ML19330A224
| ML19330A224 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 03/17/1975 |
| From: | Kartalia D NRC |
| To: | Cherry M CHERRY, M.M./CHERRY, FLYNN & KANTER |
| References | |
| NUDOCS 8007150998 | |
| Download: ML19330A224 (4) | |
Text
.
t laren 17,1975 7
THIS DOCUMENT CONTAINS P0OR QUAUTY PAGES ay ran i. C..wrev, cs2 (Mc 13!! P.laza Cnicago, Illinois 60611 In t'1e " ttar cf Cen:rar: Pc e r Co m P:y
(.lidiand Fir.nt, C9ics 1 and 2)
Socket Hos. f,3-329 L 50-330 Gear "r. Ciierry:
Tht: is in res? qsa to y3ar lett2r of Fetriary 17.1975 er.cerninc tne financini tuaiiricasies 4 Gruawes Fcn.ar Cyr,aif ca 12;ka L.; e.-
- truct tha lidi:-d.ahnt, 'Jnit: ! :nd 2.
In Decerber 1972, Consurers received cernits free the thea At;nic Ener,y Scr -issim tn cens rict tn2 '.lidland ?lant vacq the hsis of, inter alit.
.: tiaiiaq w,.
i:,.as.v...a sc u..s.]
..a a : ; n :a m :.n 2:.. :=ur. : :..a lican:21 Tscilities.
Iut as you note in your 1+.:'r,
- cncmes -cc.:nured
'tuostantial fi. ancial difficuicy" duri.;n 107'. 7::2 taff (.ca
- ..;a.et, 6 ahrery 3:aff) S r?cynse :: your incur p 'sy O.107; :w. ce : u inuiry c d2.ar-ina. :c;ncr tne currenc fimncial si:u :i+1 of :01su-urs arencea :ie cca.anc2 cunt af an ::;ian :o r.ajif/, :a::w:. Or r27::.2 in
- 1J1and ::n3tracti:n ;;r-i :.
Tiie Staff's evaluat' ion (copy enclosed), relaased on Septa-ter 13, 1974 T
cane to the conclusion that, although Consumers' financial condition clearly warranted continuing attention oy the Staff, cne comany is 'finan-cially qualified to continue construction of the D idland Plantj since it g
has reasonable assurance at this tim of obtaining the necessary construction
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fund s. " This conclusion was based on an analysis of construction expenditures
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and funds available for construction during a ' projection period' from Junc 1
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1974 through :Tay 31, 1975. The Staff did not reconnend sqy imediate action i
beyond the imposition on Consuniers of cortain nee reporting requirements and the naintenance by the Staff of continued surveillance of Consumers' finan-i cial condition.
In your letter you suggest that the Staff's d: cision was not censistant with the Corriission's duty, in your words "to r:ake continual findings of safety."
Your apparent position is that, consistent with this duty, tne Staff vas required in its Septenber 1974 evaluation to nake a finding that Consumers was either financially qualified or not qualified to design and constract
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the ilidland Plant through the entire anticipated construction period, in-cluding the ocrtion thereof after :!ay 31, 1975.
gI 8007150 % f
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. You ask, therefore, whether the Staff has rade "a judgment as to the continuing financial ability to construct the Midland Plant facility during tha period of postulated construction." If. by this yoa.::can to ask whether any de novo deterninatien of financial qualifications for the entire consIruction period was cade in connection with the Staff's September 1974 evaluatien, tn2 2ntwer is no.
It is inocrtant to add in this ccnnecticn, howver, that tna M Tsi m 3 juic ent cf financial qualifications for the entire constructico seriod was nade on behalf of the Commission prior to the issuance of the Midland con-structica per: sits, and that, after careful censideration of Consumers' current financial difficulties (see the enclosed enlaation), t.e prior judg~2nt remains in effect. Mut the Staff did in Septe-ter 197a was to deter-ine whether the currer.t financial situation of Censu~2rs was adaquate cause for seekine to overturn the Comission's prior jud-en:
in a for.al proceeding. No such cause was found.
As indicatad abcve, the Staff's deteminatica in this r2 card was based on a study of 3 cm-year " pro,* 2ction period." i one-year meici m selac:ed in order to nnsure tuc the 3taff's deter"innim oild be 5::cd ca the 13::: 3;cculative and ~" c2 --::: nnimful Sn.
"M was appropriata becausa it was apparent that Consun2rs' imediate finan-cial cenditien was in ' lux and, t% refera, of unenetain value fer on-diccing t.ie Co ;any's financial condicion over :ne icng tar
?ur e.cn?l s,
as the Staff's evaluation nakas clain, tna ican tam finar.cial condi:icn of C~":9ws wi!1 daaae l=raaly on twa villinmats nr nawillinanass ne the :iichigan Miic Cervica Oc.nissica to riat rali2f fect uisting authcri 'sd rates.
Your letter also raised the concem that the trolerentatica of safety measures at the Midland Plant might be co: premised by a lack of funds.
One of the objectires of the Staff's review of Coniurers' financial con-dition was to determine whether possible financial #essures resulted in a compromise of safety features. The Staff's review found no such com-promise. However, reliance that there has been no cocaro=ise of safety features is not determined solely on the basis of a financial review, but rsther on the basis of the Staff's ovarall defense in depth review, which,
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in addition to a financial evaluation, includes a comprehensive safety review and inspection during the plant's design, construction, testing and i
i operation, implementation of a quality assuranca program and continual
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surveillance and inspection by the NRC's Office of Inspection and Enforce-
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rnent.
In closing, I want to emphasize that we are well aware of Consumers' finan-cial condition. For this reason, we art continuing to monitor all develop-nents which may have a significant truact on the Cormany's financial qualifications to design and construct the Midland Plant.
Sincerely.
-=*
_ David E.Jartalia Se,e 1 ext page.
Assistant Chief Hearing Counsel ve Gew. 9 !3J A2CM O240 Q w. s. eovaes-a=, pamtma oce*cas tava.sas see
O 3-Enclosure cc w/out encl.
l Michael fliller-Esq.
Mr. Willian R. Ralls
.4rs. 'lary Sinclair Mr. David Comey bec: HShapar ECase DSkovholt DISTRIBUTION:
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'N David E. Kar'talia
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03/17/75 03/17/75 03"/17/75 oars >
Foran AEC ll8 (Rev. 9 53) AECM 0240 W u. e. oovannuant Painvine orricas vers.sassee
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