ML17209A516

Fl Cities Reply Brief to Applicant 801203 Response to Fl Cities Answer to Joint Motion.Supports Prehearing Conference & Contends License Condition Clause Contrary to Public Policy.Certificate of Svc Encl

ML17209A516
Person / Time
Site:	Saint Lucie
Issue date:	01/08/1981
From:	JABLON R A AFFILIATION NOT ASSIGNED, SPIEGEL & MCDIARMID
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML17209A515	List: ML17209A514 ML17209A516
References
ISSUANCES-A, NUDOCS 8101090360
Download: ML17209A516 (173)

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BEFORETHEUNITEDSTATESNUCLEARREGULATORY COMMISSION BEFORETHEATOMICSAFETYANDLICENSING BOARDInthe.MatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389AREPLYOFFLORIDACITIESTOFLORIDAPOWER&LIGHTCOMPANY'S RESPONSETOJOINTMOTIONRobertA.JablonAlanJ.RothMartaA.ManildiAttorneys fortheLakeWorthUtilities Authority, NewSmyrnaBeachUtilities Commission, SebringUtilities Commission, Gainesville RegionalUtilities andtheCitiesofAlachua,Bartow,Ft;Meade,KeyWest,LakeHelen,MountDora,Newberry, St.CloudandTallahassee, FloridaandtheFloridaMunicipal Utilities Association January8,1981>4~sxoF090'>4 TABLE,OFCONTENTSPacaeTABLEOFAUTHORITIES

~~~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~INTRODUCTIONS'

.~~.~~.~..~~~..~~~...~~~..~~~~...~...2ARGUMENT~~.~.o..~..~..o~~~~~..~...~~~~~.~.~.~~~.~~~4I.TheBoardHasTheAuthority AndObligation ToAssureThatTheSettlement IsInThePublicInterest..................................

4II.TheLicenseCondition ClauseBindingTheArbitrator Concerning Liability IsContraryToPublicPolicy..................

8III~FP&LShouldNotBeAbleToOperateTheUnitContraryToTheInterests OfTheOtherParticipants WithoutBeingSubjectToAmeliorative ContractProvisions........

19IV.FP&L'sRefusalToOfferAReliability ExchangeAndSellbackConstitutes ABlatantActofDiscrimination............

~.22V.FP&L'sContention ThatCitiesAre"Insincere" IsGroundless andSpurzous...................................

28VI~TheCorrespondence BetweenTheIntervenors AndFloridaPower&LightDemonstrates FP&L'sRefusalsToDealAndConfirmsThatAnyDelayResultsFromFP&L'sActions:TheCorrespondence IsAdmissible ForThesePurposes...........

43VII.Miscellaneous..............................

53CONCLUSION~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~54 APPENDICES AppendixA-'xcerpts fromMidlandandCrystalRiverParticipation Agreements AppendixB-LetterdatedApril1,1980fromRobertJ.GardnertoEwellMengeAppendixC-LetterdatedApril21,1978fromGeorgeSpiegeltoHarryA.PothAppendixD-LettersdatedMarch30,1976fromTracy.Danese tovariousFloridasystems~~11 TableofAuthorities COURTCASESPacaeAlabamaaVicksburRailwaCo.v.MississiiRailroadCommission, 203U.So496(1906).o..o.ooo.........oo..o.oo...

26AmericanTruckinAssociations, Inc.v.Atchison, Toeka&SantaFeRaz.lwaCo.,387U.S.397(1967)................

~~~~~..~26Associated Pressv.U.S.,326U.S.1(1945)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-~~~~~~~24-25AtlanticRefininCo.v.PublicServiceCommission ofNewYork,360U.S.378(1959)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o~~~B&BInvestment Clubv.Kleinert's, Inc.,472F.Supp.787(E.D.Pa.1979).................

48Brattv.WesternAirLines,169F.2d214(10thCir.),cert.denxed,335U.S.88(1948)~~~~~~~~~~~~~~~~~~~~~~~~o~~~~o~~45ConwaCor.v.FPC,510F.2d1264(D..CCar.1976),aff'd,426U.S.271(1976)......................................

26Drakev.DetroitEdisonCo.,443F.Supp833(WDMich'978)

~...~~17Fedorv.MauwehuCouncil,BoScoutsofAmer>.ca, 21Conn.Supp.38,143A.2d466(Super.Ct.1958)...........................

Fletcherv.WesternNationalLifeIns.Co.,10Cal.App.3d376,89Cal.Rptr78(1970)................................

50Ft.PierceUtilities Authoritv.U.S.,606F.2d986(D.C.Cz.r.,cert.denied444U.So842(1979)..oooo..o.....o....

26 PacaeGainesville Utilities

Deartmentv.FloridaPower&LxhtCo.,

573F.2d292(5thCar.),cert.denied,439U.S.966(1978).............

6,30Gamcov.Providence Fruit&ProduceBuildinInc.,194F.2d484(1stCar.),cert.denxed,344U.S.817(1952)...................

25HamlinTestinLaboratories v.U.S.AtomicEnerCommxsszon, 357F.2d632(6thCar.966)~~~~~~~~~~~~~~~~~~~~~~o~~~~~~~~~~~~~~~~~~114L'Heureax v.Hurle,117Conn.346,168A.(1933)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12Huhesv.WarmanSteelCastinCo.,174Cal.556,163P.885(1917)....................

12ICCv.Delaware,Lackawanna

&WesternRailroadCo.,220U.S.235(1911)..........

~..26InsirationConsol.CoerCo.v.Lumbermens Mut.Cas.Co.,60F.R.D.205(STDoN~Yo973)~~~~~~~~~~~~~~~~s~~~~~~~~~~~~~~48IvePlants,Inc.v.FMCCor.,282So.2d205(Fla.App.1973).............

~.~~~..12Jacksonv.ShellOilCo.,401F.2d639(6thCir.1968)...............................

45JanetRealtCor.v.Hoffman's, Inc.,154Fla.144,17So.2d114(1943).............

Johnstonv.Faro,184N.Y.379,77N.E.388(1906)..........,.................

LibertMutualIns.Co.v.Davis,412F.2d475(5thCar.1969)..................

48louisville

&Nashville RailroadCo.v.U~S~(238U~S~1(1915)~~~~~~~~~~~~~~~~~~~~~~~MissouriPacificRailwaCo.v.LarabeeFlourMz.llsCo.,211U.S.612(1909)..........

Munnv.Illinois, 94U.S.113(1876)............

Norlinv.Carr,211F.2d897(7thCir.954)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~126262645iv PacaeOtterTailPowerCo.v.U.S.,410U.S.366(1973)~~~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OverseasMotors,Inc.v.ImortMotors,Ltd.,375F.Supp499(E.D.Mich.1974)gaaadonotherrounds,519F.2d119(6thCar.),cert.denxed,423U.S.987(1975)~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~PennslvaniaGassWaterCo.v.FPC,463F.2d1242(D.C.Cir.1972)................

48,49,50Pittsburh,C.C.&St.L.R.Co.v.~Kinne,95OhioEt.64,115N.E.505(1916)~~~o~~o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12Reichenbach v.Smith,528F.2d1072(5thCar.97652ScenicHudsonPreservation Conference v.FPC,354F.2d605(2dCar.1965),cert.deniedsnhncm.Consolidated EdisonCc.ofNewYorkv.ScenicHudsonPreservation Conference, 384U.S.941(1966)...............

Snderv.SouthernCalifornia Edison,44Cal.2d793,285P.2d912(1955)...........

14SouthernSteamshiCo.v.NLRB,316U~S~31(1942)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~16Srinerv.Citizen's Cas.Co.ofN.Y.F246F.2d123(5thCar.1957)..................

48Sternbererv.U.S.,401F.2d1012(CtoClo1968)~~~~~~~o~~~~~~~~~~~~~~~~~~~~~~~~Tarbellv.RutlandR.Co.,73Vt.347,41Ao6(1901)o.oo....o....o.oo..oooooo...

UnitedStatesv.CaitalTransitCo.,325U~S~357(1945)~~~~o~~~~~~~~~~~~~~~~~~~~~~26UnitedStatesv.Griffith, 334U.S.100,1948)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(28WesternUnionTelerahCo.v.CallPublxshzn Co.,181U.S.92(1901)............

26 PacaeAGENCYCASESConsumers PowerCo.(MidlandUnits1and2)gALAB452(6NRC892(1977)~~~~~~~~~~~~~~~~DukePowerCo.(CatawbaNuclearStation,Units1and2),LBP-74-47, 7AEC1158.(1974)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~17'8/20~224-5,23ReFloridaPower&LihtCo.,FERCDocketNos.ER78-19(PhaseI)andER78-81,OpinNo.57,32PUR4th31(1979)............

FloridaPower&LihtCo.,FERCDocketNo.ER78-19(PhaseI),"OpinionandOrderDenyingRehearing",

OpinionNo.57-A(October4,1979)..................,....

FloridaPower&LihtCo.(St.LuciePlantUnitNo.2),CLI-78-12, 7NRC939(1978)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~FloridaPower&LihtCo.(St.LuciePlantUnitNo.2),LBP-79-4, 9NRC164(1979).ion6,27,326,3252HoustonLihtin&PowerCo.(SouthTexasProject,Units1&2),NRCDocketNos.50498AetalgOrder(April15'980)~~~~~~~ViriniaElectricPowerCo.(NorthAnnaPowerStation,Unitsand2),InitialDecision, LBP-7554~NRCI75/9(Sept.10,1975).....

~..~..~~~...~~~~~~~5213-14,15STATUTESAtomicEnergyActgl(a)52(d)g2(e)52(g)52(i)53(d)5103(d)5105(a)5105(c)(6)

~42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.42U.S.C.52011(a)52012(d)f2012(e)52012(g)52012(i)52013(d)g2133(d)g2135(a)f2135(c)(1973)(1973)(1973)(1973)(1973)(1973)(1973)(1973)(6)(1973)13131313131313,172625 ParcaeMISCELLANEOUS Fed.R.Eirid.408,andComment..................

passimU~C~Csg2609~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~5115Williston 3d51751.................

~~~.~..~..12 BEFORETHEUNITEDSTATESNUCLEARREGULATORY COMMISSION BEFORETHEATOMICSAFETYANDLICENSING BOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389AREPLYOFFLORIDACITIESTOFLORIDAPOWER&LIGHTCOMPANY'S RESPONSETOJOINTMOTIONFloridaCitieshavebeenactivelypursuingtheirrightstonuclearaccess,transmission andcoordination foralongtime.FloridaPower&LightCompany("FP&L")hasenteredintoasettle-mentwiththeGovernment parties,whichamongotherthingsgrantssomecitiesparticipation inSt.Lucie2.TheCitiesfindthesettlement unacceptable becauseitdoesnotrecognize theirrightsorsatisfytheirneeds.Thesettlingpartiesseekwhattheycall"immediate implemen-tation",thatis,Boardapprovalandanordergrantingimmmediate effectiveness tothesettlement.

Inastronglywordedpleading, filedDecember3,1980,FP&Lseekstopreventasubstantive Boardreviewofthesettlement todetermine whetheritisinthepublicinterest.

Bypressingitsrighttowithdrawthesettlement, ifitisnotacceptedimmediately andwithoutconditions, theCompanyseekstoimposethetermsofthesettlement upontheCitiesortoforceyearsofexpensive litigation inordertoavoidmodifica-tionsoradditional terms.TheCompanyseekstojustifyitspositionbyattacking theCitiesasbeing"lessthansincerein espousing interestinparticipation inSt.LucieUnitNo.2"andallegesthatthey"wouldpursueastrategyofprolonging nego-tiationsoverthetermsofparticipation."

FPGLResponse, p.9.Thefollowing isinreplyandopposition toFPGL'spleadingofDecember3,1980.INTRODUCTION 1.Itistimetoconfronttheobvious:Untiltheinstantsettlement withtheGovernment, FP5Lhasresistedsellingvir-tually~ancapacityfromSt.Lucie2oritsothernuclearunits.Foryears,bothinthecontextoftheSouthDadeproceeding (DocketNo.P-636-A)andthisproceeding, theCompany'openlydeclaredpositionhasbeenthat,apartfromverylimitedoffersundertheearlierSt.Lucielicenseconditions, itwasundernoobligation tosellnuclearcapacitytotheCitiesandwouldnotdoso.WhileFP&Lprofesses "reasonforbelieving thatatleastsomeoftheintervening Citiesarelessthansincereinespousing interestinparticipation inSt.LucieUnitNo.2",itisawarethatCitieshaveobjectedandcontinuetoobjectthattoolittlecapacityisbeingofferedattoounfavorable terms.However,nothingpreventstheCompanyfromofferingmorecapacity, shoulditdesiretotesttheCities'sincerity".

FP&LrefusestodealingreateramountsofnuclearcapacitythanaresetforthintheGovernment settlement orunderimprovedterms.2.WhileFP&LclaimsthattheCitieswillnotbehurtbyimmediate implementation ofthelicenseconditions, itseekstoimposelegallybindingcontracttermswhichsubsequent Board orderscouldnotchange.Moreover, evenifthecontracts couldbechanged,underFPGL'slegaltheoriesitwouldtakeyearsofexpensive litigation tochangetheterms.Inanumberofaspectsthetermsofferedarelessfavorable totheCitiesthantheNRChasapprovedinothernuclearparticipation agreements.

ThetermsthatFP&Lwouldimmediately imposelackareliability exchangeorsellbackprovision, providequestionable backuparrangements, includealiability clauseunderwhichFPGLwouldexcuseitselffromvirtually anywrongfulactionthatitmaytakeinconstructing oroperating theplant,includeonerousdepositrequirements, andomitopportunities fortransmission investment andothereconomicarrangements commontotheindustry.

3.FPGLdoesnotwanttheBoardtobeabletoruleanytimesoonwhetherthesettlement isinthe"publicinterest" orwhethercorrective conditions shouldbeordered.Thus,itseekstoimposethesettlement without~ansubstantive Boardreview.4.TheFloridaCitiesgrouphasbeenlitigating withFP&Lsince1976overthesematters.Iftheonlywaythattheycanobtainanypractical reliefistoaccept"immediate implementation" ofthesettlement andenterintoSt.Lucieparticipation contracts 1/nomatterhowadversetheterms,atleastsomecitiesmayfeelconstrained todoso.Thepresentandantici-patedcompetitive situation givesthemnochoice.Indeed,the1/Contracts wouldprobablybewiththeFloridaMunicipal PowerAgency.

verypointFPaLmadeinitsvariouspastattemptstoacquiremunicipal systemswasthatithadaccesstoeconomicgeneration sourcesandthatsmallersystemsdonot.TheCitiessimplycan-notaffordtheluxuryoflitigating forevertoobtainreasonable terms.5.Giventhiscontext,theCities'osition isthat:(a)Bythreatening towithdrawthesettlement offer,FPGLhasthepowertoseektocoerce"immediate implementation" ofitsterms;however,useofsuchthreatened oractualwithdrawal toprecludeBoardconsideration ofthesettlement woulditselfbecoerciveandanticompetitive.

TheBoardhasareviewfunctiontodetermine whetherthesettlement shouldbeaccepteduponreasonable conditions whichtheCitiesseek;reaso-nable.conditions wouldincludecorrection ofthoselicensecon-ditionsthatwouldpermitimposition ofunfairandanticom-petitivecontracttermsorthatmightprecludepractical reliefafterfutureproceedings.

(b)Reasonable timeperiodsandprocedures shouldbesetforresolution oftheentireproceeding oratleastforsimplification ofissuesandprocedures.

ARGUMENTI.TheBoardHasTheAuthority AndObligation ToAssureThatTheSettlement IsInThePublicInterest.

Aswasrecognized inCatawba,aBoardorderaccepting apro-posedsettlement shouldnotissueabsentareasonable likelihood thatthesettlement is"withinthepublicinterest".

DukePower~Coman(CatawbaNuclearStation,Unitsland2),UBP-74-47, 7AEC1158,1159(1974).FP&LwouldhavetheCommission ignorethesestandards andissueanorderaccepting thesettlement withoutconcernastowhetheritisinthepublicinterest.

Thispositionisuntenable.

AstheSecondCircuitstatesinScenicHudsonPreservation Conference v.FPC,354F.2d608,620(2dCir.1965),cert.deniedsubnom.Consolidated EdisonCo.ofNewYorkv.ScenicHudsonPreservation Conference, 384U.S.941(1966):"Inthiscase,asinmanyothers,theCommission hasclaimedtobetherepresen-tativeofthepublicinterest.

Thisroledoesnotpermitittoactasanumpireblandlycallingballsandstrikesforadversaries appearing beforeit;therightofthepublicmustreceiveactiveandaffirmative protection atthehandsoftheCommission."

Ingrantinglateintervention inthisdocket,theCommission recognized thispolicy:"Ifahearingisconvened, wethinkitshouldencompass allsignificant antitrust implications ofthelicense,notmerelythecomplaints ofintervening privateparties.Ifnooneelseperformsthisfunction, NRCStaffshouldassurethatacompletepictureispre-sentedtolicensing boards."FloridaPower&LihtComan(St.LuciePlant,UnitNo.2),CLI7812g7NRC939g949(1978)~Thefactthataproposedsettlement isbeingconsidered doesnotdetractfromtheBoard'sauthority toattachconditions toapprovalofthesettlement assurethatitisinthepublicinterest.

PennslvaniaGas&WaterCo.v.FPC,463F.2d1242(D.C.Cir.1972).WhileFP&Lmaythreatennottoacceptpublic interestconditions, attheleasttheBoardshouldconsidertheirappropriateness.

SeeAtlanticRefininCo.v.PublicServiceCommission ofNewYork,360U.S.378(1959),wheretheSupremeCourtadmonished theFederalPowerCommission toprotectthepublicinterest, withoutregardtothreatsbytheapplicants thattheywouldwithdrawproposedgassalesiftheCommission orderedconditions.

FP&LarguesthatFloridaCitiescannotbehurtby.immediate implementation ofthesettlement conditions, eveniftheyareunreasonable, becausetheCitiesreceivecertainbenefitsunderthesettlement andcanlitigateformore.Thisstatement istrueonlytotheextentthattheCitieswouldnotbeboundbyadversepresentlicensetermsorimposedcontractual provisions, shouldtheBoardfindthata"situation inconsistent withtheantitrust laws"exists,1/andonlytotheextentthatCities'onfinement 1/A"situation inconsistent" doesexistasamatteroflaw:TheFifthCircuithasmadeafactualfinding,whichisbindingonPP&Lunderdoctrines ofresjudicataandcollateral

estoppel, thattheCompanyhasconspired withFloridaPowerCorporation tounlawfully divideFlorida's wholesale powermarkets.Gainesville Utilities

Deartmentv.FloridaPoweraLihtCo.,

573F.2d292(1978),cert.denied,439U.S.966(1978).Morerecently, theFederalEnergyRegulatory Commission hasfoundthat"FPGL'spro-posals[refusingtodealinwholesale power]wereunjustandunreasonable underthestandards ofSections205and206oftheFederalPowerAct,particularly becauseoftheiranticompetitive effect."FloridaPower6LihtComan,FERCDocketNo.ER78-19(PhaseI),"OpinionandOrderDenyingRehearing",

OpinionNo.57-A,October4,1979,SlipOpinionatl.Indeed,inmakingthisdetermination, theCommission reliedinpartupon"unrebutted Companydocuments inevidence" thatFP&L'spolicywastodenyothersaccesstonucleargeneration.

Re:FloridaPowerTheofFPaLnuclearillegal~sura.termsofthesettlement themselves demonstrate arefusaltodealwithutilities outsideitsserviceareaincapacityandotherservices, therebyperpetuating theterritoriality foundbytheFifthCircuitinGainesville, tosuchadverselicensetermswouldberemediable later~Suchisnotthecasehere.TheCompanyrecognizes thatifthelicenseconditions asproposedprecludeorprejudice theCities,thentheycouldnotbeadoptedasinthepublicinterest.

TheCompanystatesatp.6:"ThedecisiveanswertotheCities'ear, however,isthatimmediate attachment oftheCommission ofthecondition willnotinanywayprejudice therightofCitiesunwilling orunabletoparticipate inSt.LucieNo.2underthesettlement conditions topursuetheirclaimof'rights'o participate undermorefavorable conditions.

AnOrderattaching theconditions imme-diatelydoesnotimairtherihtofanintervenor tohaveitscaseheardonthemertsandtoavailitselfofandifferent oraddxtxonal condztxons reardenarticxationxnSt.LucreUn>,tNo.2whichmxhtultima-telbeordered.Thus,theCities'rofessed fear-thatanintervenor whichfailstopar-ticipateinaccordance withthesettlement conditions wouldloseanyopportunity forpar-ticipation evenifprevailed onthemeritsandobtaineddifferent conditions

-isgroundless."

(Emphasis supplied)

Indeed,consistent withtheabove,theCompanysupportsanewcondition assertedly designedtopermitmodification ofpar-ticipation contracts, shouldtheBoardordernew"control" provisions.

However,thisadditional FPGLcommitment islimitedsolelytoaconflictwiththeprinciples ofSectionVIII(i)andwouldbeoflimitedvalue,ifthenewlicenseconditions permitotheradversecontractual terms.Forexample,ifthecondition permitsalaterreduction ofnuclearcapacityofferedwhich-inthecontextofthesmallamountsofnuclearcapacitybeing purchased andfinanced-couldhaveadversefinancing impacts,theCitiescouldbeprecluded asapractical matterfromtakingadvantage oftheproposedclause.Moreimportantly, onp.6,n.6,FPaL"questions" theNRC's"authority toamendaparticipation agreement" and"reserves itsrighttotakeanylegalpositiononthatquestion".

Theplainimplication isthattheCitieswouldbeboundbyparticipation agreements thattheynowenterintoasaresultofanorderapproving immediate implementation.

Immediate implementation shouldnotbegrantedunlessFP&Lacceptsasacondition itsstatement inthetextofitspleading, withoutitsfootnotequalifications:

"Theattachedconditions

'donotimpairtherightofanyintervenor tohaveitscaseheardonthemerits'nd toavailitselfofanydifferent oradditional conditions regarding participation inSt.LucieUnitNo.2."Further,thelicenseshouldbeconditioned, asisdiscussed infraandinCities'nswes toJointMotion.II.TheLicenseCondition ClauseBindingTheArbitrator Concernin LiabilitIsContrarToPublicPolicFP&Lhasinsisteduponasettlement termwhichstatesthat~anliability provision proposedbytheCompanymustbeacceptedunlessthearbitrator "determines thattheprovision proposed'by theCompanyconstitutes anunreasonable proposalwhichrendersmeaningless theCompany's offerofparticipation inSt.LucieUnitNo.2."LicenseCondition, SectionVII(E)1.TheCompany defendsthisprovision ascdmmercially reasonable, since"norationalfirmwouldenterintoacommercial arrangement whichinvolvesundertaking substantial potential liabilities withoutanyprospectofprofit..."

Response, p.19.TheshortansweristhatifFP&Lissoconfident thatitspositioniscorrect,itneednothavetherestrictive licensecondition

language, languagewhichtoourknowledge appearsinnootherlicenseconditions orderedoragreedtobeforetheNRC.FP&Larguesthatitissellingnuclearcapacity"withoutanyprospectofprofit".TheCompanyissellingnuclearcapacityinanattempttosettleclaimsofnuclearmonopolization.

Totheextentthatitwouldviolateantitrust principles forFP&Ltobeabletoconstruct andoperatenuclearunits,whileexcluding smallercompeting systemsandtheirratepayers fromtheeconomicadvantages associated withsuchunits,itwouldbeagainstpublicpolicyfortheCompanytoretainfullownership oftheunits.Therefore, FP&Lisnotentitledto"profit"inthesensethattheCompanyusestheterm.1/Entitlement toa"profit"onnuclearconstruction wouldmeanthatlargeutilities, whoaretheonlyoneswhocanconstruct andoperatenuclearplants,couldbegivenabuilt-incompetitive advantage oversmallercompetitors becauseofthisability.NRClicensing wasdesignedtoprecludesuchresults.1Infact,FP&Lzswronginitscharacterization.

Inthenor-maluseoftheterm,thereturntotheequityholdersofabusi-nessisprofit.InthesaleofSt.LuciecapacityFP&Lseekspaymentforequitycostsassociated withtheconstruction oftheplant.Traditionally, asasellerofmonopolyservices, utilityservicesaresoldat"cost",whichincludesreturn.Thus,theplantwillactuallybesoldataprofit.

10Innegotiating theGovernment's withdrawal fromlitigation, FP&Lwillobtainvaluableconsideration.

Furthermore, FP&Ltherebyincreases theCities'itigation burden.Thesettlement is"profit"enoughtoFP&L,withoutimposinganundulyrestric-tiveliability term.Asthesolepossessor oftheabilitytoconstruct andoperatethenuclearplantgFP&Lfurtherstatesthatthepricetosmallersystemsofnuclearparticipation isthattheymustwaiverightstheywouldotherwise haveunderlaw.Iftherewerenolicensecondition provisions withregardtoliability andthecontracts weresilent,anyliability tothirdpartieswouldbeborneinaccordance withstatutory andcommonlawstandards thathavedeveloped overcenturies.

TotheextentthatFP&Lhaddefensesthatunderagencylaworotherwise itsliability shouldbelimited,thesecontentions couldberaisedindefenseofanyclaim.However,byimposingLicenseCondition VII(E)(1),

FP&LseekstoavoidhavingtomakeorprovedefensesthatitmighthaveunderagencyandtortlawandtoforcetheCitiestoagreetoliability inadvance,evenwhereFP&L'sactionscausealoss.Underthelicenseconditions, FP&Lwouldhavecompleteandabsolutecontrolovertheoperation oftheplant.Evenassumingthatitwouldbejustifiable toincludeatermsimilartotheoneintheMidlandagreements, immunizing FP&Lfromliability attri-butabletotheCities'hare oftheplantforconsequential dama-gesandforitsnegligent conductexceptwheretheCompanyhad failedtouseprudentutilitypractices, thequestioniswhethertheCompanyisentitledtoevengreaterprotection and,ifso,whatprotection.

Whereoneoperatesequipment thatcancausegreatharm,thereismore-notless-reasontoinsistonhighlevelsofcare.ThereisnoreasoninlaworequitywhyFPGLshouldbelegallyexcusedfromliability foritsownimprudent conduct.Underthelawliability ordinarily followsfault.Insurance maycoversuchliability, butCitiesshouldnot,ineffect,beforcedintoinsuringFP&L.Thisisespecially truewherethereleaseprovision ispartofacontractforsomething whichoneparty(FPGL)controlsandtheother(Cities)cannothaveother-wisethanbythecontract.

Inthesecircumstances, whenthesub-jectofthecontract(here,nuclearaccess)istiedtothereleaseprovision onatake-it-or-leave-it basis,itcontravenes publicpolicy.See,Fedorv.MauwehuCouncil,BoScoutsofAmerica,21Conn.Supp.38,143A.2d466,467(1958)(Agreement signedbyinjuredcampers'arents relieving boyscoutcampofliability unenforceable asagainstpublicpolicy:lowincomefamilyhadnochoiceotherthantosignwaiverinordertoavailchildrenofbenefitofcamp);JanetRealtCor.v.Hoffman'sg Inc.,154Fla.144,147,17So.2d114(1943)("Publicpolicyfavorscompetition intradeandopposesunreasonable restraints onusefulcommodities whenthepublicwelfareisinjuriously affected.");

Seealso,Tarbellv.RutlandR.Co.,73Vt.347,41A.6(1901);Johnstonv.Faro,184N.Y.379,77N.E.388(1906);

12Pittsburh,C.C.6St.L.R.Co.v.Kinne,95OhioSt.64,115N.E.505(1916);Huhesv.WarmanSteelCastinCo.,174Cal.556,163P.885(1917).Professor Williston hastermedprovi-sionsavoidingliability inthiscontext"peculiarly obnoxious".

15Williston 3d51751at148.Wherethepartyseekingtoavoidliability hasapublicinterestobligation, itcannotavoidtheconsequences ofitsneglectofthatobligation.

L'Heureax v.Hurle,117Conn.346,356,168A.8(1933)("Publicpolicyrequiresthatdutiesofthiskindshallbedischarged, andthatallconsequences ofafailuretodososhallfollow.")

Courtshavespecifically refusedtopermitpublicutilities toavoidliability forevenordinarynegligence in'theirperformance oftheirdutyofpublicservice.AFloridacourthasobserved:

[Wjheretherelativebargaining powerofthecontracting partiesisnotequalandtheclauseseekstoexemptfromliability fornegligence thepartywhooccupiesasuperiorbargaining

position, enforcement oftheexculpatory clausehasbeendenied.(citations omitted)4/4/Atypicalsituation involving suchinequality forbargaining strengthisonewhereapublicuti-lityoracompanyservingsomepublicfunction, asaprecondition todoingbusinesswiththem,requirestheircustomertosignastipulation exempting thecompanyfromliability fornegligence.

IvePlants,Inc.v.FMCCor.,282So.2d205,208-209(Fla.App.

13FP&L'simportant dutiesasanelectricutilityaremadeevenmorecompelling becausetheconstruction andoperation ofanuclearunitisatissue.ThetermsoftheAtomicEnergyActandpriordecisions bythisCommission areunequivocal inthisregard.TheActisrepletewithreferences toits'purposes, whichareabovealltogoverntheuseofnuclearpowerinamannerconsistent withthecommondefenseandsecurityofthepublicandwiththepublic'shealthandsafety.SeeAEA551(a);2(d)(e)(g)(i);3(d);103(d).Section2(e)statesparticularly that:Sourceandspecialnuclearmaterial, produc-.tionfacilities, andutilization facilities areaffectedwiththeublicinterest, andreulatxonbtheUnitedStatesoftheproduc-tionandutilizatxon ofatomicenergyandofthefacilities usedinconnection therewith isnecessarinthenationalinteresttoassurethecommondefenseandsecurxtandtorotectthehealthandsafetoftheublxc.ThisCommission hasalreadyrecognized thedutyincumbent uponittoenforcethehigheststandards ofcareconsistent withthispublicinterestobligation.

Inanalogous circumstances theCommission hasrefusedtoallowavoidance byalicenseeoftheconsequences ofnegligent actscommitted byindependent contractors, precisely becauseitwouldbeinimicaltothepublicinterest.

ViriniaElectricPowerComan(NorthAnnaPowerStation,Units1&2),InitialDecision, LBP-75-54, NRCI75/9,Sept.10,1975.TheissueintheNorthAnnacasewaswhetherconstruction permitsshouldbesuspended orrevokeddueto 14omissions ofmaterialfactsandmaterialmisstatements madeinreporting totheCommission.

TheASLBheldthatVEPCOcouldnotdelegateitsxesponsibility tofulfillitsreporting requirements, stating:AstheActimplies,thepublichealthandsafetyistoovitaltothenationalinteresttopermitsuchanavoidance

[ofresponsibility]

.Thus,therequixements oftheActandtheCommission's regulations thereunder toprotectthepublichealthandsafety,canbeenforcdonlyiftheapplicant's

,reporting dutiesarenon-delegable.

ThisrulewasappliedinthecaseofSnderv.SouthernCalifornia EdisonCo.,44Cal.2d793,285P.2d912(1955),whereitwasheldthattheState'sregulatory schemeprohibited autilityfxomescapingliability fornegligence onthegroundsthatthenegligence wascommitted byanindependent contractor.

2NRCat505.Thus,itisrequiredbyFP&L'spublicduties,bothasanelectxicutilityandasanuclearplantlicensee, thatitassumeliability foranyharmwhichresultsfromitsnegligence, andafortiorifromanymoreseveredegreeofbadbehaviorsuchasgrossnegligence orwillfuldisregard foritspublicduties.AstheSixthCircuitobserved,

"...wecanimaginenoarearequiring stricteradhexence torulesandregulations thanthatdealingwithradioactive

material, fromtheviewpoint ofbothpublichealthandmaterialsecurity."

HamlinTestinLaboratories v.U.S.AtomicEnerCommission, 357F.2d632,638(6thCir.1966).

15ThisCommission's decisionintheNorthAnnaproceeding,

~sura,alsorevealsthatitisagainstthepublicinterestforFP&Ltobeheldaccountable (thatis,liable)foreveninten-tionalwrongdoing onlywhenitisdonebyoneexercising "managerial responsibility".

Whilethemeaningofthatphraseisfarfromclear,anyintendedlimitation mustberejected:

[TjhereisnomeritintheLicensee's pleathatitsofficershadnoknowledge thatthestatements discussed hereinwerematerialfalsestatements.

IftheLicenseewereper-mittedtoavoidresponsibility becauseitsagert'tsoritsindependent contractors failedtoinformitofmaterialinformation, itcouldthwartthepurposeofthisAct.2NRC504-505.Thesameprinciple mustapplytonegligent actsofalicensee's agents.FPGLcitesnocasesinsupportofitsgeneralclaimthatithasapresumedrighttooperatetheplantunsafelywithoutbeingsubjecttoliability.

TheCompanyisstatingthat,ifseveredamagetothirdparties(forexample,residents livingnearSt.Lucie)werecausedbyafailureofitsemployees toconnectbackupcoolingequipment, indirectviolation ofNRCrules,othersshouldbearthecostsofitslackofsafety.Thatpropo-sitionthatitshouldbeexcusedfromwrongdoing asamatterofgeneralcommercial lawhasnosupportinsofarasweareaware.NordoesithaveNRCcasesupportthatweknowof.Acommonsensewaytotesttheproposition propounded byFPsLthatitshouldbefreedofliability forits,ownwrongdoing wouldbetoaskwhetherFP&Lwoulddesireitspositiontobegenerally known.

16Mesuspectthatifitwerepublicknowledge thatFP&Linsisted-orthattheNRCagreed-thattheonlywaysmallersystemscouldobtainaccesstonuclearpowerwouldbetoexculpate FP&Lfromliability foroperating theplantsunsafely, andeveninviola-tionofNRCregulations, anationalscandalwouldresult.IfwearecorrectfFP&Lshouldnotbeabletoburyitsshockingpropo-sitioninthetechnical languageoflicenseconditions.

Thelaw,ofcourse,haspurposesbeyondrecompensation forloss.Onesuchpurposeisencouragement ofproperconduct.OnecanhardlyimaginetheNuclearRegulatory Commission seekingtoestablish aprinciple thatreleasesnuclearplantoperators fromliability forunsafeplantoperations andindeedtheCommission hasrefusedtodosointhepast.NorthAnna,~sura.Suchpolicyplainlyrunscontrarytothepurposesunderlying theAtomicEnergyAct.Apartfromantitrust considerations, theBoardhasaresponsibility nottoignoreotherpurposesofitsenablingstatute.AstheNLRBwasadmonished inanother(butnottoofarremoved)context,administrative agenciesarenottocon-centrateso"singlemindedly" ontasksbeforethemthat"theywhollyignoreotherandequallyimportant Congressional objectives."

SouthernSteamshiCo.v.NLRB,316U.S;31,47(1942).Moreover, FP&L'sattemptstocondition accesstonuclearpowerbysmallersystemsontheiragreeingtosufferthecostoftheCompany's imprudent operation ofnuclearunitsisplainlyagainstpublicpolicy.TheCommission cannotapproveanylicense(orcondition) which"wouldbeinimicaltothecommondefenseand

-17securityortothehealthandsafetyofthepublic."AtomicEnergyAct5103(d);10CFR550.40(c).Itisapparentthatthepurposeofthelicenserequirement istoprotectmembersofthepublic,Drakev.DetroitEdison,443F.Supp.833,840(W.D.fMich.1978),byproviding adequateexamination bytheCommission ofvariousfactors,including "competent supervision andoperation ofnuclearfacilities."

Drake,at837.Onewouldexpectthatcommercial plantdealsamonglargerandsmallerutilities wouldreflectcontractual provisions weightedtowardslargerones,whoafterallcontroltheplantsinthefirstinstanceandwhogenerally havemorebargaining power.Infact,however,mostplantagreements arelessrestrictive tosmallerparticipants thantheproposedFP&L-Orlando agreement, whichFP&LseekstoimposeontheCities.FP&Lessentially admitsthattheliability provisions intheMidlandagreement aremorefavorable toparticipants.

AppendixA.TheFloridaPowerCorporation CrystalRiverAgreements makeFloridaPowerliableforfailuretouseprudentutilitypractice.

AppendixA.WhileFP&LrespondsthattheCitiespaid110%ofFloridaPowerCorporation's cost,thatcostwasfarless-aboutone-third oftheanticipated St.Luciecosts.1/1/Asmightbeexpected, liabiityclausesinparticipation agreements varyintheextenttowhichownersmaybeliabletoeachotherorthirdparties.Forexample,theliability clausesoftheDukePowerCompanyandcertainotherparticipation agreements arerelatively favorable totheoperators, asFP&Lstates.However,thoseagreements includemanyfavorable econo-micterms.Forexample,theDukeagreements haveareliability exchangeandsell-back opportunities, whichFP&Lwouldwithhold(footnote continued onnextpage)

-18tVedoubtthatanyoftheattorneys involvedinthiscase,whethersupporting oropposingtheproposedsettlement licenseconditions, wouldinvesthisorherownmoneyinaventurewhereaprospective partnerwouldhavecompletecontrolofconducting abusiness, butwouldnotbeliabletoco-owners foranythingthepartnerdid.Certainly, amunicipality shouldnotbetreatedinsuchamanner.Yet,underitsproposedlicenseconditions, FPSLcouldviolatetheagreement itselfwithoutpenaltyorameansofredressforthosewhoareharmedasaresult.Theproposedliability provision inparagraph VII.E(1)shouldbeeliminated.

(footnote continued frompreviouspage)here.IftheDukereliability exchangeconceptswereappliedinFloridaandSt.LucieUnit2weredamagedorwentoutofservice,co-owners wouldbetreatedasowning1/4oftheshareoftheiroriginalpurchasefromtheunit.Bythesametoken,ifSt.LucieUnit1orTurkeyPointUnit3or4wentoutofservice,co-owners wouldbereatedasowning1/4ofeachoftheseunits.Anticipated costsofthisarrangement wereapproximately halfofSt.Lucie.SinceMidlandwasthefirstfullylitigated antitrust caseandsinceFloridaPowerCorporation isFPGL'sneighboring utility,theMidlandandCrystalRiveragreements seemgoodguidesastoappropriate liability clauses.However,ultimately thequestioniswhetherasettlement imposing(orpermitting acompanytoimpose)overlyrestrictive liability clausescanbesaidtobeconsistent withthepublicinterest.

19III.FP&LShouldNotBeAbleToOperateTheUnitContraryToTheInterests OfTheOtherParticipants WithoutBeingSub'ectToAmeliorative ContractProvisions.

Undertheproposedlicenseconditions, FP&Lhascompletecontroloverconstruction, operation anddecommissioning oftheunit.UnderthesetermsFP&Lcoulddelaytheplant,failtomaketheplantavailable forbaseloadpower,orprematurely cancelitforitsowninterests anddirectlycontrarytotheinterests ofJotherparticipants.

FP&Lrecognizes thatitscompletecontrolcouldcreateinequities forotherco-owners andhasproposedacorrective licenseprovision thatwouldpermitcontractmodifica-tionsinthisonearea,butonlyintheeventtheBoardweretoapprovemodifications ofthelicenseconditions andonlyifpar-ticipants weresubjecttosubsequent capacityreductions whichtheyhadalreadyfinanced.

Thereisnoequitable reasonthattheCitiesshouldbeforcedtoacceptthecostsofFP&L'sself-servingactsasacondition ofCityparticipation.

FloridaCitiesdonotobjecttoFP&Lgasmajorityowner,havingcontrolovertheoperation oftheplant,assuch.However,intheeventthatsuchcontrolisexercised inFP&L'sinterests andagainstthatofotherparticipants, FP&Lshouldmaketheotherparticipants whole.Alicensecondition grantingFP&Lsuchcontrol,butstatingthatintheexerciseofsuchcontrolFP&Lshallbeobligated totakefairaccountoftheinterests ofotherco-owners ortoredresstheviolation ofsuchinterests wherethisisimpossible wouldsuffice.Suchprovisions should 20providesufficient leewaysothatintheeventofdisputeanarbitrator wouldnotfeelforeclosed fromequitably balancing theinterests ofthepartiesintheeventofcontractdisputes.

1/Othercontractconditions havesuch,proposals.

Forexample,theMidlandownership andoperating agreement (whichispartofthesettlement agreement inConsumers PowerComan,NRCDocketNos.50-329A,etal.)provides:

6.1Authoritfor0erationandManaement.CONSUMERS shallhavesoleauthority tomanage,control,maintainandoperateMIDLAND,andshalltakeallsetpswhichitdeemsnecessary orappropriate forthatpurpose.CONSUMERS shalldischarge suchauthority inaccordance withGoodUtilityPracticeandtheotherprovisions ofthisAgreement.

Anacceptaecondition wouldstate:"Inaccordance withlicensecondition VII(i),Companymayretaincompletecontrolandactfortheotherparticipants withrespecttothedesign,engineering, construction, operation andmain-tenanceofSt.LucieUnitNo.2,andmakealldeci-sionsrelevanttheretoinsofarastheydealwiththerelationship betweentheCompanyandtheotherparticipants, including (butnotlimitedto)deci-sionsregarding adherence toNRChealth,safetyandenvironmental regulations, changesinconstruction

schedule, modification orcancellation oftheunitandoperation atsuchtimeandsuchcapacitylevelsasitdeemsproper,allwithouttheconsentof.anyparticipant.

Inexercising suchauthority Companyshallgivedueregardtothereasonable interests andneedsofotherpartiesandshallactinaccor-dancewithGenerally AcceptedElectricUtilityPractice, theselicenseconditions andthepar-ticipation agreement..

Intheeventtheinterests orneedsofthepartiesconflictandFPLexercises itsauthority totakeactionscontrarytothoseinterests orneeds.FPLshalltakereasonable stepstoassurethatthereasonable interests andneedsofallpartiesaresatisfied orshallappropriately compensate suchotherparties."

21Acityoughtnottohavetoturnovermoneytoabusinesscompetitor

-suchasFP&L-andtogivethatcompetitor completecontroloverafacilityessential toitwithnoobliga-~tiononthepartofthecontrolling partytoconsidertheCity'interests.

Suchlicenseprovision isanticompetitive onitsfaceandagainstpublicpolicy.ItmustbestressedthatFP&Ldoesnotdefendtheneedforsuchcompletecontrol.Theonlyarguments itadvancesinfavorofitspositionis(1)thatthecitedlanguagewasinthelicenseconditions acceptedbytheCompanyin1974(notunsurprisingly) andis(therefore) includedinitspresentconstruction permitand(2)thattherearecertainameliorative provisions intheOrlandolicenseconditions, whichallegedly lessenCities'isk.

TheOrlandoparticipation contractcontainsnorequirement what-soeverwithregardtowhentheplantwillgointoservice;itpermitsFP&LtooperatetheplantinanymannerFP&Lchooses;anditprovidesforthesupplyofsubstitute powertoco-owners onlywhentheCompanyfailstousetheplantforbaseloadbecauseofeconomic, butnotforoperational, reasons1/,anditpermitstheCompanycompletediscretion withregardtoadditions orreconstruction aswellascancellation orretirement oftheunit..Thus,thereissubstantial reasontofearthatifthepresentconditions areadopted,FP&Lwillinterpret itsrightstatedinproposedlicensecondition VII"toretaincompletecontroland1Forexample,FP&LmaychoosetobaseloadfuturecoalunitsinplaceofSt.LucieUnit'forreasonshavingtodowithFP&L'stotalgeneration configuration.

22actforotherparticipants" assanctioning suchdecisions withoutregardtotheinterests ofsuchotherparticipants.

IV.FP&L'sRefusalToOfferAReliability ExchangeAndSellbackConstitutes ABlatantActofDiscrimination.

Aswasexplained bytheAppealBoardinMidland,aproblemfortheelectricutilityindustryisthatanygeneration unitmaybesubjecttoforcedoutagesorbetakenoutofserviceforrepairs.Industrycoordination andpoolingarrangements aredesignedtopermitutilities toconstruct largeeconomicunits,whilemilitating againstsuchrisks.Consumers PowerComan(MidlandUnits1and2)g6NRC892952960'971005'0621064(1977).Afurthermeansofmitigating therisksofsuchoutagesorotherinefficient orexpensive operations ofunitsistoshareownership inunits.Forexample,inoperating fournuclearunits,FP&Lreducestheharmtoitselfifanyoneunitisoutofservicefordisproportionate periods.Further,itsufferslesseconomicharmwhenoneparticular unitisdownforrepairs.Underareliability

exchange, FloridaCitieswouldpurchaseallowedcapacityinSt.Lucie2attheSt.Lucie2price,butimmediately tradesomeofsuchcapacityforcapacityinFP&L'sothernuclearunits.Thus,ifasaresultofsuchtradeseachFloridacityowned25%ofitstotalnuclearparticipation ineachofFP&L'sfournuclearunits,whenanyoneunitisdown,aCitywouldlose25%ofitsnuclearentitlements; undersuchinsurance concepttotalsystemreliability isincreased.

Seep.18,n.lg 23shura.Bythesametoken,FP&Lwouldenhancethe.reliability ofitsopertations.

Becauseitwouldtransferanequivalent shareofeachunittotheCitiesinexchangeforSt.ZucieUnit2capacity, itwouldequalizerisksofoutageamongitsunitsanditwouldreceivethehigherSt.Lucie2priceforallcapacity.

Areliability exchangeisaninsurance conceptwhichbenefitsallsystems.FP&Lhasagreedtosuchconceptinitssettlements withOrlandoandFt.Pierce.ThisconceptisembodiedintheCatawbaagreements.

FP&LhasalsoagreedwithFt.PierceandOrlandotoa"sell-back" ofcapacitybythecitiesattheiroptionunderwhichFP&LwouldpurchaseacertainamountofcapacityfromtheCitiesoutoftheirparticipation shares.Suchconceptsareembodiedinmanyparticipation agreements.

Becausemunicipal financing isoftenlessexpensive thaninvestor-owned utilityfinancing, a"sellback"allowsapurchasing utility(i.e~,FP&L)tobuyelectricity atlessthanthatutility's owncostofconstructing andoperating theunit.Ontheotherhand,itallowssmalleruti-litiesto"growinto"plantandtomakeaprofitonthesaleofelectricity tothelargerutility.QlThus,itplainlybenefitsbothparties.roughlythemidpointofthefinancing costsbetweentheinvestor-ownedandmunicipal utility.FP&Zwouldimposetermsmorefavorable toitandcondition thereliability

exchange, whichisbeneficial toFP&L,onagreement ofsmallersystemstoagreetoitssellbackproposal.

LetterofRobertJ.GardnertoEwellNenge,April1,1980,AppendixB.

24Initsansweratp.17,n.14,FP&Lstatesthatitwillnotofferthe"reliability exchangeandsellbackprovisions" thatare"contained inanagreement betweenFP&LandtheFt.PierceUtilities Authority".

Thus,thetermsoftheofferwouldbediscriminatory againstFloridaCities.ThestatedreasonisthattheCitieshavenotagreedto"a'ettlement agreement withFP&L".WhileFP&Lmaydeemtheseprovisions ancilliary topar-ticipation agreements orreservedformunicipal systemswhohavesettledtheirlegalclaims,suchsellbackandreliability exchangeprovisions areintegralportionsofotherparticipation-contracts anddirectlyaffecttheeconomics andtheadvantages anddisadvantages ofowningnuclearcapacity.

FP&Lhassoughtappro-valbythisCommission oftheOrlandoandFt.Pierceagreements.

FP&L'slimitation innotproviding similarreliability andsellbackprovisions totheothercitiesisplainlyanticompetitive anddiscriminatory.

Asmonopolyownerofnuclearcapacityavailable inFlorida,FP&Lshouldnotbepermitted totransfercapacityonlessfavoredtermstosomeutilities thantoothers.Indeed,itisillegalforFP&Lasmonopolyownerofnuclearunitstodiscriminate againstcustomers byofferingtosellthesameproducttosomeonmorefavorable termsthantoothers.AstheAtomicEnergyActitselfattests,especially initsantitrust reviewprovisions, nuclearpowerisavaluedandvitalresource.

SeeOtterTailPowerCo.v.U.S.,410U.S.366(1973).FP&Landotherscannotenterintofavoredagreements whicheffec-tivelyexcludeordiscriminate againstsomepotential ownerstotheadvantage ofothers.Associated Pressv.U.S.,326U.S.1 25(1945);Gamcov.Providence Fruit&ProduceBld.,Inc.,194F.2d484(1stCir.1952),cert.denied,344U.S.817(1952).Havingagreedtomakeavailable nuclearcapacitytoOrlandoandFt.Pierce,including optionsforreliability exchangeandsell-back arrangements, FP&Lcannotlegallydenysimilartermstootherparticipants.

1/FP&L'sexcuseisthat,unlikeOrlandoandFt.Pierce,theCitieshavenotagreedtogiveitanantitrust release(i.e.,agreetoceaselitigation beforetheNRCintheseproceedings andbeforetheFederaldistrictcourt).Anantitrust releasemaybevaluabletoFP&L.+2However,theCompanyhasnorighttowithholdmakingnuclearcapacityavailable tosystemsonnon-discriminatory termsjustbecausetheyraiseantitrust claimsagainstit;certainly, theNRCshouldnotapprovesuchrestrictions.

Indeed,theAtomicEnergyActspecifically createstherightoftheCities'oseekintervention andattempttoobtainlicenseconditions inthe"publicinterest" under5105(c)6.

FloridaCitieshadtolitigateallthewaytotheCommission toobtainintervention inthisproceeding.

NorisFP&Lentitledtosecureareleaseagainstcourtliti-gationasthepricefornondiscriminatory participation.

ItwouldplainlybeagainstpublicpolicytoassertthattheonlywaythattheCitiesareentitledtonondiscriminatory nuclearaccessisbyagreeingtowaivewhateverantitrust claimsthey1/Theseprovisions arebeneficial toFP&L,astheirinclusion 7notheragreements demonstrate, sothattherefusaltomakethemavailable tootherCities(whocontinuetolitigate) aspunish-mentwoulditselfconstitute anabuseofFP&L'smonopolypower.2/GivenFP&L'sconduct,FloridaCitieswouldconcedethattheCompanyshouldviewsuchreleaseasextremely valuable.

26haveagainstFP&L.1/Section105(a)expressly preserves theantitrust claimstheCitiesmayhave.eItisoffurthersignificance thatutilitylawsupportsandreaffirms antitrust lawincondemning discriminatory dealings.

Thisisnotsurprising sinceutilitylawisconcerned withabuseofmonopolypowerovervitalservices.

Antitrust lawislikewiseconcerned aboutmonopolycontrolorpractices inrestraint oftrade.Thus,industries "affected withthepublicinterest" aresubjecttoregulatory control.Munnv.Illinois, 94U.S.113(1876).2/1Insuccessfully arguingagainstSection186(a)application toFP&L'soperating units,FP&Lrepeatedly pointedtotheavailabi-lityofadistrictcourtremedy.E.g.,Ft.PierceUtilities Acthoritv.U.S.,606F.2d986(D.C.Cir.979),cert.dented,4U.S.842(979),BriefofIntervenor PloridaPower&L&ghtCo.(April21,1978).Forexample,atp.10,theCompanystates:"Moreover, thereisnoquestionaboutthefullapplication oftheantitrust lawstoFPL'sactivi-tiesoroftheCommission's abilitytocondition orrevoketheselicensesonthebasisofacourtfindingofviolation oftheantitrust laws(Section105(a),42U.S.C.g2135(a)(1973))."

8ThebrieffortheCommission andDepartment ofJustice(April21,,1978)tookthesameposition(Brief,p.16,n.6).2/Casesenunciating thewellsettledprinciples thatutilities areobligated todealonnondiscriminatory basisincludeWesternUnionTelerahCo.v.CallPublishin Coman,181U.S.92,99-100(1901);Alabama&VicksburRailwaCo.v.MississiiRailroadCommissxon, 203U.S.496(1906);MxssourxPacxfxcRaxlwaCo.v.LarabeeFlourMillsCo.,211U.S.612,619,620(1909);ICCv.Delaware, Lackawanna

&WesternRailroadCo.,220U.S.235(1911);Louisville

&Nashville RailroadCo.v.U.S.,238U.S.1,19(1915);UnitedStatesv.CaxtalTransitCo.,325U.S.357(1945);AmericanTruckinAssocxatons,Inc.v.Atchison, Toeka&SantaFeRa&lwaCo.,387U.S.397(1967).See~Conwa271,holdingthattheFederalPowerCommission mustconsider"pricesqueeze"issuescreatedbydifferences instateand(footnote continued onnextpage) 27Effectively then,FP&L'sreasonfordenyingFloridaCitiesnondiscriminatory contracttermsisthattheCitiesmightother-wiseexercisetheirundoubted rightstoseekprotection beforethisagencyandtheCourtsagainsttheverysamecontractual termsthatFP&Lseekstoimpose.Obviously, ifFP&Lcanjustifytheimposition ofdiscriminatory contracttermsongroundsthattheCitiesretaintherightstocontestthetermsoffered,FP&L(footnote continued frompreviouspage):I'ederally regulated electricrates,evenwhererateswereother-wise"justandreasonable" underf205oftheFederalPowerAct.16U.S.C.824d(e).Asignificant andtypicalexampleinthislineER7819gOpinionNo~57g32PUR4thg313(1979)~1/Afterquotingthetestimony ofOtterTailPowerCo.'sVicePresident andGeneralManager,explaining thebasisfordiscriminatory rates,that"inanynegotiation thereisalwaysalittlegiveandtake",theCommission states:"Thisisclearlyillustrative ofthegenesisandtheviceofdiscrimination whichregulatory commissions arealmostuniformily directedtoremovebythestatutesunderwhichtheyoperate.Asamatteroffact,theevilofdiscrimination wasoneoftheprimemoti-vatingfactorsoftheearliestregulatory statutes....

Neneednotgointothelonghistoryofabuses,discriminations, preferences, rebates,etc.whichwerethepri-marycauseoftheinhibition againstthisformerpracticeintherailroadregulatory statutes.Theinhibitions originally writtenintothesestatutesweresubstantially carriedoverintopractically allotherutilityregu-latorystatutes....

Thereisoneotherphaseofdiscrimination whichweshouldmention.Givenamonopolist positionandtherighttodiscriminate, anelectricutilitycompanyisinpossession ofstrongandunfairweaponsinitsdealingswithmunicipalities.

2FPCat142,143.

28isfreeeithertoeffectively bartheCitiesfrompursuingtheirlitigation rightsortodiscriminate inthesaleofnuclearcapacity.

Suchimposedtermsareplainlycontrarytoantitrust lawandshouldberejectedoutofhand(e.g.,UnitedStatesv.Griffith, 334U.ST100(1948)pcondemning amotionpicturechain'swillingness todealwithasupplierintownswherethechainhadamonopolyonlyoncondition thatthesuppliergivethechainpreferred treatment inareaswherethesellerha'dalter-nativeoutlets).Thecondition byFP&LisillegalthatFloridaCitiesmustagreetoanantitrust releaseinordertoobtaintypicalcontractterms.FP&L'sstatedpositionatp.6,n.6ofitsResponseapparently seekstoseparatewhatitdefinesascontracttermsnecessarily relatedtonuclearparticipation fromotheraspectsofcontractual arrangements.

Suchartificial separation istroubling.

Forexample,transmission arrangements arenecessary forallsystemsandbackuparrangements fromFP&Lcouldbeessen-tialforatleastsome.InviewofFP&L'spositionstatedatp.17,n.14,thesebackuparrangements mustbedefinedasacon-ditiontoimmediate implementation.

Onewouldassumethat,asiscommontoparticipation agreements, adequatetransmission andbackupwouldbeavailable, butFP&Lhasnotsaidthatitagrees.FP&Lshouldberequiredtoclarifysucharrangements.

V.FP&L'sContention ThatCitiesAre"Insincere" IsGroundless andSurious.FP&Lseekstojustifyoneroussettlement provisions

-anditsownrefusalstodeal-byasserting thatithasreasonto 29believe"thatatleastsomeoftheintervening Citiesarelessthansincereinespousing interestinparticipation inSt.LucieUnitNo.2,andwouldpursueastrategyofprolonging nego-tiationsoverthetermsofparticipation."

Itthenblandlysetsforthalistofallegations, whichitclaimssupporta"basisforconcernthatatleastsomeoftheintervenors combinealackoffocusedinterestinparticipation inSt.LucieUnitNo.2withadesire,duetotacticalconsiderations oflitigation oreconomicmotives,tokeeptheissueopenforaslongaspossible."

FPGLResponse, pp.9-12;quotations atp.9,12.Amongotherthings,FPSLattackstheseniorpartnerofSpiegelMcDiarmid andquotesorreferences othermaterials inamannerwhichseemtobeknowingly outofcontextandmisleading.

ItisofmorethanpassingnotethatFPGLdoesnotsuggestthattheCitiesdonotdesireadditional St.Lucieorothernuclearcapa-citytothatwhichisoffered,andFP&Ldoesnotstatethatitiswillingtooffermore.FP&L'sarguments areoutrageous because,astheCompanyanditsattorneys wellknow,FPGLhasbeenrefusingnuclearaccesstotheCitiessinceatleast1976.Suchaccesshasbeenrequested andcontinues toberequested andisrefused,exceptfortherecentsettlement offerofsmallamountstocertainCitiesandnottoothers.Thepresentproposedsettlement limitsCities'uclear opportunities andmakesnoallowance forparticipation 30forsomeCities.1/Further,totheextentthatFP&L'spleadingstatesorimpliesthatitwillnotevenconsiderBoardorderedconditions, FP&Lunderscores itsownstrategyofdelay.IfFP&Lcanmakeittakelongenoughandmakeitsufficiently expensive fortheCitiestoobtainrelief,itwillhavesucceeded innuclearmonopolization andotherviolations oftheantitrust laws,whateverthemeritsofthiscase.FP&Lisplainlythesourcefordelay,itsattacksontheCitiesnotwithstanding.

WhiletheCitiesbelievethatFP&Z'sconductspeakslouderthanitswords,giventhepotential harmtoleavingFP&Z'sattacksandinnuendos unanswered, werespondtoeach:(1)FP&LimpliesthatGeorgeSpiegel,counseltotheFt.PierceUtilities Authority, recommended astrategyofdelayinnegotiations withFP&L.AsFP&L'scounselknows,andtheFt.Pierceminutesshow,whenmakingthestatement quotedbyFP&LfGeorgeSpiegelwasreferring toasituation whereautilitysuchasFloridaPower&Lightdelaysofferingparticipation inaunit.Thisstrategyofdelaybytheutilitybackfires againstitsowninterests.

Nr.Spiegelwascomparing utilities, suchasthoseinNewEnglandandFloridaPower&Light,ontheonehand,whichhaverefusedtoagreetodealwithmunicipals ortoagreeto1Tocuresuchunfairness FloridaCitiesmaytransfersomeofthecapacitythatisofferedamongthemselves.

FP&L'sproposednewlicensecondition thatcouldeffectively createasubsequent divestiture ofnuclearcapacityasacondition forfaircontracttermscouldacttoinhibitsuchtransfers.

Thesettlement provi-desforillegalterritoriality onitsface.Gainesville Utilities v.FloridaPower&LihtComan,573F.2d292(5thCir.1978),cert.denied,439U.S.966(1978).

31participation, andotherssuchasFloridaPowerCorporation andautilityinKansas,whichwerereadytodealingoodfaith.InresponsetoaquestionofhowquicklyFt.Piercewouldhavetofundparticipation shares,Mr.Spiegelcontrasted thesesituations andstatedthatinthelattersituation aCitywouldhavetoputupitsmoneyquickly,butintheformersituation,

~'eadelayinpayment.Indeed,FP&L'sDivisionManager,J.K.Daniel,waspresentatthemeetingandwarnedFt.PiercethatFPtLwasnotgoingtovoluntarily agreetoSt.Luciepar-ticipation bytheCity.ThefulltextoftheminutesshowthatFt.Piercewasveryconcerned aboutdraggedoutlitigation, suchasthatwhichFPGLhascreatedinfact,andthatGeorgeSpiegel.offered,ifnecessary, toworkforreducedrates-orevenfornothing-tocombatthefearedFPGLstrategyofdelay:"Ifthey[attorneys forCities]findintheiropi-nionthattheCompanyisunreasonably draggingitout,thentheybeginworkingatlowerandlowerrates.They'ediscovered theanswertowhatMr.Daniels[ofFPGL]wasimplying, istohanginasattorneys, eveniftheyhavetoworkfornothing.Heisnevergoingtositinaconference roomwitheanyutility...andhe'snevergoingtobeinapositionwherehesaystohisclientthatthey'egotarightouscause,butbecausethey'einapositiontodragitoutandmakeitexpensive, you'dbettergiveup.He'lworkfornothingforasmanyyearsasnecessary totryasbesthecantorightthebalancebetweenthesmalllitigantwiththelimitedresources andamajorcompany,thefifthlargestutilityinthecountry,anunlimited litigation budget,whichthecustomers arepayingfor.Mr.Spiegelstatedthathewouldsaythis,thatifthisthingisgoingtobedraggedoutandtheprotection ofyourinterestrequiresit,he'lworkfornothing."

32Whilethedocumentisparaphrased fromthemeeting,anyfairreadingofitshowsthatitwasFt.Piercewhowasconcerned aboutdelayandFP&Lwhowasthreatening extensive litigation ratherthangrantnuclearparticipation toFt.Pierce.FPaLhastriedtouseitsout-of-context andmisleading quotation fromtheminutesbefore;Mr.Spiegelhadresponded toFP&Lcounsel,whichcorrespondence isattachedasAppendixC.YetFPaLdidnotevenmakereference tosuchcorrespondence orresponseortothefactthatithasbeenpreviously unsuccessful initsattemptstocreateanissue.FPSL'sattempttoimplyarecommendation toFt.Piercetodragoutnegotiations, whenFt.Piercewasobviously concerned aboutdelay,isscandalous.

ThefactsarethatFP&Lwasseekingtoforceasaleofthesystem(astheminutesshow),1/was1SeeFPaL'srelatedrefusalstosellFt.Piercewholesale powertoenhancetakeoveropportunities, whichweredetailedinFERCOpinions57and57-A.FPGL'shopesoftakingoversmallersystemsarenotadeadissueasitsVicePresident, RobertJ.Gardner's statements toVeroBeachshow(MeetingofJan.'3,1980):Gardner:Idon'tthinkthere'smuchliklihood ofthereactivation ofthearrangement thatwehadin1976and7inthatsameform.Ithinkthatthereisatleastaglimmerofpossibility thatotherarrangements mightbeworkedoutifdepending onwhaty'all'sobjectives wereandwhatyourdesirewere.I'msayingthatdepending onwhatyoureallywantingtoaccomplish is...Ithinkthattheinadditiontotheantitrust problemstherewassomevulnerability tothearrangement thatwehadbefore.I'mjustspeakingofmyownpersonalassessment ofthat.Theproblemtwostandpoints.

Oneisthesubstitution ofpri-vatecapitalanditscostsformunicipals (footnote continued onnextpage) 33refusingtopermitparticipation intheplantatissueandwasforcing-andcontinues toforce-yearsoflitigation.

Alawyerwhoseekstocombatdelaytacticsbyagreeing, ifnecessary, toworkfornothing;cannotbeaccusedofdelay.At(footnote continued frompreviouspage)capitalmayhavecost.Andtheotherwasamergeroftheratesofthetwosystems.Ifwecouldfindacceptable waysaroundthoseproblems, itmaybepossibleto...andifVeroBeach'sdesiressimplytonothavetheconcer'ns ofmanagingasystem,Ithinkitmaybepossibletoputsomearrangements together.

Ihavenotgivenitagreatdealofthoughtonlyacursorythought,butifyouwanttoexploreit,we'dbehappytodoso.VeroBeach:Gardner:VeroBeach:Bob,whatIthoughtIheardyousayearlierwasthateverysinceouraborteddaywithJustice,DaveandIwerethere,sowasTom,everybody, thatyouhaveinfactbeentakingcareofthoseso-called tenconditions thattheysaidwouldbesomething you'dhavetoagreetoinorderforthemtowithdrawfromtheFERCproceeding.

NowifwhatI'mhearingyousayisthatyouhaveoraredealingwiththosetenconditions thenthenextquestionisifwewentbacktoFERCtomorrowwithasimi-lararrangement bymutualagreement, wouldJusticestayoutofitVIdon'know.-Wehaven'reallytalkedtothemdirectlyaboutthatquestionyet.Well,Iwouldn'tthinkthatthiswouldbethetimetobetalkingaboutit.

34theleast,FP&Lsholdhavehadthecourtesyofattaching Mr.Spiegel's response.

1/1/Mr.SpiegelwrotethecounselforFP&L(Appendix C):"Itappearsthattwoalternatives werebeingpresented:

thatFP&Lmight'ppose participation overalongperiodofyearsliketheNewEnglandcompanies, inwhichcasefinancial commitment wouldbeputoffperhapsuntiltheplantwascompleted; orFP&Lmightactforthrightly likeKansasCityPower&LightCompanyandFloridaPowerCorporation, inwhichcasefinancial commit-mentbytheAuthority wouldbeamatterofsixmonthstoayear.Inthiscontext,thereference toan"idealsituation".

wasmeanttoillustrate howcounterproductive itwouldbeforFP&LtobeobdurateliketheNewEnglandcompanies, inwhichcasetheAuthority's decisionastowhethertocommitfinancially wouldbetomadefardowntheroadwhenmanyrisksoftheunknownhadbeeneliminated.

Inshort,myconcernwaswiththepossibility thatFP&Lwoulddragoutthematter."TheminutesgoontoreportthecommentsbyMr.KennethDaniels,FP&LDistrictManager(pp.5-7),closingwiththestatement:

"Mr.Danielssaidifheunderstands whathasbeensaidsofar,inordertogetinvolvedinananti-trust reviewofFP&L'sapplication foralicense,theCitywouldhavetobringaboutallegations ofanti-trust toFP&Landbepreparedtodefendthem,because,Mr.Danielsstated,'IcantellyouthatFP&Lwilldenythemanddefendthemvigorously.'e furtherstatedheisjusttryingtocleartheairherebecausehedoesn'tthinktheBoardreallyunderstood itthatway"InthegiveandtakewithMr.Daniels,priortohisaboveconclusion, theminutesreportme[GeorgeSpiegel]asstating(p.6):'Thereasonthereisonthefaceofit.Theantitrust questionwhichjustifies intervention, is,asheunderstands it,becauseFloridaPower&Lightisrefusingtopermitthesmallersystemstoparticipate

.Hethinksthatisreallythebasicproposition.

Hethinksthatisfundamental toit.TheroblemcaneasilberesolvedifFloridaPower&Liht,andheissuretheDepartment ofJusticewouldsupportourposition, offersanoortunittothevariouscitiestoartxcxate....TeproemcaneeasilysolvedifFloridaPower&Lightofferssomefairshare,arelatively smallshare,bymakingaproposaltosharethenuclearplant."(footnote continued onnextpage) 35(2)FP&Larguesthatnegotiations withNewSmyrnaBeachwereundulyprolonged.

FP&Lisabsolutely correct.Thereasonsforthedelayarewell-illustrated byFP&L'proposedOrlandoagreement, whichprovidesamongotherthings,imposedtermswherebyFP&Lwouldmaintaincompletecontroloftheunitwithouthavinganyobligation totakeintoaccounttheneedsofothers;andwouldbefreedfromliability toCitiesevenforitsfailuretousegoodutilitypracticeinrunningtheplant.Afaircom-parisonofFP&L'sproposedagreement andtheConsumers PowerorFloridaPowerCorporation orotheragreements wouldshowthecauseof"unduedelay".Thefactisalsothattheparallelnegotiations withSeminolehavenotyettocounsel's knowledge beencompleted orhavebeenrecentlycompleted, andthosenegotiations havetakenyears.(footnote contnuedfrompreviouspage)LetterfromGeorgeSpiegel,Esq.toHarryA.Poth,Jr.,Esp.,April21,1978(Appendix C).Astheletterconcludes, FP&L'sapparentpositionthatFt.Pierce'sattorneyadviseddelayedparticipation is"nonsense".

First,FP&L'srepresentative madeclearthatFP&Lwouldnotagreetoparticipation; second,theNRCitselfwouldlimittheperiodfornegotiations.

Further,asMr.Spiegel's responsetoFP&Lmadeclear:hewouldnotbe"(i)soinjudicious astogivesuchadviceandatapublicmeeting(atwhichanFP&Lrepresentative waspresent),

and(ii)sopublicspiritedastogivesuchadviceinordertocommitthefirmtoprovidelegalservicesatalossofoveraperiodofuptotenyears."Id.

36Simplystated,thecauseforthedelayisthatFP&Lisanunwilling sellerofnuclearcapacity, whichhopestosellnuclearcapacity, ifatall,onlyonitsterms.Inthiscontext,FloridaCitiesbelieveitappropriate thattheBoardscrutinize thelicensing condition termswhichFP&Lwouldimpose.1/(3)FP&Limpliesthatbecausenoutilities enteredintoanI'greement withregardtoitsalleged.-

proposalforajointnuclearunitinCentralFlorida,thattheCitieswerenotinterested innuclearcapacity.

ButcomparethefactthatmanyoftheCitiesareparticipants inFloridaPower'sCrystalRiverUnit3.TheallegedproposalbyFP&Lforparticipation inaCentralFloridaUnitwasactuallymadeinthecontextofFFaL's~refusintoselltheCitiesparticipation intheSouthDadeunit.Moreover, theCompanydemandedthattheCitiesinvestapproxi-mately$1millionforasitesurveyforwhichFP&Lwouldspendno1/Itmustbestressedthatoneadvantage ofmunicipal par-ticipation innuclearunitsasopposedtopowerpurchases fromthem(whichFP&Lalsohadnotoffered)isthattheycancommittheirowncapital,oftenatreducedcosts.Thecostofdelaytomunicipals fromfailuretoreachagreement canbehigh.Notonlydomunicipal systemsnothaveaninterestindelay,butintheirjudgment, afairorderfromthisBoardwouldpenalizeFP&Lforthecostsofitsdelay.

37moneyofitsownandwouldnotnegotiate ontermsimportant totheCitiesbeforesuchmunicipal investments weremade,Finally,whiletheCompanynowprofesses thatitspie-in-the-sky proposalhadsometangibility, andthatitwaswillingtoconstruct suchaplantforothers,thefactisthatitcancelled theSouthDadeUnitratherthanofferparticipation inSouthDadetoCities.Thebackground toFP&L'sallegednuclearjointventureofferisasfollows:Inearly1976,anumberofutilities expressed interestinparticpation inFP&L'sproposedSouthDadeNuclearUnits.FP&Lrefusedparticipation bylettersdatedMarch30,1976.Theselettersstated:"Whileweappreciate yourexpression ofinterest, FPLhas-decidedtoproceedindependently withthedevelop-mentoftheSouthDadeProjectandtoutilizetheProject's electricgenerating facilitytomeetourownsystemneeds....[However,]

FP&Lispreparedtomeetwithrepresentatives ofthosesystemswhichareinterested incommiting tothejointdevelopment ofanuclearprojectforafulldiscussion ofthissubject[W]edonotfeelthattheterm"discussion" asusedhereinshouldbeconstrued asanoffertonegotiate nordowebelieveourselves underanyobligation tounder-takethewhole,oranysubstantial portion,oftheresponsibility tocarryoutsuchaprojectasenvisioned here.Whatwedoproposeistheopeningoftalksandthedevelopment ofatruejointnuclearpowerproject."

LetterfromFP&Ltovarioussystems,datedMarch30,1976.AppendixD.Thusthegenesisofthe"truejointnuclearpowerproject"wasinthecontextofFP&L'srefusaltodealintheSouthDadeNuclearProject.TheCitiestoldFP&Lthattheyhadcertainneedsinconnec-tionwiththeproject,including legislation thatwouldpermitmunicipal jointfinancing oftheproject,aswellasvarious 38transmission andbackuparrangements.

Theseneedsweresetforthinvariouscorrespondence, whichisattached.

AppendixD.However,FP&Linsistedthatpublicfundsbecommitedtoasitesurveystudyandthatnegotiations concerning the"hardware" andrelatedaspectsofthenuclearjointventureresumethereafter, deferring consideration oftheseothercrucialmattersuntilpar-ticipants committed toa$1millioninvestment inthestudy.Whiletheabovedescribed discussions weretakingplace,FP&LdecidedtocanceltheDadeCountyUnits.TheCitiesimme-diatelysuggested thatFP&Lmakeavailable itsexistingcontracts (onaconfidential basis,ifnecessary) andthatitcommencedevelopment ofaworkableparticipa'tion agreement withothersystems.Sucharrangements wouldhavegivenFP&Lameaningful interestintheunits,wouldhavepermitted earlyconstruction oftheunitsandwouldhaveeliminated mostofthethencurrentobjections toconstruction beforetheNRC.LetterfromRobertA.Jablon,Esq.toTracyDanese,Esq.,July21,1976.FP&Llaterwithdrewtheunit,butdidnotthenorlaterrespondfavorably tomunicipal requestsforpursuingparticipation.

FP&LnowcontendstheCitieswereinsincere becauseapro-jectdidnotcomeintobeing.ThefactisthatFP&Lofferedtheprojectfor"discussion" whileitwasrefusingparticipation bythemunicipals inthemoreviableunitsatSouthDade.FP&Linsistedonmunicipal investments beingmadeinadvanceofanyagreements regarding participation termsorothermajormatters.

39AndFP&Litselfresistedparticipating intheproject.ThetenorofFPGL'soffercanbereadilydiscerned fromadocumentpreparedbyFP&L'sTreasurer andCounselmemberanddiscovered laterbyCities(Document No.280954):"FPLfinancial exposuremustbeheldtoabsoluteminimum~~~~2~cParticipants mustbuildandpayfortheirownreservestobackupthenuclearplant.FPListohavenoobliga-tionorliability withrespecttobackup,power3.aFPLisnottobeheldresonsibleforanthin6.FPLshouldreceiveasubstantial management fee(overandabovecostsandoverheads) tocompensate forresour-cesdivertedfromFPLbusiness.

Asui'table feemightbe2%oftheprojectcosts.[1/]7.ItwouldprobablybebestifFPLdidnothaveanyownership intheplant.a.Bynotbeinganowner,FPLisfurtherprotected fromanyliability orrisksconnected withtheplant.b.Iftheplantweresetupasalegalentity(suchasagenerating company)FPLwouldbecomesubjecttotheHoldingCompanyActasapart-owner (1)Iftheplantweresetup.asanunincorporated jointventurewiththepartnershavingundi-videdinterest, partnership intheplantwouldnotputFPLundertheHoldingCompanyAct.(2)Butjointventurewouldbedifficult forthepartnerstofinancesinceeachpartnerwouldhavetocomeupwithitsshareofthemoneythroughitsownresources; soweshouldpro-bablyexpecttheparticipants willneedtosetupanentitysuchagenerating companywithitsownfinancing capability."

(Emphasis inoriginal.)

1/FPGLinfactproposed5%.SeeAppendixD.

Thetoneandcontentsofthememorandum,

attached, contrasts withthe"truejointventure"suggestion inFP&L'sMarch30letterinwhichallparticipants wouldhe~reuiredtomake"fullcommitment",

according toFP&L.The.factthatthefinancing arrangement proposedbyFP&L"wouldbedifficult forthepartnerstofinance"wasknowntoFP&Lmanagement, butitproposedsucharrangement anyway.Thattellsitall.(4)FloridaCitieshavecasttheirrequestsforreliefbeforethisagencyintermsofgivingsmallersystemsnuclearopportunities andofmakingnuclearaccessavailable inalter-nateforms(e.g.,directownership, purchased power,par-ticipation throughapowersupplyagency).Theyhavealsorequested theavailability ofbaseloadandwholesale powersales,whicharepartially nucleargenerated.

FP&Lcriticizes thispositionandquotesfromastatement bycounselforsomeofFloridaCitieswhoareplaintiffs inCityofGainesville ReionalUtilities, etal.v.FloridaPower&Liht,No.79-5101-CIV-JLK (S.D.Fla.),whichwasmadeinresponsetoaclaimbyFP&LbeforetheDistrictCourtthattheCitieswereengaginginshamlitigation:

nottopartxcipate thatCitieshavebeendenied.Neverhavingallegedthattheywouldnecessarily electtoparticipate inanyparticular unit,theirpositioncannotbeasham."Thisquotation isfrompage23of"CitiesMotiontoDismiss,OrforSummaryJudgmentofFloridaPower&LightCompany's'mended Counterclaim" (June26,1980).FP&Lfailstoquotetheimmediate following sentence:

41"FloridaCitiesdonotmeantoimplythatthedenialofnuclearaccesshasnotgreatlyinjuredthemorthattheydonotdesireaccess,althoughtheformofaccessmayvary."Withtheexception oftheGainesville affidavit, neitherdoesFloridaPower&LightcalltotheBoard'sattention thevariousaffidavits ofCities'anagers thatwerefiledinDistrictCourtattesting tothefactthattheydoindeeddesirenuclearpoweraccess.PFP&Lalsoquotesfromtheaffidavit ofRichardHesteroftheCityofGainesville andfromTallahassee cityminutesagainfortheproposition thattheCitiesmaynothavea"focusedinterest" inSt.Lucie2participation (p.12).OfnoteisthefactthattheCompanydoesnotallege-nordoesithaveanybasisforalleging-alackofinterestonthepartoftheCities.InthecaseoftheGainesville affidavit, Mr.HesterdidstatethatGainesville wouldhavetostudythespecificproposal.

AsFP&Lwellknows,utilities generally arrangetosecurepowersupplyinanticipation ofloadgrowth,sothattheyoftenhavemorecapacitythantheyneedwhentheyfirstobtainnewpowersupplyandmustsellpartofit.WhileFP&Lcomplains thattheCitiesmightdelaynegotiations, thefactisthatFP&LblockedGainesville's accesstonuclearpowerplantsorotherjointmunicipal

ventures, andGainesville wasforcedtoconstruct alternative generation inGainesville andwasdamagedthereby.Underthesecircumstances, havingbeenforcedtoconstruct plantbecauseofFP&L'santicompetitive refusalstodeal,Gainesville wouldneedtocarefully considerwhetherandtowhatextentit 42couldnowparticipate inSt.Lucie2.Suchdecisioncouldwe>~dependuponotherrelief,suchwhethertherewillbeanintegrated poolinFloridasothatGainesville couldmosteffec-tivelyuseitsexistinggeneration.

FP&L'spositionwithregardtoTallahassee isevenstranger.

FP&LrefusestoselltoTallahassee nuclearcapacity, evenunderthesettlement.

Inanaffidavit notreferredtobyFP&L,theTallahassee utilities managerstatedthathewouldrecommend directownership ofSt.LucietotheCityCommission.

Tallahassee CityManagerDanielKlemanexplained thatinaddi-tiontoseekingtherighttoownashareofthenuclearplants,theCityhadalsorequested reliefbeforethisBoardsothatitcouldbuycheaperbaseloadpower.Tallahassee hasalsosoughtimprovedtransmission service.OftheCityCommissioners whodiscussed theproposal, onestatedthatheopposedownership inthenameoftheCityofTallahassee intheplant,butthathefavoredpurchasing unitpower.AnotherCommissioner statedonlythatsheopposedownership.

OneCommissioner, MayorWilsondidseemtodoubtthewisdomorpolicybehindthesuitintheDistrictCourt.TheCityofTallahassee hascontinued topar-ticipateinboththeintervention andtheDistrictCourtproceedings.

Thus,thebestthatFloridaPower&Lightcando,afterhavinghadfullopportunities fordiscovery intheDistrictCourtcase,istoraisequestions ofwhethertwocitieswouldparticipate inSt.Lucie2:one,becauseitwasforcedtomakealternative powersupplyarrangements; asecond,basedupon 43FP&L'sreadingofacitycouncildiscussion, wheretheCityvotedtocontinueparticipation intheDistrictCourtaction,seekingsuchparticipation.

VI.TheCorrespondence BetweenTheIntervenors AndFloridaPower&LightDemonstrates FP&L'RefusalsToDealAndConfirmsThatAnyDelayResultsFromFP&L'sActions:TheCorrespondence IsAdmissible ForThesePuroses.OnJuly28,1976,theChairmanoftheNuclearIntervenors GroupandcounselfortheCitieswroteFP&Lalettersettingforthanuclearproposal.

FP&Lresponded negatively.

Understandably, FP&Lseekstoerasethecorrespondence fromtherecordsinceitsresponsesetsforthaclearrefusaltodeal.FP&LthusseekstohavethisBoardignoreCities'etter onthegroundsthatitissomehowprivileged, andapparently thenintendstoassertthatIntervenor's cannotprovethattheysoughtaccesstonuclearresources.

Asamatteroflaw,noprivilege everattachedtotheletters.TheywereadmittedintoevidenceinFERCDocketNo.ER78-19,etal.withoutobjection andformedapartoftheevi-dentiarybasisfortheCommission's conclusion thatFP&Lhadbeenactinganticompetitively.

1/Thus,evenifthereoncewereanyvaliditytoFP&L'snewfoundclaimsofprivilege, theobjection hasbeenwaivedlongsince.TheletteronbehalfofCities(hereafter "Cities'etter"

)toFP&LclearlysetsforthaproposalandarequestfornuclearaccessbytheCities.LetterfromHarryC.Luff,Jr.andFP&Lxsestoppedfromraisingthisclaimofprivilege now,afteritdidnotobjecttotheuseofthesedocuments intheFERCproceeding, andafteradecisionadversetoFP&Linthatdocket.TheCompanycannotpickandchoosetoadmittoevidencewhenitthinksitwillhelp,andobjecttoitwhenitthinkstheevidencewillbehurtful.

44RobertA.Jablon,July28,1977toMr.MarshallMcDonald.

FP&L'sresponsewasplainlyoneofrejection.

LetterfromRobertJ.Gardner,VicePresident toHarryC.Zuff,Jr.andR.A.Jablon,September 16,.-1977.1/FP&LassertsthattheJuly28,1977letteronbehalfoftheCities"constitutes asettlement proposal."

FP&LBrief,p.21.Itthenconcludes, withoutanycasesupport,thatthelettercouldnottherefore beadmittedintoevidenceundertheFederalRulesofEvidence, R.408.FP&Lisjustplainwrong,fortheseveralreasonsthatfollow.Citiesagreethattheirletterconstitutes asettlement

proposal, although'o negotiations wereconducted, astheCitiessought.FP&L'sresponsive letter,however,whichwasanoutandoutrefusaltodeal,isnot"[e]videnceof(1)furnishing orofferingorpromising tofurnish,or(2)accepting orofferingorpromising toaccept,avaluableconsideration incompromising orattempting tocompromise aclaim..."R.408.Thepolicybehind1/FP&Lnowcomplains thattheproposalwasconditioned andtheactualpurchaseofinterestinnuclearunitsneededcityappro-valsand,therefore, thetermswere"economically unattractive toFPL".Infact,the'letter hadbeencarefully considered byintervenors'anagement, including manyoftheirpolitical officials.

However,itwassentatatimewhenFP&Zhadbeenabsolutely refusingtodealwiththeCitiesconcerning manyofthemattersexpressed intheletter.Obviously, intervenors andFP&Zrecognized thatcontractual arrangements wouldtakenego-tiationsandformalapprovals.

Asstated:"Thisproposalrepresents acombinedeffortoftheIntervenor Grouptoprovideabasisforagreement.

Wearepreparedtoconsideranyobjections, modifications orcounterproposals ofFP&L."However,FP&L'sresponsewastotallynegative.

Thus,therewasnothingtobeconsidered.

Rule408istoencourage settlements, nottoencourage flatrefu-salsofsettlement offers.Thus,regardless ofthecharac-terization ofCities'etter, FP&L'snegativeresponsecertainly isadmissible.

FP&Ldoesnotappeartodisagree, andhasitselfputthisletterbothbeforethisCommission byitspleading(Appendix Fthereto),

andbeforetheFERCbyitsfailuretoobjecttoitsadmission inevidenceinFERCDocketNo.ER78-19.TheCompany's argumentthatCities'etter isinadmissible missestwoessential, andinterrelated points.First,evenifRule408hadcreatedaprivilege forCities'etter priortothewaiverofthatprivilege whenFP&Lacquiesced toitsuseinevidence, theprivilege wouldbelongtoCities:ItwouldoperatetopreventuseoftheletterinevidenceagainstCitiesattherequestofFP&L~Absentprioragreement tothecontrary, itwouldnotprecludetheCitiesfrommakingpublicorofferingintoevidencetheirownstatement oftheirposition,insettlementnegotiations orotherwise.

Thus,FP&Lcouldnotmoveasettle-mentofferintoevidenceinordertoshow,forexample,thatCitiesvaluedtheirclaimsforagivenamount,andtherefore arenotentitledtomoreinjudgment(although Citiesmakenosuchclaimofprivilege infact).See,e.g.,Jacksonv.ShellOilCo.,401F.2d639(6thCir.1968);Norlinv.Carr,211F.2d897(7thCir.1954);Brattv.WesternAirLines,169F.2d214(10thCir.),cert.denied,335U.S.886(1948).

46AssumingthatCities'etter isasettlement offer,arguablyitcouldnotbeintroduced byFP&LagainsttheCitiesasanadmission thatCitiesdidnothaveasupportable claim.Theobviousreasonisthatoffersmadetocompromise litigation indi-cateonlyadesireforpeace,notanadmission regarding thevalidityoramountofaclaim.Sternbererv.U.S.,401F.2d1012,1018(Ct.Cl~1968)~FPGLwouldturntheRuleinside-out.

Thisisapparentifananalogous positionisconsidered inthecontextofotherprivileges:

FPSLislikeaprosecutor whowouldpreventawitnessfromtakingthestandinhisowndefense,becauseoftheexistence ofthewitness'ifth Amendment privilege.

CitiesdoubtthatFPaLwouldclaimthatCitiescouldnotdisclosecorrespondence passingbetweentheCitiesandtheirattorneys, ifCitiessochose,becausetheattorney-client privilege preventsit.YettheCompany's presentargumentisnodifferent.

ThefactthatadocumentwassentbyCitiestoFPaLcannotpreventCitiesfromputtingthatdocumentintoevidence(absenttechnical objection, suchasauthenticity, orsomeagreement betweentheparties,whichisnotpresenthere).Citiesknowofnocasewhichspecifically holdsthattherecipient ofasettlement offercannotpreventthesenderfromputtingitintoevidence-perhapstheargumenthasneverbeenmadebefore.However,allthecasesofwhichCitiesareawareinvolvesituations inwhichthereceiving partysoughttohavethesettlement offeradmittedagainstthesender,andtheRule 47itselfandthecommentsoftheadvisorycommittee areclearlystatedintheseterms.Forexample,theCongressional Conference ReportontheFederalRulesofEvidencebill,P.L.93-595;88Stat.1926(Jan.2,1975)(quotedintheFed.R.Evid.,CommentstoRule408),statesat6:TheHousebillwasdraftedtomeettheobjection ofexecutive agenciesthatunder-theruleasproposedbytheSupremeCourt,apartycouldpresentafactduringcompromise negotiations andtherebypreventanoosinartfromofferinevidenceofthatfactattrialeventhoughsuchevidencewasobtainedfromindependent sources.TheSenateamendment expressly precludes thisresult.(Emphasis added.)(ThedebatebetweentheHouseandSenatever-sionscenteredaroundwhetherfactsstatedinsettlement nego-tiationsshouldbeincludedwithintheambitoftherule:theassumption bybothsidesthroughout wasthatthesettlement offermightbeexcludedwhenofferedby"anopposingparty".)Thatanofferingpartymayputitsownofferintoevidenceisanecessary partandparcelofthesecondessential pointwhichFP&Lhasfailedtocomprehend:

Rule408onlyexcludesevidenceofsettlement negotiations offeredforthespecific, purposeofshowing"eithervalidityoramount"ofaclaim.Therule,byitsownterms,doesnotrequiretheexclusion ofanyevi-denceotherwise-discoverable merelybecauseitispresented inthecourseofcompromise negotiations.

Thisrulealsodoesnotreuireexclusion whentheevidencex.sofferedforanotherurose,suchasprovingiasorpregudzce ofawxtness,negativing acontention ofunduedelay,orprovinganefforttoobstructacriminalinvestigation orprosecution.

(Emphasis added.)Thecasesareinaccord.Evidenceofsettle-mentnegotiations betweenatortplaintiff andthedefendant's insurerisadmissible inanactiontoshowbad-faith failuretosettlewithinpolicylimitsonthepartoftheinsurance company.LibertMutualIns.Co.v.Davis,411F.2d475,483-84(5thCir.1969).InBaBInvestment Clubv.Kleinert's, Inc.,472F.Supp.787(E.D.Pa.1979),theCourtpermitted evidencerelatingtocompro-misenegotiations toshowwhetheranindividual defendant, whohadsettledclaimsofsecurities violations withtheplaintiff class,hadreacheda"successful" settlement whichwouldentitlehimtoindemnification fromacorporate co-defendant.

Inrulingthatevidenceofthesettlement processwasadmissible, theCourtstatedtheobvious:[Indemnitee's]

objection isnotwelltakenbecausetheruleexcludesevidenceofacompromise onlyontheissueoftheamountorvalidityoftheclaimwhichisthesubjectofthecompromise.

Ifthecompromise negotiations areusedforanotherpur-posetheyarenotinadmissible underRule408.B&BZnv.Club,~suraat791.Thesameprinciple waswellestablished inthecommonlaw,whichRule408incorporates inthisregard.E.g.,OverseasMotors,Inc.v.ImortMotorsLtd.,Inc.,375F.Supp.499(E.D.Mich.

1974),aff'donotherrounds/519F.2d119(6thCir.),cert.denied,423U.S.987(1975);InsirationConsol.CoerCo.v.Lumbermens Mut.Cas.Co.,60F.R.D.205,211(S.D.N.Y.

1973);QlSrinerv.Citizen's Cas.Co.-/Consol.Coer,~sura,weredecidedpriortothepassagebyCongressofcurrentRule408,theyweredecidedafterasimilarrule,promulgated bytheSupremeCourtonNovember20,1972,wassenttoCongressonFebruary5,1973.TheCourt'sversionoftherulealsostatedthatofferswereinadmissible "toproveliabi-lityfororinvalidity oftheclaimoritsamount",andthat"[t]hisruledoesnotrequireexclusion whenevidenceisofferedforanotherpurpose...."

SeeFed.R.Evid.,CommenttoRule408.

49ofN.Y.,246F.2d123(5thCir.1957).AlthoughCitiesmightseektoshowliability basedontherefusaltodeal(heretheyonlyseektorefutethattheirstatedinterestisinsincere, orthattheydelayed)whichthecorrespon-denceconstitutes, thismustbedistinguished fromtryingtouseanoffer(oracceptance) asanadmission ofliability.

ItisthelatterwhichRule408prohibits.

InOverseasMotors,Inc.v.ImortMotorsLimited,Inc.,~sura,anautomobile dealersoughttointroduce intoevidencecorrespondence betweenitandvariousmanufacturers (defendants),

andcorrespondence amongthemanufacturers.

Thecorrespondence, whichconstituted settlement negotiations undertaken aftertheplaintiff hadthreatened alawsuit,wasnotadmittedbytheCourttoshowconspiracy becauseoftheuniquerequirements ofconspiracy claims.1/However,theCourtmadereference topre-ciselythesituation withwhichCitiesarefacednow,indicating thatsettlement documents shouldbeadmittedwhenthecorrespon-denceitselfgivesrisetotheclaimathand:1/375F.Supp.at537:"[P]ermitting proofofsuchactivitycouldeasilymisleadajuryintofindingaShermanActconspiracy basedonthedefendants'ooperation indefendingthissuit."

50Itisgenerally recognized thatoffersincompro-miseareinadmissible onlywhenofferedtodemonstrate someelementofliability inthecaseathand.Theymaybereceivedforotherpurposessuchasproofofcosts,duediligence, explanation fordelay,etc.[footnote omitted]Althoughthereislittleauthority onthepoint,itwouldalsoseemreasonable toadmitsuchevidencewhetherthesettlement neotxatxons arethemselves sub'ectsofthelawsuit-i.e.,oerativefacts.OverseasMotors,~suraat537(emphasis added).TheCourtwentontoexplain,375F.Supp.537,n.128:Theprinciple isofcoursenotthesameastheotherexceptions, forheretheproofwouldgotoliability.

Itisanalogous, however,inthattheliability inquestionwouldnotbeontheclaimwhichwasoriginally indisputeandwhichwasnego-tiated...butonthedistinctantitrust claimwhichgrewoutofit.SeeFletcherv.WesternNationalLifeIns.Co.,10Cal.App.3d376,89Cal.Rptr.78(1970)(tortclaimforemotional distressinwhichdefendant's offertosettleinsurance claimwaspartoftheconductallegedly causingthedistressandwasprovableassuch).Itisprecisely thecaseherethatthelettersarethemselves operative factsofanantitrust claimandacloseranalysisshowsnotonlytheabsurdity buttheevilofFP&L'sposition.

Cities'etter andFP&L'snegativeresponsive constitute arequestbyCitiesforaccesstoavitalgood(i.e.,nuclearpower)overwhichFP&Lclearlyhad(andhas)amonopoly, andacorresponding illegalrefusaltodealinthatgoodbyFP&L.Thus,adistinctantitrust claimarisesfromthatrequestandrefusalandthecorrespondence isadmissible toshowit.1/1Certainly thelettersareatleastadmissible tonegativeanyinference, impliedbyFP&L,thatCitiespositioninthisdocket/thattheydesirefairnuclearaccess,isinsincere, and,inthelanguageoftheRule,forthepurposeofnegativing acontention ofunduedelay."

51Inthissense,Cities'equest toFPGLislikeademandforassurances ofperformance ofacontract.

Repudiation ofademandconstitutes abreachofcontract(e.g.,UniformCommercial Cedeg52-609).Thedemandisadmissible toshowitsownexistence, andarefusaltocomplywiththedemandisadmissible asabreachofcontract, althoughonecouldconstrueboththedemandandtherefusalas"settlement negotiations" inthat,ifthedemandiscompliedwith,nosuitwouldfollow.+1Similarly, arequesttodealandarefusaltodealmustbeadmissible inthecontextofantitrust allegations toprovetheirownexistence, eventhoughcompliance withtherequestwouldbea"settlement" andnoantitrust claim2/wouldhavearisenfromthattransaction.

Ifitwereotherwise, FPaLwouldbeintheincredible positionof=beingableunilaterally topreventanyevidenceofrequeststodealbyothersandofitsownrefusalstodealsimplybecausealitigation context(prompted byearlieranticompetitive actsofFP&L)allowstheprobative documents tobecharacterized as1Or,,zfsettlement negotiations culminate inanagreement whichissubsequently

breached, andthebrea'ching partyclaimstherewasnoagreement, evidencethatanagreement didinfactexistwouldbeadmissible toestablish theclaimforbreach.2/Thatis,noclaimbasedonarefusaltodealonafairbasis,withintheambitfairlycoveredbytherequest.Citiesdonotmeantoimplythatallantitrust claimsonanybasiswhateverwouldbeforeclosed bysuchadealing.

52settlement negotiations.

1/Clearly,nosuchresultwasintendedbyRule408,nordoesatechnical application ofits,termsrequirethisconclusion.

Asthis,Boardstatedinanearlierrulinginthisdocket,"...apartymaynotseizeuponsettlement negotiations asadevicetodefusedamningevidenceagainstit."OrderofFebruary9,1979.2/Thus,thecorrespondence atissueheresimplyisnotwithinthescopeofRule408,whichisdesignedtoencourage settlement byprohibiting offersofcompromise frombeingusedeitherasadmissions ofliability orasadmissions astothevalueofa1/Thepointcanalsobemadefromadifferent perspective.

If,asFP&Lclaims,Rule408doesprovideaprivilege orbasisforexclusion forthecorrespondence, itisaqualified one.E.9.,Reichenbach v.Smith,528F.2d1072,1075(5thCir.1976),statingthatwithrespecttoevidenceofsettlement betweenaplaintiff andaco-defendant, atrialcourtmustbalanceofthepolicyofencouraging settlements withtheneedforevaluating thecredibility ofwitnesses.

Inthiscase,thepolicybehindRule408wouldhavetogivewaytotheneedtoproveactsinviolation oftheantitrust laws,andactswhichwereintendedtoimpedejusticebydelay.2/LBP-78-4, 9NRC164,184.ContrarytoFP&L'scontention, Briefp.21,thatorderdidnotruleonthelettersatissuehere.ZnthatOrder,theBoardruled,interalia,thatCities'ocument requestdirectlyseekingFF&L'ssettlement documents shouldberejected, inlightofthepolicybehindRule408and10C.F.R.52.759.Asexplained above,thepresentsituation iswhollydifferent:

Citieshereseektousetheirownofferandrequest;FPaL'sresponsewasaflatrefusalandtherefore notwithineithertheletteroforthepurposebehindR.408;andtherequestandrefusalthemselves areoperative facts,analogous totheofferandacceptance ofacontract.

Onanotheroccasion, theAppealBoardhasexpressed "considerable doubtwhether,asageneralmatter,thereisanysettlement privilege whichmightassistpetitioners'resent endeavortoresistdiscovery".

HoustonLihtinaPowerCo.,etal.(SouthTexasProject,Units1&2),NRCDocketNos.50-498A,etal.,ASLABOrderApril15,1980,at3.

53claim.Letterswhich,althoughwritteninthecontextoflitigation, areofferedbytheauthortoshowthatarequestwasmade,toshowdelay,ortoshowindependent anticompetitive refu-salstodeal,arenotcontemplated bytheRuleandarenotrequiredbetoexcludedfromevidence.

Inshort,Rule408isirrelevant.

VII.Miscellaneous.

AsFP&Lstates(Response, pp.20-21),theCitiesattachedcertaincorrespondnece toshowtheirexclusion fromthenego-tiationprocess.Theycontinuetobelieveandrepresent thatwhile,asFP&Lnotes,theycould"expresstheirviewsforcefully atthehighestlevels",theywerenotallowedtobepresentatthenegotiating sessionswherethedealwasessentially struck..Certaincorrespondence, citedbyFP&L,includescriticism oftheCompany's conduct,althoughthecorrespondence wasnotincludedtoraisethatissue.FP&Lcomplains thatJudgeKing'sorder(oftheDistrictCourt)wasnotattached, which"ruledthatFP&L'sactionswereproperineverrespect."

IfFP&LreadstheorderasgivingitacleanbillofhealthasopposedtomerelydenyingCities'equested injunction, sobeit.Citiesdisagreewiththeinterpretation.

54CONCLUSION Fortheforegoing reasonsandthosestatedin"FloridaCities'nswer toJointMotion"aprehearing conference shouldbeorderedandprocedures adoptedtoruleonallpleadings beforethisBoard,including therequestsforreliefatpp.8,18,20,24and28ofthisReply.Respectfully submitted, RoertA.JionAlanJ.RothMartaA.ManildiAttorneys fortheLakeWorthUtilities Authority, NewSmyrnaBeachUtilities Commission, SebringUtilities Commission, Gainesville RegionalUtilities andtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry, St.CloudandTallahassee, FloridaandtheFloridaMunicipal Utilities Association January8,1981LawOfficesofSpiegelaMcDiarmid 2600VirginiaAvenue,N.W.Suite312Washington, D.C.20037(202)333-4500 APPENDIXAExcerptsfromMidlandandCrystalRiverParticipation Agreements ExcerptsfromMidlandAreementGoodUttvpractice:

Ataparticular time,anyozthepractices, methodsandacts,wnich,~wtheexerciseor,reasonable ludgment'"thelightorthefactsteo~watthet'methedecisioncpsmade,wou'dhavebeenexpectedtoaccomplish thedesiredresultatareasonable cos"cons'stent withreliability andsafetyandCONST&'5obligations u"de.theDowGeneralAgreement andallapplicable Lawsandgovernmenta'ules, regulations andordersperta'ning

.toHTDLAÃ)~Suchpract'ces, methodsandactsshallinclude,butsh~notbeLimitedto,anyoithepract'ces, methodsandactsengagedinorapprovedbyasigniicantportionoitheelectricut'lityindustrypriortothetimethedecisionwasmade.GoodUtiL~typracticeistotintendedtobeLimitedotheopt~~umpractice, methodoract,totheexclusion oiallothers,butrathertobeanumberofpossibleoractices, methodsoracts.

54ARTECL=.6OPTEDARRAÃGc~S 6.1Authority "orOperation andPenaement.CONST~sha11havesoleauthority tomanage,control,maintainandoperate~i~LA%i,andsha11takeallstepswhichitdeemsnecessary orappropN~te d'orthatpurpose.CONSUiSshal'ischarge suchauthority inaccordanc w'thGoodUtilityPracticeandtheotherprovisions oxthisAgree'men't

~

~ICLE15Liabi'i~tohird2art'esZo~zhstanding anyprovision toehecontrazyMthisAgrement,anyliab"ityozanypayment,cost,expenseorobligation arisingomaclaimozL~b~~ty(azterapplication theretoofanyinsurance coverageorproceeds) toac".2"d~yor~rt"esagainstoneorbothofthe2ARZI"=Sandarisingfromtheac~~sition oz~23~%)oz'nypar-thereoz,theplanning, eng~meering, desi~,1'censing, procurement, construction, inst~ation orcomplet'on of~L>%)oranypart"".ereof, theoperation, use,management, control,maintenance, replace-ment,altarat'on, mod~"ication, renewal,rebuilding orrepairofRELATE)oranypartthereof,theretirement, decommissioning,

disposal, nz'alvagi gozKDLA'G)o-anypartthereof,orfromanyotheractionorfailuretoactbyCQNS~(or'tsemploys,agentsorcontactors)1ncar=iingoutanyoztheprovisions ozthisAgreement inregardto&~LANDincluding, withoutlimitation, theprovi-sionsorRclearFuel,shallbeallocated totheelectricpropertyDeludedinM&LA%)'ntheratiothattheAllocated

"=lectric Investment inYRLKG)bearstot"eCostofConscactionoz~LA%)andsha'~beallocated tothestamoropertyincludedm~~LAW)intheratiothattheAU.ocated SteamInvestment inKZ)LAÃ)beastotheCostofConst~ction ofKZ)LAÃ).

170Theportionofanysuch1iabi3.ity oranypayment,cost,expenseor\obligation arisingfromanysuchclaimofliability (afterapplication theretoozanyinsurance coverageorproceeds) toa'thirdpartyorpartieswhichisallocated totheelectricpropertyin'.udedini~LANDasaforesaid shallbesharedbythePARTTESinproportion totheirrespective percentage ownership interstsintheelectricpropertyincludedinK%LANDinallcircumstances exceptwheresuchliability orclaimofliability istheresultoffailurebyCONSEKRStocomplywithGoodUtilityPracticeorgrossnegligence orinten-tionalwrongdoing onthepartorCONSUMERS.

Zf,byreasonofanysuchliability orclaimofliability (afterapplication theretoofanyinsurance coverageorproceeds) toathirdpartyorparties,eitherPARTYsha31becalledupontomakeanypaymentortoQxcuranycost,expenseorobligation inexcessofthatforwhichitisresponsible undertheprovisions ofthepreceding

sentence, thentheotherPARTYshallreimburse thePARTYmakingsuchexcesspaymentorincurring anysuchexcesscost,expenseorobligation tothefullextantoftheexcess.Theportionofanysuchliability oranypayment,cost,expenseorobligation ar'singfromanysuchclaimofliability (afterapplication theretoofany~msurance coverageorproceeds) toathirdpartyorpartieswhichisallocated tothesteampropertyincludedin~iLAiU3asaforesaid shallbeborneentirelybyCONSUMERS andshallnotbesharedby.~SPA.15.2LiabilitBetweenthePARTES.CONSI2KRF sha13.notbeliableto~iAforanyloss,cost,damageorexpenseincur.edbyKAPPAasaresultoianyactionorfailuretoact,underanycircumstances, byCONS~iS(oritsemployees, agentsorcontractors) fn 171carryingoutanyoxtheprovisions oxthisAgreement inregardtoxheacquisi-tionoxMID'%)oranypartthereox,thepLanning, engineering, design,licensing, procurement, construction, installation ox'ompletion of~ALAÃ)oxanypartthereof,theopeation,use,management, control,maintenance, replace-ment,alteration, modification, renewaL,xebuilding'r repairof~iLAÃ)oranyaxtthereoz,theretirement, decommissioning,

disposal, orsalvaging ofMIDLAND)oranypart,thereof,oranyothermatterconcerning

~iLANDincluding, withoutlimitation, NuclearPuel,exceptthatCONSUMERS shallbeLiabletoMPPAforanysuch'Loss, cost,damageorexpensewhichistheresultof(a)failurebyCONSPJKtS toperformthisAgreement inaccordance withitsterms,or(b)grossnegligence orintentional wrongdoing onthepax'toxCONS~Innoevent,however,sha11CONSUMERS beLiabletoMPPAwithrespecttoanyclaim,whetherbaseduponcontract, tort(including negligence),

patent,trademark orservicemark,orotherwise, foranyindirect, special,incidental orconsequential damages,including, butnotLimitedto,lossofprofitsorrevenues, lossofuseofMIDLAND<oranypartthereof,costofcapital,costoxpurchased orreplacement power,claimsoftheParticipants orothercustomers ofMPPAforserviceinterruptions, ox'laimsofcustomers oftheParticipants forserviceinterruption, butnothinginthissentenceshallprecludeLiability foxdirectandpunitivedamages.Purther,CONSUMERS shalluotbeliabletoKAPPA1nanysingleoccurrence unlesstheuninsured damagestoMPPAresulting x'omtheoccurrence areinexcessof$15,000intermsozthevalueofthedollarasoxJanuary1,1979.Inaddi-tion,CONS~ishallnotbeliabletoMPPAunlessdemandismadeby~i 1.72writingandreceivedbyCONS~withintwo(2)yearsaftertheoccur"ence forwhichdamagesarebeingclaimedbecomesknowntoMPPA.ZtisagreedbythePARTIESthatinnoeventshallanyof(i),(ii),(Q.i)and(iv)belowbeconsidered asfailurebyCONSUMERS toperormthisAgreement

~accordance withitstermsorasgrossnegligence orintentional ongdoingonthepartofCONS~r(i)anydecisionbyCONSUME%,

foreitherofthereasonsspecified in(a)and(b)orthefirstandthirdsenten-cesinthefirstparagraph ofSection5.3.2andsub)ecttothe24~oathtimelimitation specified insaidfirstandthirdsentences, nottohaveMIDLAND)2orKQ)LAÃ)lincommercial electricoperation bytheirrespective scheduled Commercial ElectricOperation Dates(assaidscheduled Commercial ElectricOperation Datesmaybeextendedbyallintervening eventsofforcemajeure),

(ii)theentering~mtothisAgreement byCONSUMERS, orthecontinuation ofconstruction of~i'Ã)byCONSEKRS, underanyconditions whereCONSUMERS shouldhaveforeseenthattheremightbeadecisionbyCONSUMERS, foreitherofthereasonsspecified in(a)and(b)orthefirstandthirdsentences inthefirstparagraph ofSection5.32,nottohaveMIDLAND2or~iLA%)lincommercial electricoperation bytheirrespective sched-uledCommercial ElectricOperation Dates(assaidsche-173duledCommercial

"='ctricOperation Datesmaybeexended.by'Llintervening eventsoforcemajeure),

(iii)ehe.enter~Mtathishgreemene byCONS~,orthecontinuatian ozconsecution of~iLANDbyCONS~iunderanycandit'ans AreteCONSUMERS shouldhaveforseenthatit.aight~wtersufferaf~~ialdebilitytacompleteconstruction oreheelectric, propertydeluded.inKZLhÃ),or(iv)'eheoperation az~LAW)byCONS~iinsuchmannerthaethesupplyofProcessSeeamtoOa~framMZ)LAÃ)~mgivenpriorityoverelectricgeneration aeKZLA%).Provided, however,that~m.naeventshallCONS~beexcused:omliability faries~udulentaces.

ExcerptsfromCstalRiverA'eement2.2.2.Representations andWarranties (Section6.)AstheParticipants'rrevocable agent,theCompanyhasthesoleresponsibility, tobedischarged inaprudentmannerinaccordance withgoodutilitypractices, fortheplanning, licensing, design,con-struction andtestingofCR-3.IntheeventtheCompanyisfinanciaHy unabletocompletetheunit,thentheParticipants mayprovidetheadditional fundsrequired; andundersuchconditions thegeneration entitlement shareswillbeadjustedaccordingly.

IftheCompanyincursanyliability'o anythirdpartyforwhichallthePa'rticipants andtheCompanyareliable,theamountpaidshallbesharedinproportion tothegeneration entitlement sharesunless(1)thereiswillfulmisconduct bytheCompanyoranyofitsemployees, or(2)theCompanyoranyofitsemployees failtofulfilltheirresponsibilities asagentfortheParticipants, or(3)theCompanyoranyofitsemployees failtoplan,license,construct, acquire,complete, maintainandoperateCR-3inaprudentmannerinaccordance withgoodutilitypractice.

19.6GoodUtilityPractices.

TheCOMPANYandPARTICIPANTS shalldischarge anyandallobligations underthisAgreement inaprudentmannerandinaccordance withgoodutilitypractices.

,APPENDXZBApril1,1980LettertoEwellMengefromRobertJ.Gardner P.O.8OX529IOO,MIAMI,FL33I52FLORIOAPOWERILLIGHTCOMPANYApril1,1980~ih'.EwellNengeUtilities DirectorFortPierceUtilities Authority P.O.Box3191FortPierce,Florida33450

DearEwell:

ThiswiU.confirmourdiscussion totheeffectthatFPLispreparedtoenterintoasettlement withtheFortPierceUtilities Authority onthesamebasisasthesettlement betweenFPLandtheOrlandoUtilities Commission inwhichfinalsettlement papersarenowbeingprepared.

Insummary,settlement betweenFPLandFPUAwouldincludethefollowing:

l.FPLwillmakeavailable toFPUAuptoanapproximate 1%share'nSt.LucieUnitNo.2,onthebasisofaparticipation agreeme..t similartothatofferedbyFPLtotheOrlandoUtilities Commisson.Onthebasisofapresently estimated netoutputof802It~,a,1%sharewouldamounttoabout8IS.2.FPLwillprovidetransmission servicetoFPUAinconnection withitsshareofSt.LucieUnitNo.2inaccordance withatrans-missionserviceagreement tobenegotiated betweenus.Intheeventwecannotreachagreement, FPUAwillconsenttoFPL's~:ili:.'he agreement withtheFederalEnergyP..::gulatory Commission for.adjudi-cation.3.FPLwillprovidebackstand servicetoFPUAforitsshareofSt.LucieNo.2foralimitedperiodsubsequent toSt.LucieUnitNo.2commercial operation inaccordance withabackstand agreement tobenegotiated, shouldFPUAdesirethisservice.IfFPUAisagreeable, FPLwillmakeavailable anapproximate additional 0.333%shareinSt.LucieUnitNo.2which'FPUAi~illsellbacktoFPLoverthelifeoftheunit.FPLwillagreetopayFPUA1/overFPUA'scostofinterestonbondsissuedtofinancesuchshare,withpaymentsbyFPLtobeginuponcommercial operation ofSt.LucieUn~tNo.2oronsomemutuallyagreeable datecertainifcommercial ooeraton isdelayed.5.SubjecttoFPUA'sacceptance oftheprovisions ofparagraph "ourabove,FPLwill,priortoSt.LucieUnit2frstachieving co-,erci-1operation andattherequestofFPUA,negotiate anarrange-

~i'.EwellMengeApril1,1980PageTwomentwherebyFPUAcanexchangeaportionofFPUA'sshareintheoutputofSt.LucieUnitNo.2,foranequivalent portionoftheoutputforeachofFPL'sotheroperating nuclearplants,suchexchangetobecomeeffective uponSt.LucieUnitNo.2firstachieving commercial operation.

SuchexchangewouldnotentitleFPUAtoownanyportionoftheoperating plants,butonlytoreceivetheoutput.6.FPUAwillreleaseallofitsclaimsagainstFPL,willwithdrawasaPlaintiff inCivilActionNo.79-5101-CTV-JLK, willwithdrawitsintervention intheNuclearRegulatory Commiss'on anti-trust hearing,andwillwithdrawitsrequestforaSection105(a)hearingbeforetheNRC.7.ShouldFPLenterasettlement withanyothercityunderwhichthecitywillreceiveproportionately greaterbenefitsthanwouldbeprovidedtoFPUAunderthissettlement, FPL'sobligation toFPUAwillbeincreased inordertoprovideFPUAanysuchgreate-benefits.

8.FPLiswillingtoreimburse FPUAforactualcostsoflitigation expensesinconnection withFPUA'sintervention inSt.Lucia2anti-trust hearingsandinconnection withpursuingthecurrentanti-trust civilactionagainstFPLwithamaximumof$35,000.00, Bycopyofthisletter,Iamrequesting ourattorneytoforwardtoyouacopyoftheparticipation agreement presently beingnegotiated.

withOrlandoUtilities Commission, asthatagreement nowstands.FPLwouldnegotiate participation agreements withFPUAgenerally inaccordance withtheaboveagreement.

FPUAmayjointheFPL/OUCnegotiations iitwishesorwewillnegotiate separately, asyoudesire.5Tewi11appreciate beinginformedbyFPUAoftheacceptability oftheabovebasisforsettlement assoonaspossible.

Ue,ofcourse,recognize thatanyoasisofsettlement agreeduponwouldnotbebindingoneithe-ofusuntilallagreements havebeenincorporated inexecutedcontracts.

Uelookforwardtohearingfromyou.Verytrulyours,Jg].~.',.~.P'L,Rob

=rt'.Gardner~VicePresident g!?.G/smh APPENDIXC(1)April21,1978LettertoHarryPothfromGeorgeSpiegel.(2)May4,1978LettertoGeorgeSpiegelfromHarryPoth.(3)May8,1978LettertoHarryPothfromGeorgeSpiegel.

QKORQESPIEGELRCSERTC.McOIARMIO S*NORAJ.STRESELROSERTA.J*SLONJAMESN.HORWOOOALANJ.ROTHPRANCESE.PRANCISOANIELI.OAVIOSONTHOMASN.MCHUQH.JR.LAWOPPICESSPxzGELdhKGD~MD2500VIRGINIAAVENUE.N.W.WASHINGTON, O.C.20037TELEPHONE IZ02l333.4400April21I1978PETERILMAT7OANIELJ.QUTTMANOAVIOR.STRAUSSONNIES.SLAIRROBERTHARLEYSEARTHOMASC.7RAUQERJAMESCARLPOLLOCKHarryA.Poth,Jr.,Esq.Reid&Priest40WallStreetNewYork,NewYork10005Re:FloridaPower&LightCompanyFERCDocketNos.ER78-19(PhaseI)andER78-81

DearHarry:

Reid&Priest,inabriefsignedbyyouandthreeassociates, characterizes myadvicetoaclientcityseekingtoparticipate inFloridaPower&LightCompany's SouthDadenuclearunitsas:adviceofcounselforFt.Piercethattheyoffertoparticipate intheseunitsbutthattheyprolongnegotiations untilconstruction ofthe.plantiscom-pleted.""/Thecharacterization isfalse.Further,Iwouldexpectthat,beforeafirmorReid&Priest'snationalstandingwouldsoattackitshumblebrethren, anyevidencewouldbethoroughly docu-mentedandcarefully evaluated, andtheallegation madeinacontexaffording afellowattorneyampleopportunitv forreply.Instead,thecharacterization ismadewithoutsupporting facts.orcitationandintheReplyBriefofanReplyBriefofApril12,1978,p.32,footnote.

HarryA.Poth,Jr.,Esq.April21,1978expedited proceeding

<</ratherthanintheOpeningBrief,sothatthereisnonormalprocedural opportunity toreply.Ordinarily, wewouldignoresuchcharacterization asunworthyofreply.<<*/

Here,however',

theallegation ismadebysoprominent alawfirmandapparently isintendedtohaveasubstantive impact,thatweareconstrained todefendbothourreputation andtheclient'sinterests.

Reid&Priestanditsclienthavehad,undertheFloridaSunshinelaws,opportunity toreadallthecorres-pondencebetweenthislawfirmandtheclient.Theso-called "adviceofcounsel"isnottakenfromanysuchcorrespondence (Tr.409-410)butapparently restssolelyonFP&LVicesPresident RobertJ.Gardner's characterization (Tr.214-5,1852)ofastatement madebytheundersigned (Exhibit10attachedhereto,emphasisadded)atapublicjointmeetingoftheFortPierceUtilities Authority andtheFortPierceCityCommission onMarch26,1976,inthepresenceofthecitizenry, FP&Lrepre-sentatives

"**/andthepress.Noverbatimtranscript wasmade,andtheremarksappearintheparaphrased minutespreparedbytheSecretary oftheAuthority.

Onequest'onpresented atthemeetingwaswhethertheAuthority shouldauthorize apetitiontointervene inFloridaPower&LightCompany's application foraconstruction permitfortheSouthDadenuclearplant(NRCDocketNo.P-636A)toseekanopportunity toparticipate intheplantcapacity.

Therewasalsosomerelateddiscussion ofpossiblenegotiation forthesaleoftheFortPierceelectricsystemtoFP&L.Aquestionwasputasto"atwhatpointintime"wouldtheAuthority berequired"tocomeup"withthemoneytofinanceparticipation (Exhibit10,p.3)?Theresponse, asnotedintheminutes,coveredthefollowing:

<</Procedural Scheduleasestablished pursuanttoFERCOrderofDecember30,1977:Hearingscompleted

-March27,1978Simultaneous openingbriefs-April7,1978Simultaneous replybriefs-April12,1978initialdecision-May1,1978(onorabout)FinaldecisionbyFERC-June1,1978(onorabout)<<"/See,forexample,FP&L'ssimilarallegation (againinafinalreplybrief)madethroughtwootherlawfirms,ReFloridaPower&LihtCo.,NRCDocketNo.50-389A,ReplyBriefofFP&L,'ovember 21,1977,pp.14-5."**/Messs.KenDaniels,HarrySchindehette HarryA.Poth,Jr.,Esp.-3-April21,1978First.IftheCompanyweretoallowpar-ticipation itwouldhenecessary tomakeaclosestudyoftheCompany's economicdataandironoutthecontractbefore,afinancing commit-mentcouldbemade(id.pp.3-4).Second.Itwasnotedthatthereis"onecompanyout,westthatismovingalongfastandifthecompanydoesthat,themunicipal isgoingtohavetoputupitsmoneyandcomeinontheladder"(KansasCitPower&LihtComan,WolfCreeknuclear,NRCDocketNo.50-482A;andthiswascontrasted withthehappenings inNewEngland(VermontandMaineYankeenuclearplants)where"they[powercompanies]

werearguingandlitigating whiletheplantwasbeingbuilt.Theresultwasthatthey[municipals]

didn'0havetoputinanymoneyuntilaftertheplantwasoperating andtheyalreadyknewwhattheyweregettinginto."Third.The.minutesread"Itdependsonhowthecourseofeventsgowiththecompany"(meaningFP&L),andafterdiscussion ofthe1985-6proposedcommercial operation dateandrelatedfinancing, "Mr.Spiegelsaidtheidealsituation isthatyouarguewithFloridaPowerandLightupuntilthedaytheplantisreadytogointooperation.

Atdecidetooaheadwithou,theywanttoseeourmoneasfastasnossible.

Inanynegotiations somepeoplearepushingandsomearepulling."

(Emphasis added).Fourth.Theminutesthendiscussed themattersthatneedtobenegotiated andcontinues:

"He[Spiegel]

statedheworkedthisoutwithFloridaPowerCorporation in6monthswhichhefeltwasdarngoodconsidering itwasafirst.Itcanbedonein6months.Morelikelitwouldtakeaearbeforethxsrouwouldberesentedandvotetosaendthem~one."(Emphasis added)

HarryA.Poth,Jr.,Esq.-4April21,1978Itappearsclearthattwoalternatives werebeingpresented:

thatFP&Lmightopposeparticipation overalongperiodofyearsliketheNewEnglandcompanies, inwhichcasefinancial commitment wouldbeputoffperhapsuntiltheplantwascompleted; orFP&Lmightactforthrightly likeKansasCityPower&LightCompanyandFloridaPowerCorporation, inwhichcasefinancial commitment bytheAuthority wouldbeamatterofsixmonthstoayear.Inthiscontext,thereference toan"idealsituation" wasmeanttoillustrate howcounter-productive itwouldbeforFP&Ltobeobduratelike.theNewEnglandcompanies, inwhichcasetheAuthority's decisionastowhethertocommitfinancially wouldbemadefazdowntheroadwhenmanyrisksoftheunknownhadbeeneliminated..

Inshort,myconcernwaswiththepossibility thatFP&Lwoulddragoutthematter.TheMinutesgoontoreportthecommentsbyMr.KennethDaniels,FP&LDistrictManager(pp.5-7)closingwiththestatement:

"Mr.Danielssaidifheundezstands whathasbeensaidsofar,inordertogetinvolvedinananti-trust reviewofFP&L'sapplication forlicense,theCitywouldhavetobringaboutallegations ofanti-trust toFP&Landbe.preparedtodefendthem,because,Mz.Danielsstated,'IcantellyouthatFP&Lwilldenythemanddefendthemvigorously.'e furtherstatedheisjusttzvingtocleartheairherebecausehedoesn'thinktheBoardreallyunderstood itthatway."(Inamatterofdaysthereafter, FP&LdidrefusetheAuthority participation inSouthDadeandothernuclearunits.SeeFortPierce-recuestofMarch31andFP&Lrejection ofApril1,1976,FERCER78-19,etal,Exhibits30and31).Inthegiveandtakew'thMr.Daniels,priortohisaboveconclusion, theminutesreportmeasstating(p.6):"Thereasonthereisonthefaceofit,ananti-trustquestionwhichjustifies intervention, is,asheunderstands it,becauseFloridaPowerandLightisrefusingtopermitthesmallersystemstoparticipate.

Hethinksthatisreallythebasicproposition.

Hethinksthatisfundamental toit.TheproblemcouldbeeasilyresolvedifFloridaPowerandLight,andheissuretheDepart-mentofJusticewouldsupportourposition, offersanopportunity tothevariouscitiestoparticipate."

HarryA.Poth,Jr.,Esq.-5April21,1978TheMinutesthenreportfurther(p.8):DanielssaidtheMayorimpliedthatweprobablywouldnotfeelintheproperposturetotzytobuythesystemwhiletheAuthority islitigating againstusinananti-trust matterwhichwouldfurtherthatanti-trust."

Mr.Daniels'tatements thusconfirmed inmymindtheviewthattheAuthority wasfacedwithprotracted FP&Lresistance andassociated delay.Thus,theMinutes'eport mystatements:

"TheproblemcanbeeasilysolvedifFloridaPowerandLightofferssomefairshare,arelatively smallshare,bymakingaproposaltosharethenucleazplant."(p.8)Andfurther,thatthereohisbusinesswhenheeffectthatthey'enotThereafter, theMinutesistheoccupational hazard[Mr.Daniels]saidsomething tothegoingtogiveupeasily."(p.8)report:"Zfthey[Spiegel&McDiazmidj findintheiropinionthattheCompanyisunreasonably draggingitout,thentheybeginworkingatlowerandlowerrates.They'ediscovered theanswertowhatMr.DanielsfofPP&LJwasimplyingistohanginasattorneys eveniftheyhavetoworkfornothing.Heisnevergoingtositinaconference roomwithanyutility...

andheisnevergoingtobeinapositionwherehesaystohisclientthatthey'egotarighteous cause,butbecausethey'einapositiontodragitoutandmakeitexpensive, you'dbettergiveup.He'lworkfornothingforasmanyyearsasnecessary totryasbesthecantorightthebalancebetweenthesmalllitigatewiththelimitedresources andamajorcompany,thefifthlargestutilityinthecountry,withanunlimited litigation budget,whichthecustomers arepayingfor."/"/Seemingly confirmed bysubsequent events:PP&LE'ERCPozm1reports,forexample:ChargesforProfessional Services:

19761977Covington

&Hurling-0-$12,458Lowenstein, Newman,etal411,676373,966Matthews, Osborne,etal87,317206,304Reid&Priest260,781552I635Stel,Hector&Davis1I3143602/634p331 Har~A.Poth,Jr.,Esq.April21,1978Mr.Spiegelstatedthathewouldsaythis,thatifthisthingisgoingtobedraggedoutandtheprotestion ofyourinterestrequiresit,he'lworkfornothing."Commissioner Caynonsaidyou'egotadeal"(p.9).Harry,Reid&Priest'sconclusion thattheAuthority received"adviceofcounsel...

thattheyoffertoparticipate intheseunitsbutthattheyprolongnegotiations untilconstruc-tionoftheplantiscompleted,"

isnonsense.

Znthefirstplace,FPaL'representative madeclearthatFP&LwouldnotagreetoCityparticipat'on withoutalengthyfight,andthusyourpredicate ofFP&Lenteringinto"negotiations" ishypothetical-withnothingtoprolong.Second,itisunrealistic toassumethatwethoughtwecouldprolongthehypothetical negotiations some10years,i.e.,1976throughthe1985-6commercial opera-t'ondate,despitetheViRCallowance ofoneyearlimitfornegotiations afteranofferismade.Finally,youmustassumethatIwouldbe:(i)soin-judicicusas togivesuchadviceandatapublicmeeting,and(ii)sopublicspiritedastogivesuchadviceinordertocommitthefirmtoprovidelegalservicesatalossoveraperiodofupto10years.Ourfifteenyearsofadversary association shoulddisabuseyouoftheformer,anditissubmitted thatevenafirmwithaslargea"probono"budgetasReidaPriestmusthaveisunlikelytoproposethelatter.NordoesitappearcrediblethatthiscommentofmineisareasonFPGLdeniedparticipation, astheReplyBriefnowargues,andnottoservesomedeepersubstantive purpose.Znviewofthe,shortperiodavailable forAdministrative LawJudgereview,Iamsendingacopytohimandtheservicelist.Pleasefeelfreetoreplyinkind,whileImustreservemysur-rebuttalrights.Sincerely yours,GeorgeSpiegelGS/nzbcc:Administrative LawJudgeCurtisL.Wagner,Jr.Allpartiestoservicelist EXHIBIT~>(MG10)OacjcotHo.ER78-'19(Consists.of 12sheets)MINUTESOFASPECIALJOINTMEETINGOFTHEFORTPIERCEUTILITIES AUTHORITY AWTHEFORTPIERCECITYCOMMISSION, FRIDAY,MARCH26,1916,AT3x30P.M.Utilities Autharity MembersPresentxChairman, EwellMange;ViceChairmanSamReilly;Secretary, HavertL.Fenn;ErnestE.Settle,MayorBenL.Bryan,JrePEx-Ofkicia MemberCharlesJacksonCityCammissianez's ProsentxCammissioners

Browning, Caynon,Leslie,Longand,Mayor-Commissioner Bryan.OtherspresentxDirectorafUtilities, WalterBaldwin;U.A.

Attorney, CharlesR.P.Brown;CityClerk,InesLowery;HarrySchindohette andKenDanielsofFloridaPowerandLight;Attorxxeys GeorgeSpeigelandBobJablon;FiscalAgent,D.C.Huskey;Suaerintondent ofElectricDistribution, GlenMonnette; Administrative Assistant, JohnLitton;DirectorofFinance,BillBidle;Suyerintondent ElectricTransmission, TroyLee;U.A.ChiefEngineer, BobSkxnner;Electrical

Engineer, TamMoulton;CustomerServiceManager,JohnPtadd:PaverPlantHcparlntaadentJ,ack Halth;AtnHtlderedthe'ltiamiHeraldDanTurk,FMUADir.Cammunicatians.

Mr.MangecalledtheUtilities Authority meetingCoorder.MayorBryancalledtheCityCammission taordereMr.MengesaidwehavewithustodayMr.SpeigelandMr.JablonframChefirminWashington Chatispresently representing usanthegassuitsandsaforth.Hethinkstheyhavesomething.

cobringusac.thistime.Mr.MangeturnedthemeetingavertoMr.Spiegel.andMr.Brown.tMr.Brawnstatedhemightsayawordbywayofintroduction forthosewhodonotknowMr.Speigel..

Hehasrepresented Che.CityandAuthority intheGasTmxsmission suitwhichispendingintheDistric"andFederalCourtinMiami.Itstartociin19II.Wehadaninitialsettlement in1972.Hespecial-i=esinthiskindofworkorhisfirmdoesand,heisprobablythemostqualified attorneyinthecountryinthisparticular kindofwozkinvolving GasTransmission Companies andallfacetsofutilities.

Nr.Speigelsaiditisapleasuretabehere.Hehasnevervisitedherealthoughhehasrepresented theCityforEaurorfiveyears.AlthaughhisfirmdoesworkingasperhapstheLargestpartofhiswarkisdealingwithelectricproblems.

TheirIawfirmdoesalmostnothingbutrepresent municipal groups,municiyal utilities, authorities whoowntheirawnelectric, gasandmunicipal, operations.

Their,woz'kbasically isnegotiating Eorthem,arrangements withmajorpowercompanies.in thecauntryandaccasianally dealingwiththeFederalPowez'ommission andotheragenciesinordertoprotecttheirinterests.

Thethingthatstrikeshim.abouttheFortPiercesituation isthatitislikesamanythings.Theyhaveagoodoperation hereandsomething hashayyened.

Hez'etheyarelosingtheirgassupylywhichwasproducing energyatafairlycheaprateandhavehadCoshifttoail.Everyut'lityfacedwiththat,particular situation foundthattheirrateswereescalating.

What.needstobedaneinevaluating thesituation isfirsttoevaluatewhetheryouneedtooperateyoursystemadifferent wayinviewofthechangeofeconomics Therewasafuelsupplywh:chpermitted chesystemtooperate.baseload.Thofuelwascominginprettycheaply.HecauldtalkforanhouraboutwhythepriceofChatgaswaskeptdown.There'wasacayputonthepriceofgasandbutfor'thatcay,thepricewouldhavegoneuy.ItnolongermakossensetoaperatebaseIaad.NawtheCi.ywantscaoyerateunderaveryexcellent agreement theyhavewithFIarida.PawerandLight.Thereisanintercannection agreement and.thefirstthingthatshauldbestudiediswhattheeconomics aftheoperation wouldbe--whatkindofratescauldbecharged--onaful1ycannected, fullyintegrated basiswithFloridaPowez'ndLight.Anoperation Iikothatwhichiscontemplated bythe.agreement andcontemplated.

asbeingdonethroughout the-industry, thentheplantwouldayerateasparrofa-combined, systemmadeuyafFIoridaPowerandLight,thissystemandsameoftheothez'ystems thatFIoridaPowerand..LightdisylayCathem.Thehourstheplantwouldoperatewouldbegreatlydecreaseci, thoamountofoilburnedwouldbegreatlydecreased.

Hehasn'lookedatallcheengineering aspectsoftheoyerations, buc,theplantwouldprobablyoperateasapeakingplant,a.flawEactorcyclingplant.Theplantwouldbeturnedanandgeneratewheneveritisinthebestinterestafthecombinedsystemsinchathourtogenerate.

OnchatbasisyouwouldEindthatthetotalcostofpowerisconsiderably cheaper.That,isaneanalysisChatneedstobemade..Thesecancianalysisisthefactthatwiththenewgenerator

comingin, PageZ5/Z6/76yauaretemporarily surplusincapacity.

Whar.youaddgenerating'units youdon'tgetjustenoughtotakacareofthisyearandnextyear;youhavecosi=eitbigenoughsoyauhaveafairlyefficient unitand,therefore, yauputinmorecapacitythanisneededintheyearinwhichitisinstalled.

Itusuallycakes3,4,or5yearscagrowintochatcapacity.

WhattheydoissellchairexcesscapaciCy.

Theanalysishastobemadeofwhatyaucauldsellthatexcesscapacity'or,whatprice,ona.short;langormediumtermbasis.Therearesome40ar50separateelectricutilities inFlorida.Ananalysisneedstabemadeastowhattheirrelationships arebetweenhowmuchcapacitytheyhaveandhowmuchleaddotheyhave.SomeyearsagotheCityofLakelandvasselLingtemporary excesscapacityaverFloridaPaverandLight'ssystem,CotheCityofJacksonville.

FloridaPowerandLightvastransmitting thepower.Thewaythcarrangement, wassemantically puttogetherwasasaleframLakelandtoFloridaPowerandLightandasaleframFloridaPaverandLightto'Jacksanville.

Inconnection withtheNewSmyrnasituation, FIoridaPowerandLightagreedtotzansmitpowerforNewSmyrnaBeachandhethinkstheyagreedtotransmitpowerfozthiscapacity.

Hehasn'tLookedatFloridaPowerandLight'sbalancebetweencapacityandload.Hedaesn'tKnowyetwhethertheyneedit.IfChereissameothersystemthat,needsit,itissalable.Itseems,tohimintalkingwith,CharlieBrawnlastweek,thata,studyhastobemadeastowhetherunderarevisedoperating basiswithFloridaPowerandLight,youwouldvanttoseewhetheryourratesinFartPiercemightbereduceddawn.Hedaesn'tknowhowfardown.Theymightwellgetbolo~FloridaPowerandLight.Thczeisanothertheme-thatneedstobestruckhere.Anybusinesshasgaadtimesandhard.times.Yauhaveagoodbusiness..

IfyoulookbackonChehistory.ofthebusiness,yau.wil1secthat,ithasbeenagoodbusiness.

Ithasproduced.

Zthashadalot.ofecanomicbenefitstotheCity.Likeanybusinessiccomesintohard.times.Thosethingsdan'tnecessarily lastforever.TodayFlorida,PowerandLight'sratesazclowerthan'ortPierce'srates.Thereazeanumberofreasons,aIatofwhicharecothecreditofFloridaPowerandLight.They'egenedeeplyintonucleargeneration.

Theytaaktheirchances.They~madetheirjudgements andmadetheinvestments.

Aslongasthosenucleargenerators arerunningandtheydon'tzunintoanyspecialproblems, great.Yaudon'tknowwhatcaulihappentomorrow.

If(heydevelopproblemswithsameoEthesenucleargenerators, suddenlythesituation cauldchangeandifandwhentheyliketheCityarefacedwithrunningoutoftheirfuelsupply,oumightfindinax!otheryearortvo=thatthesituation isreversed.

Heasseenanumberofsituations wheresystemsvezesoldbecauseoftheanti-cipation.of lowerratesEzomanothercompanyandtwoorthreeyearslater,yaufindthatbecauseafsituatians andcircumstances, thisdaesn'tmaceziaL-ice.Hcdoesn'mean'tounderestimate thcproblemthatfacesFartPierce,buthewouldsaythatastheownersofthisbusiness, itwouldseemtomakesensecofirstsccifthereisanatherwayofapezating itataprofit,atgood.Lowratesand.evaluatethatalongwitheverything elsethat.maybeevaluated.

Hesaid,hcwouldbehappyto-answerquestions becausehe'striedtosayaIotina.relatively shorttime.Mr.Mcngesaidhcunderstands one-ofthe.actionsthisboard.needscotakeistoEileourintentians tobuyapieceofchenucleazpowerplantthatistobebuiltinSauthDadeCaunty.HeaskedifthatisinthepzacessofbeingdaneararewewaitingEordirection onthat.Mr.Baldwinsaidheiswaitingorsamewordtogoahead.Wchavewrittenthem,askedChemaboutitsometimeago,buthaven'tgottenanyEurcherwithit.Mr.Mangeunderstands ourintentions hvetobefiled.intheearlypartafApril.Mz.Baldwinconfirmed.

this.Mr.SettleaskedMr.SpeigelifhcisgoingCosetintosomeofthesealternatives.

Mr.Speigelsaidhewouldatthectizcctian ofthisAuthority.

Hesaidheisrepresenting theAuthority ingasmattersandiftheydesirehim.torepresent Cheminelectricmatezs,hevillbe.glad.todoit.Mr.SettleaskedhimwhatsameoftheaLternativcs are.Mr.Speigelsaidtobespec'c,theAuthority hasafine.interconnection agreement withFloridaPowerandLight.Heremembers thisveryacutelybecausewhenhearguedthecasefarCheCityofGainesville intheSupzemeCourt,hebroughtthatagreement uponChedayoftheargument.

HesaidthatallGainesville isaskingforEzamFIozidaPowerCorporation iswhat,FortPiercehasEzamFloridaPowerandLight-Page33/Z6/'T6Thereisanagreement butFortPierceisnotutilizing ittoitsfullextent.Thefirstthingthatneedstobedoneistomakeananalysiswhichultimately hastabeajointstudybetweenFortPierceandFloridaPowerandLight,astohowthetwosystemscanmosteconomically benefitframacombinedoperatian whichgenerally willhavecentralieddispatchbyFloridaPowerandLight.Thenanevaluation ofthecosts,chargesandrateswouldbenecessary.

Mr.SettlesaidNr.Syeigelisspeakingofpeakload.Nr.SpeigelsaidthatisrightHewouldhavetoknowthecharacteristics ofthegenerating unit.Ideallythiswouldbepeakingandreservecapacity.

Everyelectrical systemhastohavebaseloadcapacity, peakingcapacitysuchasturbinesandgenerally theiroldercapacitywhichusuallyisn'tworthverymuch,theyholdinreserveIntheeventafautagesofthegoodunits,theyhavetobringintheolderstuff.We'eonacombinedoperation basisand,PortPiercewouldn'tbeburningalltheoilthey'eburning,energycostswould'bereduced..SettleaskedWi.Syeigelifherepresents theFMUA.Ar.Speigelsaidhedoesn'trepresent theFMUAassuch.Herepresents anumberofcitiesin,FMUA.Mr.SettlesaidheknowsNr.Speigelrepresents theso-called sevencities.AsNr.SettLeunderstands it'heFMUAcangointogethernowandbuildtheirownnuclearplant.Heaskedifthisiscorrect.Nr.Speigelsaidhedealtwiththeedgesofthatissue.Heisn'tsureandwouldhavetoturntosomeFloridaLawyersanthat.TherewasLegislation'assed inconnection withtheChrystaLRivergenerator.

There,Florida PowerCorparation sold100megawatts toanumberofmunicipals inFIoridaandtherewasspecial,legislation related.tothat.Therewasanatherbi11.introduced whichhebelieveswasapposedbyFIaridaPo~erandLightunderwhichthemunicipals could,havedonewhatNr.Settleissaying.Mr.Settleaskedifthatbi11waspassid.Mr.Brownsaid.DonTurkcauldprobablyte11Mr.Settle.Nr.Turkintroduced himself.HestatedheisDirectorofCommunications EarFMUA.HestatedtherewereZ,billsintro-duced-insessionlastyear.OnewasinresponsetotheConstitutional Amendment approvedinNovember, 1974,whichwauldallowprivatecompanies andmunicipaLs tobainvolved.

togetheringeneration andtransmission facilities.

TherewereZintroduced lastyear:Onetoallowparticipation inFloridaPo~erCorporation's

'nuclearunitandanotherwhichbecameknownsharctitle-wise asjointpowerauthority whichFMUAintroduced.

Thebillthatallowedtencaoperatives goparticipate inFloridaPowerCorporations nuclearunitpassedandtheotherisstillanfileintheHouse.ofRepresentatives.

Thereissomedisagreement astowhethercitiescouldgettogetherwithpresent.Legislation.

Ithasnot.beentested.ThebillFMUAfiled.pertaining.

tojointpowerisstillintheLegislature.

Nr.Settle,saidsoatthispointtheanswerisna.Mr.Turksaid.thatprobabLywouldbethe.quickestanswer.Nr.Settle-saidthat,wouldbringautanotherquestianinhismind.Lfwefile.intervention intheDadeCaunty'lant ofFP5Lsomeonehassaid,andheisgoingbackinhismindanddoesn'tknowwhosaiditorwhereorwhen,thatthebandscouldbesoldonfuturerevenueof.thisparticipation inthisplant.Heasked.ifthatispassible.

Nr.Huskey-said thatis'apossiblemeans.Ifyaucanshaw-asufficient savingsavera.periodoftime,itisapassiblewayoffinancing.

Mr.Settleaskedwhatthecostpermegawattwasforthisplantdownhere.Mr.Schindehette statedthatifhe.recallscorrectly itwasaround$1,000to$1,100perkilowatt.

MayorBryan.askedwhatheestimates thecostafthenewplanttobe.Mr.Schindehette saiLitwould.beapproximately 5800,000,000.

It<<illbeinthesama-area.perkilowatt, butthatdoesn'tincludeinflation.

Mr.SettlesaidL08ofthatwould.be$80,000',000.

Ifwecanshowthatwe'egoingtosaveenoughmoneytopayoffthe80'miLIion dollarsoveraZO.yearpetiod,wecansellthe.bondsonthatbasis.Mr.HuskeysaidthereareanumberofcitiesthathavedoneexactLythatincannection withtheFIoridaPowerCarparatian deal.Thesame.processcouldbefaLLowedexceptthatthisisaLittlebitdifferent situation inthat:theyanticipate beingonthelinesame-timeLatethisyear.Itwasn'tan8or10yearproposition.

Itwasayeartaa'earandahalfbefare.theycouLd,startreceiving thosebenefits.

Itwouldbeanciovetart.ir.settesaidheistryingtopicturethisinhisownmind.HeaskedMr.SoeigLehowmuchleadtimeisinvolved.

Supposeweintervene inthesecondplantandwanttobuyLOtoftheplantinDadeCounty-atwhatpointintime,eitherinconstruction, aaplicatian orcompletion, dawehavetocomeupwiththe80KLLiondollars.Nz.Speigelsaiditvariesdepending uponhowthemat.erisresolved.

Ifthecamyanysaysthey'arewillingtoLet,yauinasaparticiyant andsaytolet'ssitdawnandgetthecontractdraftedandthestudiesaut,thereareZthingsyou.needtodo:Youhavetotakeagoadcloselookattheacanamicdatathatanlythecompanyhas-whatisitreallygoingtocostT RPage45/Z6/76SecondLy, youhavetoironoutthecontracts.

Whenyouareputtingyourmoneyautforaplantsomewhere else,youhavetamakesureyouhavethetransmissian andeverything else.ThereisanecompanyoutwestthatismovingalongEastandifthecompanydocsthat,themunicipal isgoingtohavetoputupitsmoneyandcome'nontheladder.Sameofthesesituations upinllewEngland,theywere,arguingandlitigating whiletheplantwasbeingbuiLt.Theresultwasthartheydidn'thavetoputinanymoneyuntilaftertheplantwasoperating andtheyalreadyknewwhattheyweregott'nginto.Itdependsonhawthecourseofeventsgowiththe.,cam~any.

Nr.Settlesaidlookingaitfromourownparticular s'tandpaint ifwearelackingatlcadtimeandhedoesn'tknowhowlongit,takes--MaybeHarrycananswerthis--ifwefileintervention andaresuccessful andtheysaythey'ILsellusapercentage aftheplantorregardless ofwhetherwedon',whatpoinr.intimeistheDadeCauntvplantgoingtobeinoperation.

Arewetalkingtenyears,fiveyearsorwhatfMr.Danielssaid1985-86.Mr.SettlesaidthisisaboutIOcats.eausserxausyxwecoulpayxnterestonteonsoratlengtottime.Nr.Huskeysaidyouwouldn'tneedtoselL80milliondollarsworthofbandsatonetime.',Yau wouldse114orSseriesofbonds.Yauaren.'tgoingtoneedtoputup80milliondollars.Mr.Settlesaidpossiblywecouldwarkitoutlikethecompanyoutwestandnxt'it upafteritisinaperation.

FloridaPowerandLight'sgotallthemoneyintheworld.Mr.HuskeysaidheissurethatFloridaPowerandLightisn'tgoingtobarrow800milliondollars.They'egoing,toborrowit.astheyneedit...Spcigelsaid,theidealsituation isthatyouarguewithFlorida,PoweranL'ightupuntilthedaytheplantisreadytogointaoperation.

AtthattimeyoufinalLygetyaurcantract.

Qnce.the.decidetooaheadwithauthcwanttosecourmoneasfastasosszoc.nanynegotxatxons somepeopearepushxngandsame.arepullxng.Tewayhclooksatitis'hepetitiontointervene isforthepurposeofestablishing your-rightto,.havetheopportunity tobuy;Whenyaupetitiontointervene you'enotmakingyourdecisionbecauseyaucan'tmakeadecisionuntilyouhavemoreofthefactsandthewholelegalrelationship clarified.

Itcostsmoneytodothat.Yau'retalkingaboucmiIlions ofdollarsininvestments.

You'rcgoingtohavetaspendmoneyonconsultants analyingthethingbefareyoucommityourself..

Yaucanstudyeverything intheworld,unlessyouknowyauhavesomething thatisreal.That'sthepositionhehastakenineveryproceeding he'shandled.ThedutyofthecompanytonakeapropasaL, adefxnitive proposaLwiththefactsand,dataisneededbyCityofficials tomakeanintelligent determinatian.

as.towhetherornottheywanttodoitHeremembers thisincannection withtheNaheYankeeplantwhere-thecampanysaiddramatically beforetheFCC,"Nell,Mr.Speigcl,are.yourclientsreadytoputuptheirmaneyf"He=saidtheyarenatreadyuntilyougiveusaproposaI, andwaknewwehaveanoffer,thepeople.canspenLthe-moneyneededtoevaluaetheofcrandgeti.Atthcfirstrtageyoudevelopyourrighttohavetheproposalmadedefinitively.

Thereafter, yaumakeyaurstudiesandsitdawntonegotiate withthecompany.,

Everything maybefineexceptthepriceforsomeofthoback.upandthings.LiRethatmaybetoomuch.Inthatcaseifisn'teconomic.

HcstatedheworkedthisautwithFloridaPowerCorporation in6monthswhichhefeLtwasdarngaodconsidering itwasafirst.Itcanbedonein6months.Morelikclitwouldtakeavearbeforethisrouowoucrcscnteanvotetosentemone.iayorryansaxIorxdaPowerCorporation wasinabin,weretheynotVMr;Speigelsaiditwaspartlythatanditwaspartlythat'here weresomegaadrelationships developed betweenFLoridaPowerCarporation andthemunicipals andcooperatives theydobusinesswith.About:Sor4yearsagoLitigatian andarguingterminated.

Theyarewi11ingto.dobusinessanthatbasis.Nr.FennsaidaslongasMr.SpeigclissayingthattheAuthority isnotobligating itselftotheolantitselfandthatwe'ejustgoingtouseaurprivilege-ofintervening andletting,themknowthatweare.interested, hcdoesn'tscewhywccouldn'tgoaheadand'ntervene.

Nr.Mengesaidifthishad.beendonesamefiveyearsagoonunitno.Iwcwouldbeinonthatnow.MayorBryanaskedwhatisinvolvedinintervcntian intermsofwhatwcobligateourselves to.Mr.Speigelsaidwhenyau'reintervening, draftingthepetitionisn'ttooexpensive a.prooosition, althoughitisbecomingamoreexpensive document.

Thebigquestionis,isitgoingtogotohearingsandwhatkindofhearingsaretheygoingtobe.Itisdifficult taknow.VeryEcwafthemhavegonetohearings.

Somehavegonetohearingsandthey!vebeen1onganddifficult.

ThereareanumberofothercitiesinFIoridathatareconsidering inter-vening.Ifthatwouldhappen,thecostwouldbesplitamongthem.Basicallv, you'eintervening.

ingoodfaithwithintention ofpursuingthematter..Qn Page55/26/76theotherhand,realities beingwhattheyare,ifyou'efacedwithaIong,expensive hearingprocedure, youhavetore-evaluate howdeeplyyouwanttogetintotheproceedings.

Hewouldsaythey'ecommitting themselves toanintervention andtothecostofarelatively shorthearing,not100daysofhearings.

MayorBryanaskedhowmuchNr.Speigelistalkingabout.Nr.Speigelsaidifthereisagroupitwouldcostaboutthesamething.Inter-ventionistalkingabout2-4thousanddollars.There'dbesomeadditional pleadings andthenthere'lbecontracts.

Withallpreliminaries andeverything else,you'dprobablygetuptomaybe$10,000forallthecitiesparticipating.

Generally

speaking, mostofthesecaseshavebeenresolved, depending uponthepositiontheJusticeDepartment takes.Hecanthinkoffhandofthreecasesthathavegonetolengthylitigation, twoofwhichhisfirmwasinvolved.

OneoftheminLouisianna, theywereabletoconfinetoarelatively shorthearing.OneinMichigancouldn'tbeconfinedandwentto10-80daysofhearings.

Whattheydidinthatparticular proceeding wastoputtestimony inanddidn'appearatthehearings.

TheyputintheircaseandtoldtheAdministrative LawJudgethatitwasfineiftheCompanyandtheDepartment ofJusticewantedtogointoanintellectual bitofresearch, buttheyjustcouldn'tspendthemoney.Ifyougotoareasonably appropriate hearingyou'etalkingaboutcostsintheorderof40-80thousanddollars,legalandtechnical personnel.

Hewould.say,heshouldbe.abletoanswerthisquestionmorebriefly.Lawyersalwaysexpectotherpeopletoanswertothepoint.Hethinksintermsofimmediate committment,,

it'sintheneighborhood of,5-10thousanddollarsspreadamonga.groupofcities.MayorBryansaidasanindividual city,ifwedecidedtodothis,couldwepulloutatanytimewewantedtowithnofurtherobligation.

He-asked.ifthatwouldbecorrectornot.Mr.SpeigelsaiLhewouldthinkit'scorrect,subjecttowhatlawyersknow.Youmakeagoodfaithrepresentation butthatasgeneral,istheexperience.

That'stheunder-standingamongthegroups.Mr.Settlesaidhe.isnotwillintoconcedeasaletdFloridaPowerandevenowxzterexntereste

.InIgtotatanwattheMayorassaid,overandoveranwat,etuyconcurswith,tha-itseemsthatatomicpower,istheonlywaywe'egoingtobeabletogotogetthisratedown,hewouldmakeamotionthatwefileforintervention intheSouth.DadeAtomicPlantofE1ardin~overendLdtht.NrPenn.stranded thenatdan.Nr.BaldwinaskedtW.Speigelifitwouldbenecessary tohaveafairlycom-prehensive studymadebeforeweintervene, decidingtheamountofelectricity we'lneed.Mr.Speigelsaidthiswouldnotbeneeded.Generally

speaking, weknowenoughfacts.MayorBryanaskedwhatthedeadlineonintervention is.Mr.Speigelsaid.itisApri114thMr.Baldwinsaidthat;isthelast.he.heard,too%Commissioner Caynonaskediftheyshould,haveanappraisal madeontheolantbeforetheystartoutand,seewhattheyhavetoworkwith.Mr.Settlesaidright.drwe'retalkingaboutbuying,notsellingourplane.'r.

Ãengesaidwe'etalkingaboutbuying,themoutnow.Nr.DanielsofFlor'da.PowerandLightasked,.ifitispermissible tomakeacomment.MayorBryansaidhewouldliketohear.fromhim.Mr.Danielssaidhe.wouldliketobring'utacouplerofthingsforhisownclarification iffornobodyelse'.Onethingisyouaretalkingaboutanintervention insomeproceedings inWashington.

Heisn'talawyersoheaskedeveryone.

tobearwithhim.Itishisfurtherunderstanding thatwhatyouaretalkingaboutwouldrequirebringingasuitessentially allegating anti-trust actions;that.is,thatFloridaPowerandLightishavingdealingsthatareinconsistent withtheanti-trust laws.<~fr.Speigelsaidthatisonlypartlycorrect.Basically, whetherthesituation andcircumstances maybe-inconsistent withtheanti-trust laws--youmaynotbedoinganything, butyoumayhavefromaneconomics pointofview,thekindofmonolopy, whicheventhough,personally, you'enotdoinganything, youshouldn't do,youhave.obtained.

sucha.monolopy, woulLbeanissue.Thereareanumber,ofac.ionsonoccasionwhichtheyhavetakenanissuewith,withFloridaPowerand,Light.Nr.Danielssaidheknowsthat.Hispointisthatjustasimplestatement ofvotingforintervention is,inhisview,aIittlebitmorethansigninga"metooetpetition.

Thatisyouaregoingtoessentially bringthosethoughtsagainstFP6LwhichsaysthattheyareintheirdealingswithFortPierce,inconsistent withthoselaws-dealingwithanti-trust.

Mr.Pennsaidhedidn'tunderstand itthatway.

Page6.3/Z6/76HeEeltMr.Speigelwassayingthat.asamunicipal ownedutility,thatvchavetheprivilege afbuying.intotheSouthDadeNuclearPlant.Ãemissedthatopportunity sameyearsagowiththeaneonHutchinson Island.Sometimeagowhenwecontacted acertainagency,theytoldusweweretoolatetonegotiattobuyintotheHutchinsan Islandplant.ThereisanothernuclearplantwhichwillbebuiltinSouthDade.Asheunderstands i"wchaveuntilApril14thtoshawaurinterestinbuyingintothispLant.Inordertodosowchavetogothroughthepraceduxe ofintervening, sayingtatheDepartment thatingoadfaithwewant,tobuyintathisplant.opportunxty oflocalutilities, smallerutilities, toparticipate Intheawnership afalargenucleargenerator isconsidered implicitinanti-tzust lawsinthesekindafcircumstances.

Youhaveadramaricexampleheretoday,whereyouazesuddenlyfacedwithasituation whereyourailcostshaveganeupand.youdon'thaveanynuclearenergy,you'zeputinadisadvantageous pasitian.

Thisisnotbecauseyoudon'thaveagoodsystemorbecauseyoudidn'tuseforesight, but.totalcircumstances result.Theconcept,behindthenucLearactwasthatthisnewEormofcheapenergywhichhadbeendeveloped atgreatcostbythegovernment andtaxpayers, wouldputlargecompanies vhoareina.positiontoouttogetherthetzemendous aggregate ofcapitalnecessary tobuildthcTurkeyPaintozSt.Lucic,Qxapositionwheretheycouldputevery-bodyelse.autofbusiness.

HehearspeoplesaywehavetosellauttheFortPiercesystembecause-we.haveaiLandnotnuclear.Thisstatutewasdesignand;hcwasn'tinvolvedinthedrafting, butwasinvolvedinitsmodifications, and.theconcernwasthatsmallerutilities likeFartPierceshouldhaveanopportunity toparticipate innucleardevelopment withthebigcompanies asameansoEbeingabletostayixxbusinessbecauseitwasfeltthat,basically, evenintheutilitybusiness, competition isaEundemental principal underlying thiseconomicsociety.Theconcept.ofcourtshavesaidthattheyhavetopreserveasmuchcompetition aspassible, becauseifyouwipeoutthesmallsystemsandturnthestateovertooneortwobigcompanies, thentheydon'havetocamocteandtheed'avebee~icnt.t0hat'sinvolvedhereat.ercasoxxthere,isontheEnceofit,ananti-trust quest.onwxcjustifies interventian, is,.asheunderstands it,,becauseFloridaPaverandLightisrefusingtopermitthesmallersystemstoparticipate.

Hethinksthatisreallythebasicproposit'an..

Hethinksthatisfundamental toit.:The.problemaflitigation cauldbeeasilyresolvedifFloridaPowerandLight,'nd.hcissuretheDepartment oEJusticewouldsupportourposition, afersaxxopportunity tothevariouscitiestoparticipate.

Maor8ansaidwhatconcernshiminlightoEMr.Daniels'emarks isthatetxnswe'eapproaching.

thisintervention more-inanefforttoobtaininformation onthisasacomparison.

Ifitcosts80miL1iondollarstoacquirctheportionoNthe-plantthatwasneeded,andwe'esittingwith30miLLiondollarsworth'fbondsonaplantve,alreadyhaveandvehavemarepowerthanvcneed,thatitmightve11bethataEterintervening foravhiLe,thatwould,beeliminated.

asanalternative orasareasonable alternative or.somewhere aLangthewayvemight'ind outthatwecouldn'.WhattheMayorwouldhatetosechappenthenistohavesameotherpartiestakeaurownpleadings ifwehavetoallegeanti-tent actionotsamesorttogctQxthere,andusethattoblockthenegatiatians Eozthesaleofthesystemwhichvenavhave,toFloridaPowerandLight.Thisbusinessafbuyingpoweriscertainly something thatneedstobeexplored, butve'rcsittingherewithaplantthatcanatleastfartheconceivable Suture-assoonasthegenerator goesonline,makemorcpoverthanwhatwecanuse.Itisanexpensethat'sgoingtobethereregardless afwhether'<<e.azcgoingtobeabletocomeupwithsolutians tobuypo~eratacheaperrateExamFlorida.Paverandlight.'>le'vcstillgatthcbondsontheplants,theempLoyees attheplantandtheplanttomaintain-.

Ashcundezstoad thcproposalthatwasbeingmade,wasthatweneededtoexplore-alternatives and,heagreeswiththat,buthedoesn'twanttoexploreanalternative whichisgoingtoknackusoutofthcballparkthenanwhatmaywelI.bethemastxcasanable salutiantatheroblcmandthatwouldbetaHewouldhesitatetovateoramatxonthatwaulaveachanceofknackingusautofthenegotiatians taselltheplantbasedanourintervention andpleadings wemightmakerelativetaanti-wast violations byFloridaPowerandl.ight.Heiswondering ifitmightbebetter,becauseitIsawfuLhardtotalkintheabstractabautpleadings, tohavesomething

draftccl, aproposalastowhatwccandointheEormoEintervention andwhatvcwauldbesayingintheintervention, whatpositionwewouldbetaking,andlookatthatandhaveittousintimethatwccouldseeitandLookitoverEaradayatleast.ancehaveaspecialmeetingandthenvoteanwhattado.

Page75/26/76TheMayordoesn'twanttogetalCernatives byhedoesn'tthinkit'out-ofwhatlookslikewaynegotiations goatogethungonthesaleofChcsysteminaneffortexpLoring anavenueChat'sreasonable toexplore,butreasonable toexploresomething thatmightknockusareasonable solutionatthispointdepending onthcrNr.Danielsaskedforaclarification ofwhatMr.Speigelsaidastoyourimplicitrightstosomeoneelse'snuclearunit.HcstaCedChaCitishisunderstanding thatthelawdoesnotsaythat.Itmaybeimpliedbutitisn'inthclawthatanyonehasarightofaccessforsomebodyelse'sproperty.

Heaskedifthatistrue.Mr.SpeigclsaidChcLawdoesnotsaythat.Asfarasheknowstheonlypeople,privatecompanies Chathaveaccesstootherpeople'spropertyareutilitics excrcizing therightofeminentdomain.Autilitywhichhasthisrightisexercizing someoftherightsofthesovereign.

Inorderforcompetitor.on tosurvive,itneedsaccesstothisnewformofenergywhichisonlyavailable.

inratherLargeplants..Theconclusion whichhasbeendrawnandappliedin,manycasesisinordertomaintainasituati.on consistent withtheanti-trust laws,a.Portionoftheplantshouldbeofferedtootherutilities.

Nr.Danielsstatedchatisn'titreallytruechatsincethelawdocsnotsaychat,thatthe.implications arechatifI'utility isinfactinconsistent undertheanti-trust.

laws,then.theJusticeIhparcment maytrytogetasettlemcnt tohavetheotherpartygainaccessratherthanhavingadirectrighttojust.say,"Hey,Iwantapicccofyourunitoverhere,"andthat'sallthere.istoit.Nr.SoeielsaidhearceswithMr.Danielsin'hatthisisnotcheIaw.ir.annessaxzeunerstanswatrasbeensaxsocar,xnorertogetinvolvedinananci-trust reviewofFP5L'sapplication.

forlicense,theCitywouLdhave.tobringaboutallegations o'.anti-trust toFP5Landbepreparedtodefendthem,because,Mr.Daniels'tated,"IcanCellyouthatFP4Lwilldenythemanddefendthemvigorously."

'efurtherstatedheisjusttrying,tocleartheairhercbecausehodoesn'thinktheBoardreallyunderstood itthat,way.Mr.SettLewouldliketotake.opposition toFloridaPowerandLightobjectsstrenuously proceeding according CowhatNr:.DanielsisutusinamuchbetterosostowhatthcMayorhassaid.ObviousLy, Cousfilingthisintervention saying.,telethinksicwouldFloridaPowerandLihtifweofIcthisinte'ecce~.Heisnotwillingtosayattn.stameteatthatisthebestthingtodo.Hedoesn'tthinkanyofuscantakethatpositionatthispoint.MehavenoideaChatFloridaPowerandLightwantsCobuythisplantandifwedo,whatthey'ewillingCoofferusforthisplant.1'(cdoknowwc'reputtingsome$600,000ayearoutofthisplant.intotheGcncralFundatthispoint..MayorBryan.said$462,000plusa$70,000credit.Nr.Settlesaidalright.-

$56$,000.Itiscloseto$600,000.ItseemstoMr.SettlethatifwegctcomparedtowhattheyofferthcCityofVeraBeachwhichhebelieveswassixandahalfmillionifherecalls,andifChat,couldbe--noCwill5e--b7'omefutureCityCommission, scenasawindfalltopavestreetsandsoforthandChenthemoneyisgone,thenyou'egottogointotaxesto.raisebondsforthegeneraLfund'.Always20'4ofthepeoplepay80"ofthetaxes.ItwouldseemcohimthisisgoingtohavetobestudiedlongandhardasCowhetherwc're-reallyinterested inselling.HcforoneisnotwillingCotakethepositionat.thispointChatwe'rcinterested inselling.HemightalsopointoutthatMr.LittlewasaformeremployeeofFLoridaPowerandLightformanyyearsandisnowthe-CityhfanagerofVereBeach.Nr.Settlecansee~here.FloridaPowerandLightwoulddefinitely LikeCobuyPortpierceandVcroBeachandgetridofthispocketofcompetition.

HcwouldhavetoCakeavery,very1onghard.Lookatitbeforehewould.voteforsellingit.,Mr.Settlewouldprefertovoteonthemotiononthe.floor.MayorBryansaidthepointhewastryingtomakewasifwebypassing.thismotion,takeachanceoneliminating thepossibility ofsellingthisplanCtaFloridaPowerandLightbyalleging.

anti-trust action,chenobviously ifwegointocourt,andproveanti-trust actiononthepartofFloridaPowerandLightinanefforttowinChcoppoMnity Copurchase104orsomepc.centoftheplantdowninMiami,thenchenextanswerbyanyoneelsewhowantedcointervene, ifaftergettingtheopportunity topurchasethatplant,thedetcrminationweremadethatitwerebeternottospend80milliondollarstohaveaportionofaplantinMiamiandthat.itwouldbebettertoproceedtoselltheplanttoFloridaPowerandLightoratleasthavethataliveasanalternative, thatanyinterested partyopposedtothatforwhateverreasonwouldthenbcablecotakethepositioncheCityhadtakenincheintervention Coestablish ChatbasedontheCity'sownpleadings ChatFloridaPowerandLightshouldnotbcallowedtonegotiate withtheCitybecauseitwouldfurthertheanti-trust violations whichwchadallcgcdFloridaPowerandLightwerecommitting.

~'

3/$6/76Hissuggestion wasthatwedeferactiononthisuntilwecanseewhatisactuallygoingtobepledinthisintervention andhavesometimeEorconsider-ationofthismattertodetermine whateffecttheintervention wouldhave,ifany,onthecontinuing effortstonegotiate withFloridaPo~erandLight.Heisn'tpreparedtosaythatwewillselltoFloridaPowerandLighteither.Heispreparedtosaythathe~antstoseeanofferframFloridaPowerandLightsothatwecanandthepeopleofthiscommunity canconsiderthatofferandhe.isn'tpreparedtovoteinfavorofamotionthatmighteliminate thochoiceofthepeopleofthiscommunity tohavetheopportunity toconsiderwhetherornottheywanttosellthisplanttoFloridaPowerandLight.HeispreparedtoproceedfurthertoaskNr.Speigelorwhoeverisappropriate tosubmittousforconsideration'at aspecialmeetingbeforethe14th,whatevereffectinter-ventionmighthavesothatwecansee.Heissittingherebeingaskedtovoteonamotiontofilepleadings thathchasn'tseentoraiseissuesthatheisn'tsureof,butapparently oneofthemisanti-trust, andwithoutbeingadvisedoftheramifications tousofraisingtheanti-trust issueandthceffectthatwouldhaveonournegotiations withFloridaPowerandLightandheisn'goingtovotainfavorofthat.rNr.SettLeaskedifwecouldaskNr.Danielsthatquestion.

Nr.Danielssaidhewouldliketoclearuponepoint.Heisn'therctodaytotrytogetthis'body nottointervene

--noway--thatisyourchoice.Hisonly.pointinbeinghereistomakesure-thisbodyunderstands whatisinvolved.

Ashesaid,heisn'.a.lawyer,butistryingtosaywhatheknowsofthcsituation.

Mr.DanalssaidFPL<<asaskedtocomeadtal.wthtieAuto'tad,aroosaIortheosaCYTheywilldothatifthatisstillwhatisdesired.Theyaregoingtolookatitverycarefully for3pointsOneis,isitgoodforFortPierce,isitgoodforFP6Landitsshare-holdersandisitgoodEorthccustomers andemployees ofFortPierce.Ifthosethingsdon'tjiveup,asEarasFPOLisconcerned iEtheycan'tmakeaproposalsuitabletothosepoints,theywillprobablycomeandsay,"Sorry,wcdon'thinkwecando,businesswithyou."Nr.Settleasked.Nr.Danielsifhecouldaskhimaquestionwithaycsornoanswer.Nr.Danielssaidhecan.Nr.Settleaskediffilinganintervention uiIX.ceasenegotiations

.Nr.DanielssaidhethinkstheMayorans>>aredthatalready.Mr.'aniels can',answerthatbecauseheisn'tanofficerofthecompanyandthatdecisionwillhavetobemadebyone.Nr.Settlesaidhadidn'getthcMayor's-answer.Heaskedwhatitwas.Nr.Daniels.saidtheNaorimpliedthatweorobabiwouldnotEeelintheroerosturetottoutesstemldwxeteAutoratsloftiatinaainstusinananti-trust matterwxcwouNr.SettIesaidashe,understands it,ifthereissuchathingasafr'endlyanti-trust suit;thisauldbeoneofthem.Nr.Danielssaidhcisn'tawareofanyofthattype.Mr.Settlesaid,FPCLiscreatingamonopolyinthesouthFloridaarea.Hethinksitwould.beargued.onthatbasis,especially ifVeraissoldtoFPtlL.Hc.understands DaytonaBeachisconsidering atthispointgoingbackintotheirownsystemsince-theircontracthasexpired.Nr.Danielssaiditwillexpire.Nr.Settlesaiditwillexpirenextyear.Personally fromhisownstandpoint, asabusinessman andnotasanattorney, ifhcwereFloridaPowerand.Light,hemightnegotiate moreanxiously ifintervention wasfiledMayorBryansaidifyouareinadangerous positionrelatingtoanti-trust andtherearecivilandcrhaiaaIactionswhichcanbetakenagainstyouforanti-trustand.allegations aremadethatyou.alreadyhavetoomuchofanarea,,youmightverywellfeelthatyoucan~tnegotiate foranymoreofthatareaoncethatallegation ismadebythepartywithwhomyouaresupposedly nogotiating.

Mr.Settlesaidheunderstood.

therewouldbenocriminalcharges,simpIyacivilcharge;bfayorBryansaidEoranti-tmtthere,arecivilandcriminalchargesthatcouldbemade.Mr.Settlesaidtherearebutinthisoarticular e<<oudtheebecriminalcharcs?br.pelagesa'xno.ascaly,wewouldbestatingfactswhichshowonthegroundsorprincipal, whywhatthey'rcdoingmaybeinconsistent withtheguidelines oftheanti-trust laws.Thisisaltogether different fromacasaincourt.TheproblemcanbceasilysolvedifFloridaPo~erandLightofferssomefairshar~,arelatively smallshare,bymakingaproposaltosharcthenuclearplant.TherewasonecommentMr.SpeigelnoticedearlierbyNr.Daniels.Thisistheoccupational,.

haardofhisbusinesswhenhesaidsomething tothceffectthatthey'enotgoingtogiveupeasily.

Page95/Z5/T6Mr.Speigelwouldliketohave504for.evcrytime he'sheardthatfromamajarucilities company.Manymajorcompanies havesucceeded incarryingtheirpointjustbyimpressing uponsomcbadythatdisagrees withthemchafactthat.itmaybelongandexpensive anddifficult toprevail.Mr.Speigeihasbeensurprised, howrapidlythesituation.changes veryquickly.When yougaaheadanddoitallofasuddenyaufindthatithappens.Hcthinkshecanprobablyprobehismemorieswhenhe'sheardthisevenfromFloridaPowerandLightbefore.That'sanoccupational.

haaard.hfr.SpeigelCakeshiswarkveryseriously.

IftheyfindxnChairapinionChatthecompany"isunreasanably draggingitaut,Chentheybeginworkingatlowerandlowerraces.They'ediscovered theanswertowhathfr.Danielswasimplying, istohanginasattorneys eveniftheyhavetoworkfornothing..

Heisnevergoingtasitinacanferenc'e zoomwithanyutility--hereprcsentcd asmallcityinFloridasame10yearsagowhentheylookedFloridaPowerandLightintheeye--and,he'snevergoingCabeinapositionwhorehesaysCohisclientthatthey'egotarighteaus cause,butbecausethey'einapositiontodragitautandmake.itexpensive, you',bettergiveup.He'lworkEornothingfarasmanyyearsasnecessary cotryasbesthccantorightthebalancebetweenthesmalllitigatewiththelimitedresources andamajor.company, thefifthlargest.utilityinthe,country,withanunlimited litigation budget,which,thecustomors arepayingfor.Mr.Speigolstatedthathewauldsaythis,thatifthisthingx.sgoingtobedraggedoutandtheprotection ofyourinterestrequiresit,he'l.workfoznothing.Commissioner Caynonsaidyaugveygota.deal.htr.Speigelthinksthisisveryimpoztant whenaprivateutilicycomesbeforeapublicagencyandmakeswhat,hethinkswasclearlyimplicit.

inwhat.her.Danielssaid.MayorBryansaidwhatconcernshimisnotdraggingicoutor.howlongit'goingCoCake.He'sconcerned abouttheinitialactionandthecffcccthaticwouldhave.Ifwewerenocintherecessofconsidcrin saleofCheplanttoF1oridaPowerandLihtanweweredetermined cooaheaorsurevxcoutconsiderin thisasanalternative ifweweretoaahead.andoacrateamunxcxaanc,owounteconcerneaoutcezoccurcoencor-eeaaHccinksvanton.tn,oscorrawwevesttgocapant,toprtoneofthachoicesbeingconsidered atthistimebythecityandUtilitias Aathority isthepotential ofchesaletoFloridaPowerandLight,PurchasebychamancLthcsalebytheCity.Heisconcerned thatthepapersfiledinthisinter-ventionwouldhaveaneffectonthccother choicewhichmighcormight'ocprovetobethebestsolutionfarthecity,byeliminating it-asachoice.Heisconcerned thatifweproveour,casecoogaadintheintervention, wemightgetalldanewit'gitanddetermine itisnoteconomically feasibleCogoaheadand.getapieceaftheplant,andsothenwesaywedon'twanttodothat.and.decidecogoback,ta"go"andtalktoFloridaPowerandLightandtheysay,"Sozzy,wecan'ttalktoyou.You'eprovensowelltheanti-trustallegations you'e.madethat.youdon'thavechat;asachoiceanymore.Mecan'taford.togetintathat."Rr.Speigelsaid.heisveryoftengladhe'snotaMayorwhohastobefacedwiehtoughdecisions.

Herecognires therearesomecoughelementsinic.Onepzablemisthatyou'egota.deadline.

That'schezealproblem.Xfyaudidn'tWavetafacethezealitythatFloridaPower'ndLight,unlessyau.dointervene byApril14th,isgoingtosayastheysaid:aboutCheocherunits,thatyou'zeaut---ifFloridaPowerandLight'srepresentative iswillingtosaythatevenifFort'ierce doesnotintervene, theywillnonetheless begivenchesameopportunities coparticipate intheplantasanyocherintervener has;thentheycauld.get:PortPierceoffthehookinChatfashion.Iftheyarewi1lingtoworkoutsameocherinterimarrangement thatwould,doit.Ifthey'zenot-,Fare,Pierceisfacedwiththeproblem.MayorBryansaidifwecouldintime.tomeetchcdcadlinc, haveacopyoftheproposed.

pleadings andaletterfromlegalcounseladvisingusthatifchasepleadings arefiled,chacthiswouldnocprohibit, win,loseordraw,oreffectaurabilityconegotiate asaletoFloridaPowerandLighc,wecouldatchateifwehadthatadviceandacopyofthepleadings sowecauldactuallyseecheaQegacians relatingCaanti-trust, bein.apositionCo/mowwhat'beingfiledandhaveexpertakviceastochospeciiceffectoffilingthosespecifics, onthealternative ofsellingtheplanecoFloridaPowerandLight.~~

~~PageLO3/Z6/76Hr.Speigelsaidtheyknowwhatitistahavedeadlines.

IftheCommission andAuthority desireit,theycertainly willgetthisthingdraftedasEastastheycan.Hewouldexpectthattheycouldgetittothebodies.Hewouldpreferwheneveritispossiblethatthcpleadings bereviewedbytheCityitselfbefaretheyarcfiled,becauseitisthecity'saction,nothis.Hedoesn'tknowiftheywillbeabletoanswerprecisely thequestionbeingplacedbeforethem.bfayorBryansaidthatisthequestionhe'sinterested in,becauseiEfilingofthosepleadings isgaingtaeliminate thepassibility ofncgotia'ting with.FloridaPowerandLight,weaughttoknowthatontheErontendofthatfilingandnotfileit,ratherthancameinonthebacRendandbetoldwe'vcknocRedourselves outofthcpassibility ofnegotiating withFloridaPowerandLight.Hr.Mangesaidhcissorrytosaythatwe'egotacoupleofmemberswhahavepriorengagements andthey'rcgoingtahavetoLeaveus.There'isaquestionanthe-floor.

Nr.'Fenncalled.forthcquestion.

MayorBryansaidhewauldLiRctoofferasubstitute motion.Mr.SettlesaidHr.Penncalledthcquestion.

Mr.MengesaidtheMayorcouldofferhismotion.MayorBryansaidhewouldliketomovethattheAuthority authori=e thcpreparation ofpleadings forintervention intheprocedure involving thcplantxnDadeCountyEorsubmission totheAuthority atthcearliestpossibledateandthataspecialmeetingbecalledtoconsiderthosepleadings andthatalong withthepleadings, advicebesoughtastotheeffectoffiling.thesepleadings onanypotential orprospective negotiations withFloridaPowerandLigfctconcerning thesaleoftheelectriCsystem.Thismotiondiedforlackofasecond.Hr.Mangeaskedthattherollbecalledonthequestion.

Mr.Fenn,Mr.Rcilly,Mr.Settle-andMr.Mangevotedyes.MayorBryanvotedno.Motioncarried.Nr.Pennex'.tcd,atthispointCommissioner Caynonsiidnobodyeversaid,whatthisplantwauLdbcworthifweweretosellit.Hr.Mengesaid.thatistrueanl,thatisthcnextthingwe'rcgoingtatakeup.HeisgladtohavetheCityCommission heretodaybecausehcthinksit'important tohavethemknowwhat'sgoing.onbecausethey'egoingtobeinvolvedinanyfinaldecisionmade.Xehaveherc-atthepresenttimearesolutian

--onethatwaspresented andonethattheMayorhasrevisedthatnowgetsinvolvedinthesaleoftheplant+Mr.NengeaskedMr.Baldwinifthereisanyparticular disagreement wi.ththerevisedresalutian.

Nr.Baldwinsajdhehasn'thadtimetocomparethem.Hedoesn'tthinktherewouLdbe.anyprablem.Mr.Nengcsaid.basically it'sthcsamething.Thoreissamechangeinwarding.Mr.BaldwinsaidhethinksthcNayarhasessentially requiredanestimateofcost.Mr.Mangesaiditstateswewill.proceedtobringaboardsomeexpertpcrsans,engineers, accountsandsaforth,tomakeanevaluation ofaurplantsowecanEindautwhatweown.Youcan'tscilanythingunlessyauknawwhatyouhave.Rightnawhcdoesn'thinkanyofusknowwhatwedohave.1feneedtoknawthenctworth,marketvalue,potential value,whatwillhappenEiveortcnyearsdowntheroad.Mr.BaldwinsaidMr.Brownindicated therewasnoquarrel.withtheMayor'resolution.

Mr.Settlesaidtheanlythinghenoticesthathasbeanchangedisratherthanhiringpeople,thatwegetproposals.

Heisinagreement withthis.Mr.BaldwinsaidhethinksNr.Bryanalsoexcludestheattorneys inthelastLine.Nr.Bryansaidhewasassuming, maybehcwasassumingwrong,that.itwouldbeMr.Brown.Hegathersthatmayhavebeenanerror.

Pagell3/26/76Mr.SettlemovedthatResolution U.A.70-Sbeadopted.Nr.Baldwinsaidsotherewillbenoquestion, thisisthesubstitute resolution preparedbyMayorBryan.MayorBryansaidhchasanoriginalhere.TherollwascalledwithNr.Reiiiy,.Nr.

Settle,bfr.Bryanandhfr.Nengevotingycs.Notioncarried.Therebeingnofurtherbusinesshfr.Nengeadjourned theUtilities Authority SpecialMeeting..

MayorBryanadjourned theCityCommission Specialhfeeting.

ATTEST:ecretaryairman N1QTC>NOA'ICE30ROCKZLRPLAZ*NEWYORE.N.Y.10020'2844H.EID(9PRIEST40WALLSTREETVEWYORK,V.Y.1000531334nn33OLDEADDR?SS:RLIDAIW"INTLRNAX1ON~

TELEX:22019$May4,1978h'kSBZNOTOV OFFICE1201KSTREET.N.W.WASHTBOTON, D.C.000620222111D2GeorgeSpiegel,Esq.SpiegelGMcDiarmid 2600VirginiaAvenue,N.H.Nashington, D.C.20037Re:FloridaPower6LightCompanyFERCDocketNos.ER78-19(PhaseI)andER78-81

DearMr.Spiegel:

Thisistoacknowledge receiptofyourpuzzlingletterofApril21,1978whichwasreceivedonApril26.SincethattimeIhavebeentryingtodiscernitspurpose,otherthantosupplement improperly yourreplybriefofApril12,1978,intheabovecaptioned proceeding.

Youbeginbyquotingthefollowing excerptfromourreplybriefofApril12andstatingthatitfalselycharacterizes youradvicetoyourclient,Ft.Pierce:adviceofcounselforFt.Piercethattheyoffertoparticipate intheseunitsbutthattheyprolongnegotiations untilconstruction oftheplantiscompleted."

Youthen,however,goon,atpage3ofyourletter,toquotefromExhibit10inthisproceeding, theoriginofthestatement inourbrief:"Mr.Spiegelsaidtheidealsituation isthatyouarguewithFloridaPowerandIightupuntilthedaytheplantisreadytogointooperation.

Atthattimeyoufinallygetyourcontract."

Exhibit10,asyouarewellaware,isacopyoftheminutesofajointmeetingoftheFt.PierceUtilities Authority andtheFt.PierceCityCommission onMarch26,1976,despiteyourgratuitous assertion "Noverbatimtrans-criptwasmade,andtheremarksappearintheparaphrased mllutespreparedbytheSecretary oftheAuthority."

IcanonlyassumethattniscommentisintendedtosuggestthattheSecretary didnotaccurately summarize whatyousaidatthe meeting.Ifthatisso,Iamcompletely atalossastowhyyouwaitedformorethantwoyearswithoutcallingthesupposederrortotheattention oftheSecretary ofyourclient.Ofasubstantially moreseriousnatureisyouraccusation thatthelanguageyoucomplainofappearedinourreply,ratherthaninouropening,briefsothattherewas"nonormalprocedural opportunity toreply."Thereasonthatsuchlanguageappearsinthereplybriefisobvious.Itwasinreplytocharges,inyourinitialbrief,astotheaccuracyofFloridaPoweraLightCompany's evidenceastowhyithadcancelled twoproposednuclearplants,including theSouthDadeplantyoureferto.Moreimportantly yourchargethatyouhad"nonormalprocedural opportunity toreplyiscompletely beliedbythetranscript.

inthisproceeding.

Atpages1851-52thefollowing collocgxy tookplacebetweenyourassociate, Mr.Guttman,andMr.RobertJ.Gardner,VicePresident oftheCompanyandamajorwitnessinthisproceeding:

"QNow,Mr.,Gardner,couldyoulookatthebottomparagraph,.

page29ofyourerebuttal

[sic]testimony?

AYes.Q-Inthatparagraph yourefertoExhibit10,whicharetheexhibitsofameetingoftheFt:.PierceUtilities Commission, whichyoustatereflects, theadvicegiventoFt.PiercebyGeorgeSpiegel,,

attorneyfortheFt.PierceUtilities Authority, inwhichherecommendecL that.Ft.Pierce'ffer topartici-pateinFP&T.'sSouthDadenuclearplantbutthatthecompletion ofnegotiations relatingtothatplant.bedelayeduntiltheplantcommenced operation sotheparticipation andfinancing couldbedeferredaslongaspossibleHaveIread.,thatcorrectly?

A.YesQ.'IsExhibit10the.soledocumentyourelyonforthestatement Ijustread?1A.Yes."

IfMr.GuttmanthoughtthatMr.Gardner's testi-monyandExhibit10inaccurately portrayed youradvicetoyourclient,hehadfullopportunity toraisetheissueatthatpointinthehearing.Onthecontrary, hethenshiftedtoalineofquestioning involving acentralized economicdispatchstudybeingconducted bytheFloridaCoordinating Group,andnofurtherreference wasmade,asfarasIamaware,toyouradvicetoFt.Pierce.eytrulyrHAP/gegHay.PJr.cc:Administrative-LawJudgeCurtis.L.,wagner,Jr.A11.parties GEORGESPIBGEIROBERTC.MCDIARMID SANDRAJ.STREBELROBERTA.JABLONJAMESN.HORWOODALANJ.ROTHFRANCESE.FRANCISDANIELI.DAVIDSONTHOMASN.MCHUGH.JR.LAWOFFICESSrrxozx.8nMcD~xm2EOOVIRGINIAAVENIJE,N.W.WASHINGTON, D.C.20032TELEPHONE I202I333~00May8,1978PETERK.MATTDANIELJ.QUTTMANDAVIDR.STRAUSBONNIES.BLAIRROBERTHARLEYBEARTHOMASC.TRAUGERJAMESCARIPOLLOCKHarryA.Poth,Jr.,Reid&Priest40WallStreet:NewYork,NewYorkEsq.10005Re:,FloridaPower&LightCompanyFERCDocketNos.ER78-19-(PhaseT)andER78-81

DearMr.Path:

ltmaybe"puzzling" toReidandPriest,asstatedinyourletterof-May4,1978,thatanattorneybelieving himselffalselyaccusedbyReid&Priestonthebasisofanout-of-context quotation woulddefendhisreputation, asIdidinmyextendedreplyofApril21,1978.Thisperhapsindicates thatourstandards differastotheimportance ofanattorney's reputation andthecourtesies andresponsibilities.

owedbyonememberofthebartoanother.IThisappearstobeconfirmed bythefactthatyourletterdoesnotconsiderthe,manyspecificpointsinmyletter,whichplacethesinglequotation intothecontext:ofthelengthypublicdiscussion.

Zncontext,thequotation demonstrates thatitwouldbecounter-productive forFlori:daPower&LightCompanytoopposeoveralongperiodoftimewhatIbelieveistheinevitable establishment oftherightofFortPiercetoparticipate in,FP&L'snucleargeneration.

Etwillbecounter-productive toFP&LbecauseFortPiercewouldnotbegintasharefinancial risksuntilFP&LadmitsFortPierceintoparticipation.

4 HazryA.Poth,Jr.>Esq.May8,1978Yourletterappearsfurthertoconfirmtheaccuracyofmyprediction, thatFP&L,byrefusingvoluntarily tograntnuclearparticipation, would,ironically, forceuponFortPierceasituation underwhichFortPiercewillnotberecpxized toputupitsmoneyuntilFP&L.iscompelled tograntparticipation, bywhichtimeconstruction willbefaradvancedandmanyrisksalreadyresolved.

Answering specifically theonlypointmadeinyourletter,onceitwasestablished thatFP&L'switnesswasre-lyingsolelyupontheminutesofthepublicmeeting,weweresatisfied thatnofurther.responsewasnecessary.

Wecouldnot,andstilldonot,believethatanyresponsible attorneywould.place,upontheout-of-context quotation, theinterpre-tationchosenbyReid&.Priest-oncethelengthycontextisreviewed.

Verytrulyyours,GeorgeSpiegelGS/nzbcc:Administrative LawJudgeCurtisL.Wagner,Jr.Allparties

APPENDIXD(1)Z'ettersdatedMarch30,1976fromTracyDanesetovariousFloridamunicipal systemsRe:SouthDadenuclearproject.(2)LetterdatedApril14,1976fromGeorgeSpiegeltoTracyDaneseRe:SouthDadenuclearproject.(3)LetterdatedApril29,1976fromTracyDanesetoGeorgeSpiegel(4)LetterdatedJuly21,1976fromRobertA.JablontoTracyDaneseRe:SouthDadenuclearunits.(5)LetterdatedJuly28,1976fromR.J.GardnertoRobertA.Jablon.(6)LetterdatedAugust3,1976fromJ.T.BlounttoRobertA.JablonRe:SouthDadenuclearunits.(7)JointParticipation Agreement, Generating PlantStudy.(8)September 10,1976DraftFloridaJointNuclearFacilities SteeringCommittee MeetingMinutes.(9)LetterdatedOctober21,1976fromRobertA.JablontoTracyDaneseRe:JointVentureProject.(10)LetterdatedNovember12,1976fromRobertA.JablontoRobertJ.GardnerRe:FPGL'sProposedJointVenture-Project.

(ll)LetterdatedDecember16,1976fromRobertA.JablontoRobertJ.GardnerRe:FP&L'sProposedJoint-Venture Project.(12)February21,1977Statement.

releasedbyMr.MarshallMcDonald, president andchiefexecutive OfficerofFP&L,relativetothedecisionannounced inTallahassee bytheFloridaPublicServiceCommission.

~0~P.0SQXOI31CO,JNIAhll,fLQRIOA33)OII,~Ip'Ig%OR.QRlOAPQWER5UGHTCQi'APAiMY

.March30,1976Hr.JoeB.Dykes,Jr.~DiectorFlectricDepartment CityofTa3.lahassee CityEallTallahassee, Florida32304.DeaH.Dykes:Thisrespondstoyou~,inauiryregarding ourCompany's SouthDadenuclearproject.Whileweappreciate yourexpression ofinterest,

'PLhasdecided.toproceed.independen lywithdevelopment oftheSouthDadeproject'.

andtoutilizetheproject's electricgenerating, capability tomeetourownsystem'senergyneeds.FloridaPower&LightCompanyrecognizes thewidespread interestwithinFloridainthejoint.development of'uclear, powerfacilities.

Enthatregard,FPLwouldconsiderbeingpartofajointventuretoconstruct anuclearfacilitysomewhere.

intheCentra3.Floridaareasoastobeconveniently.

located.forpotential participants.,

Suchaprojectwouldbeatruejointventurefromitsinitialinception throughcompletion andwould.recuirefullcommitments ofallparticipants commencing withtheplanningstages.Wewouldbepreparedtoutilizetheexperience andexpertise ofFPLinthenuclear,environmental andengineering areasincoordination withthoseofparticipating systems.FPLwould,atth'stage,considervariousalternatives astoutilizing theoutputofsuchafacilitydepending ontheoverallparticipation.

Forexample,itmightbedesirab3.e fromtheviewpoints ofallconcerned forparticipants otherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecreasing cpzantities astheneedsoftheownership participants inceaseThiswouldbeonlyoneofmanypossibleapproaches.

Accordingly, FPLispreparedtomeetwithrepresentatives ofthosesystemswhichareinterested incommitting tothejointdevelopment ofanuc3.earproject.forfulldiscussion ofthissubject.WefeelContinued...

Mr..Joe:B.Dykes,Zr.March30,'L976geTwo.that'or.suchdiscussions tobe-real'stic, allparticipating systems-wouldhaveto,.execiseproportionate-degreesofinitiative andresponsibi3.ity inan,atmosphere ofmutualcooperat'on.

Inthatcontext,wedonotfeel,thattheterm"discussion"

.asusedhereinshould,beconstrued's anoffertonegotiate.

nordowebe3.ieveour--selves-underanyobligation toundertake thewho3.e,,oranysub-stantialportion,of'heresponsibility tocarryoutsuchaprojectasenvisioned here.Whatwedoproposeistheopeningoftalksonthedevelopment of.atruejoint.nuc3.earpower.project.Veytrulyurs.,VicePresident Public:A+fairs

+~6!$4$%l'a~~>(@March30,1976HrRodneyNewtonDirector-ofUtilities St.CloudPublicUtilities St.Cloud,Florida32769

DearNr.Newton:

Thisrespondstoyouincuiyregarding ourCompany's SouthDadenuclearproject.Whileweappreciate yourexpression ofinterest, FPLhasdecidedtoproceedindependently with.development oftheSouthDadeprojectand'outilizetheproject's electricgenerating capability to-meetour;ownsystem'senergyneeds.,Florida-Power6LightCompanyrecognizes, thewidespread interestwithinFlorida.in-thejointdevelopment ofnuclearpowerfacilities.

Xnthatregard,FPLwouldconsider.

beingpartofajointventuretoconstruct anuclearfacilitysomewhere intheCentral.Floridaareasoastobeconveniently located'forpotential participants.

Suchaprojectwouldbeatruejointventurefromitsinitialinception throughcompLetion andwouldrequirefullcommitments ofalXparticipants commencing withtheplanningstages.Wewouldbe,preparedtoutilizetheexperience andexpertise ofFPLinthenuclear,environmental andengineering areasincoordination withthoseofparticipating systems.FPLwould,atthisstage,considervariousalternatives astoutilizing theoutputofsuchafacilitydepending ontheoverallparticipation.

Forexample,itmightbedesirable fromtheviewpoints ofallconcerned forparticipants otherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecreasing quantities astheneedsoftheownership participants increase.

Thiswoul'dbeonlyoneofmanypossibleapproaches.

Accordingly, FPLispreparedtomeetwithrepresentatives oEthosesystemswhichareinterested incommitting tothejointdevelopment ofanuclearprojectforfulldiscussion ofthissubject.WefeelContinued...

Hr.RodneyNewtonMarch30,1976'ageTwothatforsuchdiscussions toberealistic, allparticipating systemswouldhavetoexerciseproportionate degreesofinitiative andresponsibility inanatmosphere ofmutualcooperation..

1nthatcontext,wedonot.feelthattheterm"discussion" asusedhereinshouldbeconstrued as.-anoffertonegotiate nordowebelieveour-selvesunderanyobligation to'undertake thewhole,oranysub-stantialportion,oftheresponsibility tocarryoutsuchaprojectasenvisioned.

here.What.wedoproposeistheopeningoftalksonthedevelopment ofatruejointnuclear.powerproject.Verytrulyyours,*~1I~~TracyDa>>eseVicePresident PublicAffairsTD:mh R.OAIOAPOWVjR5LIGHTCOMPANYMach30,1976H-.Wa3.terBaldwinDirectoroUtil'ties FortPierceUtilities Authority P.O.Box3191FortPierce,Florida33450DearKr.Baldwin'IThisrespondstoyourinauiryregarding ourCompany's SouthDadenuclearproject.Whileweappreciate yourexpression ofinterest, FPLhasdecidedtoproceedindependently withdevelopment oftheSouthDadeprojectandtoutilizethepx'oject's electricgenerating capabi3.ity tomeetouzownsystem's.

energyneeds.FloridaPower&LightCompanyrecognizes thewidespread interestwithinFloridainthejointdevelopment ofnuclearpowerfacilities.

Xnthatregard,FPLwouldconsiderbeingpartofajointventuretoconstruct anuclearfacilitysomewheze intheCentralFlorida,areasoastobeconveniently locatedforpotential pax'ticipants.

Suchaprojectwouldbeatruejointventurefromitsinitialinception th"oughcompletion andwouldzecpxirefullcommitments ofa3.1participants commencing withtheplanningstages.Wewouldbeprepaxedtoutilizetheexperience andexpertise ofFPLinthenuclear,env'ronmental andengineering areasincoordination withthoseofpart'cipating systems.FPLwould,atthisstage,considervariousaltexnatives astoutilizing theoutputofsuchafacilitydepending ontheoverallparticipation.

Forexample,itmightbedesirable fromtheviewpoints ofallconcerned forparticipants otherthanFPLtoowntheentireoutputandFPLinturntopurchaseunitpowerindecxeasing cpxantities astheneedsofthe'wnership participants incx'ease.

Thiswouldbeonlyoneofmanypossibleappx'oaches...:

/Accozdingly, FPLispreparedtomeetwithrepxesentatives ofthosesystemswhichaeinterested incommitting tothejointdevelopment ofanuclearpr'ojectforfu3.1discussion ofthis'subject.

Wefee3.~Continued...

HFt.Pl"t<ysill<.Q'R:fib Hr.WalterBaldwinMarch30,1976PageTwothatforsuchdiscussions toberealist'c, allpaticipat'ng systemswouldhavetoexerciseproport'onate degreesofin'tiative and.responsibility inanatmosphere ofmutualcooperation.

Inthatcontext,wedonotfeelthattheterm"discussion" asusedhereinshouldbeconstrued asanoffertonegotiate nordowebelieveour-selvesunderanyobligation toundertake thewhole,oranysub-stantialportion,oftheresponsibility tocarryoutsuchaprojectasenvisioned here.Whatwedoproposeistheopeningoftalksonthedevelopment ofatruejointnuclearpowerproject.Very..truly yours~r&7TracyDaneseVice.Presid'ent Pub3:icAffairs P.O.SOXOIDICO,MIA/Al.ROIIIOAX?IIIICR.cnlQAPOVN=R5UQHTOOVIPAi4Y March30,1976Mr.H.C.LuffAssistant GenealManagerOrlandoUtilitiea Commission P.O.Box3193Orlando,Florida32802

DearMr.Luff:

Thisrespondstoyourinquiryregarding ouCompany's SouthDadenuclearproject.Whileweappreciate yourexpression ofinterest, FPLhasdecidedtoproceedindependently withdevelopment oftheSouthDadeproj'ectandtoutilizetheproject's elec-r'cgeneatingcapability tomeetourownsystem'senergyneeds.FloridaPower&L'ghtCompanyrecognizes thewidespread inteestwithinFloridainthejointdevelopment ofnuclearpower-facilities Znthatregard,FPLwouldconsiderbeingpartofajoint.venturetoconstruct anuclearfacilitysomewhere intheCentraFloridaareasoastobeconveniently locatedforpotential participants.

Suchaprojectwouldbeatruejointventurefomitsinitialinception throughcompletion andwouldrecpxirefullcommitments ofallpartic'pants commencing withtheplanningstages.Newouldbepreparedtoutilizetheexperience andexpertise ofFPLinthenuclear,environmental andengineering areasincoordination withthoseofparticipating systems.FPLwould,atthisstage,considervariousalternatives astoutilizing theoutputofsuchafacilitydepending ontheoverallparticipation.

Forexample,itmightbedesirabI.e fromtheviewpoints ofallconcerned, forparticipan sotherthanFPLtoowntheentireoutputandFPLinturntopu-chaseunitpowerindecreasing auantities astheneedsoftheowneshipparicipantsincrease.

Thiswouldbeonlyoneofmanypossibleapproaches'ccordingly, FPLispreparedtomeetwithrepresentatives ofthosesystemswhichareinterested incommitting tothejointdevelopment ofanuclearprojectforfullciscussion ofthissubject.WefeelContinued...

r.H.C.Luffinarch30,l976Page-Twothatforsuchdiscussions toberealistic, a13.participating systemswouldhavetoexercisepropotionatedegreesofinitiative andrespons'b'l'ty inanatmosphere ofmutualcooperation.

Xnthatcontext,wedonotfeelthattheterm"discussion" asused,hereinshouldbeconstrued asanoffertonegotiate nordowebelieveour-selvesunderanyobligation toundertake thewhole,oranysub-stantialportion,oftheresponsibility tocarryoutsuchaprojectasenvisioned here.Whatwedoproposeistheopeningoftalksonthedevelopment ofatruejointnuclearpowerprojectVe.trulyyo~Cji'.~TracyaneseV'cePresident Publ'cAfairsTD:mh

~~OKORQK5PISCiKLROSSRTO.M44IARMIO 5ANORAJ,5TRSSSIROSSRTAJASLONJAMS5N.HORWOOOALANJ.ROTH4P44Urc4CLLAWOFFICK5SPIEGzL8rMcDIARMID25OOVIRGINIAAVKNIJS.N.VV.WASHINGTON.

O.Cc'ROOQ7TtlAtH4NC I141l111~144AprilL4,1976OANISII.'OAVI45ON PRANC555.PRANCI5THOMASN.MCHUGH.JRPSTSRK.MATT'CMICI

• CMTTMCM4AMCCCCAICCMMCCÃTracyDaneseVicePresident.

PublicAffa'rsP.Q.BoxOl3l00Miami,PLorida3310l

DearTacy:

Re:PLorida'Power 6LightCompany,SouthDadenuclearoro'ectThisiswithreference toyourLettemofMarch30,1976toanumberofmunicipal ut'Lities inPloridainwhichyoudecline,onbehalfofPloridaPoweraEightCompany,to.affordtheopportunity oftheseutilities toparticipate intheCompany's, proposed'outh Dadenuclearproject.YoualsoindicatethattheCompany"wouldconside"beingapartofajointventuretoconstruct anuclearfac'litysomewhere inCentralPloridaandthatitispreparedtomeetfor"fulldiscussion" inan"atmospnere ofmutualcooperation."

'Youpointoutthatthisisnot"anoffertonegot'te" nordoestheCompanyconsiderthatithas"anyobligation" alongtheseLines.TheseLetteshavebeenreferredtomeforreplvbysomecftherecipients.

Wearepleasedwiththisproposalandarehopefulthatdiscussions alongtheseLinesmaydevelopandultimately provehelpful.lw'lcertainly recommend toourcLientsthatthesediscussions beinit'ated ataconvenient andappropratetime.You,ofcourse,recognize thatthisdoesnotaffecttheimmed'ate economicandlegalauestions whichhavemotivated manyofthemunicipal uti,lities tointervene attheNuclearRegulatory Commission withreference toPPSZ'sapplication foraconstruction permitforitsSouthDadeNuclearproject,toobtain TracyDaneseAprilL4,1976essen~a'eaupcwe.,Thecurrentcircumstances havemanvfacets,partofwhichistheCompany's pxograminvol'ving theac-cuisition.

ofanumber.ofmunicipal utilities whosecurenteconomicsituat'on stemsin.LargepartfrompastandcurrentCompanypolicies.

ThismatterwilLbedeveloped insomedetailinthejointpetitiontointervene intheNECproceedings.

Inthisregard,youwi3.1reca3.1,duxingtheperiodinwhichyourepresented, asattorney, theFloridai>unicipal Utilities Association, thatFloridamunicipal utilities hadtwoprincipa3.

objectives:.

(a)legislation toauthorize municipal utilities toestablish anauthority forjointmunicipal ownership ofLargeplantssuchasyourlettersuggests; and(b)thedevelop>>mentofaful3.yintegrated FloridaPowerPool(whichwou3.dprovideimmediate benefts and.isanessential predicate tothetypeofjointventuresuggested inyourletter).Ibel'evethatbothoftheseobjectives wouldhavebeenattainedbynowbutfortheopposition.

orFPK,andi,t.isbelievedthatFPKiscont'nuing itsopposition.

'Theevistence ofsuchapoo3.wouldgreatlyame3iorate theeconomicsaueezeonmunicipal utilities suchas,forexample,PierceandhieroBeach.Thosesystems'navegoodgeneatingplantsbutareunderaninterimpressurebecause,operating thei-generation atsystem-load capacityfactors,theymustpassintothei-retailratesaLargeproportion ofhighcostoil.Undeaproper,fu3.lyintegrated, F3.oridaPowerPoo3.,therewouldbesingle-system opeationofa13.F3.oridae3.ectric uti3.ities andineverygivenhour,on3.ythelowestcostunitswouldbeonerating statewide inordertoservethestatewide 3.oadattheLowesttotaLcost..Thesmallerun's,havinghigherheatratesandopeatngcosts,andtheunitsbeaingthelargerpecentagesofhighepricedoiL,wouldoperateonlywhennecessary; theywouldbecomethecycling,pea3cingandreserveunitsfortheintegrated system.TheenergvneedsorsuchsystemswouldbesuppliedgeneraLLy onthebasisofeconomyenergypricedonasplit-the-savings basis,orsomeothersecondary energybasis,suchas,forexample,theF3.oridaPowerCorporation salestotheCityofSebring.Thiswouldimmediately reducetheleveLofthefueladjustments intheratesofcitiesLi!<eFtPierceand.VeroBeachandthuseducethe TracyDaneseAprilLA,1976differen'tials betweentheirretailratesandthoseof'P&L.Such'ransactions wouldalsobenefitPP&Eandotherlargeutil'ities becauseofthe.additiona3.

prozittheywouldearnonsalesofeconomyenergy.PP&Ewouldjuztherbenej'duringperi.odsofnucl'earshutdown, when,withitsLow-cost.

nuclearenergyun-availabLe, itwouldbeabletodrawupontheLowestcostsourcesavailable ingenera.tors ofothersystems.Suchapoolwouldalsoinc3.udearrangements forstate-widetransmission obulkpowe~onajointratebasisthatwou3.denabLesystemssuchasPt..PiezceandVeroBeachtosellthe'rinterimexcesscapacitytoothersystemswhich.maybetemporari.'v shortofcapacity.

Withaproper-pool,,thesearrangements aremadeonajointlyplannedandcoordinated basissothatthetimingoftheinstallat'on ofnewcapacitybyeachmembersyst:emisarrangedsoastominimizethetotalgeneration investment necessary toservethetotalFloridaLoad'.WiththerevenuesthatFt.PierceandVeroBeachwouldreceivefromsuchtzansactions, itappearsthattheywou3.dthen.beinapositiontoreducetheirretailratesto.alevelcurrent3.y competitive withPP&Eandsurviveasindependent entities.

E)reover, suchcoordinated pool.operations wouldbebenefi.cial toPP&E,sinceitwould.helpitminimizeitsinvestment in'eneration, itwouldprovideitwithadditional revenuesfromitstransmission investment, and,intheeventPP&Eisunable'tosolvethecurrentspent-fuel, tank-3.eak, problemojTurkeyPoint,enabLeittokeepitsretailratescompetitive despiteanyLong-termshut-down oztheTurkeyPointgenerators.

Athirdareatobeconsidered isrP&E'shistoricpol'cyconcerning itsrefusal,orstrictreluctance, tosellfirmwholesale powertomunic'paL util'ties.

Zenclose,forexample,acopyozaLetterofNovember28,3.967whichPP&LsenttotheCityComm'ssion ofVeroBeach,inwh'chtheCompanystatedthat"wearereluctant" togofurtherintothematterofsellingwholesaLe powertotheCitybecauseoftheneedtostudythreeotheralternatives, twoozwhichinvolvedthetakeover.

byPP&EoftheCity'sbusinessby"outright purchase" or"30-yearlease"ofthesystem.

TracyDaneseApril14,1976Thispalicyhascontributed totheproliferation ofrelatively small,generators onmunic'pal systemsintheareaservedbyFPEZascompaxedwi&themanymun'cipa3.

utilit'es intheareaserved.bvFloridaPoweCarporation whichpuchasepoweratwholesa3.e.

Municipals.

connected toFloridaPaweCorporation's transmission systemhavecachedbasicagreements withthatCorporation cavexingsystem-wide.

transmission, back-upandrelatedarrangements whichnowenablethemtoplanthecoordinated develop-.

mentofefic'entgeneatingunits.Thus,forexample,within6manthsw3.975,participation w=3.00,000kwintheCrystalRivernuclearp3.antwasmarketedtoa.numberofmunicipa3.s andoneco-op,complexpaticipatian-agreements werenegotiated, arange-mentsweremadefortransmission and.back-upandthenecessary financing stepsweretaken..F?&L,however,appearstobecontinuing itshistoricpo3.icyagainsttransmission, generaLLy ofbulkpave,althoughtherehavebeenafewrecentstatements astoitswillingness toprovide'transmission inafewtightlylimitedcircumstances.

Znsummary',

thereareimportant areasofimmediate concernand-impact whichyoushouLdtakeupwithmanagement sothattnemunicipal utlitiesreceiving yourLettervillbeabLetooperatetatheirfu13.efficiency andremaininbusiness3.angenoughtoaccompLish thelang-term objective ofyourMarch30,1976Letter.3:naddition,.

asapredicate tothatobjective, themunicipals needassurance nawthat-FPSZ.wi13.providebulkpowertransmission throughout itssystem,that'willtakea3.LstepsinitspowertobringafuLLy-integrated F3.oridaPo~erPoa3.intobe'ng,andthatitwillsupport'he 3.egisLa,tion whichi,thas.prev'ous3.y successfu'Ly opposed,whichthemunicipals.

arstiLLseekng,toauthorize forma-tionafanauthority forthejointmunicipal ownersh'p oflargegenerating units.IlaokbackvithaLeasuretoocrfiendlyassociation asca-counse1 totheFloridaMunicipal Uti3.ities Association andtrustthatyouvillrecognize thattherapportveestablished TracyDanese5Apzi3..14,1976thenshould'ehelpful,nowthat.thisfirm,wil3.berepresenting.

a,numberofseparate, mun'cipals withreference:

toPP&L'sSout:hDadeunits.thuss'mplifying fozPPSZthematterofdealingwithanumberofseparatemun'cipals.

Quzpastrelationship shouldenableustoresolve.theforegoing mattersinanamicab3.e mannerintheinterest, ofallpitiesconcerned.

-Please-donot.hesitatetoca13.me-withzeezencetoanyoftheforegoing mattes.Sineelyyours,GS/nzhGeorgeSpiegelMr.NiLLiamT.Mayo,.Chairman, FloridaPublicServiceComm'ssion CLientsMr.MacCunningham, Executive VicePresident, PNUACharlesR.,P.Bzown,Esq.,CityAttorney, Vt.P~erceQseePagan,,Zscr.,CityAttorney, Gainesville Mr.JohnR.Kel'Ly,.DirectorofUtilities, NewSmyrnaBeachThomasGurney,Esc.,Attorney.,

OrlandoUtili;ties Commission Mz.ZamesE..Phi13.ips, Genera3.Manager;SebringMr.,GlenDuBois,CityPotager,ALachuaMrDonS..Baldwin.Superintendent ofUtilities, Ba,towJosephMinotti,Zsq.,C'tyAttorney, BushnellMz.ClydeEopkins,C'ySuper'ntendent, Chattahoochee ZohnC.Chew,CityAttorney, DaytonaBeachMr.Fvezett.B.Eowe,CityManager,ct.MeadeEonorable ZrstonRoyal,Mayor,LakeEelenMr.CliffordC.,Blaisde13.,

Zr.,Utilities Diectoz,iakeNorth-Mr.CalvinZ..Glidewell, City8~ger,I.eesbuzg Mr..CecilBarks,DirectorofUtilities, MountDoraMr..Z.N..Caldwell, D'zectorofUti3.it'es, HewberzyFe.Z.C.Shreve,J.,DirectoroUtilit'es, Qcala8.,Nilliam;.

Zohnson,CityManager,QuincyMr..C.R..Bevezly,President, N'listonMr.C.ECorn,Superintendent, Tallahassee TracyDaneseApril.l4,l976ccOtheraddesseesoz'P&LAprill,l976letterreSouthDadesite:Mr..RW'ochxan, Supt.Planning&,Engineering,

Lakeland, Fw.Zohn.T.Doughtxy, Manager,UtilityBoaxdofCityozKeyNestNr..williamR.Snow,Cityi>~ager,CityofGreenCoveSpringsMr..C..PBlai-,CityManager,Clewiston Mr.RodneyHewton,DirectorofUtilities, St.CloudMr.EenxvC'eters,Sr.,Dixectoz'f Utilities, homestead MrQ.H'..Sykes,President, GladesE3.ectxic Cooperative,.

Tnc.Nr;PeterJ".Gibson,,Manager,,Qkezenoke

~~Mr.,ZedraH..hamilton, President, ClayZ3.ectric Cooperat'e, Znc.MxArnoldE.Smith,'eneral Manager,SuwanneeValleyElectricCooperative, Xnc.Mr;KarlM..Allison,Zr.,w+ecutivei<mager,LeeCountyElectricCooperative Mr.Richard;Maenpaa,P~ager,PeaceR'verElectricCooperative, ZncMx.PmionESweet,Chaixzan,.

Jacksonville ElectricAuthority FredKxay,GeneralManager,FloridaKeysFleexicCooperative Association P.O.SOX010100,NIAAII,.FIORIOA3510IFLORIOAPOWER5UGHTCOMPANYApril29,1976"GeorgeSpiegel,Esp..Spiegel&McDiarmid 2600Virginia.

Avenue,N..W..Washington, D..C;.20037'ear George:I.aminreceiptofyourletterofApril14whereinyouhaveexpressed

interest, onbehalfofvariousmunicipal clients,inour.suggestion-that.wejointlyengageintalkslookingforwardtoatruejoint;ventureinanucleazfacilityin.thecentralpart:ofthestate..iInadditiontothosemunicipalities onbehalfof.whichyouresponded, theJacksonville ELectricAuthority andFloridaPowerCorporation have-alsoexpressed interestinthiscon-cept;Subseauently, Ihavetalked'ith Mr.Ron.KuetheroftheJacksonville ElectricAuthority andhavesetameetingdatefor"May13,L976,,in-,JacksonviLle.,

Inviewofthelargenumberofclientswhich.you represent, Iwouldthinkthatitmightbehelpfulifsomeofyourclientscouldsendsystemrepresentatives sothatindividual needsandtimeframescanbeinitially discussed.

Themeetingwillbeheldat1:30PMattheJacksonville ElectricAuthority

building, 233W..DuvalSt.,Jacksonville, Florida..

Anagendawillbeforwarded.

toyoupromptly.

Very,.truly yours,/.TracyDaese.zesidentPublicAffairsVxcePTD:mhcc:Mr.RonKuetherMr.GeorgeC.MooreClientsofSpiegelSMcDiarmid HKLPIiVGBUILOPLORIOR CSORCSSPISOSLAOSSRTC.MCOIARMIO 5AHORA*5TRSSSLROSSRTAJASLOHJAMSSN.HOIIWOCOALAN*ROTACPCOIIII5N~W.OPRICZSSPIEGEL8oMcDl&RMID 2SOOVIRCINIAAVENVOI.N.W.WASHINGTON, O.C.2OOSTTZLZPIICHC' 24SI4QSM544'AHISI I.O*VIOSOHPRAHCKSILPRAHCI5~TIIOMASN.MCIIIICIL JR.PCTSRILMATTOAHISL,JCVTTMAN"'OletflS 5.SLllRJAMSSCARt,POLLOCK21.July1976TracyDanese,,FsauiraVicePresident foxPublicAfairsFloridaPower&LightCompanyP.O.BoxOI,3100KLami,Florida33101;Re::SouthDadeNucleaxUn'ts

DearTracy.ThisletterconcernsreportsthatFlorida,

Power6LightCompanyplanstocancelordeferitsconstruction andnuclearsearnsupply'ystem contracts fortheSouthDadenuclear=generating units..3numberofmyclientshaverequested par'cipat'on intheseproposed.

nuclearunits.Byletterof30March1976,youstated:FPThasdecidedtoproceedindependently w.'th-davelopment oftheSouthDadepxojectand.toutilizetheproject's electricgenerating capability tomeetourownsystemtsenergyneeds.You.didindicatem~.that1'etar,however,that:.FPTwouldconsiderbeingpartofajoinventuretoconst~anuclearfacilitysomewhere intheCentral.Floridaa~aOn14April1976,GeorgeSpiegel,Zsq.,responded withaletterstatingthathewaspleasedwiththeproposalforanewjointventureandsettingforthelementsnecessary foritsconsideration.

Hithoutresponding substantivaly, you Pm.Danese2LJu3.y1976scheduled ameetingonthe13th'ofNay,1976,inJacksonville, taconsidersuchjointventure.Atth'smeeting,youreiterated thatP3.axi.da Power&LightCompanydidnotwishtoshaeSouthDadecapacity, sincesuchcapacitywasnecessary tomeettherangements oftheCompany's awncustomex's.

Atthattimeyoudiscussed loadgrowthestimates.

PP&Lanticipated thatbythe.end'fthecenturyitwouldneedtoaddtoissystemanewnuc3.eaxunitannually.

Atthe22June'1976meetingoztheSteex'ing Committee fortheproposedCentralPloridajointven-.ture,needsfor.newnucleaxcapacitywere-againdiscussed, eludingPP&L'sneedsforanumber.afnewplants.Atthistime,.Bab"Gaxdneragain.statedthat:.FloridaPower&LightCampanywasunwil3.ing to,shareSouth,Dadenuc3.eacapacity.

Purther,inPP&L's"Response toJointPetitionofP3.aridaCities,"filedwiththeNuclearRegulatory Commission in.DocketHo.P-636-A(South.DadePlants),.P&Zstatesthat(p-6)-"Applicant's prim~concernisthatthemeritsofthecasebereachedandxesolvedina.timelymannersothatconstruction oftMsvitallyneededgenex'ating caaacityisnotthreatened withde3.ay."Ztwas,theefore,withsomesurprisethatZlearned1ateonMondayafternoon, thxoughpressreports,thatPloridaPower&LightCompanywascansidex3ng postponement oftheSouthDadeunits.ZwasfuMersumrisedtolearnthatatameetingatTampaElectricCompanyyesterday>>-to.

whichneithex'norapparently manyoxmyclientswereinvited-BobGaxdnerstatedthatbecauseofpresently prajected lackoffutureloadsuf-ficienttosupporttheunits,PP&LintendedtodeferplanstoconstmcttheSouthDadeunitsandtapossiblyternatethewestinghouse contractintendaysand,further,that,ifothersw'shedtoassumetheHestinqhouse centactforconstruc-tianatanotherplantsite,thedecisionwouldhavetobemadewi~saidtendayperiod.BobGax'dnera3.sosaidthatPloridaPawer&LightCompany's participation insuchconstruction cou3;dnotbecountedon.however,heappaxently indicated thatPP&Lwouldbewillingtasellitsownersh.'p interesttoothers,pro-videdthatadecisionwasmadew'thintendays.Thefollowing thoughtscametomind.=irst,consider-ingnewcapacityneedsandescalating capitalcosts,itwouldbeunfortunate iftheplanningthathasgoneintoSouthDade,andthecastsassaciated withthatplanning, werelost.As-suminqPP&L'sproposedcancellations ordeferrals doresult.fomanant'cipated decxeaseinloadgrowth,stepsshouldbe Hx.Danese21July1976takentoassuretnattheinvesMent madeintheprojectmaybeutilizedbyotherswhose3.oadgrowthwhencombinedwiththatofPPa3'ould suxelybesufficient tosupport.theproject..

Xnthisregard,were.PPaZorathersta.buildsubstitute nuc-Learcapacitywithout.takingadvantage ofyourinvestment, thesubstitute plantsmightwellcaine'onLinetwoarmoreyearsLaterthantheSouthDadeunits,atmuchhigheassoci>>atedcasts.1'tisvirtuaLly.

impossibLe forothersystemstomaReaf.xmdecisianwhethertoutilizetheSouthDadecontracts.

andtomaRetheassociated commitments withintendaysbecauseofthemyriadofengineering, financing andLegaldecis'ons involved.

Xndeed,theonlyhopeforacruickdecisionwouldinvolveFPGL'sagxeemeatosellasubstantial portionoxtheunitsforcanst~ction attheplannedSauthDadesiteandtheCompany's immediate agxementinprincipLe tothenecessary back-uparxangements, inc3.uding thosediscussed in.GeorgeSpiegel's 14April3.etter..

Beforecommitting themselves tothetypesofinvesMent invo3.ved, systemswou3.dhavetabeassuredoftheavailability axtransmission anreasanable termsforbothSouth'Dade powerandnecessary back-upandotherpowesauces.Pmy-systemswouldneedjointfinancing Legislation~

anintegrated powerpoa3.andotherappropriate bacRup.FloridaPower&Light-Company's reducedLoadgrowthwouldapaeartaaffordtherealistic possibility fo-ajoinparticipat'on agreement thatwouldbeneitLax'gesegmentsofFlorida's population tathedetriment afnone.Participants cauldseLLcapacityfxomthe'rownership sharetoeachotherinamannerthatbestfitstotalelectricaL andeconomicneecsoftheparticipants fromyeaxtoyear.Certainly, ifde3.ayaftheunitsisnecssa~,whenbuilt,theymustbejoinlyownedunits.3:therefore suggestthefalLowing:

(1)Plox'idaPoweaLightCampanyshouldprovidei"sexistingcontracts toaLLsystems(onacanfidentia3:

basis,ifnecessary),

including detailsofcostsarpena3.ties assaci-atedwithgoingforward,taa3.1awsuchsysems,onanintex'imbasis,todetexmine thefeasibility oftheircantin~dng theproject.(2)FloridaPoweraLightCompanyandotherscauldseekagreement fromNestinghouse toallowtimeforallsystem Kr.Danese421.July1976todecidewhethertoparticipate.

(,3)Plarida.Power&Ligh<Companyshouldimmediately informallsystemsof-itsinvestments, including sitingplans,andprovideaccesstocompletecas<andengineering studiesre3.ating toSouthDade,sothatconstruction maygoforwadasplanned.atpxesently selectedsites.(4)FloridaPower&LightCompanyandothersystemsshouldcommencedevelopment afaworkableparticipation agree-mentfortheplannedSouthDadenuc3.earunits.Florida.Power&LightCompanyshouldproceedwiththeSouthDadeplantwithasubstantially 3esserawnexship interest.

Thiswouldaccomplish seveal.worthyobjectives.

(a)Thiswould.recognize PP&L'scurrent1'aweredesimateofrecpxired capacity.

(b)Thiswouldeliminate mostofthecurxentobjections toconstruction intheHuclearRegula.atary Commission proceeding.

(c)ThiswouldgivePP&Lameaningful interestinunitsthatwouldse~futurerecuirements withinthestate.(d)Thiswould.permitea3ycans~ctian oftheunitswithoutunduede3.ayatareducedcapitalcostcam-paredwithalaterunit,aswe3,1assubstantially reducingFP&L'scurrentcapitalrequiementsforsoleawnexship.

Totheextentthesesteasarenottaken,increased costswillbecreatedfaxmyclientsand,theircitizensandratepayers and,Zbelieve,forPlaridaPowex&LightCompanyaswell.Suchunnecessary costsmayhopefully beavoidedthroughmutual.cooperation.

.Moreover, suchagreement canhelplimit,orelimina,e,furthercontroversy concerning rightstojointSouthDadeparticipation andback-uparrange-mentsoras.to.>>loridaPower&LightCompany's possiblelega3.rightstowithdrawitsplanfox'heseunitsatthistime.

Mr;Danese.21Ju3.y1976Sincerely you~RobertA.J'ahlonAttoxney'ar thePlorida-Munic~alUtilities Association, thePortPierceUMlitiesAuthority.

oftheCityofFortPierce,theGainesville-Alachua CountyRegionalElectricWaterandSewerUtilities, theLakeWar&Utilities Authority, theUtilities Cammissian oftheCity.of'ew-SmyrnaBeach,theOrlandoUtilities Commission andtheSehringUMlitie'ommission, andtheCitiesofA3.achua, Bartaw,Bushnell, Chattahaochee, DaytonaBeach,.PortMeade,Homestead, KeyWes,LakeHelen,Leeshurg, MountDora,Nevhe~,Ocala,Quincy,StCloud,Williston andTa3.3.ahassee, Ploridacc.J.ABauknight, Jr.,Esture[ByhandlJohnEMathews,Jr.,EstureMr.Mac.H.Cunningham CharlesR.,P.Brawn,Esca.reOseeR.Pagan,EsquireMr.ClifardC.Blaisde13.,

Jr..Mr.JohnR.Kel3.y.ThomasGurney,Sr.,EsquieMr..JamesHPhillipsMr.GlennDuBoisMx.AW.KellyJosephMinotti,ZsauireMr.Clyde.HopkinsJohnC.Chew,EsquireMr.EverettB.HoweHonarah3.e ErstonRaya3.Mr.Ca3.vinE.Glidewell Mr.Ceci3.Barks-Mr.J.W.CaldwellMichae3.Watkins,,

ZscpzireMr.E.C.Shreve,Jr.Mr.WilliamP.JohnsonMr.CR.BeverlyMr.C.H.CornMr.JohnT.DaughtxyMr.RadneyNewtonMr.RobertZ.BathenBlindcc:DanMcZntoshJoeJacobs e.o.aoxo>a>co,w~t,acro~auoi'mari;~<sx.

FiORiOAPOWER5IJGHTCQ<VPAT;Y July28,1976Mr;,RobertA.JablonSpiegel5,Mc0ianrid 2600Virginia.

Avenue,H.W..Washington, 0.C.20037OearMr.Jablon:IThisisinresponsetoyourletterofJuly8,T976,addressed toNr.TracyOanesewhoisout.oftheofficeforanextendedperiod..WithregardtoFloridaPower5LightCompany's participation inthejointventurewhichwasproposedbyMr.Oanese'sletterofApril29,1976,anduponwhichwe.elaborated inthetwoJacksonville

meetings, youhaveincorrectly charactrized-FPL'sposition.

Wethinkthereislittletobegainedbywritinglettersbackandforthparaphrasing whatwassaidatthismeetingorthatinanattempttocreatearecordtotheadvantage ofoneentityortheother.Webelievewedescribed ourpositionquitopenlyandclearlyatthoseandsubsequent meetings.

Asubcommittee oftheSteeringCorrmittee isatworkdraftinganoverallprojectparticipation agreement.

Thatagreement willconstitute thefinalintentofallthesignatory parties.Speculations concerning themotives,intent,policies, andthelikeof'nyofthepartiesarepremature, untilsuchagreement hasbeenfinalized.'n themeantime, theSteeringCommittee isproceeding onanadhocbasiswiththeirplantoinvestigate thefeasibility ofandtodefinetheultimateproject.Theothermattersreferredtoinyourletterareatissueinotherforums.Ourrespective positions haveandwillberevealedandadvocatdinduecourseandthisresponseshouIdnotberegardedasanindication ofagreement onourpartwithanyofyourcoamentsorobservations onsuchissues.Wedonotbelievetheseissues,haveanynecessary connection withthe.ultimatefeasibility oftheproposedjointventure.Verytruly.yours,R.J.GardnerVicePresident RJG:stdHBLPINg9VI(.APLQPio; P.O.SOX010100,AIIAMI,FlQRIDAMIOIII;PLQRIOAPOWER4LIGHTCOMPANYAugust3,1976Mr.RobetA.JahlonSpiegel&McDiaxmid 2600VirginiaAvenue,N.W.Washington, D.C..20037Re:.SouthDadeNuclearUnits

DearMr.Jahlon:

InMr.Danese'sahsence,Iamxesponding toyourlettertohimofJuly21,.1976.Yourletterreflectsaseriousmisunderstanding ofthenatureofFPL.'sannouncement xegarding development oftheSouthDadeproject.FPLhasnotcancelled, butintendstoproceedwiththatproject.Whileexploring'ertain modifications ofourcontractwithWestinghouse, Mr..Gardnerdiddiscusswithothersthepossibility oftheirinterestin.theunitintheeventobtaining such.contractmodifications wereunsuccessful.

Howevex,we.havenowworkedoutdesiredcontractmodifications andthecontract.

willremaininforce.Thus,FPLstillplanstodeveloptheSouthDadeprojectindependently andtoutilizetheproject's generating capability tomeet-oursystem'senergyneeds.Much.oftheremainder ofyourletterrelatestomattersincontx'oversy inNRCDocketNo.P-636-A,and'twouldnotbeappropriate formetocommentonthesematters.JTB:dtSincex'ely,

/-/T.Blount=.anagerofTegalAffairsHELPING8VILORLOPIIOA ADDRESSEES':

Nr..GeorgeMoore.FLorida.PowerCorporation P.O.Box14042St-Petersburg,.

Floxida.33733Mr.,RayWelchTampaElectricCcmpany.P.O.Box,llLTampa,Flaxida33601..Mz.StanLivengoad'ainesville-Alchua CountyRegional.

Utilities BoazdP.O.Box490Gainesville, Florida32602Mr.R..C.ZuetheJacksonville Electric.

Authority P.O.Box53015Jacksonville, Florica32201'Mx.RobertW..CochranDept.afElectric&WaterUtilit'es C'tyofLakeland'00E.ParkerStreet=Lakeland, Florida33802Nr',HarryLuffOrlandoUtilities Commission P.O.Box-3193Orlando,Florida32802Nr.RadneyNewtonSt.CloudUtiliiesCommission NewYorka9thStreetSt.Cloud,Florida32769Nr.HarryWrightSeminoleElectricCooperative 24LOE.BuschBLvdTampa,Florida.336L2Nr.JaeDykesTallahassee FlectzicDept.2602JacksonBluffRoadTallahassee, Flaxida.32304Mr.,RalphBowersBartowMunicipal ZlectricDept.P.O.Box1069Baztow,Florida33830Nr'..C.F.BlairClewiston ElectzicSWaterSystemP.O.Box698Clewiston, Florida33440Mr.FredK"ayFloridac(eysElecticCaopeativeP.O..Box377Taverniez, FLorida33070Nr.WalteBaldwinFortPierceUtilities Authority P.OBox3191,Ft.Pierce,,Florida33450,Mr..,L.AddisonGulfPowerCompanyP.O.Box1151Pensacola, Florida32520M-.Hen=yC.Peters,Jr.Homestead Municipal ElectricDept.P;O.-Drawer429Homestead, Florida33030'r.ZeithRobertsDept.ofFlectricUtilities CityofJacksonville BeachJacksonville Beacn,Florida32250 ADDRESSEES CQiViiiVuu3:=

Mr.O.Robers,Ouincy.Municipal ElectrcLightDept..404W'.Ze~ferson.

Street.Quincy,Florida32351Mr..J..K.Phillips-SehringUtilities Commission 213.S.CommerceSt=eetSehring,Plozida33870M'.G..GraudonStazkeLight&,WaterPLant.DrawerCStazke,PL'orida3209L~Mr~G~BuzisWauchulaMunicipaL Ligh~.Plan.~P.O.Box818Wauchula, PLorida33873Mr.D.JTannerWilliston Municipal, ElectricDept..P.O..Box160Williston,,

Florida326967Kr.N.Z.Parish,XZZChoctawnatchee ElecicCooperative 700W.BaldwinAvenueDePuniakSprings,Florida32433M.H.P.PruettEscamhiaRiverElectricCooperative P.O.Box428Jay,Plorida32565Mr.,M.V..Truitt,Jz.GulzCoastElectricCooperative P.O.Box217Wewahitcnka,.

Florida32465Nr.E.FranklinWestFloridaEleczicCooperative Association P.O.Box127Graceville, Plozida32440 INFORMATION=

FORTHOSESYS~iMHICHHAVEPREYIOUSLY O'PRESSED INTERESTINTHEJOINTPROJECTThefollowing-scheduleshows.theproportionate share'ofeachutili.ysystemwhichhasthusfarexpressed aninterestinthejoiN.projectifnoothersystemsparticipate.

Tneformulaisthesameasthatusedtoderivepropor-tionatesharesofeachutilitysys~intheStateofFloridaifallutilities'ere toparticipate.

This,scheduleisbeingfurnished onlytothoseutilitysystarsnamedtherein.Includinc OthersExcludino OthersUtilitAFactorShareAl.Fac.orShareSartaw,CityofClewiston, CityofFloridaPowerCorporation Ft.PierceUtilities Authority Gainesville/Alachua CountyRegionalUtilities SoardGulfPowerCompanyHomestead, CityofJacksonville Ele~c.Authority KeyMes,CityofLakeMorthUtilities Authority

Lakeland, CityofLeesburg$

CityofOcala,CityofOrlandoUtilities Commission St.Cloud,CityofSeminoleElectricCooperative

.Tallahassee, CityofTampaElecricCompanyVeroSeach,Cityof.0052..0019,2358.0099.0221.1124.0057.1192.0116.0083.0306.0066.0142.0540.0026.0725.0308.1832.0091$58059.601,848.70229,433.40

'9,632.70 21,503.30 109,365.20 5',546.10 115,981.60 11,286.80 8,075.9029,773.80 6,421.8013,816.60 52,542.00 2,529.8070,542.50 29,968.40 178,253.60 8,854.30.0236.1202.0061.1274~.0124.0088.0327'0070.0152.057?'.0027.0775.0329..1959.009722.,962.80 116,954.60 5,935.30123,960.20 12,065.20 8,562.4031,817.10 6,811.0014,789.60 56,142.10 2,627.1075,407.50 32,011.70 190,610.70 9,438.10.0055$5,351.50.00201,946.00.2520245,196.00

.010610,3'l3.80 JFLORIDAELECTRICUTILITIES QOINTPARTICIPATION AGREEMENT'ITH FLORI.DAPOHER&LIGHTCOMPANYGenerating Plant:SiteStudy'pThe.electricutilities, whoseseparately signedletterssignifying theiragreement toparticipate areattachedhereto,(Participants) hereby)ointly.agreetoparticipate ina.studytoidentifyandevaluateelectricpowergeneratin'g sitesinnorthernpeninsular Florid.The-scope,generalcriteria, andtermsandconditions ofsuchstudyaresetforthinadocumententitled"AProposalfromFloridaPower&LightCompanytoFlori'daElectricUtilities foranElectricPowerGenerating SiteStudy.9-15-76",

whichdocumentissignedbyFlorida-Power

&LightCompany(FPL)andisattachedheretoandmadeaparthereofas.ExhibitA.TheParticipants acceptsuchproposalfromFPLandagreethat'PLactingonbehalfoftheparticipants willmanagethestudy,,contractforoutsideservices, anddoallsuchworkandcoordination whichisnecessary tocompletethestudyasdefinedinExhibitA.TheParticipants agreetoshare,inaccordance withthetermsofpthisAgreement, thecostsofsuchstudyandtoreimburse FPLforsuchcostsinaccordance withthetermsandconditions ofExhibitA.NopartytothisAgreement shallbeliableforanydamages,costs,orotherexpensesresulting fromanyact,omission, determination, orrecommen-dationmadebysuch.partyinconnection withorarisingoutofperformance ofthisagreement orasaresultofanyconsequences resulting

,romsuchperformance.

Thetotalcostofthestudyshallnotexceedtheamountof$973,000,exceptbytheexpressmutualagreement oftheParticipants, whichamount.shallhknownhereinasthe"MaximumAuthorized Cost".~~~1~EachParticipant shallbeliabletoFPLforthatshareorproportion ofthecostsincurredbyFPLincarryingoutthestudyuptotheMaximumAutho-rizedCost,whichissetforthoppositeitsnameinExhibit8entitled"Schedule ofParticipant Shares"whichisattachedheretoandmadeaparthereof.

I~QfwThis-agreement shallbecomeeffective uponthereceipt:byFPLofthelastsignatory letterfromthegroupofparticipants whohavepreviously indicated their-intenttoparticipate inthestudy.FPLmayterminate.

thisagreement with30daysnoticeafternon-receipt ofanyinvoicedamountdueunderthetermsandconditions ofExhibitA.FLORIDAPOWER5LIGHTCOMPANYSyYancePres>dent Date~\~'C\

Exhibit"A"'~APROPOSAIFRON'LORIDA POWER'.&LIGHTCDHPNYTO'LORIDA ELECTRIC'TILITIES'ORŽ ANELECTRICPOWER'EHEKTIHG SITESTUDY9-15-76'FloridaPower&LightCompany(FPL)proposes, as'apart.ofa'ontinuing work-p1an intendedtoleadtoajointnucleargenerating plantproject,,

toconduct'n electricpowergenerating..site.

locations.udyonbehalfofagroupof'lorida.

utilities (Participants) inaccordance withthefollowing termsandconditions:

A:~Scoe2.~3.4.Thegeneralareaofthe.study.will'ethenorthernhalf'ofpeninsular Florida;thatis,,thearealyinggenerally'orth andwestofFlori'daPower&,LightCompanyserviceterritory.

Theroughboundaries ofthe.studyare--northof'alinerunningfrom.,Piney Point.toCocoa-east.of'heApalachicola River.Candidate site,locations willbeselectedbyreference toexistingandfutureelectrical loaddistributions inthe.abovearea,'ggregated geographically in5,000td10,000mwamounts.Approximate loadcenterswillbelocated.Suchloadcenterswillbeconsistent withtheFloridaElectric.

PowerCoordinating Group,,Inc.Peninsular FloridaGeneration Expansion Study,1976-,1990.

Sitingresources suchasexistingtransmission, watersources,andtransportation facilities willbeidentified inrelationtotheaboveloadcenters.Suchresources andload,centerswillbegroupedintositingareasoAnadvisorygroupofstateandlocalofficials andrepresentatives ofconcerned citizengroups-willbeformedtoadviseonrelevantsiting'riteriaandratings.

5.Specifictractswil'Jbe.'identified ineachofthesitingareasusingtheresources ofFPLandotherFloridautilities.

Thetractswillbesuchastosupporttotalgeneration additions of2,000to10;000nr.6..Asetofcriteria-will bedeveloped to-screenthecandidate sitesN'toapproximately threeineachloadarea.,7.Afur.her-set:ofcriteriawillbedeveloped toperformadetailedevaluation ofeachofthesites.8..Oatawillbecollected..on eachoftheremaining sitesusingpublished sourcesorinformation inthepossession ofFloridautilities, public,agencies, andotherinstitutions..

Consultants willberetainedto,collectandevaluatecertainspecialized dataareas.9.Aratingwillbeestablished foreachsitebyapplyingthedeveloped information totheevaluation criteria.

10..Suitablereviewsoftheprocess+illbemadetoadvisorygroupsandFloridaUtilities-SteeringCommittee.

11.Areportshallbepreparedandsubmitted totheParticipants settingforththe.resultsof'he.studywhichshallcontainrecommendations ofpreferred sitesineachof'hedesignated.

loadareas.GeneralCriteria.1.Sitesshouldbecapableofsupporting different land-based fueland'eneration typessuchascoal,nuclear,combinedcycle.2.SitesshouTdbeawayfrompopulation centersandoutofthepathoffuturedevelopment.

3.'itesshouldbecapableofsupporting generation additions foranextendedperiod,saytentotwentyyears.4.S'itesshouldhavethecapability forsomemulti-purpose development oralternatively havesubstantial area'sofundeveloped bufferzone.S.Theprocessofsiteselection shouldbeopenandaccessible toresponsible agencies,'nterested membersofthepublic,andthemedia,6,Theprocessofsiteselection shouldstressearlyidentification andJresolution ofpolicyandproblemareas.

7..Theprocessshallmakemaximumuseofexistinginformation inthehandsof'lorida utilities andothergroups-.8.S'tudyshallbefullycoordinated withFCGGeneration PlanningStudy.~~eIdentify.tracts...

OevelopcriteriaScreening

...........Information collection Evaluation Recommendations

......~Hudete~~~~~e"~~~eet4mn'~e~~~'~~~e~~~~~~~~~~'~~~~'~~~~~~'ee~~~~~~\FPL'imeandoverhead:,

SystemPlanning...7man-weeks ProjectManagement

.8man-weeks Environmental

....60man-weeks LandHanagement

..12man-weeks-ContractAdministration

..1man-weekScheduleIdentifyloadareas.......Identifysitingareas........'-...

Startto4weeks4weeksto8weeks-8weeksto20weeksStartto20weeks20weeksto24-weeks24weeksto36weeks36weeksto40weeks40weeksto42weeksStrategic Planning.8man-weeks 96man-weeks 9$1,500Expenses.-travel,60weeks9$200...,Reports:-

.printing

..~IOutsideServices:

.Land...,..$57,000Engineering

'.250,000Environmental

.500000~~~~~~a~r'$144,00012,00010,000507000TotalEudget........................

$575,000.TermsandConditi~n 1.FloridaPower5L;ghtCompanywillbereimbursed forthecostsofthestudyasfollows:a.TimespentontheprojectbyFPLexempt,salaried, professional, technical, andadministrative personnel willbeaccounted fortothenearesthour.b.FPLwillbereimbursed foralltimeaccounted foronthebasisof$1,500/week foreachfortyhoursormajor.fraction".hereof, c.ActualtravelexpensesincurredbytheaboveFPLpersonnel willbeaccounted for.FloridaPower&LightCompanywillbe.reimbursed forsuchactualtravelexpensesspentonproject.businessplus105ofsuchexpenses.

d.TheactualcostofoutsideservicesspentontheprojectandbilledtoFPL.plus5Cofsuchserviceswillbereimbursed toFPL.2.FPLwillrendermonthlyinvoicesattheendofeachcalendarmonthforcostsincurredduringsuch~leadarmonthtoeachparticipant whichwillbecomedueonthe10thofthefollowing calendarmonth.Suchinvoicesha11berenderedonthe10thofthemonthfollowing thefirstfullca)endarmonthaftertheeffective dateofthepartici-pationagreement.

FLORIQAPOMMER&LIGHTCONPNY'ateBy>ceresdent RQG9/14/76Exhibit"8"FlORIDAELECTRICUTILITIES JOINTPARTICIPATION AGREEiMEilT WITHFLORIDAPOWEREcLIGHTCOHPNYScheduleofPartiripant.

SharesUtilitShare

~ICOPIESTO:Membersof:FloridaUtilities SteeringCotnaittee-Nr.GeorgeMoore.'1orida PowerCorporation P.0.,Box14042StrPetersburg, R.33733R.J..Gardner(Temporary Chairman)

FIoridaPower5LightCompanyP.0.Box013100Miami,FL33101Nr.StanLivengood Gainesville-Alachua CountyReg.UtilSoldP..0.Box490'ainesville, FL32602Nr.R..C.KuethorJacksonvi.lie ElectricAuthority P.0.Box53015Jacksonvi1 Ie,FL32201Nr.RobertH.CochranCiLyol'akolanIl Unapt.ofEloc.8MaterUtil.100E.ParkerStreet,LakeIand, FL.33802Nr.HarryLuffOrlandoUtiIities Commission P.0.Box3193Orlando,FL32802Mr.E.C.Shreve,Jr.CityofOcala'Iec.

UtilityOept.P.0.Sox1270Ocala,FL32670Nr.RodneyNewton't.CloudUtilities Catmnission NewYork89thStreetSt.Cloud,FL32769Nr.HarryWrightSeminoIeEIectricCo-Operative 2410E.SuschSoulevard Tampa,FL33612Mr.JoeOykesTallahassee ElectricOepartment 2602JacksonBluffRoadTall'ahassee, FL32304Mr.RayklelchTampaEIectricCompanyP.0.Sox111,Tampa,FL33601(Continued ne..tsheet)

COPIESTO:(continued)

Mr.NichehlR.GentFloridaElectricPowerCoordinating Group402ReoStreetTampa,FL33609Hr..OonTurkFloridaMunicipal Utilities Association P.0.Box2402Lakeland, FL33803Mr.J.0.DenkinsFloridaPublicServiceCommission

~700SouthAdamsStreetTallahassee, FL32304FPLPersonnel-E.A.Adomat3.T.BloutE.L.Bivans~TracyOaneseH.M.Kloin0.F.Poarson

'~~~FLORIDAJOINTNUCLEARFACILITIES STEZRlNGCOMiVIITTEE MEETQTGMINUTESDRAFTDate:September IQ,1976Place:LakelandUtilities Offices,Conference BoomAttending:

Seeattachedlist.'.TheminutesfromthelastmeetingweretakenbyMr.JoeDykesofTallahassee andhavenotbeendistributed tomembers.2TheChairmandescribed theeventssincetheMiamimeetingto~.bringeveryonetothesamepointintimeforthismeetingofSeptember 10:a)TheMiamimeetingwasca,liedtomoveforwardwithanuclearprojectassoonaspossible.

b)Theplan,asofthat.meeting,wastomeetandreviewtheproposals receivedfromengineering companies.

Therewasatievotewhichwasthenbroken,bytheChairmaninfavorofmovingforward,consistent withthephilosophy ofobtaining ajointnuclear-project asquicklyaspossible.

c)Discussed withMr.Gardinertheramifications ofmovingforwardandrequested thatanothervotebetaken.d)Telephone pollwastakenwhichresuLted.

infivevotesagainstreceiving theproposals andmovingforwardxvithaneconomicstudy.offloatingversuslandnuclea.rpowerplants.Thevotewasasfollows:.Infavorofcontinuing the.study:.Againstcontinuing thestudy:JEASt.Cloud~~egxinoleainesville Tallahassee OrlandoTampaFlorida.PowerCorp.LakelandFloridaPowerCcLightdidnotvote.e)FloridaPowerCcLightadvisedconsultants topostponetheirpresentation anddidnotcancel.shouldthegroupdesiretochangeitsposition.

FLORIDAJOINTNUCLEARFACILITIES STEERSGCOMiVTTTZE MEET'MINUTESSeptember 10,1976page2.f)'dvised-St;ClouL.ofthecanceling ofplansandalsoadvisedoftheplanstomeetinaone-day'meeting anddiscussthenewapproachofmovingforward.~vithjustalandsitingstudy..g)Gilbert&United.Engineers havevolunteered togivesummaries ofthestatusofthefloatingnuclearplantlicensehearings; 3.FloridaPower&Xightisproposing todoasitingstudyandtheproposaLwillincludethefoLLowing basicpoints:a)IdentifyloadareasoutsideofFlorida.Power&Light'sserviceterritory.

b)Examinesiting:resources.

c)Dramconclusions'to arriveatbasicsitingareas.d)Developatractsearchfromavailable landrecords.e)Developscreening, evaluation criteriaasrequiredby'permitting agenciesandcomeforthwiththree,approximate sites.'f)DeveLopadetailedratinganalysiswhichisnecessary to-studyeachsiteindetail,but:notnecessarily'erform on-sitestudies.g)Develop,recommend, andpresentthesite.reportto.the'roup.Ph).FloridaPower&Lightproposestodothisunderafee.arrangement plusanadderplusout-'of-pocket expensesplusa5'.feeplus.outsideconsultants'ees.

i)Thetimescheduleforthestudywouldbeapproximately sixtoninemonths.j)Theproposalwillbeinthemailonthe15thofSeptember.

k)Wouldliketogetbackandreviewanddiscusstheproposed'roposalbythe20thto27thofSeptember.

1)Asharingformulawasthendiscussed ingeneralandthatwhichappearedacceptable wastheadjustednetenergyforsystemfor1975...Thisformulawastobeworkedoutby.theFloridaElectricPowerCoordinating GroupandisincludedhereinasExhibitI.

FLORIDAJOINTNUCLEARFACILITIES STEERINGCONMITTEEMEETBTG-MI:NUTESSegtember.

10,1976Page.3;.4.Lakelandpresented itsthoughtsonthesubjectofmovingforwardasa.groupinareas=whichdefinitely needworkfor.a.jointproject-taproceed.,

Their;thoughtswereoutlinedonasheetwhichisin-cludedhereinasExhibitII.Ageneraldiscussion washeldwithseveraLmotionsbeingofferedforcorisideration.

Philosophical problemswhichwereaddressed'ncluded risksharing,trans-missionwheelingagreements, andonesystemversustwosystems'withinFlorida.Theconsensus ofthegroupwastoallowutilities interested toget*togetherwithLakelandandpresenttheirview-points.to FCGfor'consideration ofestablishment'.oi committees toaddressthesespecific.

problems.,

6.FloridaPower&.Lighta~in'stated theirproposaltothegroupwhichisunderstood.

as;.')TheirwLLLingness toassist;intheprojectbyofferingtheresources ofthe-company'Ib)Tooperatethefacility, ifdesiredbythegroupc)Toshareintemporary purchases ofpowerfromthejoint,project.toassurethatitwouldmoveforward.6.FloridaPower&.Lightstatedthattheywouldnotshareinthe~,.costofthelandsitestudysinceithasidentified allsitesavai'-..'blein.itsserviceareaandtheirproposalistoidentifysites'utsideoftheirservice.area.whichcouldbeconsidered asjointsites.-7.Thenextmeetingwasscheduled forSeptember 30attheoQicesofTampaElectricCompanyat10:00a.m.Theagendaisbasically asfollows:a)TodiscusstheFloridaPower5LightCompanyproposalb)~ekeamendments wherenecessary c)Reachagreement ontheamountofparticipation byeachutility8..Anexpression ofinterestwiLLsoonbeneededsothatallpartiescanunderstand whattheircostofthestudymaybeandalsohowmuchpowertheycouldexpectfromsuchajointproject,ifitweretoproceed.HCK:fcEnc.cc:Committee Members8cOthersonMailingList ll4~:86tlC;C,hz)dLi'.g~g<'vJ;.Qg,a)(.A~kC94.~r'(.guNc,~IrAte'tCA~Q~rC..~.+Qi7+4-.~Bzy~m~D.I:<.!macwD/g,8&)&8))~::~udr~c,Cz,C.Modem.IJ,~QQAtCgg~~IJ~~Fcc.'QogD>c'F'cps1"'JpgcWliLc.)(~1~..))min'ouil(e.tr'.goP4ACC/7-Pc..'(&I76C'cDPlPRi<Y'CRPAZI~t~

EXHIBITI(Page1)FI.QAIOAEI.ECTAIC FOYERCQQROINATINC'CRQUP (FCC)l(fO"tA(KT.SUI(fio'sblaAPA.FLOIHO-~r>~ISI3Iol'I.Mal~0>1~~September 13,1976I~j/Mr.R.C.KuetherAssociate ManagingDirectorJacksonville Elect=ic.

Au&orityP.O.Box53015.Jacksonville, Florida32201JointNuclearFacilities'Stud

'udetAllocation

DearRon:

Enclosedaretheallocation

.factorsfortheFloridaUtilities SteeringCommittee asrequested attheirmeetingonSeptem-ber10,1976.Theallocations arebasedonthe1975AdjustedNetEnergyforSystem(NES)andareintendedforstudycostassessment..

Table1liststhefactorsforeachofthetwentyparticipating utilities

'hefactorsonTable2werecalculated toshowtheassessments forthesitingstudywhichisbeingproposedbyFloridaPoweraLightCompany.~Since.theNESforSeminoleCo-op.iszero,.the2,744,352 Mt/Hindicated.

ontheenclosedtablesrepresents.

thetotal1975NESofSeminole's eleven'memberco-ops.~~PleaseSeelfreetocallmeif'ouhav'eanyquestions concerning

.theseallocations.

ISincerely,.

DONALDM.BENJAHXHStaffEngineerDMB/tmbEncl.~~

FLOnIDAJOINTN..ff;AnFACILITXHS TABLE.1STUDYCOSTALLOCATION fACTOf\SBasedon.1975AdjustedNctHneryforSstem1975AdjustedNetEnergyforSystemMHfl1975NetEnergyforSysteml/MHHAllocation Fcctct~0tillt.0035.0013.3725,1582.0066.0148.0754.0038~.0799.0078.0056;0205.0044.'0095.0362.0017.0486.0206.,1229.0061147,91053,682'156839,064 6,725,321 2&2,639630',9583,206,472

~'62,3763,399,385 331,009236,132872,734187,111404;6591,540,446 73,0362,066,611 877,6205,225,949.

258611'147;91053,68235,547,659 12,763,303

..282,639638,6984,644,120 162,376'4,965,642

'331,009.236,132.940,917187,111404,-6591,867,410

~73,0362,.744,352

'2/'47,025 9,014,873 258,6111CityofBartow2CityofClewiston 3FloridaPowerf'ightCompany4FloridaPowerCorporation 5Ft.PierceUtilities Authority Gainesville/Alachua CountyRUB7GulfPowerCompany8Cityofllomestead 9Jacksonville ElectricAuthority 10CityofKeyHestll'akeNorthUtilitiesi Authority 12CityofLakeland13CityofLeeshurg14CityofOcala.15OrlandoUtilities Commission 16CityofSt.Cloud17SeminoleElectricCo'-op.18CityofTallahassee 19TampaElectricCompany20CityofVeroBeach-Total'6,211,164 42,521,725

.9999ofFirst600,000offofNext900,000MHflofNext.4,500,000 MWflofallOvei6,000,000 MHflNESAdjustedMethod:,100%80%604f,40't1/Source,.1975FPCForm12/12A2/NESofmemberCo-ops.~~~~0~r~M4aq.et~~4444~44 FLORIDAJOINTNLi.EARFACILITIES STUDVCOSTALLOCATION FACTORSBasedon1975Ad'ustedNetEnerforSstem(.Florida Power6Light:Co'mpanyExcluded)

TABLE.2~L'tilit1;Cityof.Bartow2CityofClewiston 3FloridaPoweraLightCompany4FloridaPowerCorporation-5Ft.PierceUtilities Authority 6Gainesville/Alachua CountyRUB7GulfPowerCompany0CityofHomestead 9Jacksonville ElectricAuthority 10CityofKeyWest11LakeWorthUtilities puthority 12CityofLakeland13CityofLeesburg14"CityofOcala15OrlandoUtilities Commission 16CityofSt.Cloud17SeminoleElectricCo-op.10CityofTallahassee 19.TampaElectricCompany20CityofVeroBeach1975NetEnergy.forSysteml/HWll147,91053,60212,763,303 2024639638,6984,644,120 162,376.4g965,642

.331,009236,132940,917107jlll404,6591;067,410 73,0362,'744,352.

2/~947,025.9,014,073 250,611'1975Ad)ustedNetEnergyforSystem~l'1WH147,910~.53,6026,725,321

.202,639630,958'-..3,206,472 162,376~.3,'399,305 33lc009236,132072,734107,111~404,6591,540,446 73,0362;066,611 877,6205,225,949-250,611'Allocation Factor..0055.0020.2520.0106.0236.1202.0061,1274..0124.0000.0327.0070.0152.0577.0027.0775.0329.1959.0097Total40,663,505

~26,602,661

.9999,Il/Source:1975FPCForm12/12A2/NESofmemberCo-ops.NESAdjustedHethod:100%of80%of~,60%of40%ofFirst'00>000HWllNext900,000HWHNext4,500,000 HWll..allOver6,000,000 HWll

'XHIBITII'ROPOSED CHANGESTOFLORIDAJOINTNUCLEARSTEERINGCOMMITTEE 3;..Reexamine, identifyandrestatetheobject-ivesofthecommittee I.toinclu'decoalfiredand;otherfossi1-fueledgeneration)

.2.Renamecorn'mittee someappropriate name(suchasF'.CG.JointPowerSupplyCommittee),

andrequestF..C.G.,Executive.

Committee toembracethiscommittee asacommittee oEF.C.G.5..Define-scopeofcomnittee activities, suchas:l..Si.ting.2.Contracts andworkingagreements 3.Financing4..Construction

'S.Interface withgovernmental" agenciesIngeneralthepurposeoftheCommittee wouldbetoimlementthefin'dings ofthePlanningCommittee',

toeveloppowersupplyprojectsasindicated bythePlanningCommittee.

StanLivingood hassuggested thatanappropriate namemight',bethe"FCGImplementa-tionCommittee".

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CCORCC5RICCCLROSCRTC.MCOIARMIO 5*HORA*5TRCSC!ROSCKTAJACLOH4AMCSH.)IORWOOOALANAROTIIFRAHCCSC.RRAHCI5OAHICLI.OAVIO5CHTIIOMASH.MCIIUCII.

jRMwORRIczs-SPTEGEL8cMCDl*RM1D CSCOeVIRCIHI*AVCHVFH.W.WASMIHCeOH.O.C'COS7TCL4IeIICHC l5dCI455~4ddNovember12,1976IICTCRK.MATTOAHICL*QUTTXIAHeaeeie~.eeeieJAMCS.CARIRCLLOCXPx.RobertJ.GardnerFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101Re:PPGZ,'sProaosedJointVenturePro'ect

DearBob:

This,letterisw-'ttanonbehalfo"theZntarvenor GroupinasponsetoyourOcober26letter.Lsthatlettevoustate"...,[TjheSteeringCommittee hassuggested thatlettersofintent-beorwardadtotheundersigned.

nolaterthanNovembe22,.1976".Whileindividual systemsmaydesire=torespondseparately ortosupplement thisletter,itisintendedthat,thisletterrespondgenerally fortheZntarvanors.

.Yourecuestthatpublicmoneysnowbecomm'tedtoajointventurenL'.clear project.however,beforecommitting fundstosuchproject,acitywouldhaveafiduciary obligation toi"scitizensandratepayers tocarefully evaluate~heengineering, economicandlegalaspectsoftheprojec"suff'iently tojust'ytheexpend'ure ofpresentandfuturemoneysinvolved.

WhiletheCitiesdonotbel'evethatfinalagreement mustbenecessarily cachedonall'ens,attheLeastthereshouldbeagreements inprinciple onmattersthatcouldhaveasubsantialimpactontheirdecisionwhethertoparticipate.

Xn,myOctober21,1976le"arXstated:"Amemorandum ofunderstanding w'lhenecessary tomeetanumberoft2esholdconcernsinconjunction withagreement toasitestudy.Theitemsthatmustbeagreeduponbeforesystems,cancommitfundstotheprojectinclude,leg'lation opermitjoin"financing; transmission andbackuparrangements; an'ntegrated powepool;useofsitesbestadaptedfornewgeneration regardless oftarritorv,.

procurmentofnuclearfueland,E'PaL'sparticipation RobertJ.GardnerNovember3.2,1976'ntheproject.Ia.addition, thereLationship betweentheSouthDadePlantandtheCentralPlor'daPlantshouldbeclari'ed....""/SincePP&Lhasnotyet:responded tathislette,thereisnobasisfortheCitiesnowdetrminingwhethertheyshouldcommittotheprojectatthistime,a3.though Irecognize thatPP&LmaystiLLbecansidering the'temsraisedtherein."*/

Toput,thisLetterinitspropercontext:,

itisappropriate tareviewthehistoryofnegotiat'ons.

Thepossibi3.'y ofajointventureprojectwasf'rst.proposedbyTracyDanese'~hisletterofMarch30,1976,inresponsetonumerousrecuestsforparicipation

'n.theproposedSouthDadeNuclearUnits.,Inthatletter,Tracyrefusedreauestsforpazt'cipation inSouth.Dade.However,hestated:PP&Z,wouldconsiderbeingparofajointventuretaconstruct anuclearfaci3.itv somewhere inthecentral.Ploridaareasoastobeconveniently 3.ocatd.forpotential partic'pants.

Suchaprojectwouldbeatruejointventuefromits.initia3.inception thzoughcompletion.

Tracya3.sostatedthath'slettershouldnot"beconstrued asanoffertonegotiate"

$outhDadeparticipation.

SincePloridaPower&Lighthadrefusedtarecognize theizrightstojointparticipation, theJointIntervenor Groupintervened before.the.'nuclear Regulatory Commission toseekenforcement oftheirr'ghtstonuclearparticipat'on.

However,cantemporaneous3.y, GeorgeSpiegelresaonded taTracy'sletter:"Wearepleasedwiththisproposalandarehopefu3.thatdiscussions alongthese'inesmaydevelopandultimtelyprovehe'pfu3.."

LetterofGeogeSpiege1,toTracvDanese,April14,1976.Amongotherthings,hecitedasnecessary, mattersforagcement,legislation toauthorize municipal utilities toestab3.ish auhoritiesforjointmunicipaL ownership oflargeplantsandthedevelopment ofafullyintegrated powerpool.PP&Edidnotrespondtotheseconcerns.

OnApril29,1976,TracyannouncdthatPP&LhadarrangedameetinginJacksonville fori<Lay13tod'scusspp&E,'sjo-'ntventureproposaland,stated:"Iwouldthinkthatitmightbehelpfulifsomeofvourclientscouldsendsystemrepresentatives sothatindividual needsandtimefzamescanbeinitially d'cussed."

Foryouconve~c,Ien~seapiesozcaresponcence andwr't"amat~~re~ta.~/Iun'd~HarryLufft~~tyouaintmd'garsponseto~Ce~of~i'5,1976,renxsmgawr't~aresponseanthepositions voutookattheNm~ber4,Tata~~~g.Ii~thatsuchresponsewi3~addressthe~mmsexnressed I

RobertJ;.Gardne~;November12,1976J'iatelyupanreceiving knowledge aftheLet"er,althoughbothheand;Iwere.outoftawn,GeorgeSaiegel.replied(LetttoTacyDanese,May6,1976):"Newill.makeevervefforttoarrangeforrepresentatives.

ofourclientstoattendthe,meetinginJacksonville...

AsIstatedin,myletterof'4April,,'willalsobenecessary tad'scussthefollowing

'matters:

.theearlyformation.

ofafullyintegxated

"-Loridapowerpool,including PLarica~cetransmission sexvceandplanningcaordinat'on, aswellasLegislat'on enablingtheformation ofjointmunicipaL acencieswi;ththeabil'tytofinance,cons-uctandtoowngeneration andtransmission facilities.

WeCMnkthemeetingwillserveaconstructive purpose.Theeisnaquestionthattheearlyestablishment oraFloridaPower?oolisaprerecuisite fortheabilityofmunicipal uilit'estomakefinnestimates andcommitments concerning theplanninganddevelopment ofanuclear.plantwhichwould.comeintooperation manyyearsinthefutue".A"themeets~g;chairedbyTracyDanese,PP&L.madeaprepared, presentation, including slides,inaccordance withapreviously suppliedPP&Lagenda.Eowever,otherthantastateitwaswillingtod'cusssuchmatterssubsequently, PP&Laidnotaddresstheconcernsexpressed

'nGeorgeSa'egel's Lette.Atthatmeeting,theseconcernsrerera'sedbvbothmvclientsand.myself.Tracydidstatetha"thecastsforaproposednewunitwouldbeinthe."samegeneralrance"and"timeframe"asSouthDade.Eowever,hestatedthatSouthDadewasPLannedforP?&L'sneeds..Thus,PP&Zrefused.tomitigateriskstoallsystemsincluding itselbysharingSouthDadecapacityin,exchangeforcapacityinpassibleadd'ional units.I'nsubsequent meetingsand.thxoughsubsecuent cor-spondence, IandthesvstemsthatIrepresent havetiedtoconveythattheyneedsubsant'veresponses toquestions thathadbeenra'edfromtheoutsetandthatweresummarized inmyOctober21,L976Letter.Thus,forexampLe,attheJune3,1976meetingoftheSteeringCommittee, EaxyLuffstatedthattheissuesraisedbymeat.thepreviousmeetincandbvGeorgeSpiegelinhisletterstoPP&Lneededtobediscussed becauseoftheimportance oftheissuestosomesystemswhomavdesiretoparticipate

'nthisproject.TracyDaneseadMowledged th'sstatement, buttherewasnowillingness expressed.

bvP?&Ltodiscusstheissues.

RobertZ.Gardner~ilavemher 12,1976OnZuly8onbehalfofcertainmembersoztheSteeringComm'tee, i.wrotetoTracyDanese:"'U.yaudonotenvisiond'xecownership gaxmcipatian.

byPloz'idaPower&LightCompanyin.theproposedunits,wefeelitincumbent upon.youtaLet.usknowatthistime.Wehavebeensurprised byyouxapparentunwillingness.

tashareSouthDade(orother)'apacity andjointventuxecapacity.

Assumingcostcamparahil'y, hy'educing riskstoindividual systemsofa-part:icula gzohLemun't,,suchshazinqshouldbeadvantaqeous toallconcerned.

Such.shainqalsoappearstohaveadvantages infinancing'nd

'nqa'ningflexibility inthetimingoz.placingnewblocksofnuclearcapac'yon.Line...Znhisletterof14Apr',...'eorgeSpieqelpoints-auttheimmediate concernsofobtaining afullyintegrated'ower gaol,Legislation'uthorizing-the formation ozmun'ipal'uthorities andappropr"ate transmission arrangements'.

This14AprilLettrhasnevebeen.responded to,otherthanhyyour29Aprilletter(settinguptheJacksonville meeting).Sincethese.itemswouldaffecttheecanomics of'newcapacity, theymust.beaddxessed, bytheLegalcommittee aspaxtof.jointventurealarming".

OnJuly13,HarryW.WrightofSeminoleElectricCoop'e"ative sentacopytayouofaletterezpressinq similarconcerns:

"Thereisnodouhtthatwewereallcuitedisappointed toobservethedimin'shed interestozPlaxidaPower&LightCompanyinownership participation oftheproposedCentralPloridaUnit.EtisouxopinionthatfortheCentalPlorida.Unittobeviableand-successful, itisabsolutely necessary thatPlordaPower&Lightcompanyawnaparticipating interestintheplant...Neareozthefixmopinionthatcertain'ollateral arrangements must.bemadewithPloridaPower&L'ightCompanyforthesuccessful andreasonable use,oznucleazcapacityfomanynewunits".AtaJuly21meeting,youannounced thatbecauseofpresently projected lackoffutureload.suficienttosuppozttheunits,PP&Lintendedtodeferglanstoconstruct theSouthDadeUnitsandtopossiblyterm'nate theWestinghouse contracintendays.However,fartheirsttime,vouindicaedthatPP&LwauldbewiLLingtosell,itsownesh'pinterest'nSouthDadecontracts toothes.

Robert.J;GardnerNavember12,1976stated:Znaletter.thatsamedaytaTracyDanese,"Itisv~duallyimpossible.

forothesystems-tommeafirmdecisionwhethertout'lizetheSouthDade.contracts andtomaketheassociated commitments with'nten,daysbecauseofthemyriacofengineering, inancingandlegaldeci,sicns involved.

Indeed,theonlyhopeforaauickdecsionwouldinvolvePP&E'sagreement tosellasubstantial portionoftheunitsforconstruction at;-the:plannedSouh-DadesiteandtheCompany's ediateagreement i.priaciple tothenecessa~back-uparancements, includinc thosediscussed inGeorgeSpiegel's 14Apri3.letter.Beforecommitting themselves tothetypesafinvestment

involved, systemswould.havetobeassuredofthe--availability aftransmission onreasonable termsforbothSouthDadepowerand,necessary back-upand,otherpowerso~~ces.Manysystemswouldneedjoint.financing legislat'on, anintegrated power~poolandother'-appropriate back-up".

Withoutstatinginwhatregard,youresponded thatIhadincorrectly characterized ZP&L'sposition.

LetterofJuly28,1976..Nr..Blountstated:"YourletterreflectsaserousmisunderstanMg ofPP&Z'sannouncement recarding development oftheSoutnDadeProject.ZP&Lhasnotcancelled, butintendstoproceedwiththeproject....Muchoftheremainder ofyourletterrelatestomattersincont=oversy inNRCDocketNo.P-636-A,anditwouldnotbeappropriate

"'ormetocomment-onthesematers".Letteror"August3,1976.-Neitherletterdiscussed themattersofconcernraisedfromthebeginninc w'thregardtoajointnuclearventureandyouwithdrewthepossibility ofparticipation inSouthDade.5OnOctober15,1976,Seminolecruestioned theappaentattemptofFP&Ltolimitconstruction oftheproposed.

jointun't"toanareainPlaridanormofalinermningframPineyPointtoCocoa".LetterofBarryW.WrighttoTracvDanese,October15,1976.Thehistorycitedaboveofrepeatedattemptsbvmyselfand'yclientsta.obtainresponsetaconcernsraisedbythemthataffectthei.'rabilitytaparticipate inyour.proposedjointventureprojecledtomyOctober21letespecifyi.ng i,temsnecessary forresolution.

AmeetingoftheSteeingCommittee washeld.onnovember4attherecuesofGainesville.

Representatives fromGainesv'lie, Orlandoandothersrecuested specificresponsetothitems1'stedinmy RobertJ.Gardne:November12,1976lettersothattheycouldeva3.uate whethertheycouldpar"'cipate inthejo'ntventuze.ThecitiesZrepresent.

arefaced.withanobviousdilemma,,

butonethat"-P&L',canresolve,tothebenefitofallF3.oridaconsumers of-electricity.

Citiesazeoperating in.aneconomicenvironment whezefoss'.fuelsa"einshorto"uncertain supply,areofhighand-uncertain pr'ce,orboth.Moreover, becauseofFP&L'sunwillingness toagreetonecessary legislation, appropriate transmission z'hts,andasatewidepowerpoo3.,theproblemscreatedbvthefuel.marketsarecompounded inthat-PP&Z,'nhibitsCities'bilities.

toobtaintheLo~westcostpowezsupplvthroughbeingabletomaximizethemoseeff'cienuseoftheirgeneration andintegrate thatgeneration.

withoptimaloff-system powesupplysources.NorhasPP&Z,indicated awillingness tosellunitpower.fromitsexisingunitsorwholesa3.e powertomeetbaseloadgeneration recuirements.

SuchagcementbyPP&Lwouldmakeavailable bM~powersupplvtomunicipal sysiemsbasedupon,nuc3.eazfuelcostsandatpricestoFP&Z,equiva3.ent tothoseitcouldexpect,toreceive.fromreta'1sales.,Theotherhalfofthed'ilemma, asisstatedabove,isthat.youazeaskingCitiesto'nvest.substantial sumsinanuclearprojectwithouthavingspecificanswerstocuestions thatvitallyaffectitseconomics.

Theunwillingness of>>P&Ztodiscussthesematterscreatesaddeddifficulties.

Underthecircumstances, iftheyinvestnowintheproject,cities,cannotassumefuturecooperation concern'ng theseitemsspecified above.Thus,eventhoughasystemmightbelievethatinviewofthecurrentstateofthefuelmarkets,itisvitalfarittopursueajointgeneration project,'cannotdoso.Thedilemmaiscompounded byPP&L'sexpressed desizetoaccuireindependent systemsasdemonstratec byRalphHulholland's recommendation tothevotersofVeroBeachtoapproveasaleo'fthat-svstemasameansofaccui'ngaccessto'&L'sreducedpowercostsanticipated fromuseofitsSt.Zucienuclearcapacity.

LetterofR.G.Hulho3.land toVezoBeachresidents, September 4,1976.eZnlightoftheabove,thelettersrequireresponsetotheitemsstatedinmyOctober21letterande'sewhere.

RohezZ.Gafldner,November12,1976'pec'fically, potent'pl participants mustknow.whetheF9&Iis'repared toassumeashustanti 3.ownezship shareand.underwhat-,te~andconditions Zftheresponseisnegative, otherpotential part:icipants wil3findthemselves in;thepotentially awkwardpositionofhavingsubstantial investments in.ap3.antaverwhichFPGIisinchargeafconstruction and,operations vithouthavinganyeconomicinterest..

Underthesecircumstances, itvauldhedifficult fartheCitiestomeettheirfiduciaxy ahl'ations tothei-citizensabsentamechanism toassureprotection oftheirinvestments whichPPaZmayhaveindependent priorities ofconstruction andapezatian framthejoint.ventureun'.2.Absent3.egalah'3.ityforsystemstajointogethertofinancetheiinterests througha.jointagency,municipaL svstemsmayhe1~tedmtheirabilities tofinanceand.manage.theizawnership shares.Examples.

in.otherstatesshowthat.eventhesmallestsystemscanparticipate injointgeneration projectsth-oughpuxchas'ng fromajoint.agency,therehvmak'ngtheirpar,"icipation ana3.agous topurchasing wholesale power.Zfthisoptianisforeclosed, manysystemsvillundoubtedly heunabletoparticipate.

3.-Wlhatarrangements wouldbecontemplated withregardtofuel?Zffue3.istabepurchased and,financedseparately heeachparticipant

-totakeoneexample-therisksarefardifferent.

thanif.-P&Lprooosestotakeresponsihi3.ity forfuelaccuis'ian.

Zffuelistoheprocuredindependently afSouthDade,thentherisksandcostso"th'sprojectwould.not:hecomparable taSouthDade..4.Theremustbeprovision madeforcapac'yandenergy,fortimeswhenitisoutofservice,and'ftheun'isde3.ayed.

Zuther,.participants mustknovhovtheunitvill.heoperated.

Theseconcernscanbepartially metbytheestablishment ofastatewide paverpooltoassureopeationofthelowestincrementa3.

castgeneration atanyonetime.Therehavebeennospecificdiscussions orback-upresources fortheunit,oftransmission availability andafoperations.

Suchsubjectshavehadimoortant bearingsonnegatiatians fornuclea".capacityelsewhere intheUnitedStatesandwouldaffecttheeconomics hexe.5.ZsPPGLwillingtaagreetouseofthemosteconomically andenvironmentally compatible site?(e.g.,SouthDade).Again,theansvertothiscuestionwou3.dhaveasubstantiaL bearingonthedecisionasystemwouldmakewhetherand.tovhatextentitiswillingtoparticipate

'theproposedjointventuxeunit.

RobertJ.CadnerNovember12,19766.-EsFPGLwillingtomin~~zerisksbyagreeingtosharingcapacityinSouthDade?Asis-statedinitially, as.ageneral.matter,thesystemsthatErepresent cannotnowrecommend totheir.governing boardsthatpublicfundsbecommitted toyourproposedjointventureproject:,

absentagreement onthesecpxestions.

ThepositionoftheCitiesisnotthat.thereisnoroomfornegotiation onthesubstance ofthesematters,ortomeetFPGL'sneeds..However,theyhavenothacKsubstantive responsefromyouconcerning them.Sincethesemattersvitallyaffecteconomics ofpart'cipation, asageneralmatter.,theCitiescannotgofozwazdwiththeproject,althoughforparticular citiesind'vidual factorsmaymodizythisresponseWhetherseparately oraspartofthesamelett",anyresponsetoHarryLuff'sNovember5letteshou3.dincludesubstantive responsetothemattesraisedhee.Shit.etheCit'escannotagreetopart'ipation inthejointventureproject=withoureceiving suchresponsetothe'rconcerns, theymaintainaninterestinexploring theproject.Thisassumes,ofco~~se,thatyourresponseprovicesabasiswherebytheprojecŽcan.becommenced onasoundeconomic.

andlegal,basis.TheCitieswou3.dcerainlywishtoconsiderlaterpazticipation inanyprojectresulting fromasitingstudy,althoughthemethod,ofdesixedparticipation mightvaryamongsysems(forexample,dixectownezship, participation thxoughjointagencyorauthority, un'.powezpurchase, etc.)Ehaveoutlinedthehistoryofconsidezat'on oftheproposedjointunitsothatyoumayunderstand theCities'osition.

However,EefezbacktoCworaeSpiegel's April14letter.Hestated,thatifseiousdiscussions takeplaceconcerning thematters-thatdividePP&LandtheCit'es,anyproblemsshouldbecapableofresolution.

Ehooeforanaffirmative responsesothattheCitiesandPP&Lcan=worktogethertomeettheneedsofa3.ltheir"customers.

Sincerely, RobertA.JablonBAZPcgEnclosures RoberJ'.GardnerHovemberl2,1976CooJ.A.,Boukaight, Jr.,Esp.JohnE.Mathews,Jr.,Esc.Nr.NacH.Cunningham, EsaCharlesR.P.Brown,Esc.OseeR.Pagan,sc..Nr.ClifordC.Blai*sdell, Yw.JohnR.KellyThomasGu~ey,Sr.,Esp.JamesH.PhillipsGlennDuBoisNr.A.Ã.KellyJosephNinotti,Esc.ClydeHopkinsJohnC.Chew,Esc.Nr..EverettB.HoweHonorable ErstonRoyalCalvinE.Glidewell Nr.CecilBa~ksMr.J.,H.Ca>dwellMichaelWatkins,Esp.Mr.Ãi13.iamF.JohnsonC.R.BeverlyNr.C.H.CornNr..JohnT.Daught~Mr.RodneyNewonMr.RoberE.BathenMr.TracyDaneseJr..

~EXTOATTIC~:HTS Letterof'0-26-76 fromR.Gadner.Letterof10-21.-76 fromR..A.JablontoTracyDaneseLetterof3-30-76fromTracyDanese.toC.Blaisdel'1 Letterof4-14-76fromGeorgeSoiegel,toTracvDaneseLete-of4-29-76from'racy-DanesetoGeorgeSpiegelLetterof5-6-76fromGeorgeSpiegeltoTracyDaneseLetterof7-8-76fromRobet.ZablontoTracyDanese.Letteof7-13-76from,EarryalrighttoR.A.Jabloneit"of7-21-76fromR.A.Jablon,toTracyDaneseLette.ofLetterof7-28-76fromR.GardnertoR.A,Jablon8-3-Z6'rom JT.BlounttoR.A.JablonLettero10'-15-76 fom-E.N.FrighttoTracyDaneseLetterof9-4-76fromR.G..Mulholland toVeoBeachresidents

~~II55ORO55RISQSI.ROSSRTCMCQI*4MIQ

.5AHQRA*5TR55dlROSCRl'JAdtA7HJAMCSH.IIORWOOQALANJ.ROTMIIRAHC555,RRAHCI5QAHISII,QAVIQ5ONTIIOMA5H.MC?IVON.JR.LLWORFlCKSSPfEGEL.&McDI*BMID 2500VIRCIKIAAV5KU5.K.W.WASKIKCTOK.

Q.C.2OO57Td!A~NCl202l$55WCOODecember16,1976PCTER'K.MATTQAHISI*QUTTMAH8CIINtls.SLAIRJAlleSckRLPOILCICIC Robe~J.GardnerFloridaPoweraLightCompanyP.O.3ox013100Mia~,Florida33101Re:.FP&L'sProaosed'oint Venture'r'o'ect

DearBob:

Th'sletter'sinresponsetoyourNovember16,1976,lettertoEaryLuff.AsChai~oftheSteeringGroupofMunicipal Zntervenors inP-636-A,EarryLuffreferredyourlettetome.ZndividuaZ.

systemsmaysupplement thisresponse.

ThisletterdealswithFPaL'sjointparticipation proposaltomanageasitingstudytoevaluateelectricpowergenerating sitessuitablefortheconstruct'on ofoneormorenuclearunitsinwhichFPSLwouldhavenoownership interest.

FPGLfirstsuggested s'uch"jointdevelopment ofanuclear'roject"inaletterfromTracyDanese,March30,1976.ZnGeorgeSpiegel's letterofApril14,1976,hesetforthasa'redicate tothejointventuretheneedforlegislation toallowforjointmunicipal f'nanc'ng andforanintegrated powerpool,including transmission.

YourleterofNovember16setsforthyourfirstwritenstatement ofFP&L'spositionconcerning legislation powerpoolingandrelatedmatters.You=position.

isthatyouwillmanagetheunitforaee,but,exceptforthepu-chaseofnom'nalamountsofpower,.'you areunwilling topat'cipateinit.Asapreliminary mat.er,youauestiontherelationship betweentheareas=ofconcernraisedbyStanLivengcod andthoseraisedinmyOctober21andNovembe12letters.StanandEbothhaveexpressed similarconcerns.

Stanreauested theNovember4thmeet'ngbecauseyouhadnotresponded totheCities'revious reauestsforagre.entonpartic'pat'on, leg'slation, poweraoolingtransmission andotherstatdmatterssetforthinmyNovember4thlette Mr.RobertJ.GardnexDecember16,1976ZnyourNovember; 16Letteryou,state,first,thattheitemsofconcerninmyOctober2landNovember12lettersaenot"germanetoconducting asitestudyandproceeding aheadtodevelopajoint.nuclearpowexprojectassoonaspossible" (pages1-2);second,thatPPGXhas-offeredsufficient resouxces tojustifyaffirmative municipal decisions regarding.

theproposedjointventure(page5,lastparagaph);andthird,thatthejointventurecanprovideequivalent capacityto.SouthDade(page-4,lashparagraph).

YourletterrejectsCit'es'equests forfavorable consideration ofmost,ifnotall,,ofthesubstantive concernsthattheyhaveraisedaboutgoingforwardwiththejointventureproject.The-majorthrushofyourletterappearstobethat.thejointventureprojectshouldproceedbeforeagxeement ontheitems.ofconcernraised'ytheCities..Youstate(page1),"Zremaininastateofconfusion aboutthestatusofthesemattersinrelationship toouxoffertoconductasitingstudy."AsStanLivengood expressed, specificindividual itemswouldbemoreimportant.

tosomesystemsthanothersdepending upontheirindividual circumstances.

Whilefinalagreements onallmattersarenotnecessa~toproceed,theremustbe.agreements inprinciple withsuffi'cient specificity tosatisfysystemsthatdollarscommitted tothesitingsurveycanresultinaneconomicpxoject.Theseagreements mustprovidesufficient assurancthatthere's-acommonality ofpurposeonimportant matterstopermitasufficient numberofsystemstoinvestfoxtheprojecttobeeconomically viabLe.FromthetimeofH'al.'sfirstsuggestion thatthereshouldbeajointventure,IandthesystemsthatXrepresent havebeenattempting toobtainaffirmative answersconcerning mattersofcen~a3.importance totheCities.Yourcormnents attheNovember4thmeetingandyourNovember16thletterprovidesPP&L'sfirstresponse.

TheSubcommittee inchargeofdraftingajointparticipation agreement couldnotgoforwardabsentagreement onwhattodraftandPPGThasbeenreluctant tostatepositions atall,muchLesstoconsiderseriously the~Citiesconcerns.

Amajormisunderstanding oftheCitiesproblemsisimplicitinyoursentence(page2):"...[WJedonotfeelthatthesubjectmatterofthevariouspointsdiscussed isgexmanetoconducting asitestudyan'dproceeding aheadtodevelopa,jointnuclearpowerprojectassoonaspossible."

Mr.RobertZ.GardnerDecember16,1976Thissentenceimplies.thattheC'tiesshouldinvestpublicfundsinaprojectheforehavinganycommitmentfrompuef,concerning itemsnecessary fortheirparticipation.

Citiescannotspendmonyinsuchamanner.Concerning your,secondpoint,sincePP&Lrefuses.to addressprerecuisites tothejointventureunit,theCitiessimplydisagreethat.yourNovember16responseprovidesasufficient basisfortheirgoingfoxwardabsentfurtheragreement.

'Ihavesuggested thatifthejointventureprojectunit(s)couldbereasonably antic'pated tobecomparable

~v'ostsandtimingtotheSouthDadeUnits,thereisobviousadvantage

'nsystems'haringcapacityandcoordinating development inboththeSouthDadeand,joint.ventureunits.Suchsharingwouldmitigateisisandallowsystemsgreaterflexibility inaddingincrements ofcapacity.

Apparently, t.'.eparagraph beginning atthebottomozpage4ozyourletteraddresses thesequestions.

Youimplythatthetwoadd'tional Westinghouse unitsdoprovideequivalent capacitytoSouthDade.However,ifthisisthecase,Istilldonotun'derstand whyPP&Lrefusestotreattheunitsasoneproject,whyitisapparently unwilling touseSouthPloridasitesforadditional unitsandwhyitisunwilling topoolfuelresources, amajoritemofcostanduncertainty ofnuclearunits.Promtheinception ofdiscussions wehaveraisedconcernsthatmanysystemswouldnot.beabletosubscribe tothejointventureprojec"absentagreement onPP&Lpaticipat'on, coordination, transmission, legislation toallowjointmunicipal financing andotherstatedmatters.PP&Lhastreatedtheseconcernsasperipheral.

IfyourNovember16letterisarefusaltoattempttoreach.agreement onthesematters,therecanbenofurtherdiscussions.

However,ifitismeanttoimplypossibleagxeement, Ishallbepleasedtosubmitanagendaforseriousnegotiations concerning thesepoints.IfPP&Lisnotinterested inreachingsuchagreements, itispurposeless tospendtimeandeffortinnegotiations thatcannotbefruitful.

Iaddressbelowsomeof'ourspecixicresponses toCitiesconcerns.

intheorderstatedbyyou:l.Transmission:

YousatethatPP&Lwould"negotiate atransmission serviceagreement" totransmitanypartic'pant's "shareofpowerfromanyjointprojecweagreeon."Inview RobertZ.Qardner.December18,,1976ofthelargecapacitycostsassoci.ated with.mxclearunits,systems.shouldbeassuredof.theabili.tytointegrate powergenerated asaresult:oftheirnuclearinvestments withtheirotherpowerresources (bothonandoffsystem)tomeettheirsystemloadsinthemostoptimalmanner.Theyneedtobeassuredoftransmission.

ofbackuppower.andtheabilitytobuy,sellandexchangepowerresources amongotherutili.ties.

Yourlettestatesonlythatitwilltransmitpowerfromanyjointprojectforaparticipating utility.Areyou'willing tocommittotransmitpowerresources generally forutilsinFloridaun'der"individually.

negotiated transmission serv'cecontracts?"

Youstatethat:Refeelthatindividually negotiated transmission servicecontracsarethemostequitable kindsofarrangements inthattheycancomprehensively reflectalloftheconditions andparticular circumstances thateachpartyfindsthemselfin.Ageneral.wheelingtariffcouldresultininequities tooneofyourutilities orFPL.Youcouldpaymorefortransmission underanacross-the-board tariffthanunderatransmission serviceagreement in.somecircumstances."

Towhatspecif'cinequities doyourefer?Ifyouaresuggesting thatundercerta'nsituations, ifitwerebeneficial tootherutilities, youwouldagreetopoint-to-point pricingfortransmission serviceorinvestment ownership inLines,filedtransmission tar'ffsattheFPCdonotprecludesuchparticularized arrangements.

Inanyevent,thereareareasconcerning rates,termsandcondi.tions.

fors'ervices whichcanbeworkedoutnowingeneraltermstoassurethattheservicewillbeprovidedonaneconomicbasis.2.Legislation:

Theabsenceof-legislation toallowmunicipals tojointfinancelimitsthefeasib'lity ofparticipation forsomesystemsandincreases coststoothers.Thefactthatsomesystemscouldparticipate inCrystalRiverNuclearUnitNo.3attsstotheimportance.

ofnuclearavailability tothosesystems;itdoesnotjustifyFPaL'spositioninopposition tosuchlegisLation.

Iacceptyourstatement thatyouare"simplyignorantofthetechnicalities, complexities, requirements, issuesandpractices ofmunicipal finance."

Eowever,thesestatements couldnotapplytoDickJonesandTracyDanesewhoarethoroughly familiarwiththemunic'pals effortstoobtainjointfinancing legislation and,who(I.aminformed.

byQseeFaganandothers)'

Mr.RobertZ.Gaxdner'ecember 16,197&vehemently insisted.

at:PCGmeetingsthatjointf'nancing bedeleted.from1975'oint venturalegislation.

TracyDanesewould,.of'ourse, befamiliarwithmunicipal.

needsxor.suchlegis3.ation.

<</3.Power.Pooling:Xamp1.eased-thatyouappeartorecognize.

theexistence of.apowerpoolinPlorida.ZnPP&L'sbrieftothe,UnitedStatesSupremeCourtinthejurisdiction case,(FederalPowerCommission v.PloridaPower&Light,404U.S.453(1972)),PP&Lstated:"ThePloridaQpexating Committee interchanges energyamongthemselves foxa3.imitedpurpose.,".-..(Taheconnections.

amongthemembersoftheOperating-.

Committee donotexistso,thattheseutilities mayassisteachotheri"..meetingtheanticipated loadrecpxixements, butonlyemergency ortemporary needs..."ThismeansthattheFlorida,Operating Committee isnota'powerpool'stheCourtbelo~sostated(App373.)andas-theCommission recognizes in,its'rief(CommBriefp.5fn2).."Yourecognize thatFlorida's power,pool"couldbeimproved,.

However,XaminformedbyHarryLuffthatFP&L'asevenrefusedtoputinwritingtheagreements to-committothet~es.oftransactions thatarenowtakingplace.PP&Lhasrefusedtoparticipate inthepoolingtaskforceoftheTechnical AdvisoryGroup'togenerateaproposed, powerpooland,hasstillnotagreedtothereleaseoftheTAGpowerpoolingstudv.Thus,considering PP&L'slackofsupportforaprogressive satew'de.poolingaqreemenwithin=CG,Xamnotcertainof'hebasisforyourstatement, "ThePCGstructure providesabasisforcontinuous changeandimprovement."

Ultimately, thelackofanintegatedpowepoolpreventstheleasexpensive avai3.ab3.e capac'yinthestatebeing'usedtomeeteachincxementa3.

needforpower.Thus,~/Youstatethatyoudidnotxeceivea'copyof'yOctober21lettertoTracyDaneseofPP&L.Xapologize foranydiscourtesy, butassumedthatFP&LcooXdinated mattersinternally concerning thejointventureproject.Xfyouletmeknowwhoshou'd,receivecopiesof'uturecorrespondence, Xshall.markcopiesforeachnamedperson..

Mr.RobertZ.GaxdnexDecember16,1976forexample,VeroBeachandothershaveavailable capaci,ty thatFP&Iiswillingtopurchaseinconjunction withacquiring suchsystems.Underanintegrated poolarangementsuchcapacitycanbeusedeconomically tothebenefitofboththemun'cipal systemsandFP&Zanditsratepayers.

Inconjunction withexpensive nuclearcapacityinvestments, theremustbesufficiently sophisticated poolingtoutilizeavailable intermediate andpeakingcapacity, therebyavoidingunnecessary additional capacityinvestments andachieving efficient useor.'xistingcapacity.

4.Location:

YourefuseuseoftheSauthDadesites.Myund'erstanding isthatpowerinFloridatendstoflowtowardsMiamimakingasouthFloridasitefornewcapacityelectrically advantageous.

Yourletterappears.toimplyFP&Lwould'uppor const~cting theunitsatalessadvantageous locationfromanengineering standpoint toavoidenteringintonecessary transmiss'on andpoolingageements.Iamconformed thatFloridaPowerCorporation hasdoneextensive workinlocatingsitesinnorthern-Florida.5.Participation:

Fxceptfor"nominalamountsofpoweronatake-or-pay basis",yourejectFP&Zpartcipationinthejointproject.TheneedforFP&Lparticipation isnot"asaperformanc bondfor[y]ourgoodfa'th"orbecauseyou"can'tbetrusted."

Eowever,whex'etheremaybeconflicts ofinterestinvolved, Citiesquestiontheappropr'ateness ofFP&L'smanagingtheirinvestments withoutitshavinganinterestinthoseinvestments.

FP&Lshouldbereimbursed forservicesitpx'ovides, asshouldanyjointventurepart'ipant, butIquestiontheappropriateness ofa"management fee,"therebyincreasing thecostsofmunicipal nucleacapacity.

Ihavenotmadethestatements youattibutetomethatFP&L"can'tbetwstedbecausewea=eincompet'tion" orthatmy"objective istoel~atecompetition."

Hx.Rober~J.GardnexDecemhex, 16>1976Enconclusion, assumingyourwi11ingness todoso,Zsuggestthatseriousnegotiations beginconcerning Ne.itemsListedinmyOctober.21andNovember12letters.Neaxe,ofcouxse,willingtoconsideranyconcernsMat.youmayhave.Sincerely, RohertA..JahlonM:mmmcc:TracyDaneseRichard,Jones eaueWgT4H.teIJleytgeggf9$%)PCStDgŽ'Q(yI~February21I197'7Stat'ement releasedbyih.Harshal3; HcGonal;president andchiefexecutive oficeofFloridaPowe4LightCompany,"3.at'vetothedec'sionannounced inT>>lahassee bythePloidaPub3.icServ'cCommission.

"Myreactionis'neofcompletedisrmy,"'arshall

HcDona3d, oresident ofFloridaPoweraZdghtCompanysaidtoday."Thedecisionnottogant:-PLfullinteimratereliefapparently wasnotbasedonthesameaccepted(makewhole)ormulausedprev'ous3.y bythCommission.

Cucurentratesaebasedonou=costsof4<eeyearsagoeventhoughintheintervening timeinflati.on hasincreased.

morethan20percent,"

hesaid."E"justdoesn'tfi"theoract'calities ofsoundbusinessprinciples."

FloridaPowe6LightCompanyhad.asked'rinterimatere3.iefintheamounof$235millionwh:chrepresents patofafu3.1ratereaestof$349millionnowbeingconsidered.

"The$235millioninterimwouldhavebroughtuson'ytothe.3.ow&strate"ofreturnaut3sri"edbasedon1974figures,"HcQonaldsa'd."HadtheCommission gantedthereouested

$235mill'o,.the consumewouldhavebeencompletely protected sincetheamountwouldhavebeencollected subjec"torefundpend'ngtheCommission's finalorder-"Previously, Ihavevoicedthtselectedservicesandprojectswouldhavetobeterminated opostponed iwereceivednore3.ief.Today'sannouncement, whichhasshaRenmyconfidence thatthefull$349miU.ionre3.iefvillbeganted-inJune,meansthattheCompanymustta3cehanediate actiontoadjusttothisdisappoin"'ng order,"McDonaldstated.TheCompanyhasinitiated steostoaccozp3.ish thefolloving:

+"Can=&auzpraaasedtuasauthDadenualeazgenerating units,end+"Sellthefuelenrichment contracts forthesetwounits;+"Ermdiately reducetreet=i~g,buildingandgroundsmaintenance pesonnel;+"Reduceallroutinemaintenance exceptthatreruiredforsafety;and c+"Cutbackonservicerelatedactivities whichwouldaffectesponsetimeontelephone

~eric,'rouble zestorat'on andnewserviceconnections.

~a4"Myestimateisthattheseactionswillaffectseveralhundredpositions wi~&inFPLinthenearfuture."Noneofthesereductions areinthelong-term beskinterestof'urcustomes,"\HcDonaldsaid,adding;"butifthemoneyisnottherethenthenecessary work~~simplycannotbe.:::~.!~ed."

Iw\4McDonaldsaid;'letheSeniorManagement Ccmmittee had'eeninstmcted tocontinuetosearchdiligently foradditional cons~ction andservicereduct'ons basedonthemoniesavailable.

InadditiontoFPLpositions beingel~ated,cancellation oftheSouthDadeunitmeansthat,approximately 3,000construction jobs,notbecomeavailable.

tohelpalleviate thehigherthan4*inDadeCounty.atmaximizeemployment, wiU.nationalaverageunemployment "Wewilldevelopa'waitandsee'ttitude onthefullratereliefre~estbeforefollowing throughon,add'tional contingency planswhichwouldfurthedrastically reducepresentandfuturesezvicetoourcustomers,"

McDonaldsaidA~~NOTETOEDITORS:Additional management actionswhichcouldbetakenbyFPLaeincludedintheenclosedleafletpreviously published intheeventnointerimratereliefwasoffered;thegrantingofanamountabove"zero"butlessthanthatrequested willmeantheSeniorManagement Committee oftheCompanymustweighpossiblealternatives. 76~SRS~tupc>>czp~c~~s~gp~'\~~~~e=v~=c".;Ra aist'es,g.)~<<ZLQMRR~$t'~~~oIeeoo~'~~~Pr~o~~~~~'4er~.o~~~or~er~'~~~~~e~~~~~r.'r.'~o'~~~~~~oeo'j,~er~~~>>r'~o~~~oS~~o~o~o*~~'~,~~o%o,'\"~o.~o~~<<~~~.Cocpezct~v'e Nues~'c=-e-DXz"t1,~Qeeoc~~r~I'~~e~~~~~~~'*~~'r~~CS>>e.us>>'beM.C;taCiSOL.t~~oeLO~~.'T.=z..c=zo~~~~'e~~~~~~eI'~~~'~~e~~~At.ht.~<<a.$ieztc'TNto+RLsac<<e,0<<.r~o*~o~~~~:~-"-Dlc="c~snD(seate=7'e~mrcauce~oee~~~~~o'~~UIee<<rere<<~

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~~.cas"szu6ave=heals) tac~e-..sat or=esou=ces 8ve"te~~~~~~~P~P-'-"&~~Lbus~~ess.:

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~~~"JPJ~~~~>>~~~'~~~~~~~~~'~'+~~>>~h~~~0~~1~~:t.z.Zy-otbd=g~'c=e;K,~sfu=the=p='ote"e'6=a='.'~~~0P~P~~~~~~~~~:".:-':Zuy~~o~~"tyor.,r~skca"etedt"thep~'a=t-.~~~~~~~bIfwe~~>>>>-eesz-uozs.a~ega~ecity(such'zs~~~0~~JJ~~~~~a"ego=a>>a~g c~a-v)~L.-~26oecc=e.Sub)ect-'othe.'.~J1J~P~~P~~P~~~~~~~~~0~~~~EOM~gCC~OZVAC>>ZSZZi>>Wee~~'i~~P'h~~..4BJP~t,'~~0~~~'~J~~Q.)Lc&ep3.a=--eresetuo.asza~~~'-co~a~ted P~~~~~\~~~JgoMtverure~"~""e-a~eshz~gu~~~-~~~~~~~~~~',~.'*.':.."~-.~.'LotputZo~>>8ethe-d~gCo>>zc~AcPJ~0(Z)rutgo=-v~tu-e==~~abe~pzrtoe=stofezcesmceeachparwe=.vms~~h~-.eocaseuowithias~a=eo"~e=aney'~~~~~~~~~~~..'~.~.'..'ough~o>>>>resourestsoves>>ocpooze~>>expectthe1pa-~c~p~s-~~nee6tosett~a=~.-.'.zxe"~~suchage"erzt~-g c="zny~"h~ts'o-a~~.P~P~~...,,~J~C4'h'gJ~.,.f~zuc~gcapa>>~~~~~',J,0~~'P0~~P0~~0t0e'c4'..'v4~JP~~~~~n~~0tr"~h BEFORETHEUNITEDSTATESNUCLEARREGULATORY COMMISSION BEFORETHEATOMICSAFETYANDLICENSING BOARDIntheMatterofFloridaPower&LightCompany(St.LuciePlant,UnitNo.2)DocketNo.50-389ACERTIFICATE, OFSERVICEIherebycertifythatcopiesoftheforegoing havebeenservedonthefollowing bydepositintheUnitedStatesmail,firstclass,postageprepaid,this8thdayofJanuary,1981.IvanW.Smith,Esq.,ChairmanAtomicSafety&Licensing BoardNuclearRegulatory Commission Washington, D.C.20555MichaelA.Duggan,Esq.CollegeofBusinessAdministration University ofTexasAustin,Texas78172RobertM.Lazo,Esq.,MemberAtomicSafety&Licensing BoardNuclearRegulatory Commission Washington,D.C.20555JeromeSaltzman, ChiefUtilityFinanceBranchNuclearRegulatory Commission Washington, D.C.20555ThomasGurney,Sr.,Esq.203NorthMagnoliaAVenueOrlando,Florida32802J.A.Bouknight, Jr.,Esq.E.GregoryBarnes,Esq.Lowenstein, Newman,Reis,Axelrad&Toll1025Connecticut Avenue,N.W.Washington, D.C.20036AtomicSafety&Licensing BoardNuclearRegulatory Commission Washington, D.C.20555TracyDanese,Esq.VicePresident forPublicAffairsFloridaPower&LightCompanyP.O.Box013100Miami,Florida33101JackW.Shaw,Jr.,Esq.JohnE.Mathews,Jr.,Esp.Mathews,Osborne,Ehrlich,McNatt,Gobelman&Cobb1500AmericanHeritageLifeBldg.llEastForsythStreetJacksonville, Florida32202WilliamH.Chandler, Esp.Chandler, O'Neal,Avera,Gray/Land&Stripling P.O.Drawer0Gainesville, Florida32602RobertE.BathenFredSafferR.W.Beck&Associates P.O.Box6817Orlando,Florida32803 WilliamC.Wise120018thStreet,N.W.Suite500Washington,D.C.20036PeterG.Crane,Esq.OfficeoftheGeneralCounselNuclearReuglatory Commission Washington, D.C.20555DanielM.GribbonHerbertDymJoanneB.GrossmanCovington

&Burling88816thStreet,N.W.Washington, D.C.20006DonaldA.Kaplan,Esq.JanetR.Urban,Esq.JohnS.Caragozian, Esq.RobertFabrikant, Esq.GeorgeM.Pond,Esq.Department ofJusticeP.O.Box14141Washington, D.C.20044obertA.ablonAttorneyortheLakeWorthUtilities Authority, NewSmyrnaBeachUtilities Commission, SebringUtilities Commission, Gainesville RegionalUtilities andtheCitiesofAlachua,Bartow,Ft.Meade,KeyWest,LakeHelen,MountDora,Newberry, St.CloudandTallahassee, FloridaandtheFloridaMunicipal Utilities Association