprojectswithconcernaswell.Asa1971memorandum, byVicePresident BenFuquaputit(App.D224):"LetussupposethattheYankee-Dixie projectbecameareality,withtheFloridamunicipal electriccooperative gridasitssouthernanchor.Itisreadilyseenwhataproblemthatwouldposefortheinvestorownedelectriccompanies inFlorida.Similarly, a1969noteevidently toFPLVicePresident J.G.Spencerregarding aclippingonthe"twelvecities"studynoted(App.225):"Theproposed'system'ould reallybe'stretched out'...However,thefact,thatastudyistobemadecertainly isamatterofgreatconcern."
2.FMUAcommittees.
In1966-1967 theFloridaMunicipal Utilities Assocation (FMUA),towhichCitiesbelonged, formedcommittees toconsiderwaysinwhichsmallersystemscouldjointogethertogainthebenefitsofcoordination.
77Thedocuments fromthesecommittees showthatCitieswereawarethatlargersystemswouldnotpermitthesmalleronestoparticipate intheFloridaOperating Committee poolandwouldlikelyopposethemunicipals'fforts to"goitalone."Forexample,inaJune9,1966letterannouncing thefor-mationofthe"interconnection committee,"
aJacksonville officalwrote(App.D227):"Ithinkthecommittee shouldalsoweightheadvan-tagesthatcanbegainedbythesmallermunicipalities tyingtothelargermunicipalities, suchasJacksonville, OrlandoorLakelandinasmuchasthelargeronesarealreadytiedwiththeprivatepowercompanies andtherewouldbenonecessity thenforthesmallermunicipals tochancethedomination oftheirsystembyadirectinterconnection withaprivatecompany."Ithink,too,thecommittee shouldexploretheattitudes oftheofficersanddirectors oftheprivatecompanies inrelationtoourdetermination tohaveamunicipal grid.Sincecollectively wewouldhavestrongsupportforoursystems,itmightmaketheprivatecom-paniesfacethefactsoflifeandacceptusasapartofthestatewide operating gridsystem.Ihavehadsomeindication thatthereisasoftening intheirattitude.
AstheJune9,1966letterstated,municipal accesstonuclearpowerwasanexpresshopeinfoundingthecommittee.
Id."Ithinkthecommittee oughttoconsiderjointlyownedlargenucleargenerating plantsandweshoulddiscussthelegalaspectsofjointownership offacilities."
Inestablishing theCommittee itwasfurtherobservedthat(App.D230):"(O)nlybybeingelectrically interconnected throughastrongtransmission system,ownedandoperatedatleastinpartbytheMunicipal systems,canthetruebenefitsofscaleinlargemodernconventional andnuclear~lantsaccruetcMunicipal systems."
(emphasis
~added 78XnaJuly1967report,theFMUACommittee explained thatthesmallersystemshadnoalternative tocoordination amongthem-selves,butthat,thelargersystemswouldmake.municipal coor-dinationdifficult (App.D232-D233):
"1.Themunicipal systemsinFloridamusttieordieo"2.Someofthemunicipals willberequiredtocommitthemselves togeneration andsomeofthemunici-palswillhavetocommitthemselves topurchasetheirwholesale powerrequirements fromaFloridaMunicipal generation andtransmission organized asanonprofit corporation.
"3.Thecommittee feelsthatageneration andtransmission systemfromtheLakelandareatotheGainesville andJacksonville areaisentirelypractical andfeasible, butthatthesamecouldnotbeaccomplished withinthenextfewyearsduetothepressures wemayexpectfromtheprivatepowercompanies uponourlocalandstateauthorities."
Asevidenced byFPLdiscovery documents, FPLevidently keptcontinuing watchonCities'onsideration ofjointefforts.Documents atApp.D234;D235-D236; andD237-D238 arethreeofmanyreports,evidently submitted toFPLofficials periodically, onNewSmrynaBeach.Asthefirstreport,datedDecember1966,records(App.D234):"LittleI.NewSmyrnaUtilities DirectorJohnLittle]expectedtoattendameetinginJacksonville oftheMunicipal plantoperators.
Hehaswildideasoftieingallmunicipal plantstogetherinagridformutualhelp.Hethinksthiswouldmakethemcompetive (sic]withpri-vatecompanies."
79Asthesecondreport,alsoevidently in1966,records(App.D235):"Littleisproposing a500Mwatomicplanttosupplyallmunicipal'plants inanemergency orpeakload."1/3.TheGainesville litigation.
Ifthesmallersystemsneededfurtherproofoftheirinability togainaccesstothestatewide gridcreatedbyFPLandtheFloridaOperating Committee, itwasdramatically providedin1965-1966 byFPL'sandFloridaPowerCorp.'srefusalofGainesville's requestsforinterconnection.
Following theserefusalsGainesville undertook costlyandprotracted litigation toestablish itsrightand,byextension, therightsofothersystemsvis-a-vis FPLandFloridaPowerCorporation.
Thislitigation, whichotherCitiesfollowedclosely(seeApp.D239-D240) resultedinaSupremeCourtholdingforGainesville andaCourt.ofAppealsverdictforGainesville in1978.By1973,asFPLwasundergoing itsfirstantitrust reviewinconnection withanuclearlicense,2/FPLapparently knew,asanFPLdiscovery documentrecords(GardnerExh.46,App.B471):1Athirdsuchreport.recordsApp.D237):"CityManager,saysFPELhasnosparepower,couldnotandwillnotwholesale power,soCitycouldnotbuypowerfromthem.HadaveryhardtimegettingpowerforSamsuladuringthechangeover.FloridaPowerCorp.doeswholesale powerbutFP&Lwillnotlettheminterritory, sothereisnothingtodobutinstallanotherengine."2/TheTurkeyPointandSt.LucieIunitswerelicensedas"research anddevelopment" plants;theywerenotsubjecttopre-licenseantitrust review,asistheSt.Lucie2unit.
80"Citieswanttoshareownership andwheeling; etc."1/4.TheTallahassee experience.
AsrecordedinaninternalFloridaPowerCorporation memoran-dum(produced intheGainesville case,App.El-E3),in1966Tallahassee soughtaccesstotheFloridaOperating Committee, butwasrebuffed.
TheSeptember 8,1966memorandum, concerning ameetingbetweenFloridaPowerCorp.officials andTallahassee, including Tallahassee consultant RobertBathen,records,App.'2,thatMr.BathenstatedthattheCitywasinterested inbeingamemberoftheFloridaPool.Messrs.DunnandPerezt:Florida PowerCorp.officials]
assuredMr.Bathenthattherewasnopool,thattheFloridaOperating Groupcarriednoobligations butwaspredicated onfaithandgoodwillandaspiritofcooperation, andthattheCompanycouldnotinviteanyoneintotheGroupwithoutawillingness onthepart,ofothermemberstocooperate."
Tallahassee's requestwasnotsuccessful, atleastnotuntil1971whentheFloridaOperating Committee wasgenerally expanded.
Asdiscussed,
~suraFPL,andFloridaPowerCorp.deniedaninterconnection toGainesville in1966.Inthatyear,thesmallersystems,including Tallahassee, beganstudyingcoor-dinationandpoolingamongthemselves.
Tallahassee officialJoeB.Dykes,Jr.,workedontheFloridaMunicipal Utilities Association's powersupplycommittees.
(App.E4)Asmeetingminutesrecord,themunicipal systemsrecognized thatthebigutilities wouldnotletthesmalleronesintotheirpool,and1Mr.Gardnerwasnotfamiliarwiththenotes(GardnerExh.46),andCitieshaverequested furtheridentification.
81thatthesmallsystemswouldneedtohangtogetherinordertoavoidhangingseparately.
AsrecordedintheJune15,1967minutesoftheFMUAPowerSupplyCommittee (emphasis added)(App.E5):"Mr.Dykessuggested jointmunicipal andcompanytransmission.'/
"Itwassuggested thatamunicipally ownedcentralgeneration andtransmission systemwouldbelargeenoughforthemtotrytonegotiate withtheprivatecompanies onanequalbasis,itwaspointedoutthatFloridaPowerCorp.wasusingthehighwholesale ratestosmallmuni-cipalstobuyoutthemunicipal systems."
FloridaPowerCorp.andco-conspirator.FPL activelysoughttofrustrate theabilityofCitiestoevenconsideralternatives totheFloridaOperating Committee.
In1966Tallahassee retainedRobertE.Bathen,whohadsuggested the'availabiity ofcoordination andofnuclearpowerforsmallersystems.Asdetailedbelow,FloridaPowerCorporation demandedthat-Tallahassee limitorrefuseBathen'semployment ifitwishedtodiscussinterconnection withFloridaPowerCorporation.
FPLpromptlymadeparalleldemandswithinitsretailterritory.
2/Thus,FPL'sconspiracy withFloridaPowerCorporation actedtodeprive"outside" cities,aswellas"inside"citiesfromaccesstonucleargeneration andcoordinated operations.
InAprilof1967FloridaPowerCorporation learned,throughanewspaper article,thatTallahassee wasconsidering hiringR.W.BeckRAssociates toperformastudyforTallahassee (App.1FPL,atpresent,continues torefuseCities'equests forjoint.transmission investment.
O2/FPL'sactionsaredescribed, infra.
82ES-E9).FloridaPowerCorp.hadpreviously warnedTallahassee nottouseBathen.App.E26-D29andE74-E75.Mr.BathenwastheFloridaheadofBeck'sFloridaoffice.Asthearticlesummarized, (App.E9)(emphasis added)."Acquisition ofFloridaPowerCorporation's LakeTalquinpowerplant,participation inavastregionalpowerpoolandeventually thedevelopment ofanuclearpowerplantaresomeofthelongrangepossibilities thatwouldbeincludedinaproposedelectricutilitystudyfortheCityofTallahassee."
R.W.BeckproposedastudythatwouldincludeTallahassee's participation inanalternate powerpoolandinnuclearpower.TheApril1,1967R.W.Beckproposalstatedinregardtonuclearpower(at5,App.E14):unitsundertheBaseCaseintheearlyyearsofthe20yearprogramnoconsideration willbegivenduringatleastthefirst10yearstoanuclearpowerplant.However,ifinthelatteryearsofthe20yearprogramtheprojected loadsindicatebaseloadgenerating unitsofasizesufficient forconsideration ofnuclearpowerasanalternate tofossilfueledgeneration, thenadiscussion willbeincludedintheReportastothepre-sentdayrelativeeconomics ofnuclearversusfossilfueledlargegenerating plants.Thisdiscussion whichwouldincludecomparative costparameters willbeusefultotheCityinguidingitsthinkingtowardtheproblemsandpossibilities ofthistypeofpotential powersupplyinthelatterpartofthe20yearprojected loadperiodwhenloadsmaybeintheneighborhood of500,000Kwh."FloridaPowerCorp.promptlyandrepeatedly toldTallahassee thatongoinginterconnection negotiation wouldceaseifTallahassee proceeded toemployMr.Bathen,whohadalsoraisedthepossibility ofexpandedmunicipal coordination.
1/Asa1FloridaPowerCorp.'sinsistence thatTallahassee severtieswithR.W.Beckwasnottheonlyconcession thatTallahassee hadtomakeinordertogainaninterconection.
FloridaPower,inparallelwithFPL,insistedthatsmallsystemsenterintoterri-torialagreements asaprecondition tointerconnection (seeApp.E29,E71-D73).
Thus,Tallahassee wasrequiredtogiveupFOOTNOTECONTINUED ONNEXTPAGE 83June9,1967FloridaPowerCorp.memorandum, recording ameetingofthepriorday,described (App.E23):"Attheopeningofthismeetingweexpressed astrongunwillingness tocontinuenegotiating withTallahassee onaninterconnection aslongastherewasanychanceofBeck6Associates beingintheTallahassee powersupplyproblem....WestressedthatifBeckdidshowup,wewouldcallahalttothenegotiations."
Whileissuingtheultimatum toTallahassee, FloridaPowerCorp.President W.J.Clappsentalettertotopofficials oftheotherprivateutilities, including FPLPresident RobertH.Fite,warningofthe"activities" ofR.W.BeckandAssociates (andalsoofattorneyGeorgeSpiegel).
BothFloridaPowerCorp.andFPLappearedconcerned lesttheCitiesbeadvisedofthepossibi-lityofgreatercoordination orparticipation thanwasthenavailable.to them.AstheJuly11,1967letterstatedinpart(App.E30)(emphasis inoriginal):
"Iknoweachofyouisfamiliarwiththeactivities ofGeorgeSpiegel,'ashington
- attorney, andR.W.BeckandAssociates, engineers, inthefurtherance ofpublicpowereffortsinFlorida.Perhapsyouhavealreadyreceivedcopiesoftheenclosedmap,'Potential FloridaMunicipal PowerPool,"whichBobBathenofBeckandAssociates hasbeenadvocating amongthemunicipal uti-litiesofthestateandaboutwhichhehasmadeseveralspeechesoutofstate.FOOTNOTECONTINUED FROMPREVIOUSPAGE:territory.
Whileseekinginterconnection withFloridaPowerCorp.,Tallahassee andotherCitieskeptinformedofGainesville's litigation againstFloridaPowerCorp.andFPL.See,forexample,theJuly16,1968letterfromGainesville toTallahassee, App.D239-D240).
Thislitigation, whichwasini-tiatedin1968,resultedina1971SupremeCourtdecisionupholding aFederalPowerCommission orderthatFloridaPowerinterconnect withTallahassee (Gainesville Utilities Dept.v.FloridaPowerCor.,40FPC12271968,affirmed, 402U.S.5151972andthe1978FifthCircuitfindingthatFloridaPowerCorp.andFPLwereengagedinaconspiracy inviolation oftheShermanAct.Gainesville Utilities Det.v.Florida'Power 6LihtCo~,573F.2d2925thCir.,cert.denied,439U.S..966(1978.Thislengthyandcostlylitigation reaffirmed theunderstanding ofTallahassee andothersthatFPLandFloridaPowerCorp.wouldrequireCitiestospendtimeandmoneytofightfortheirrightstodealwiththelargersystems.
"Allofthisisbeingsenttoyousothatyoucanbealertedtothefactthataconcerted effortisbeingmadebySpiegelandBatheninthefurtherance ofpublicpowerand,'odoubt,theyaregoingtomakeeveryefforttocontactallcommunities whosefranchise mightbe~exirinwithinthenexttewyears."i/Theresistance ofthelargestutilities toallowcitiesaccesstonucleargeneration wasagainpubliclyconfirmed whenin1968FloridaPowerCorp.flatlyrejectedGainesville's requesttoparticipate initsrecentlyannounced CrystalRiver3unit(App.E38-E43).
WhenGainesville soughttopressitsclaimattheAtomicEnergyCommission, itwasdeniedonthegroundsthattheCrystalRiverunit(liketheTurkeyPointunitsandSt.Lucie1)wastobelicensedasaresearchanddevelopment reactorandtherefore wasnotsubjecttopre-licensing antitrust reviewbytheAEC.2/D.FPLCouldHaveBuiltLarge,MoreEconomical PlantsAndSharedThemWithCities.FPLcouldhavebutdidnotpurchaselargernuclearunitsthanitdidatalessercostperunitofpower.HadCitiesbeenofferedthatpartofthelargerunitsnotneededbyFPL,the1AsrecordedintheJuly27,1967Homestead CityCouncilminu-tes(App.E34),twoweeksaftertheletterfromFloridaPowerCorp.,FPLopposedHomestead's hiringGeorgeSpiegel.WhenHomestead officials didmeetwithFPLtorequestwholesale powerandinterconnection, FPLgottheCitycounciltoagree,"withouttoomuchenthusiasm,"
asFPLputit,"toconsideraproposalatthesametimetopurchaseorleaseyoursystem."App.D10.2/InJanuary1965,FloridaPowerlaterofferedlimitedCrystalRivercapacitytocitiesthroughout Florida.
85largerunitscouldhavebeenbuiltandthecosttoFPL'scusto-merswouldhavebeenreduced.FPLlikewisecancelled itsSouthDadenuclearunits(Docket-No.P-636-A),
ratherthanacceptCities'articipation.
Internalmemoranda toFPL'sSeniorManagement Councilshowtheanticompetitive reasonforFPL'srefusalstolettheCitieshaveaccesstoeconomical generating plantsby,forexample,FPL'sbuildingplantslargeenoughtoaccommodate Cities'articipation.
(Membership ontheCouncilincludedtheChairmanoftheBoard,President andExecutive andSeniorVicePresidents.)
AsstatedatthetimeoftheCouncil's creationin1973,oneofthe"strategy" areastobeconsidered was"Competition
-TheFloridaElectricSystem".(App.D256)AdocumenttotheCouncilgenerated byR.G.Gardner,'ice President forStrategic
- Planning, recognizes (App.D250):"Themunicipals-co-operative strategy:
shouldhavestatewide generation
- planning, multiple-unit sharingandfullcoordination."
ItlistedasoneofFPL'sconsequent "problems" withthemunicipals'trategy (id.):"FPaLmaynotbeabletocompeteifmunicipals andco-operatives cangainaccesstogeneration investment withtheirlow-costcapital.Municipals presently havingfranchises withFPLwillbeencouraged togopublic."In1976-1978 FPLwasbeforetheFederalPowerCommission seekingtojustifyitsproposedacquisition oftheVeroBeachsystem.FPLhadnotpreviously servedVeroBeachfromits nuclearunits,norhaditofferedtoprovidenuclearaccess.1/Uponacquisition, ofcourse,VeroBeach,asallofFPL'sretailcustomers, wouldbeserved,inpart,fromFPL'snuclearunits.Insupportoftheapplication, FPLportrayed VeroBeachasagoodinvestment becauseofits"growth"prospects (DocketNo.E-9574,Tr.56).ItwasinthiscontextthatStaffCounselaskedFPLofficialJ.L.Howardwhethertheacquisition ofsuchnewloadwouldadversely affectFPL'sexistingcustomers.
FPL,asMr.Howardmadeclear,indicated thatanyqualitative long-term effectwouldbebeneficial toFPL'sexistingcustomers (App.D326-D328):
"BYMR.ROGERS:Inlightofyourmostrecenttestimony thattherewillbesomeincreaseinthefueladjustment chargeasaresultoftheacquisition, somepossibleincreaseresulting fromhavingtoputonlinenewgenerating capacity,'ou havestatedveryemphatically thatno,thelastraterequestwasnotpredicated inanywayonacquisition ofVeroBeach,isitnotaprettygoodconclusion fortheStafftodrawthat,thatacquisition isboundtoresultinhigherratesforthepresentcustomers ofFPL?A.Q~No.ShallIexplainthereasons?Yes,sir.Ilicensetosteal.fsic]1Duringtheproceeding beforetheFERC,a"citizens" hearingwasheldatVeroBeach.Atthathearing,acitizentestified thatFPLhadnotofferednuclearaccesstoVero(App.C399-C402);
anassertion whichFPLhasneversoughttocontradict.
(Furtherevidenceindicates thatwhileproposing toacquireVeroBeach,FPLwasalsodenyingitbothwheeling(App.C404)andwholesale power(App.C405-C410).
87A.Whenyoustarttotalkoffuturegeneration youarelookingintothefuture,itwillnotchangeourgeneration expansion plansintheshortrun.Idon'tbelieveitwillchangeourbaserates,althoughitwillinitially affectourfueladjustment.
futureitwillbecoalornuclear.Giventhe~re-sentsituation inthecountry,totheextentweotherwise Ibelieveitisconsistent withtheinterestofthe~countrandthatthecoalgenera-tion~mawillbecheaperthanthepresentgenera-tion.SointhelongrunIamnotsureitwillresultinincreases.
Theremaybesomeback-and-forth.Ithinktheneteffectwillnotbenegative."
(emphasis added)Thus,FPLdeniedCitiesnuclearaccessandwholesale purchases, whenithadtestified thatitwouldbenefitfromalargermarkettosupportnewcoalandnucleargeneration.
Infact,FPL'sindustrial development staffisseekinglargenewcustomers (App.D259-D264).
1/1WhenFPLsoughttodenywholesale servicetoHomestead andFt.Piercein1976-1979, itattempted tojustifyitsactionbyclaiminglackofcapacity.
TheFederalEnergyRegulatory Commission considered theissueandrejectedFPL'sposition(OpinionNo.57,32PUR4that336):"FPLwould'seek tojustifyitsproposedlimitations onfullandpartialrequirements availability intermsofoperational constraints.
Specifically, itassertsthatfuturepowersupplyistoouncertain toallowunlimited accesstoitsrequirements serviceFOOTNOTECONTINUED ONNEXTPAGE 88ZnOpinionNo.57,~eura,32PUR4th313at335,theFederalEnergyRegulatory Commission found:Limitations onAlternative SourcesofCaacitUnrebutted Companydocuments inevidenceindicatethatitisFPGL'spolicytoretainfullownership ofthenucleargenerating plantswhichitconstructs.
TheCompanyhasstatedthatthefullcapacityoftheseunitsisneededtoserveitsowncustomers, sosharingisnottobeanticipated untilFPELreachestheoptimumamountofnuclearcapacityforitssystem(Exhibit27).However,nopartydisputesthatjointownership ofsuchfacilities wouldprovidemunicipal andcooperative uti-lities(aswellasotherutilities intheregion)withaccesstoFPEL'seconomies ofscale(ExhibitGT-1,at6).FOOTNOTECONTINUED FROMPREVIOUSPAGE:"However, thedifficulty withthisproposition isthatithasvirtually norecordsupportandisbasedonafewconjectural statements byCompanywitnesses AsOpinionNo.57records,FPL'scontention inthatcasefollowedapriorattempttousethatstrategem todenyservicetoHomestead in1973-1974.
AstheOpinionstates(32PUR4that332,footnotes omitted):
Homestead nextrequested powerfromFPLinAugustof1973,proposing afirmpurchaseof12-16MWfrom1975through1980.TheCitystatedthatitintendedtousethiscapacityforbaseload,purchaseinterchange energytomeetitsintermediate loadanduseitsowngeneration onlyforpeakloadcapacityandreserve(ExhibitGT-29,at12).TheCompanyfirstdecidedtorespondtoHomestead's requestwiththeso-called "Marshall Theory"[evidently FPLBoardChairmanMarshalMcDonald]:
Homestead wastobetoldthatFPGLhadnofirmpowertosell.Companynegotiators wereadvisedtohaveloadandreserveesti-matesavailable tosubstantiate thisreponse(ExhibitGT-29,at14).Immediately thereafter,'owever, theCompanyconcluded thatHomestead hadbeenlistedasacustomerunderallrequirements scheduleSRandwasactuallyreceiving firmpoweratcommitted intervals.
89FPSListhesoleownerofthreeoperating nuclearplantshavingaggregate capacityof2,188MW.FPScLhasagreedtoshareaportionofSt.LucieNo.2nuclearplantwithneighboring systemsincluding Homestead andNewSmyrnaBeach;however,FPGLdocuments inevidenceindicatethatthiswasdoneattheinsistence oftheJusticeDepartment andthatFPSLhasnotcommitted itselftosharethecapacityofanyfutureunit(ExhibitGT-71,at22).49/49In1973FP8Lconsidered cancelling St.LucieNo.2becauseof"escalating costsandJusticeDepartment reviewofourantitrust status"(Exhibit20).Thenin1976theCompanyconsidered ashift.tocoal-fired plantsforfuturebase-load generation "toeliminate theATomicEnergyActasaroutetomunicipals'nvestment ingeneration" (ExhibitGT-1,at13).Seealso,thedeci-sionoftheAtomicSafetyandLicensing AppealBoard,NuclearRegulatory Commission, inFloridaPowerRLihtCo.,DocketNo.50-389A(ALAB-420, July12,1977regarding antitrust reviewproceedings onSt.LucieNo~2~FPL'ssettlement licenseconditions wouldevenpermitrestriction oftheamountofnuclearcapacityavailable tocitiesinunitsnotyetsizedtooffsetnuclearcapacitythatthecitiesmightotherwise obtain.Condition VIIgrantsthose"neighboring entitiesandneighboring distribution systems",
whichareper-mittedSt.Lucie2entitlements "theopportunity toparticipate intheownership ofallnuclearunitsforwhichtheCompanyfilesaconstruction permitapplication withtheNRCpriortoJanuary1,1990,provided, however,thatnoopportunity topar-ticipateneedbeaffordedtoanyneighboring entityorneighboring distribution systeminanamount,ifany,whichwould,intheaggregate, resultinitsowningnucleargenerating
- capacity, orenjoyingdirectaccesstheretobyunitpowerpurchaseorparticipation throughajointagency,asapercentage ofitspeakloadinexcessofwhatCompany's percentofsamewouldbeaftertheadditionoftheproposedplant."
90Thus,FPLrecognizes theimportance ofnuclearcapacitytoCitiesandwouldassurethatCitiescannotobtainmorethanFPL,assumingthatthiswerearealistic hope.ARGUMENTINTRODUCTION UnlessFPLsetsforthgenuineissuesoffacts,summaryjudgmentshouldbeorderedthatasituation inconsistent withtheantitrust lawsexists;alternatively, alimitedhearingshouldbeheldtoresolvefactsgenuinely indispute.FloridaCitiesbelievethefollowing factsarenotreasonably subjecttodispute1/:(1)FPLcontrolsthreeoutoffouroperating nuclearunitsinPeninsular Floridaanditisconstructing afourth(St.LuciePlant,UnitNo.2).Ithasaneffective monopolycontrolofnuclearfacilities.
SeeUnitedStatesv.AluminumCo.ofAmerica,148F.2d416(2dCir.1945).FPLisrefusingtograntaccesstothosefacilities, exceptforlimitedentitlement undersettlement licenseconditions inthiscase.FloridaPowerSLightcanhardlydisputetheimportance ofsuchfacilities, sinceithasciteditsnuclearadvantage inacquisition attemptsandhassoughttolimitCities'uture nuclearaccessinSt.Lucielicenseconditions.
2/Seepp.47-53,1Attachment 1containsastatement ofthematerialfactswhichFloridaCitiesbelievearenotgenuinely inissue,asrequiredby10CFR$2~749'2/TheFederalEnergyRegulatory Commission's findingofFPL'spolicyagainstsharingnuclearcapacityisquoted~sura.
91~sura.Moreover, evenifitwerefoundthatnuclearfacilities Odonotconstitute aneconomic"market"understrict,DistrictCourtShermanActanalysis, theAtomicEnergyActdealswith"situations inconsistent" withtheantitrust lawsandunfaircom-petitionwithinthemeaningofSection5oftheFederalTradeCommission Act.TheAtomicEnergyAct'santitrust provisions mustbereadinthecontextoftheentireAct.Sections1-3oftheAct,42U.S.C.$2011-2013, establish thatthebenefitsofnuclearpowerbebroadlydirectedandthatnuclearadvantages notbeusedtolimitcompetition.
UnderSection2oftheShermanAct,OtterTailPowerCo.v.UnitedStates,410U.S.366U.S.(1973)andConsumers Power~Coman(MidlandUnits1a2),ALAB452-,6NRC892(1977),FFL'srefusalstodealinnuclearpowerconstitute anticompetitive restraints oftrade.(2)Theinterconnected systemsgeneration andtransmission facilities inPeninsular Florida,aswellasFPL'sactionssetforthintheStatement ofFactsandconfirmed byFederalPowerCommission andFederalEnergyRegulatory Commission decisions onwhichthisBoardcanrely,establish thatFPLhasdominance inbaseloadgeneration, transmission andcoordination.
FPLhasactedtorestrictCitiesaccesstobaseloadgeneration, transmission andcoordination.
(3)ThereisaPeninsular Floridageographic marketforatleastsomewholesale andcoordination powersupply.Suchmarketisconfirmed byFPL'sactions,publicdocuments, andinternalFPLdocuments.
TheCompanyhasactedjointlywithothersinthat 92markettorestrict.
competition forwholesale powersupplythroughout peninsula Florida.TheFifthCircuitdecisioninGainesville Utilities Dept.v.FloridaPowerSLihtCo.,573F.2d292,cert.denied,439U.S.966(1978)isdeterminitive thatawholesale territorial divisionexisted,,that thedivisionwasillegal,andthatitrestrained trade.(4)FPLplans,constructs andoperatesitsnuclearandotherbaseloadunitsincontextofcoordination withFloridaPowerandTampaElectric.
TheFederalPowerCommission hassofoundinanorderthatwasultimately affirmedbytheUnitedStatesSupremeCourt.FloridaPowerSLihtCo.,37FPC544(1967),reversed, 430F.2d1377(5thCir.1970),reversed, 404U.S.453(1972).Companydocuments anddeposition testimony admitthatFPLoperatesinlightofsuchcoordination.
Indeed,FPLhaspubliclyadvertised coordination benefits.
A."situation inconsistent" existsbecausetheCitiesareexcludedfromthefruitsofsuchcoordinated activities (e.g.,nuclearandwholesale power)aswellasfromcoordination itself.(5)FloridaPower6LighthasagreedtoOrlandopar-ticipation inSt.Lucie2andhasofferedparticipation tosomeCitiesinPeninsular Florida,butnottoothers.Suchexclusion isaviolation ofSection1andisotherwise inconsistent withtheantitrust laws.(6)FPLhasaretailservicemonopolyineasternandsouthernFloridaandcompetesforwholesale powersupplyorcoor-dinationthroughout peninsula Florida.FPL'srefusalstodealin 93nuclearandbaseloadpower,transmission andcoordination helpeFPLtodefeatcompetition andtopreserveandextenditsretailmonopolyandincompetition atwholesale.
Suchrefusalstodealareinviolation ofSections1and2oftheShermanAct,ascon-firmedbyOtterTail,~sura,andtheprinciples established byotheractsaswell(including Section5oftheFederalTradeCommission Act).I.FPLCANNOTLAWFULLYRESTRICTRELIEFTO"INSIDE"CITIES'HE RESTRICTION CONSTITUTES ANUNLAWFULCOMBINATION INRESTRAINT OFTRADEANDAPERPETUATION OFAMARKETDIVISION.
Thereisjointownership forSt.LuciePlant,UnitNo.2.Orlandoisaparticipant andothershavebeenofferedparticipation.
Underthesecircumstances, FPL'srefusalstograntaccesstootherCitiesinPeninsular Floridaisagroupbottleneck andgroupboycott.Caselawestablishes thatcom-paniesinthesamebusinessmaynotband.togethertocontrolimportant resources totheexclusion ofsmallerfirms.Such"combination" isplainlyarestraint oftradeUnderSection1oftheAct.SuchcasesasUnitedStatesv.TerminalR.R.Ass'n.,244U.S.383,(1912);
Silverv.NewYorkStockExchane,373U.S.341(1963);RadiantBurnersv.PeolesGasLihtSCokeCo.,364U.S.656(1961);Klor's,Inc.v.Broadwa-HaleStores,Xnc.,359U.S.207(1959);FashionOriinators'uild ofAmericav.FederalTradeCommission, 312U.S.457(1941);Associated Pressv.UnitedStates,326U.S.1(1945);Gamcov.Providence FruitProduceBuildin,Inc.,194F.2d484,487(1stCir.),cert.
94denied,334U.S.,817; ToledoEdisonComan(Davis-Besse Units1,and2),ALAS-56010NRC265(1979).Thestandards ofSection1wererecentlyenunciated bytheSecondCircuitinBerkePhoto,Inc.v.EastmanKodakCo.,603F.2d263(2dCir.1979),cert.denied,444U.S.1093(1980).TheCourtstatesthat"thegravamenofachargeunderSection1oftheShermanActisconductinrestraint oftrade;nofundamental alteration ofmarketstructure isnecessary."
603F.2dat272.Kodakismorerestrictive thanotherantitrust casesinprotecting firmsagainstpredisclosure ofprospective marketing underSection2,wheresuchprotection isrequiredtoprotectinnovation.
However,thecaseappliesastrict,standardwherethereisjointaction(orwherethereisexclusionary conductunderSection2):Thereisavastdifference, however,'etween actionslegalwhentakenbyasinglefirmandthosepermitted fortwoormorecompanies actinginconcert....Wehavestatedthatwerespectinnovation, andwehaveconstrued
$2oftheActtoavoidaninterpretation thatwouldstifleit.Butthisistotocaelodifferent fromanagreement amongafewfirmstorestricttothemselves therewardsofinnovations."
603F.2dat301.Normusttheproductorserviceinvolvedbeessential inanyabsolutesense.Contractual relationships aswellasfacilities maybeinvolved.
Forexample,inAssociated Pressv.UnitedStates,326U.S.1(1945),'he SupremeCourtfoundthattheAssociated Pressby-laws"hadhinderedandrestrained thesaleofinterstate newstonon-members whocompetedwithmembers."
326QU.S.at13.TheCourtstates(326U.S.at17-1S):"Ztis 95apparent" thattherestrictive practices complained ofgave"manynewspapers acompetitive advantage overtheirrivals";"[cjonversely, anewspaper withoutAPserviceismorethanlikelytobeatacompetitive disadvantage."
1/Aclassicexampleoftheprinciple isGamcov.Providence FruitProduceBuildin,Inc.,194F.2d484,487(1stCir.),cert.denied,344U.S.817(1952)~There,lessorsofabuildinghousingwholesale fruitdealers,refusedrenewalofaleasebyGamco,butcontended thataccesswasunnecessary sinceonecouldsellfruitvirtually
- anywhere, including atapointadjacenttothebuilding.
194F.2dat487.TheCourtfoundhowever,thatthejointactiontodenyGamcoaccesstothebuildingwasanillegalexclusion (Id.,citations andfootnotes omitted):
amonopolized resourceseldomlackssubstitutes; alternatives willnotexcusemonopolization
....itisonlyattheBuildingitselfthatthepurchasers towhomacompeting wholesaler mustsellandtherailfacilities whichconstitute themosteconomicmethodof1QuotingthelowercourtopinionofJudgeLearnedHand,theSupremeCourtnoted:monopolyisarelativeword.Ifonemeansbyitthepossession ofsomething absolutely necessary totheconductofanactivity, therearefewexcepttheexclusive possession ofsomenaturalresourcewithoutwhichtheactivityisimpossible.
Mostmonopolies, likemostpatents,givecontroloveronlysomemeansofproduction forwhichthereisasubstitute; thepossessor enjoysanadvantage overhiscompetitors, buthecanseldomshutthemoutaltogether; hismonopolyismeasuredbythehandicaphecanimpose.~~Andyetthatadvantage alonemaymakeamonopolyunlawful."
326U.S.17,n.17'ndeed,therewerenewspapers thatsurvivedwithoutmembership intheAssociated Press.
bulktransportation arebroughttogether.
Toimposeuponplaintiff theadditional expensesofdeveloping anothersite,attracting buyers,andtranshipping hisfruitandproducebytruckisclearlytoextract.amonopolists'dvantage."
TheActdoesnotmerelyguarantee therighttocreatemarkets;italsoinsurestherightofentrytooldones.TheCourtconcluded that:"thepossibility ofduplicating thephysicalfacilities Lcannot]...ofitselfdestroytheillegality oftheassertedmonopolization.
Ztisclear...thatexclusion fromanappropriate marketorbusinessopportunity isactionable, notwithstanding substitute opportunities."
194F.2dat488.Accord,CitiesofAnaheimv.SouthernCalifornia Edison,~sura,pp.3-4ofSlipOpinion(Attachment 4).Anyarguments thatFPLmightmakethatitshouldnotbeforcedtosellnuclearcapacitytoanyonearebesidethepoint.FPLisselling,selectively, andwithavirtualcertainty ofananticompetitive effect.Moreover, havingofferedsuchcapacitytoCitiesoutsideitsretailservicearea,FPLisforeclosed frommakingthemarketargument.
EveniftheCitiesofferednuclearcapacitywhicharenotwithinFPL'sretailserviceareaalongwithFPLcouldbepresumedtoestablish anewmarketarea,FPL'srefusaltodealwouldbenomorethanablatantattempttocontinuetounlawfulwholesale territorial divisionfoundillegalinGainesville Utilities Det.v.FloridaPowerliLihtCo.,573F.2d292(5thCir.),cert.denied,439U.S.966(1978)..Moreover, therecanbenorationale formakingcapacityavailable toGainesville, OrlandoandLakeHelentotheexclusion ofnearbycities.FPL'sproposedactionsareverymuchlikeKlor's,Inc.v.Broadwa-HaleStores,Xnc.,359U.S.207(1959).ZnKlor's 97sellerswoulddealwithafavorednearbyretailoutlettotheexclusion ofKlor',orwoulddealwithKlor'onlessfavorable terms.Suchactionwasheldtoconstitute agroupboycottanddeclaredillegal~EarlierNRCSteLucie2licenseconditions haveprovidedforafairshareoftheplanttobesoldtoHomestead andtheUtilities Commission ofNewSmyrnaBeach,aswellastwocoopera-tiveuti1ities.FPLhasofferedeachofthesetwosystems2Nwunderthoseconditions
~Othersarebeingofferedparticipation undertherecentsett1ement.dealwithsomecitiesbutnotothersinPeninsular Floridawithregardtoessential facilities andservices~Silverv.NewYorkStockExchane,~sura;Montaue&Co.v.Low,193U.ST3S(1904);ToledoEdisonCo.,~sura,(ordering offerofnuclearcapacitybydominantelectriccompanies tosmallersystemsafterfindingofviolation ofantitrust laws),1/andcasescitedimmediately
~sura.1~ComareMissouri PacificRailwaCo.v.LarabeeFlourMillsCo.,211U.S.612,619,6201909;Louisville andNashville RailroadCo.v.UnitedStates,238U.S.11915;ICCv.DelawareLackawana 6WesternRailroadCo.,220U~S~235(1911)UnitedStatesv.CaitalTransitCo.,325U~S~357(1945)Amer'.canTruckinAsspcwatson,Inc.v.Atchison, ToekaandSantaFeRailwaCo.,387U.S.397(1967,confirming theobliga-txonofutilities todealfairlywithal1,includingcompetitors, oncetheyengageinaparticular service~Ifthecarrierhowever,doesnotrestbehindthatsta-tutoryshieldLpermitting refusalstoothercarrierstouseitstracksorterminalfacilitics]but.choosesvoluntarily tothrowtheTerminals opentomanybranchesoftraffic,ittothatextentmakestheYardpublicWhatevermayhavebeentherightsofthecarriersinthefirst.instance;
~~~theAppellants cannotopentheYardformostswitching purposesandthendebarapar-ticu1arshipperfromaprivilege grantedtothegreatmassofthepublic.Louisville andNashville RailroadCo.,~sura~23SU.S,atj,g.
98InToledoEdison,theNRCLicensing Board"characterized theprincipal issueas'whetherdominantelectriccompanies inarelevantmarketareawhichdonotcompetewithoneanothermaymakecompetitive
- benefits, including coordination andpooling,available toeachotherwhiledenyingthesebenefitstosmalleractualorpotential competitive entitieswithinthemarket.'heBoardjudgedthisamatterofCommission concernbecause'thebenefitstobesharedordeniedincludepowergenerated fromproposednuclearstations[having]asubstantial competitive impact...intherelevantmarket."5NRCat141'nbroadoutline,thedecisionsustained inlargemeasurethecomplaining parties'llegations, rejectedapplicants'egal
- defenses, concluded thatlicensing thesefivenuclearpowerplantswouldcontinueorworsenasituation incon-sistentwiththeantitrust laws,andimposedremedialconditions ontheirlicensestoameliorate thoseconsequences."
ToledoEdisonCo.,10NRCat277-278.Afterathoroughreviewofapplicable legalstandards, theAppealBoardaffirmedtheLicensing Board,largelyongroundsthatundertheantitrust lawsapplicant utilities couldnotdenysmallersystemsbenefitstheyenjoythemselves.
- Moreover, toavoidobligations toothercitiesinPeninsular Florida,FPLmustestablish thatitsplanning, construction andoperation ofnuclearcapacitywasdoneindependently fromotherutilities; ifnot,itisengagedinaSection1and2conspiracy orcombination toinjureCitiesbydepriving themofessential resources.
Klor's,Inc.v.Broadwa-HaleStores,Inc.,359U.S.207(1959);UnitedStatesv.TerminalRailroadAssociation ofSt.Louis,244U.S.383(1912);Associated Pressv.UnitedStates326U.S.1(1945).Gamcov.Providence FruitProduce 99(1952);CitiesofAnaheimv.SouthernCalifornia EdisonCo.,~sura,pp.3-4ofSlipOpinion(Attachment 4).However,.asismanifest, andhasbeendetermined bytheFederalPowerCommission, FPL'sbaseloadgeneration wasplannedinthecontextofandinlightofextensive jointactionwithFloridaPowerCompanyandTampaElectricCompany.Seepp.26-29,~sura.Itsdocuments admit.extensive coordination throughout Peninsular Florida.Seegenerally, Statement ofFacts.Itcan-not.asserttheabsenceofjointactionofanaturethatwouldcreateobligations todealwithallcities.II.THECASELAWCONCERNING ANTITRUST ABUSESBYELECTRICUTILITIES CONFIRMSTHEUNLAWFULNATUREOFFPL'SREFUSALSTODEALWITHFLORIDACITIES.FPLwouldarguethatithasnoobligation tograntCitiesnuclearaccess,oratleastmorethanisprovidedbythesett,lement.
1/Alargebodyofcaselawconfirmsthatafirmwhichcontrolsessential facilities, suchasthenuclearfacili-tiesinthiscase,hasobligations undertheant,itrust lawstoIAswehavediscussed
~sura,PpLcannotlegallyhidebehindthesettlement toarguethata"situation inconsistent" doesnotexist,.Beingcontractual, ifthesettlement itselfgivesrisetopotential anticompetitive effect.sthismaybeconsidered.
However,theCompanycannotprecludereliefthatwouldbeinthepublicinterestunder$105(c)(6) byaskingtheBoardtoconsiderthesettlement asexonerat.ing it.sconduct.Otherwise, apartyfearinganadversefindingcanalwaysprevent.additional reliefbyadoptingaminimally acceptable policy.AstheSupremeCourtsaidinUnitedStatesv.GrinnellCor384U.S.563,577(1966):FOOTNOTECONTINUED ONNEXTPAGE 100permitfairaccesstothem.Moreover, whereafirmsuchasFPLhasapositionofeconomiccontrolinonemarket,itcannotleveragethatcontroltoadvantage itselfincompetition inthatorothermarketssuchasretailandbulkpowermarkets.'he leadingcaseisOtterTailPowerCo.v.UnitedStates,410U.S.366(1973),~sura.LikeFFL,OtterTailcontrolled majortransmission andgenerating facilities.
OtterTailrefusedtotransmitortosellwholesale powertoactualorpotential smallersystems.TheDistrictCourtheld,however,UnitedStatesv.OtterTailPowerCo.,331F.Supp.54,61(D.Minn.1971):thatdefendant hasamonopolyintherelevantmarketandhasconsistently refusedtodealwithmunicipalities whichdesiredtoestablish municipally ownedsystemsontheallegedjustification thattodosowouldimpairitspositionofdominance insellingpoweratretailtotownsinitsservicearea.Thecourtconcludes thatthisconductisprohibited bytheShermanAct.Xtiswellestablished thattheunilateral refusaltodealwithanother,motivated h~a~uroseto~re-~-"'"SouthernPhotoMaterials Co.,273U.S.359,47S.Ct.400,71L.Ed6841927);LorainJournalCo.v.UnitedStates,342U.S.143,72S.Ct.181,96L.Ed162(19~61FOOTNOTECONTXNUED FROMPREVXOUSPAGE:"Westartfromthepremisethatadequatereliefinamonopolization caseshouldputanendtothecombination anddeprivethedefendants ofanyofthebenefitsofillegalconduct,anditbreaksuporrendersimpotentthemonopolypowerfoundtobeinviolation oftheAct"OrastheCourtsaidinOtterTail(410U.S.at381),~uotinFTCv.NationalLeadCo.,350U.S.419,431(1956):"Thosecaughtviolating theactmustexpectsomefencing1neGiventheauthority andresponsibility oftheHRCtofashionappropriate relief,ifa"situation inconsistent" hadbeenestablished withoutthesettlement, byenteringintothesettle-menttheCompanycannotavoidbroaderrelief.
101"HereOtterTailrefusestosellpowertomunicipalities whichwouldtherebytakeretailpowerbusinessfromdefendant andrefusestowheelpowerforotherswillingtoselltothesemunicipalities.
Becauseofitsdomi-nantpositionOtterTailisabletodeprivetownsofthebenefitsofcompetition whichwouldresultfrommunici-pallyownedfacilities.
"Pertinent toanexamination ofthelawisa.reference tocasesexpressive ofthe'bottleneck theory'fantitrust law.Thistheoryreflectsinessencethatitisanillegalrestraint oftradeforapartytoforeclose othersfromtheuseofascarcefacility.
Herethetheoryfindsapplication inOtterTail'useofitssubtransmission lines.Oneauthority believes:
'TheShermanActrequiresthatwherefacilities cannotpractically bedupli-catedbywould-becompetitors, thoseinpossession ofthemmustallowthemtobesharedonfairterms.'Thisstatement epitomizes theholdingsinfederalcaseswhichhaveestablished theprinciple:
UnitedStatesv.TerminalRailroadAssoc.,224U.S.383,32S.Ct.507,56L.Ed.8101912;Gamco,Inc.v.Providence FruitSProduceBuildinInc.,194F.2d4841stCir.1952PackagedProrams,Inc.v.WestinhouseBroadcastin Co.,255F.2d7083dCir.1958;SixTwent-NineProductions, Inc.v.RollinsTelecasting, Inc.,35F.2d4785thCir.1966)."Thebottleneck principle isapplicable toOtterTail.Itscontrolovertransmission facilities inmuchofitsserviceareagivesitsubstantial effective controloverpotential competition frommunicipal ownership.
Byitsrefusaltosellorwheelpower,defendant, preventsthatcompetition fromsurfacing."
(emphasis supplied; foot-noteomitted).
Exceptforremanding forreconsideration ofthe"shamlitigation" issue,theSupremeCourtaffirmedonappeal:"Therecordmakesabundantly clearthatOtterTailuseditsmonopolypowerinthetownsinitsserviceareatoforeclose competition orgainacompetitive advantage, ortodestroyacompetitor, allinviolation oftheantitrust laws.SeeUnitedStatesv.Griffith, 334U.S.100,107.TheDistrictCourtdetermined thatOtterTailhas'astrategic dominance inthe 102transmission ofpowerinmostofitsservicearea'ndthatitusedthisdominance toforeclose potential entrantsintotheretailareafromobtaining electricpowerfromoutsidesourcesofsupply.331F.Supp.,at60.Useofmonopolypower'todestroythreatened competition's aviolation ofthe'attempttomonopolize'lause of$2oftheShermanAct.LorainJournalv.UnitedStates,342U.S.143,154;EastmanKodakCo.v.SouthernPhotoMaterials Co.,273U.S.359,375OtterTailPowerComanv.UnitedStates,'sn ra,410U.S.at377(1973).TheCities'llegations againstFPLarelikethosefounddeterminitive inOtterTail,including allegedrefusalstodeal,attempted acquisitions ofmunicipal systemsandforeclosure ofnewentrants.
Cities'llegations havebeenvindicated byactualFERCfindingsmadeagainst,theCompany.OpinionNos.57and57-AoftheFederalEnergyRegulatory Commission haveidentified andcriticized FPL'srefusalstosellwholesale powerandtransmission as"unjustandunreasonable underthestandards ofSections205and206oftheFederalPowerAct,particularly becauseoftheiranticometitiveeffects".
OpinionNo.57-A("OpinionandOrderDenyingRehearing",
October4,1979,page1)(emphasis supplied).
InOpinionNo.57theCommission found:"I:Taherecorddocuments twentyyears'orth offranchise competition betweenFP&Landthemunicipal utilities locatedwithinitsserviceterritory.
AtvarioustimesFP&Lhaspromotedacquisition orwillingly receivedmunicipal proposals.
Most,ifnotall,ofthoseincidents occurredwhenthemunicipal systemswerearranging newbulkpowersuppliesfromtheoptionsofself-generation, wholesale purchasefromFP&L,andretailpurchasefromFP&Lafterfranchise disposition.
TheCompanyhasnot,su'cceeded inmanyacquisitions, becausethemunicipal candidates solvedtheirsupplyproblemsbyaddinggeneration.
However,therecord 103stronglyindicates thatself-generation isbecominglessandlessattractive tothepointwhereFPGL'switnessGerberhasdescribed smallscalegeneration asananachronism.
-SinceFPtNLcontrolstheremaining twooptions,weconcludethatitswholesale monopolypowercanonlyincrease, and,thereafter, itsretailpoweraswell.See,BorouhofEllwoodCitv.PennslvaniaPowerCo.,D.C.Pa.1979462F.Supp.1343,1346.FloridaPoweraLihtComan,FERCOpinionNo.57,~sura,32PUR4that330.Thus,likeOtterTail,FPL'srefusalstodealaideditsattemptstorepresscompetition forretailsales.Further,likeOtterTail,FPLhasrefusedtoprovidetransmission voluntarily formunicipal utilities.
Transmission isnecessary forautilitytosecurealternate powersupplies.
Priorto1975FPLrefusedtotransmitforCitiesatall.Sincethen,ithasagreedtolimitedtransmission onrestricted terms.FPL'sresistance isevidenced byFPL'scontinuing resistance tofilingatransmission tariff.1/Ithassoughtacquisitions.
Inshort,ithasengagedinsimilarmonopolizing conducttoOtterTail.SeeStatement ofFacts,PartZl,pp.43-89,~sura,andOpinionNo.57,~sura.Afterthoroughexamination ofjudicialauthorities, theNRCcasesholdthatwhereacompanyusesitsdominanteconomicpower"topreserveorextendanexistingmonopoly, toforeclose actualorpotential competition, togaincompetitive advantage, ortodestroycompetitors" itrunsafoulofthelaw.Consumers Power1/TheCompanyhasappealedFederalEnergyRegulatory Commission ordersthatitfileitstrans'mission policiesintariffformandstillhasnotfiledatariffcoveringotherthan"interchange" services.
FloridaPowerRLightCo.v.FERC,CA5No.80-5259(April4,1980.See~sura 104~Coman,~sura,SNRCat922,citinciOtterTailPowerCo.v.UnitedStates,~sura,andUnitedStatesv.Griffith,~sura,334U.S.at107.Accord,ToledoEdisonCo.,~sura,10NRCat376-378,holdingillegaltheexerciseofpowertocontrolamarket,whichresultsinbarrierstocompetition anddoesnotarisemerelyfromsuperiorbusinessskillsorbusinessacumen.Inthecontextofresolving questions oflegalentitlements ofsmallersystems'btaining accesstonuclearunits,theNRC'sAppealBoardinConsumers heldthatafirmwithamonopolysharewasnot"freeofanyobligation todealwiththesmallutilities."
Tobeginwith,therearecircumstances inwhichtheantitrust lawsimposeanaffirmative dutyonbusinessfirmstodealwiththeircompetitors.
Asevidenced bydecisions following
- Colcaate, unilateral refusalstodealbyafirmwithadominantmarketpositionhaveregularly beenheldtoconstitute either'monopolization'r an'attempttomonopolize'n violation ofSection2oftheShermanAct.501/InEastmanKodakCo.v.SouthernPhotoCo.,~sura,forexample,KodakviolatedSection2byrefusingtosellexceptatretailpricestotheplaintiff, aformerretaildistributor ofKodakproducts.
502/(Kodak,alreadyholdingamonopolyof501/Ourdiscussion excludescasesarisingunderSections1or2oftheShermanActinvolving conspira-ciesorconcerted refusalstodeal.502/TheCourt'sdecisionisunclearonwhetherKodakwasguiltyofmonopolization oranattempttomonopolize.
TheCourtwasaffirming ajuryverdictanditsdiscussion wasbrief.Itstated:althoughtherewasnodirectevidence-astherecouldnotwellbe-thatthedefendant's refusaltoselltotheplaintiff wasinpursuance ofapurposetomonopolize, wethinkthatthecircumstances disclosed intheevidencesufficiently tendedtoindicatesuchpurpose,asamatterofjustandreasonable inference towarrantthesubmission ofthisquestiontothejury.273U.S.at375.
105production andat.wholesale, wasexpanding intotheretailmarketandhadpurchased otherretailoutletsinthearea.)503/InLorainJournalCo.v.UnitedStates,~sura,thesolenewspaper xnatownwasguiltyofanattempttomonopolize byrefusingtoselladver-tisingspacetothosewhoadvertised onthetown'snewradiostation.InPackaedprorams,Inc.v.WestinhouseBroadcastin
,~sura,plaintiff, anadver-txsxngagency,averrethatWestinghouse, owneroftheonlytelevision stationinpittsburgh, wasattempting tomonopolize theadvertising marketbyrefusingtoaircommercials producedbytheplaintiff.
(Westinghouse alsoproducedcommercials.)
Thecourtheldthat.thiscomplaint statedaclaimcognizable underSection2oftheShermanAct..Inafactualsituation paralleling packaedprograms, thecourtinRollinsTelecastin
~sura,reversedsummaryjudgmentforthedefendant tele-vxsxonstation,andinOtterTailPowerCo.v.UnitedStates,~sura,theSurpemeCourtheldOtterTailguiltyofmonopolization whenthatvertically integrated electricutilityrefusedtowheelpowerforandtosellwholesale powertomunicipalities seekingtodisplaceit.astheirretaildistributor ofelectricity.
Inaword,astheSecondCircuitrecentlyruled,casessuchasLorainJournalandEastmanKodak504/are503/TwocasessimilartoKodak,i.e.,awholesale supplier-monopolist foundguiltyofmonopolization byrefusingtodealwithindependent retailers infavorofanintegrated system,areposterExchange, Inc.v.NationalScreenServ.,431F.2d3345thCir.1970),cert.denzed,401U.S.912(1971)andUnitedStatesv.Klearflax LinenLooms,63F.Supp.32(D.Minn.1945Seealso,WoodsExloration&producinCo.v.AluminumCo.ofAmerica,438F.2d1286,1308fn9(5thCir.504/Thecommonthreadrunningthroughtheseandsimilarcasesisthepossession ofamonopolyoranearmonopolyinarelevantmarketbythecompanyrefusingtodeal.Thus,forexample,Kodakpossessed amonopolyatthewholesale level;theJournalwasthesolenewspaper intownandpossessed amonopolyoveradvertising inLorainuntiltheradiostationbeganbroadcasting; Westinghouse Broadcasting andRollinsTelecasting possessed amono-poly-viaFCClicensing
-inlocaltelevision QUOTEDFOOTNOTECONTINUED ONNEXTPAGE
106SupremeCourtdecisions
'whichdostandfortheproposi-tionthatwhereasingletraderrefusestodealinordertoenhanceitsmonopolyposition, at.Sherman Act]Section2violation maybefound.'nternational RailwasofCentralAmericav.UnitedBrands,532F.2d231,239,certiorari denied,50L.Ed.2d100(1967)~505/QUOTEDFOOTNOTECONTINUED FROMNEXTPAGEbroadcasting; andOtterTailheldamonopolyoverretaildistribution ofelectricity.
Ineachcase,throughuni-lateralrefusalstodeal,themonopolist hadusedits.dominanteconomicpowerineffortseithertomaintainitscurrentmarke'tposition(e.g.,OtterTail)ortocompanies ranafouloftheSupremeCourt'swarninginGriffiththat.'useotmonopolypower,howeverlawfullyacguxred, toforeclose competit.ion, togainacom-petitiveadvantage, ortodestroyacompetitor isunlawful.'34 U.S.at107.AsJudgeWyzanskicogentlyobserved:
'Anenterprise thatbymonopolizing onefield,securesdominantmarketpowerinanotherfield,hasmonopolized thesecondfield,inviolation of$2oftheShermanAct.'nited Statesv.UnitedShoeMachine~Cor.,~sura,110F.Supp.at346.505/WhetherConsumers'efusal ofaccesstoitstransmission linespresentsa'bottleneck'ituation isirrelevant inouranalysis.
Suchdenialsmaybetreatedasinstances ofrefusalstodeal.OtterTailPowerCo.v.UnitedStates,~sura,410U.S.at371;Nullisv.ArcoPetroleum Cor.,502F.2d290,296fn.19~7thCir.1974)perStevens,Cir.J.);seeNote,RefusalstoDealbVerticall InteratedMonoolists,87Harv.L.Rev.17201974.TheLicensing Board'sassumption, sup-portedbyConsumers, thatbottleneck casesmustinvolveconspiracies (see2SRCat76)isamisreading ofOtterTail.6NRCat1026-1028.
Othercasesconcerning theutilityindustrystronglysupporttheobligation ofelectricutilities todealwithsmallercompeting systems.InMunicialElectricAssociation ofMassachusetts v.SEC,413F.2d1052,1055(D.C.Cir.1969),the 107basicissuewaswhetherapprovalofanacquisition underthePublicUtilityHoldingCompanyAct,Section10,15U.S.C.$79j,shouldbegiven"inamannerwhichwouldgiveMunicipals anopportunity onreasonable termstoobtainaccesstothisnewlowercost[nuclear]
power."TheCourtcharacterized theissueintermsoftheutility's blockingaccesstonuclearbaseloadpowerand"...low-costbulk-power suppliesandtransmission services."
413F.2dat,1058-ItwasheldthattheSECcouldnotgranttheutility's requestforanexemption fromtheHoldingCompanyActwithoutconsideration oftheclaimsofanticompetitive conductraisedbytheCities.InGainesville Utilities Det.andCitofGainesville, Floridav.FloridaPowerCor.,40FPC1227(1968),affirmed,,
402U.S.515(1971),FloridaPowerCorporation refusedtointerconnect withtheCityofGainesville, atleastabsenta"standby" charge;theCompanyrefusedtosupplybackuppowerbecausetheinterconnection wasmorevaluabletoGainesville thantoFloridaPowerCorporation.
Inaffirming aFederalPowerCommission orderinfavorofGainesville, theSupremeCourtsaid:"Itiscertainly truethatthesameserviceorcommodity maybemorevaluabletosomecustomers thantoothers,intermsofthepricetheyarewillingtopayforit.Anairplaneseatmaybringgreaterprofit.toapassenger flyingtoCalifornia tocloseamillion-dollar businessdealthanoneoflyingwestforavacation; asaconsequence, theformermightbewillingtopaymoreforhisseatthanthelatter.Butfocusonthewillingness orabilityofthepurchaser topayforaserviceistheconcernofthemonopolist, notofagovernmental agencychargedbothwithassuringtheindustryafairreturnandwithassuringthepublicreliableandefficient service,atareasonable price."
108402U.S.at528.1/Asinterpreted andappliedbytheDistrictofColumbiaCircuit,theSupremeCourt'sdecisioninGainesville requiresthatmunicipals shouldnotbetreateddiscriminatorily "ontermsmoreonerousthanthoserequiredofotherinvestor-ownedutilities."
CitofLaafette,La.v.SEC,454F.2d941,952(D.C.Cir.1971),affirmed, subnum.GulfStates,infra.InGulfStatesUtilities Co.v.FPC,411U.S.747(1973),certainmunicipal systemsallegedthatGulfStatesUtilities Companyand.othershadblockedtheiraccesstogeneration, transmission andpooling.Theysoughtantitrust conditions toaGulfStatesfinancing underSection204oftheFederalPowerAct,16U.S.C.$824c.TheSupremeCourtreversedtheFPC'sfailuretoconsidertheseallegations ofanticompetitive conduct.CitingthehistoryoftheFederalPowerAct,theSupremeCourtheldThisstatutewasenactedaspartofTitsIIofthePublicUtilityActof1935,49Stat.803,850.TheActhadtwoprimaryandrelatedpurposes:
tocurbabusivepractices ofpublicutilitycompanies bybringingthemundereffective control,andtoprovideeffective federalregulation oftheexpanding businessoftransmitting andsellingelectricpowerininterstate commerce.
49Stat.803-804,847-848;S.Rep.No.621,74thCong.,1stSess.,1-4,17-20;H.R.Rep.No.1318,74thCong.,1stSess.,3,7-8;JerseCentralCo.v.FPC,319U.S.61,67-68(1943;seeNortAmericanCo.v.SEC,327U.S.686(1946~TheActwaspassedinthecontextof,andinresponseto,greatconcentrations ofeconomicandevenpolitical power1TheComma.sszon notetatrespondent hadnotincludedacom-parable[backupservice]chargeinanyoftnecontracts forinterconnection voluntarily negotiated withmembersoftheFloridaOperating Committee."
402U.S.at523.Thus,Gainesville providesdirectSupremeCourtsupportforthepropo-sitionthatFPLhasobligations todealwithcities(including thoseoutsideitsretailservicearea)onasimilarbasistoitsdealingswithotherFloridautilities.
109vestedinpowertrusts,andtheabsenceofantitrust enforcement torestrainthegrowthandpractices ofpublicutilityholdingcompanies.
SeeS.Rep.No.621,~sura,at11-12;UtilityCorporations
-SummaryReport,70thCong.,1stSess.,S.Doc.Ho.92,Part73-A,pp.47-54;79Cong.Rec.8392(1935)."411U.S.at758.AstheMishawaka DistrictCourtputit,.[F]ederal antitrust lawrecognizes complementary obligations onpersonspossessing scarceresources orfacilities thatareessential toeffective competition."
CitofMishawaka, Indianav.AmericanElectricPowerCo.,Inc.,~sura,465F.Suppat13361/~Theproblemhereissimilartothatinvolvedwiththeinter-connection ofspecialized commoncarrierstotheAmerican6Telephone 8Telegraph network,wheretheThirdCircuitupheldaFederalCommunications Commission decisiononthebasisofpro-competitive principles, holdingthat:1Also,amonopolist' "exclusion ofitscompetitors fromafscarce]resourceorfacilityisparticularly condemned bytheantitrust laws.UnitedStatesv.OtterTail,~sura,331F~Suppat61."Id.,465F.Supp.1320,1331(N.D.Ind.1979),affirmedin~art,vacatedin~art,616F.2d976(7thCir1980.).WhileFPL'soperation inthecontextoftheelectricutilityindustrymaybetakenintoaccountinsomecontexts, itis"nowsettledaxiom"toquotetheCourtinMishawaka, thattheantitrust lawsarefullyapplicable totheelectricpowerindustry.
CitofMishawaka v.IndianaaMichiganElectricPowerCo.,560F.2d1314,1321(7thCir.1977,cert.denied,436UUS.2(1978).ToledoEdison,~sura10NR,Cat.BY-WE,323-3270 110whereacarrierhasmonopolycontroloveressential facilities wewillnotcondoneanypolicyorpracticewherebysuchcarrierwoulddiscriminate infavorofanaffiliated carrierorshowfavoritism amongcompetitors."
BellTelehoneCo.ofPennslvaniav.FCC,503F.2d1250,1262,1271-1273 (3dCir.1974),cert.denied,422U.S.1026(1975).And,ofcourse,PloridaPower8LihtCo.,PERCOpinionNo.57,~sura,32PUR4th313,Providesamostrecentaffirmation oftheseprinciples.
OtterTail,citedabove,isconsistent withandreinforced byotherbottleneck monopolycases.Thesecases1/confirmthatautility-orotherbusinessconcern-thatcontrolsessential facilities isobligated todealinthosefacilities onnon-discriminatory termsand,further,thatitisobligated nottotakeadvantage ofthestrategic dominance resulting fromcontrolofsuchfacilities togainanadvantage inothermarkets.Porexample,PPLmaynotrestrictaccesstoitsnucleargeneration ortransmission facilities toothers,whileatthesametimeusingtheeconomicadvantages itobtainsfromsuchrestriction in1E...OtterTaxiPowerCo.v.UnitedStates,410U.ST366T1973;UnitedStatesv.TerminalRailroadAssociation, 244U.S.Uo.v.UnitedStates,342U.S.143(1951);Silverv.HewYorkStockExchane,373U.S.341(1963).Hechtv.Pro-Football, Inc.570F.2d9821977),cert.denied,436U.S.956(1978;GamcoInc.,~sura.
competition forretail,wholesale orcoordination transactions.
1/Thebottleneck theoryisinrealityashorthand expression forclassicSection1and2analysisthatfirmshavingmonopolypowermaynotusethatpowertogainadvantage inasecondmarket,lineofcommerceorfactorofproduction.
Cf.,Consumers powerComan,~sura,6RRCat1028,n.505,quotedat.pp.108-110,~sura.And,astheAppealBoardheldinConsumers theuseoftheCompany's monopolypoweranditspotential com-petitiveinjurytosmallersystemsnecessitated antitrust licenseconditions.
Consumers PowerComan,~sura,5BRCat1095-1095.
Thefacts{discussed
~sura)compeltheconclusion thatPBLhasmonopolypower,whichFPLhasusedtoenhanceitscompetitive positioninretailandwholesale markets.However,theSupremeCourthasheldinGriffiththatitisimpermissible forafirmtousemonopolypowertogainacompetitive advantage, evenwheretheacquisition ofsuchmonopolypowerisinnocent(aswherethedefendant ownstheonlymoviehouseintown):ET]heuseofmonopolypower,howeverlawfullyacquired, toforeclose competition, togainacom-petitiveadvantage, ortodestroyacompetitor, isunlawful."
334U.STat107'FPL,whichcontrolsthreeofFlorida's four'uclear unitsandisplanningafourth,canhardlydenytheiressential nature.FPL'sBoardChairman, MarshallMcDonaldhaspubliclycharacterized nuclearenergyas"anessential anddesirable sourceofelectricpower."App.D325.
112AstheSecondCircuitsaidrecentlyinKodak(603F.2dat.275),discussing Section2:"Thisconclusion appearstobeaninexorable interpreta-tionoftheantitrust laws.Wetoleratetheexistence ofmonopolypower,werepeat,onlyinsofarasnecessary topreservecompetitive incentives andtobefairtothefirmthathasattaineditspositioninnocently.
Thereisnoreasontoallowtheexerciseofsuchpowertothedetriment ofcompetition, ineitherthecontrolled marketoranyotherThus,afabricator ofingots,wholawfullyobtainedadominantpositionoverthemarketforthesaleofrawingotscouldnotusethatpositionofdominance toimproveitspositioninsellingproductsmadefromtherawmaterialthroughchargingcompetitors higherpricesfortherawingotsthanthedominantsellers'nternal transactional pricetoitsownfabricating operations.
UnitedStatesv.AluminumComanofAmerica,148F.2d.416(2dCir.1945).Accord,UnitedStatesv.Loew',Inc.,371U.S.38(1962);LorainJournalCo.v.UnitedStates,342U.S.143(1951);EastmanKodakv.SouthernPhotoMaterials Co.,273U.S.359,375(1927).Cf.,ConwaCororationv.FPC,426U.S.271(1976).Similarly, apublicutilitythatsellselectricpoweratretailcannotrefusetosellsuchpoweratwholesale toacom-petitorinordertoretainorimproveitsshareoftheretailelectricmarket.OtterTailPowerCo.v.UnitedStates,410U.ST366(1973);FloridaPowerSLihtComan,OpinionNo.57,32PUR4th313(1979)(Attachment 3).SeeGulfStatesUtilities Co.v.FPC,411U.S.747(1973).Inthiscase,itisnotaquestionof~~~price:Except,asprovidedforinthesettlement license 113conditions FPLrefusestodealwithCitiesconcerning nuclearpowersupplyatall.1/Thebottleneck monopolytheoryisbaseduponordinaryprin-ciplesoffairness.
Onewhooperatestheonlybridgeatarivercrossing; ortheonlyinn,necessary tohumancomfortonahighway;orastockmarketexchange, throughwhichthebulkofthestocktradingisdone;oramovietheaterchainwiththeonlytheaterintown,maynot,undertheantitrust laws,takeadvantage ofthesituation todenycompetitors access.Acompanymaybeentitledtoprofitfromthatfacility; butanticompetitive dealingandrefusingtodealiswrongful, notonlyundertheantitrust lawsbutalsounderregulatory statutes.
SeeGulf.7ElectricAssociation ofMassachusetts v.SEC,413F.2d1052(D.C.Cir.1969);Consumers PowerCo.(MidlandUnits1and2),ALAB-452, 6MRC892(1977).1FPLrefusedtodealinwholesale powerevenwithsystemsit.considers initsservicearea,untilitwasforcedtodosobyFERCorder(FloridaPoweraLihtCo.,FERCOpinion57,~sura32,PUR4th313).Thatwasanticompetitive, astheFederalEnergyRegulatory Commission held.Suchwholesale saleswouldincludenuclearpower,indilutedformaspartofthewholesale powermix.However,FPLmadenumerousattemptstoholdoracquiresmallersystemsonthepromotional basisthatFPL'snuclearpowermadeFpL'selectricity moreeconomical.
See,pages55-55,~sura.Thus,FPLwouldhavesoldelectricity to.theCities'ustomers atretail(i.e.,thegeneration andtransmission
~lusthedistributaon),
butitwouldnotsellatwholesale alone(i.e.,generation plustransmission).
Thisrefusaltosellwholesale powerisnotonlyanact,ofmonopolization, butaclassictyingarrangement, aswell.International BusinessMachinesv.UnitedStates,298U.S.131(1936,requzrxng ununxngocompanytransactions).
Accord,International SaltCo.v.UnitedStates,332U.S.392(19~47;NorthernPacificRailroadCo.v.UnitedStates,365U.S.1(1958);UnitedStatesv.Loew's,Inc.,371U.S.38(1962).
114Thus,the,lawisnotblindtotheinherentcontrolwhichgoeshandinhandwiththedomination offacilities necessary forbusinessinaparticular industry.
Forexample,whererailroads alsoowncoalmines,iftherailroads couldpricetransportation toequalizemarketpricesforcoal,theywouldadversely affectcompetition attheretaillevel.UnitedStatesv.ReadinCo.,253U.S.26(1920).Accord,Baltimore andOhioRailroadCo.v.UnitedStates,("ChicagoJunctionCase")264U.S.258(1924);1UnitedStatesv.AluminumCo.ofAmerica,148F.2d416(2dCir.1945),Similarly, anOtterTail,Consumers PowerorFloridaPowerSLightmaynotlegallyrefusecompetitors accesstonuclearpowerortobulktransmission, especially inordertoaffectcompetition ontheretaillevelortopreserveorextendwholesale powermarkets.1/Theultimatethrustofthe"bottleneck" casesisthatamonopolist maynotusehispositiontoextendthatmonopoly.
Sucharuleevenappliestopatents-monopolies grantedbythestate.2/1/Ifnuclearorbaseloadgeneration weretreatedasa"factorofproduction" ofelectricity ratherthantheendproduct,itwouldstill,besubjecttotheprohibition againsttheillegaluseofmonopolygower.E.cC.,UnionCarbide6CarbonCor.v.Nisle300F.2d561,585(10thCir.1962,~aealdasmassed, 371U.8.801(1963).SeeUnitedStatesv.YellowCabCo.,332U.ST218.(1947).PgFOOTNOTECONTINUED ONNEXTPAGE2/"ThetestofmisuseI:ofapatent]iswhetherapatentee's agreements orotherconductexpandsthepatentmonopolybeyondthescopepermitted bytheConstitution ortheCongress, regardless ofwhetherthereisanysubstantial lessening ofcompetition orothereffectnecessary toafindingofantitrust violation."
Antitrust LawDeveloments(American BarAssociation 1975),p.328.Thus,UnitedStatesv.NationalLeadCo.,332U.S.319(1947)upheldcompulsory licensing ofoutstanding atentsinexchaneforreasonable royalties topreventuseof 115III.STATEMENT CONCERNING RELIEF.Unlessasettlement canbereachedbaseduponBoardrulingsorotherconsiderations, FloridaCitiesbelievethatahearingwillberequiredtodetermine appropriate relief.Citieswould,ofcourse,bewillingtoconsiderstipulations astoprocedures fornarrowing thescopeofsuchhearingorsupporting otherpro-ceduresrecommended bytheparties.FloridaCitiesbelievethatcounselforFPLisawareoftheCities'ettlement positions.
However,sincesettlement hasnotbeenreached,itmay,beusefulforCitiestosetforthprincipal areasofdisagreement withthesettlement licenseconditions inthecontextofalitigated proceeding.
1.Thesettlement licenseconditions limitrelieftocer-tainnamedCities,andexcluderelieftootherCitiesinPeninsular Florida,including thosewhohaveactivelypressedtheirrightsbeforethisforumortheDistrictCourt.FOOTNOTECONTINUED FROMPREVIOUSPAGE:patentsformonopolization.
Thepatentcasesholdthatrestrictive activities whichwouldotherwise belawfulbythosenothavingpatents(i.e.,thosenothavingmonopolypower),forexample,acontracttorequirethebuyertobuyallofcertaingoodsfromaseller,becomesmonopolistic whenengagedinbypatentownersorothermonopolists.
E.g.,AnsulCo.v.Unircal,lnc.,448F.2d872(2dCir.,cert.dented,404U.S.10181972;Strcnv.GeneralElectricCc.,305F.Supp.1084(N.D.Ga.1969,affirmedercuriam,434F.2d1042(5thCir.1970),cert.denied,403U.S.906(1971).SeeZenithRadioCor.v.Hazeltine
- Research, Inc.,395U.S.100,133-136(1969);Brulottev.TsCo.,39U.S.29(1964).Normayapatent,holderdiscriminate inthelicense-termsofferedtopotential licensees, PeelersCo.v.Wendt,260F.Supp.193(W.D.Wash.1966).CompareFPL'ssaleofnuclearcapacitytoOrlando,butnottoKissimmee orSt.Cloud.
1162.Theamountoftotalnuclearcapacityavailable toCitiesprovideslessthananuclearloadratiosharetotheCitiesascomparedwithFPL.IttotallyexcludesCities'ccess totheadvantage ofFPL'snuclearmonopolyfromitsoperating plants.1/1Reliefcouldbeorderedwhichprovideslessthananownership sharefromoperating units,suchasunitpowersalesataprofit.toFPL,additional capacityfromSt.Lucie2,etc.Conditions couldtakeintoaccountfactorssuchasFPL'sneedforcapacity, FPL'srefusalstodealwithCities,including afterrequestsweremade,andCitieslateintervention here.Withregardtothelatter,however,FloridaCitiesdeemFPL'ssubsequent can-cellation ofitsSouthDadeunitandrefusalstograntCitiesaccesstoSt.Lucie2relevant.
Thesituation issimilartothatinConsumers PowerComan(MidlandUnits1and2),ALAB-452, 6NRC892,10821977where:Eventssubsequent to1971confirmthatthecompany's policyatthetimetherecordclosedwastodenythesmallutilities accesstonuclearpower.Firstinearly1971,justbeforethesmallutilities requested par-ticipation inMidland,Consumers'rojected peakloadfor1980was7,790MW:by1973itsestimated demandfor1980haddroppedto7,020MW;andbymid-1974itdroppedfurtherto5,870.MW.
Althoughin1971Consumers mayhaverequireduseoftheentireoutputfromMidlandtomeetprojected loadgrowthonitssystem,theoutlookchangeddrastically inashortperiodoftime.Ratherthanengageinnegotiations withthesmallutilities forsaleofsomeoftheexcessplannedcapacity, however,Consumers voluntarily delayedconstruction ofothergenerating unitsoriginally plannedtocomeonlinein1978and1982.Inotherwords,thecompanyhjascon-tinuedtoplanitssystemasthoughitneverreceivedtherequestsfromthesmallsystems.(footnotes omitted)InFt.PierceUtilities AuthoritoftheCitofFt.Piercev.UnitedStatesNuclearReulatoCommission, D.C.Cir.No.80-1099,theNuclearRegulatory Commission tookthepositioninbriefandinoralargumentthatantitrust conditions inaSection105(c)proceeding "isnotlimitedtothefacilitythatisthesubject,oftheproceeding."
Brief,p.26(July1980).WhileFPLopposedsuchposition, theCommission's statement astoitsauthority isbinding.
1173.Wholesale powerprovisions areunclear.Theypermitresalerestrictions andlimitation ofwholesale powerrights,ifacitybuysnuclearcapacityorusesFPLtransmission.
4.FPLisnotrequiredtofileatransmission tariffattheFederalEnergyRegulatory Commission.
Xtcancontinuetoecono-micallydisadvantage Citiesandimpedemunicipal powersupplybyfailingtoprovideforeitherajointtransmission rateortoprovideforfull,non-discriminatory powerpooling.Citiescanbedisabledconcerning newtransmission toGeorgia.5.Thelicenseconditions permitFPLtocontrolcertaintermsofnuclearplantparticipation adversetotheCities.6.Thelicenseconditions limitCities'ccess tofutureFPLnuclearplantsbasedupontheirnuclearloadratioshare,including theirshareinthirdpartynuclearplants.7.Noprovision ismadeforsharinginterconnection costs.Theabovestatement isnotintendedtowaiverightstootherrelief.
118CONCLUSION 1~Basedupontheforegoing, theBoardshouldgrantresjudicataorcollateral estoppeleffectto(a)Gainesville Utilities Det.v.FloridaPower&LihtCo.,573F.2d292(5thCir.1978),cert.denied,344.U.S.817(1978);(b)FloridaPower5LihtCo.,OpinionNos57and57-A,32PUR4th313(August3,1979),aealdismissed; FloridaPowerLihtCo.v.FERC,D.C.Cir.No.79-2414(April25,1980);and(c)FloridaPower5LihtCo.,37FPC544(1967),reversed, 430F.2d1377(5thCir.1970),reversed, 404U.S.453(1972).2.Basedupontheforegoing, theBoardshouldfindthata"situation inconsistent withtheantitrust laws"existsunlessFPLraisesmaterial, disputedfactualissuesthatrequirehearings; ifFPLdoesraisesuchissues,theBoardshouldlimitfurtherdiscovery (a)toissuesthatremainindisputeand(b)toadditional discovery fairlyrequiredinlightofdiscovery thathastakenplacetodate.Additional discovery shouldnot.overlapdiscovery inGainesville ReionalUtilities etal.v.Florida3.TheBoardshouldpermit,answersbyotherpartiesandareplybyFloridaCities.
-119-4.TheBoardshouldconveneaprehearing conference todiscussmattersraisedbythesepleadings andfuturescheduling.
Intheeventthatsettlement doesnotappearlikely,ascheduleshouldbeadoptedforfurtherproceedings.
Afterrulingsrelatingtomotionsforsummarydisposition andfurtherdiscovery, ifrequired, ahearingscheduleshouldbeadopted.Respectfully submitted, RobertA.JablonAlanJ.RothDanielGuttmanAttorneys fortheGainesville RegionalUtilities, theLakeWorthUtilities Authority, theUtilities Commission ofNewSmyrnaBeach,theSebringUtilities Commission, andtheCitiesofAlachua,Bartow,FortMeade,KeyWest,LakeHelen,MountDora,Newberry, St.Cloud,andTallahassee, FloridaandtheFloridaMunicipal Utilities Association RobertA.JionMay27,1981LawOfficesofSpiegel8McDiarmid 2600VirginiaAvenue,N.W.Washington, D.C.20037(202)333-4500 UNITEDSTATESNUCLEARREGULATORY, COMMISSION BEFORETHEATOMICSAFETYANDLICENSING BOARDIntheMatterof))FloridaPowerSLightCompany)DocketNo.50-389A)(St.LucieNuclearPlant,Unit1Vo.2))MOTIONTOESTABLISH PROCEDURES, FORADECLARATION THATASITUATION INCONSISTENT WITHTHEANTITRUST LAWSPRESENTLY EXISTSANDFORRELATEDRELIEFIndexofAttachments ATTACHMENT 1MaterialFactsNotGenuinely InDisputeATTACHMENT 2Memorandum Re:Discovery BetweenCitiesandFPLATTACHMENT 3ExhibitAtoAttachment 2-JulyJuly2,1980LettertoE.GregoryBarnesfromMartaA.Manildi.andJosephL.VanEatonRe:NRCDocketNo.50-389A-Discovery ReFloridaPowerandLihtComan,OpinionNo.57,FederalEnergyRegulatory Commission DocketNos.ER78-19(PhaseI)andER78-81(August3,1979)FloridaPower&LihtComan,OpinionNo.57-A,FederalEnergyRegulatory Commission DocketNos.ER78-19(PhaseI)andER78-81(October4,1979)ATTACHMENT 4ATTACHMENT 5Memorandum ofFloridaPower&LightCompanyConcerning TheScheduleForFurtherGainesville, etal.v.FloridaPowerRLiht~Comany,S.D.Fla.No.795101C-ZVJL-K-OrderSpecifying CertainFactsToBeWithoutSubstantial Controversy, AndRequiring FurtherBriefingOnOtherIssues,CitiesofAnaheim,Riverside, Bannin,ColtonandAzusa,California, v.SouthernCalifornia Edison~Coman,D.C.Cal.No.CV-78-810-MML ATTACHMENT 1MATERIALFACTSNOTGENUINELY INDISPUTEl.FPLcontrolsthreeoutofthefouroperating nuclearunitsin.Peninsular Floridaandisconstructing itsfourth.FPLhasaneffective monopolycontroloversuchfacilities there,whichithasusedtoadvantage itselfincompetition.
Exceptasprovidedundersettlement licenseconditions inthiscase,FPLrefusestograntFloridaCitiesaccesstothesefacilities.'.
FPLhas(a)dominance inPeninsular Floridaand(b)amonopolyinitsretailserviceareaovereconomicbaseloadgeneration (including nucleargeneration),
transmission andcoordination.
SeeStatement ofFactsandFERCOpinionNos.57and57-A.3.FPLhasaretailservicemonopolyineasternandsouthernFlorida.FPL'spresentorpastrefusalstodealinnuclearandbaseloadpower,wholesale power,transmission andcoordination haveadvantaged itincompetition topreserveandextend.itsretailmonopolyandincompetition forwholesale orIcoordination.
OpinionNo.57,Statement ofFacts.4.FPLhasactedtorestrictordenyCitiesaccesstobase-loadgeneration (including nuclear),
transmission, wholesale powerandcoordination.
SeeGainesville Utilities Det.v.FloridaPower8LihtCo.,FERCOpinionNo.57,Statement ofFactsandpositions takenbyFPLinthiscase.
5.APeninsular Floridageographic marketexistsforwhole-saleandcoordination powersupply.FPLisinterconnected withotherelectricsystemsinFlorida,including FloridaPowerCorporation, TampaElectricCompanyandothermunicipally andcooperatively operatedutilities.
FPLhasreceivedsubstantial benefitfromitscoordination withtheseotherutilities intheoperation orplannedoperation ofitsnuclearandotherbaseloadgenerating units.SeeStatement ofFacts,FPCOpinionHo.517..6.FPLwaspartofaconspiracy withFloridaPowerCorporation (FloridaPower)todividethewholesale powermarketinFlorida.SeeGainesville Utilities Det.v.FloridaPower&7.FPLandthemunicipal utilities locatedwithinitsretailserviceterritory engageinfranchise competition.
AtvarioustimesFPLhaspromotedacquisition andhasbeenreceptive tomunicipal proposals.
Most.,ifnotall,ofthoseincidents occurredwhen.themunicipal systemswerearranging newbulkpowersuppliesfromamongtheoptionsofself-generation, wholesale purchased fromFPLandretailpurchases fromFPLafterfranchise disposition andwithouttheoptionofsharinginFPL'snuclearorotherbaseloadunits.SeeStatement ofFactsandOpinionNo.57.8.Infilingsandpublicstatements, FPLhasadvertised theeconomicbenefitsfromitsbaseloadgeneration (including nuclear)andcoordination.
Suchstatements wereofanatureto inducefranchise renewalsforFPLorsalesofmunicipal systemstoFPL.9~FPLhassoughttoacquireindependent municipal systems.SeeGainesville Utilities Det.v.FloridaPowerSLihtCo.,Opinion5l7,Opinion57,Opinion57-A,Statement ofFacts.10.FPLcancelled itsproposed.
SouthDadeUnitafterreceiving requestsforparticipation bymunicipally ownedsystems.SeeStatement ofFacts.~ll.FloridaPowerRLighthasagreedtoselltheCityofOrlandoortheOrlandoUtilities Commission participation inSt.LucieUnit2andhasofferredparticipation tosomeotherCitiesinPeninsular Floridawhichhaverequested suchaccess,buthasnotofferredparticipation toutilities otherthanthoselistedintheSt.LucieUnit2licenseconditions.
SeeStatement ofFacts.
ATTACHMENT 2MEMORANDUM RE:DISCOVERY, BETWEENCITIESANDFPLExtensive discovery has'alreadybeenconducted betweenFloridaPower&Lightandtheintervening Cities,overthecourseofyearsandinconnection withthisandotherdockets.Thereremainslittleif'anything intheCities'iles whichhasnotbeenmadeavailable toFPLalready,orwhichwillnotsoonbeprovidedtoFPL.Mostrecently, alltheintervenors exceptLakeHelenhaveansweredinterrogatories and/orresponded tovoluminous documentrequests, asmorefullydescribed below.CitiesnotethatalthoughHomestead, Kissimmee andStarkearenotnamedpartiesinDocketNo.50-389A,1/theyhaveintervened inFloridaPowerR'LihtCo.(St.LucieUnitNo.2),NRCDocketNo.50-389,andareplaintiffs inadistrictcourtsuitagainstFPLinwhichtheyareseeking,amongotherthings,theopportunity foraccesstoFPL'snuclearunits.Therefore, thesethreeCitiesareincludedinthediscussion ofdiscovery below.References belowto"district court"discovery aretotheantitrust casecurrently pendingintheSouthernDistrictofFlorida,MiamiDivision, Gainesville ReionalUtilities v.FPL,No.79-5101-Civ-JLK.
Thatproceeding hasasplaintiffs FloridaCities,including allintervenors hereexceptKeyWest,LakeHelen,andFMUA.1/Homestead, Kissimmee andStarkearerepresented throughtheirmembership inFMUA.e FPLDISCOVERY OFCITIES1.DistrictCourtInterroatories.Cities(exceptKeyWestandLakeHelen)haveresponded totwosetsofinterrogatories fromFPL,totalling 40separateinterrogatories (notincluding sub-parts) andabout300pagesofanswers.Inaddition, theCityofTallahassee hasresponded toasupplemental setofinterrogatories.
TheanswerstoFPL'sfirstsetofinterrogatories wereservedonFebruary22,1980;answerstothesecondsetwereservedAugust1,1980;andTallahassee's responsetosupplemental interrogatories wasservedSeptember 17,1980.Inaddition, FPLservedCitieswithathirdsetofinterrogatories andrequestforproduction ofdocuments relatingtoCities'amageclaimsinthetreble-damage suit.Answersarenotrelevanttothisproceeding, wheresuchdamagesarenotbeingsought.2~DistrictCourtDocumentReuests.Citieshavealsoresponded totwosetsofdocumentrequestsfromFPLinthedistrictcourtlitigation.
'Theresponsetothefirstsetwaslargelycompleted inthesummerof1980,bywhichtimedefendants hadcopiedfromCities'iles 98shelf-feet ofdocuments, selectedfromamonghundredsofthousands ofdocuments producedintheCities.Thedistrictcourtdocumentrequest,was,ifanything, broaderthantherequestfiledbythecompanyinthisdocket.ExhibitAheretoisaletterfromCities'ounsel tocounselforFPL,datedJuly2,1980,describing theoverlapin 3discovery requestsandsettingforthindetailtheonlyareasofdiscrepancy betweenthetworequests(seepp.4-6oftheletter).ISincethetimeofthatletter,discovery washadatKeyWest,withtheexception ofafewfileswhichcanbe.providedtoFPLimmediately.
OnlyLakeHelenhasnotproduceddocuments toFPLineitherthisorthedistrictcourtdocket.CitiesnotethatintheirletterofJuly2,theystated:Wewouldbeagreeable toyoursuggestion thatwesearchLakeHelen'sfilesandprovideyouwithalistofresponsive filesuponourreceiptfromyouofnoticethatyouwishtogotoLakeHelentoinspectdocuments.
Wewouldrequiretwoweeksnotice.LakeHelencanbemadereadybyJuly18I:1980],subjecttosuchtwo-weeks'otice fromyou.FPLhasnotsoughtdiscovery ofLakeHeleninthetenmonthssincethatletter.NorhasFPLindicated anyobjection duringthattimetotherepresentations byCitiesthattheybelievetheyhaveotherwise compliedwiththedocumentrequestfiledinthepresentdocket.Moreover, alsoinconnection withthedistrictcourtcase,FPLwasprovidedwithcopies,aftertheinitialdocumentproduction, ofsupplemental documents whichCitieswerenotabletolocateatthetimeofinitialproduction; FPLwasaffordedtheopportunity tore-examine certaindocuments relatingtofuelcostsinStarkeandHomestead; FPLmisplaced allbutafewofitscopiesofdocuments fromtheCityofNewberry, andwasallowedtore-examine allfilesinthatCity;andTallahassee madeavailable additional fileswhichhadbeenomittedinitially.
FPLandCitiesdisagreeconcerning theinterpretation of,theinitialdistrictcourtdocumentrequestasitrelatestoi>fountDora;thepartieshaveexchanged correspondence concerning thismatterwhichinvolves, atmost,ahandfulofdocuments.
CertainHomestead discovery remainstobecompleted forthedistrictcourtsuit.FPLnotifiedCitiesthatresponsive documents hadapparently beenoverlooked inthatCity.Uponinvestigation, Citiesfoundthatthiswastrue.Acompletere-search ofHomestead's fileshasnowbeencompleted, andproduction ofdocuments toFPLwillbemadeveryshortly.Xnaddition, Citieshavere-checked theirsearchinStarke,theGainesville powerplants,andSebring.There-checking established thattheproduction hadbeencorrectandcompleteintheseCities,withperhapsafewoversights duetohumanerror.Ofcourse,allresponsive documents.
foundintheseCitiesduringthere-search willalsobeprovidedtoFPLveryshortly.Are-search ofKissimmee' filesindicated certai;nfilecabinetsandboxesnadbeenoverloooked.
Responsive materialfromtheCityarenowbeingcopiedforproduction toFPL.Are-search of4ViewSmyrnaBeach'sfilesisnowinprogress.
Alldistrictcourtplaintiffs havealsocompliedwithasecondwavedocumentrequestbyFPL.Thus,theonlyoutstanding mattersfromthevariouswavesofproduction ofdocuments byCitiestoFPLare(a)tocompleteproduction ofHomestead andcorrections fromotherCitiesasnotedabove.Completion isexpectedbyearlyJune,and(h)completion oflistsofdocuments withheldasprivileged.
CitiesandFPLhavebothproduced'onecompletelistofprivileged documents asaresultofdiscovery inthedistrictcourt,case.
AtFPL'srequestanduponitsrepresentation thatitwouldreciprocate, Citiesarerevisingtheirlistsinordertoprovideafullerstatement ofeachprivileged document.
Citieshaveproducedmorethanhalfofthisrevisedprivileged listtoFPLandexpecttocompletetheremainder byJune.CitieshavenotyetreceivedFPL'srevisedlist.3.OtherdiscovebFPLfromCities.(a)FPLhashadcomprehensive discovery oftheCitiesofHomestead, NewSmyrnaBeachandStarkeasintervenors inFERCDocketHo.ER78-19,whereafullevidentiary hearingwasheld,culminating inFERCOpinionNo.57;(b)FPLhasavaileditselfofFlorida's expansive PublicRecordsActtoinspectfilesinLakeWorth,HewSmyrnaBeach,Gainesville, Homestead, andpossiblyotherintervenors; (c)FPLhasextensively discovered Gainesville inpreparation forGainesville Utilities Deartmentv.FloridaPowerwhichtheFifthCircuitfoundthatFPLhadconspired inviolation oftheantitrust lawstodivideterritory forsalesofwholesale powerinFlorida.4.Districtcourtdeositions.
In'ecentmonths,FPLhasdeposedofficials.
orformerofficials inTallahassee, Kissimmee,
- Newberry, Mt.Dora,Homestead, Starke,Ft.MeadeandLakeWorth.
5.Consultant discover.FPLhasalsohadextensive discovery fromatleasttwoofCities'ajor consultants, R.W.BeckRAssociates, Orlando,Florida,andSmithSGillespie, Jacksonville, Florida.Discovery iscomplete, withminorexceptions:
(a)bothBeckandSmithSGillespie haveyet.toproducelistsofprivileged documents; (b)certainfilesandnotesofMr.RobertE.Bathenarebeingproducedininstallments; thefirstofthreeinstallments hasbeencompleted; and(c)non-Florida officesofR."W.Beckhavebeenreviewedforresponsive material; responsive filesarebeingcopiedfromofficesinDenver,Colorado; Seattle,Washington andWellesley, Massachusetts, andwillbeproducedshortly.CITIES'ISCOVERY OFFPL1.LikeFPL,Citieshavehaddiscovery throughFERCDocketHo.ER78-19andtheGainesville litigation, althoughnotundersunshinelaws.2.Inthedistrictcourtantitrust proceeding, Citieshavereceivedanswersandobjections toonesetofinterrogatories anddocumentrequests(withFPL'srevisedlistofprivileged documents notyetreceived)-
Citieshavetakendepositions ofcertainpresentorformerFPLofficials andaformerofficialofFloridaGasTransmission Company.
Citiesstillhavecertaindiscovery mattersoutstanding fromFPL:TheynaveprovidedFPLwithalistofdocuments 1apparently overlooked inFPL'sinitialproduction; theyhaverequested permission fromthecourttoserveasecondsetofinterrogatories; theyhavesoughtdocuments fromthefilesofFPLconsultants; andtheyhavenoticedandintendtonoticedepositions ofotherFPLpresentorformerofficials'.
Forpurposesofthisproceeding, Citieshavenonetheless receivedamplediscovery overthecourseoftimefromtheCompany,andtheysubmitthatFPLhashadamplediscovery oftheCities.Thereisnoneedtodelayrulingsuntiltail-enddiscovery mattersinthedistrictcourtcasearecompleted.
ExhibitAtoAttachment 2GEORGESPIEGEIP.C.BERTC.MCDIARMID ORAJ.STREBELOBERTA.JABLONJAMESN.HORWOODALANJ.ROTHFRANCKSE.FRANCISDANIELI.DAVIDSONTHOMASN.MCHUGH.JR-DANIELJ.GUTTMANPETERK.MATTDAVIDR.STRAUSLAWOFFICESSPIEGEL8MCDIARMID 2600VIRGINIAAVENUE.N.W.WASHINGTON.
O.C.20037TELEPHONE I202I333-4500TELECOPIER (202)333.2974July2,1980BONNIES.BLAIRROBERTHARLEYBEARTHOMASC.TRAUGERJOHNMICHAELADRAGNACYNTHIAS.BOGORADGARYJ.NEWELLMARCR.POIRIERMARTAA.MANILDIJOSKPHL.VANEATONE.GregoryBarnesJEsq.Lowenstein, Newman,Reis&Axelrad1025Connectiout Avenue,N.W.Washington, D.C.20036Re:NRCDocketNo.50-389A-Discover
Dear'Greg:
Asyousuggested inourrecentphonecall,andforyourconvenience, wearecommitting towritingcertaindetailsregarding discovery intheNRCcase.Ourpurposeistogiveyourfirm,Mr.Leon,andCovington andBurlinganopportunity toreviewthesepointsnowsothatanywrinklescanbeironedoutearlyandourdocumentproduction canproceed,efficiently, toourmutualadvantage.
Aswediscussed onthephone,wehavemadeacarefulreviewofyourNRCrequestsforproduction ofdocuments, com-paringthemtoyourrequestsintheSouthernDistrictofFloridacase.Ourcomparison confirmed thatthedistrictcourtdocumentrequestsequalorcovercorresponding requestsforproduction in50-389A,withafewexceptions discussed below.EnclosedisalistingofeachNRCrequest,exceptthosenotallowedbyCommission order,andthecorresponding districtcourtrequest.Byusingthislistinconjunction withthefilelistwhichwasprovidedtoyoupriortoproduction
'intheCities,youwillbeabletodetermine easilywhichdocuments areresponsivetowhichNRCrequests.
EachNRCrequestlistedhasthusbeenfully-answeredbyourdistrictcourtcaseproduction, withthelimitations notedherein,forallNRCintervenors exceptLakeHelen,KeyWest,andFMUA.Astothese,weproposethefollowing:
dbdyf'tionuntilJuly18x,nNRC50-389A.However,KeyWesthasbeensearchedandisreadyforinspection; subjectto'lientapprovalwewouldbewillingtoproducedocuments therean'ytimeafterJuly10.AswasthecasewithotherCities,youwillbeprovidedwithalistoffiles(or,asappropriate, storageboxes)con-tainingresponsive documents, andalistofassumptions wemadeduringoursearchofCityfilespriortoproduction inKeyWest(theassumptions willbethesameassumptions asthosemadeinotherCities).BecauseFP&Zquestioned certainassumptions forcertainCitiesinthedistrictcourtcase,wewillalsosendyoucopiesofsomedocuments whichtypifytheassumptions wearemaking.'his willenableyoutodetermine whetherandtowhatextentyouwanttoseeanydocuments thatweassumearenon-responsive orirrelevant.
Youshouldalsobeawareoffourpoints:a.Althoughaccording totheNRCorderondiscovery weareonlyrequiredtoproducedocuments throughOctober31,1978,wehavesearchedKeyWest'filesthroughJune1,'980.Filescontaining documents throughthatdatewillbeincludedonourlisttoyou.Wedonotintendtomodifyobligations.-
undertheNRCorderorourMemorandum ofUnderstanding, butweassumethatyoumaybeinterested inthemorecurrentdocuments andthatitwouldbemoreconvenient foryoutoinspectthoseatthesametimeyouareinKeyWesttoinspectpre-November 1978documents.
And,frankly,itwaseasiertoincludethansegregate the.morerecentdocuments.
b.KeyWestkeepstapesofitsUtilityBoardmeet'ings.
Thesewillbeavailable foryourlistening and/orcopyinginKeyWest.Ifyouexpecttomakecopiesofthetapes,itwouldbehelpfulifyouwouldsoadviseusinadvanceofscheduled production.
c.Weanticipate thatitwilltake10daystotwoweekstocompleteproduction, inspection, andcopyinginKeyWest.d.Inadditiontotheresponsive filelist,organized according todocumentrequestnumbers,wewillalsoprovidealistorganized bythelocationofthefiles,whichcanbeourguideduringproduction.
Thisshouldmakeproduction andinspec-tionmoreefficient.
Wewillprovidethislistthemorningpro-ductionbeginsinKeyWest.(Thisitemmaybeclassified under"learning frompastexperience."
Ifyouhaveothersuggestions forstreamlining procedures, theywouldbewelcome.)
AsisthecaseforKeyWest,theofficesoftheFMUAhavebeensearchedandarereadyforinspection.
Wewouldbeamenabletoproducing theseofficesbeforeJuly18ifareaso-nableschedulecanbeworkedout.IttookusonedaytosearchFMUAoffices;weexpectitwilltakeyoulonger,becauseofcopying.3.LakeHelen:Youindicated thatduringthelasttwoweeksofJulyyourofficemightbeunavailable forinspection inLakeHelen,duetodepositions andothermatters.,
Asweexplained toyou,itwouldbeill-advised forustosearchLakeHelen'sfilestoofarinadvanceofyourarrivalthereforinspection.
TheCityusesitsfilesdaily,mayneedtoreorganize them,andsoon.Thelikelihood ofchangedlocations offilesandhenceconfusion anddelayintheproduction processbecomesgreaterastheinter-veningtimebetweensearchandproduction increases.
Weare,therefore, reluctant toproceedwithourplannedsearchofLakeHelen'sfilesuntilscheduling canbearrangedmoredefinitely.
Wewouldbeagreeable toyoursuggestion thatwesearchLakeHelen'sfiles'andprovideyouwithalistofresponsive filesupon-ourreceiptfromyouofnoticethatyouwishtogotoLakeHelentoinspectdocuments.
Wewouldrequiretwoweeksnotice..LakeHelencanbemadereadybyJuly18,subjecttosuchtwo-weeks'otice fromyou.Youarenodoubtawarethatincertaincasesthew'ordingofdistrictcourtandNRCrequestsdonotcorrelate precisely, givingrisetothepointslistedbelow.Weraisethepointsbelowinordertobecompleteandtoavoidanypossiblemisunderstanding.
Atthistimeisappearsunnecessary tous(andyouten-tativelyindicated itseemsunnecessary toyou)toreturntothoseCitiesalreadyproduced, toinspectdocuments again.Weshallprotestifyouaskustoproducecopiesof"Electrical World"orothertrademagazines whichFPGLitselfreceives, andwhichinanycasewere.available inourearlierproduction.
Nevertheless, althoughmeterbookswerepresented toyouineveryCityinourearlierproduction, wewouldbewillingtoreturntotheCitiesshortlyafterJuly18andproducethemagainforyourinspection.
Weareconfident thatyouhavebeenpresented allrelevant, responsive materialinCitiesotherthanKeyWestorLakeHelen.Moreover, webelievethatappli.cation oftheprin-ciplesstatedintheMemorandum ofUnderstanding supportstheinterpretation wehavemadeofyourrequests.
Theparticulars are:1.NRCDocumentRequests1-8askforallCityorganiza-tionalmanuals,jobdescriptions, etc.Aswemadeexplicitinearlierproduction, wedidnotsearchindividual citydepartments that.arenon-utility related,suchaspoliceandfiredepartment files.Thus,.intradepartmental organizational chartsofsuchdepart-ments,whichinanyeventarenotrelevant, werenotproduced.
2.Documents responsive toNRCDocumentRequest45wereproducedinresponsetodistrictcourtrequestNo.30.Althoughtherequestsaredifferent intheirparticulars, the-information soughtisavailable fromthesamerawdata(primarily meterbooks)alreadyproduced.
Allotherextantrecordsregarding thereasonslargecustomers terminated theiraccountshavebeenprovided.
Thus,youhavehadaccesstothedocuments neededtoansweryourquestion.
IneveryCity,FP&Lchosenottoexaminetherawdata.3.NRCDocumentRequest112Aasksforbillsforpowerpurchased fromCrystalRiver3.Inthedistrictcourt~production, samplesofsuchbillswereprovided.
FP&Ldeclinedtocopyorexamine.suchmaterials, althoughitwasmadeexplicitthatsuchbillswereavailable inallCities.4.NRCDocumentRequest183seeksdocuments regarding each'"expansion orcontraction oftheCities'ervice area."Itisnotclearwhatismeantbythequestion.
If,asyouindicated youthoughtwaslikely,thisquestionisdirectedatchangesinthegeographical bordersoftheareaservedbyeachcity,allresponsive documents havealreadybeenprovided.
If,ontheotherhand,thisrequestisintendedtoincludeachangeinthenumberofmetersservedbythecity,somedocuments maynothave.beenproduced.
Forexample,ifanapartment complexwasbuiltwithintheservicearea,relateddocuments maynothavebeenproduced.
Aswe.madeexplicitduringpriordiscovery, wedidnotsearchorproduceeverycustomeraccountfileineverycity.5.NRC'Document Requests118and119havebeenfullyresponded to,exceptthattrademagazines, advertisements, etc.,describing particular unitswerenotprovided, unlesstheywereinfileswhichalsocontained otherresponsive documents.
6.Alldocuments responsive toNRCDocumentRequests,219and290havebeenproduced, exceptthatcertainindustry-generaldocuments werenotproducedinGainesville, suchasSERC,NERC,orNEPOOLreports,asexPlicitly setforthin"GAINESVILLE, I.A.1."ofourintroduction tothelistsofresponsive documentfiles.7.NRCDocumentRequests31and34askforcertainveryparticular financial andoperating data,whichconceivably maycoversomedocumentweoverlooked.
However,inresponding toyourbroaderdistrictcourtrequestforsuchdata,wecompiledcomprehensively.
Ifyoubelievewehavenotproducedanyitemrequested byNRCDocumentRequests31or34,pleaseadviseus.8.NRCDocumentRequest238referstocertainspeci-ficswithregardtolobbyingandrelateddocuments.
Thedistrictcourtrequest,104,iswordedmorebroadly.Wereadthemtomeanthesamething.I9.NRCDocumentRequest320asksforallmaterialrelatingtoenvironmental constraints oncoalplants.Asnotedintheprefacetothedistrictcourtlists,weprovideddocuments regarding environmental considera tionsinsofarastheyaffectedtheplanning, design,costs,construction timerequired, etc.,fordevelopment ofanytypeofplant(including coalplants).Inourdistrictcourtresponsewealsonotedthatsomedetailedenvironmental-related information, suchasdataonemissions asderivedfromastacktest,andenvironmental impactstate-mentswereavailable.
Theywerenotrequested.
10.NRCDocumentRequests353,357-358askquestions specifically concerning theJacksonville ElectricAuthority, OrlandoandtheCoordinating Generation StQdyGroup.Thismaterialwasprovidedinsofarasitrelatedtojointpower-supplyplanning, pooling,andsoon.However,wedidnotcloselyreadanumberofbindersinthepossession ofMr.RichardHestercon-cerningtheJacksonville ElectricAuthority whichgenerally dealtwiththeorganization ofthatsystem,andwhichwerenotthem-selvesresponsive tothedistrictcourtrequest.Thesedocuments havenotbeenprovided.
ll.CertaindocumentrequestsrequireCitiestosimplyproduceonecopyodspecificmaterial, seee.cC.,NRCDocumentRequest394.Thesedocuments willbeprovided.
12.Cities'uty toproducedocuments insomeinstances, (forexample,NRCDocumentRequest264)dependsontheanswertotheinterrogatory.
Allsuchfurtherdocuments willbeproduced.
Shoulditbenecessary foryoutoreturntotheCities,giveusacallandwewillsetupareasonable timetable forproduction.
NRCInterrogatories andDocumentRequests302-393makereference toHarryLuff'saffidavit andaredirectedattheOrlandoUtilities Commission, whichisnolongerapartyintheNRCcase,andneverwasapartyinthedistrictcourtcase.AllotherCitieshavealreadyturnedovertoyouallmaterialrelatingtoOrlandoreceivedthroughFCG,FMUAorFMPA,andallresponsive correspondence betweenotherCitiesandOrlando.Ifyoudesiremoreinformation, pleaseseekthatinformation directlyfromOrlando,throughitsattorneys.
Asyouknow,wedonotnowrepresent theOrlandoUtilities Commission.
Finally,inordertoavoidduplication andwaste,weproposethatconsultants'ffices besearchedandproducedfortheNRCcaseinthesametimeandmannerasinthedistrictcourtcase..Yousaidtentatively thatthisseemedreasonable toyou.Wehopethisletterishelpfultoyou.Thankyouforyourcooperation, andweanticipate hearingfromyousoon.Sincerely, MartaA.ManildiJosephL.VanEatoncc:JackLeon,Esq.HerbertDym,Esq.
CROSS-REFERENCE NRC-DISTRICTCOURTDOCUMENTREQUESTSNRCReuestNumberDistrictCourtReuestNumber810ll1322A23.24293032.3335,36A3738394041424444A4546474849505152535455,5759616263,6667686970,72A73747576365664,6571,71A,721112414517,10510545676113,462626282729131430301515111163231'38344263pr'odres52526'19,61,57,61575745,70(from1950)83ucedasgenerally ponsive31,53,Int9Int961 NRCReuestNumberDistrictCourtReuestNumber77787980,81848586878888A89909293949596979899100101103103A104104A106107108109113-1191211'23(g)124(11)127(b)128(8)130131132133,134135136137138139140141142142m142C142D142'46-47, 82,8315152'5657/16157575859,60,Ent1270646965,66,6765-69,Int14617172,73,-Int15,1619,31'42424242325,29232538'8,7638,76767676767676Int3,Ent3777,Int179,109,109,10106179798081818181818181828383-86,Int19,2082,Int188239~52~56~58~61 NRCReuestNumberDistrictCourtReuestNumber162163164165166167168169170172173174175176177'78-180181182183185187188194IntInt23/IntInt23/2323/23/99,99,Int18,194444124443872012,20,88,261(inpart)1Int11(inpart)1Int1Int1Int1Int30Int3030993147,51,53,59,60,95,Int6,9,12,21,196218221223224226228230,231232233234236,238241(g)243245248251268296297304/305/30631731932176,434571/72/6272/Int74,103103103104929291,89,9237/4923/55,7981798178,79,Int22737274,Int15,1674/90/101/102/15,16,31-33Int1694,Int23,2592,Int22Int335/4748/49/50/59,62,etc.
NRCReuestNumberDistrictCourtReuestNumber322324325327331334336339341344346(inpart)352,353,354355356359360361362369370373374,375376-380381390392393397'398399401404(c)405409412415416418419420421818123233S,72f617261,276147,61,72g72/7217S,72I65,72I72I71692312,2320,cf.2117,49,Int248,747472IS9,72I74747410474,68747487887545,74Int3170,andproducedrallyresponsive 70~76~77'870'6J77/7810asgene45,45,Int9259,59,50'7,17,55,55,47,47,40,60,9560,95897017,45,37'360,61,72,74,9574