ML19331A947
| ML19331A947 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 09/07/1976 |
| From: | Axelrad J, Malsch M NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | |
| Shared Package | |
| ML19331A948 | List: |
| References | |
| NUDOCS 8007240535 | |
| Download: ML19331A947 (21) | |
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/l UNITED STATES OF AMERICA O'S X I'
I NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD' In the Matter of
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CONSUMERS POWER COMPANY
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Docket Nos. 50-329 /
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50:330 (Midland Plant, Units 1 and 2)
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BRIEF 0F THE NRC STAFF IN RESPONSE TO THE BOARD'S AUGUST 18, 1976 ORDER i
s Martin G. Malsch Deputy Chief Regulations Counsel e
Jane A. Axelrad Counsel for NRC Staff 1
Sept mber 7,1976 f
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TABLE OF CONTENTS Page
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Ta bl e o f A u th o r i ti e s.............................................
11 I.
Background and Introduction...................................
1 II. ' The Construction Permits for the Midland Facility Should be Continued Until an Interim Fuel Cycle Rul e Ha s Bee n Made E f fec ti ve.................................. 5 A.
Legal Standards........................................... 5 B.
Argument.................................................. 6 1.
No significant adverse impacts will occur in the period before an interim fuel cycle rule is in place...................................... 6 2.
No reasonable alternatives will' be fore-closed by conti nued construction......................
7 3.
The costs of delay will likely be substantial........................................... 9 s
4.
The cost / benefit analysis will not be tilted against project abandonment by increased i nves tmen t.................................
11 5.
Public policy conc' erns are either neutral or appear to be of little weight in the balancing process....................................
14 a.
Need for power......................,,^,,,,,,,,,,,,
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Extent of the NEPA viol a tion..................... 15 c.
Timeliness of objections.........................
16 III.
Conclusion....................................................
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TABLE OF AUTHORITIES CASES Page Aeschliman v. NRC, Nos. 73-1776 and 73-1867 (D. C. Cir., July 21, 19 76 ).................................. 1,2,3,4,13 Consumers Power Company ((Midland Units 1 and 2),LB P-7 2 -34, 5 A. E.
3,8,14 Environmental Defense Fund v. Froehlke 477 F.2d 1033 (8th Cir. 1973).................................
10 Natural Resource's Defense Council v. NRC, Nos. 74-1385 and 74-1586 (D. C. Cir., July 21,1976)..........
1,9 Ohio v: Callaway, 497 F.2d 1235 (6th Cir.
1974)...............................
10 Public Service Co. of New. Hampshire (Seabrook Station, Units 1 and 2) Docket Nos. 50-443 and 50-444, ALAB-338 (July 14, 1976).........................
14 Toledo Edison Co. (Davis-Besse Nuclear Power S ta ti on ), 4 - A. E.C. 871, 881 ( 19 72 )............................
10 Toledo Edison Co. (Davis-Besse Nuclear Power j
Station), 4 A.E.C. 912 (1972).................................
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Southerr. California Edison Co. (San Onofre l
Nuclear G:nerating Station, Units 2 and 3),
ALAB.189, 7 A.E.C. 410 (1974).................................
14 Union of Concerned Scientists v. AEC, 499 F.2d 1069 (D. C. Cir. 1974)..............................
13 STATUTES:
4 2 U. S. C. E l 4 3 21 e t s e q.....................................
1 5 U.S.C. 55 501 ettseq.
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l REGULATIONS:
h 10 C.F.R. I 51.20(e)...........................
1 OTHER AUTHORITIES CITED:
41 Fed. Reg. 34707(1976)......................
2,5,6,8,9,13,14 Final Environmental Statemen t..................
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M BR' 0F THE NRC STAFF IN RESPONSE TO THE BOARD'S AUGUST 18, 1976 ORDER I.
Background and Introduction On July 21, 1976, the United States Court of Appeals for the District of Columbia Circuit decided Natural Resources Defense Council v. NRC (hereinafter Vermont Yankee) and Aeschliman v. NRC,2/ two cases involving challenges to the validity of the Comission's fuel cycle rule and the exclusion from nuclear power plant licensing hearings of the issues of waste management and spent fuel reprocessing impacts. The court held in Vermont Yankee that the Nuclear Regulatory Commission's rule codify-ing the environmental effects of the' uranium fuel cycle for individual 3.f light-water nuclear power reactors was inadequately supported by Nc3 record insofar as it treated the reprocessing of spent fuel and the handling of radioactive wastes. The court found that the National Environmental Policy Act of 1969-4/
requires analysis of these reprocess-ing and waste issues, either through rulemaking or in individual licensing proceedings, before the Commission authorizes construction or full-power operation of a nuclear power plant.
Further, the court stated that revision of the rule, should the Comission decide to handle the matter generically, must be accomplished by more demanding procedures than those required for informal rulemaking under the Administrative Procedure Act.
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Nos. 7 -1385 and 74-1586 (D. C. Cir., July 21,1976).
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Nos. 7:-1776 and 73-1867 (D. C. Cir., July 21,1976).
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42 U.S.C. 594321 et. seq.
ff 5 U.S..
55501 e_t seq.
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. The Aeschliman decision was issued on judicial review of the AEC's grant of construction permits for the Midland plant.
In Aeschliman the court remanded the case, stating that the Commission must " undertake appropriate 6J consideration of waste disposal and other unaddressed fuel cycle issues,"
consider the issue of energy conservation, and that the report of the Advisory Comittee 'on Reactor Safeguar6 must be clarified.
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The Comission issued a General Statement of Policy in response to the two decisions.
It stated that, in the absence of a valid rule on the uranium fuel cycle, no full-power operating licenses, construction permits or limited work authorizations should issue. The Commission announced its intention to reopen the rulemaking proceeding on the environmental effects of the fuel cycle to supplement the existing record and to determine whether or not the rule should be amended. The Comission directed the Staff to produce a revised and well-documented environ-1 mental survey dealing with radioactive waste management and reprocess-ing impacts. The revised survey is to be completed on or about September 30, 1976, and, if warranted, is to serve as the basis for an interim rule on radioactive waste management and reprocessing impacts l
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Aesciriman, supra, at 21.
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4TTe I-Teg. 74707 (1976).
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, to be promulgated as early as December of 1976. The Commission indicated that the interim rule could serve as a basis for issuing new licenses at that time.
In its statement, the Commission addressed the issue of whether to continue, modify, or suspend existing licenses, specifically 8J including the Midland construction pennits at issue in Aeschliman.
It did not take any position on the factual merits of this issue.
Instead, on August 16, 1976, the Commission issued a Memorandum and Order directing that an Atomic Safety and Licensing Board for the Midland facility be reconvened, for the limited purpose of considering, in light of the facts and the applicable law, whether the construction permits for that facility should be continued, modified, or suspended until an interim fuel cycle rule has been made effective. Th'e order directed the Board to call for briefs on that issue, and to hold an evidentiary hearing, if necessary.
On August 18, 1976, this Board ordered that the parties to the proceeding file briefs on the issue of whether the construction permits for the Midland facility should be continued, modified, or suspended until an interim fuel cycle rule has been made 8]
A c~ truction permit was issued to the Consumers Power Comoany on De ember 15, 1972, after an Initial Decision in Consumers Power Compe v (Midland Units 1 and 2), LBP-72-34, 5 A.E.C. 214 (1972).
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This tomic Safety and Licensing Board was appointed on August 17, 1976.
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. effective. The Board's order directed that the briefs should indicate whether the parties consider an evidentiary heari.ng to be ndcessary on this issue and, if so, what evidence the parties might expect to produce.
In its Memorandum and Order the Commission indicated that no hearing would be appropriate on the merits of the other issues assigned for reconsideration by the court in Aeschliman (energy conservation and ACRS clarification) until that decision becomes final. The mandate of the court in Aeschliman should issue shortly. Accordingly, as the Staff construes the Commission's General Statement of Policy, this Licensing Board will then have the power to hear and decide the other issues assigned for reconsideration in Aeschliman. As a necessary incident to this power, this Licensing Board also will have to consider, either sua sponte or on motion of any party, the
' matter of whether the Midland construction permits should be suspended pending completion of remand proceedings on the other issues. We believe that this Licensing Board should treat this other suspension question with a degree of urgency commensurate with the degree of urgency with which it treated the questions of suspension pending promulgation of an interim fuel cycle rule. However, since the mandate b's not yet been issued, this brief is confined to the i
question f suspension pending promulgation of the interim fuel cycle rule. The Staff is prepared to brief the other suspension gros;ien 'n the immediate future, shculd the Licensing Board so order.
, II. The Construction Permits for the Midland Facility Should be Continued Until an Interim Fuel Cycle Rule Has Been Made Effective A.
Legal Standards In its General Statement of Policy the Commission stated that the following equitable factors should be assessed and balanced in determining whether outstanding licenses or permits should be continued, modified or suspended until an interim rule has been made effective:
1.
whether it is likely that significant adverse impact will occur until a new interim fuel cycle rule is in place 2.
whether reasonable alternatives will be foreclosed by continued construction or operation 3.
the effect of delay 4.
the possibility that the cost / benefit balance will be tilted through increased investment 5.
general public policy concerns, the need for the project, the extent of the NEPA violation, and the timeliness of objections 10/
This General Statement of Policy is, of course, binding on this Licensing Board, and controls the resolution of the instant question of whether to continue, modify or suspend the construction permits for the Midland facility.
The Commission stated in the General Statement of Policy that the five factors must be balanced to determine "where the equities of 10/ General Statement of Policy, supra note 7, at 34709.
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, 1 each particular case lie," 1/and that there is no requirement that each factor must be individually satisfied.
A The Staff has very carefully considered the application of these factors to the instant case. For purposes of analysis, the period of possible suspension was taken to be four to six months.
B.
Argument 1.
No sienificant adverse impacts will occur in the period before an interim fuel cycle rule is in olace It is important to note for the purposes of the determination to be made by this Licensing Board that the activities which would take place over the next four to six months would not involve any generation of nuclear waste materials or spent fuel that could be reprocessed, sin'ce neither unit is currently scheduled to begin operation before March 1981. Since Unit 1 is thirteen to fourteen percent complete and Unit 2 is sixteen percent complete, the major environmental impacts to the plant site already have lla/
occurred.
Trees and brush have been cleared, extensive earth moving operations have been completed and dredging to widen the Tittabawassee River is finished. Activities over the next few months will be largely confined to installation of einforcement steel and pouring of concrete ca major power 11/
Id., n. 3.
11a/ The facts with regard to status or construction and the environmental 4
impacts which have already occurred are supported by the accompanying Affidavit of Edward L. Jordan, Acting Branch Chief for Construction and Engineering Support of the NRC Region III, Office of Inspection and Enforcen.ent.
. block structures (the containment buildings, the auxiliary building and the turbine building) now in various stacas of completion.12/
It is clear that the adverse effects expected to take place during the time period before an interim rule is in place are insignificant as compared with the environmental impacts which resulted from clearing the site and commencing construction -
activities which have already occurred. The environment has already been disturbed significantly. Further construction during the short-terr period before an interim rule is pro-mulgated will not have significant adverse impacts and will not significantly increase the difficulty or costs involved in redressing the environmental harm that has already occurred.
2.
No reasonable alternatives will be foreclosed by continued construction Consideration of this factor must focus on the possibility that interim construction activities could have the effect of render-j ing reprocessing and waste management technically infeasible, or making abandonment of the Midland pro [ect impracticable.
The possible effects of increased investment are dealt with
"-der the Commission's fourth factor, discussed in 4 infra.
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8-It is not necessary for this Board to consider the alternative of modification of the plant to reduce other environmental costs (for example, non-radiological impacts of plant operations).
These are not relevant to the question at hand which arises solely because of the court decisions relating to reprocessing and waste management.
Furthermore, these other alternatives (except for alternatives related to the energy conservation issue) were thoroughly considered in the Final Environmental Statement 14/ and in the Licensing Board's Initial Decision. D All aspects of the NEpA review of the Midland construction per-mits except for fuel cycle and energy conservation matters, were upheld by the court in Aeschliman.
The alternative of modifying the plant to minimize the environ-mental costs of waste management and reprocessing will not be foreclosed by continued,onstruction. As the Commission 9
indicated in its Policy Statement, existing concepts for reprocessing and waste technology do not vary significantly with the design of nuclear power plants, and "it is extremely unlikely that the revised environmental survey will result in any modification of these nuclear power facilities. Only 13f Othe 11ternatives may be relevant in any consideration of the separ6 te question of suspension pending completion of other remand procar fings.
_14/ Final Environmental Statement, Chapter XI.
_l5f Initi;.1 Decision, pp. 223-228.
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-9 the possibility of discontinuing their construction or use is likely to be at issue." 15./ Furthermore, the construction activities scheduled to take place during the next few months are not related to the waste management or spent fuel handling systems of the plant.
The alternative of abandonment of the project will not be foreclosed. The costs of restoring the site have already been incurred and will only increase slightly during the period until the interim rule is in place. Thus, unless the increased investment will tilt the cost / benefit analysis, the al+.ernative of abandonment will not be foreclosed. 32./
3.
The costs of delay will likely be substantial The additional cos'ts which will be incurred as a result of delay in the Midland project are difficult to estimate with any degree of certainty at this time. Hard dollar figures were not avail-able from the permittee at the time this brief was written.
Thus, the dollar costs of delay have not been analyzed in depth by the Staff. However, general knowledge of construction practices, and the costs of delay calculated for other nuclear jl6 Ge..
'l Statement of Policy, supra, note 7, at 34708.
_17/ Fuel.ycle environmental impacts, other than to impacts from wastes mana_ ; ment and reprocessing, will also need to be factored into the Midl; id cost / benefit balance. However, these impacts are essentially insignificant (see 10 CFR 551.20(e), Table S3, ' upheld by the court in Mril Resources Defense Council) and thus have no impact on the in'stuat suspension question.
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' projects which have stood the test of highly contested construc-tion permit suspension proceedings conducted in the past, suggest that the impact could be substantial.
Project costs are likely to increase substantially each month that the project is delayed. These cost increases are attributable to escalation t
clauses built into contracts for equipment, to allowances for funds.during construction and to supplies of equipment and other materials on-site during the delay.
Finally, these would include socio-economic impacts of the lay-off of the large number of construction workers presently on the site.
However, some care must be exercised in examining and weighing the dollar costs. The actual impact on applicant from
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escalation may be substantially less than calculation would indicate, since the increased costs will likely be compensated to a substantial extent by payment in dollars that have inflated toward the end of the construction period. Also, the cc,3ts of shutdown and start-up would not have been incurred had not the pennittee elected to proceed with construction i
prior 'to completion of judicial review.
Such costs are, neletheless, real costs to the permittee and are the kinds of costs that have been considered by the courts in ruling
- c. injunctions in NEPA cases. lE Thus, although these costs 18/
E_.g., ioledo Edison Comoany (Davis-Besse Nuclear' Power Station),
4 A.E.c. 871, 881 (1972). The'Dev4-Besse figures suggest that total oelay costs for a four to six month suspension period in i
Midland could be on the order of $20-28 million or more.
19/ Environmental Defense Fund v. Froehlke, 477 F.2d 1033 (8th Cir.
j 1973); Ohio v. Callaway, 497 F.2d 1235 (6th Cir.1974).
w should be accorded less weight, they cannot be ignored. Further-
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more, some of these costs--for example carrying charges on money expended for environmental studies and engineering and design--
are ordinary and prudent expenditures for project planning and prosecuting the applicetion before the Commission, and would have been. incurred even if construction had not commenced.
The lay-off of large numbers of construction workers presently i
on the site is a significant cost of delay.
The effects of unemployment on the area as well as the effects on individual employees and their families should be considered. In sum, while the effects of delay cannot be calculated with certainty at this time, there is every reason to believe that they will
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be substantial.f,
4.
The cost / benefit analysis will not be tilted against project abandonment by increased investment Prior to issuance of the construction permits, an analysis of the environmental and economic costs and.the benefits of the project was conducted pursuant to NEPA. At that time it was determined that the benefits outweighed the costs. However, l
tl2 environmental costs of waste management and reprocessing 9
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were not factored into the analysis.
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The cost / benefit analysis will have to be re-examined in light of any additional costs of waste management and reprocessing set forth in the interim rule. However, in computing the new cost / benefit analysis, the costs of the plant, excluding waste management and reprocessing costs, and the benefits of the project should be considered to be the same as were originally found. This is consistent with the view that, in computing the costs of abandonment, sunk costs must be excluded.
In the original cost / benefit balancing, the total economic costs were considered as were the total environmental costs of construc-tion. The economic costs included the then current total anticipated capital investment in the plant, an estimated 20/
$554 million.- f Thus, while the cost / benefit analysis could be changed by the inclusion of waste management and reprocessing impacts, it will not be changed by increased ir /estment during the interim because the additional investment has already been factored into the total capital investment figure.
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nvironmental Statement, Table XI-1.
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Both Aeschliman and Union of Concerned Scientists v. AEC require that sunk costs be ignored when considering costs of abandonment of a project in restriking a cost / benefit analysis.
In both of these cases the U. S. Court of Appeals for the D. C. Circuit stated flatly that " sunk costs are not appropri-ately considered costs of abandonment." Clearly, if such costs are not an appropriate part of the costs of abandonment.,
then they carry no weight when abandonment is considered as an alternative.
If they carry no weight in considering abandonment as an alternative, then such costs will not
" tilt" the cost / benefit analysis when it is restruck.
In any event, even assuming that investment during the interim could " tilt" the' cost / benefit analysis, the effect of invest-l ment on the cost / benefit analysis cannot be determined without i
some knowledge of how close the cost / benefit analysis is likely 24/
to be.
This, in turn, cannot be determined without some knowledge of what the impacts from reprocessing and waste management will be. Yet these impacts are inestimable at this early stage of the Staff's analysis of the waste management and reprocessing issues, and litigation of these impacts in tri 3 case would be contrary to the Commission's Statement of 22/ Supra, page 1, at 22, n. 30.
1D3 4'] c.~ J 1069,1084 n. 37 (D. C. Cir.1974).
_24/ Commis ion " Memorandum and Order," Toledo Edison Company (Davis-Besse Nuclear Power Station),4 A.E.C. 912 (1972).
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. Policy. Accordingly, the actual effects of this increased investment are incalculable at this time. The most that can be said under this assumption is that this increased investment--
estimated to be about $10 million over the next four months and $15 million over the next six months--
is an extremely small fraction of the total project costs. However, since the Commission's Statement of Policy contemplates a balancing of factors, inability to reach any definitive conclusion on this particular factor does not compel a suspension--rather, the question of suspension turns on the application of the 2_6/
other factors.
5.
Public policy concerns are either neutral or appear to be of little weicht in the balancing process a.
Need for Power The Midland units are designed to serve the projected demand for electricity in the Michigan Electric Power Pool service area and to supply process steam to Dow Chemical Company.
However, the significance of the need for power factor is unclear, since it has not been clearly established that a suspension of construction will give rise to a corresponding 25/ This t Eimate assumes labor costs of about $1.25 million per month and ccsts of materials (concrete and steel of about the same mangnitude).
,26/ See Public Service Company of New Hampshire (Seabrook Station Units 1 i M 2' Docket Nos. 50-443 and 50
, SLAB-338 (July 14, 1976).
l Southern California Edison Company (San Onofre Nuclear Generating i
Station, Units 2 and 3), ALAB-189, 7 A.E.C. 410 (1974).
27_/ Initial Decision, at 223-224.
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. delay in operation.
Accordingly, we have given no consider-ation to this factor in our analysis.
b.
Extent of the flEPA violation By failing to consider the impact of waste management and reprocessing in either a valid generic proceeding or individual licensing proceedings, the NRC has, according to the United States Court of Appeals for the District of Columbia Circuit, violated the requirements of fiEPA. However, all environmental impacts but those of waste management and reprocessing have already been adequately considered.--29/
This is manifestly not a case where the agency has failed to do any HEPA evaluation, or where the analysis that was conducted is totally invalid.
Furthermore, the extent of the liEPA violation cannot be gauged in the abstract. The impacts of waste management and reprocess-ing are being considered by the Commission at this moment in a gtneric agency evaluation. The matter of energy conservation will also be considered by this Licensing Board on an expedited basis. No wastes or spent fuels will be generated in this interim period and, if, when the future impacts of waste manage-mcnt and reprocessing are factored into the Midland cost / benefit
..tlysis under an interim fuel cycle rule, the environmental ct its outweigh the benefits, then construction can be suspended at that time.
28/ Also, the issue of energy conservation must be reopened, and the changed circumstances of Dow's need for process steam must be taken into account.
29/ An evidentiary hearing on energy conservation matters must also be held.
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Thus, in the case of Midland, the integrity of the NEPA process will not be affected by ongoing activities. For these reasons, we believe that the NEPA violation was essentially harmless in this case.
c.
Timeliness of objections The waste management issue was raised quite early in the proceed-ing and therefore the timeliness of objections does not have any impact on the balancing process.
III. Conclusion The above analysis of the five factors propounded by the Commission, based on the information to date, has shown the following:
(1) the adverse impacts from activities in the period before an interim fuel cycle rule is promuigated will not be significant; (2) continued construction will not foreclose any alternatives; (3) there is every reason to believe that delay will have substantial and adverse effec.s; (4) the cost / benefit analysis cannot be tilted through increased investment; (5) public policy concerns are either neutral or appear to be of little weight.
Of particular importance is the fact that ongoing activities will not. ; ult in any significant environmental impacts or foreclose alten itives (factors (1), (2), and (4) above)). These factors, which' 6
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, weigh against suspension, are particularly important because they go to the heart of the NEPA review process. Effects of delay are also crucial to any equitable balancing of factors, and here there is every reason to believe that the effects of delay will be substantial and adverse (factor (3)). Public policy concern:.
(factor (5), are either neutral or appear to be of little weight in the balancing process.
While the complete facts are not available--dollar delay cost.s to applicant are not available at this time--the analysis to date is highly suggestive of the answer to the suspension questions. All factors are either essentially neutral or argue against suspension.
However, the Staff must reserve its position on the suspension question pending ana,1ysis of applicant's and intervenors' briefs.
An evidentiary hearing would be required in this matter in the event that there were a genuine issue of material fact having a critical bearing on the suspension question. However, the normal procedure for ruling on a stay or suspension question is to rely on moving papers and affidavits of the parties. Furthermore, there is the danger that the conduct of hearings would itself consume the entire period of possible suspension.
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, The Staff believes that the analysis of all factors set forth above indicates that no serious factual dispute is likely to arise as to factors (1), (2), (4) (5). Thus, any evidentiary hearing should be confined to factor (3)--effects of delay. The Staff further be-lieves that any final decision on the need for a hearing on the impact of delay should await analysis of the briefs filed by all ti.e parties.
Respectfully submitted,
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Martin G. Malsch Deputy Chief Regulations Counsel u
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Jane A. Axelrad Counsel for NRC Staff Dated at ba'.hesda, Maryland this 7th day of September 1976.
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