Easton Utilities Commission v. Atomic Energy Commission, 22184.

• Citation: 424 F.2d 847
• Decision Date: 10 February 1970
• Docket Number: No. 22184.,22184.
• Parties: The EASTON UTILITIES COMMISSION, Petitioner, v. ATOMIC ENERGY COMMISSION and United States of America, Respondents, Philadelphia Electric Co. et al., Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

424 F.2d 847 (1970)

The EASTON UTILITIES COMMISSION, Petitioner, v. ATOMIC ENERGY COMMISSION and United States of America, Respondents, Philadelphia Electric Co. et al., Intervenors.

No. 22184.

United States Court of Appeals, District of Columbia Circuit.

Argued January 9, 1969.

Reargued June 26, 1969.

Decided February 10, 1970.

Mr. Spencer W. Reeder, St. Michaels, Md., for petitioner.

Mr. Marcus A. Rowden, Asst. Gen. Counsel, Atomic Energy Commission, with whom Messers. Charles M. Farbstein and William C. Parler, Attys., Atomic Energy Commission, were on the brief, for respondents. Messrs. Howard K. Shapar, Asst. Gen. Counsel, Thomas F. Engelhardt, Atty., Atomic Energy Commission, and Howard E. Shapiro, Atty., Dept. of Justice, also entered appearances for respondents.

Mr. Arvin E. Upton, Washington, D. C., with whom Messrs. Leonard M. Trosten and Eugene J. Bradley, Washington, D.C., were on the brief, for intervenors.

Before BAZELON, Chief Judge, and WRIGHT, McGOWAN, TAMM, LEVENTHAL, ROBINSON, MacKINNON and ROBB, Circuit Judges.

TAMM, Circuit Judge:

This court's order of April 2, 1969 consolidated this case with cases No. 21,706, Cities of Statesville v. AEC, and No. 21,844, Power Planning Comm. of the Municipal Elec. Ass'n of Massachusetts v. AEC, for en banc argument and consideration. By our opinion of December 5, 1969, we ruled upon the issues involved in the companion cases but reserved consideration of the present case for a separate opinion because of the existence herein of a problem not common to the other cases.

I

The petitioner before us, Easton Utilities Commission, is "authorized to engage in the distribution of electric energy" (Brief for Petitioner at 5) and presently generates all the power that it distributes and sells within the municipality of Easton and its environs. It is not a customer of any of the intervenors nor is it a competitor or in any other way associated with any of those parties. It has, however, been instructed by the Maryland Public Service Commission to study "`the effect on its service and on its economy of operation of effecting an interconnection with another electric generating system'" (Tr. 2608).

The intervenors in this proceeding, Philadelphia Electric Company, Public Service Electric and Gas Company, Delmarva Power and Light Company, and Atlantic City Electric Company, are utility companies operating in the Pennsylvania, New Jersey, Maryland interstate power interconnection known as the P. J.M. Pool.

The respondent Atomic Energy Commission (hereinafter "Commission") is the government agency established by Congress (42 U.S.C. §§ 2011-2296 (1964)) to control the utilization of nuclear power including the granting, suspending, revoking or amending of any license or construction permit encompassing atomic energy as a source of fuel or power.

II

On February 10, 1967, intervenor Philadelphia Electric Company, acting on its own behalf and as a representative of the other three intervenors herein, filed an application with the Atomic Energy Commission for licenses to construct, and later to operate, two nuclear reactors to be located at the Peach Bottom Atomic Power Station of the Philadelphia Company in York, Pennsylvania. The application was filed pursuant to section 104(b) of the Atomic Energy Act, 42 U.S.C. § 2134(b) (1964), which authorizes the Commission to issue licenses for, inter alia, "utilization * * * facilities involved in the conduct of research and development activities leading to the demonstration of the practical value of such facilities for industrial or commercial purposes." The proposed reactors are to be singlecycle, forced circulation, boiling water reactors, each having an initial power rating of 3295 thermal megawatts (1065 electric megawatts) and a somewhat higher ultimate expected power level. The proposed facilities would be owned by all four intervenors as tenants in common with specified undivided interests, and these participants would use the facilities for the generation and ultimate sale of electricity.

The application, upon review by the regulatory staff of the Commission, was found to meet all requirements for the issuance of construction permits, specifically the standards of the Act as implemented by the Commission's regulations relating to the public health and safety, common defense and security (Tr. 2565-2566).

On November 1, 1967, following, of course, the review outlined above, the Commission issued a notice of hearing, which was published in the Federal Register on November 3, 1967, 32 Fed.Reg. 15,403. The notice advised that a public hearing would be held to consider the application for provisional construction permits on December 7, 1967, at a specified location contiguous to the site of the proposed facilities. The notice described the issues to be considered and initially decided by an Atomic Safety and Licensing Board under 42 U.S.C. § 2241 (1964), as a basis for the ultimate determination of whether provisional construction permits should be granted. Included in the notice of hearing were the requirements for leave to intervene as established by the Commission's Rules of Practice, 10 C.F.R. § 2.714 (1969). The notice also stated affirmatively that petitions to intervene "must be received" by the Commission "not later than November 16, 1967" and warned that "a petition for leave to intervene, which is not timely filed will be denied unless the petitioner shows good cause for failure to file it on time." (32 Fed.Reg. at 15,404.)

On November 16, 1967, the City of Dover, Delaware, acting in the capacity of a municipal customer of one of the applicants, filed a petition to intervene in the proceedings. By its petition the City of Dover challenged the authority of the Commission to grant the licenses applied for by Philadelphia Electric Company under the provisions of section 104(b) of the Act. Pursuant to a memorandum and order issued by the Commission which stated that the Commission considered a grant of intervention appropriate, the Board by an order dated December 6, 1967, granted intervention to the City of Dover.

At the hearing conducted by the Board on December 7 and 8, 1967, the City of Dover participated and presented its case challenging the Commission's jurisdiction under section 104(b). The hearing was devoted both to the safety and national security issues specified for hearing as well as the question of licensability of the projects under the provisions of section 104(b).

The Safety and Licensing Board on January 29, 1968, rendered its initial decision in which it ordered the issuance of the provisional permits to the applicants permitting the undertaking of the project construction. The findings of the Board were favorable to the applicants on all issues heard including, of course, the propriety of the license issuance under section 104(b). Pursuant to 10 C.F.R. § 2.764 the initial decision was made immediately effective, subject to review by the Commission, and on January 31, 1968, the provisional construction permits were issued and the construction of the reactors was thereafter undertaken.

Still contending that the Commission lacked jurisdiction to license the reactors under section 104(b) of the Act, the City of Dover filed exceptions to the initial decision, arguing in substance that since the facilities were to be sold by the manufacturer and bought by the applicants for use in the normal course of business, and without government subsidy, the project was without the authorization of section 104(b).

On June 5, 1968, the Commission denied the City of Dover's exceptions. Relying upon its own earlier ruling in the Matter of Duke Power Company, AEC Docket Nos. 50-269, 50-270, 50-287, the Commission held that a section 104(b) licensing procedure was proper upon the facts herein involved. The City of Dover did not file a petition for reconsideration, nor did it seek court review (Tr. 2613-2614).

Now, and for the first time, our present petitioner appears upon the record. On June 17, 1968, Easton Utilities Commission filed a petition for leave to intervene and a petition for reconsideration of the Commission's decision of June 5, 1968. Predicating its action upon the representation that it was satisfied with the City of Dover's representation of its interests until Dover elected neither to file a petition for reconsideration nor to seek court review, Easton renewed the contention that the licensing of these projects under section 104(b) was in violation of the Congressional limitations imposed by that section. Easton's petition, narrating the possibility of its ultimately having to effect an interconnection with intervenor Delmarva, and asserting that it had sought and been refused the right "to contract for its fair share of the capacity and energy entitlement" of the proposed project (Tr. 2609), alleged that it was an aggrieved party because the construction of the Peach Bottom units would affect the future economy of Easton's power supply.

The Commission on September 6, 1968, issued a memorandum and order denying both of Easton's petitions. Contained therein were the Commission's reasons and reasoning for its action (Tr. 2648-50) including the determination, as to the intervention petition, that it was not only untimely but also lacked acceptable justification for its late filing. As to the petition for reconsideration, the Commission concluded that under its rules (10 C.F.R. § 2.771(a) (1969)) such a proceeding may be filed only by a party to the proceeding and that Easton was not, nor was it entitled to become, such a party. The Commission also pointed out that aside from the procedural defects, Easton's petition for reconsideration contained no substantive matter which had not already been considered and passed upon in the Commission's final decision of June 5, 1968.

Thereafter, on September 16, 1968, Easton filed a petition for reconsideration of the Commission's order of ...