Alliance cleared for joint procurement

21 December 2012

The US Department of Justice will not challenge a proposal by STARS Alliance - a group of seven nuclear power plant operators - to jointly procure certain goods and services.

"The proposed joint procurement was not likely to restrict competition in either the upstream markets for the particular goods and services or the downstream markets for electricity," the department concluded.

Renata Hesse, acting assistant attorney general in charge of the department's antitrust division, commented: "The proposed conduct may allow the joint venture to increase efficiencies that result in lower costs for electricity, benefitting customers."

The Department of Justice noted that "none of the proposed joint procurement involves the sale or purchase of the electric power or the purchase of nuclear fuel, that STARS will adopt measures to prevent anticompetitive exchanges of information and that membership and participation in all of the activities of STARS is voluntary."

The STARS Alliance meets antitrust guidelines, the department determined. These guidelines provide an "antitrust safety zone" under which the regulators will not challenge a joint venture when the market share of the joint venture or its members do not exceed 20% of each relevant market. It noted that in the case of electricity, the STARS members generally operate in different geographic markets and do not compete against each other for the sale of electricity.

The STARS Alliance was officially launched in July with the aim of achieving efficiencies for single-plant operators similar to those of a nuclear fleet operator through joint procurement. The independently owned plants represented are all modern Westinghouse pressurised water reactors located within the same Nuclear Regulatory Commission administrative region. Members of the alliance include Callaway Energy Center (Missouri), Comanche Peak Nuclear Power Plant (Texas), Diablo Canyon Power Plant (California), Palo Verde Nuclear Generating Station (Arizona), San Onofre Nuclear Generating Station (California) South Texas Nuclear Operating Company (Texas) and Wolf Creek Nuclear Operating Corporation (Kansas).

Researched and written
by World Nuclear News