public utility

In 1967 the Atomic Energy Commission granted Vermont Yankee a construction permit for a nuclear power plant in Vernon, Vermont, after the required adjudicatory hearing and reviews. Vermont Yankee later applied for an operating license; NRDC intervened and objected to exclusion of fuel-reprocessing and waste-disposal impacts from the hearing. In November 1972 the Commission opened a separate rulemaking proceeding on those fuel-cycle issues, noticed two alternative approaches based on its Environmental Survey, and conducted a February 1973 hearing at which more than forty participants submitted comments but no discovery or cross-examination occurred. In April 1974 the Commission adopted a rule assigning numerical values to fuel-cycle impacts and applied it prospectively. In January 1969 Consumers Power applied for permits to build two nuclear reactors in Midland, Michigan. After staff and ACRS review, Saginaw and Mapleton intervened and raised 119 environmental contentions, including seventeen on energy conservation. The Licensing Board held hearings on radiological issues, the staff issued a final environmental impact statement in March 1972, and further hearings occurred in May and June 1972; Saginaw declined to participate in the later hearings or submit proposed findings. The Licensing Board granted the construction permit, the Appeal Board affirmed, and the Commission declined further review. In November 1973 the Commission ruled in another case that energy-conservation evidence meeting threshold tests could be considered, but it later refused Saginaw's motion to reopen the Consumers Power record. NRDC appealed the Vermont Yankee license and rule to the D.C. Circuit; Saginaw and others appealed the Consumers Power permit. In 1976 the Court of Appeals remanded both matters, holding the fuel-cycle rulemaking procedures inadequate, the Consumers Power environmental impact statement defective for omitting energy conservation, and the ACRS report insufficiently explained. The Supreme Court granted certiorari in 1977. The Commission is the successor agency to the Atomic Energy Commission under the Energy Reorganization Act of 1974. All licensing proceedings followed the two-stage process of construction permit followed by operating license under the Atomic Energy Act of 1954, with NEPA environmental reviews added after 1969.

The cases involve two nuclear power projects regulated by the Atomic Energy Commission. In December 1967, the Commission granted Vermont Yankee Nuclear Power Corp. a permit to build a nuclear power plant in Vernon, Vermont. Vermont Yankee subsequently applied for an operating license, prompting an adjudicatory hearing in August 1971 at which the Natural Resources Defense Council participated and objected to the exclusion of fuel reprocessing and waste disposal environmental effects. In November 1972 the Commission began informal rulemaking to address the environmental effects of the uranium fuel cycle for light water reactors, publishing notice of two proposed alternatives based on its Environmental Survey. Hearings occurred in February 1973 with over forty participants submitting written comments; the Commission allowed oral statements but prohibited discovery and cross-examination, instead permitting questioning by the Commission itself. The Commission adopted the second alternative in April 1974, incorporating numerical values into a table for cost-benefit analyses. In January 1969 Consumers Power Co. applied for a construction permit for two nuclear reactors in Midland, Michigan. Intervenors including Saginaw and Mapleton submitted numerous environmental contentions and discovery requests, which the Licensing Board largely denied before holding hearings in 1972. Although Saginaw raised energy conservation issues in comments on the draft environmental impact statement, it did not present evidence at the hearings or participate further after the final statement issued. The Court of Appeals for the District of Columbia Circuit in 1976 remanded both the Vermont Yankee operating license and the Consumers Power construction permit. It found the fuel cycle rulemaking procedurally inadequate and required consideration of energy conservation alternatives as well as further development of the Advisory Committee on Reactor Safeguards report. The Supreme Court granted certiorari in 1977.

When Congress passed the Atomic Energy Act of 1954, it provided for licensing of private construction, ownership, and operation of commercial nuclear power reactors for energy production under strict supervision by the Atomic Energy Commission. Private industry responded to the Atomic Energy Act of 1954 with the development of an experimental power plant constructed under the auspices of a consortium of interested companies. It soon became apparent that profits from the private exploitation of atomic energy were uncertain and the accompanying risks substantial. The risk of potentially vast liability in the event of a nuclear accident of a sizable magnitude was the major obstacle. Notwithstanding comprehensive testing and study, the uniqueness of this form of energy production made it impossible totally to rule out the risk of a major nuclear accident resulting in extensive damage. In 1957, Congress passed the Price-Anderson Act, which limited the aggregate liability for a single nuclear incident to $500 million plus the amount of liability insurance available on the private market, some $60 million at the time. The Act was amended in 1966 to extend its basic liability-limitation provisions for another ten years and to require those indemnified to waive all legal defenses in the event of a substantial nuclear accident. In 1975, Congress again extended the Act's coverage until 1987, continued the $560 million limitation on liability, added a provision requiring each of the sixty or more reactor owners to contribute between $2 and $5 million toward the cost of compensating victims in the event of a nuclear incident, and explicitly provided that in the event of damages exceeding the aggregate liability Congress would thoroughly review the incident and take whatever action was deemed necessary. Appellant Duke Power Company, an investor-owned public utility, is constructing one nuclear power plant in North Carolina and one in South Carolina. In 1973, appellees, two organizations—the Carolina Environmental Study Group and the Catawba Central Labor Union—and forty individuals who live within close proximity to the planned facilities, commenced an action in the United States District Court for the Western District of North Carolina against Duke Power and the Nuclear Regulatory Commission, seeking among other relief a declaration that the Price-Anderson Act is unconstitutional. After the parties engaged in extensive discovery, the District Court held an evidentiary hearing on standing and ripeness and determined that appellees had standing and that their claim could properly be adjudicated. The District Court found that appellees suffered immediate effects including the production of small quantities of non-natural radiation invading the air and water, a sharp increase in the temperature of two lakes used for recreational purposes, interference with the normal use of the waters of the Catawba River, threatened reduction in property values, objectively reasonable present fear regarding the effects of increased radioactivity, and the continual threat of an accident with no assurance of adequate compensation. The District Court also found a substantial likelihood that Duke would not be able to complete construction and maintain operation of the plants but for the protection provided by the Price-Anderson Act. This finding rested on testimony of corporate officials and legislative history showing that reactor manufacturers and architect-engineers required escape clauses in contracts absent the liability limitation. The District Court held the Act unconstitutional. The Supreme Court noted probable jurisdiction in 1977.

In June 1933 Congress enacted the National Industrial Recovery Act. Section 9(c) of Title I authorized the President to prohibit the transportation in interstate and foreign commerce of petroleum and its products. This prohibition applied when the petroleum was produced or withdrawn from storage in excess of amounts permitted by any state law or valid regulation. On July 11, 1933, the President issued an Executive Order prohibiting such transportation of excess petroleum. On July 14, 1933, he issued a further order authorizing the Secretary of the Interior to enforce the prohibition by designating agents, setting up boards, and promulgating rules and regulations. The Secretary of the Interior issued regulations on July 15, 1933, later amended on July 25 and August 21, 1933. These regulations required every producer, purchaser, shipper, and refiner of petroleum to file monthly sworn statements detailing residence, production locations, allowable and actual production, deliveries, and storage, and to maintain adequate books and records available for inspection. Panama Refining Company, a Delaware corporation engaged in refining crude oil and shipping it in interstate commerce, together with its Texas subsidiary and Amazon Petroleum Corporation along with other Texas oil producers, filed suits in federal district court in Texas against federal officials including the Administrator and Attorney General. The complaints alleged that the regulations restricted their interstate shipments of oil produced in compliance with Texas law. The District Court granted permanent injunctions against enforcement of the federal regulations and orders. The Circuit Court of Appeals reversed the decrees and directed that the bills be dismissed. The Supreme Court granted certiorari on October 8, 1934.