U.S. Will Not Challenge Nuclear Power Plant Operator Collaboration

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

A proposal by seven nuclear power plant operators to share resources and coordinate best practices and other operational activities will not be challenged by the Department of Justice Antitrust Division.

In the first business review letter issued in more than six months, Joseph Wayland, Acting Assistant Attorney General in charge of the Antitrust Division, said that the Antitrust Division had no present intention to challenge a proposed venture to be named the STARS Alliance LLC.

“To the extent that the proposed cooperative activities increase efficiencies that result in lower costs, increased output or increased safety, the proposed conduct could have a procompetitive effect,” according to the letter.

The Justice Department noted that the cooperative activities STARS proposes to undertake should not have any adverse effect on competition. STARS members would represent 13 of the 69 operating commercial nuclear pressurized water reactors in the United States and 13 of the 104 operating commercial nuclear reactors in the United States.

The STARS members, for the most part, are in separate geographic areas and do not compete against each other for the sale of electricity. In the two instances where members both have reactors in the same electricity transmission organization, the members’ nuclear units are not likely to have an impact on price. The members will be prohibited from sharing competitively-sensitive pricing or marketing information, according to the Justice Department.

The members of the proposed STARS Alliance each operate single nuclear electric generation plants of a similar design – pressurized water reactors – and vintage.

The STARS Alliance participants are: Union Electric Co., with its Callaway plant in Missouri; Arizona Public Service Co., with its Palo Verde plant in Arizona; Luminant Generation Company LLC, with its Comanche Peak plant in Texas; Pacific Gas and Electric Co., with its Diablo Canyon plant in California; Southern California Edison Co., with its San Onofre plant in California; STP Nuclear Operating Co., with its STP plant in Texas; and Wolf Creek Nuclear Operating Co., with its Wolf Creek plant in Kansas.

The July 3 business review letter is STARS Alliance LLC, Business Rev. Ltr. No. 12-1, CCH Trade Regulation Reporter ¶ 44,112.