ML19338C230

Responds to Intervenors' 760903 Motion to Halt Const Pending Completion of Remanded Hearings.Motion Is W/O Merit & Should Be Denied.Applicant Motion to Recall Show Cause Proceedings Should Be Granted.Certificate of Svc Encl

ML19338C230
Person / Time
Site:	Midland
Issue date:	09/13/1976
From:	Reis H CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.), LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL
To:	NRC COMMISSION (OCM)
Shared Package
ML19338C229	List: ML19338C228 ML19338C230
References
NUDOCS 8008050683
Download: ML19338C230 (30)

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UNITED STATES-OF AMERICA

' NUCLEAR REGULATORY COMMISSION Before the United' States Nuclear Regulatorv Commission In the Matter.of )

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CONSUMERS -POWER . COMPANY. ) Docket Nos.,50-329

): 50-330 (Midland Plant, Units .1 and' 2) )

LICENSEE ' S ANSWER TO INTERVENORS ' MOTION 4

I. INTRODUCTION On September 3, 1976 intervenors moved the

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. Commission " formally to halt construction of the Midland Nuclear Facility pending completio'n of remanded hearings in accordance with the decision in the Court of. Appeals in Aeschliman,.et al. v. NRC, decided July 21, 1976, or in the alternative for the amendment of the Commission's Order ~of August, 1976 in this docket establishing an Atomic Safety-and Licensing Board to make. clear that the d

'Atoritic Safety and Licensing Board should consider in connection.with suspension of construction all of the issues: presented 'by- the Court of Appeals' Opinion and

-not just fuel cycle issues'" (footnote omitted). By

. letter ~ to NRC. Secretary Samuel J. Chilk, dated ' September 7, 1976, Consumers : Power Company (Licensee) - requested the

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' Commission to' consolidate its consideration.of the

, Intervenors'/ Motion-with that being given-the. earlier p .,

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'Mo tion of Consume s Power Company to Recall Show Cause Proceedings (Licensee's Motion).

The analysis which follows demonstrates three

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important' points. First, as demonstrated by the Licensee's Motion, it mak'es no sense to place already issued licenses and permits in' jeopardy'at a time when the Commission, the Licensee and other affected utilities are expending efforts ~ directed at obtaining further review by the Supreme Court. Accordingly, the Commission should recall the Midland proceeding initiated in con-formance with its General Statement of Policy (GSP;

, 41 F. R. - 34,707) , thereby rendering the Intervenors '

Motion moot.

Second, even if=the Commission decides not

'to grant the. Licensee's Motion and recall the-proceedings, Lit should still deny the request in the Intervenors' Motion to suspend construction at Midland. Addressing i the question. of ' suspension involves the consideration and weighing of several factors against the background of the . Court's refusal, in the Aeschliman decision itself, to vacate'the Commission's orders and thus halt construction.

~ Proper evaluation of'the relevant factors, which -- in- l i

'lightLof th'e Commission's decision to' postpone additional fconsideration of' energy conservation and ACRS issues

- until after the Midland decision becomes final -- all' u

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relate to fuel'gyc.le matters, can only lead to the conclusion that construction should continue.

l Finally, the Intervenors Motion should be denied to the ' extent it seeks to expand the scope of I 'tdue Midland shcw cause proceeding to include consideration i of issues other than those related to fuel cycle matters.

The Commission's decision to delay the ccmmencement:of a remand proceeding on energy conservation and ACRS i

issues until after the Midland decision becomes final 4

i was a proper and correct exercise of administrative f' discretion. When, and if, such a proceeding is 1

i convened, then it may be appropriate to re' consider the j- matter of suspension in light of a new proceeding on-those issues.- However when it is not even possible to_tell if sdch proceedings will ever be held, it makes no -sense -- and, indeed, is impossible -- to properly cons'ider:the question of. interim suspension in the

-light of those issues.

A II. Analysis i A. - The Licensee's Motion

In

its order of August 18, 1976, the Commission

! directed that an Atomic Safety:and Licensing Board for the

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.MidlandJfacility be reconvened for the purpose of con- -

!sidering "whether:the construction permits-~for'that facility;should'be continusd, modified or: suspended until

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an interim fuel cycle rule has been made effective." The Licensee's Motion requested the Commission to recall that order. ! The motion pointed out that the licensees and intervening utilities who are_ parties to Natural Resources Defense Council v. NRC and the Aeschliman cases (the fuel cycle decisions) vill seek Supreme Court review of those decisions ~and that the NRC has recommended to the Depart-ment of. Justice that the Government also' file a peti-

. tion seeking such review. The motion referred to the investment which Consumers Power Company had made in complying with the terms of the construction permits, the potentially great social and financial costs involved in suspension, and the equitable considerations which weigh against the institution of suspensics proceedings at this time. The motion took the position that, even if suspension J

should become necessary at some time in the future, it -should not be imposed, and no proceedings imperilling the permit should be instituted,until further judicial review is pre-cluded. Paragraph 2 of.the motion contended:

2. The technicalities of whether a mandate has or has not issued aside, it makes no sense to put already issued con-struction ' permits and operating licenses J/ In accordance with a telegram sent by the Secretary on August'31, 1976, responsive pleadings were filed on or i

.- before' September 7. On September 8, 1976, the Licensee

. transmitted to the-Secretary, 'together with a request for permission'to file it, a " Reply to Staff Answer."

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. in jeopardy' at this time. If'the Supreme

' Court det, ermines to review the cases, full implementation of the Court of Appeals decisions would be inappropriate while the cases are pending before the Supreme Court.

On the other hand, if the Supreme Court declines to review the cases, any delay in implementing the principles they adopt

' against any Ccmmission licensee _ or permittee will have only been for the_ comparatively.

brief peried of time it will take the Supreme Court to decline to issue the writ.

If the Commission does grant the Licensee's Motion it must deny the Intervenors' Motion. The two are mutually exclusive.

The Licensee's Motion is basically addressed to the discretion of the Commission. As we demcastrate belew, the legal authority of the Commission to exercise its dis-a cretion as proposed is beyond question; and no pleading f

filed in this proceeding offers any real justification for not doing so.2/ donsequently, the Intervenors' Motion However, even if the Commission should should be denied.

' determine that there exists a basis for denying Licensee's Motion, the'Intervenors' Motion should, nevertheless, be

' denied for.the reasons _ set forth below.

i 2/';See Licensee's " Reply'to Staff Answer,"' dated Sep-u tember 8, 1976.

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. i B. Susp'ehsion -

A brief. review of certain-background matters may be helpful in considering the question of suspending the Midland construction permits. In its Aeschliman deci-sion the Court'of Appeals remanded the Midland proceeding to the Commission for further consideration of three basic issues: energy conservation; the report of the ACRS; and the uranium fuel cycle. See Slip Op., pp. 16, 21. In connection with the third issue (fuel cycle) the Commission issued its GSP. There the Commission -- for the purposes of the Midland case -- did two things. First, the Commis-sion announced that it had decided to reopen the fuel cycle rulemaking and that, as part of that proceeding, an interim-rule might be adopted. 41 F. R. 34,708. Second, the L

Commission indicated that it would assign to a. Licensing Board the question of whether or not the Midland construction per-mits "should be continued, modified, or suspended until an interim rule has been made effective." Id., p. 34,709.

Equally.important, however, is what the' Commission, in its GSP,-did not do. It'did not-initiate a remand pro-ceeding in connection with the other two issues (energy j conservations and the ACRS report) and -- no such pro-i-

iceeding : having been - established -- it did not assign to a L .

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- Lice ~nsing Board consideration of the status of the Midland-

- construction permits pending its completion..

As is' discussed.in detail in Part II.C of this Answer,.the Commission's decision not to immediately con-

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. vene remand proceedings concerning the energy conservation and ACRS issues was a propor exercise of its discretion.

i- More important for present purposes, however, is the

- specificity /and clarity with which the Commission charged

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the reconvened Midland Licensing' Board with'its task.

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In the ' GSP aus noted above, the Commission stated that the fuel cycle rulemaking was being reopened and that

.the Licensing Board was to consider what should be done

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with the' Midland construction-permits,-if anything, during the pendency.of~at least a-part of that proceeding. The Commission also indicated, however, that another eviden-

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tiary pr'oceeding would be. required in Midland "barring

-further review," but that that proceeding should not begin "until'the Midland decision has become final." 41 F.' R.-

34,709n.2. In addition, in its Memorandum and-Order of

' August 16,.:the Commission stated:'

" No hearing on the merits of. the' other issues assigned for- reconsideration by the court

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- , Lof appeals initheLAeschliman v. NRC decision willibe~appro-

-priate,until hhe decision of the court of appeals _has-9 9

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become final." In the context of the GSP's explanatory phrase, "barring~further review," and the Memorandum and

-Order, finality of the Midland decision can only mean

. final inLthe sense that the opportunity for appeal is

- exhausted.

The-Commission's use of the term in this way is,

. of course, familiar legal usage. lNs used in the GSP " final" means conclusive, i.e., from which there is no appeal. In

!- postponing the commencement of an-evidentiary hearing on other than fuel cycle issues in Midland until that " decision

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has become final," the Commission utilized the precise .

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language' dealt with by the Supreme Court in'a decision where f

its interpretation of those words coincided with that which -

the Commission plainly gave them within the context of the In Linkletter v. Walker, 381 U.-S. 618, 85 S. Ct. 1731 GSP.

(1965), the Court was deciding whether the principle estab-2 lished:in .apy,.v.

3 Ohio applied "to state court convictions

which had.become final before. rendition of our opinion."

Id. at 622, 85 S. Ct.-at 1734. For clarification, the

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LCourt notedi By final we mean where judgment of con-

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vict' ion was rendered, the availability of' appeal exhausted, and :the time for petition;for certiorariLhas elapsed be --

-fore ourndecision in Mapp v. Ohio.

Id.=at 662n.5, 85 S. Ct.L15 1734n.5.

.More recently,-a. district court made an-identical

'intierpretation of ~ the word: " final" ;in a declaration that its e

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. decision should apply to all cases "not finally decided" on the date'of the filing of that. suit. In that context,

.the court said, A case is finally _ decided when time for direct appeal expires- without direct appeal having been taken,.or if direct appeal has been taken and decision rendered, the date on which certiorari was denied or on which i the time to apply for certiorari expired without such an application hav.ing been made. See Linkletter v. Walker, 381 U.S.

618 (1965).

Long v. Robinson, 316 F. Supp. 22, 31n.8 (D. C. Md. 1970).  !

In light of these holdings, it could not be 4

clearer that when the Commission, in the context of a reference to "further review," spoke of postponing hearings until after the Midland decision has become " final" it had in mind'the-Supreme Court's' concept of finality which contemplates thatthe time for petitioning for certiorari has expired, or'that rights.to petition for certiorari have.been^ exercised and that certiorari has been denied or granted and the merits. decided, thereby providing a final decision.

-Accordingly, at this time the question of con-

!struction permit suspension pending the outcome of remand proceedings-must be~ limited _to' factors _ pertaining to.the.

fuel: cycle matter. Among other things, it would be

. meaning 1cssLto attempt to decide ~ia the Midland construc-

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tionLpermits:should be continued,'modifi'ed or' suspended

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. pending the outcome of evidentiary hearings which in fact t

do not n'ow and may never exist (assuming certiorari is granted and the. Aeschliman decision reversed) . - From a.

more practisal standpoint, however, it would be anomolous to let conservation of energy issues, for example, play a role in determining whether construction should be sus-pended while Supreme Court review of that issue is being sought. As we show below, in II.C., the considerations which apply to that issue and fuel cycle. matters are easily distinguished.

Consequently, the discussion which follows addresses the-question of suspension solely in terms of' the reopened fuel cycle rulemaking and related factors.

Within that context and as indicated below, a proper application of the relevant law leads to the inescapable conclusion that construction'at Midland should proceed without interruption; and~that the construction permits should remain in fu111effect, without modification or sus-pension.

Any_ consideration of the' matter of modifying or suspending the Midland construction permits-pending.

the adoption of an' interim fuel cycle' rule must neces-sarily occur'against'the background of the Court's deci-sioniin the Aeschliman case. The action of'the Court there

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.w eighs heavily against any modification or termination of the permits during the course of further proceedings.

It is most significant that the Court of Appeals deliberately chose not to vacate the construction permits.

As the Commission has itself~ recognized, the Court allowed the permits to remain in effect pending further action.

See 41 F. R. 34,707. In the. face of specific requests for both reversal and injunctive relief, as well as re-mand, the Court deliberately chose only to remand; it did not vacate. See Aeschliman v. NRC, Slip Op., pp. 16, 21, 23; Brief for' Petitioners in No. 73-1867 at 68 (Feb. 25, 1974); Reply Brief for Petitioners in No. 73-1867 at 33

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(June 20, 1974); Appellate Brief for, Petitioners in No.

73-1776 at 42 (Oct. 26, 1973).

In simply remanding,' and refusing to vacate or

. reverse,1the Court was no doubt aware of the strong possi-bility that the error'it had identified would not affect the final result. In fact,.in the almogt three years the case wasEbefore it, the' Court was able to identify only t'hree errors (concerning which the Licensee will, and the

~ . Commission may', seek further judicial review) in a record

- .of.more than 25~,000 pages.- With respect to the relevant error,-it is likely that-the Commission will reach.the

- :samelconclusionjon remand.

In Judlge Tamm's view, "it [is]

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I' t almostinehitable.that, after' fully considering the pro- ,

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--blems and L alternative methods of waste. disposal and storage, '

theLCommission will reach ~the same conclusion . .. " NRDC-

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. v. NRC,' Slip Op., p...5.(Tamm,~J., separate statement-con-curring in

result). .

4 of course, the Aeschliman Court's action in1 simply j' remandin'g was not only proper in view of the specific cir-cumstances o'f the particular case in' question; it was fully j

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consistent with established judicial practice. Its~deci-p slon not to vacate the' Midland construction-permits repre-I se'nts an appropriate. exercise of a court's power,-on're- l view of' administrative orders, to " adjust its relief'to the j exigencies of the case in accordance with the equitable.

principles' governing? judicial. action." Ford Motor Co...v.

NLRB , . : 305 U.S.-364, 373, ,59-SL Ct. 301, 307-(1939). When an administrative' order is presented'for review:to a court' it'has,Safter determining-that; error has been committed,

.severa1' options. It'may affirm on the ground that the error :was not'. prejudicial;' it" maysvacate or reverse the .

-o'rder and reman'd.'for further. proceedings; or, based on the 4

. specific; circumstances of the: case,.it.may remand for~ fur-Ltherfproceedings:butfleave'the order below fully effective

_pending1the outcome,ofitlte'_ remanded case.

This'la'st approach hasLbeen'followed both in J

-reviewcproceedings1 generally, Land in casasiarising under .

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- 13 NEPk. For example,11n American Smelting and Refining Co.

v. FPC,l494 F.2d 325-(1974),. cert. denied, 419 U.S. 882,

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- 95:S. Ct. 149 (1974), the' District of Columbia circuit Ifound that a temporary FPC gas curtailment plan'was ,

erroneous:in specified respects and required further' pro-ceedings.' 'But the. Court permitted the curtailment ~ plan to remain in -effect pending the outcome of additional adtainis-trative action 1to" cure the defects. Similarly, in a leading ,

case, a three-judge District Court headed by Judge Friendly determined that further proceedings under NEPA were required-to support an ICC abandonment order previously issued and in effect. .However, in remanding the order to allow the agency an opportunity to comply with the requirements of NEPA, the order was.not vacated but permitted to stand.

City of New York v. United States, 337 F. Supp. 150- (E. D.N . Y. ,

1972).2! More - particularly, with respect to Commission pro-ceedings,-courts-have allowed permits and licenses to remain-in effect while,7at the~same time,' remanding:for further, consideration of:both health'and safety-(York Committee for a2 Safe Environmentsv. NRC,:527 F.2d 812: (D.~C. Cir.

'1975)) and environmental matters (Coalition for Safe Nuclear

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See Essex County Preservation Ass'n v.-Campbell, 399 F.

3/ ' Supp.;208:(D. Mass..19.75), aff'd, Essex-County,Preser-

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vationLAss'n v.7 Campbell,1. Slip:Op., No. 75-1392 (1st

. .Cir., June 18,.1976). ~ See also.. Arizona Public1 Service- '

,;Comm'nf.v.-FPC,-483TF.2d 1275 (D. C. . Cir.119 7 3) ; .

Simmans.v.cGrant,J370 F.(Supp. 5 (S.D. Tex. 19 74 ) ~ .

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Poweriv ~ AEC, .463 F.2d 954 -(D. C. Cir. 19 72) ) . .

In' connection;with the. Midland case, of course,-

1 J the Commissionihas already: directed an' Atomic Safety and. -

Licens1ng-Board to consider one of the_ precise' questions a't

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issue here,ii.e., whether or no't-the-Midland construction permits should' continue inJeffeet during~the' pendency of.

a? generic rulemaking concerning the environmental impacts .

b of fuel' reprocessing'and waste management. -

An interim rule-

. t m.ight be expected by December. See'41 F. R. 34,708. But, i .

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.before the:rulemaking is complete,. full consideration of fuel' cycle-impacts -- as required by the Aeschliman decision ---

,will,-of.' course, be impossibie'. This circumstance,-however,  !

, poses ~.no bar to a finding by either the Commission or the

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L  ; Licensing Board ' or both ~iri favor of' the . continued - effective-l

' ness.of"the permit's. In: fact,'an examin'ation of the appro-l c priate' factors indicate's quite clearly _that any modification- ,

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. . or sus' pension'of'the. Midland construction permits would be l

improper.-

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' In'. one ' of..it's : earlier' NEPA decisions , _ Coalition l .

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ofor. Safe' Nuclear?Po'ferEv.LAEC,-463 F.2d'954'(1972), the- ,

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District'ofOColumbia-Circuit had occasion.to consider;a-

questionisimilar.toitha'tlatEissue here. 'The~ case itself- .

,. - 'aroseJshortlyfaftersthat.same Court ~had ruled,~in Calvert p *

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L . Cliffs:v.(AEC,f.449fF.2d.1109 (1971) , that~ an environmental (analysis wasirequiredifor reactors:which'had-been'under

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cons"truction, but not operating, prior to the effective date of NEPA. In considering whether or not reactor con-4' struction activities shoul'd be suspended pending completion 2

of environmental reviews, the Court approved of'four factors "to oe conside' red'and weighed in the determination of the question of. suspension of a construction permit pending completion of a full N.E.P.A. review." Id., p. 956.

Applied here, as the Commission has in its GSP, those factors are: Whether it is likely that significant adverse impact will occur before a new interim fuel cycle rule is-in place; whether continued construction will foreclose sub-sequent adoption of alternatives with respect to the fuel cycle; the effect of delay in facility construction upon the public interest; and the possibility that the ultimate cost / benefit balance will be prejudiced as a result of

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continued expenditures _for plant construction. See 41 F. R; 34,709. Considoration of these factors dictate. at construction at Midland should continue.

First,.the environmental effects of operation of the plant are not involved in this proceeding. All 4

that is involved is the environmental effect of continued

- construction during~the. limited period.of time until the interim rule is made' effective.

The' fact: is that the total environmental impact

. of-site. preparation.andlconstruction of the complete plant.

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is-small. See Final Environmental Statement, pp. IV-1 to IV-4 ("FES," March'1972). 'Moreover, it is beyond dispute T

! that virtually all adverse environmental impact associated.

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"with construction.has already occurred. Construction began

! cat ~the' site under an AEC exemption issued'in July of 1970 2[ .and'was suspended by.the Licensee in November 1970, when

~it'became: apparent.that.there would be an extensive delay 1..

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before issuance of the construction permits. The permits-s I were issued in December 1972. See Consumers Power Co.-

i (Midland Plant ' Lnits 1 & 2) , LBP-74-71, 8 AEC 584, 585 I (1974). As early.as March 1972,_however, site clearing '

.and'dredhingtowidentheTittabawassee' River'hadbeen-

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j completed.and the major terrestrial impact of the Midland

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4 L < project'had already been realized. See FES, pp. IV-lito  ;

- IV-2; V-12Lto V-131(March 1972). Currently, construction i .

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j is estimated to be about fifteen. percent complete. See, e.g., NRC,' Construction Status' Report (NUREG-00 3 0-7) , pp.

2-54Eto 2-55: (July 1976). Moreover, no, nuclear fuel will -

-be' irradiated and'no! nuclear waste will be generated"by the facility:until construction of the-first unit is complete. i and(an operating license has been issued. .

In short,.no:.

ysignificantiadversejimpactiwill occur as:a result of the J continued construction <of~the Midland facility before a-4

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new$ interim fuelLcycle: rule.is;in place.

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I - Second, no. reasonable. fuel cycle alternatives will be foraclosed by continued construction. As the Commission has already noted in its GSP, "[s]ince ex-j istin'g concept's for reprocessing and waste technology do l

not vary significantly with the design of nuclear power

-generating facilities, it is extremely unlikely that the

[ Commission's] revised environmental survey will result in any modifications of these facilities." 41 F. R.

l 34,708.

l-Third, suspension of construction would have l

serious economic and social effects. Consumers Power

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j Company has already expended approximately $300,000,000 in connection with the construction of the Midland faci-lity. - See Registration Statement on Form S-7 to the Securities and~ Exchange Commission, including Preliminary Prospectus dated September 8, 1976. The project is already seven years behind schedule and the estimated cost of the facility has increased.from less than $400 million to more than $1.5 billion.b! Even a relatively short delay 4/ By March 1972,~aftar almost a year and a half of.the 1970-73 suspens' ion'of' construction, the estimated con-struction cost of the Midland facility has risen to -

$554 million.- FES,:p. XI-6. Early in 1975, budget-constraints forced a severe cutback in construction activity at'the site. 'By.then, the estimated cost of the facility was:$940 million. -It was revised to $1.4 billion.during.19751due to the then-projected delay in (continued cnr following; page) ,

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{ s j if four months:would further delay the project i- substantially, cost.many millions-of' dollars and

put very large numbers 'chf workers out L of jobs.

!, .. Id., pp..

. . Under the Coalition decision such

" delay costs to the licensee-and the consumers" are properly.to be considered.and weighed in deter -

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mining whether construction should be permitted to continue at: Midland. 463:F.2d'at 956. Environmental-

j. Defense Fund, Inc. v. Froehlke, 477 F.2d 1033 (8th 4

' Cir. 1973), is.to. the same effect. -

1- Nevertheless, under the rule of the Aeschliman case, at least, the costs of continued' construction cannot-prejudice the outcome of-the ultimate cost /

benefit 1 balance. Accord i ng to the Court, any e

a reanalysis of costs and benefits must not. include l

j 3/ ithe' (Continued from.' previous page.)

i commercial; operation dates of'the units, and:further .

refinement.of the estimate.of the scope of work. See

- Licensee's 1975' Annual: Report, pp. 10, 24; Appendix A to-Quarterly-Report for the. Fourth: Quarter of 1975' submitted to NRC-in1these dockets;by: Letter from '

S.~H. Howell.;to B. C.'Rusche, dat'ed March:2,- 1976.

.As noted~in the report, and Mr. Roger Boyd's" reply

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l thereto1 dated May.13, 1976, thejLicenseeJannounced,

- in.' December 197'5,1thenresumption.ofLa: normal con ,

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, :struction'-program. ~More?recently, the. estimated: cost.

- - . of:the~ Midland. facility:has increased from.S1.'4 billion-1to'$1.67 billion,?as' disclosed;in Licensee's Amendment '

mNo. 1 to jForm S-7. Regi strat ion l Statement toTthe.

LSecurities.'andf Exchange: Commission;(Registration?

No. :2-56950) ,; p. 4 of: Prosper.tuscdated!AugustL19,~1976,'

forL2,'000,000 shares of:: Preference Stock. ,

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. sunk costs asJcosts of abandonment. -Aeschliman v.

.NRC, Slip Op. p.--21n.20. Thus, if it becomes appropriate to ' consider : the alternative of abandoning .the project l

-under.Aeschliman, the cost / benefit balance will be

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'independent-ofLpercent plant completion. Under the decision, such costs as-replacement costs -- which are not a function of construction status -- may be considered; but not past expenditures. ' Id. Accordingly, the ultimate outcome.of the NEPA cost / benefit balance for~ Midland cannot be prejudiced by continued expenditures now,zno matterfwhat their rate or. duration.

In-brief,-consideration of each of the factors presented in the Coalition case requiresEthat construc-

-tion continue.. Moreover,~since there-is'no " compelling basis for halting construction" (Greene County Planning .

Board v. FPC, 455 F.2d 412 (2d Cir. 19 72) , cert. denied,

-409 U.S. 849, 93 S. Ct. 56-(1972)) the equities should-be cons'idered. See, e.g., Conservation Society of Southern Vermont v.--Secretary of Transportation,'508

'F.2d'927 (2d Cir. 1974), rev'd on other grounds, 531 F.2d 637-(1976).

- This is=not a situation in which the construction

permit has only.-recently been icsued and the economic and'socialicosts of~ suspension of construction might'

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'therefore bersmall; Here the(co,nstruction permits 1were

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' issued almost four, years ago. 'In order to comply with their. terms-and to meet the. Licensee's perceived obligationsfconstruction has proceeded atLcosts ranging into the hundreds of millions of. dollars. A large work- force has been assembled. During that time'no party sought a stay pending.the appeal; and the ' Court -of ' Appeals itself. took almost three full-years (more than one and one-half years after ' the date of

oral argument) to issue its decision. In such cir-

cumstance equity cries

out against j eopardizing con-

struction,=at'least'until Supreme Court review is either-completed or' foreclosed.-

4 In addition, at the very minimum, nothing should be done .by either the Commission or Licensing Board t

to . disturb the permits before September- 30.

At tha't time.the' revised environmental survey will be available add.the: Commission will decide whether or not;the resumption of all licensing Would be-appropriate. : See 41' F. - R. 34,708; Testimony of NRC Chairman Rowden Before the Joint Comm. on Atomic

. Energy , Tr.- -pp. - 6 2-6 3 .(Aug .- - 27, 19 7 6) . To suspend J thelMidland construction . permits 1on the ' basis of the

.. fuel.cycleidecisionsfat.'a. cost of millions of dollars

~

'and hundredgjof : jobs and then -find - va : few . days nlater --

[that?they .present no 1bar . toicontinued ' licensing af ter .

T l

7all7?vouldjtranscendLboth[ fairness andflogic.;  ;

a -

O~ ~ '

, , , . ,  ; ;; . - . , ..,.n., ,. ..- -, , - - -.

! +

- e '- ~

21 -

. Finally h turning 1 to ! the ' " (g] eneral policy con-

. _cerns"Lwhich the. Commission;has mentioned in its GSP, 4

there is'no doubt as to the need for the project. The Midland plant willLbe utilized to provide nuclear base-

~

c. .

load ? capacity for .the Michigan ~ Electric Power Pool.

See FES, . pp. X-l~to.X-2.3! Generation not supplied by the plant will have to be provided by other

- available alternatives, which consist only of facili-Lties utilizing valuable and' versatile fossil' fuels.

.Id., p. XI-1. .The sooner the Midland generating

capacity beccmes available,.the sooner these resources ,

can be conserved.-

As for!"the extent of the NEPA violation," there may;be~no pertinent violation at all. With respect to.

the fuel cycle issue, - Judge- Tamm 'specifically stated:

~

I further agree with the conclusion of l the majority that itzis impossible to determine- from the record before us whether the : Commission 'has fulfilled

'its statutory 1 obligation under NEPA~. . .

NRDC v.;NRC, Slip..Op.-pp. 1-2 (Tamm,.J., separat'e

_ statement / concurring -in result) . In any event, this i 2 l

3 I5/. LTheLquestion of- precisely when the output oi the

-Midland

plantfwill be .necessary. to' meet- load demands will be:the1 subject'ofEanother pro'ceeding, along with the matterlof: the ACRSiletter,- unless the Aeschliman

~ decision is. reversed by:the? Supreme Court. 41 F.R.

- :3 4 ,' 70 9 n . 2. : .

x Y

= , , ,me---6 - -

=+e-

n

,r

~

is, clearly :not on'e of . those "most flagrant cases" calling for" suspension.- See generally Levanthal, Environmental Decisionmaking:and'the Role of the-Courts, 122 U..Pa.

- L. Rev. 409, 539 (1974).

l: Third ~,-with respect to "the timeliness of objec-

~

tions,",although the fuel cycle matter was raised early

~

l in.the proceeding, this cannot be a reason to halt

~

construction. Under the circumstances of-the' instant p case (where the Commission's decision was part of a-deliberate policy. implemented through a line of opinions) the fact that the Waste = management issue was timely raised.can'only be-of neutral weight.

Fin ~ ally,-it is important.to note that permitting the continuation of construction at Midland is'not only required by.-the relevant judicial precedent;-it-is a necessary: outcome under the law applied.in-the-Commission's own^ licensing cases. In considering whether or not permits and-licenses'should remain in A

effect during the pendency;of remand proceedings, the LAppeal Board"hasvfollowed the consistent. practice

' ~

of leaving.such. permits.and" licenses undisturbed. absent l

- reason' to :believe that the : pendente - lite continuation L ..of(the.activitiesoin; question might pose, in itself, a F threat tojhealthiand safety'or.the environment. - Southern

~

! California Edison 'Co. -(SanL Onofre: Nuclear Generating -

N h kJ e 4 , 4 -

- , - . * - . .-..E.--

.~

5 J -

- 23 _

Station, Units 2's 3), ALAB-212, 7?AEC 986 (1974).

s . ' Applied to' Midland, construction between now and the p . adoption:offan' interim rule: involves no threat to the publicLand, as discussed above, little if any risk of-' incremental adverse environmental-impact.

4 Accordingly, L by - the commission 's own standard, construction should be allowed to continue.

$ Based-on'the foregoing analysis, it is clear that construction of the Midland facilitygshould not i.

be suspended. Since there are substantial costs, but essenti^ ally'no~ benefits, associated with halting

-construction'at. Midland, the proper course is for this Commission to deny the Intervenors' Motion insofar-

. as.it re, quests that construction.be halted and allow-

~

the Midland construction permits to remain in full.

~effect. -

4 .

JC. The Scope:of'the Licensing Board Proceeding LAs:hasLalready been discussed under II.B above, in its GSP an'fAugust116' d Memorandum and Order,.tho

Commission confined theLjurisdiction.of the reconvened

<  : Midland Licensing; Board to consideration-of whether or; not i construction..should be suspended.until an~ interim-In addition,

~

fuel cycle rule has'been?made-effective.

- =since.<the Commission 1has'not yec ordered. evidentiary 4

-; hearings;into.the energ:r anservation and:ACRS questio'ns.

, raised'by;theJAeschlimanidecision (and'may:neverLdoeso' 4;;

.- . 3; if the case is reversed) the Licensing Board's jurisdiction

-was properly-limited to consideration of matters pertinent to the fuel cycle issue.

The following discussion demonstrates'that the Commission's decision to delay additional ~e*cidentiary hearings'en energy conservation and the ACRS report (and, consequently, an inquiry into possible suspension of the Midland construction permits during the pendency of such proceedings)' constituted a proper and correct exercise of-Commission's discretion and, under the circumstances, was wholly ~ appropriate. .

Upon remand of-an order by a reviewing court, an agency has-broad discretion-as to_how it proceeds.

While there is no question that a. reviewing court has the-

_ power to remand for a limited purpose, the affected agency has the authority tx) conduct its proceedings on remand as -

it deems appropriate. See generally FCC v. Pottsville Broadcasting.Co.,'309 U.S. 134, 60 S. Ct. 437 (1940).

In particular,.as' Professor Caffe has indicated, when-the issues decided byLthe reviewing. court involve the relevance of factors omitted, "the power vel non of the agency.once more tx) reach- the result challenged on appeal has not been decided. . The: exercise of discretion on all appropriate  ;

-factors remains open_under the. mandate." L. Jaffe, Judicial H controlDof Administrative Action, p. 716 (19 6 5) . .

l I

m, A

25 -

With respect.to.the. scheduling of. administrative

~

proceedings, it is7well settled.that federal agencies are freeL to e::erciseLwide discretioncin Lmanaging their dockets.

'See,Je.g., FCC v.;WJR,"Th'e' Goodwill' Station, 337 U.S.

265, :69 ' S. LCt. :1097 (1949) .= In the instant case it is

' clear-that the Commission's determination to; postpone-commencement'of hearings 1into energy conservation and-

~

- ACRS issues until the . appellate -process is exhausted was a proper and' correct exercise of- that discretion.

As 'is .well known', Consumers . Power- Company intends to file a petition for'certiorari with-the Supreme. Court

(see, ' e.g. -Motion 'for Stay of Mandate (August 23, 1976))

=and the Commission itself;has suggested?to.the Department-of Justice.that it,-likewise, petition.the' Supreme Court.

With the Aeschliman~ case in such a= posture, the Commis-sion's decision"to wait and see if certi,orari is. granted j beforeLeonveningsnew evidentiary hearings was not only j

-within its- discretioni; but 5; holly. correct as .well. Among.

]  ;

other-things,'fsimple fairness suggests that the Commis- ,

Tsion not subject parties: to proceedings which might prove-i 7: unnecessary and,.' fro,m'a logical-standpoint, it would make-Lno'senseifor the(commissi'on~to hastily pursue a course 1of' action-based-on:a decision.which it believes-to be in.

12 error!in.'importantqrespects witho't, u a't'least,-first.

\

_ l

<. j

~

. 1 -

.!=

. - 26 : -

waiting lto'see-ifLcorrective? efforts might prove effec-tive. -

As expressed'inLthe GSP,'it was the Commission's judgment:that the problems of waste disposal and repro-cessing.re. quire that administrative measures be taken immediately:-- even while further judicial review was 1

being' considered. However, as the GSP also made-clear, a:similar judgment was not made'with respect to the remaining ,

issues involved in:the Aeschliman case. This view of the

~

matter'. finds ample support-in the fuel cycle. decisions. -The

[ ,

court's special concern witli the long-lived toxic-qualities of _ high level waste is manifest 'in the NRDC decision. It

~ emphasized that the problems " warrant the most. searching ~-

[ scrutiny _under, NEPA. " (Slip Op. .p. 8,'n. 11). For the Com-mission t'o initiate immediate efforts toideal with those -

} problems ~while deferring action with respect to the other issues: involved-in the.Aeschliman decision, pending further l, judicial review,fis.a' wholly rational exercise of ad-minis'trative' . discre tion.-

In sum, the Commissions authority to: proceed'as-p it-has~is.iclear;1it is.well within the Commission's pre-i-

~

rogativesito; postpone the commencement.of certain evidentiary hearingsiuntil therjudicial' review process has been exhausted;

.and ther basisifor discriminating between-the. issues!to be

~

Dimm,ediately treated andJthose to be: deferred pending " fur--

therTreview"lis rational.

M

'k

,i, .. + . - , ~._,n , , , , - . . , . . , , _ > - . . - .,

y ,

4 ,

4. -L27 --

'One additional pointibears mention.

~

Both the.

'intervenors and the NRC Staff appear to--belicve that,.

' underLthe GSP, evidentiary hearings into energy conser-

vation :and ACRS T

' issues 1are to commence- with - the issuance of Lthe1 mandate.by;the Court of Appeals. The Intervenors'.

Motion incorrectly states on'page two:

The Nuclear Regulatory Commission ex-

. pressly noted.inLits. Statement of-Policy-(as.did the Chairman of 'the established Atomic, Safety _and Licensing

- Board) that evidentiary-consideration

~

of.other' issues would await the issuance-of the mandate by'the Court of. Appeals,

^

And thefBrief:of the:NRC. Staff in Response to'the (Re -

convened' Midland; Licensing] Board's August 13, 1976. Order l

, (dated Sept.~ 7, 19.76) . contains the following language on f

page four:

The mandate of the court in<Aeschliman-should~ issue' shortly. . Accordingly, as thelstaff construes the Commission's

~

GenerallStatement-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 in-cident to thisspoweri this1 Licensing Board also will have to consider, Leither suaisponte-or on1 motion of any party,: the matter of-whether.-the Mid-land constructionLpermitsLshould.be-suspended?pendingEcompletionfofLre-l mand proceedings onfthe other issues.

~

What the-Commission:actually1said in its GSP,

~

l Lof: course, was-that!"barring.further revied" an evidentiary e ihearing1will!'b'e! required,=butithatisuch a hearing "should 1

{

- . :not:be! commenced 7until: the- Midland decision has become' i

i

? .

s ,

~

final.'" .41 F. R. 34,709n.2. As this pleading indicates, the meaning of'these words is quite different than what the intervenors and the staff appear to believe. The confusion over this basic point is so great that clarification.by the Commission would be appropriate.

III. Conclusion

.The Motion of Consumers-Power Company to Recall Show Cause Proceedings should be granted; the Intervenors' Motion-is without merit and should be denied. The issues involved are so cignificant that if the Commission does not take such action on the .

pleadings alone, it should order prompt oral argume nt.

Respectfully submitted, Hhrold F. Reis LOWENSTEIN, NEWMAN, REIS & AXELRAD 1025 Connecticut Avenue, N. W.

Washington, D. C. 20036 (202) 833-8371 September 13, 1976

~

Dated:

's UNITED STATES OF AMERICA'

~ "

!before.the NUCLEAR REGULATORY COMMISSION 4

.In.the Matter of' -

CONSUMERS POWER COMPANY Docket Nos.50-329 3

50-330

(Midl'and Plant, Units _1. & 2) f -

A

. CERTIFICATE OF SERVICE I-certify that copies of the attached letter

to. Samuel J. Chilk,-Secretary, and " Licensee 's ' Answer to.Intervenors Motion,"'both dated' September- 13, 1976, l were served'upon the following personally or by deposit .

'in the~ United States mail, postage prepaid and properly.

addressed,.on September 13, 1976..

Mr. C. R.-Stephens Supervisor, Docketing.and Service'Section Office of the. Secretary of the Commission Nuclear.. Regulatory Commission

Washington, D.-C. 20555 Peter L.' Strauss, Esq.

General Counsel U._S. Nuclear Regulatory Commission Washington, D. C. 20555-

?

-.y. .

L- -

2'-

Howard K. Shapar Executive Legal Director U. S. Nuclear. Regulatory Commission Washington, D.C. '20555 Myron M. Cherry, Esq.

One~ IBM Plaza Chicago, Illinois 60611 Howard J. Vogel, Esq.

2750 Dean Parkway Minneapolis, MN 55416 The Honorable Vern Miller Attorney General Statehouse Topeka, KS 66612 Daniel M. Head, Esq. , Chairman sg Atomic Safety and Licensing Board . Panel U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Dr. Emmeth A. Luebke, Member Atomic Safety and Licensing Board Panel U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Dr. J. Venn Leeds, Jr., Member 10807 Atwell Houston,~ Texas 77096 Harold F. Re(s LOWENSTEIN, NEWMAN, REIS & AXELRAD 1025 Connecticut Avenue, N. W.

! Washington, D. C. 20036 (102) 833-6371 j Dated: September 13, 1976 l

\.

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