ML18088A873
| ML18088A873 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie, Turkey Point  |
| Issue date: | 09/01/1976 |
| From: | Bouknight J, Mathews J Florida Power & Light Co, Lowenstein, Newman, Reis & Axelrad, Mathews, Osborne, Ehrlich, McNatt, Gobelman & Cobb |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| Download: ML18088A873 (96) | |
Text
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of Florida Power
& Light Company
)
(St. Lucie Plant Unit No.
2)
)
(St. Lucie Plant Unit No.
1)
)
(Turkey Point Plant Units No.
3 and 4)
)
Docket No. 50-389A Docket No. 50-335A Docket Nos.
50-250A 50-251A
RESPONSE
OF FLORIDA POWER AND LIGHT COMPANY IN OPPOSITION TO:
JOINT PETITION OF FLORIDA CITIES FOR LEAVE TO INTERVENE OUT OF TIMEg PETITION TO INTERVENE AND REQUEST FOR HEARING On August 6, 1976, the Florida Municipal Utilities Association (FMUA) and twenty Florida municipalities (collectively, "Petitioners" )
/
submitted, a Joint Petition (the "Petition" ) reauesting that:
(i) the Petitioners be granted "late intervention" in Docket 'No. 50-389A and an antitrust hearing be commenced therein in connection with issuance of a construction permit; and (ii) proceedings be com-menced to determine whether the operating licenses issued by the fl Commission pursuant to Section 104b of the Atomic Energy Act of 1954 as amended (the "Act") for Turkey Pcint Units No.
3 and 4 and 1/
St. Lucie Unit No.
1 should be "revoked or modified" on 1
Operating Licenses No. DPR-31, DPR-41, and DPR-67, issued in Docket Nos.
50-250, 50-251 and 50-335, respectively.
2/
antitrust grounds.
Florida Power and Light Company (FPL) is the applicant for a construction permit. for St. Lucie Unit No.
2 and the holder of operating licenses for Turkey Point Units No.
3 and 4 and St.
Lucie,Unit No. 1, and submits this Response in such capacity.
The request for an antitrust hearing with respect to St. Lucie Unit No.
2 is late by more than two and one half years, and no substantial showing of good cause for this lateness appears in the Petition.
Moreover, to begin an antitrust hearing at this late date would result in substantial prejudice to FPL, which has proceeded with the development of the project in reliance on the antitrust review completed more than two years
- ago, and, would almost inevitably delay significantly the issuance of the construction permit.
There is no legal basis for commencing any proceedings respecting the three operating units in response to this Petition.
In the first place, the Commission's regulations contain no 2/ Petition, p.
3.
For purposes of convenience, FPL is responding to the Joint Petition in a single document.
Since it is the position of FPL that the Joint Petition should be denied in every respect, it is not necessary to raise any argument as to the propriety of the Joint petition's attempted de facto consolidation of various licenses and applications, but no such argument is hereoy waived.
provisions for entertaining, other than in the manner specified in Section 2.206, any request for proceedings to modify or revoke licenses.
However, the Petitioners'rgument is flawed substantively as well as procedurally.
The three operating licenses in question were issued under Section 104b of the Act; consequently, they are not subject to antitrust review except in very limited circum-stances not, here pertinent.
We should note, moreover, that the equitable and practical circumstances which surround this Petition overshadow the purely legal issues.
This Petition imposes a cloud on the validity of operating licenses which represent a significant percentage of FPL's assets and casts doubt upon FPL's ability to construct St.
Lucie Unit No.
2 in the planned time frame.
Even though the Petition wholly lacks merits, the very fact that it is pending could have an adverse impact upon FPL's ability to obtain needed capital on favorable terms by the sale of securities to the investing public.
No action by FPL or dramatic external event can be identified as prompting this novel and far-reaching filing by the Petitioners at this particular time.
The only discernable parallel is to the antitrust hearing in Docket No. P-636A, in which.
prehearing procedures are now in progress, and where FPL has sig-nailed its intention to defend vigorously against the unwarranted allegations brought by the FMUA and a group of municipalities which largely overlaps with the Petitioners here.
The submission of
pleadings which may have the effect of impairing the financial strength of an electric utility, in the expectation of strengthening the filing parties bargaining leverage in other contexts, represents a deplorable abuse of this Commission's processes.
For the foregoing reasons, as supported in detail below, it is the position of FPL that the Petition should be summarily denied in all respects.
Z.
PROCEDURAL BACKGROUND A.
The Operating Plants On March 25,
- 1966, FPL applied for licenses to construct 3/
and operate Units 3 and 4 at the Turkey Point plant.
The applica-tion reauested licenses pursuant to Section 104b of the Act.
On 4/
April 29,
- 1967, the Commission issued construction permits for 5/
the Turkey Point facilities.
On July 19, 1972, the Commission 3/ Docket Nos.
50-250 and 50-251.
4/ The Nuclear Regulatory Commission succeeded to the licensing responsibilities of the Atomic Energy Commission pursuant to 42 U.S.C;
- 5841, enacted October ll, 1974.
Throughout this Pesponse the term "Commission" refers without differentiation to the Nuclear Regulatory Commission and its predecessor, the Atomic Energy Commis s ion.
5/
3 AEC 195.
6/
issued an operating license for Turkey Point Unit, No.
3
- and, thereafter, on April 10,
- 1973, an operating license was issued for Q7 Turkey Point Unit No. 4.
All such licenses were issued pursuant to Section 104b of the Act, and no antitrust review pursuant to Section 105c was requested by any person or conducted by the Commission in connection with any of the licenses described above.
The application for licenses for Unit No.
1 of the St.
Lucie plant, submitted on January 29, 1969, also requested licenses 8/
pursuant to Section 104b.
A construction permit was issued by 9/
the Commission on July 1,
- 1970, followed by issuance of an operating 10/
license on March 1, 1976.
Both such licenses were issued, pursuant to Section
- 104b, and no antitrust review pursuant to Section 105c 0
was requested by any person or conducted by the Commission in connection with either license.
At no stage of the licensing or operation of any of these three plants was any request for a hearing on antitrust matters received from any member of the public until this Petition was submitted on August 6, 1976.
6 Operating License No. DPR-31, Docket No. 50-250.
7/ Operating License No. DPR-41, Docket No. 50-251.
8/ Docket No. 50-335.
9/
4 AEC 373.
1o/ Operating License No. DPR-67, Docket No. 50-335.
B.
St. Lucie Unit No.
2 The application for a construction permit for St. Lucie Unit No.
2 was docketed on September 4, 1973.
In accordance with the 11/
Act as amended in 1970, the application requested licenses under Section 103 of the Act.
Accordingly, the Commission embarked on an antitrust review pursuant to Section 105c of the Act.
The application was transmitted to the Attorney General of the United States for his review and advice.
On November 14, 1973, the Attorney General advised the Commission that "[i]n view of the consideration Applicant is now giving to the question of access by other entities to the nuclear generation, and the probability that, participation in St. Lucie Unit No.
2 will be made available to certain of these entities
[footnote omitted], the Department does not at this time 12/
recommend an antitrust hearing."
- Instead, the Attorney General recommended that the Commission "abide the outcome" of FPL's further consideration of certain matters, primarily regarding offering of an opportunity to participate in St. Lucie Unit No.
2 (together with necessary support services) to certain entities which had 13/
indicated an interest in participation.
11/
Public Law 91-560 (84 Stat.
1472)
(1970).
12/
38 Fed.
Reg.
26483-26484.
The complete advice letter is attached as Attachment A.
On November 21, 1973, the Commission published a Notice of Receipt of Attorney General's Advice and Time for Filing of Petitions to Intervene on Antitrust Matters, specifying December 28, 14/
- 1973, as the final day for filing of intervention petitions.
No such petitions were filed by any of the Petitioners or any other person.
Subsequently, FPL and the Staff of the Commission agreed upon certain license conditions which the Commission's Director of Licensing found "would satisfy the staff with regard to the anti-trust issues that have been raised in connection with this applica-tion and the position of the Department of Justice as expressed in its letter of November 14,
- 1973, and accordingly obviate an
'5/
antitrust hearing."
As a res'ult FPL was advised that the agreed upon "conditions will. be included in any license issued in connection 16/
with the above application."
The'reafter, FPL wrote to the City of New Smyrna Beach, the only Petitioner named in the license conditions, transmitting a copy of the license conditions, stating FPL s willingness to offer participation to New Smyrna Beach and suggesting a meeting to discuss the matter further.
14 Id.
15/ The letter of February 25,
- 1974, from the Commission's Director oz Licensing together with the attached license conditions are attached hereto (Attachment B).
FPL indicated its acceptance of those conditions by letter to the Director of Licensing of February 26, 1974 (Attachment C).
Hereafter, these license conditions will be referred to as "the St. Lucie Unit No.
2 license conditions" or "the license conditions."
16/ ld., Attachment B.
From the time of docketing of the application for St. Lucie Un'it No. 2, throughout the antitrust review process described
- above, and continuously through the present date, correspondence received by FPL from New Smyrna Beach indicates that New Smyrna Beach was actively advised and represented by Robert A. Jablon, Esquire of Spiegel and McDiarmid, the attorney foi the Petitioners.
In the meanwhile the St. Lucie Unit No.
2 application has progressed through a contested hearing on environmental and site 17/
suitability matters and through evidentiary hearings on radiological health and safety matters.
Work is now in progress pursuant. to a limited work authorization issued by the Commission on March 17, 1975.
Upon the completion of such further proceedings as may be required before the Atomic Safety and Licensing Board, including proceedings necessary to comply with the decision of the Appeal Board in ALAB-335, that Licensing Board will be in a position to 18/
authorize issuance of a construction permit.
At present FPL is hopeful that a construction permit will be issued near the end of 1976.
If an antitrust hearing were to be convened in connection with the construction permit proceeding, it is clear that the Commission would not issue a construction permit for the facility 17/ See Partial Initial Decision, Florida Power
& Li ht Com an (St. Lucie Plant, Unit 2), LBP-75-5<
1 NRC 101 (1975 ), affirmed in part and remanded in part, ALAB-335, NRCI-76/6, 330 (June 29, 1976).
18/ FPL 'i.s unable to predict at. this time whether any further proceedings will be required as a result of the steps described by the Statement of Policy issued by the Commission on August 13, 1976.
until an effective decision had been rendered on the antitrust 19/
- issues, except upon unanimous agreement by the parties to the antitrust proceeding.
The Petitioners state that "they do not seek a delay in actual construction" of St. Lucie Unit No. 2,20/
thus implying that they would enter into such an agreement.
However, the Petitioners disclaimer of intent to delay construction 21/
is also couched with references to a "temporary [construction] permit" and is carefully conditioned upon some form of "interim relief" which 22/
they characterize as "in the nature of a preliminary injunction."
Thus there is no realistic possibility of construction being permitted to proceed during an antitrust hearing as a result of an agreement among the parties.
Moreover, it is by no means certain that FPL's management would invest, hundreds of millions of dollars in construction prior to final issuance of a construction permit.
Accordingly, it must be assumed that convening of an anti-trust hearing at this date would significantly delay issuance of a construction permit, and therefore of construction of the-. facility.
19/
Louisiana Power and Li ht Co.
(Waterford Steam Electric Gen-erating Station, Unit 3) 6 AEC 48, 50, n.2 (February 23, 1973);
6 AEC 619, 621-22 (September 28, 1973);
Duke Power Co.
(Catawba Nuclear Station, Units 1
& 2),
7 AEC 307, 309 (April 8, 1974);
Toledo Edison Co.
(Davis&esse Nuclear Power Station, Unit 1),
ALAB-323, NRCl-76/4,
- 331, 340 (April 14, 1976).
20/
Petition, pp.
14, 39.
21/
Zd..~ p.
39, n.l.
22/
Zd., pp.
14, 84-85.
THE REQUEST FOR A HEARING ON THE OPERATING LICENSES FOR TURKEY POINT UNITS NOS.
3 AND 4 AND ST.
LUCIE UNIT NO.
1 SHOULD BE DENIED Petitioners acknowledge that the operating licenses for Turkey Point Units Nos.
3 and 4 and St. Lucie Unit No.
1 (the "existing licenses" ) were issued under Section 104b of the Act, and seek review of these licenses "to determine whether the Commission has
'impose [d] the minimum amount of... regulations and terms of license as will permit the Commission to fulfillits obligations under
[the Atomic Energy Act],'" pursuant to such section (Petition, p.
- 2).
They state that they seek a hearing under the provisions 23/
of Sections
- 104, 185,
- 186, 197 and 188 of the Act as to whether these licenses should be revoked or modified to remedy the za/
effects of FPL's alleged anticompetitive activities.
It should first be noted that the tardy requests as to the existing licenses should be denied because they do not comply with any procedure available under the Act, or regulations; Nothing in the sections of the Act cited by Petitioners authorizes any person to request an antitrust hearing with respect to an out-standing license.
The Petitioners do not cite any Commission regulation 23/
At page 46, however, they cite Sections
- 183, 185, 186 and 187 of the Act, and not Section 188. It is difficult to under-stand how Section
- 188, "Continued, Operation of Facilities", could possibly relate to the subject matter of the Petition.
24/
- Petition, pp.
2-3
25/
which authorizes the filing of such a request,,
and, in fact, no such regulation exists.
The one established means for suggesting that a proceeding should be initiated to revoke or modify a license is by filingof an appropriate request with the Director of Nuclear Reactor Regulation under Section 2.206(a).
Clearly, the Petition does not purport to have been submitted under the provisions of thi.s regulation.
Thus, there simply is no procedural basis for entertaining the Petition as it relates to the existing licenses.
However, the Petition is flawed substantively as well as procedurally, because there is no statutory basis for the Commission to conduct the requested antitrust review of the existing licenses or to revoke or modify them on the antitrust grounds alleged by Petitioners.
Tt is difficult to attempt. to rebut Petitioners'egal theory as to the jurisdictional basis for their hearing request, since they never set it forth explicitly.
However, there appear to be two thread's to their argument.
First, Petitioners appear to contend that the antitrust review provision of Section 105c are somehow applicable.
In this
- regard, they state that "ft]o a large extent the Commission's obligation to provide for appropriate antitrust review for these units is analagous to its obligation as to St. Lucie Unit No. 2" Petitioners'eferences to Sections 50.54 and, 50.100 only reflect that licenses are subject to revocation, suspension or modification, "in accordance with the procedures provided by the act and regulations" (Section
- 50. 54 (e) ); nothing therein provides for the initiation of a hearing simply by the filing of a request therefor.
-3.2-and attempt to incorporate their St. Lucie Unit No.
2 argument 26/
into their argument about the existing licenses.
ln addition, by pointing to the language changes in Section 104b made by
~ s7 /
Congress in 1970 and by thai'r repeated underscoring of the "now 28/
or thereafter" language of Section
- 183, the Petitioners apparently contend that the 1970 amendments to the Act were intended to subject Section 104b licenses to the antitrust review reauirements of Section 105c.
Finally, Section 186, which defines the Commission' power to revoke licenses, and which is cited throughout the pertinent-section of the Petition, provides for revocation for reasons "which would warrant. the Commission to refuse to grant a license on an initial application. <<Thus, Petitioners 'rgument appears to be grounded on the contention that the pre-licensing review provisions of Section 105 would apply to the issuance of any of the existing
- licenses, were the Commission initially considering any such issuance at this time.
The second thread of the argument appears to be that'one or more of Sections
- 183, 185, 186 and 186 of the Act authorize the Commission, independently of Section 105c, to conduct a proceeding to determine whether a licensee is in compliance with the anti-trust laws, and to modify or revoke a license i it. is not.
26/
Petition, p.
44 27/
Petition, p.
45 28/
Petition, p. 46-47.
There is no merit whatsoever to either of these arguments.
A.
The Antitrust Review Provisions of Section 105c Do Not. Apply to the Existing Licenses Zt is clear beyond question that, prior to the 1970 amendment to the Act, the antitrust provisions of Section 105c were not 29/
applicable to licenses issued under Section 104b.
- Indeed, the Petitioners do not, appear to challenge this proposition.
The ques-tion that they appear to raise is whether, as a result of the 1970 amendments, there is some basis for applying the antitrust provisions of Section 105c to licenses issued under Section 104b.
An examination of the legislation itself and of the accompanying legislative history leaves no doubt that Congress did not intend such a result, except in one specifically defined area not 30/
pertinent here.
Prior to 1970 the Act provided that the Commission could license power reactors under Section 104b (for research and develop-ment and demonstration purposes) or, after it made a finding of "practical value," under Section 103 (for commercial purposes).
the Commission had not made such a finding by 1970, all power reactor licenses to that date were issued under Section 104b.
No antitrust review pursuant to Section 105c was conducted by the Commission in con-nection with the. issuance of any of these Section 104b licenses.
~29 See Cities of Statesville et al. v. AEC, 441 F.2d 962 (D.C.
Cir. 1969).
30/
Section 105c(3).
This procedure was challenged by the petitioners in the Statesville case and upheld in every respect by the Court, which concluded that "Section 105c is patently restricted to Section 103 licensing" and, therefore, is not applicable to Section 104b 31/
licenses.
In part as a result of the controversy reflected by the 32/
Statesville,case, Congress conducted lengthy hearings and, acting in late 1970, amended the Act in significant respects.
In the 1970 amendments to the Act, Congress abolished the requirement that, the Commission make a finding of "piactical value" and provided that "any license hereafter issued for a utilization or production facility for industrial or commercial purposes shall be issued 33/
pursuant to Section 103."
- However, Congress provided in Sec-tion 102b that if construction or operation of facilities with "industrial or commercial" purposes had been authorized under Section 104b prior to the 1970 amendments, any license hereafter issued "shall be issued under subsection 104b."
The Joint Com-mittee, in explaining the purpose of this provision, stated that:
it would impose an unnecessary hard-ship on subsection 104b licensees to compel 31/ 441 F.2d at 973.
32/ Hearings Before the Joint Committee on Atomic Energy on Prelicensing Antitrust Review of Nuclear Power Plants, 91st Cong., Parts 1 and 2
(November 18-20, 1969 and April 14-16, 19701 (hereinafter "Joint Committee Hearings" ).
33/ Sect~on 102a.
them to convert their permits,to section 103 licenses; the matter of potential anti-trust review of certain subsection 104 licenses is specifically dealt with in Section 6 of the bill, and is discussed
- below, and it appears to the committee that no useful purpose could be serve Qy compelling any conversion to Section 103."/
The provisions for antitrust review by the Commission are set forth in Section 105c and apply, with one exception, only to applications for construction permits and operating licenses filed under Section 103.
The one exception is contained in Section 105c(3) which provides that if a construction permit had. been issued under
, Section 104b prior to 1970, persons who intervened or who sought. to intervene in the construction permit proceeding "to obtain a
determination of antitrust considerations or to advance a jurisdic-tion basis for such determination" would have the right to request, within a specified time, an antitrust review of the operating license application.
The purpose of this section was to give persons who had sought and had been denied antitrust review of Section 104b
'construction permit applications the opportunity to raise these 35/
issues in connection with the applications for operating licenses.
TEuis it is clear that Congress carefully considered the crues'tion of antitrust review in connection with issuance of operating licenses 34/
Report of Joint Committee on Atomic Energy, H.R. No. 91-1470, 91st Congress, 2nd Session
.(September 24, 1970)
(hereinafter "Joint Committee Report" )
pp'. 26-27.
35/
ZcL., p.
30.
for plants for which construction permits were issued -under Section
- 104b, and concluded', with one explicit and limited exception, that no such antitrust review should be required.
In the faceof this explicit legislation and legislative history to the contrary, Petitioners appear to contenci that Section lOSc is applicable to FPL's existing licenses.
Their basis appears to be the modifications made to Section 104b by the 1970 amendments.
Prior to the 1970 amendment, Section 104b read:
"In issuing licenses under this subsection, the Commission shall impose the minimum amount of such regulation and terms of license as will permit the Commission to fulfillits obligations under this chapter to promote the common defense and security and to protect the health and safety of the public and will be compatible with the regulations and terms of license which would apply in the event that a commercial license were later to be issued pursuant to Section 2133 of this Title for that type of facility.
It was modified in 1970 to read in pertinent part:
"In issuing licenses under this subsection, the Commission shall impose the minimum amount of such regulation and terms of license as will permit the Commission to fulfillits obligations under this chapter."
Apparently, the Petitioners contend that this deletion from Section 104b of all of the language following "to fulfillits obligations under this chapter" was intended to expand the scope of the remaining recpxirement.
This perceived change in the meaning of Section 104b appears to be the reason for Petitioners'mphasis on the portion of Section 183 which makes all licenses subject to "all of the other provisions of the chapter, now or hereafter 36/
in effect.
I The only logical extension of this argument is that by deleting certain words from Section 104b Congress intended to overrule the Statesville case and to apply the antitrust review provisions of Section 105c to all licenses whether issued under Section 103 or t
Section 104b.
This position is nonsensical in view of the legislative history described above and, if adopted, would make Section 105c(3),
one of the most carefully considered and drafted provisions of the 1970 amendments, completely superf ious.
- Moreover, Congress stated explicitly its reasons for deleting the language in question:
"Zn revising the text of subsection 104b, the committee has retained the present requirement
. but deleted the balance of the text because subsection 104b licenses would no longer be 37/
convertible to Section 103 licenses under the bill.
As a result of a thoughtful decision by Congress, the anti-trust review provisions of Section 105c do not apply to FPL's existing license, issued pursuant to Section 104b.
Accordingly, no request for an antitrust hearing in the nature of a Section 105c proceeding can be granted.
- Moreover, any effort to modify or change the existing licenses by invoking indirectly the antitrust provisions of Section 105c must fail.
36/
- Petition, pp.. 46-47, emphasis by Petitioners.
The Petitioners also appear to rely upon the change in Section 104b in support of the argument, that one or more of Sections
- 183, 185, 186 and 187 permit the Commission to undertake an antitrust proceeding independent of Section 105c, i.e., to determine whether FPL is controverting the "overall purposes". of 0he Act (Petition,
- p. 45).
We address this argument in a subsequent section of this Response.
'37/
Joint Committee Report, p.
28.
B.'here Is No Basis For Granting The Relief Requested by Petitioners Independent of Section 105c.
The Commission's antitrust responsibilities other than as specified in Section 105c are clearly spelled out in Sections 105a and 105b.
Section 105a authorizes the Commission to "suspend, revoke
'r take such other action as it.may deem necessary" with respect to a license when the licensee has been found by a court to have violated the antitrust laws "in the conduct of the licensed activity." It is clear, however, that the Commission's authority under Section 105a, as Petitioners recognize, becomes operative only after the licensee has been found by a court to have violated 38/
the antitrust laws.
- Thus, Section 105a provides no basis for the grant of the present Petition.
Section 105b provides only that the Commission shall report to the Attorney General any information it may have with respect to licensed plants "which appears to violate or to tend toward the violation of any of the foregoing [Antitrust] Acts, or to restrict free competition in private enterprise."
Thus, it also provides no basis for the grant of the present Petition.
The Petitioners seek to invoke, generally through the provisions of one or more of Sections
- 183, 185, 186 and 187, and more specifically through reference to the amended language of Section
- 104b, 38/ One of the Petitioners, the City of Gainesville brough a civil antitrust action against FPL.
However, after a trial on the merits and a jury verdict favorable to FPL, judgement was entered for FPL by the United States District for the Middle District of Florida
.(No.68-305 Civ.).
Gainesville. has taken an appeal. from the judgment.
some expression of overriding policy in the Act which would justify the commencement of antitrust proceedings without reference to any particular jurisdictional provision of the Act.
In this regard the Petitioners refer to Section 1 of the Act, which states that one of the policies underlying the act is to "strengthen free com:-
petition in private enterprise."
However, these same'arguments were considered and rejected in the Statesville case.
The court charactertized and disposed of the argument as follows:
"[W]e note that the petitioners...base their contentions...on a broad public policy argument that can be seen running through many the administrative law decisions of this court and other courts
[footnote omitted].
They say, correctly, that the [Act] contains specific caveats urging the Commission to act in the public interest by promoting 'free competition in private enterprise'....[They]
also assert that section 105(a) of the Act...makes it clear that antitrust laws are applicable to everything contained in that chapter.
Also, under section 105(a) the Commission is empowered to suspend or revoke licenses in cases where courts of competent jurisdiction have found antitrust violations.
What petitioners fail to see is that, in reading the legislative history of this Act, one can find many examples of the draftors'ntent to limit antitrust considerations to specific portions of the statute while expanding the health and national'security considerations of the Act as a
whole." ~/
~/
441 F.
2d at. 972.
The court pointed out that the Commission is not precluded from "keeping an administrative eye on anticompetitive effect of the use of these facilities once they are constructed under Section 104(b),
"but that its proper recourse is "to report to the Attorney General any information" about such anticompet-itive effects pursuant to Section 105b.
40/
Thus, there is no basis whatsoever for 'commencing any proceeding, within or without the ambit of Section 105, to consider whether the existing Se"tion 104b licenses
-should be modified or revoked on grounds of alleged anticompetitive activity.
III-. THE LATE PETITION FOR AN ANTITRUST HEARING ON THE CONSTRUCTION PERMIT APPLICATION FOR ST.
LUCIE UNIT NO.
2 SHOULD BE DENIED A.
The Board Must Consider The Late Petition To Intervene in St. Lucie Unit No.
2 In the Context Of The Statutory Scheme Set Forth In Section 105c We will set forth in detail in the succeeding portion of this Response why this untimely Petition should be denied for failure to satisfy the pertinent requirements of Section
- 2. 714 (a).
Since Section 2.714 (a) has come into play more often in 40/
Id., at 973-4.
instances involving late petitions in the Commission's envir-onmental or health and safety proceedings,
- however, we believe it would be useful to the Board first. to point up the distinctive framework of statutes and regulations that governs the initiation and conduct of pre-licensing antitrust review by the Commission.
As we will show, both Congress and the Commission have taken special care to assure that any potential antitrust. issues are identified at an early stage of the licensing process and resolved in timely fashion.
This special care is reflected in the explicit provisions of Section 105c of the Act, the legislative history of those provisions and the Commission's implementing rules and regulations.
1.'he Provisions of Section 105c.
The intent of Congress to provide for an early review and opportunity for hearing in connection with antitrust aspects of an application for a construction permit is, made clear in the provisions of Section 105c.
Although the Act is silent as to the timing of review of environmental or health and safety aspects of an application, Section 105c mandates that prompt action be taken by the Commission and the Attorney General with respect to the necessary pre-licensing antitrust review.
Thus, Section 105c (1) requires that the Commission "shall promptly transmit, to the Attorney General" a copy of the construction permit application, and that the Attorney General shall render his advice within a reasonable
- time, "but in no event to exceed 180 days after receiving a copy" of the application.
Accordingly, the statute mandates that the antitrust review begin promptly upon receipt of the application and places a strict time limit of six months upon the Attorney General in rendering his advice.
As we will show below, these were carefully conceived and deliber-ate mandates.
Thereafter, Section 105c(5) requires that "[p]romptly upon receipt of the Attorney General '
- advice, the Commission shall publish the advice in the Federal Register."
Publication in the Federal Register by the Commission of the Attorney General's advice is the mechanism which triggers the period for filing of petitions to intervene and requests to hold an antitrust hearing.
Again, this highlights the Congressional intent that antitrust hearings, if any are
- required, be commenced at an early stage.
2.
Congressional Intent in Providing For Early Antitrust Review The legislative history of Section 105c leaves no doubt that Congress was acutely aware of the need to avoid delays in the issuance of construction permits arising from the requirements for prelicensing antitrust review.
Although Congress did not expressly authorize the Commission to issue a construction permit prior to completion of the antitrust review and hearing, nevertheless, Congress did attempt to minimize this problem in the provisions of Section 105c by providing for early antitrust review and opportunity for hearing.
Congress expected that the anti-trust proceeding would be conducted apart from the radio-logical health and safety review on a schedule that would not delay the issuance of any construction permit.
This expectation is reflected in the report of the Joint Committee when Section 105c was amended:
"The committee expects and will urge the Commission to make every reasonable effort to deal with the potential antitrust feature under subsection 105c. of the bill fully but expedi-tiously.
Clearly a separate board or boards should be utilized in the implementation of paragraphs (5) and (6) of subsection 105c.
The committee anticipates that all the functions contemplated by these paragraphs would be carried out before the radiological health and safety review and determination process is completed, so that the entire. licensin procedure is not'further extended z.n'tame'b r
reason of the added. antitrust, review function."
The Commission clearly understood and agreed to implement this intent.
In answering written questions submitted by the Joint Committee the Commission expressed the view that "we would expect that. in most cases the prelicensing antitrust review would not extend the licensing process."
It discussed the "separate hearing on antitrust issues well in advance of our usual health and safety hearings" as a potentially effective mechanism to achieve this objective.
42/
When Representative Holifield introduced the 1970 amend-ments on the floor of the House, he reiterated this point:
41/
Joint Committee Report, pp.
15-16 (emphasis added)
See also, for example, the exchanges between Representatives Hosmer and Holifield and Mr. Hennessey, the Commi.ssion's General
- Counse3, at Joint Committee Hearings, Part 1, pp.
90, 94; the further expressions of concern over possible delay by members of the Joint Committee (Rep. Holifield, Id., p.
91; Rep.
- Hosmer, Id., Part 2, p. 485); the testimony of representatives of industry evidencing concern about possible delay '('e~., Carl Horn, Jr., testifying on behalf of the Edison Electric Institute, Id., Part 2,. p.
328; J. Harris Nard, Chm. of the
- Board, Commonwealth Edison Co., Id., Part 2, p. 383).
42/
Id., p. 98.
~
~
'"We believe a separate board can be utilized by the Commission in connection with such anti-trust considerations.
This feature of the total licensing process should be completed by the Commission before the radiological health and safety matters are concluded in the licensing procedure."
43/
- Moreover, he left no doubt that the concern for timely consideration of antitrust issues applied equally to issues raised by persons other than the Attorney General:
"In the latter regard
[other persons raising antitrust issues],
the committee intends that in any event, the Commission's rules and regulations will set a fixed period in which such issues may be raised.
It is hoped that, this period will coincide with and not extend, beyond the specified period in which the Attorney General's advice may be rendered.
The bill contemplates that all aspects of the antitrust considerations constituting part of the Commission's total licensing procedure, including the ultimate findings of the Commission, would be dealt wi'th in such a way as not to impose an additional delaying factor." 44/
In establishing an early mandatory prelicensing antitrust
- review, Congress was concerned, not only with the prospect of potential licensing delay, but also with providing the utility with an antitrust decision at an early stage, before the s'tility committed massive funds toward the construction of the 43/
116 Congressional
- Record, p.
34309 44/
116 Congressional
- Record, p.
34309.
proposed facility.
In an October 15, 1969 speech that was made part of the record of the first day of legislative hearings (November 18, 1969), the Director of Policy Planning, Antitrust Division, Department of Justice, had noted that one of the basic reasons for the application of antitrust policies at the time facilities are licensed is that such procedure
.enables companies to be advised at an early stage in the planning of projects concerning any inconsistency between their plans and competitive policies.
- Thus, we should be able to minimize the number of times plans are thrown into uncertainty after significant time and resources have been committed to them". 45/
The General Counsel of the Commission, Mr.
testified to the same effect, that:
"By bringing the Attorney General into our proceedings before a license is issued, conditions which would tend to create or maintain a situation inconsistent with the antitrust laws were the plant to be built can be identified and resolved.
Thus, it should be easier to make the necessary changes before commitments by the applicant are made".
46/
Mr. Walker B. Comegys, Acting Assistant Attorney General, Antitrust Division, Department of Justice, expressed similar views in the course of his testimony.
He noted that:
45/
Joint Committee Hearings, Part 1, p.
7.
." 46/
Id., page 72.
"the AEC prelicensing review may be useful in resolving antitrust problems before they seriously disrupt planning, construction and use of new facilities." 47/
He emphasized that facing antitrust questions "clearly at the outset of the licensing proceeding, and obtaining the Attorney General's advice on the issue, can permit an early and orderly resolution of problems before much money and time has been spent."
48/
- Indeed, Chairman Holifield began the Joint Committee Hearings on this very note, saying in his opening statement:
"I have also tried to make it clear that no utility that is intent on serving the public interest need fear any proposal I have made.
"preconstruction antitrust review will enable the utilities to know at an early stage in their planning whether their plans violate the antitrust statutes."
49/
3.
The Commission's Rules and Regulations The objectives reflected in the statute and its legis-lative history have also been clearly reflected in the Commission' implementing regulations.
47/
Id., page 120.
48/
Id., p. 121.
49/
Id., p.
319.
One of the principal mechanisms to assure a timely and orderly antitrust review has been the adoption of provisions in Section 50.33a of the regulations requiring early submittal of antitrust information.
Such information must, now be submitted at least 9 months, but not more than 36 months, prior to the date that any other part of the construction permit application is filed.
As explained by the Commission, such early submittal of antitrust information was required because of the significant shortening of time for sa fety and environmental r'eviews anticipated by the Commission.
As stated by the Commission:
"The early filing of antitrust information should permit the Attorney General and the Commission to complete the antitrust review
- process, including antitrust hearings where necessary, concurrently with other licensing reviews."
50/
Similarly, Section 2.102 of the regulations specifies a
time schedule for each step of the antitrust review, through the final date for submittal of petitions for leave to intervene.
Appendix A to Part 2, which sets forth the general policy and procedures that the Commission expects to be followed in the conduct of licensing proceedings, expressly states the Commission's intent that its proceedings be conducted expeditiously.
50/
39 Federal Register, p.
14613 (April 25, 1974).
According to Section Z(e) of Appendix A, which specifically relates to antitrust proceedings:
"If a hearing on antitrust aspects of the application is requested, or is recommended by the Attorney General, it will generally be held separately from the hearing on matters of radiological health and safety and common defense and security described in Sections I-VIII of this Appendix.
The notice of hearin will fix a time for the hearin
, which wa.ll be as soon as racticable after the receipt of the Attorney General's advice and com la.ance with Section 189a of the Act and other provisions of this part."
emp ass.s added 4.
Consideration of Statutory Scheme.
The carefully structured, statutory and regulatory framework reflected in provisions of Section 105c, the legislative history and the Commission's rules and regulations must be carefully weighed by the Board in ruling on Petitioners'xtremely tardy Petition.
Taking the statutory scheme into consideration, the Board should not grant the Petition absent some demonstrated overriding reasons to do so in accordance with the requirements of Section'2.714(a)
This is particularly true since granting the Petition will cause substantial delay in the issuance of a construction permit for St. Lucie Unit No.
2 or will cause FPL to expend massive sums of funds in advance of knowing whether the construction permit will be subject to further antitrust conditions.
B.
The Nontimely Petition Does Not. Satisfy the "Substantial
~
Showing of Good Cause" Requirements of Section 2.714 (a)
Section 2.714 (a) of the Commission's Rules of Practice provides in pertinent part as follows:
Nontimely filings will not be entertained absent a determination by the Commission, the presiding officer or the.,atomic safety and licensing board designated to rule on the petition and/or request that the petitioner has made a substantial showing of good cause for failure to file on time, and with particular reference to the following factors.
(1)
The availability of other means whereby the petitioner's interest will be protected.
(2)
The extent to which the petitioner's partici-pation may reasonably be expected to assist in de-veloping a sound record.
(3} The extent to which the petitioner's interest will be represented by existing parties.
(4} The extent to which the petitioner's participation will broaden the issues or delay the proceeding."
In interpreting the general requirements of this section in instances'where a late petition has been filed in an on-going proceeding, the Commission has held that "the purpose of Section 2.714(a) is to establish appropriate tests for disposition of untimely petitions in which the reasons for the tardiness as well 51/
as the four listed factors should be considered.
In other
- words, "the appropriate disposition of untimely petitions depends upon both (1} the sufficiency of the justification, if any, offered for the tardiness and (2) the assessment of four factors
~52 set forth in the Rules."
- h
d
' ~1, h
made in the context of a proceeding where a hearing was being held and would continue whether or not the late petition was granted.
The NRC Staff has recently argued in an instance involving a late petition for an antitrust hearing that "the four criteria contemplate an on-going proceeding" and "it does not appear that applying the four factors in [thatj proceeding would be of any 51 Nuclear Fuel Services, Inc.
(West Valley Reprocessing Plant),
CLI 75 4g 1 NRC 273'75 (1975) 52/ Vir inia Electric and Power Com an (North Anna Station, Units 1 and 2) g ALAB 289 g 2
NRC 395 g 396 (1975) 53/
assistance."
From the wording of the four factors listed in Section 2.714(a) it would appear, at best, unclear that the authors intended them to be applied in an instance where there did not 54/
exist an on-going proceeding.
In Marble Hill the Licensing Board did apply the first factor but concluded "that the second, third.and fourth factors obtain only where there is an on-going 55/
antitrust proceeding, and thus do not apply herein."
As we will demonstrate, Petitioners have failed to satisfy the requirements of Section 2.714(a) regardless of whether the 53/ NRC Staff's "Answer to Motion for Leave to File Untimely Petition to Intervene and Request for Hearing" in Public Service Com an of Indiana, Inc.
(Marble Hill Nuclear Generating Station, Units 1 and 2, Dockets Nos. 50-546-A, 50-547-A)(April 7, 1976)
(page 5).
The NRC Staff pointed out that "Since the Attorney General did not recommend a hearing, intervenors did not request a hearing in a timely manner, and the Staff did not otherwise recommend a hearing, the antitrust aspects of the construction permit application have been completed."
Thus in Marble Hill, as in the instant case, no antitrust hearing would be held unless the late petition was granted.
54/ Thus, the reference to "other means" implies that an existing
- means, namely an on-going hearing, exists; assisting "in developing a sound record" implies that a hearing record is being developed; "existing parties" implies that there is a hearing with parties; and, obviously, broadening "issues" and delaying a "proceeding" implies the existence of issues and a proceeding.
55/
public Service Com an of Indiana,Inc.
(Marble Hill Nuclear Generating Plant, Units 1 and 2),-LBP-76-25, NRCI-76/6,847,856 (June 15, 1976) four factors listed therein are to be considered.
They have utterly" failed to satisfy their "substantial burden in justifying 56/
their tardiness."
And, even if the four factors are considered, they do not weigh in favor of granting the Petition but instead mandate its denial.
1.
The Tardiness in Filing Xs Not Justified As the Commission noted in describing the purpose of Section
. 714 t "Obviously, an important policy consideration underlying the rule is the public interest in the timely and orderly conduct of our proceedings.'s the Commission has recognized,
'fairness to all parties...and the obligation of administra-tive agencies to conduct their functions with efficiency and economy, require that Commission adjudications be conducted without unnecessary delays.'0 CFR Part 2, Appendix A.
Late petitioners properly have a substantial burden in justifying their tardiness.
And the burden of justifying intervention on the basis of the other factors in the rule is considerably>greater where the latecomer has no good excuse."
The usual "substantial burden in justifying their tardiness" that late petitioners bear under Section 2.714(a) is even heavier under the particular circumstances of this proceeding.
Zn the first place, it should be axiomatic that the longer the period of tardiness involved, the greater should be the
'57/
Zd, at 275.
justification; and, in this case, the period of tardiness is unbelievably lengthy, over 2-1/2 years.
Petitioners were apparently extremely slow even to realize that they had an anti-trust concern which they believed warranted a hearing as to St.
Lucie Unit No.
2.
The first such indication came in a pleading in another proceeding before the Commission filed by 'entities sub-stantially identical to these Petitioners on April 14,
- 1976, more 58/
than 2-1/4 years after the time for intervention had expired.
And, even thereafter, Petitioners still required more than four 59/
addit'onal months until the present Petition was filed.
The characterization by another Licensing Board of a petitioner's delay in filing a late petition appears equally apt here; it represen s
"at best, a casual attitude toward pursuing its interest with respect 60/
to a most, serious matter."
Actually the period of tardiness here involved reflects more than. "a casual attitude," it demonstrates 58/ Joint Petition of Florida Cities for Leave to Intervene and Request for Conference and Hearing, Docket No. P-636A (South Dade Plant),
pp.
9-14 (April 14@ 1976).
59/ Petitioners, of course, allege no good cause at all for this additional four month delay.
Even this four month period alone exceeds other pe iods of lateness that have been held to bar granting of a petition.
For example, the petition o the City of Cleveland for an antitrust hearing with respect to Beaver Valley, Unit 2 was denied in an instance involving a filing late by approxi-mately 60 days.
Ducuesne Li ht Company, et al,(Beaver Valley, Unit 2) 7 AEC 282 (1974),
rec(nest for reconsideration
60/ Beaver Valley, 7 AEC at 284.
a serious attempt to "make a mockery of procedural rules and.
61/
create chaos in the licensing and hearing process."
In addition, Petitioners nontimely petition flies in the face of the carefully conceived statutory and regulatory scheme for timely consideration. of antitrust issues in licensing pro-ceedings that we have described at length above.
The Commission has recognized that the burden under Section 2.714(a) can vary depending upon the particular circumstances involved.
For example, in an instance where the late petitioner had, shown only a shaky claim to standing, the Appeal Board noted that. "given the at best marginal basis for the asserted right< we can demand much more of [petitioner] in terms of a showing either (1) that its not having filed the petition on time was due to circumstances beyond its control or (2) that, the four factors.
. weigh heavily
~62 in [petitioner'] favor. " 'imilarly, whatever "substantial burden" a late petitioner faces in a Commission proceeding pertaining to radiological or environmental issues, the Commission can "demand much more" when the grant of the late petition would so clearly serve to frustrate the statutory intent with respect to timely review of antitrust. issues.
Having established the exceptionally heavy burden that these
~61*
See Beaver Valle 7 AEC at 707.
62/
Lon Island Li htin Comtian (Jamesport Nuclear Power Station, Units 1 and 2), ALAB-292, NRCI-75/10 631, 646 (1975).
(emphasis added) 63/
Petitioners must bear in justifying the lateness of their Petition, we now turn to the Petition itself to ascertain how they have sought to meet such burden.
As best we can determine, such attempt is made solely in the somewhat unfocused and unclear discussion of "good cause" contained on pages 16-24 of the Petition.
Apparently, Petitioners there seek to establish that they have a valid excuse for filing a petition more 'than 2-1/2 years latethat excuse being based upon events alleged to have occurred after the opportunity for intervention expired on December 28, 1973.
Me vill proceed 63/ It is interesting to note that counsel to Petitioners - though experienced in NRC proceedings neither discusses burden under Section 2.714(a) in the Petition nor even mentions the leading NRC decisions that provide guidance as to the application of Section 2.714(a) to late petitions.
We do note that pages 31-36 of the Petition contain a
rambling discussion presumably supporting the notion that changed circumstances "legally warrant" the grant of Petitioners late petition.
- However, we fail to perceive the relevance of such discussion.
If Petitioners are arguing that intervening events can, in appropriate instances, constitute an element of "substantial showing of good cause" within the context of Section 2.714(a), their erudition is unnecessary.
If they mean that "changed circumstances" can provide a legal basis for a late petition outside of the framework of Section 2.714(a) their discussion is both obscure and wasted, since the Commission is governed by such rule.
We will briefly respond, however, to one portion of their argument, namely that "Congress certainly did not intend that intervention to raise anticompetitive issues should be foreclosed.
merely by passage of time beyond the date initially set forth for the filing of petitions to intervene."
(p. 33).
There is, of course, absolutely no basis for Petitioners'mplication that Congress intended that the Commission's procedural rules pertaining to late filings be ignored.
The evidence to the contrary is overwhelming, particulary in the emphasis given by Congress ta. the importance of timely and orderly resolution of antitrust issues.
The Joint Committee Report specifically states that if the Attorney General does not recommend a
hearing "but if antitrust issues are raised by another in a manner accordin to the Commission' rules and re ulations, the Commission would be obliged to give such consideration thereto as may be required by the Administrative Procedure Act and th Commission's rules or regulations-Joint Committee Report, up.
30"31 (onphasis added).
to discuss each of these allegations.
2.
The Claims of Changed Circumstances Are Not Substantial and Do Not Provide Good Cause for the Lateness of the Petition The claimed changed circumstances appear to fall into three categories:
disputes regarding implementation of the license conditions agreed upon by FPL and the Commission; allegations of refusals to deal and related conduct on the part of FPL; and, the energy crisis.
a.
Implementation of the License Conditions The St. Lucie Unit No.
2 license conditions provide for FPL'o afford to certain entities, including only one of the Petitioners, New Smyrna Beach, the opportunity to participate in the ownership of St. Lucie Unit No. 2, and for FPL to make arrangements for the delivery o the output of the portion owned by New Smyrna Beach to that city.
The Petition states that FPL and New Smyrna Beach have 6~/
not yet agreed on the final terms oz the arrangements.
The 64/ lt is apparent from the Petition that the disagreement is hardly of a fundamental nature.
The license conditions refer to a "reasonable ownership share" and to "delivery of [the] participant's share.
.on terms which are reasonable..."
As the Petition itself indicates, the only areas of disagreement concern the percentage of ownership which is "reasonable" and the formulation of a rate for transmission service.
(Petition, p. 16, e.g. "[T]he Company has committed itself in general terms to transmit power for New Smyrna Beach from its St. Lucie Unit No.
2 entitlement share.
..")
As the letter of April 15,
- 1976, from counsel for New Smyrna Beach (Attachment D) indicates, the idspute ovex the pxoposed ownership has narrowed to'a disagreement over approximately one megawatt'f capacity.
Of course, any rate for transmission service will be subject to filing with, and regula-tion by, the Federal Power Commission.
16 U.S.C.
Se'ction 824 et sea.
Petitioners apparently contend that this failure to reach agreement is a "change in circumstances" which provides good cause for the lateness of the Petition, because New Smyrna Beach refrained from filing a timely petition in reliance on the protection provided by the license conditions.
In the event that FPL and New Smyrna Beach are ultimately unable s
to agree on the details of implementation of the license conditions, New Smyrna Beach's appropriate remedy will be to seek enforcement of the conditions, a remedy readily available under Sections '2-200'et sece. of the Commission's regulations.
In no way has the enforceahility of the license conditions been impaired in the more than two and a half years which have intervened since New Smyrna Beach's decision I
not to file a timely petition.
The very same conditions on which New Smyrna Beach claims it relied will be incorporated into the construc-tion permit for St. Lucie Unit No.
2 and will be enforceable against FPL.
Thus there has been no change in circumstances in this respect.
Moreover, to treat disagreements over the terms of enforcement of license conditions as changed circumstances providing good cause for the late commencement, of an antitrust hearing would create havoc with the antitrust review procedures which have evolved in practice before the Commission.
In many instances (including St. Lucie Unit 65/ The actual license 'conditions had not bee'n formulated at the t'ime of publication of the Attorney General's advice letter, but were finalized between the Applicant and the NRC Staff in February 1974 (see
- p. 7;" ~su 'ra
)
~
However, the advice letter descrihed the substance of the conditions in contemplation of their finalization by the Staff.
-39<<
No.
2} applicants have agreed to license conditions contemporaneously with the Attorney General's review of an application.
Obviously, the purpose of agreeing to the imposition of license conditions is to avoid an antitrust hearing, with, among other things, the attendant risk of delay in issuance of the construction permit.
However, if disagreements over the implementation of such conditions, occurring prior to issuance of the construction permit, are likely to result in an antitrust hearing being convened on the eve of issuance of the construction permit, an agreement as to license conditions would be
~f worse than meaningless.
b.
Conduct by FPL The second category of allegations of changed circumstances relates to what the Petitioners call "FPL's intensified anticompetitive activities" (Petition; p. 23).
These allegations appear to be summarized in the second full paragraph on page 21, where the Petitioners refer to:
"the attempted acquisition of competing utx,lxty systems; refusals to enter into an integrated statewide power pool; active opposition to legislation which would allow joint ventures by smaller systems; and other practices.
~/
On page 17 of the.Petition, reference is made to a disagreement between FPL and Seminole Electric Corporative, Xnc. regarding implemen-There is no accom tation of one provision of the St. Lucie Unit No.
2 li d
i o.
incense con itions.
ere is no accompanying explanation of why this allegation appears art The P
in a pleading to which neither Seminole nor any of its memberers is discus p
y.
etitzoners have no basis for alleging any facts r ga d'gar ing Seminolesions who.ch have been, and are, taking place betw FPL d
'nole and no interest whatsoever in asserting Seminole'.s rights under the. license conditions.
These allegations parallel the contents of a Petition filed by almost all of the same entities in NRC Docket No. P-636A.
This Board is, of course, aware that FPL has taken sharp issue with these allegations on the merits, in that proceeding, and that FPL has asserted that. many of the allegations are simply untrue.
However, the issue here does not concern the merit or legal sufficiency of the charges, of improper conduct on FPL's part, but concerns only whether the Petitioners have alleged changes in FPL's conduct which are significant enough to justify the granting of a Petition which is late by more than two and one half years.
The Petition itself precludes such a finding.
Petitioners description of "The Situation Inconsistent" (Petition, pp.
54-85) makes abundantly clear that Petitioners contend that the alleged conduct described on page 21 is consistent with, and merely a part of, a course of conduct which they contend persisted for years prior to December 67/
1973.
The allegation that FPL has "attempted acquisition of competing utility systems" (p.
- 21) appears to relate primarily to the City of Vero Beach, which has requested and received from FPL a proposal for the purchase of the City's electric utility facilities. It is note-worthy that the City of Vero Beach itself is not among the Petitioners, 67 Obviously, FPL takes vigorous issue with the entire discussion which begins on page 54, and denies that it has ever been or is now responsible for a situation inconsistent, with the antitrust laws.
and's not a party to Docket No. P-636A. It is difficult to perceive just how these bi-lateral dealings between FPL and Vero Beach constitute significant "changed circumstances" justifying this late Petition by other, uninvolved municipalities.
However in any event, the litany of accusations appearing on pages 62-66 of the Petition, under the heading "Past Acquisition Attempts", negates any argument of changed circumstances based on the possibility that FPL may acquire the electric facilities of a municipality.
- Likewise, no significant supervening event can be found among the allegations of "refusals" by FPL. It is alleged that FPL has "refused to enter into an integrated statewide pool."
(p. 21). It is not alleged that any "integrated statewide pool" was either existing on imminent in December of 1973, or that FPL's position with respect 6S/
to any such pool has changed at any time.
Presumably, the other "refusals" to which the statement on page 21 refers are those discussed in the section of the Petition which begins on page 70.
Petitioners do not point to any of those allegations as establishing changed circumstances which would provide good cause for the lateness of the filing, and indeed they could not fairly do so.
~/
To the contrary, see footnote 2 on page 72 of the Petition.
As regards the allegation of "opposition to legislation which would allow joint ventures by smaller systems" (p. 21), it is clear from Mr. Fagan's affidivait in Docket No. P-636A (which the Petition purports to incorporate) that prior to November 1974 municipal partic-ipation in joint ownership of generating facilities. was constitution-ally prohibited in Florida.
Mr. Fagan's affidavit (p.
- 2) indicates that "some legislation authorizing joint ownership" was passed at the 69/
1975 Session of the State legislature.
Apparently, the Petitioners would have preferred that Such legislation should have contained broader'rovisions.
Obviously, the Petitioners'ailure to obtain State legislation in the exact form desired is not the kind of changed circumstances which provides good cause for the late filing of the instant Petition, which, in any event, is submitted more than one 70/
year after the close of the 1975 session of the Florida legislature.
69'hus it is apparent that, to the extent that circumstances have changed.since 1973, the changes have significantly favored the Petitioners.
7(V Moreover, -it is clear that the views expressed by FPL to legis-
.ilative bodies, and their committees, cannot provide the basis for a finding of inconsistency with the antitrust laws.
See Eastern Rail-road Presidents Conference v. Noerr Motor Frei ht, inc.
365 U.S.
127 (1%61); United Mine Workers v. Pennin ton, 381 U.S.
657(1965).
Presumably the "other practices" referenced on page 21 concern such matters as the charge that Orlando was "misled" to believe that it would be invited to participate as an owner of the South Dade Project (p. 19), the reference to transmission of powe'r from Florida Power Corporation's Crystal River Unit No.
3 to the City of New Smyrna Beach (p. 17}, and the argument, in footnote 2 on page 20, that FPL is "implicit[ly]"committed to sharing of further nuclear capacity.
As regards the Orlando and "implicit commitment" matters, U
Orlando and twenty-one other entities are currently participating in an antitrust hearing in Docket, No. P-636A where the question of any "rights" to participate in the ownership of FPL's South Dade plant is in issue.
There is no logical basis for treating a dispute which has
- arisen, and will be resolved, in connection with a new application as a "changed circumstance" which justifies extremely untimely petitions with respect to a previous application.
The matter of transmission of power from the Crystal River Plant to New Smyrna Beach merits but brief comment.
As the Petition reveals, as much by omission as by representation, FPL has agreed to provide the transmission service requested by New Smyrna Beach.
The only matter on which agreement has not been reached concerns the rate to be charged for the service, a matter subject to regulation by the Federal Power Commission.
Finally, Mr. Bathen's "Supplemental Affidavit" refers to an alleged "price squeeze."
Ne are unable, however, to locate any related reference in the portion of the Petition itself which deals with "good cause" for the late filing.
Xn any event, the matter can be treated briefly.
The only Petitioner which purchases power at wholesale from FPL is New Smyrna Beach.
Initially, New Smyrna Beach raised the subject of "price squeeze" in a pleading 71/
submitted to the Federal Power Commission on September 14, 1973.
Subsequently, in 1975, New Smyrna Beach raised the issue in another FPC rate case involving FPL's wholesale rates Docket No. ER76-211.
On December 23'975/
FPL and New Smyrna Beach entered into a 72/
Settlement Agreement in which New Smyrna Beach agreed to withdraw "its petitions and protests in FPC Dockets No. E-8008 and ER 76-211 insofar as they relate to allegations concerning
. price squeeze or other anticompetitive issues" and "not to raise before the Federal Power Commission (or successor agency or body having similar power) allegations concerning...price squeeze or other anticompetitive issues...based upon facts occurring prior to the date of this Settlement Agreement."
Thus, the price squeeze issue arose before the time for filing timely petitions to intervene in the St.
Lucie Unit No.
2 docket had, expired, the issue has subsequently been resolved (at least at the FPC) between FPL and New Smyrna
- Beach, the only Petitioner concerned, and it can scarcely be considered a significant intervening event.
71/
FPC Docket No. E-8008.
72/
Filed with the FPC in Dockets No. E-8008 and ER 76-211, on February 24, 1976.
c.
The Energy Crisis The Petitioners contend that one significant event which has occurred since 1973 is, to quote from page 21 of the Petition,:
[P]artially as a result of the OPEC oil boycott and subsequent OPEC related oil price increases, prices for all fossil fuels have skyrocketed and a severe shortage or potentially severe shortage of some fossil fuels has developed."
In essence the Petitioners contend that, in August 1976, they have, for the first time, appreciated the significance of the energy crisis which has gripped the nation for the past several years.
This contention fails utterly upon even a cursory examination of the chronology of the energy crisis.
Although the potential for certain fossil fuel shortages was not obscure before that date, the outbreak of war in the Middle East on October 6, 1973, signaled the beginning of the severe "energy crisis" in the United States.
It appears that the curtailment of supply to the United States by 73/'973.
Prom that, date events the Arab nations began on October 17, moved swiftly.
The New York Times for October 20, 1973, reported Libya's declaration of an oil boy-cott against the United States in the price of oil from $ 4.90 and its announcement of an increase 74/
a barrel to nearly
$ 9.00.
On 73/
Attachment E, New York Times, October 18, 1973.
74/
Attachment E.
Qctober 21, 1973 the Times reported that Saudi Arabia and four other C
producing nations had joined the boycott against the United States.
On November 7, 1973, President Nixon delivered a televised address to the nation on the "energy crisis", in which, among other actions, he proposed a nationwide 50 miles per hour speed limit.
In December of 1973, when presumably the Petitioners weighed the possibility of filing a timely petition in the St. Lucie Unit.
No.
2 proceeding, emergency energy conservation measures were in effect throughout the United States and Project Independence was a
current news topic. It would hardly have been possible for any 77/
American to be unaware of the substantial implications of the energy crisis.
Of course,
.these increases by the producing nations soon
- found, their way into the prices paid by electric utilities for their oil.
For example, the price paid by FPL at its Port Everglades plant increased from less than 80 cents/mmBtu (below
$ 5.00 per barrel) in early September 1973 to 180.3 cents/mmBtu
($ 11e14 per barrel) in late January 1974. In fact, FPL's most recent, Form 423 filing with the 78/
FPC for April 1976, shows a cost about equal to the January 1974 cost, 187.4 cents/mmBtu
($ 10,89) per barrel. It.strains 79/
V credibility for any electric utility participating in this market to
.claim that it did not appreciate the operation of these forces 75/
Attachment E.
76/
Attachment E, New York Times, November 8,
1973.
77/
See generally the New York Times,
- December, 1973.
78/
Although the largest increment of increase occurred in early January
- 1974, steady increases occurred throughout the final months of 1973.
See FPL filings with FPC on F rm 423 for each month.
79/
Id.
in December of 1973.
Moreover, it would not have been possible for an oil-purchasing utility to avoid feeling the full impact in the early months of 1974two and one half years before the Petition was filed.
Although the portion of the Petition which pertains to "good cause" for the late filing (pp. 16-24) does not specifically discuss curtailments in the supply of natural gas, the natural gas situation is a major theme of the Petition's section entitled "The Situation Inconsistent."
(p.
54 et
~se.).
However, the Petitioners cannot credibly claim that reduction of the supply of natural gas to interruptible customers is a "changed circumstance" which justifies their late filing.
As early as April 1971, the Federal Power Commission (FPC) issued a "Statement of General Policy" indicating that one measure which would be considered to alleviate the growing shortage of natural gas is'the curtailment of volumes equivalent to all interruptible sales and to the curtailment of large boiler fuel sales where 80/
alternate fuels are available.
On May 29, 1972--more than 22 months before the Petition was filedeight Florida municipalities, including four of the Petitioners, submitted, through the same counsel who subscribed the Petition, a.
I brief to the FPC in opposition to a request for extraordinary relief sumbitted by another customer of the common supplier, Florida Gas 81/
Transmission Company.
The brief illuminates the Petitioners
'0/
FPC Order No.
431 (April 15, 1971).
81/ Initial Brief of Cities to Presiding Law Judge, Docket No. RP74-50-1
't al, May 29, 1974.
The title page and the page of the brief from which we quote are attached as Attachment F.
understanding at that time of the status of their natural gas supply, and of the significance of the energy crisis generally.
For example, on page 24, the municipalities acknowledge their understanding that by 1975 their gas supply would be curtailed to a small percentage of the contracted quantity.
The discussion on page 25 of the brief indicates the municipalities'ull appreciation of the impact of the energy crisis on electric utilities.
Finally, harking back to a settlement agree-ment approved.
by the FPC on May 18, 1973, the municipalities admonished the 'party applying for extraordinary relief by pointing out that "Applicant clakes for special relief are based upon no facts which could not have been known or anticipated at the time of the settlement and 82/
the
[FPC's] order."
Thus, it is obvious from the discussion in pages 37 to 48 of this Response that the 'Petitioners'ake-shift allegations do not, either individually or collectively, identify any inter-vening events or changed circumstances that could conceivably justify a delay in over 2-1/2 years in the filing of this Petition.
The Petitioners have described no cause for lateness at all, let alone the "substantial showing of good cause" referred to in Section 2.714(a).
3.
Assessment of the Four Factors in Section 2.714(a)
Weigh Against the Petition When the Commission in West Valley determined that the four factors listed in Section 2.714(a) should be taken into account even 82/
ld.,
p,. 10;
in cases of inexcusable tardiness, it acknowledged concern that its interpretation of the rule "may have the effect of reading the
'good cause'equirement out of the rule."
Therefore it emphasized that:
"To obviate that result, we stress that favorable findings on some or even all of the other factors in the rule need not in a given case outweigh the effect of inexecusable tardiness.
Conversely, a
showing of good cause for a late filing may never-theless result in a denial of intervention where assessment og the other factors weighs against the petition."
- And, as we have previously noted, the Commission also emphasized that "the burden of justifying intervention on the basis of the other factors in the rule is considerably greater where the late-84/
comer has no good excuse."
85/
Application of the four factors in this proceeding reinforces the decision that this inexcusably late Petition should not be granted.
As to the first factor, it is clear that other means do exist to protect Petitioners'nterest.
In fact Petitioners do not even dispute this point and, instead, argue that "other means to vindicate Cities'nterest may exist, but these point to the equities of 86/
granting late intervention here."
In view of Petitioners'dmission, we need not belabor this point but we do wish to note 84/
Id.
85/
See pages 31-33,
~su ra,as to whether the four f'actors are applicable in instances that do not involve an on-going proceeding.
86/
- Petition, pp.
37-38.
briefly the extensive means available to Petitioners both outside of and within the framework of NRC proceedings.
87/
Outside of NRC proceedings, 'etitioners'emedies are as ample and varied as their imagination in framing complaints.
If they have any disagreements as to transmission rates or wholesale
- rates, they have a readily available forum before the FPC.
To the extent they wish to raise questions as to "unfair methods of competition," the FTC is readily available to Petitioners.
More-over, if they wish to assert in another forum that FPL has violated the antitrust laws they can institute a proceeding in Federal court or they can attempt to convince the Department of Justice to initiate an action.
Moreover, other means are available to Petitioners within the NRC.
To the extent that Petitioners complain that FPL has not complied with the antitrust conditions in the St. Lucie Unit No.
2 construction permit, New Smyrna Beach will have ample oppor-tunity to enforce such conditions, in a show cause proceeding, if necessary.
On the other hand, to the extent that Petitioners'omplaints relate to activities under licenses for future nuclear.
facilities of FPL, their, forum within NRC proceedings is not only ample but is already being exercised.
A group of municipalities 2/ ~
9 view on an envxronemntal question before the New York State Board on Electric Generation was determined to provide a satisfactory forum in which the pet).tioner could protect its interests and a late petition was denied.
ALAB-292, NRCI-75/10 at 648.
almost identical to Petitioners has raised,,
and had admitted in that in that proceeding all of the antitrust contentions raised herein.L~
One final note as;to the first factor is that, even if ample other means did not exist, such consideration could not conceivably tip the balance in favor of Petitioners.
In circumstances involving a lesser period of tardiness, the Licensing Board in Marble Hill after finding that there were apparently no other means whereby the petitioner could protect its interest and that the other three factors did not apply, concluded nevertheless that the petitioner's "extreme tardiness is inexcusable and that intervention should not 89/
be granted."
Such action was, of course, consistent with the g 'd '11 h
h b 8
on one or more factors need not outweigh the effect of inexcusable tardiness.
The second and third factors assistance in "developing Ia sound record" and representation by "existing parties" can readily be disposed of together.
These are 0he two factors which most obviously contemplate the existence of an on-going proceeding and which therefore, in the absence of such a proceedinq, are irrelevant or should be given no weight.
The fourth factor broadening the issues or delaying the s
proceeding weighs most heavily against Petitioners.
Perhaps tongue-in-cheek, they 'argue that since a proceeding "has 'not yet been initiated to consider St. Lucie Unit 88 T ese munxcz.pa z.ties have also reauested in that docket that relief he grantedo
'nclud'e, inter alia, participation in PPL's Turkey Pornt and St. Lucia facilities, FPL has taken the oosition that it would not be proper or appropriate for such relief to be granted in that docket:.
The Licensing Board there has not yet decided the auestion.
89/ NRCI-76/6 at 856.
t No." 2, granting intervention cannot delay such proceeding."
This absurd argument would mean that this paramount fourth factor would never be considered against a tardy petitioner in those instances where his lateness is most damaging
- namely, where no on-going hearing is being held because all of t
the pertinent issues have been fully resolved by the interested parties in the absence of any timely petition.
Moreover, it would be in those very instances that the most time would have been wasted and thus the petitioner's delay most harmful because no 'other petitioner will have asked for a hearing and therefore no pre-hearing conferences, discovery and other time-consuming procedural steps will have taken place during the late petitioner's absence.
90/
Recognizing the levity of their argument, Petitioners'ore serious argument appears to be that there will be no delay because they do not seek a delay in construction.
Although they do not state a precisely clear proposal, they will apparently generously agree to the issuance of a "temporary p<<>>t i (e - g ~ r p.
39 r n.
- 1) coupled somehow with the qrant of "interim relief," in the nature of "a preliminary injunction," which will be reguested separately (e.g.,
pp.
14, 84-85).
90/
In an attempt to mitigate the harmful effects of delay, wEen a late-filed petition is granted, the petitioner "may be required to take the proceeding as it finds it."
West Valley, INRC at 276.
This is, of course, impossible when there xs no on-going proceeding.
Zt is clear that the granting of the Petition will cause the most grievous delay.
The Commission has held that when an antitrust proceeding is convened, a construction permit cannot 91/
be granted without:.the agreement of all of the parties.
Thus, if the tardy, Petition were granted at this 11th hour, a
'construction permit for St. Lucie Unit No.
2 could not be granted unless Petitioners'greement were obtained.
Obviously Petitioners'everage in any bargaining under these circum-stances would be unconscionable.
Of course, Petitioners protest that they do not seek to delay construction, but these are empty words when FPL is faced with the possibility of unspecified conditions in a "temporary permit" and an ominous "preliminary injunction" for which a request has not yet even been filed.
Even if the conditions of a "temporary permit" were known and if there were no threat of a "preliminary injunction,"
there would still be an important "delay" here involved that would mandate denial of the Petition.
As described above in the discussion of the statute and its legislative-history, the thrust of the Congressional intent was to assure that I
antitrust issues were identified at an early stage and resolved in timely fashion so that an applicant would know exactly what antitrust conditions, if any, would be imposed prior to making the extensive financial commitments required
~r 91/
See note 19I suura.
for construction of a nuclear plant.
At best what Petitioners are suggesting is that they will not cause delay because they will permit construction to start, and that FPL should go ahead and invest its money without knowing what portion of the resulting plant it will own and without knowing what antitrust related conditions may ultimately be imposed prior to its being permitted to operate the plant.
Thus, if the Petition were granted, and if, as is extremely improbable, some agreement were reached among the
- parties, FPL would be able to avoid a delay in construction only if it. agreed to another equally significant delay-a delay in its obtaining assurance that there are no out-standing antitrust questions relating to St. Lucie Unit No.
2.
In essence, FPL would be asked to waive a most important substantive right the right to obtain such assurance prior to investment of extensive funds.
Under these circumstances, Petitioners cannot conceivably be credited for not causing delay. If the Petition is 92/ It is interesting to note that in North Anna, a
petitioner filing a late petition a few weeks before the scheduled start of an environmental hearing alleged there would be no delay since it would take the proceeding as it finds it.
The applicant,
- however, argued there would be no delay only if the applicant waived important procedural rights against the petitioner, including discovery.
The Appeal= Board decided that:
"It is scarcely equitable to give [petitioner] credit for not causing delay when that result could be achieved only because the circumstances would coerce other parties into waiving substantial rights."
2 NRC at 400.
granted there will be serious, lengthy delays either in the commencement of construction, in obtaining assurance as to the absence of antitrust questions, or in both.
Regardless of any other factors, this factor alone dictates denxal of the 93/
Petition.
- Thus, none of the four factors weighs in favor of granting this late Petition; they are either irrelevant or strongly reinforce a decision that this inexcusably late Petition should be denied.
C.
NRC Is Not Required Under These Circumstances To Make Affirmative Findings Under Section 105{c) {5)
In pages 24-30 of the Petition, Petitioners argue that the Act requires that late intervention be granted because of the NRC's "special responsibility" for antitrust review under the Act.
Although again Petitioners'heory is not precisely stated, their argument appears to be advanced as a means of circumventing the provisions of Section 2.714(a) 93/
As stated by the Appeal Board in Jamesport;
~Vndeniably, the delay factor is a particularly significant one; indeed -- barring the most compelling contervailing considerations an inexcusably tardy petition would (as it should) stand little chance of success if its grant would likely occasion an alteration in hearing schedules."
2 NRC at 651.
This statement would obviously apply even more strongly if the Delay were not simply in a hearing schedule (which might be made up), but in the commencement of construction or in the ultimate resolution of the issues.
pertaining to untimely petitions.
- Namely, even if Petitioners have not satisfied the requirements of Section 2.714(a),
the Commission should still grant the Petition because it must resolve antitrust questions raised by Petitioners in order to make the Section 105 (c) findings that the proposed activities are not inconsistent with the antitrust laws.
It is not necessary to explore Petitioners'rguments in any great detail because they are based upon a single wholly mistaken premise.
Notwithstanding Petitioners 'llegation that "the Commission is statutorily obligated to make an 94/
antitrust finding prior to issuing a construction permit,"
Section 105(c}(5} does not require such a finding prior to issuance of a construction permit for St. Lucie Unit No.
2 The last sentence of Section 105(c)(5) makes quite clear that only when a hearing has been held with. respect to antitrust matters is the NRC required to make "a finding as to whether the activities under the license would create or maintain a situation, inconsisteni with.the antitrust laws as specified in subsection 105a."
This is emphasized by the section-by-section analysis in the 1970 Joint Committee Report which specifically states:
94/
Pet'ition, p.
25.
"This finding'y the Commission is required only in those cases where the Attorney General advises there may be adverse antitrust aspects or antitrust issues are raised by another in a manner according with the Commission's rules and regulations."
95/
- Thus, we are not aware of any instance where the Commission (including the NRC Staff, Licensing Boards and Appeal Boards) has made such a finding in the absence of an
'ntitrust hearing.
Quite to the contrary, we believe that such finding is consistently absent in any construction permit issued without. the holding of an antitrust hearing.
Commission practice in this respect is reflected in Regulatory Guide 9.1, "Regulatory Staff Position on Anti- ~
Trust Matters," which states:
"With regard to'those applications for which antitrust hearin xs re uvre ne comme Energy Commission, with the advice of the Department of Justice, is directed to
'make a finding as to whether activities under the license would create or maintain a'ituation inconsistent with the antitrust laws.
..'" 96/
(Emphasis added.)
95/
Joint Committee Report, pp.
30-31.
96/
Reg. Guide'.1, Section A, p.
1 (December, 1973).
See
- also, Penn et al, "The U.S. Nuclear Regulatory Commission's Antitrust Review of Nuclear Power Plants:
The Conditioning of Licenses,"
NR-AIC-001, (Nay 1976), in which the authors state "'In those cases in which a hearin is held, the Commission must make a finding as to whether the granting of a license
'would create or maintain a situation inconsistent with the antitrust laws.'"
(Emphasis added)
(p. 5).
Accordingly, the statute itself, its legislative history and
.consistent agency interpretation and implementation thereof demon-strate Petitioners'istaken characterization of the Commission's obligations under Section 105(c)(5).
Since the Commission is not required to make an affirmative finding under Section 105 (c) (5) as to St. Lucie Unit No. 2, the Petitioners'ttempt to place a gloss on such non-existent obli-gation through references to legal precedents in instances where on organic statute or NEPA did require an agency to make certain 97/
findings is wholly irrelevant and need not be responded to.
IV.
OTHER MMTERS Apparently in the nature of suggesting some relief in the alternative to granting the interventions and hearing requested by the Petition, the Petitioners appear to suggest. that:
(i) if the request for an antitrust hearing on the application for a construction permit for St. Lucie Unit No.
2 is denied, an anti-trust hearing concerning issuance of the operating license for 98/
that facility should 'commence immediately; and (ii) if the Petitioners'equest for a hearing as to any unit is, de'nied, the Commission should transmit the Petition to the Federal Trade Commission 99/
and, request that that, agency conduct an investigation of FPL.
97/
Our silence should not imply, however, any acquiescence in Petitioners'iscussion of those irrelevant legal precedents.
Ne simply do not wish to lengthen an already necessarily lengthy Response.
98/ Petition, p.
39,n'. l.
99/,Id., p.
48.
Neither suggestion has any basis in lawor reason, and both can be treated briefly.
The suggestion regarding an operating license antitrust hearing on the St. Lucie Unit No.
2 application, being tendered prior to 100/
issuance of a construction permit, is premature by several years.
Moreover, it is based upon the completely erroneous premise that an antitrust review "will be mandatory" in connection with the operating 101/
license.
Presumably this statement is derived both from the Petitioners'rroneous impression that the findings on antitrust matters specified in Section 105(c) (5) must be made by the Commission before issuing any license whether or not an antitrust hearing was 102/
- required, and from the Petitioners'onviction that they have made a showing of "[s]ignificant changes in the license's activities"
.. 103/
since the Attorney General's construction permit review.
Of
- course, FPL completely rejects this latter contention for reasons descrihed on pp.
37 46,
~su ra H.owever, there is no need to argue here the substantive questions which might be involved at some future time in the Commission s determinations under Section 105(c) (2).
The prematurity of the request is dispositive of any question now pending before this Board.
The suggestion that the Commission transmit the Petition to
)
100/
See Section 50.34(b) of the Commission's regulations.
J 101/
- Petition, pp.
31,39.
102/
This argument is addressed at pp. 66 58, sunra 103/
Section 105(c)(2),
quoted at page 31 of the Petition.
the FTC and request that it conduct an investigation of FPL is distinguishable only by its novelty.
The Act contains no provision for consultation by the Commission with',the FTC or for reportine of information to the FTC.
However, the Act contains detailed provisions 'Section 105b for reporting information relating to antitrust inconsistencies to the Attorney General, and of course provides for advice from the Attorney General with respect to each new license application.
Apparently, the Petitioners have become disenchanted with the Attorney General.
He did not see fit to recommend an antitrust hearing with respect to FPL's South Dade application, and he has not chosen to participate in the hearing which has been convened in that docket.
- Moreover, FMUA officials have made public statements to the press in Florida expressing anger that the Attorney General, after analyzing for several weeks complaints that have recently been submitted to him 'by the Petitioners, h'as not conclude'd that any action against FPL is warranted.
Ne suggest that the problems that Petitioners have had with the Attorney General are a telling indica-tion of the lack of merit of their accusations a'gainst FPL.
FPL is not aware of any legal or other constraints which prevent the Petitioners from contacting the FTC on their own.
However, there is no basis in the Act or the Commission's regula-tions for the'ommission's taking the action suggested in the Petitions.
Moreover, there is no apparent reason for the Commission's lending its prestige to the Petitioners'fforts to forum shop and attract additional publicity to their baseless charges against FPL.
V.
THE MERITS OF 1 6'L'I'l'IONE'RS" CONTENTIONS As is stated on page 50 of the Petition "the substantive contentions raised in [the Petition]
and in Docket No. P-636A are virtually identical."
As this Board knows, FPL has taken the position in the South Dade proceeding that these contentions are wholly without merit.
That is FPL s position as to the instant Petition as well.
However, in that proceeding, where petitions were submitted in a timely fashion, FPL has readily agreed to meet the charges on their merits, and intends to demonstrate on that record their complete lack of factual substance.
To go through the exercise of identifying technical faults in these same contentions in this context would be an artificial exercise, wasteful of the time'f the Board and the parties.
~
The compelling reasons for denying this Petition in its entirety have been stated in the foregoing sect'ons of this response.
VI.
CONCLUSION As we have demonstrated above, with respect to their late Petition for an antitrust hearing in Docket 50-389A, Petitioners have utterly failed to satisfy the "substantial showing of good cause" recpxirements'f Section 2.714(a).
They have not satisfied the "substantial burden" they must bear in justifying an unbelievably lengthy tardiness of over 2-1/2 years; in fact they have not even sought to explain, let alone justify, their casual attitude in delaying for over 4 months the filing of a petition they first threatened in April, 1976.
To the extent that the four equitable factors mentioned in Section 2.714(a) are to be applied in an instance such as the instant case which does not involve an on-going proceeding such factors reinforce a decision to deny the Petition.
As we have demonstrated above, Petitioners'ovel request for a post-licensing antitrust review of FPL's existing Section 104b operating licenses for Turkey Point Units Nos.
3 and 4 and St. Lucie Unit No.
1 is grossly defective both procedurally and substantively.
Zn a slightly different context, the Appeal Board has referred to "the need to preserve the integrity of the hearing process by 104/
discouraging the unjustifiably late filings of intervention petitions."
Zn,another. proceeding where a late petition gas filed "but three weeks before the hearing was scheduled to commence,"
the Appeal Board stated:
"Thus Petitioner's procrastination made it inevitable that its entitlement to intervene could not be finally resolved until just before the hearing began, if then.
Simple fairness to all parties in these proceedings mandates that such practices not be 105/
condoned."
The instant Petition threatens the integrity not, only of the hearing process but'f the carefully structured antitrust review
/~.
~
t"'
P'ver.
Salzman) 105/ North Anna, ALAR-289,
~su ra, 2
NRC at 400.
I framework set forth in the Act and the Commission's regulations.
C If a'etitioner filing 2-1/2 years late can benefit from his own procrastination and obtain significant leverage over the applicant who has relied on a decision reached years earlier, then the entire statutory and regulatory scheme for early antitrust review is meaningless.
If a cloud can be cast on operating licenses constituting a significant portion of a licensee's assets which were properly issued without a prelicensing antitrust review by the simple expedient of filing a request for a hearing,: then the entire statutory and regulatory scheme distinguishing between Section 103 and Section 104b licenses is meaningless.
Simple fairness to not only FPL but to all other applicants and licensees who would be subject to the abuse of process reflected in the instant Petition "mandates that such practices not be condoned."
FPL respectfully requests that the instant Petition be summarily denied in all respects.
Respectfull submitted, f~
A. BouRnigh
, Jr.
- wenstein, Ne an, eis 6 Axelrad 025 Connecticut Avenue, N.
W.
Washington, D. C.
20036 (202) 833-8371 (7
lg I. /?i'all
~
John E. Mathews, Jr.
- Mathews, Osborne,
- Ehrlich, M att, Gobelman 6 Cobb
'1500 American Heritage Life Building Jacksonville, Florida 32202 (904) 354-0624 Counsel for Florida Power 6 Light Company Date:
September 1,
1976
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATO14IC SAFETY AND LICENSING BOARD In the Hatter of.
FLORIDA PONER AND LIGHT COMPANY
(St. Lucie Plant Unit No.
2)
(St. LUcie Plant Unit No. 1)
'Turkey Point Plant Units No.
3 and
)
)
) Docket No. 50-389A
) Docket No. 50-335A
) Docket Nos.
50-250A 4)
)
50-251A CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of the following:
Response
of Florida Power And Light Company In Opposition To:
Joint Petition Of Florida Cities For Leave To Intervene Out of Time; Petition To Intervene; and Reauest For Hearing has been served on the persons shown on the attached list by hand delivery or deposit in the United States mail, properly stamped and addressed on September 1, 1976.
C unsel for Florida Power
& L:ght Company
Robert A. Jablon Daniel J.
Guttman 2600 Virginia Avenue, N.W.
Washington, D.C.
20037 Secretary U.S. Nuclear Regulatory Commission Washington,D.C.
20555 Lee Scott Dewey Counsel for the Staff U.S. Nuclear Regulatory Commission Washington, D.C.
20555 David A. Leckie Antitrust Division Department of Justice P.O.
Box 7513 Washington, D.C.
20044 Docketing and Service Station Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C.
20555 (Original and 20 copies)
Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington,D.C.
20555 Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555
n PA~AAS AhN; ATTORhTfGV!ERR
/J(AP4UA'OIVI$1ON gepadnmnf af J<nstice gVnsfptgbm, P.S.
20530
'ETTA'CHNENT A N0y 14 1973 Howard K. Shapar, Esauire Assistant General Counsel Licensing and Regulation U. S. Atomic Energy Corunissio'n Washington, D. C.
20545 Re:
Florida power 9 Light Company St. Lucie Plant:, Unit No.
2 AEC Docket No. 50-389A De artment of Just ce Pile 60-415-45
Dear Mr. Shapar:
You have reouested our advice pursuant to the provisions of Section 105 of the Atomic Energy Act oz 1954, as amended oy p;- L.91-560, in regard to the above-captioncd application.
Flox'ida Power 6 Light Company ("Applicant"} has applied for a construction permit for its St. Lucie p ant, Unit No. 2, an 810-megawatt nuclear steam generating unit to be located on Hutchi~son Island off Plox'ida'.s east coast.
Operation of the facility is presently scheduled for September, 1979.
A~IA 1'pplicant is by far the largest electx ic utility in the State of Florida; it serves 'approximately half of the staLe-wide electric 1oad.
Headaua-tered in Miami, its area oz operation includes most of southern Florida and extends up the east coast to the Georgia border.
As oz the end o
- 1972, it provided retail electric power to 574 communities with over 1,500,000 customers.
Its total energy. sales for 1972 were 28,927,808 megawatt hours.
Applicant's summer 1972 peaic load was 6,011 megawatts; its dependable generating capacity at that time was 6,585 megawatts--over 70 percent oz the genera-tion in the area.
its system of generating stations is integrated by over 3,400 miles of high-voltage transmission lines, approximately 90Apercent of the high-voltage trans-mission in the area--including the 230-kilowatt main trans-mission grid ="or southern Florida and the east coast.
~
~
~
~
\\
4h Applicant calls itself "the nation's fastest growing electric utility." Florida's rapid growth has been concen-trated in the area in which it serves; and for the past several years, the Applicant has added more new customers than any other electric utility in the United States.
Applicant's projected peak load for 1980 is 14,475 megawatts--
.over twice its 1972 load--and generating capacity is planned to increase more than 10,000 megawatts to meet that lo'ad.
/
- Applicant's system is directly interconnected and coordinated to some degree with most of the other electric generating systems in Florida:
Florida Power Corporation, Tampa Electric Company, and the municipal systems of Jackson-ville, Orlando, Fort Pierce, ve-o Beach and La¹ Worth.
Applicant coorainates operations'ith still other sys'tems
.through the activities of the Florida Operating Committee.
Some of these coordinating arrangements have been entered into only recently.
Applicant supplies electric power in bulk at wholes a le to seven rural electric cooperative distribution systems:
Lee County, Clay, Glades, Okefenoke, Peace
- River, Suwanee Valley, and Florida Keys.
hith the exception of Florida Keys, which has some generation of its own, these cooperatives are exclusiveLy dist=ibuticn systems'and purchase all of the>
bulk power requirements.
1/
Applicant also supplies bulk power to suppiement the generation of two small municipal
- systems, Homestead and Now Smyrna. Beach.
Competition There is substantial and vigorous actual and potential competition among electric utilities in Florida in both bulk, power supply and retail distribution markets.
Florida law does not xecruire elect ic utilities to restrict their service areas.
The Florida Public Service Commission has approved certain voluntary te ritorial agreements between Applicant and neighboring systems, 2/
1/
Applicant supplies the total requirements of Lee County, most of the xequirements of Clay, Florida Keys, and Glades, and a portion of the requirements or Okefenoke, Peace River and Suwanee Valley.
2/
Some territorial agreements involving the Applicant apparently have taken the form of oral unde"standings and have never been submitted to the Conmission.
2'
Even where these territ:orial agreements exist, neighbor-ing smaller systems do compete with Applicant at retail.
They still compete to attract new loads who can choose t:o locate either in their service areas or in Applicant s.
They still compete to extend service in developing areas on the fringes of their systems.
Finally, they compete.to stay in business; if their costs and retail rates become too high, their customers may force them to sell out to the Applicant.
There is also competit:ion in bulk power supply, where t:erritorial agreements cannot lawfully operate.
The smalle=
systems have Lo basic competitive alternatives; either they produce t:heir own bulk power supply, or they buy their bulk power requirements from the Applicant.
Antitrust Implications of This License Avolication The Department regards Applicant's ownership of the main high-voltage transmission network in sout:hem and east coast Florida as a significant factor in this antit:rust xeview of t:he St. Lucie Unit No.,2 license application.
,...As we have advised you previously,3l there are substantial economies of scale in the business of oenexation and bulk supply of electric power. 'uclear power, which is expected to be the cheapest kind of base-load elect:ric power ava'lable
. to meet: future load growth, may be produced economically only from large generating units--units with a capacity of 500 megawatts or more.
Hose electric generat"'ng systems cannot install and market power from such large units on their own.
They can employ large units--and achieve the economies of scale necessaxv to compete effectively in today's electr c
power markets--only th=-ough coordination with ot:her generating system.
High-voltage transmission is the necessary med.um for such coordination.
Applicant's control over the transmission network in its area has given it: the power to grant or deny access to coordina-tion--and thereby access to the benefits
.a large-scale, 3/
~E... 1ercer of edv1ce of June 28, 1971, regarding Consumers Power Company (Midland Units 1 and 2),
AEC Docket Hos. 50-329A and 50-330A.
~
~
~
~
low-cost, base-load nuclear generation--to neighboring smaller systems.
There have been some allegations that Applicant may have used this power to deny coordinating benefits to smaller systems or. to take the predominant share of the benefits of such coordination as has been entered into.
The principal'llegations of this nature axe (1) that Applicant insisted upon retail territorial allocation agreements as a prerequi-site to entering into interconnections and bulk power supply transactions with other systems; (2j that Applicant once refused interconnection arrangements to Gainesville in adherence to wholesale territorial allocation with Florida Power Corporation; ~/ and (3) that on one occasion in the 3.960's, Applicant refused to ma1<e available to a rural electric coopexative the coordinating arrangements necessary tp "firm up" its own isolated generaiion.
Applicant's control over regional transmission and ove-access to necessaxy coordinating arrangements for small systems is illustrated by the current problems of two municipal
- systems, Homestead and New Smyrna Beech.
Both have generation of their own and have endeavored to remain in the business o
producing their own bulk power supply and to ezpand their gene-rating faci.litotes to.compete..fcr new and growing loads. 5/
Applicant has interconnected with these two municipal systems for the sale o= wholesale bulk power. 6/
The nature of the interconnection and the tew~
s under whz.ch the power is sold appear to be des"gned for systems without any generation ox systems planning to cease self-generation, rather than for systems seeking to coordinate with othexs.
C 4/
During the*course of our antitrust revi w, the municipal distribution system of Jacksonvill Beach (which presently obtains its full bulk power requirements from the Jacksonville municipal system) adv'ised us 'of a pending recuest to Applicant t.which nas transm ssion lines."lose by> to cons"d r an inter-connection witI it. for the sale of bulk power.
Applicant's ultimate xesponse-to this request should indicate its current policy with regard to sellin~ wholesale bulk power to a retail distribution system seeking an alternative source of bulk
'power supply.=
5/
Homestead now has barely.sufficient generation to meet its Toad requirements, and it lacks reserves.
X<ew Smyrna Beach's generation is.sufzicient to serve approzima~ely half of its oad.
6/ 'There is some'evidence that Applicant earlier had a policy of refusing to sell power at wholesale to municipal systems.
'I Ue are advised that'.Homestead and New Smyrna Beach are negotiating with the Applicant for parallel interconnections at transmission voltage and appropriate coordinating arrange-ments.
Since the instant application mas filed, Homestead and Hem Smyrna Beach have sought omnership participation in oz unit pomer purchases from St. Lucie Unit No,
- 2. as a
m ans of satisfying their future power supply needs in coordination with their own generation.
Homestead and New Smyrna Beach also have 'asked the Applicant to agree to provide transmission services ("wheeling" ) to accommodate future pomer transactions with other systems as anothex means of satisfying their power supply expansion needs.
T¹
~ ollcmin~ example indicates how wheeling might be used.
ETe are advised that the Jacksonville electric system proposes to construct tmo 1,150-megawatt nuclear units and has inauired of other Florida systems, including Homestead
~
and Hem Smyrna
- Beach, whether they would be interested in participating in those units or purchasing unit pomex surplus to Jacksonville's needs.
Applicant, which already has a
. high-voltage interconnection mith Jacksonville, could trans-mit this nuclear pomer to Homestead.and New Smyrna Beach.
Applicant has not yet offered;.
- however, to provide such transmission services to Homestead or i3em Smyrna Beach.
Tiie have noted above that seven ruxal electric cooperative systems purchase some or all of.their bulk pomer reauixements from the Applicant.
Six of these
- systems, 7/ 'and six other distribution cooperatives mho do not obtain any powe'r. from Applicant, are membe s of Seminole Electric Coopexative, Inc.,
a corporation formed to act for its members in solving theix power supply problems.
Seminole has at various times in the past conducted studies to determine the feasibiliLy of alter-native means of power supply for its members.
Zt appears that the possibility of self-generation by these cooperatives as an alternative to purchased power has had the effect of keeping mholesale purchase rates relatively lorn, and therefore the cooperatives have continued to purchase their power requirements from the Applicant and other large generating systems.
- Recently, both Applicant and Florida Power Corporation have filed wholesale rate increases m'ith the Federal Power Commission;
- and, as a result, Seminole is again exploring 7/
The exception is Florida Keys.
power supply alternatives to meet the growing loads of its inembers.
One alternative for the cooperatives would oe to acquire a share of, or purchase unit power from,Applicant's St. Lucia Unit No.
2 (in conjunction with appropria te provi-sions for power delivery, reserve
- sharing, and other forms of coordina tion).
A second a lterna tive would be. to obta in nuclear power from Jacksonville or other systems which may contemplate installing nuclear generation~
arith provision for delivery of that power over Applicant s high-voltage
'ransmission system to those cooperatives with which it is interconnected.
Since the filing o this license application, Seminole has advised ihe Applicant of its interest in partici-pating in St. Lucie Unit No.
2 and in other forms of coordination to achieve a feasible long-range power supply program.
App1icant has recently installed its first two nuclear generating units, Turkey Point Nos.
3 and 4., each with a capability of 728 me awatts.
A third nuclear unit, St. Lucie
. Unit Ho. 1, wi~h 810 megawatts of capacity, is projected to enter service in September, 1975.
Unit No. 2, the subject of the present license application, and also 810 megawatts
'a size, is scheduled for operation in September, 1979.
Hhen
..Unit Ho.
2 comes on. line, Applicant will have over 3,0'00 mega-
'atts of 1arge-scale, logic-cost, base-load nuclear generating capacity.
The marketing of power produced oy this suostant al bloclc of nuclear ge-..eration clearly could impair the compet--
'ive viability of the other systems in Applicant '
area if they are unab e to ezercise a similar opportunity to obtain their power from nuclear genera tion.
Xf systems such as Homestead and Hew Smyrna Beach are denied both access'to nuclear generating units like Applicant's St.
Luce.e No.
2 and access to other systems'uclea-gene-st'on through the use of Applicant's transmission
- system, they will not b~ able to take advantage of nuclear oeneration to meet mowing loads as bu k power suppliers.
Likewise, without similar access to nuclear generation, the feasibility o Seminole's members entering the bulk power supply business as an, alternative to full-requiremen wholesale purchase appears greatly diminished.
Conclusion Our antitrust review led us to the following conclusions:
(1) Applicant is the dominant electric utility in Florida and because of its ownership of transmission, has the power to
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gxant or deny other systems in its area the access to cooxdi-nation--and thus the nucleax power--needed to compete in bulk power supply and retail distribution markets; (2) there is some indication Applicant's dominance may have been enhanced thxough conduct inhibiting the competitive opportunities of the smaller systems in its area; and (3) construction and oporation of St. Lucie No. 2, and the sale'f power therefrom to meet Applicant's load growth and compete.rrith the smaller
. systems in its area could cxeate or maintain a
situation'nconsistent with the antitrust laws if access to nuclear generation were d nied those smaller systems.
Ue related oux concern over these matters to representa-tives of the Applicant.
While denying construction and opera-tion of at. Lucie Unit Ho.
2 could have the effect we feared, they advised us that Applicant would nevertheless seriously consider offering participation in St. Lucie Unit <fo.
2 (with the transmission
- services, reserve
- sharing, and other coordi-nation necessary to support such participation) to the three utilities who, prior to our rendering this advice, have given Applicant notice of their. interest in such participation to meet a portion of their future powez supply reauirements-'-
~i.e. -homestead, Hew-:Smyrna-Beach and Seminole Electric Cooperative.
- Further, because of the status oz Applicant's transmission network as the key to coordination by these systems with others;. the Department requested Applicant: also to consider adopting a policy to facilitate their efforts to obtain access to other. economical power sources.
Xt was indicated that the Applicant's zinal position on these matters will be determined within the nezt 90 days; this would appear to leave sufzicient time to formulate such license conditions as'may be appropriate.
In view of the consideration Applicant is now giving to the auestinn oZ access by other entities to nuclear generation, and the probability t.'";at participation in St. Lucie Un't No.
2 will be made available to certain oz these ent. ties, 8/
the Department does not at this time recommend an antitrust hearing.
Considering that issuance oz ghe construction permit f
8/
In this connection we note also that Applicant will almost cextairiLy.apply to the Commission fox licenses to construct and operate additional nuclear generation units.
Further questions concerning the opportunities of its neighboring sys tems (including systems other than Homestead, Nevi Smyrna
- Beach, and Seminole') for acc ss to the b nezits of nuclear generation may be ripe for resolution in the antitrust review of such license applications.
for St. Lucie Unit No.
2 is not contemplated until early in
- 1975, we believe it reasonable to ask the Commission to abide the outcome of Applicant's 90-day consideration prior to ultimately deciding whether or not to hold an antitrust hearing.
The Department would, of course, be pleased to advise the Commission urther on this auestion or other rele-vant auestions, in the light of whatever offers Applicant may make and other intervening'developments.
Sin erely you BRUCE B.
l'lLSON Acting Assistant Attorney General Antitrust Division
UNlTED STATES ATOMIC ENLRGY COMMISSION ViASHlNGTON,O.C.
20545 Attachment B
gfgtES OC AEC Docket Ao. 50-389A FE~ ~G 19j'q Nr.
Ben H.
Fuqua Senior Vice President Florida Power 8 Light Company Post Office Box 3100 t1iami, Florida 33101
Dear fir. Fuqua:
By letter of November 14, 1973, the Department of Justice recommended that an antitrust hearing was not necessary in connection with the Florida Power 8 Light Company application for St. Lucie Unit 2 in view
~.
of the consideration of the granting of access to this facility to certain entities.
In view of your expressed intent te provide reasonable access to the St.. Lucie Unit with the necessary ancillary arrangements, the fact
~ =. that no antitrust issues have been raised by another in a manner accord-
"'i'ng with the Commission's Rules of Practice, and that no finding has been made that an antitrust hearing" is otherwise required, it is. our position that'he attached conditions would satisfy the staff with regard td the antitrust issues that have been raised in connection with this application and the position of the Department of Justice as expressed in its letter of November'14,
- 1973, and accordingly obviate
'n antitrust hearing.
Accordingly, the attached conditions will be included in any license issued in connection with the above application.
Sincerely,
'($Igned) John j'. O'~~
John F. O'eary Director of Licensing
Enclosure:
Subject commitments cc:
Lon Bouknight, Esq.
~
~I COMMITMENTS FOR FLORIDA POWER 8
LIGHT ST.
LUCIE UNIT 2
'I.
Mith regard to Clay County Electric Cooperative, Inc., Florida Keys E1ectric Cooperative, Inc., Glades Electric Cooperative, Inc., Lee County Electric Cooperative, Inc., Okefenokee Rural Electric Member-r ship Cooperative, Inc., Peace. River Electric Cooperative, Inc.,
and Suwannee Yalley Electric Cooperative, Inc. and. the municipalities of New Smyrna Beach and Homestead:
a.
Licensee will offer each the opportunity to purchase,
.at licensee's
- costs, a reasonable ownership share (hereafter, "Participant's
~
Share" ) of the St. Lucie Plant, Unit No.
2 (the Unit).'
".Licensee's costs" will include all costs associated with develop-
. ment, construction and opey ation of the Unit, determined in
'ccordance with the Federal Power Commission's Uniform System of
- Accounts.
V I'Purchase" means payment, within a reasonable time, of parti-cipant's share of licensee's costs incurred through date of acceptance of the offer, and, thereafter, regular payments of the participant's share of all costs incurred during development, construction and operation of the Unit.
,6
~
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Two or more of the referred-to coops may determine to agg'regate their entitlements from the St. Lucie Unit;2 through a single representative.'n such'event, the licensee shall allocate the delivery of said entitle-ments as designated by the representative to one or more existing or mutually agreeable Florida Power 5 Light Co. delivery points on the combined system provided that such delivery is technically feasible.
~ ~
b." Participant will notify licensee of its acceptance to participate in St. Lucie 2 within a reasonable time after receipt of the C
offer.
Licensee may retain complete control a'nd act for.the other parti-cipants with respect to the design, engineering, construction, 0
operation and maintenance of St. Lucie Unit 2, and may make all
~
I decisions relevant thereto, in so far as they deal 'with the
'<< ~
re1ationship between the licensee and the. other participants, inc1uding, but not limited to, decisions regarding adherence to AEG health, safety and environmental regulations, changes in construction
- schedule, modiiication or cancellation of the project, and operation at such time and at such capacity levels as.it deems proper, all without the consent of any participant.
., 2.
Licensee shall facilitate the delivery of each participant s share of
/
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the output of the Unit to that participant, on terms which are reason-able and will fully compensate it for the use of its facilities, to the extent that subject arrangements reasonably can be accommodated
- from a functional and technical. standooint.
3.
Licensee shall not refuse to operate in parallel to the extent that it is technically feasible to do so with 'the participants and shall provide emergency and maintenance power to participants as required when such power is or can be made available without jeopardizing
A,
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3 power supply to lice'nsee's customers or its other power supply commit-ments.
A separate rate schedule(s) 'shall be est'ablished for such I
emergency and maintenance power exchanges.
4.
At a time when licensee plans for the next nuclear generating unit to be constructed after St. Lucie No.
2 has reached the stage of serious planning, but before firq decisions have been made as to the size and desired completion date of the proposed nuclear unit, licensee will notify all non-affiliated utility systems with peak loads smaller than licensee's which serve either at wholesale or at retail adjacent to areas served by applicant that licensee plans to construct such nuclear unit.
It is recognized that the foregoing conditions are to be implemented
~.
in a manner consistent with the provisions of the Federal Power Act
'and all rates, charges or practices in connection therewith are to
--be subject to the approval of regulatory agencies having jurisdiction over them.
e
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'4
Attachment C
<<.~<'!~~.
FLORIOA POWER 5 UGHT COtv1PANY HAND DELIVERED February 26, 3,974 Mr. John F. O'eary Director Directorate of Licensing United States Atomic Energy Commission Nashington, D.C.
Re:
Florida Power and. Light Company St. Lucie, Unit No. 2, AEC Docket No. 50-389A
Dear Nr. O'eary:
The license conditions attached to your letter of February 25th narc acceptable to Florida Power and Light Company as a resolution of all antitrust matters w'h regard to this Docket.
Accordingly,
'lorida Power and Light Company agrees to inclusion of these condi-tions in the licenses issued in this Docket.
Acceptance of these license conditions is for the purpose of avoiding an antitrust hearing in the proceeding, and is not to be construed as an admission that any situation inconsistent with th antitrust laws would be created or maintained by activities under'n unconditioned license, or that Florida Power and Light Company is otherwise in violation of any of the antitrust laws.
Sincerely, Ben H. Fugua Senior Vice President
Attachment D
GEORGE SPIEGEL ROBERT C. MCOIARMIO SANDRA J. STREBEL ROBERT A. JABLON JAMES N. HORWOOO ALANJ. ROTH OP COIINSEL LAw OFFIGEs S Pl EGEL 8t, MCDI ARM ID 2600 VIRGINIA AVENUE. N. W.
WASHINGTON. O. C. 20037 TELEPHONE (202) 333W500 April 15, 1976 Wrt o ~
~
APP, g 6(qv6 DANIEL I. OAVIOSON t t:ia y
g... I FRANCES E. FRANCIS THOMAS N. MCHUGH, JR.
PETER K. MATT OANIELJ. GUTTMAN
~
JAMES CARL POLLOCK J. A. Bouknight, Jr.,
Esq.
Lowenstein,
- Newman, Reis 6 Axelrad 1025 Connecticut
- Avenue, N.W.
Washington, D.C.
20036 Re:
FP&L, St. Lucie Unit II, NRC 50-389A Dear Lon; The purpose of this letter 'is to respond on behalf of the Utilities Commission of New Smyrna Beach to your offer of 2 mw of St. Lucie Unit II as representing a "reason-able ownership share."
See Tracy Danese's letter to John R. Kelly, January 22; 1976.
c'>>>ject to the Utj.:L'i.ties ommis sion s
R3"T'> TIIT'ITI<
reasonable financing and subject to its reaching necessary legal agreement, operating and transmission agreements with you, 'the Commission accepts your offer of 2 mw.
It.will, of
- course, make all efforts to consummate necessary agreements.
I look forward to working with you towards that end.
The Utilities Commission cannot,
- however, waive its rights to seek a reasonable ownership share from St. Lucie Unit II.
As you know, since the Company's January 22, 1976, letter, I have.had man'y conversations with you to attempt to resolve the matter.
The Utilities Commission has given very serio'us attention to your 2
mw limitation, but it simply cannot reconcile that limitation against he principle that, in light of present,.circumstances, the Utilities"Commission should have an opportunity to acquire at lea'st equal nuclear
. capacity to that which will be possessed by FPGL.
Thus we cannot concede that the above acceptance of your 2
mw offer would resolve the di.fficulties which exist between us.
J..A. Bouknight, Jr.,
- Esq,
.April 15, 1976 The Utilities Commission is also disturbed that your proposed transmission rate applicable to Crystal River III
.(and presumably to St. Lucie) makes no allowance for a joint rate with Florida Power Corporation or for proper functional allocations necessary to allocate costs fairly between the Utilities Commission and FP&L. s other services.
In addition, an analysis shows your rate proposal to overstate allocable transmission costs.
The high level of your proposed trans-.
mission charges are especially discouraging in light of your unwillingness to allow general transmission rights to New Smyrna Beach or to make provision for participation through capital investment in your transmission facilities as was proposed by John Kelly in his November 13, 1974, letter to Ralph Mulholland.
~r <14
. ~
As you recall, NSB initially proposed the purchase of 30 mw from St. Lucie No.
2 under a "sell back" arrangement similar ta the Company's proposal in paragraph 2 of its March 30, 1976 letter.
Letter. of Tracy Danese to those requesting'articipation'n the proposed South'Dade nuclear units.
After long. negotiations at,.the suggestion of Tracy.:
Danese, I agreed to recommend to the Utilities Commission acceptance of a 3.08 mw share in the hopes that this would facilitate final settlement, even though, as you recall, I and other Ne': Smyrna Beach negotiators vigo cu ly dis gre"d that this 3.08 mw represented a fair share.
See my letter to Harry A. Poth, Esq.,
11/25/75.
lghile any agreement must be subject to the Utilities Commission's approval, in view of my past offers I shall undertake 'again to recommend. settlement by the Utilities Commission and their withdrawal from any St. Lucie litigation, if you will agree to the 3.08 mw share originally proposed by one of your negotiators and to a mutually acceptable trans-mission rate or formula.
If. you cannot agree, the Utilities Commission reaffirms that it desires to purchase 2
mw from St. Lucie II and suggests that a meeting be called between
..the Department of Justice and.the NRC regulatory staff to..
assist in this matter.
I understand from our telephone conversation of two
'weeks ago that Ralph Mulholland had been planning to telephone Bob Bathen concerning the transmission rate.
Subject to your
.approval, I shall request Bob Bathen to call Ralph Mulholland in the hopes that both matters can be resolved.
With good will on both sides, especially in light of what I believe
J. A. Bouknight, Jr.,
Esq.
April 15, 1976 to be the mutual respect between Ralph Mulholland and Bob Bathen,'greement should be possible.
However, if.that is unavailing, T. suggest either a meeting between us or resolu-tion by the Nuclear Regulatory Commission.
Sincerely, l'<
)
PI+
Robert A.. Jablon
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NE)V YOl(1C, 'lVIUh<'sDr1Y, Of'"1'ODL<R 18, 19/3 AeS Cm Oz, J'"Xpazn s~ AMOIDÃ O,S, OI IHP TARGHT Reduction ls Smaller Than Expected Effect Uncertain By RICHARD EDER sr<<< ~ > <o
< ><<v v<<c c<aa
- BEIRUT, banon, Oct. 17&
The Arab oil. rodudng nations prodaimed I ight a monthly cut In export of oil, with the burjtcn to faij on the United States and other nations con-sidcred to be dnfriendly to tip Arab cause.
The Iong.awaited formal dt.
cision to use o>I as a weapon in the hliddle East conflict was announced at the end of an eight. hour mectinjj in Kuwait of n>lnisters from I I countries.
The monthly export redo<
tion was set at 5 per cent of(
each previous month'a
- sale, starting with the level of sales in Scptcmbcr. The measure was st once more
- modest, more flexible and vaguer than had generally been prcdictcd.
A Significant Shiit "lt was about as mild a step as; they could have taken,"
said one oil expert who had talked ttr'Ihe participants.
At Ihe same liine, to have finally come to the use of oil as s'eapon.
as had teen threat-cncd IM years, marks a signi ~
ficant fcvnlution In hfiddlc Easter>t affairs.
Thc f cpts wouhl continue.
month t>y i>>onthunIQ Israel evacuated the tcrrltr 'ccu.
pied ln the 1967 war, made provision to respect Ai;a rights.
~
<>L
~
< ~ ~
i <tbight bc. Japsp.
whose position was gescribed by one partlclpant as that of "odious neutrality,"
might experience some difficulties. It was hard to say what treatment would be given to Britain, wlllch h>ss also
-unued on Page Id, Column 6 SIIIII/'l R "K SCAMP" CKMOV" f
y f
i I
o
.IAII11IIATIOIISIT I Oll HXPORTS HY5j' IContinued From I'age I, Col. 5 1,tried to be neutral.
I The 5
per c nt cutback twould he computed against
<the previous month's exports.
'The cut is'less than it would Ibe it this 5
per cent
<vere tcompuled
<,from soinr single point. Thus. sRer six mon>hst thc actual reduction ivould be 23 per cent instead of 39, and, at the end of s year, 43 per cent instead of 6th The I I countries involveave insisted on avoiding mcssurec that would put relations with Ihe United States beyond
-the point of no return,'
phrase used by the Fgvptian Prrci-dent.
Anwar el Ssdat, in his speech yesterday.
Reductton ls htndesl Tonight's decision appears to take account of llus view. Ihe dimensions of
>he cUI were conciderabiy more modest than Ihe kind of sll ou>
sr.
lion calle<i for hy countriec such ss Syria snd Iraq.
Tt<r tinited Stat<s us<c corn<
17 million barrels of em<le oil and refined products csrh dsv.
snd some 6.4 million hsrrrlc of this are imported. From th<:
Arab countries Ihe Uniteal nf <rudr and hest.
'inr, oil <'stimated variously at ll.5 million to 1.9 million barrels dily.
This werk the I'nitrd Slates" tel<aced figurrc purporting Io jshoic'hst All>rficsns wotll<l not
'he ceriously sffrrtrd e<rn hy
- major cuts in Arab nil pro<lnr-ltion.
cvitlism F.. Simon. chairman ol President Nixon's nil poli<y rnnunit tee. said that Ihe l>nitril; Sls>rc roiild de<riser i>s <on smnplion of oil liy ac nuirh ac.
thre< niillion hsrrrts s dsv if itt minie thr nrrecssrv rffo>t.
I
I ~ ~ ~
~ <
.I,<. a, or.
~ u de>)A Y, 0<. J'.)BER 20, Iyd>>
'll I.IAal tl. 88IITII Ilf<<'
1 II<>ill>leI<Jff<'I h<'f
~ <ll
<< I;lpl>ll y<'s I>f<l<'lit a cll>I>if of Ie>I<s I'<f
~.fade oil and u pf<alcels >o the t>nit and ainu<st doubling r other il>>porters.
Incuueementa Shcek<od
<Iy slllllued allot con-k>dus>fy.-
ol><>~>I>,
Abu Dhai>1, thc nlajdf Arab oil ls, was le~x>fled Io
>liating IOr a multi~
Iollar loan. I>stensil>ly ustrial dl'.eclopmen>.
'as speeu)atil>n, how-at Ihc fends would ab war ef-I>y I J I>y1 bl.ls> l<f 1ef<l'ly all slop petr<>ieu I~I Stat<
pflees I Tile a an aire fused ui jh>
one of produe hc nep million f<>r in 1 herc ever.
I I>c us<a fern P I.ibya Inr thc Af gc I4.j oup pl> ell aI>out I42,000 7, Column 4 I <>lltlllu< I oil ) agc I
CIIta fin Oilta U.S.
Or red bj Libyff Cutoffi'n Oilf red byLibya or U.S.Orde Coo<oooo F oooo>o<o
< MI <
O,mol ~ ~ <BF o< ooodo o< <l.
rectly to> the Vnitcd States and indifecUZ 100,000 baneis of pctroleuln products out of a total Ufiited States consump-tion of >Ibout 174 million bar-rels.
This Ik about 1.4 per cent ol total AjuAcan consumption, 10 per cent of all Arab exports to thc United States and 3.8 per cent.of all Imports by this countqr. I Thc llnportance of the Libyan crude ls shat it has a low sul-phur content and js blended with considefdbly larger amounts of other cr>jde oil to make heat-Ing oil iconfofrn to environ.
mental standards in many East Coast cities.
Ncw York could be parUcu-larly affected by the action be-cause th) Consolidated Edison Company Imports 'a large part of its olj ff>>fn Bahama refin.
eries, whjch use Libyan olI to make other oils acceptable under thj city's dean.air rcgu.
Iaaons.
There i a question of whcth.
er Liby will considcc'ldp-ments to he Bahamas and else-where in the Caribbean in the same cat.gory as shipments to the VnlteII States.
An oil company executive commet>tcd:
"lf the Libyans arc serious about thc oil weap-on, they. will cmbirgo the Cafibbca>I. If it Is just another exercise fn Arab rhetoric, they won'."
I The Lillyans raised the price of oil from $ 4.90 to,$ 8.925 a
barrel. Theaction follows asharp increase
>announced Wcdnes.
dOy by Persian.Gulf produc.
ers, including Iran, whlcll is not Arab.
Venezuela also an.
nounecd,yesterday that sl
~
would read just her oil tax based on the Persian Gulf ad.
- vance, which amounted to 70 pcr cent.
The breakdown of the ncw Ubyan price of $8.925 a barrel was a
$6.979 posted price.
a
$ 1336 premium for low sul ~
phur, a transportation premium of.458 cents because the oil is closer to consumer centers than the Persian Gulf and a.152<cut premium because thc Suez Canal is closed.
The increase Is likely to have the greatest Impact in Europe, which gets mokt of Libya's to-tal production of 2.2 million barrels a
day. Thc resultant rise In prices of oil products will spur already rampant in-(saon.
I John Uchtblau, head of the Petroleum Industry Research Council, commented: "Although all the details are not ln, what the producing countries appear to have done Is to have raised the price of running a factory, heating a home and powering a car around the world by an unprecedented degree."
'TI>IUon Fees Rise The price at the wellhead for domestic oil In the Unithd States ranges bctwccn
$4 a
barrel for "old" oil and slightly inore than
$5 for newly dis-covered oil under thc nation's present Phase 4 guidelines,.
In accordance with Arab pro-ducUon cutbacks announced Wednesday, tho Persian.Gull state of Qatar said yesterday It would cut production by 10 per cent and take additional steps to halt 'supplies to the Vnitod States and other countries that support Israel.
Qatar, which I>ad an average production of 482.MO bafrcls a about 6,000 barrels a day to the United States.
Qatar followed the example o! the area's'oil giant, Saudi Arabia, which on TI>ursday an-nounced that she was cuttlnx back hcr pfoducUon of 8.5 mll-Ik>n barrels a day by 10 pcr cent.
The Vnitcd States gets directly mo'e than 200,MO bar-rels a day from Saudi Arabia.
On Wednesday, 10 Arab oII.
producing >fhtcs innounccd a
minimum 5 pw cent cutback In pfr>ducthn with an additional 5 pcr cent drop fn output each month until Israel evacuates all the territories occupied in 1967.
Arab Alms Unclear hs yet it is undear to both oil industry executives and United States Government of.
flchds as to whether the Arabs intend an across4he.boafrLcut.
back of pf>>ducUon that would affect all consuming countries equally or whether the cutback sttould affect only the United States.
ln Japan, wldch hnports 90 per cent of her oil, Arab diplo-mats told the Foreign Minister, I.fasayoshi Ohlra. that Japan would not be "inconvenienced" by the Arab acUonL Nonetheless, the Japanese Goveft>ment ycmcfday asked thc 24.member OrganizaUon for Economic Cooperation and De-velopment to negoUate with the oil producers on both thc price rises and producUon cutbacks.
ln Seoul, South Korean offi-cials said they were consider-ing rationing plans.
Washington sources said yes-terday that the Administration would not consider the situa-tion serious until at least one million barrels a day of supply had been cut off.
~ NEW'ORK TIIZES, SATURDh Y, OCTOBER 20, 197J
~ Nore Arab Gouerrtmartfs Bar Oil Snpplies for U.S.
Four More A.rab'overnments Cut OffSupplies of Oil to U.S.
By RICII social te we BEIRUT, Lebanon, Oct. 2l-Four Persian Gulf oil producers Kuwait, Qatar, Bahrain and Dubai today announced a
total embargo of oil to the United States.
'Ihe announcements made the cutoff ot Arab oil to thc United States thoorctlcally complete.
Of the l7 million barrels ot crude and heating oil and re-finery products used hy thc United States each day, approx.
Itnatciy 6 pcr cent has been im-ported from the Arab. states.
At tbe same Unfe, thc Hcthcr-landi, which has been accused by the Arabs of being pro.ls.
rael, was the obJect ot reprisals today. Iraq announced the ns.
tlonallzatlon of Dulch oil hold.
Ings in the country. Previously Iraq had nation"llzcd Am:rlcan holdings.
Ilut even the Arab producers themselves'bclfove that tire usc ARD EDER Nm Yah Tls>>
of thc oil weapon against the Unit"d States will have much Immediate
- etfect, although lf main'talncd for a long period It could present serious problems.
There Is, for example. no slmpfc way to prevent oil sold to Euro-pean countries from tlnding its way~to the United States.
Today's moves completed a
second phase of Arab govern-ments'ecision to use oil to put pressure on the Vnltcd States to abandon or reduce Its sup-port'of Israel.
Last Wednesday.
meeting.in Kuwait, tile Arabs announced that each na'tlon would cut oil production.by 5 pcr cent each montk These escalating cuts would continue, It was d'clarcd, until Israel evacuated thc lands taken ln 1957 and made rcsto.
ration to the P lcstlnlan'cf.
Continued on P-ge 20, Cofat<7 I
Continued From Page I, Col, 7 ugees. This ovcr-all squeeze on oil consumers was to be applied flexibly. Countries that gave "concrete assitance" to the Arab cause, i% was announced, would not suffer cuts.
Coun.
tries considered unfriendly-the United States in particular would be made to bear the effects of thc progressive cur.
tallment.
The formula was purposely unclear and flexible. It was de-signed not simply to punish countries for supporting the Aratts insufficiently, but also lo encourage them to change their policies.
Countries that
'adopted a stiffer line toward
'Israel could find themselves placed in a more favored cate.
gory.
At the same time, the use ot the over-all reduction in pto-
- duction, especially as it cs.
calated each
- month, would make R less and less likely that
,the European countries, for in-
.'stance. would allow oil sold to them to be sent to the United IStatcs..
The Kuwait meeting was
)followed by announcements ot more United States military aid to israel and President Nixon's request for a $2.2-billion appro-priation to pay tor it. This seems to have set in motion the second phase of the oi!
squeeze.
Several
- states, among them Saudi Arabia and
- Qatar, an-nounced that the first pro-duction cut would be l0 per cent rather than 5 per cent. In the case
. of Saudi Arabia.
whose production dwarfs that of the others.
the IO per cent cut would replace the first two monthly 5 pcr cent reductions.
The results would be roughly the same, but thc initial bite would bc much harder.
Then over the last three days, the oil states began succes-sively announcing a total em-bargo on oil to the United States.
By tonight these in-.
cluded Saudi
- Arabia, Libya, Kuwait, Abu Dhabi, Qatar, Al.
gcria, Bahrain and Dubai.
The total embargo on the United States could mean that the olhcr form of prcssure, the production cut. willbegin to be felt in Europe and Japan some-what htcr than it otherwise would have done. This is be-cause the United States took close to 10 pcr cent of the Arab output.
TJJK Ntf)V YORK TlhfJ,"S. TJJVRSDA Y, HOVZhfBER 8, 7972 Ilui it will rrquir<'
>me szrr>fi<'r hy all Amrriranc.
h1usetc Not Damaged Wr must hr sure that niir
'ost vnul ne< ds are met
'>rxt and
>h.>i our Iras( im-I p >rten> ae<<vuies are ih< firs(
ln b>> cut hark. and wc must hr sure that while Ihe fat frpm nur cannon>y is being tnnimcd (hr muscle
>s not seriously damayrd.
To help us <.arrv out that resp>nsibility I
am tonight announcing Ihe followmg st<'ps:
Eirst.
I am directing that industr>rs and ut>l>ties which use roal, whirh is our most abundant resource. be prevent-r<l from <onverting from coal to oil. Efforts will also be nude tn convert power plants from the use of coalof oil
. tn the usc of coal.
-Second, we are allocating reduced quantilics of fuel for aircraft.
Now Ihis is 'going
(<< Ica<l tn a cutback of more thun IO pcr cent of the num-ber of flights and some re-scheduling of arrival and de-parture (lines.
Third. there wilt be reduc-tions ot approximately IS pcr cent in the supply of heating oil tor homes anhng work>n>a hours.
fI>llo><'>n>t
>5 r><ill><vip(
nf I'<re>drn(
N>xon's brood.
<oe(
s><f<ll<'ss on rl>rtgy JID>ll
>Voi>or<gtnn!uxt mgh(, os rr-ro<drd by 'l'hr New york 1'>mrs, Goo I rvr>>ing I went to talk tn you tonight about a aerl-ouc national problem.
A problcn> wc must all lace lo grther in the months and years uhcud.
As Amerira las grnwn and prospered m
ra%mt
- years, nor <n<rgy drna>><ls lave be-gun to exceed available sup-f'.
lire. In recent months we ave taken many actions to increase supplies and to rc-dure <oncumption. Itut evan with our l>rst efforts we knew that a period of tempo-rary shortages was inevi.
table.
linf<irtmiutely. our expcc-tu>ions for this winter have noiv bren sharply altered hy thr irrcnt
<onfliat in Ihc t.luhlle East. Ilrrausr of I(>at
>var. most o( the Mi<tdic Its(-
em oil p>odurcrs have re-duced <<vcr.all pr<>durlion und ru> nff their shlpmrn>c of oil to tl>r t>ni>ed States.
I(v Ihc <'Iid <lf ti>is ll>01>tll, morc (lan two million Ixir.
rrls a day nf nil wc expected to import into Ihc ltnited States will no longer bc available.
IO per Cent Short We must therefore face up tn a very stark fact. \\Ve arc heading toward the most acute shortages of cncrgy since Worle at least IO pcr cent short ot our anliclpaled de-ll>a>>ds al>d lt Could fall Shor(
by as much as l7 pcr cent.
Now <<vcn before war broke nut in the I.li<ldlc East thcsc pn>spcrtivc shortages werc thc subject nf intensive dis-ruscsionc an>ong members of my Administra(ion.
Icadcrs of (hc Cnngrrss, Governors, hfayors and oth<'r groups.
I:rom these discussions has emerged a broad agreement that we as a nation must now sct upon a new course.
In the short run, this course means that wc must use legs energy that nieans less heal.
less electricity.
less gasoline In lhe long run il n>cans llut we must develop new sources of energy which will give uc the capacity tn nice( our needs without re-lying on any foreign nation.
The immediate shortage will affect the livcc of each and every one ot us. In our factories.
our
- cars, our homes.
our offices we will have to use lees fuel than wc are accustnmod tn using.
Some school and factory schc<lules may bc realigned.
And some let airplane thghts will be cancclcd.
This does not mean that we'rc going tn run out of
- gasoline, or tha( air travel will slop. or that ave will frceze in nur homes or of.
ficrs anyplace 'in America.
Tlic fuel crisis need not mean genuine suffering tor any American.
16 7l Iv0.df s Jf Gf a Fo=-l Ca'i'is 15 M<><<one oibedeis pel day
- };c 14 U.S. Con".umpf Ion of Polrolount Producfg.
< no>c a )
12
-9 U.S. Produclion of Crudo Oil I
l I
lGQ 1 964 1965 1966 1967 1966 1969 1970 1971 1972 Soiree. Oo<eeooi M<nes
>e> u>e vwa rna<M><or >. >>>s Transcript of President's Address on the Hnerg,y Situation
Fourth. I am or(I<<ring addi-tional reductions in the con.
sumption of <<ncrgy by the Federal Government. Wc have already taken steps to reduce the G>overmnent's consump.
lion by 7 per cent. The cuts must now gn deeper and must bc made by cvcry agen-cy snd every department ln the GovcrnincnL I am direct-ing that the daytime tem-peratures in Fed<<rsl offices he reduced immedis(cly to a level of l><<tween 65 and Gg d<<grec>>.
and that means; in this room, too. ss well as in
<<<<cry otlicr, room in the Whity Hnusc.
In addition. I am ordering that all vchiclcs owned by the F5dcral Government, and there sre over a half a mil.
lion o( them, travel no fasler than 50 miles pcr hour cx-ccpt in emcrgcncies.
This is a step which I have also asked Governors, hlay-ors and local officials to take immcdiatcly with repard to vehicles under their au-thnrity.
Fifth, I'm asking the Atomic Energy Commission to speed up tht.
licensing and con-struction of nuclear planta We must seek to re<luce the time rcquircd to bring nu-clear plants on line, nuclear plants that can produc<<
power To bring them on line from 10 years to 6 years reduce that lime lsg.
Sixth, I'm asking ll>at Gov-ernors and Ilayors reinforce these actions by taking ap-propriate steps st the state an<I local level.
We'vc already learned. for example (mm thc State of
- Oregon, that considerable amounts of energy can bc saved simply hy curbing un-'.
necessary lighting. snd siipht-
~
ly altcrinp the school year.
Stagger Working llours I am rccommcndinp that other communitics followthis, example. And also seek ways to stagger working hours, to encourapc prcatcr use of mass transit and
<<nr pools.
1lo'(v )nilly t()Iles havt'oll g>>ne along the hiphwny or the (rcewny,
<vhcrcvct th<<
case may be, and scen lnui drcds and hundreds n( cars with only onc individual in tl>at car. Thi>> w<<On)st all cooperate to change.
Consistent with sa(c(y and
<<con>>mic
<<onsidrrstions, I
alii ')iso asking G>>>vcfn>>fs to take. <eps to reduce hiphwny
>>peed limits to 50 mil<<If.
This a<<ibm sion<< if it is a(lop(cd on s
nationwide hs>>is <<ould save over 200.000 barrels of oil a
dayjust r<<(luring the speed limit to 50 miles pcr hour.
Now all of these actions will result in substantial savings of energy. More than that. most of these are ac-tions that wc csn lake Fight now without further delay.
The key to their success
- lies, howcvcr, not just here in Washinj;ton but in every home m
every community across this country.
If each o? us joins In this effort. joins with the spirit and (lie dctcrmination that have always graced the American character. then half the battle will already be won.
Additional Steps Dut we should recognize that cvcn these steps as es-sential as they are may not be enough. Wc must be pre-pared to lake additional steps and for that purpose addi-tional authoritics must bc provided by Ihc Congress.
I have also directed my chic( adviser for cncrgy pol ~
icy. Governor IA)ve, and other Adn)inistration o(ficials to
. work closely with the Con.
grcss In dcvcloping an Emer-gency Energy Act.
I mct with the leaders of Congress this morning snd I asked that they act on this
- cgisbtion on a priority basis.
It's bnperative that this legislation be on my drisk (or.
a signature bc(ore the Cong-ress recesses Ibis December.
Dc<<ause of the hard work (hit's already been done on this bill by Senators Jackson and Fannin and others, I am confident that we can meet that goal. And I willhave the bill on this desk and will be able to sign it.
This proposed lcgislatio0 would enable the cxcculive l>ranch to mcct the energy emergency in,several.
im.
portant ways.
- First, it would authorize an immedbte return Io day-light saving time on a ycar-round basis.
'Second, it would provide the ncrcssaf1
~ authority to relax environmental regulations on a
temporary case by case basis. (hus permitting an sp.
propria(e balancing ofour en-vironmental interests, which sll of us sharc, with our en.
ergy requirements which, of cour>>c. src indispcnsabl<<.
Third, it would grant au.
(hority to impose spcfial rn-crgy conservation
- measures, such as restrictions on thc working hours for shopping centers and other commer-cial establishments.
And, fourth, it would sp.
prove and fund increased cx.
pioralion.
dcvclopmcnt and production from our naval pctrolcutn rcscrvcs.
Now.
these reserves are rich sources of oil. From one of them alone. Elk Hills, in Cali-
- fornia, we could. produce more than IG0,000 barrels of oil a day within two months.
Fifth. it would provide the Federal Govcrnmcnt with au.
thority to reduce hiphwsy spccd limits throughout the nation and finally, it would expand the power of the Gov-.
ernment's rcgu'latory agencies to adjust thc sche<lulcs of
- pbncs, ships and other car-r<ci's.
If shortages pcrsisl (i<<spile sll of these actions hnd de.
spite inevitable increases ln the price of energy products it may Ihcn hccomc ncccs.
sarymay become necessary to take even s(ronger m<<asur<<s.
It is only prudent that ivc bc ready to cut Ihe consumption of oil products such as pi>>>>linc by rationing or hy a fair sys(<<m o( laxa-tion aml consequently I have dir<<<<t<<d (list contingcn<<y plans. if (his 4<<c>>n)cs nrr<<s-sary.
h<
pr<hr<<d for that put()>>sc.
SO)11<<Of
.'1'Ou l))iy wl>lid<<f 'ivllcth<<f '<vc f<< Ill<ack Ihe rl<>fk I>> annthrr sg<<. Gas rsti>>ning. Oil sli>>rt-spc>>.
It<<<lu<<<<<l spec(l limi(s.
llicy all sound like a ivsy of life <vc Irft l>chind wi(h Glenn hlillcr in tlie wsr of thr for-ties. Well in fart lair( of oor curr<<nt prob!<'m nlso stems froni war, the war in Ihg htiddl<<Fi>>t. Dnt >>ur deep<<r cnrrgy pr>>hlcm>>
<<on)r.
not from wir hut fr>>m peace and n
~
~ ~ ~
(ron) abun((nn<<c. We are run-ning out of energy today be-cause our c<<on>>my has grown enormously and bc<<ause in prosperity
<vhat werc once
<<onsidcr<<<l luxuri<<>> are now considered nc<<essitios.
C>>nsunie 30 Pcr Ccnl How many of you can r<<n)cn)t>cr when it was v<<ry unusnal (o have a home air-conditioncd? And yet Ibis is very co>>noon in almost all parts of the nalion.
As a
result, thc average American willconsume as much energy in thc next seven days as most other pcoplc.in the world will consume in an
'ntire year.
We have only 6 pcr cent of. (lie world's people in
- America, but wc consume over 30 pcr cent of sll the energy in the world. Now our growing demands have bumped up against the limits of available supply.
And until we provide ncw sources of energy for to-
- morrow, we must be pre-pared to tighten our belts todav.
Lct me turn now.Io our long-range plans.
While a resolution of Ihc immediate crisis is our high-est priority, we must act now to prevent a
recurrcncc of such a crisis in Ihe future.
This is a matter of biparti-san concern. It's going Io re-quire a bipartisan response.
Two years ago, in Ihe first energy message any Presi-dent has ever sent to Ihe Congress.
I called attention to our urgent energy prob.
lem. Last April, this year, I reaffirmed to Ihe Congress the magnitude of that prob-lem, and I called for action on seven major lcgislalive.
initiatives.
Again in June, I called for action. I have done so fre-quently since then.
Dut Ihus. far, not onc ma-jor cneigy bill that I llavc asked for has been enact<<<l.
I realize (hat thc C;ongress has hccn distracted In this.
period.l>y other matters. but.
thc time has now <<onje for the Congress to gct un with this urgent business, provid-ing thc legisbtion that will mcct not only the.current crisis but also the long.range
<<hallcnpe that wc face.
Our failure to art noiv on mir lonp term cncrpy prob-lems could seriously cndsn.
ger the capacity of our (arms and of our factories to cm.
ploy Americans at record.
breaking rates.
Nearly 86-million people arq how at work in Ihis cquntry and to provide Ihe highest standard
~
of livinp wt pr any other i
nation has eve/known in his-tory. Il t'ou(d du<<e Ihe <<a.
'pacity of our farmers to pro-vi<le thc (no<i we nrc(l: it could jcopar<lize our cntirc
'ransnortatlon system; Il
<<oui<i s<<riously 1<<<<ak<<n thc ability of Am<<ri<xi (>>continue (o
1%'e (h>> leadership ivhich
<>nl<'vc can pr>><ide to keep (hc pear< that wc have
<von at such great
<<ost of thou-sands nl our finest young Ainericans.
That is why It is time lo a<<t now on vital energy legi-slation that will aHect our daily lives, not just this year, but (or years to come.
We must have the legislation now which will authorizt con-struction of thc Alaska pipe-line.
I.cgislation which is not burdened with irrtlcvant and unnecessary provi>>ions.
We lilust i)ave I<'glsla(lvc suthof ity to cncoursg<<production of our vast quantities of nat-ural gas, ont of the cleanest nml I><<>>t >>>>urr<<>> of <<ncr>(v.
4'us(
have Ihc legal ability lo s<<t r<>onsht<<
slandsrils for th<<surface mming of ronl. an<I <ve must havt Ihc ofpnnirational s(fu<<-
turcs to <acct an>.
And lhcrcforr lonipht.
ns I did (hi>> morning in in<<<<( ~
il>g will< Ill<<Congr<<>>>>innnl I<<id(r>>
I nhiin urged Ihc Congr<> tn give its a((<<n(i<>>i to tht'nitia(ives I r<<r>>m-.
mended>>ix m>>nths sg>>
(o mc<<t Iht>><<needs that I have drsfrihrd.
A<<sou)ccs I.btrd.
Finally, I hive strrss<<<l r<<-
1><<atcdly Illc ll('ccsslty>>(
i)1 ~
t'r<<n>>ing our energy r<<search snd d<<v<<lopmrnt rffor(>>. I sst June, I ann>>once(l s (iv<<.y<<nr
$ 10 billion pmgrnm lo d< ~
v<<lnp he((rr ways of u>>inp
<'lit'fpy slid Io 'xpl>>f<<. slid dcv<<l(>p ll<'iv t'l)t'rgy>>>>llrt'<<>>.
I.nst nmnth.
I nnn>>un<<<<(l'lans for an imm<<din(t s<<.
<'cl<'mtloll of that pfopi;1<n.
We can take heart in the fact that wc in the United Slates havt half thc workl's known coal reserves.
1Ve have huge untapped sour<<is of na(ural gas.
Wc have Ihe in>>st
&d.
van<<cd nuclear technology known lo inan. Wc have oil in our contincn(al shelves 4Ve have oil shale out m
Ihe wc>>lorn part of the United States.
And we have some of the finest tech<)ical snd s<<icntific minds in the world. In short, we have all tht resources
<vc
'need lo nicct the great chal.
lengc before ua Now. wc must demon>>(rate the will to meet tha(
<<hal-lenge.
In World KVar 11 Amcri<<a was faced with the nc<<cssity
of rapidly developing an
. atomic capability.
The cir-cumstances were great.
Re-spondinq to that challenge this nation brought together
. its (inest sclentihc skills and its (inest administrative skills in what was known as the hlanhattan project. With all the needed resources at its
- command, with the highest riority assigncll to its ef-orts, the htsnhattan Project gave us thc atomic capacity that helped to end the war in thc Pacific and to bring peace Io Nic world.
Twenty years
- later, re-sponding to a different chal.
lcnge, we focused our scien.
tific snd teclmological genius.
on the frontiers of space. Wc
~
pledge<l to put a man on the moon before 1970.
and on July 20. 1909, Neil Af<nstrong made that historic giant leap (or mani'ind when hc stcppcd on thc moon.
The lessons of thc'pollo project snd of Ihe earlier Manluttan Projcrt are thr came lessons that src (augh<
hv Ihe win<le of American h'<story. Whenever thc Ameri-can people afc fa<'cd with a clear goal and they'rr chal-lenged tn meet it, <vc can do extraordinary thinps.
Today the clullcngc ic (o regain th<< ctrrng(h wc hsd earlier in (hie century the strcng(h of self sufficiency.
Scrvicc 0( Pcscc Our ability to meet our own energy needs is directly limited to our continued abil.
ity to sct decisively and in-dcpendcntly.
at home snd abroad. in the service of peace not only for America. but for all nations in thc world:
I have onlcrcd funding of this effor( to achieve self-suffiriency Isr In exrcsc of Ihe funds that werc expended in thc h1snhst tan Projcf(. But money is only nnc of Ihc in-gredients essential to the suc-cess of surh a project.
We must also have a un>.
fied commi(ment to that goal.
We must have uni.
(lcd direction of the cf(ort to accomplish it Because of Ihc urgent need for an organiration (hst
, would provide fofusrd I<ad.
cfsl>lp (of thIs c((oil, I i<<i<
.<aking thc'ongress to ron.
sider my propocaI for sn Fncrgk Research snd D<vrl.
npmc<it Ailminis(ration. crps.
fa(e ffom any <<(lie<gsn< ~
zstionsl ini(ia(ives.
Aml In enact thic lcgisls.
linn in (hc prcscnt scccion of (h>> Congrcs'c..
I.rt us unite in rommi((ing Ihc rcsourccs nf (IIIc nation to s
insjor nrw cn<trsvof.
An tn<II'svof (h,'ll
<<1 (hic hircn(cnnisl rrs
<vr can ap-prfis(cly fall Project Imlr-1<cn<lrnn.
1st nc cct ac our ns(ional goal. in Ih< cpiri( of hpolln
- iud >vi(h Ihc d<'i<'f<i<<ns(<o<l n(
Ihc blsnhs<(sn Project.
that hy (h<
cnd o(
thic deradr.
wc will hav>> <icvrl" opcil the p<itcntisl (o
o>c>>t our own cnrrgy nrc<ls with.,
ou(
d<pcn<linp nn any for-eign enemyforeign energy sources.
Some llsrdship Let us pledge that by 1990 under Project Indcpcndcnce
>>e shall l>e able to nieet America's energy nccdc from America's own energy re.
sources.
In speaking to you tonigIJ(
in terms ss direct ss these my concern hac been to by bc(ore you thc full facts of
. the nation's energy shortage; It is important that each of us understands what thc sit-us(ion ic, and how Ihc e(forts wc together can take to help
.Io meet it are essential to our total cf(ort.
~ No people in the world perform niore nobly than the American people when called upon Io unite In (ne scsi.
of their country.
I sm su-c premeiy confident that while the days and weeks ahead may bc a tiine rf some hard-ship for many o( us they will also be a
time of renewed commitmcnt and concentra-tion lo the na(ional Interests.
We have an energy crisis, but (here is no crisis of the i American cpirit.
Lct us go.
forward then doing what nccds to bc uone.
proud of.
what we have accomplished lope(her in the past. snd con-fident of wlut we can acc<o<n-phsh together in the fu(ure.
1st us find in this time of ~
national necessity a renewed awareness of our capacities as s people, a dccpcr sense of our responsibilities as a
nation. and an increased un-d>>rstandin gthst thc measure and the meaning of America hss always been detcrniincd hy the devotion which each
<>f us brings to our duty as.
c<(izcns of A<nerica.
I should like Io close with a personal note. It is Just one cv'ir 'lgo tli:it I wss fc.cicdcd ac Prcsidcnt o( the United Sis(rc of America.
During thic psst yrar we have made great progress in acliicving (hr go<sic that I
have sct (or(h in my re.election cam-paign.
EVC have ended the longest war in America's his-(orv. All of our prisoners of ivsr have been rc(urncd home.
hnd for the first time In 29 years no young Americans are heing drafted into the hfn>cd Services.
Deplorable tVs(crgs(e
" " vc made progress to.
i<"<r<f our posl o( s peritv>>ithou(>>ar Thc rctc of uncmplnymcnt is down to
<.5 pcr rent'vhifh is lhc lowest uncmploymcnt in peacetime (hat <ve'vc had in IG years. And w>> are finally beginning to nuke pr<<grrss in <>ur fight sgsinct the risc in Ihc cost of living.
Th>>cc src suhc(sntisl a< hicvcmcnts in this year 197(L Bul I unuld hc Ircv than
<andi<i it I wnc not (o admit.
ths(
I(lie llss not hccn s<i cacy crsr
<n ionic o(hcr r<
spcnc ss sll of you arc qui(<<
s'lvafc.
Ac s rccult n( Ih<<lrplor<
shlc Wstrrps(c mst(n. pica(
nun>hns of Amcrirsnc j>cvc ha<I douh(c rsisrd ac In (hc int<g<i(y <>I (hc Pr(sidrnt of Ihc l<ni(cd Statcc. I'cc rvcn no(>>d Ihst somo publica(iona hsv< cslird on mr to rccign (h>> o(fire o( Pfrcidcnt of (hc Uoi(< d Ststcc.
Tonipht I woold likr Io'give my anew< r (o
thoc<
who hivr suppcctcd Ih,it I
r< ~
sign.
I have no intnitlon <vhst.
< vcr r>f walking awny from th>> joh I ivas clef(c<l to do.
ts!ong ss I sm phycirsl(y able. I sm going Io con(inuc io<v oik I<I I<>
I>< hou<c
<Ilv h>r th>> raucc n(
<( r>>c(
pca<r Shins<i.
a<<<i 4<<r Ihc I sue<
o( nrocnnitv. w>il<oo(
nf la(un and>>ithout >>ar at 11'p>C
.<.nd in Ihc months ahead. I chsll d<l clerything that I ran
(<> scc that snv doubts ss tn the intcprity of <l<<msn <<ho
<irrupics the highect office in (hic land-(o rrmo<c (Iu>sc douh(c where they cxis(.
And I a m ron(<dent (hst in those mon(hs ahead.
thc hmrri<sn people willron>
to r<aliee that I ha<>> nnt vio.
lated th<
trust (hai thry placed in m<
whni
<hr<'Icc(cd mr sc Pf<'ci<lcn( of
- h< I'ni(rd Stair s in Ih>> Ius(.
And I
pic<ig>> to you.tn.
<.ight that I si>all always do every(lung I >>sn to hc vor(hv of that trust in the
- u(uf<'I'hank you and good night
ATTACHMENT
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e I THE CO1t1t1T.SS 1ON
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Docke t No.
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ttP7'.-50-1 -"I'3..
CXTXES TO JUDGE Robert:
1'.. Jablon Attorney for Ble For t Piercc Util3.t"."-'uLlol~it;tj of.'llc City of Fo t Pie.".c Gv 3.Iles v3. 11 e A 1 ac;illa coun ty Regional Electric, Wat er and Sever Utilttie", ltoilie -..e~:c1, Klsslmttl"e, LaIicl.:-'ltd, Sebi 3 nQ Utilit3.~ Conti.s ion, Stt r}>>e ant; Taller'l(ssee~
Flor1da j C)
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BEFORE
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- "" I,"'..."" ",. ""..:PEDEML POWER Florida 'Gas Transmission'ompany (Bas'c Magnesia, Tncorporated)
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."": ".'XHITTZ.L.BRXEF OF I
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May. 2 9, '974
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- .Itaw Off3.ces 0f ~
. -.';-.-". "..: '...-Spiegel 6 NCDiarmid' 2600"Virginia'venue, N.N.
- , =-Hash3.ng ton, D.C..
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~'he reason for imposing strict standards is implied in the applications themselves.
These are applications for "extra-ordinary" relief.
Since there is a limited amount of gas available, in derogation of contract and certificate rights, granting these applications has the direct result of taking gas from other customers.
Granite City Steel Co. v FPC, 320 Fed 711 (CADC, 1963),compare Cascade Natural Gas Corporation v El Paso Natural Gas Cor oration, 386 US 129 (1967).
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Fairness demands that the general standards set as a result of 'the FGT tariffs - and the settlement element be followed to the extent possible.
These priorities have a
historic basis; They have been sanctioned by settlement.
It is of moment that the applicants for special relief neither contested the settlement agreement nor appealed from the Commission's Order approving the settlement, both of which occurred last year.
See Statement for citations.
The settlement
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et al, 3/95-121(May 18, 1973).
This takes on practical significance when the importance of planning is recognized.
For 'example, if parties know of a lack of long range availa-bility<<of fuel, they can plan for alternative supplies, make appropriate. equipment
- changes, adjust pricing, and afford notice to customers..
However, freely granting applications for 'special relief negates and even counteracts such planning, forcing parties to make abrupt changes often in adverse market situations.'t is.- precisely'or such reasons that parties have a right to rely on. tariff provisions, settlement agreements and generalized regulations.
See e.g.,
Texas Eastern Transmission Co., y. FPC,...306
- F2d, 345 (CA5, 1962).
Applicants 'laims for special relief are based upon
,'o facts which could not have been known or anticipated at the time of the settlement and Commission 's order.
- Moreover, applicants for special relief, Cities as well as others who would be affected by transferringgas td applicants have the same type.of preferred interruptible contract While per-haps contractual agreements cannot be said to be inviolate in an absolute
- sense, contractual agreements do constitute a means to provide for commercial planning and an os-~g of af airs.
'For this 'reason, the Commission has been admonished many times that its'egulatory authority is to be exercised within the
- context of private agreements.
Eg.,
United Gas Pipe Line Co.v
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L~nsdale Pennsvlvania, v FPC, CADC 73-1031 et al (March 15, 1974).
..10-
- i-'&~~4K XV.
THE COPZXNUED 'UAXLABXLXTYOP NATURAL GAG'
~'O TIlE CXTXES XS-OF VXTAL PUBLXC XNTEREST
'I s
As was stated by Cities'itness
- Phillips, head of an informal organization of the Cities to aid in m~.cong available fuel. supply, the Cities are not seeking either special favors or pecial treatment. as a result qf this proceeding.
(5/966:7-16)
'However, they do recognize their obligation to their citizens and I
='. :-za.tepayers; '
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.'"Granting these four applications for special relief alone would reduce the amount. of gas available to other prefer ed interrupt-ible, customers by an additional 6.5 percent above.already projected
'..::curtailments in 1974.
Xn 1974 the applicants for special relief
-;.:.--::;-, would receive 82.5 percent of their annual cont:xactual
- amounts, hut:
the other. members of the preferred interzuptible class would receive
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- ..'- '8.2 percent; in 1975 the applicants fear specia3. relief would continue
';";:;:;-.,':.-,.to xeceive."82.,5 percent (i.e;,'heix'equests),
while thc rest of the i-a',';.-,:. class 'would,;receive 19'. 6"'percent"'.'6/1073:
21-1075: 1) (Exhibit
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"" ':i'Ks. natural gas mray become less available the impact of
"'::.: '-.':-",granting special exemptions so that certain cu tomers receive the full amounts of theix" claimed needs on'a guaranteed basis becomes
~ ".. ':.'",.-riiore and naze signify;cant
- ..-'. Xn'his ituation the Commission must weigh the importan'e
. of gas and of the needs of other customers.
As an i3.lustration, we
,.:-..=," set forth how =important natural gas is.to the Cities, although wc
-'=".,=.;:. have no doubt that natural gas i;s also of great importance to other
. members. of the preferred interzuptible class who have not partici-
.:- pated. in this litigation.
.:At the outset,'he importance of electricity to ociety
~4 'ust he st'ressed..
Ztprovides the means for a1most ail ha.",io pro-
- '..'.-.=.:.::duction or nearly every product pxoduced in the United State and
.:.-.:;;, 'for all health and welfare needs.
Xndeed, electricity underlies
- ,--'he enti e..structure of modern'ife.
Ahsence of electricity, inevi-
-::: <.".".tably means loss of vital services, such as police pzotection, fire
-:;;-;='.;:.',':- protection,'ealth
'services, watex supply, street lighting and traffic control and humancomfoxt needs (5/917:19-918:3; 918:
19-920:
2; 6/1096:6-1097:3).
This is especially true in Florida where
'. ';.;,-: electricity; serves many of the uses normally served by direct fuel
".".::.."..-;. use elsewhere.~
(Exhibit 50).
- ..:;..~,The.- economics. of direct fuel use in Florida are much less favorable
'han elsewhere in.the United States because of the disproportionate
'amount of aiz. conditioning and reduced amounts of space heating.
On
.';-'o:;:.coldez'ays, 'like elsewheze in the country heati.ng is an <<bsolutc
'.:. "::. necessity.
'owever, in Florida it often pays to utilize the same type of equipment.'for heating which 'i.s used for air-conditioningand th'erefore heat" by electricity--rather than to install furnace or
,-.: other equipment to use"'direct fuels.
(6/1084:C-l."';
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",. Re state the'importance of electricity, because perhaps it: i o obvious and supply has been assured for such a long period
.'.. 'of time in most areas of the country that it is taken for grant:ed.
. However; if the question is amilability of fuel or supply, electri-
..-.- city. production must rank of pximary importance.
- Indeed, becaus
. of th'e necessity of continued supply, as a condition of granting any special relief, should electric service be threatened, a con-
, dition should be applied. to the granting of the applications that such relief would then discontinue.
--.:-';'To the',extent. that claims for special relief are predicate upon general fuel shortage, the utilit:ies would be faced with the
.":-'.."..;.'ame diffi;culties of obtaining alternative supplies and.
a superior
- .. claim; to relief.
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.'. '-'-;"The. same factors that:
'ma1ce electricity a vital service
.=-."- '.make it socially essential that e'lectric xates not be allow~c. to become excessive.
Xndeed, this Commission is well aware of the
.-.",'.-~.- '-problems of large electric rat:e increases.
Because a use of elec-tricity is pervasive, the impact;s of increased costs affect our entire economy and evezybody in it:.
No segment is immune.
The
~."'.'-",'..",, " very-poor or the elderly, who often congregate in Florida on recluced
- . incomes, would be especially hard hit
- by drastic e.ectricity price
" increases'.~+
(5/931:14-932:5);
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- -:".The rise of electricity prices and. i~s implicat on.. are a'larming;" Even without the natural gas shortage, oil pzices have
'inczease'd often more than three-fold and foz spot purchases more
- than six,.fold..
The. need to meet environmental stanc'.ards is likely
..to mean oil at
$ 22 a barrel rather than recent
$ 3 prices.
(5/925:6-
- '. 929: 53; '6/1092: 8-1094: 22).
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."..:."::.- -":,:,'.:.;-".""-:"..-",:,",:.::='his means:that even without considering environmental
"..:'-'.':-"::.-".impacts",-spot: prices or further inflation, substituting oil for
':;.-'.:.:,":;.:"-':na'tural..gas'-by the utilities can easily double electric bills;
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- :--:;:.":,,::,.".'considering, environmental restraints'and spot purchase
- prices, the
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- - -. increase, can':be well over'300 percent.~+*
(6/1092:B-l095:22) exhibit
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'52.
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. The ferti'lizez-and, phosphatefood manufacturers stress the irpor~-
ance of their products arid we=do not'disagree.
However, likewise,
people on'-low incomes can'e restricted in the food, that they can afford.to purchase. because of mounting elect:ricity bills.
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The... arithmetic is'emonstrated in'itness Bathen' Exhibit.ts 51 through
-52
.Today, fuel costs can account for fifty percent of. elect'ric.bills.
Substituting 53 cents mcf natural gas with its
'oil. equivalent of $ 1.50 to
$ 303can and has resulted in a doubling
'to a tripling of electricirty,,costs.
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- Xn viewing these figures, it'must be borne in mind that fertilizer or feed additives are a small pzoportion of grain or
- meat prices," but that fuel cost increases have an immediate and direct impact on the bills of electric users.
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~ The result of increases in fuel cost in Florida would
- =,
- .~:,t:en'd. to. be inuch more severe than elsewhere in the country because
'.:.':.'. 'of. the lacl:rof availability for. the most part of coal resources
- and,
'aga~n, because of the great:er dependency upon electricit:y.
" '.-".."...,'i.s.'a'State whose economy has been built on air-conditioning, which
.::-'.',;"--':-'s Ilargerly -electric. Exhibit:" 50 (6/1081: 9-1084: 18).
'-."P'~nally, 'Cities competitive 'situation shoulQ be tal-en into
- -:;:,:...'- "..-.'.=':account.', If through its orders, the C'ommission will tal:e direct:
"";:.-'::;";-".":.:.action-to gzarit. special exemptions reducing available gas to Cities
': -:-';:.'..::-';,.still =further, it must. recognize that this can have seriou, economic
=.'-.
I"..:,:,,="..',Sz~pacts, on:them.'They,'re surrounded by and are in compet tion with
", -;".,:,",.major'utilities;.- The continued,. existence of Cities as independent:
~,".'":.',.',.'.,:!':.generating: entities.is-of gen ral advantage.
The Commission and
.'..'i;,'""-.';.:conj"ts have-'.often"re'cognized
"-he importance of maintaining competi-
-:..':."'.::;;.,'tion', where'ossible;. in the. electric industry.
For it: can be demonstzatreQ,that; where.there 're comparable sezvices from smaller
~',-".-. 'nd large -'.utilities'.available, this t:ends to have a geneza cost reducing;i-pact and improved efficiency on the 1 rger 'nvcstoz owned
- utility's, well as. advantages
'to Cities.
(6/1097:7-13, 1119:21-1121=
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'-;.': :: -:'--'.,':".:.:.For'istori.c. and still'. exist:ing reasons, Cities are more
-..gas reliant'. than the major inve tor on>ed utilities, Florida Power
":-'and Light,'-'73.orida. Povsez and.. Tampa Electric Company.
Those utilities have =had:greater potential or'ctual access to nuclear power and
-; 'oal in contrast: to Cities..
Fuzthezmore, Florida Power and Florida
- ',,.;..";-.'ower and. Light have been able to obtain independent natural gas
- .',-;-.::; -.contracts from producers,'hich, are transported by Florida Gas.
""'":~ '-';. ('6/1081:5-3.083:6/1097:13-18.
929: 11-931:7) Exhibit 49.
Tran."-.fers
..;.-".'-',.'.,'- -"of-ayailab3e. natural.gas 'rom Cities could have a devastating effect
-': '.'-:". on *the competit:ive situation,.the economics og Cities and the rates th iz citizens must pay for electricity. / Air auality factors further.r mitigate-.against an abrupt transferal of gas.
5/997:19-998:3, 6/1097:
21-1098.': Exhibit. 56)..
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Apart from.the human impacts. of such potential pri.ce increa es, they can affect: the location. of industry and the well-heing of an
. area; (5/932:13-22,.
933 934:.7)..
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. Xt"should be'oted that especially for the small r
- systems, e
"4he necessity of abruptly transferring fuel supply can
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esult ini a.'.lack of available alternate oil supplies.
Tn this
'5.t'is b no means certain that the existing inter ics situation,
'x. 's y n (or underlying intexchange contracts) would be sufficient to main-
'taiii adequate electric 'supply.+~
(6/1083:9-17).
".'.F 11 we note that 'in certain contexts, use of gas for e'nezation has beeri criticized..
'Ne would merely point: out that
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no place here.
Such criticism ha always had the availability of economic ubstitute fuels.
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- -: '.'-;:aa'ts. premise e
--.; '.: ev'er'ts. va z z y, l'd't t:he sudden inczease in oil price" combined with 1&'1'w:
1 >>g 1: 'et o othex uses. 'oreover, because of their competitive location in florida, other altnerative. fuel
'-:.-..'aituatxon xn weir oc
'1 bl Servicing human needs-.-and the economics of
--'--',-.~=,ere. noi avaz.la e.."
eneration.++/
8 "::.'.;;Zloriaa demands availability of natural gas for generation.++
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~ P V 'MS SHOULD NOT BE TAWN PRO1~1 CITIES NXTHOUT
',: -..'-'-'.,;.ADEQUATE CO1~1PEMSATlON.
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e that-the Presiding Law Judge and Comm2.sszon c.ecarte
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t.'x-more of the applications for spectra~
re~me~,
or to gran
. one ox-
'hat 1-the Gazdinier feed stock gas.
Gazdiniez has claimed t: a un-
.: it must have na ura g turalgas for feedstoclc because of the xnhe needs
~'1't f
lternate..fuels'.
Tn other words, it claims it nee s
... su3.tcsb3.
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the.gas to supply its product..
Xt malines no economic claim a i g
- Indeed;. the. economics of t:he Florida Gas Tzansmi. sion Company r
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'".;.:,;;:. pipeline. seas pcredicated upon. such use.
{6/1071:2-107):4).
".'~;'To.the extent and use arguments aze predicated upon hig er
..:-'g-:;-'..'--.'efficiencies of direct" fuel use, they are inapplicable in Florida.
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in terms of total enery conservator.,on, as bat~ een gas and oi tba argument becomes irrelevant.
Xt'sbou18
'be pointed out tbat, ir ed='that electxicity use more fuel that comparably direct as and
(
h'
~ no means certain due to the need to exhaust gas an oil through ch'mneys or otherwise),
the impact of u ing the more ex-ensive.'fuel'er BTU for 'electric generation.is to greatly increase
,-"i';;.:;..electricity costs..
Since electric use will undoubteclly continua, such
- '"""'.-policy'cannot be supported.'.'5'/996:10-997:
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- p*/'le various of the applicants for special relief have averted "o
th "h
4 priority" po it:ion allegedly under other, possible cui-83.r 'ag ez p tailmerit programs, 'smaller cities such as Star):e and earing 1
'.b hi her priority.
These systems are generating a vita pro-
"."'. - duct and':would have all.t:ie problem t:he Comma,ssion. re
- -'..'.':."- obtaining alternat'e supplies of-any.smaller.
user of natural gas-4
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