ML17053B456

Responds to to Ahearne Re More Stringent Design Stds & More Rigorous Accounting Procedures to Reduce Costs at Site.Facility Is Under Const at Reduced Pace.Util Has Reduced Work Force & Delayed Completion Date

ML17053B456
Person / Time
Site:	Nine Mile Point
Issue date:	02/22/1980
From:	Harold Denton Office of Nuclear Reactor Regulation
To:	Zagame J NEW YORK, STATE OF
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ML17053B457	List: ML17053B456
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NUDOCS 8003060606
Download: ML17053B456 (16)

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DISTRIBUTION -

(3l/ENCLOSURE l ONLY) t DockeMile 50-410 NRC PDR Local PDR NSIC TIC EDO Reading NRR Reading L3lR-4 File H, Denton E.

Case D.

Ross D. Yassallo S.

Varga L, Rubenstejn M. D. Lynch M, Service Atty., ELD G. Ertter (>08144)

M. Groff E.

Hughes B. Moore ASLB IE (S)

SECY Mail Facility (3) (-..80-0060)

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Ryan H. Berkow/M. Russell D. Muller R. Mattson D. Eisenhut

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The Honorable John R.

Zagame New York Assembly

Albany, New York 12248

Dear Mr. Zagame:

Your letter of December 20 1979, to Chairman Ahearne of the Nuclear Regulatory Commission (RRCI regarding your views on Unit 2 of the Nine Nile Point facility has been referred to me for reply.

In your letter, you state that" the NRC should act, expeditiously to develop more stringent design standards in light of the report issued by the Presidential Commission (Kemeny) which investigated the nuclear accident at Unit 2 of the Three Nile Island facility (TMI-2).

You also suggest that the NRC should develop more rigorous cost accounting mechanisms to minimize massive cost overruns of nuclear power plants.

In responding to your concerns, I should like to point out that this facility is presently under construction at a reduced pace.

In early December, there was a significant reduction in the work force from about 1900 to about 800.

At that time, it was our understanding that this reduction in staff affected those employees working out-of-doors.

The work effort continuing since December is predominantly inside the reactor building where some measure of protection against adverse winter weather can be provided.

On January 30, Niagara Mohawk Power Corporation announced (Enclosure 1) a further reduction from about 800 to about 350 construction workers.

This reduction was coupled with a deferral of the completion date for Unit 2 from

'fall 1984 to late 1986.. Additional information supplied by Niagara Mohawk indicated that construction effort would continue on the.reactor building.

!Ae note that Niagara Mohawk attributed part of this delay to uncertainties over possible design changes that. might be ordered by the NRC in light of published reports by irivestigative bodies.

However, this uncertainty is probably not the decisive factor in Niagara Mohawk's decision to delay completion of Unit 2 by two years.

This factor and several other factors such as the'resent low growth rate in the demand for power (currently about two percent per year), the recently discovered geologic anomalies on the Unit 2 site and the required rework of the vlelds in the containment liner and the biological shield probably all contribute to Niagara Mohawk's decision.

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I agree with you that it is imperative that the NRC expeditiously develop stron'ger safety standards following the accident at TNI-2.

In this regard, we issued in July 1979 our identification and evaluation. of safety concerns oi I icc3m SVRNAMCW DATC3N'RC FORM 318 (9 76) NRCM 0240 4 V,m, OOVCRNMCNT TRINTINO ORRICCI I ~ 1 ~

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The Honorable John R. Zagame w2 ot originating from the THI-2 accident; this report is NUREG-0578, "TNI-2 Lessons Learned Task Force Status Report and Short>>Term Receanendations" (Enclosure 2).

There are about 25 major areas identified in this July 1979 report, most of which pertain to the design criteria oF nuclear power plants.

This early guidance provided by the NRC has been supplemented by the recommendations contained in the Kemeny Commission Report (October 1979) and the Rogovin Report (January 1980).

In order to provide more de-tailed guidance to the nuclear industry and to ref'lect the further recom-mendations of the Kemeny Report, the NRC staff developed a tentative draft document fn December

1979, NUREG-0660, "Action Plans for Implementing Recommendations of the President's Commission and Other Studies of TNI-2 Acci-dent," which has not yet been fully adopted by the Commission; however, the major facets of this document have been communicated to the nuclear industry.

The lead plants for operating licenses

have, or wi'}1 shortly have, incor-porated many important elements of this additiona'} guidance into their design.

The Commission is closely reviewing these planC with the staff and we expect that a revised plan <<ill be established by the Commission in the near future.

Me wi'}1 continue to issue further additional guidance at appropriate intervals as industry accumulates experience in implementing the more stringent design criteria and as we receive the conclusions of the extensive research presently being conducted.

}le believe that our published reports cited above, our numerous meetings with industry, and our continuing discussions with both the Advisory Committee on Reactor Safeguards and with the NRC Coaeissioners, which are all open to the public, make these new standards known to the nuclear industry quickly as you suggest in your letter.

Me believe that the increases in the cost of nuclear power plants in the past few years to which you refer primarily reflects the effect of'igher construction costs associated with inflation and the capitalized interest-during-construction charges attributable to the present high interest rates.

If an individual facility such as Unit 2 of the Nine }I}ilePoint facility is delayed by a lower growth rate in electrica'l demand, the final cost will continue to escalate significantly if inflation persists.

However, the NRC has provided a means of accomplishing some cost control in the design and construction of nuclear power'lants by: (1) encouraging the standardization of plant design; (2) recommending the generic resolution of common problems; and (3) issuing guidance to the industry in the form of regulatory guides, technical positions and a Standard Review Plan.

Nhile these measures alone wil'l not in themselves contro'} costs, they are a necessary step in that direction.

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The Honorable John R. Zagame w3A In this regard, we note that our congressfonal charter is primarily orfented toward protection of the publfc health and safety, 'e are not author fzed to either develop or impose more rigorous cost accounting mechanisms as you suggest in your letter.

Rather, we believe that by establishing clear,

, well-defined design criteria and by conducting timely safety reviews, we can minimize delays attributable to the regulatory'rocess thereby mfnfmfzfng cost escalations resulting from regulatory-derived delays in construction.

If you wish any further information on these matters, please contact me or my staff.

Sincerely,

Enclosures:

1.

Niagara Mohawl; Press Release 2.

NUREG-0578 Original signed bg E. G. Case Harold R. Denton, Director Office of Nuclear Reactor Regulation D PM 'EGER-4 MS ice 2/

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The Honorable John R.

Zagame ori nating from the THI-2 accident; =this report is NUREG-0578, Ti'lI-2 Lesso s Learned Task Force Status Report and Short-Term Reco>

ndatfons" (Enclo re 2).

There are about 25 major areas identified fn his July 1979 rep rt, most of which pertain to the design criteria nuclear power plants.

his early guidance provided by the NRC has been.supplemented by the recomm ndations contained in the Kemeny Commission port (October 1979) and t Rogovin Report (January 1980);

In order to provide more de-tailed guidan e to the nuclearvindustry and to refle the further recom-mendations of e Kemeny Report, we issued a tenta ve draft document in December

1979, 5,

EG-0660, "Action Plans for Imp menting Recommendations of'he President'ommission and Other Studies of TMI-2 Accident," which has'not yet been fo ally adopted by the Comm sion.

However, the major facets of this docume t have been cormunfca d to the nuclear industry and the lead plants for op ating licenses hav, or will shortly have, incor-porated this additional uidance into th

r. design.

We intend to revise this draft document and i ue it formal He will continue to issue further additional guidance at'ppr riate fn rvals as industry accumulates experience in implementing the more str gent d sign, criteria and as we receive the conclusions of the extensive sear h presently being conducted.

We believe that our published reports cite ove, our numerous meetings with industry, and our continuing discussions th both the Advisory Committee on Reactor Safeguards and with the HRC C

,rnfs ioners, which are all open to the public, make these new standards kno to t e nuc1ear industry quickly as you suggest in your letter.

'He believe that the incr ases in the cos of nuclear power plants in the past few years to whic you refer primari reflects the effect of higher construction costs as ociated with inflatio and the capitalized interest-during-construction har ges attributable to e present.high interest rates.

If an individual f ility such as Unit 2 of th Nine Nile Point facility is delayed by a

1 wer growth rate in electrical

. emand, the final cost will continue to esc ate significantly 'if inflation p sists.

However, the fiRC has provided a

cans of accomplishing some cost con rol in the design and construction f nuclear power plants by: (1) encoura

'ng the standardization of'plant de gn; (2) recommending the generic resoluti n of common problems; and {3) is ing guidance to the industry in the form of egulatory guides, technical ositions and a Standard Review Plan.

While th se measures alone will not n themselves control costs, they are' necessary step in that directio OfflCC~

OURIIAMKW OATC9I'EC PORN 518 (9 76) NRCM 0240 0 V O OOVNRNMNNT RRINTINO ORRICNI I ~ TO T ~ ~

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ENCLOSURE 1

STATEMENT BY THE OWNERS OF NINE NILE POINT NUCLEAR UNIT P2 January 30, 1980, 10 A.M.

Early in December

1979, a slowdown in the construction of Nine Nile Point Unit '2 led to reduction of the construction work force on the site, east of

Oswego, from 1,900 to about 800.

At that time, the 1.08 million kilowatt project had been scheduled for completion and commercial operation in October 1984.

A new construction schedule is made necessary by a number of continuing technical and regulatory uncertainties and by a decision to reevaluate geologic design criteria.

It would, therefore, be imprudent in the interest of our customers and our investors to continue full-scale construction at this time.

The new construction schedule projects a late 1986 commercial operation date.

This change in the anticipated operating date is not expected to be a

problem in meeting statewide customer energy needs.

There will be a further reduction from 800 to about 350 workers in the building trades and from 350 to 150 in supervisory and administrative areas.

Engineering personnel reductions at Cherry Hill, N. J.

headquarters of Stone and Webster Engineering Corp., architec

-engineers on the project, will take place.

Return to full-scale construction must be started by Spring 1981, to support a late 1986 commercial operation date.

Niagara Mohawk Power Corp.

has 41 percent ownership in the project with the balance shared by Long Island Lighting Co.,

18 percent; New York State Electric and Gas Corp.,

18 percent; Rochester Gas and Electric Corp.,

14 percent; and Central Hudson Gas and Electric Corp.,

9 percent.

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80-0060 1/9/80 I:gggIgg D929~IIII IIII IIII

'RC SECRETARIAT TO:,

Cl Commissioner XXKZ Exec.,Dir./Oper.

Q Cong. Liaison O Public Affairs Date O Gen, Counsel I:I Solicitor O secretary Incoming:

From:

To,'ubject:

,~29 us cos Xtube Prepare reply for signature of:

0 Chairman C3 Commissioner XXQ EDO, GC, CL, SOL, PA, SECY CI Signature block omitted Q Return original of incoming with response C3 For direct reply' For appropriate action O

For information D

For recommendation Remarks:

SKuspense:

January 22 ROC d OIjIj

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For the Commission:

'Send three (3) copies of reply to Secy Mail Facility NAC42 ACTION SLIP

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FROM:

'John. R..g~ame New York State Assembly TO:

Chairman ACTIO COMPL DEADLINE ACKNOWLEDGMENT INTERIM REPLY 80 FINALREPLY F ILE LOCATIO~

p-P 08144 DATEOF DOCUMENT 12-20-79 PREPARE FOR SIGNATURE OF:

Q CHAIRMAN Q EXECUTIVEDIRECTOR OTHER:

DESCRIPTION Q LETTER Q MEMO Q REPORT Q OTHER Urges NRC to adopt stringent design standards MN along with more rigorous cos accounting mechanisms,

.especially for

- Nine ffile 2 SPECIAL INSTRUCTIONS OR REMARKS DOCUMENT/COPY NO NUMBER OF PAGES POSTAL REGISTRY NO.

CLASSIFIED DATA C LASS IF ICATION Q

N Q

Q SECY 80-0060 ASSIGNED TO:

DATE INFORMATIONROUTING LEGALREVIEW Q

FINAL Q

COPY ASSIGNED TO:

DATE NO LEGAL OBJECTIONS NOTIFY:

Q EOO ADMIN8 CORRES BR EXT.

COMMENTS, NOTIFY:

EXT.

JCAE NOTIFICATIONRECOMMENDED:

Q YES Q NO NRC FORM 232 (11-75)

EXECUTIVE DIRECTOR FOR OPERATIONS PRINCIPAL CORRESPONDENCE CONTROL DO NOT REIIIIOVE THIS COPY

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