[Federal Register Volume 64, Number 121 (Thursday, June 24, 1999)]
[Notices]
[Pages 33916-33927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16073]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-482-LT; CLI-99-19]


In the Matter of Kansas Gas and Electric Company, et al. (Wolf 
Creek Generating Station, Unit 1): Memorandum and Order

    Commissioners: Shirley Ann Jackson, Chairman, Greta J. Dicus, 
Nils J. Diaz, Edward McGaffigan, Jr., Jeffrey S. Merrifield.

[[Page 33917]]

I. Introduction

    Pending before the Commission is a license transfer application 
filed on October 27, 1998, by Kansas Gas and Electric Company (KGE) and 
Kansas City Power and Light Company (KCPL) (Applicants) seeking 
Commission approval pursuant to 10 C.F.R. 50.80 of a transfer of their 
possession-only interests in the operating license for the Wolf Creek 
Generating Station, Unit 1, to a new company, Westar Energy, Inc. 
Currently Wolf Creek is jointly owned and operated by the Applicants, 
each of which owns an undivided 47% interest, and Kansas Electric Power 
Cooperative, Inc. (KEPCo), which owns the remaining 6% interest. The 
Applicants request that the Commission amend the operating license for 
Wolf Creek pursuant to 10 C.F.R. 50.90 by deleting KGE and KCPL as 
licensees and adding Westar Energy in their place.
    Pursuant to the Commission's recently-promulgated Subpart M, 10 
C.F.R. 2.1300 et seq., KEPCo opposed the transfer on antitrust grounds, 
claiming, in a February 18, 1999, ``Petition to Intervene and Request 
for Hearing,'' that the transfer would have ``serious adverse and 
anticompetitive effects'' (p. 5), would result in ``significant 
changes'' in the competitive market (pp. 15-17), and, therefore, 
warrants an antitrust review under Section 105c of the Atomic Energy 
Act, 42 U.S.C. 2135(c). In response to the petition to intervene, on 
March 1, 1999, Applicants filed an ``Answer of Applicants to Petition 
to Intervene and Request for Hearing of the Kansas Electric Power 
Cooperative, Inc.'' Applicants requested that the Commission deny the 
petition because the issues raised were outside the scope of the 
license transfer proceeding, the positions taken were not factually 
supported, and the Commission had not made and should not make a 
finding of ``significant changes'' in the activities under the license.
    By Memorandum and Order dated March 2, 1999, CLI-99-05, 49 NRC 199 
(1999), the Commission indicated that although its staff historically 
has performed a ``significant changes'' review in connection with 
certain kinds of license transfers, it intended to consider in this 
case whether to depart from that practice and ``direct the NRC staff no 
longer to conduct significant changes reviews in license transfer 
cases, including the current case.'' The Commission stated that, in 
deciding this matter, it expected to consider a number of factors, 
including its statutory mandate, its expertise, and its resources. 
Accordingly, the Commission directed the Applicants and KEPCo to file 
briefs on the single question: ``whether as a matter of law or policy 
the Commission may and should eliminate all antitrust reviews in 
connection with license transfers and therefore terminate this 
adjudicatory proceeding forthwith.'' Id. at 200. The Commission also 
invited amicus curiae briefs.
    Briefs and reply briefs have been filed by the Applicants and 
KEPCo. Amicus briefs were timely filed by the National Rural Electric 
Cooperative Association (NRECA), the Nuclear Energy Institute (NEI), 
the American Public Power Association (APPA), the Florida Municipal 
Power Agency (FMPA), the National Association of State Utility Consumer 
Advocates (NASUCA), and the American Antitrust Institute (AAI), and an 
untimely brief was filed by WML Associates (WML).1
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    \1\ WML's brief was filed approximately five days after the time 
provided by CLI-99-05. WML's excuse is that the filing date 
coincided with Passover and the Easter holiday week and created 
unforeseen scheduling problems for it. Although WML has not 
satisfied us that it had good cause for the untimely filing, in the 
circumstances here we have considered WML's comments.
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    Applicants argue that both legal and policy reasons justify the 
elimination of all antitrust reviews in license transfer proceedings. 
They state that by the express terms of Section 105 of the Atomic 
Energy Act, which is the sole source of the Commission's antitrust 
jurisdiction, antitrust reviews are required only at two stages of the 
licensing process: when an application for a construction permit is 
submitted and then when the application for the initial operating 
license is submitted. Applicants' position is that ``Commission 
antitrust review of a license transfer is not authorized by statute, 
nor would such a review be consistent with the purpose of section 105c. 
For these reasons, as a matter of law the Commission should eliminate 
all antitrust reviews in connection with license transfers.'' ``Initial 
Brief of Applicants in Response to the NRC's Memorandum and Order 
Regarding Antitrust Review of License Transfers' (March 16, 1999) 
(Applicants' Initial Brief) at unnumbered p. 11. Applicants state it 
clearly another way: ``Neither section 105c nor Commission case law 
supports a finding that the Commission has jurisdiction to review the 
antitrust implications of a license transfer * * *'' Id. at unnumbered 
p. 18. In addition to their argument that the Commission is not 
authorized to conduct antitrust reviews of transfer applications, 
Applicants also argue that there are compelling policy reasons why the 
Commission should not perform such reviews. Finally, and 
notwithstanding their ``lack of authority'' argument, Applicants 
request that the Commission decide this case not on the absence of 
authority, but rather on the merits of the merger and the antitrust 
issues (i.e., by finding no ``significant changes'' in the Applicants' 
activities).
    KEPCo and NRECA, in their ``Joint Brief of the Kansas Electric 
Power Cooperative, Inc., and Amicus Curiae National Rural Electric 
Cooperative Association'' (March 16, 1999) (KEPCo Brief), argue that 
the Commission may not, as a matter of law, eliminate all antitrust 
reviews in license transfer proceedings. They argue that neither the 
statutory language nor its legislative history hint that Congress 
intended to allow the Commission to eliminate administratively any and 
all antitrust review when a nuclear power facility is sold or 
transferred. They further argue that even if the Commission had the 
statutory authority to eliminate such reviews, it cannot do so in this 
proceeding because applicable regulations ``unambiguously'' require a 
threshold ``significant changes'' determination which can only be 
changed by notice-and-comment rulemaking, which should not be 
undertaken for policy reasons.
    NEI's position, reflected in the ``Amicus Brief of the Nuclear 
Energy Institute on the Issue of Antitrust Reviews in License Transfer 
Cases'' (March 31, 1999) (NEI Brief), is that the NRC has the legal 
authority to, and as a matter of policy should, eliminate antitrust 
reviews in license transfer cases as duplicative of other federal and 
state agencies with mandates to address competitive issues and because 
such reviews divert NRC's finite resources from its fundamental health 
and safety mission and constitute an unnecessary barrier to the 
completion of beneficial license transfers.
    APPA and FMPA, in their ``Joint Brief of the American Public Power 
Association and Florida Municipal Power Agency'' (March 31, 1999) (APPA 
Brief), assert that a license transfer application seeks the issuance 
of an operating license requiring antitrust review and that this 
``proposition is so plain it previously has never been challenged.'' 
APPA Brief at 3. APPA and FMPA argue that the Act, the Commission's 
regulations, and its consistent past practices would be unlawfully 
disregarded were the Commission to abandon antitrust reviews of license 
transfer applications.
    NASUCA supports KEPCo's argument that the Commission may not, as a 
matter of law, eliminate all antitrust reviews in connection with 
license

[[Page 33918]]

transfers. ``Amicus Filing, The National Association of State Utility 
Consumer Advocates'' (March 31, 1999) (NASUCA Brief).
    AAI argues that antitrust is a primary statutory function of the 
Commission which can only be eliminated by Congress, though it can be 
limited by the Commission. ``Motion to Submit Comments and Comments of 
Amici Curiae of the American Antitrust Institute'' (March 31, 1999) 
(AAI Brief) at 4-5. AAI takes the position that the Commission's role 
of focusing an antitrust review on electric industry competitive 
problems cannot be substituted for by other agencies.
    WML argues that the ``Commission's success in conducting 
competitive reviews is unchallenged,'' and that without delaying any 
construction permit or operating license, NRC antitrust license 
conditions have saved ``disadvantaged'' entities millions of dollars in 
``monopoly rents'' and significantly enhanced the competitive 
environment of the bulk power services markets. Amicus Curiae Brief, 
WML Associates'' (April 5, 1999) (WML Brief) at 4. WML points out that 
Congress has not eliminated the NRC's antitrust function and speculates 
that, in view of its history, probably would not do so. Id. at 5.

II. Analysis

    After consideration of the arguments presented in the briefs, and 
based on a thorough de novo review of the scope of the Commission's 
antitrust authority, we have concluded that the structure, language and 
history of the Atomic Energy Act cut against our prior practice of 
conducting antitrust reviews of post-operating license transfers. It 
now seems clear to us that Congress never contemplated such reviews. On 
the contrary, Congress carefully set out exactly when and how the 
Commission should exercise its antitrust authority, and limited the 
Commission's review responsibilities to the anticipatory, prelicensing 
stage, prior to the commitment of substantial licensee resources and at 
a time when the Commission's opportunity to fashion effective antitrust 
relief was at its maximum. The Act's antitrust provisions nowhere even 
mention post-operating license transfers.
    The statutory scheme is best understood, in our view, as an implied 
prohibition against additional Commission antitrust reviews beyond 
those Congress specified. At the least, the statute cannot be viewed as 
a requirement of such reviews. In these circumstances, and given what 
we view as strong policy reasons against a continued expansive view of 
our antitrust authority, we have decided to abandon our prior practice 
of conducting antitrust reviews of post-operating license transfers and 
to dismiss KEPCo's antitrust-driven request for a hearing on the 
proposed Wolf Creek license transfer.

A. The Atomic Energy Act

1. Statutory Framework: The Antitrust Provisions
    Analysis of the Commission's statutory authority must begin with 
the language and structure of the Atomic Energy Act itself. To properly 
interpret both the specific language and the overall scheme of the 
Commission's antitrust authority, it is important to understand the 
background and history of that statutory authority.
    In 1954, Congress wished to eliminate the government monopoly over 
the development of atomic energy for peaceful purposes and provide the 
incentives of competition and free enterprise in the further 
development of nuclear power.2 Since nuclear power 
technology was developed to a great extent at government (i.e., 
taxpayer) expense, Congress believed that its benefits should be 
available to all on fair and equitable terms. Congress was concerned, 
however, that because the construction of large nuclear generating 
facilities was expensive and only the largest electric utility 
companies likely could afford such a capital asset, they could 
monopolize nuclear power plants and exclude smaller utility companies 
from sharing in the benefits of nuclear resources and thereby create an 
anticompetitive situation. It, therefore, was especially concerned that 
smaller electric systems have access to nuclear power plant electrical 
output by sharing in their ownership at the outset. Ownership access by 
itself, however, would be meaningless if the generated electricity 
could not be effectively transmitted and distributed by the smaller 
owners, many of whom were ``captive'' bulk power supply customers of 
the larger, dominant utilities which would be constructing and 
operating the nuclear facilities. Thus, ownership access had to be 
accompanied by other services such as ``wheeling'' of bulk power.
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    \2\ See Report By The Joint Committee On Atomic Energy: Amending 
The Atomic Energy Act of 1954, As Amended, To Eliminate The 
Requirement For A Finding Of Practical Value, To Provide For 
Prelicensing Antitrust Review Of Production And Utilization 
Facilities, And To Effectuate Certain Other Purposes Pertaining To 
Nuclear Facilities, H.R. Rep. No. 91-1470 (also Rep. No. 91-1247), 
91st Cong., 2nd Sess. at 8 (1970), 3 U.S. Code and Adm. News 4981 
(1970) (``Joint Committee Report'') (quoting from legislative 
history of 1954 Act).
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    To alleviate these concerns, Congress amended the Atomic Energy Act 
of 1946 (``Act'') to authorize the Atomic Energy Commission, the NRC's 
predecessor, to conduct an antitrust review, in consultation with the 
Attorney General, prior to issuing a license for a nuclear generating 
facility. As subsequently amended in 1970, Section 105 of the Act, 42 
U.S.C. 2135, requires the Commission to determine whether the 
activities under the license would create or maintain a situation 
inconsistent with the antitrust laws. The Commission, with its unique 
authority over the licenses it issues, also was given the authority to 
remedy such situations by refusing to issue licenses or by amending or 
conditioning them as it deemed appropriate. With this historical 
background in mind, the carefully-crafted antitrust review authority 
given to the Commission can be considered.
    Section 105 of the Act is the sole source of the Commission's 
antitrust authority. Before examining the Commission's specific 
antitrust authority granted in Section 105, it is important to 
understand that this authority is not plenary but instead, as a general 
matter, is limited to certain types of applications or otherwise 
limited in scope or nature. No other provision of the Act grants any 
antitrust authority to the Commission. As the Commission stated some 
years ago:

    We find the specificity and completeness of Section 105 
striking. The section is comprehensive; it addresses each occasion 
on which allegations of anticompetitive behavior in the commercial 
nuclear power industry may be raised, and provides a procedure to be 
followed in each instance.

Houston Lighting & Power Company (South Texas Project, Unit Nos. 1 and 
2), CLI-77-13, 5 NRC 1303, 1311 (1977). Further, the Commission's 
antitrust authority is not derived from its broad powers provided by 
Sections 161 and 186 of the Act. Id. at 1317, 1317 n.12. Thus, absent 
Section 105, the Commission would have no antitrust authority.
    Because the prelicensing antitrust reviews described in Section 
105c. apply only to applications for certain types of licenses 
authorized under Section 103, we set out Section 103 before turning to 
Section 105. Section 103a provides, in relevant part:

    The Commission is authorized to issue to persons applying 
therefor to transfer or receive in interstate commerce, manufacture, 
produce, transfer, acquire, possess, use, import or export * * * 
utilization or

[[Page 33919]]

production facilities for industrial or commercial purposes.

Section 105 (``Antitrust Provisions'') of the Act 3 
provides, in relevant part:

    \3\ A point of clarification is in order concerning ``antitrust 
laws.'' The ``Acts'' explicitly cited in Section 105a include the 
two most basic antitrust laws--the Sherman Act and the Clayton Act--
as well as the Federal Trade Commission Act (FTC Act). Whether the 
FTC Act truly is an ``antitrust'' law is debatable. Clearly, conduct 
that violates the Sherman or Clayton Acts is also cognizable under 
Section 5 of the FTC Act. In FTC v. Cement Institute, 333 U.S. 683, 
690-91 (1948), the Supreme Court specifically rejected the argument 
that because the price-fixing scheme (which the FTC had held was an 
``unfair method of competition'') was cognizable under the Sherman 
Act, the FTC lacked jurisdiction. In general, all conduct prohibited 
by either the Sherman Act or the Clayton Act is within the scope of 
Section 5 of the FTC Act. See FTC v. Brown Shoe Co., 384 U.S. 316 
(1966); FTC v. Motion Picture Advertising Service Co., 344 U.S. 392, 
394 (1953); Times-Picayune Publishing Co. v. United States, 345 U.S. 
594, 609 (1953); Fashion Originators' Guild of America v. FTC, 312 
U.S. 457 (1941). But practices which do not necessarily violate 
either the letter or spirit of the traditional ``antitrust laws'' 
(the Sherman, Clayton and Robinson-Patman Acts) may nevertheless 
violate Section 5 of the FTC Act as unfair or deceptive acts or 
practices affecting consumers, regardless of their effect on 
competition. FTC v. Sperry & Hutchison Co., 405 U.S. 233, 239 
(1972). Whether or not purists would consider the FTC Act as an 
``antitrust law,'' that act is one of the specific acts enumerated 
in Section 105a and we hereinafter include it in our use of the 
phrase ``antitrust laws.''
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    a. Nothing contained in this Act shall relieve any person from 
the operation of the [antitrust laws]. In the event a licensee is 
found by a court of competent jurisdiction, either in an original 
action in that court or in a proceeding to enforce or review the 
findings or orders of any Government agency having jurisdiction 
under the laws cited above, to have violated any of the provisions 
of such laws in the conduct of the licensed activity, the Commission 
may suspend, revoke, or take such other action as it may deem 
necessary with respect to any license issued by the Commission under 
the provisions of this Act.
    b. The Commission shall report promptly to the Attorney General 
any information it may have with respect to any utilization of 
special nuclear material or atomic energy which appears to violate 
or tend toward the violation of any of the foregoing Acts, or to 
restrict free competition in private enterprise.
    c. (1) The Commission shall promptly transmit to the Attorney 
General a copy of any license application provided for in paragraph 
(2) of this subsection, and a copy of any written request provided 
for in paragraph (3) of this subsection; and the Attorney General 
shall, within a reasonable time, but in no event to exceed 180 days 
after receiving a copy of such application or written request, 
render such advice to the Commission as he determines to be 
appropriate in regard to the finding to be made by the Commission 
pursuant to paragraph (5) of this subsection. Such advice shall 
include an explanatory statement as to the reasons or basis 
therefor.
    (2) Paragraph (1) of this subsection shall apply to an 
application for a license to construct or operate a utilization or 
production facility under section 103: Provided, however, That 
paragraph (1) shall not apply to an application for a license to 
operate a utilization or production facility for which a 
construction permit was issued under section 103 unless the 
Commission determines such review is advisable on the ground that 
significant changes in the licensee's activities or proposed 
activities have occurred subsequent to the previous review by the 
Attorney General and the Commission under this subsection in 
connection with the construction permit for the facility.
* * * * *
    (5) * * * The Commission shall give due consideration to the 
advice received from the Attorney General . . . and shall make a 
finding as to whether the activities under the license would create 
or maintain a situation inconsistent with the antitrust laws as 
specified in subsection 105a.
    (6) * * * On the basis of its findings, the Commission shall have 
the authority to issue a license, to rescind a license or amend it, and 
to issue a license with such conditions as it deems appropriate.
* * * * *
    Not surprisingly, the parties' and the amicus briefs focus almost 
exclusively on Section 105c, which describes the construction permit 
and operating license antitrust reviews, the antitrust finding the 
Commission must make, and the licensing remedies available to the 
Commission in the event of an adverse finding. While the language in 
Section 105c unquestionably is at the heart of the determination 
whether an antitrust review is required in connection with post-
operating license transfer applications, we find that the scope of 
antitrust authority granted the Commission in Section 105 as a whole 
sheds considerable light on the correct interpretation of the specific 
language in Section 105c. And as will be seen, the structure of the 
Section 105 scheme, as well as the legislative history of Section 105, 
support the conclusion that Section 105c does not require, and indeed 
does not authorize, antitrust reviews of post-operating license 
transfer applications.4
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    \4\ The issue of our authority to conduct antitrust reviews of 
post-operating license transfers has not been explicitly addressed 
heretofore in any Commission adjudicatory decision (or elsewhere by 
the Commission). While some briefs contain arguments that certain 
past Commission adjudicatory decisions can be read to imply that the 
Commission has asserted such authority, and others suggest the 
opposite, we conclude that at most they reflect an assumption by the 
Commission of such authority, but certainly not a reasoned 
conclusion. Accordingly, past adjudicatory decisions provide, at 
best, marginally useful assistance in resolving this issue.
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a. Statutory Structure
    We start at the beginning, and will examine each portion of Section 
105 in turn. At the outset, Section 105a makes clear that nothing in 
Section 105 relieves any person (e.g., applicant or licensee--see 
Section 11s of the Act) from complying with any of the antitrust laws. 
Further, if any licensee is found by a court to have violated any 
antitrust law, then the Commission is empowered to suspend, revoke, or 
take such other action as it deems necessary, with respect to the 
license issued. Thus, after issuing an operating license, to the extent 
that an antitrust violation is found which may warrant some remedy 
involving the license itself, or ``licensed activities,'' the 
Commission could order a remedy. Similarly, Section 105b requires the 
Commission to report to the Attorney General any information it may 
have with respect to its licensees' anticompetitive practices. As will 
be seen, these provisions assist in understanding the nature and scope 
of the prelicensing antitrust reviews required by Section 105c.
    Section 105c.(1) provides for transmittal of ``any license 
application provided for in paragraph (2)'' and related information to 
the Attorney General, and for advice, with explanatory reasons, from 
the Attorney General regarding the antitrust finding to be made by the 
Commission pursuant to paragraph (5).
    Section 105c.(2) states that the review process provided in 
paragraph (1) ``shall apply to an application for a license to 
construct or operate'' a nuclear power facility but that ``paragraph 
(1) shall not apply to an application for a license to operate a * * * 
facility for which a construction permit was issued * * * unless the 
Commission determines such review is advisable on the ground that 
significant changes in the licensee's activities or proposed activities 
have occurred subsequent to the previous review by the Attorney General 
and the Commission * * * in connection with the construction permit for 
the facility.''
    Section 105c.(5) requires the Commission, with respect to 
applications subject to paragraphs (1) and (2), ``to make a finding as 
to whether the activities under the license would create or maintain a 
situation inconsistent with the antitrust laws * * *.'' In the case of 
affirmative findings, Section 105c.(6) grants the Commission authority 
to refuse to issue the license, to rescind or amend it, or ``to issue a 
license with such conditions as it deems appropriate.''
    The overall structure of the process designed by Congress to 
address its concerns about potential antitrust problems arising from 
the licensing of nuclear generating facilities is evident from the 
nature of its concerns and the

[[Page 33920]]

corresponding scheme provided above. To address the concern over 
smaller utilities' ability to obtain ownership access to a nuclear 
facility (and associated services such as ``wheeling'') before it 
operates and in order to resolve incipient antitrust problems before 
any competitors were damaged, a mandatory and ``complete'' antitrust 
review was provided at the construction permit stage of the licensing 
process.5 At this time, all entities who might wish 
ownership access to the nuclear facility, and who are in a position to 
assert that the activities under the license would create or maintain a 
situation inconsistent with the antitrust laws, are able to seek an 
appropriate licensing remedy from the Commission prior to actual 
operation of the facility, thus realizing their fair benefits of 
nuclear power from the beginning of electrical power generation.
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    \5\ The Commission's traditional process for licensing nuclear 
facilities is known as a two-step licensing process, consisting 
first of a construction permit followed by an operating license. See 
Section 185 of the Act, 42 U.S.C. 2235.
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    This construction permit review theoretically is the broadest 
antitrust review provided in the law, not only because it measures the 
competitive situation against all the antitrust laws, including the FTC 
Act, but also because the standard of anticompetitive conduct and basis 
for a remedy is not the traditional one of antitrust violations but the 
potential for the licensed activities to create or maintain ``a 
situation inconsistent with the antitrust laws.'' 6 At the 
time Congress enacted Section 105, it envisioned this broad and 
comprehensive review at the construction permit phase of licensing a 
facility but, as we shall see, not at other licensing or post-licensing 
phases for the facility in question. Congress believed that at the 
construction phase--before the plant is built and before its operation 
is authorized by the Commission--the Commission would be peculiarly 
well-positioned to offer meaningful remedies, such as license 
conditions, if it found that granting the license would create or 
maintain a situation inconsistent with the antitrust laws.
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    \6\ But see note 22, infra.
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    The Commission's independent antitrust review responsibilities 
diminish from plenary reviews prior to initial licensing to passive 
information-reporting after licensing. Section 105c.(2) explicitly 
states that the Act's formal antitrust review provisions ``shall not 
apply to an application for a license to operate a utilization or 
production facility for which a construction permit was issued under 
section 103 unless the Commission determines such review is advisable 
on the ground that significant changes in the licensee's activities or 
proposed activities have occurred subsequent to the previous review * * 
* in connection with the construction permit for the facility.'' As 
suggested in the legislative history (see discussion below), Congress 
added this restriction--in effect, a prohibition of second antitrust 
reviews at the operating license stage absent a significant changes 
finding--as part of compromise legislation in 1970 intended both to 
require vigorous prelicensing antitrust reviews and to avoid undue 
disruption of utility planning and investment decisions.
    Consistent with the progressively diminishing role Congress 
intended for the Commission regarding the competitive practices of its 
applicants and licensees, Sections 105a and b preserve traditional 
antitrust forums to resolve allegedly anticompetitive conduct by 
Commission licensees. Once a nuclear facility is licensed to operate, 
traditional antitrust forums--the federal courts and governmental 
agencies with longstanding antitrust expertise--are better equipped 
than the Commission to resolve and remedy antitrust violations by NRC 
licensees. To the extent that a court finds antitrust violations that 
arguably warrant some unique ``licensing'' relief that only this 
Commission can provide, such as by imposing conditions on the operating 
license, then 105a provides the Commission with remedial (but not 
review) authority.
    From the mandatory and broad construction permit review to the 
conditional review in connection with the initial operating license, to 
the constricted review authority after issuance of the initial 
operating license (limited to information-reporting), Section 105, in 
concept, describes a logical and progressively more narrow and less 
active role for a Commission whose primary and almost sole 
responsibility under the Act is to protect the public health and safety 
and the common defense and security.7
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    \7\ If the Commission has continuing antitrust review 
responsibility over post-operating license transfers, it conceivably 
could have to conduct at least a ``significant changes'' review 
almost 40 years after the initial operating license is issued, since 
Section 103 of the Act provides that Section 103 licenses are issued 
for up to 40 years. Nothing in the Act or in its legislative 
history--which, as we shall see below, focused on the Commission's 
``anticipatory,'' prelicensing antitrust role--suggests that 
Congress intended to assign the Commission such extensive and long-
lasting antitrust review duties.
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b. Statutory Language
    The overarching structure of the Commission's antitrust 
responsibilities, both the prelicensing construction permit and 
operating license antitrust reviews, as well as the post-operating 
license authority to order a remedy for antitrust violations found 
elsewhere, as described above, is consistent with the very purpose for 
the Congressional grant of specific and limited antitrust authority to 
the Commission. We turn now to our analysis and interpretation of the 
key statutory words and phrases material to the issue of whether 
Section 105 contemplates antitrust reviews of post-operating license 
transfer applications.
    Although the antitrust laws continue to apply to all Commission 
licensees after issuance of the facility operating license and the 
Commission continues to have authority to order licensing type relief, 
if warranted, based on violations of the antitrust laws found by other 
forums (Sections 105a and b), the prelicensing antitrust reviews 
required by Section 105c are limited both in terms of the types of 
applications subject to the review and the threshold for conducting the 
review. Section 105c.(1) requires transmittal of antitrust information 
to the Attorney General only for a ``license application provided for 
in paragraph (2).'' Paragraph (2), in turn, applies to ``an application 
for a license to construct or operate a * * * facility under section 
103'' but limits the review of operating license applications by 
stating that paragraph (1) ``shall not apply to an application for a 
license to operate a * * * facility for which a construction permit was 
issued under section 103 unless the Commission determines such review 
is advisable on the ground that significant changes in the licensee's 
activities or proposed activities have occurred subsequent to the 
previous review by the Attorney General and the Commission * * * in 
connection with the construction permit for the facility.'' Section 
103a provides, in relevant part, that the ``Commission is authorized to 
issue licenses to persons applying therefor to transfer or receive in 
interstate commerce, manufacture, produce, transfer, acquire, possess, 
use, import or export * * * utilization or production facilities for 
industrial or commercial purposes.''
    By its terms, Section 105c.(2) requires a Commission antitrust 
review of applications for certain activities. The only types of 
applications the provision explicitly subjects to antitrust review are 
those for construction permits and operating licenses issued under 
Section 103. Section 103, however, does not use

[[Page 33921]]

either ``construct'' or ``operate'' to identify the activities for 
which the Commission is authorized to issue licenses. These two basic 
terms, which are the hallmarks of the NRC's historical two step 
licensing process (construction permit followed by operating license), 
are conspicuously absent from Section 103. To construct a facility, 
however, is the same as to manufacture or produce a facility. 
``Construct'' in Section 105c.(2), therefore, is equivalent to the 
Section 103 activities of ``manufacture'' or ``produce.'' Similarly, to 
operate a facility is the same as to possess and use the facility. 
``Operate'' in Section 105c.(2) thus is equivalent to the Section 103 
activities of ``possess'' and ``use.'' The only types of applications 
expressly made subject to antitrust review under Section 105c.(2), 
therefore, are applications to manufacture or produce (``construct'') a 
facility and applications to ``possess'' and ``use'' (``operate'') a 
facility, not applications for any other activities requiring a license 
under Section 103.
    Equally as conspicuous as the absence of the words ``construct'' 
and ``operate'' from Section 103 is the inclusion of ``acquire'' and 
``transfer'' in Section 103 as activities explicitly requiring a 
license from the Commission. Yet Section 105c.(2) does not, explicitly 
or implicitly, identify applications to either ``acquire'' or 
``transfer'' facilities as being subject to antitrust review. So the 
only types of applications explicitly mentioned in Section 105c.(2) as 
requiring an antitrust review (construction and operation) are not 
mentioned verbatim in Section 103 but are mentioned using equivalent 
language, while the type of application which is not mentioned in 
Section 105c.(2), but for which an antitrust review is urged by some 
(transfer), is identified verbatim in Section 103 (transfer) as well as 
in equivalency (acquire).
    It would be strange, to say the least, if Congress intended the 
Commission to perform an antitrust review of post-operating license 
transfer (or acquisition) applications but did not mention applications 
for those Section 103 activities, either explicitly or equivalently, in 
Section 105c.(2), but instead mentioned only applications to 
``construct'' and ``operate,'' two commonly used words for the Section 
103 activities of manufacture or produce, and possess and use, 
respectively. Construing Section 105c.(2) in this fashion would violate 
the basic canon of construction that where a particular term is used in 
one section of a statute, neither it nor its equivalent should be 
implied in another section of the same statute where it is omitted. See 
BFP v. Resolution Trust Co., 511 U.S. 531, 537 (1994); R. Mayer of 
Atlanta, Inc. v. City of Atlanta, 158 F.3d 538, 545 (11th Cir. 1998).
    The explicit focus of Section 105c.(2) on applications for only two 
types of Section 103 activities--construction (manufacture or 
production) and operation (possess and use), coupled with the omission 
from Section 105c.(2) of any mention, either explicitly or by 
equivalency, of applications to ``transfer'' (or ``acquire'')--strongly 
suggests that our Section 105c prelicensing antitrust review authority 
does not include applications for post-operating license transfers. 
This conclusion is supported both by the overall structure of the 
Commission's antitrust authority provided in Section 105 and the 
specific language Congress used to authorize prelicensing antitrust 
reviews of only certain types of license applications. Congress's grant 
of limited antitrust review authority to the Commission does not give 
us free rein to conduct across-the-board reviews of license 
applications not specified by Congress. ``The duty to act under certain 
carefully defined circumstances simply does not subsume the discretion 
to act under other, wholly different, circumstances, unless the statute 
bears such a reading.'' Railway Labor Executives' Ass'n v. National 
Mediation Bd., 29 F.3d 655, 671 (D.C. Cir. 1994) (en banc). Accord, 
University of the District of Columbia Faculty Ass'n v. DCFRMAA, 163 
F.3d 616, 621 (D.C. Cir. 1998).
    The only conceivable way to interpret Section 105c to require some 
form of antitrust review of applications to transfer an existing 
operating license is to construe the application to transfer as an 
application for an operating license.8 But if it is so 
construed, Section 105c.(2) brings our antitrust review responsibility 
into play only if there is a ``significant changes'' finding made in 
accordance with the process described in that section. The mandated 
significant changes process, however, does not lend itself to reviews 
of post-operating license transfer applications.
---------------------------------------------------------------------------

    \8\ Such a construction is at odds with reality, since no new 
license will be issued to effectuate a Commission-approved transfer. 
Instead, as will be true in this Wolf Creek case if the Commission 
approves the transfer request, a license amendment will be issued to 
reflect the new licensee. The Commission has characterized such 
amendments as ``essentially administrative in nature'' and not 
involving any significant substantive changes. Streamlined Hearing 
Process for NRC Approval of License Transfers, 63 FR 66727 (Dec. 3, 
1998) (codified at 10 CFR Part 2, Subpart M). An amendment 
reflecting a license transfer does not require a prior hearing. See 
Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), 
CL1-92-4, 35 NRC 69, 77 (1992).
---------------------------------------------------------------------------

    To trigger the Commission's duty to conduct an antitrust review of 
an operating license application, there must be ``significant changes'' 
in the licensee's activities that ``have occurred subsequent to the 
previous review by the Attorney General and the Commission * * * in 
connection with the construction permit for the facility.'' Section 
105c.(2). It is immediately obvious from this language that the 
statutory ``significant changes'' inquiry is not compatible with 
antitrust reviews of post-operating license transfers, for the 
statutory baseline from which to measure ``significant changes'' is the 
facility's construction permit, whereas at the time of post-operating 
license transfers the facility already would have received its 
operating license, and undergone a previous ``significant changes'' 
review. It would be absurd for the Commission to look back again to the 
original construction permit and make the ``significant changes'' 
inquiry anew.
    In short, while the statutory method of making the ``significant 
changes'' finding reflects a common sense approach in the case of the 
initial--original--application for an operating license submitted to 
the Commission by the construction permit licensee, the approach makes 
no sense whatever if a post-operating license application for license 
transfer is construed as the equivalent of an initial operating license 
application and thus force-fit into the ``significant changes'' 
process. A comparison of activities of new licensees with activities of 
other licensees who underwent at least two previous antitrust reviews 
(there could be a series of post-operating license transfer 
applications) for any facility that underwent an operating license 
antitrust review makes no practical sense and also would ignore the 
significant changes explicitly found to exist between construction and 
initial operation of the facility. The statutory scheme and language 
are simply inconsistent with treating post-operating license transfer 
applications as operating license applications.
    Interestingly, the Commission's past practice of conducting 
``significant changes'' reviews of post-operating license transfer 
applications, now being reconsidered in this case, compared the 
activities at the time of transfer with those at the time of the 
previous operating license review, a comparison more logical than that 
required by the statute. We suspect that no one ever suggested that the 
Commission should have been using the statutorily-required

[[Page 33922]]

construction permit review as the benchmark for its ``significant 
changes'' determination for post-operating license transfer 
applications for the simple reason that it makes no sense in reality if 
post-operating license transfer applications are deemed to be 
``operating license'' applications for purposes of a Section 105c 
antitrust review. This, too, strongly suggests that Section 105c cannot 
be read to require Commission antitrust reviews of post-operating 
license transfer applications and that the Commission's past practice 
of reviewing post-operating license transfer applications for 
significant changes is at odds with the clear language of the statute.
    Because the statute does not explicitly address the issue of 
antitrust authority over post-operating license transfer applications, 
however, we turn to the legislative history for additional guidance on 
Congressional intent.
2. Legislative History
    Desiring to end the government's monopoly over the development of 
nuclear power for peaceful purposes, Congress, in 1954, amended the 
Atomic Energy Act of 1946 to provide for further development by private 
enterprise. Because the development of nuclear power had theretofore 
been at government (i.e., taxpayer) expense, Congress wanted to ensure 
that commercial nuclear facilities were accessible to all types of 
electric utility systems, large investor-owned, smaller private ones, 
municipal systems, electric cooperatives, and others, on fair and 
equitable terms. Although large nuclear generating facilities would be 
expensive to construct, the non-capital generating costs were expected 
to be inexpensive (one AEC Chairman erroneously predicted that nuclear-
generated electricity would be ``too cheap to meter''). This meant 
that, absent some mandated means to address this situation, large, 
wealthy, dominant electric utilities could achieve great economies of 
scale by constructing large, expensive nuclear facilities which the 
smaller utilities could not afford to do, thereby increasing the 
already dominant competitive position of the larger utilities in the 
marketplace. To address these concerns, Congress included in the 1954 
Act a requirement that the Atomic Energy Commission ( the NRC's 
predecessor), in consultation with the Attorney General, conduct an 
antitrust review prior to issuing any license under Section 103 for a 
nuclear power facility for commercial or industrial 
purposes.9
---------------------------------------------------------------------------

    \9\ Only commercial licenses issued under Section 103 of the Act 
were made subject to the antitrust review provisions. ``Research and 
development'' licenses issued under Section 104 were exempt from 
antitrust review. The 1954 Act authorized the issuance of commercial 
licenses only upon a written finding that such facilities had been 
``sufficiently developed to be of practical value for industrial and 
commercial purposes.'' For many years after 1954, the Commission 
made no findings of ``practical value'' and issued all licenses for 
the construction and operation of civilian nuclear power plants as 
``research and development'' facilities under Section 104b of the 
Act.
---------------------------------------------------------------------------

    Because nuclear power plants were being licensed in the years after 
the 1954 amendments under Section 104b as ``research and development'' 
facilities, however, no Section 105 antitrust reviews actually were 
being conducted. In 1970, the Joint Committee on Atomic Energy 
identified the Section 105c antitrust review requirement as a major 
roadblock to ``commercial'' licensing under Section 103 and in need of 
clarification and revision. See Joint Committee Report at 13. 
Proponents and opponents of prelicensing antitrust review expressed 
strong positions and emotions from one extreme to the other. Id. at 14. 
Proponents of prelicensing antitrust review feared that, absent such 
review, the large, already dominant utilities would further increase 
their market share and power by monopolizing nuclear power, with its 
large economies of scale, with the smaller private, municipal and 
cooperative systems denied their fair share of nuclear power. These 
proponents, therefore, urged the need and importance of antitrust 
review ``at the outset of the licensing process,'' ``before any 
competitor was damaged'' or ``much money and time has been spent.'' See 
Hearings at 21, 420, 481.10
---------------------------------------------------------------------------

    \10\ Prelicensing Antitrust Review of Nuclear Power Plants: 
Hearings Before the Joint Committee on Atomic Energy, Part I, 91st 
Cong., 1st Sess. (1969), Part II, 91st Cong., 2d Sess. (1970).
---------------------------------------------------------------------------

    Opponents of prelicensing review, on the other hand, believed that 
the Commission's Section 105a and b authority (to report 
anticompetitive conduct of its licensees to the Attorney General and to 
take licensing action to remedy antitrust violations found by a court) 
was sufficient by itself. Joint Committee Report at 14. They believed 
that it would be unreasonable and unwise to delay the construction and 
operation of nuclear facilities by imposing special antitrust reviews 
on those willing to invest in nuclear facilities. Id.
    The AEC proposed an antitrust review at both the construction 
permit and operating license stages of the licensing process but with 
no operating license review in cases where antitrust concerns were 
satisfactorily resolved at the construction permit stage. Hearings at 
38, 481. This proposal was met with strong opposition, including that 
of the Chairman of the Joint Committee. See Hearings at 37-38 (remarks 
of Rep. Holifield). The concern was that after a utility had planned, 
sized and constructed a facility to meet its customers' power 
requirements, including any requirements from the construction permit 
antitrust review, any further review would delay the licensing of the 
facility and unfairly damage the utility's considerable investment. Id. 
The legislation that resulted--including the limitation of such reviews 
to construction permit applications and adding the ``significant 
changes'' trigger for a second antitrust review of operating license 
applications--reflects a careful balancing and compromise of the 
respective concerns and positions. Joint Committee Report at 13. See 
also 116 Cong. Rec. H9449 (Daily Ed., Sept. 30, 1970). The 1970 
amendments, which remain in effect today as reflected in Section 105, 
were passed by Congress after considering the Joint Committee Report.
    As is evident from the language of Section 105c, the Commission's 
antitrust review obligations are triggered by applications for only two 
types of licenses issued under Section 103: construction permits and 
operating licenses. As indicated above, applications for activities 
requiring a license under Section 103 other than enumerated activities 
equivalent to ``construction'' or ``operation,'' such as ``acquire'' 
and ``transfer,'' are not included in Section 105c.(2). The legislative 
history is consistent with this reading. In its Report, the Joint 
Committee 11 made clear that the term ``license 
application'' referred only to applications for construction permits or 
operating licenses filed as part of the ``initial'' licensing process 
for a new facility not yet constructed, or for modifications which 
would result in a substantially different facility:

    \11\ The Joint Committee Report is the best source of 
legislative history of the 1970 amendments. See Alabama Power Co. v. 
NRC, 692 F.2d, 1362, 1368 (11th Cir. 1982). The Report was 
considered by both houses in their respective floor deliberations on 
the antitrust legislation and is entitled to special weight because 
of the Joint Committee's ``peculiar responsibility and place . .  in 
the statutory scheme.'' See Power Reactor Development Co. v. 
International Union, 367 U.S. 396, 409 (1961).

    The committee recognizes that applications may be amended from 
time to time, that there may be applications to extend or review 
[sic'renew] a license, and also that the form of an application for 
construction permit may

[[Page 33923]]

be such that, from the applicant's standpoint, it ultimately ripens 
into the application for an operating license. The phrases ``any 
license application'', ``an application for a license'', and ``any 
application'' as used in the clarified and revised subsection 105 c. 
refer to the initial application for a construction permit, the 
initial application for an operating license, or the initial 
application for a modification which would constitute a new or 
substantially different facility, as the case may be, as determined 
by the Commission. The phrases do not include, for purposes of 
triggering subsection 105 c., other applications which may be filed 
---------------------------------------------------------------------------
during the licensing process.

Joint Committee Report at 29. See generally American Public Power Ass'n 
v. NRC, 990 F.2d 1309, 1311-12 (D.C. Cir. 1993). These remarks were 
made with the narrow issue in mind of clarifying the scope of the terms 
``license application'' and ``application for a license'' used in 
Section 105c and thus reasonably can ``be said to demonstrate a 
Congressional desire.'' See Chevron U.S.A., Inc. v. Natural Resources 
Defense Council, Inc., 467 U.S. 837, 862 (1984). The ``other 
applications which may be filed'' but which do not trigger an antitrust 
review clearly encompass applications for those activities listed in 
Section 103, such as transfers, that do not constitute construction or 
operation.12
---------------------------------------------------------------------------

    \12\ In American Public Power Ass'n v. NRC, 990 F.2d 1309 (D.C. 
Cir. 1993), the Commission's determination that license renewal 
applications were not required to undergo a Section 105 antitrust 
review was upheld because such applications were not ``initial'' 
applications or applications for a ``new or substantially different 
facility.''
---------------------------------------------------------------------------

    In sum, the legislative history of the Commission's antitrust 
authority supports the overall scheme of one mandatory antitrust review 
at the initial construction permit stage of the licensing process and 
one potential antitrust review at the initial operating license stage 
if and only if there are significant changes from the previous 
construction permit review. So, too, does it support the interpretation 
of the term ``license application'' to exclude post-operating license 
transfer applications from an antitrust review based on their being 
interpreted as applications for an initial operating 
license.13 There is no evidence in the statutory text or 
history that Congress expected the Commission to conduct antitrust 
reviews of post-operating license transfers. In such a detailed 
statutory scheme, Congressional silence on such transfers seems to us 
tantamount to an absence of agency authority. At the least, it cannot 
be said that Congress required antitrust reviews of post-operating 
license transfers.
---------------------------------------------------------------------------

    \13\ In its Joint Brief (amicus curiae) (at 6), the American 
Public Power Association and the Florida Municipal Power Agency 
argue that it ``could not have been Congress's intention . . . that 
a utility must undergo an antitrust review if it applies for a 
construction permit, but not if it induces others to construct the 
project and then purchases the already-operational nuclear plant. 
After all, it is the operation of the plant, not its construction, 
that most offers the potential of harm to competition.'' (Emphasis 
in original.) We find it highly unlikely, to say the least, that one 
utility could ``induce'' another to construct a nuclear power plant 
in a sham scheme to obtain operational control of the completed and 
operationally-licensed plant without undergoing the NRC's 
prelicensing antitrust review. Moreover, if that were suspected and 
could be proven, then it would be strong evidence that the inducing 
utility had serious concerns that its market position or competitive 
practices might run afoul of the antitrust laws. In that case, those 
who arguably have been injured could bring a private antitrust 
action or bring the matter to the attention of the Justice 
Department, FERC, the FTC, or other governmental agencies with 
traditional antitrust authority. And if NRC authority over the 
license were considered to be necessary to fashion an appropriate 
remedy, the Commission could exercise its Section 105a authority.
    APPA also argues that Sections 184 and 189 of the Act prevent 
the Commission from foreclosing antitrust hearings on license 
transfers. APPA Brief at 9-10. Section 184 prohibits license 
transfers unless, ``after securing full information,'' the 
Commission finds the transfer in accordance with the Act, and 
Section 189 provides for hearings in certain licensing proceedings, 
including transfers. We disagree. If the Act does not require or 
even authorize antitrust reviews of post-operating license 
transfers, then antitrust issues associated with the transfer are 
not material to the license transfer decision and antitrust 
information is not required to be considered by the Commission, 
except perhaps to determine the fate of existing antitrust license 
conditions. We, therefore, do not believe that these provisions 
provide any obstacle to terminating these antitrust reviews.
---------------------------------------------------------------------------

B. NRC Regulations, Guidance, and Practice

    The Commission's practice has been to perform a ``significant 
changes'' review of applications to directly transfer Section 103 
construction permit and operating licenses to a new entity, including 
those applications for post-operating license transfers. While the 
historical basis for such reviews in the case of post-operating license 
transfer applications remains cloudy--it does not appear that the 
Commission ever explicitly focused on the issue of whether such reviews 
were authorized or required by law, but instead apparently assumed that 
they were 14--the reasons, even if known, would have to 
yield to a determination that such reviews are not authorized by the 
Act. See American Telephone & Telegraph Co. v. FCC, 978 F.2d 727, 733 
(D.C. Cir. 1992). We now in fact have concluded, upon a close analysis 
of the Act, that Commission antitrust reviews of post-operating license 
transfer applications cannot be squared with the terms or intent of the 
Act and that we therefore lack authority to conduct them. But even if 
we are wrong about that, and we possess some general residual authority 
to continue to undertake such antitrust reviews, it is certainly true 
that the Act nowhere requires them, and we think it sensible from a 
legal and policy perspective to no longer conduct them.
---------------------------------------------------------------------------

    \14\ Until recently, the Commission's staff applied the 
``significant changes'' review process to both ``direct'' and 
``indirect'' transfers. Indirect transfers involve corporate 
restructuring or reorganizations which leave the licensee itself 
intact as a corporate entity and therefore involve no application 
for a new operating license. The vast majority of indirect transfers 
involve the purchase or acquisition of securities of the licensee 
(e.g., the acquisition of a licensee by a new parent holding 
company). In this type of transfer, existing antitrust license 
conditions continue to apply to the same licensee. The Commission 
recently did focus on antitrust reviews of indirect license transfer 
applications and approved the staff's proposal to no longer conduct 
``significant changes'' reviews for such applications because there 
is no effective application for an operating license in such cases. 
See Staff Requirements Memorandum (November 18, 1997) on SECY-97-
227, Status Of Staff Actions On Standard Review Plans For Antitrust 
Reviews And Financial Qualifications And Decommissioning-Funding 
Assurance Reviews.
---------------------------------------------------------------------------

    It is well established in administrative law that, when a statute 
is susceptible to more than one permissible interpretation, an agency 
is free to choose among those interpretations. Chevron, 467 U.S. at 
842-43. This is so even when a new interpretation at issue represents a 
sharp departure from prior agency views. Id. at 862. As the Supreme 
Court explained in Chevron, agency interpretations and policies are not 
``carved in stone'' but rather must be subject to re-evaluations of 
their wisdom on a continuing basis. Id. at 863-64. Agencies ``must be 
given ample latitude to ``adapt its rules and policies to the demands 
of changing circumstances.' '' Motor Vehicle Mfrs. Assn. of United 
States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 42 
(1983), quoting Permian Basin Area Rate Cases, 390 U.S. 747, 784 
(1968). An agency may change its interpretation of a statute so long as 
it justifies its new approach with a ``reasoned analysis'' supporting a 
permissible construction. Rust v. Sullivan, 500 U.S. 173, 186-87 
(1991); Public Lands Council v. Babbit, 154 F.3d 1160, 1175 (10th Cir. 
1998); First City Bank v. National Credit Union Admin Bd., 111 F.3d 
433, 442 (6th Cir. 1997); see also Atchison, T. & S. F. Ry. Co. v. 
Wichita Bd. of Trade, 412 U.S. 800, 808 (1973); Hatch v. FERC, 654 F.2d 
825, 834 (D.C. Cir. 1981); Greater Boston Television Corp. v. FCC, 444 
F.2d 841, 852 (D.C. Cir. 1971).
    We therefore give due consideration to the Commission's established 
practice of conducting antitrust reviews of post-operating license 
transfer applications but appropriately accord

[[Page 33924]]

little weight to it in evaluating anew the issue of Section 105's scope 
and whether, even if such reviews are authorized by an interpretation 
of Section 105, they should continue as a matter of policy. Moreover, 
as we noted above, the Commission's actual practice of reviewing 
license transfer applications for significant changes is on its face 
inconsistent with the statutory requirement regarding how significant 
changes must be determined. The fact that the statutory method does not 
lend itself to post-operating license transfer applications, while the 
different one actually used does logically apply, also must be 
considered and suggests that such a review is not required by the plain 
language of the statute and was never intended by Congress.
    In support of the arguments advanced in KEPCo's briefs and some of 
the amicus briefs that the Commission must conduct antitrust reviews of 
transfer applications, various NRC regulations and guidance are cited. 
Just as the Commission's past practices cannot justify continuation of 
reviews unauthorized by statute, neither can regulations or guidance to 
the contrary. Before accepting the argument that our regulations 
require antitrust reviews of post-operating license transfer 
applications, however, they warrant close consideration.
    Section 50.80 of the Commission's regulations, 10 C.F.R. 50.80, 
``Transfer of licenses,'' provides, in relevant part:

    (b) An application for transfer of a license shall include 
[certain technical and financial information described in sections 
50.33 and 50.34 about the proposed transferee] as would be required 
by those sections if the application were for an initial license, 
and, if the license to be issued is a class 103 license, the 
information required by Sec. 50.33a.

Section 50.33a, ``Information requested by the Attorney General for 
antitrust review,'' which by its terms applies only to applicants for 
construction permits, requires the submittal of antitrust information 
in accordance with 10 C.F.R. Part 50, Appendix L. Appendix L, in turn, 
identifies the information ``requested by the Attorney General in 
connection with his review, pursuant to section 105c of the Atomic 
Energy Act of 1954, as amended, of certain license applications for 
nuclear power plants.'' ``Applicant'' is defined in Appendix L as ``the 
entity applying for authority to construct or operate subject unit and 
each corporate parent, subsidiary and affiliate.'' ``Subject unit'' is 
defined as ``the nuclear generating unit or units for which application 
for construction or operation is being made.'' Appendix L does not 
explicitly apply to applications to transfer an operating license.
    KEPCo argues that the section 50.80(b) requirement, in conjunction 
with the procedural requirements governing the filing of applications 
discussed below, requires the submittal of antitrust information in 
support of post-operating license transfer applications and that the 
Wolf Creek case cannot lawfully be dismissed without a ``significant 
changes'' determination. See KEPCo Brief at 11. While we agree that 
section 50.80 may imply that antitrust information is required for 
purposes of a ``significant changes'' review, linguistically it need 
not be read that way. The Applicants plausibly suggest that the phrase 
``the license to be issued'' could be interpreted to apply only to 
entities that have not yet been issued an initial license. See App. 
Brief at 11.15 Moreover, neither this regulation nor any 
other states the purpose of the submittal of antitrust information. For 
applications to construct or operate a proposed facility, it is clear 
that section 50.80(b), in conjunction with section 50.33a and Appendix 
L, requires the information specified in Appendix L for purposes of the 
Section 105c antitrust review, for construction permits, and for the 
``significant changes'' review for operating licenses. But for 
applications to transfer an existing operating license, there are other 
Section 105 purposes which could be served by the information. Such 
information could be useful, for example, in determining the fate of 
any existing antitrust license conditions relative to the transferred 
license, as well as for purposes of the Commission's Section 105b 
responsibility to report to the Attorney General any information which 
appears to or tends to indicate a violation of the antitrust laws.
---------------------------------------------------------------------------

    \15\ This reading is consistent with the history of section 
50.80(b). Its primary purpose appears to have been to address 
transfers which were to occur before issuance of the initial 
(original) operating license, transfers which unquestionably fall 
within the scope of Section 105c. See Detroit Edison Company (Enrico 
Fermi Atomic Power Plant, Unit No. 2), LBP-78-13, 7 NRC 583, 587-88 
(1978). When section 50.80(b) was revised in 1973 to require 
submission of the antitrust information specified in section 50.33a, 
the stated purpose was to obtain the ``prelicensing antitrust advice 
by the Attorney General.'' 38 FR 3955, 3956 (February 9, 1973) 
(emphasis added).
---------------------------------------------------------------------------

    While we acknowledge that information submitted under section 
50.80(b) has not been used for these purposes in the past, and has 
instead been used to develop ``significant changes'' findings, the 
important point is that section 50.80(b) is simply an information 
submission rule. It does not, in and of itself, mandate a ``significant 
changes'' review of license transfer applications. No Commission rule 
imposes such a legal requirement. Nonetheless, in conjunction with this 
decision, we are directing the NRC staff to initiate a rulemaking to 
clarify the terms and purpose of section 50.80 (b). 16
---------------------------------------------------------------------------

    \16\ In one important respect the language of section 50.80(b), 
quoted above, in fact supports the Commission's analysis of Section 
105 and its legislative history. The phrase ``if the application 
were for an initial license'' certainly demonstrates that, 
consistent with the clearly intended focus of Section 105c on 
antitrust reviews of applications for initial licenses, the 
Commission has long distinguished initial operating license 
applications from license transfer applications. Be that as it may, 
clarification of section 50.80(b) will be appropriate in the wake of 
our decision that our antitrust authority does not extend to 
antitrust reviews of post-operating license transfer applications.
---------------------------------------------------------------------------

    KEPCo also argues that the Commission's procedural requirements 
governing the filing of license applications supports its position that 
antitrust review is required in this case. See KEPCo Brief at 11-13. 
The Applicants disagree, arguing that nothing in those regulations 
states that transfer applications will be subject to antitrust reviews. 
See App. Reply Brief at 3. For the same reasons we believe that the 
specific language in Section 105c does not support antitrust review of 
post-operating license transfer applications, we do not read our 
procedural requirements to indicate that there will be an antitrust 
review of transfer applications. Indeed, the language in 10 CFR 
2.101(e)(1) regarding operating license applications under Section 103 
tracks closely the process described in Section 105c. As stated in 10 
CFR 2.101(e)(1), the purpose of the antitrust information is to enable 
the staff to determine ``whether significant changes in the licensee's 
activities or proposed activities have occurred since the completion of 
the previous antitrust review in connection with the construction 
permit.'' (Emphasis added.) As explained above, this description of the 
process for determining ``significant changes'' is consistent with an 
antitrust review of the initial operating license application for a 
facility but wholly inconsistent with an antitrust review of post-
operating license transfer applications.
    Nevertheless, clarification of the rules governing the filing of 
applications by explicitly limiting which types of applications must 
include antitrust information is appropriate. So too should Regulatory 
Guide 9.3, ``Information Needed by the AEC Regulatory Staff in 
Connection with Its Antitrust Review of Operating License Applications 
for Nuclear Power Plants,'' and NUREG-1574, ``Standard Review

[[Page 33925]]

Plan on Antitrust Reviews,'' be clarified. In conjunction with this 
decision, we are directing the NRC staff to initiate an appropriate 
clarifying rulemaking.

C. Policy Considerations; Other Agencies and Other Forums

    The parties' and amicus briefs, at our invitation, advanced policy 
reasons why the Commission should, or should not, terminate its 
practice of reviewing post-operating license transfer applications for 
antitrust considerations. Presuming that the Commission is free under 
the Act to continue its prior practice, we would abandon it as largely 
duplicative of other, more appropriate agencies' responsibilities, and 
not a sensible use of our limited resources needed to fulfill our 
primary mission of protecting the public health and safety and the 
common defense and security, from the hazards of radiation.
    At the time of the 1970 antitrust amendments to the Atomic Energy 
Act, Congress believed that the Commission was in a unique position to 
ensure that the licensed activities of nuclear utilities could not be 
used to create or maintain a situation inconsistent with the antitrust 
laws. As explained above, the focus of the 1970 amendments was on 
prelicensing antitrust reviews conducted during the pendency of the 
two-step licensing process comprising applications for construction 
permits and initial operating licenses. In contrast to the competitive 
situation which existed in 1970, the current competitive and regulatory 
climate in which the electric utility industry operates is markedly 
different. Key statutory changes substantially enhance smaller 
utilities' ability to compete with the larger generating facilities and 
gain access to essential transmission services. These differences from 
1970 reduce, if not eliminate, the incremental protection of 
competition that the NRC could provide through its antitrust reviews. 
To the extent that the Commission can still be considered to be in a 
unique position vis a vis other governmental authorities to address 
antitrust concerns, such uniqueness surely ends at the time the 
facility is granted its initial operating license.
    In 1992, Congress passed the Energy Policy Act of 1992, Pub. L. 
102-486 (EPAct), substantially enlarging the authority of the Federal 
Energy Regulatory Commission (FERC) to prevent and mitigate potential 
and existing abuses of market power by electric utilities, including 
nuclear utilities. Specifically, the EPAct amended sections 211 and 212 
of the Federal Power Act,17 16 U.S.C. 824j and 824k, with 
respect to wholesale transmission services. Pursuant to these amended 
sections, any electric utility or person generating electricity may 
apply to FERC for an order requiring a transmission utility to provide 
transmission services to the applicant at prices recovering just and 
reasonable costs.
---------------------------------------------------------------------------

    \17\ Section 272 of the Atomic Energy Act provides that every 
NRC nuclear facility licensee is subject to the regulatory 
provisions of the Federal Power Act.
---------------------------------------------------------------------------

    After enactment of the EPAct, FERC issued Orders 888 (April 24, 
1996) and 888-A (March 4, 1997) which in part provide for tariffs to be 
filed regarding transmission service and certain necessary ancillary 
services.18 In Order No. 888, FERC exercised its expanded 
statutory authority and required all public utilities that own, control 
or operate transmission facilities ``to have on file open access non-
discriminatory transmission tariffs that contain minimum terms and 
conditions of non-discriminatory services.'' 19 Pursuant to 
these required tariffs, utilities can now enter into arrangements for 
transmission and ancillary services without instituting proceedings 
under section 211.
---------------------------------------------------------------------------

    \18\ It is our understanding that these FERC orders are 
currently undergoing judicial review.
    \19\ Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities and 
Recovery of Stranded Costs by Public Utilities and Transmission 
Utilities, 61 FR 21,540 (May 10, 1996), (to be codified at 18 CFR 
Parts 35 and 385), reh'g denied in pertinent part, Order 888-A, 62 
FR 12,274 (March 14, 1997), petitions for review pending, People of 
New York, supra n.13.
---------------------------------------------------------------------------

    As a result, FERC now possesses statutory authority overlapping 
that of the NRC under Section 105 to remedy potential and existing 
anticompetitive conduct by the NRC's nuclear facility licensees, at 
least with respect to transmission services. As we noted above, 
transmission services are the services without which access to nuclear 
power facilities is meaningless and which, therefore, were of great 
concern to Congress in granting prelicensing antitrust review authority 
to the Commission. With this expanded FERC authority, however, the NRC 
cannot be said to be in a unique position to address or remedy 
antitrust problems involving access to transmission services. To the 
contrary, NRC antitrust review might even be said to be redundant and 
unnecessary. As FERC stated in Order 888-A, ``unbundled electric 
transmission service will be the centerpiece of a freely traded 
commodity market in electricity in which wholesale customers can shop 
for competitively-priced power.'' FERC Order 888-A, 62 FR 12,275 
(1997). In conjunction with the Department of Justice's broad authority 
to enforce compliance by NRC licensees with the antitrust laws (see 
subsections 105a and b of the Act), this expanded FERC authority and 
enhanced competitive climate for the electric utility industry render 
the NRC's post-operating license antitrust reviews duplicative 
regulation contrary to the sound objective of a streamlined government.
    Since 1970, changes in the Clayton Act also have contributed to 
eliminating any need for an NRC role in reviewing acquisitions of 
nuclear power facilities by new owners. The Hart-Scott-Rodino Antitrust 
Improvements Act or 1976, Pub. L. 94-435, 90 Stat. 1383 (1976), added 
section 7A to the Clayton Act, 15 U.S.C. 18a, which established a 
``waiting period'' notification process which allows the Department of 
Justice and the Federal Trade Commission to screen certain commercial 
transactions such as acquisitions of assets 20 for potential 
violations of the antitrust laws before the transactions are 
consummated. Under section 7A(f), DOJ has the authority to institute a 
court proceeding to enjoin a transaction that it has determined would 
violate the antitrust laws. Since the Clayton Act standard, like that 
of Section 105c, is ``anticipatory'' in nature, designed to permit the 
correction of anticompetitive problems in their 
incipiency,21 the scrutiny of DOJ's pre-acquisition review 
is comparable at least to the NRC's ``significant changes'' review.
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    \20\ The transaction must meet certain threshold jurisdictional 
amounts, but acquisitions of nuclear power facilities always have 
met, and are expected to meet, the requirement and thus are subject 
to the screening process.
    \21\ See generally Houston Lighting & Power Co., CLI-77-13, 5 
NRC 1303 (1977).
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    In summary, the competitive and regulatory landscape has 
dramatically changed since 1970 in favor of those electric utilities 
who are the intended beneficiaries of the Section 105 antitrust 
reviews, especially in connection with acquisitions of nuclear power 
facilities and access to transmission services. For this Commission to 
use its scarce resources needed more to fulfill our primary statutory 
mandate to protect the public health and safety and the common defense 
and security than to duplicate other antitrust reviews and authorities 
22 makes no sense and only

[[Page 33926]]

impedes nationwide efforts to streamline and make more efficient the 
federal government.
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    \22\ Theoretically, the Section 105c.(5) standard of ``whether 
the activities under the license would create or maintain a 
situation inconsistent with the antitrust laws' is broader than any 
used elsewhere in antitrust law enforcement since no actual 
violation is required. As a practical matter, however, it is 
difficult at best to even envision a competitive situation which 
satisfied the Section 105 standard for relief but would not warrant 
relief under traditional antitrust statutes, which have been broadly 
construed by the courts. For example, Section 5 of the FTC Act has 
been held to empower the FTC ``to arrest trade restraints in their 
incipiency without proof that they amount to an outright violation 
of Section 3 of the Clayton Act or other provisions of the antitrust 
laws.'' FTC v. Brown Shoe Co., 384 U.S. 316, 322 (1966). Thus, there 
will be no realistic gap in antitrust law enforcement if the NRC no 
longer performs antitrust reviews of post-operating license transfer 
applications.
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D. Existing Antitrust License Conditions

    Whether or not the Commission conducts a ``significant changes'' 
review of post-operating license transfer applications, it still must 
consider the fate of any existing antitrust license conditions under 
the transferred license. Theoretically, at least, three possibilities 
exist: (1) The existing license conditions should be attached verbatim 
to the transferred license, (2) the existing conditions should be 
rescinded or eliminated in their entirety, or (3) the existing 
conditions should be modified and attached as modified to the 
transferred license. We do not believe it is possible in the abstract 
to generically preordain any one solution for all conceivable cases. 
The license conditions on their face, the nature of the license 
transfer, and perhaps the competitive situation as well, would need to 
be considered to determine what action were warranted in a given case. 
(For example, and without regard to the competitive situation, (1) it 
might be appropriate to retain the existing conditions where they apply 
only to a particular co-owner or co-operator which will remain a 
licensee under the transferred license, (2) it might be appropriate to 
remove the conditions where they apply to only one of several licensees 
and that one will no longer be a licensee after the transfer, and (3) 
it might be appropriate to remove existing conditions or modify 
references to licensees in the conditions when existing licensees to 
whom the conditions apply merge among themselves or with other entities 
and new corporate licensees will result.)
    While the issue of the appropriate treatment of existing antitrust 
license conditions in the past would have been addressed as part of the 
``significant changes'' review of license transfers, there will need to 
be some means provided for consideration of the matter in connection 
with transfers of licenses with existing antitrust license conditions. 
In such cases, the Commission will entertain submissions by licensees, 
applicants, and others with the requisite antitrust standing that 
propose appropriate disposition of existing antitrust license 
conditions. Here, antitrust license conditions are attached to the Wolf 
Creek license. We therefore direct all parties to this proceeding (and 
other persons with an interest in the license conditions) to submit 
letters to the Commission addressing the disposition of the conditions. 
Such letters shall be filed within 15 days of this decision and shall 
not exceed 15 pages.23
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    \23\ Consideration of the Wolf Creek antitrust license 
conditions is not inconsistent with our holding that the NRC need 
not conduct ``significant changes'' antitrust reviews of license 
transfers, for the Wolf Creek conditions were imposed at a licensing 
stage (initial licensing) when the NRC undoubtedly had antitrust 
authority. The Commission plainly has continuing authority to modify 
or revoke its own validly-imposed conditions. See Ohio Edison Co. 
(Perry Nuclear Power Plant, Unit 1), CLI-92-11, 36 NRC 47, 54-59 
(1992).
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E. Rulemaking Versus Adjudication

    KEPCo argues that the Commission cannot lawfully eliminate 
antitrust reviews by pronouncement in an adjudicatory decision, either 
in general or in this Wolf Creek case in particular, without first 
resorting to notice and comment rulemaking. See KEPCo brief at 11-14. 
KEPCo asserts that to do so would violate the NRC's regulations, id., 
and such a policy determination could not lawfully be binding in other 
cases, id. at 13. We disagree.
    As explained above, no NRC regulation explicitly mandates an 
antitrust review of post-operating license transfer applications. Not 
one comma of the Commission's current regulations need be changed in 
the wake of a cessation of such reviews, although because of the NRC's 
past practice of conducting such reviews, we have decided that 
clarification of our rules is warranted. Thus, while a dismissal of 
this antitrust proceeding based on a new but permissible interpretation 
of the Commission's authority would be contrary to past practice, it 
would not be contrary to the explicit language of any Commission rule.
    With respect to the propriety of deciding in this proceeding that 
henceforth there will be no antitrust reviews of post-operating license 
transfer applications in this or any future cases, ``the Supreme Court 
has repeatedly emphasized that the choice between rulemaking and 
adjudication ``lies primarily in the informed discretion of the 
administrative agency.'' General Am. Transp. Corp. v. ICC, 883 F.2d 
1029, 1031 (D.C. Cir. 1989), quoting SEC v. Chenery Corp., 332 U.S. 
194, 203 (1947). See also Cassell v. FCC, 154 F.3d 478, 485 (D.C. Cir. 
1998).
    In fact, what criticism there has been of agencies' use of 
adjudication to decide new general policy or changes in general policy 
has focused on the unfairness of doing so without giving nonparties 
advanced notice and opportunity to comment. See General Am. Transp. 
Corp., 883 F.2d at 1030, and the authorities cited therein. For the 
very purpose of avoiding such unfairness, however, the Commission in 
this case sought amicus curiae briefs from ``any interested person or 
entity'' and received briefs on the issue from a number of nonparties. 
CLI-99-05, 49 NRC at 200, n.1. Widespread notice of the Commission's 
intent to decide this matter in this proceeding was provided by 
publishing that order on the NRC's web site and in the Federal 
Register, and also by sending copies to organizations known to be 
active in or interested in the Commission's antitrust activities. Id. 
While KEPCo and others may have preferred that the Commission proceed 
by rulemaking, the Commission is acting well within its discretion in 
deciding this matter now in this proceeding.

III. Conclusion

    For the foregoing reasons, the Commission has concluded that the 
Atomic Energy Act does not require or even authorize antitrust reviews 
of post-operating license transfer applications, and that such reviews 
are inadvisable from a policy perspective. We therefore dismiss KEPCo's 
petition to intervene on antitrust grounds. Applicants and KEPCo may 
submit letters to the Commission suggesting the appropriate disposition 
of the existing antitrust license conditions due to the planned changes 
in Wolf Creek ownership and operation. All such letters shall be 
submitted to the Office of the Secretary no later than 15 days after 
the date of this Order and shall not exceed 15 pages in length. Any 
other person with an interest in the Wolf Creek antitrust license 
conditions also may submit a letter, not to exceed 15 pages, within 15 
days of the date of this Order. Finally, the NRC staff will be directed 
to initiate a rulemaking to clarify the Commission's regulations to 
remove any ambiguities and ensure that the rules clearly reflect the 
views set out in this decision.
    It is so ordered.

    Dated at Rockville, Maryland this 18th day of June, 1999.


[[Page 33927]]


    For the Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 99-16073 Filed 6-23-99; 8:45 am]
BILLING CODE 7590-01-P