ML19347A634

Intervenors',Other than Dow Chemical Co,Response to ASLB 770513 Proposed Findings of Fact & Conclusions of Law. Proposed Findings Are Riddled W/Unsupported Conclusions & Statements Flatly Contrary to Record

ML19347A634
Person / Time
Site:	Midland
Issue date:	07/11/1977
From:	Cherry M, Flynn P CHERRY, M.M./CHERRY, FLYNN & KANTER
To:
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ML19347A633	List: ML19347A632 ML19347A634
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NUDOCS 8007300707
Download: ML19347A634 (12)

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s! p s Q q-ATTAC w ai TO LETTER OF JULY 11-, 1977-4 Th'e purpose of this document is' to comment, in 1 extremely brief compass, on the Proposed Findings of Fact and Conclusions ~of Law submitted by the Commission Staff.

We realize that the procedures establishe'd by. the Board -

during'the May 13,'1977 hearing do not expressly provice ~

for such cocnents, and we accordingly formally request leave to' file these comnents in response to the Staff's Findings. We believe that the discussion which follows

-will be helpful to the Board in as'sessing the evidence developed at the hearings and- the parties ' positions , and

, we also believe that the r.ature and content of the '.ita.ff's Findings cannot be left unchallenged. As we show below, t

the Findings consist in large part of completely unsupported

. conclusions , for which no : record reference of any kind is provided~-of~  ; legally' erroneous arguments and premises;.and of factual'~ assertions which are, to put it bluntly, flatly .

. wrong. ' Because~ we .wish to keep- this reponse .as brief as

possible, we haveinot' identified all of the inaccuracies,

errors.bylomis'sion, improper or incorrect legal argument

'in the Staff l Findings.- We-respectfully submit, however, .j that what we have idencified warrants, at a minimum con- l

siderable' caution a'nd skepticism in reviewing the Staff's

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~ Proposed Findi~gs.- n InLview of the. obligation of allLcounsel

• before th'e Comission- to accurately set forth the facts and

- thec law', Tennessee- Vallev Authority L(Hartsville Nuclear Plant) ,

,ALAB-409,:NRCI-77/.7 (March 31, 1977)., and given~the ostensible position of :the' Staff asxa neutral and impartial arm of the.

Commission, the problems with the Staff's Findings described 1b'elow:are a matter of. serious concern.

Our comments are set out in two parts. First, we will point' out some of the'more glaring deficiencies in

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the. Staff's' Proposed Findings. - Second--and equally impor-tant--we vill point out that the conclusion so stubbornly adhered tot by the? Staff through this proceeding--that continued construction and f' urther multimillien dollar expendituras sh'ould' be authorized pending completion of the remanded hearings on the merits--is; violently at war not; only with the actual facts developed in this record, L

but with the-Staff's own findines themselves.

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' THE' STAFF'S PROPOSED FINDINGS $ ARE .

RIDDLED WITH UNSUPPORTED CONCLUSIONS ~,

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STATEMENTS ' FLATLY CONTRARY TO THE RECORD.

AND SERIOUS' MISAPPREHENSIONS OF THE-APPLICABLE LAN.

J To begin with, the-Staff. Findings rather strongly-

_ support"the conclusion, suggested by:the Board during'the s

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y s he,arings q (Tr.15070,; 5081)" and appearing stronglyifrom the testimony"of Staff witnessec Jrocher (Tr. 4294,'4295), o

'Gundersen (Tr.15152-53, 5161, 5175-76), Echols'(Tr. 3068, .

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f 3117'-20', h3130,3313'5) ~, and Feld ;(Feld Testimony c foi-. Tr.f4375', _

j. ll) ,- thatfthe' Staff has based almost its. entire p.ositio'n

' onLan~ uncritical, blanket: acceptance of whatever' Consumers

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cho~e.to:say. s . Large portions o'f; the -~Stiaff's Findings consist Lof nothingtore than a1 repetition, without comment,lof state' -

& Ements byl Consumers. See, e,.g., 11 13-2C (the entire < discussion-of " adverse environmental impacts'.' in the -Staff's' Findings)',

21-23, 29,v45-'46, 67, 71, 73-77,.83-86, 91-99, 116-18;~134,.136.

Even more alarming, the. Staff's reliance oniConsumers Le in. almost every Jinstance at the expense of the fact's of record; . ,  ; I For.Jexample, V1 22,123, and 2'S of..th'e Staff Findings', asserting n

. that -Consumers considered energy ~ conservation in its: forecasting And that;its long4 range forecase ;is: reliabie, ' omit the facts : ,

that the Staff's ;own witness Dr. Feld described: the probability E

. encoding technique u's ed :in ' th'e long-range . forecase as "not:.

oneJthatEI would:have much confidence in" (Tr. 44 71-7'2) ,. that - 2

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ConsumersF Messrs . [Bickeifand Mosely: agreed thht' the fore- 1 castfis~"more?or'less-basedJon entirely subjective' considera-

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^4 tion"iandithat the,subjectivelbases for: that1 forecast were - .

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neverJprobed[(Tr.K1918-20,7 3293-94,73299, 3363), and'that

' ineither . Consumers' long-range: forecas t nor' its "" validating

. m -  : study" act ually considered'cither price: elasticity or f any

'ofitdefenergy7. conservation pos.sibilities identified by .

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2 Intervenors' witness'Dr. Ti=m (Tr. 1911, 1913-16,.1990,-

1994~, 3262-63, 3279-80,-3326, 4468)'. -Although the Staff

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Findingsfassert that.'various~ independent studies support Consumers ' load growth forecast ' (1Y 26-28) , they omit the e

r important1 facts that~ Consumers' cun forecasting team thinks there is at least an even chance that the forecast is too high -(Nidland Intervenors ' Group Exhibit 11), and thac -

two 'of the three' independent- studies reviewed by the Staff project growth ~ of less' than 57. (Feld Testimony, fol. Tr.

4375,Lpp. 15-16, 19-21):. The Staff also omits to note that.the remaining-study was. regarded by the Staff's own

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Dr. Feld as " overly optimistic:on growth," and in any event is not'actually an independent study but rather a review of data supplied by Consumers and Detroit. Edison. Id.,

p. 10; Tr. 4415-16. 'Accordingly,-the Staff's " findings" thae~ Consumers'?fo' recast'is' accurate and even conservative -

(ti,53-35, s45, 47) are the product more of wishful thinking

'than of reasoned analysis _'of the record.

The same is true concerningEthe. Staff's' discussion of reserve' requirements.

The, Staff'would have us believe that Palisades is in oserious: trouble-(1 43)', which contradicts the Staff's~own -

conclusionf(TL36) that any Palisades derating.is at:best' highlyf uncertain . " Thel Staff claims thatLOntario Hydro

< :is 'a doubtful energy source -(TYE 44, 47) even _ though Consumers

.- $ Nr.f Heins ~ specifically testified that Ontario Hydro projects

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. :availablelcapacity in- S the near future (Tr. -1848-49) . .And-

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' the - Staff's . treatment of the evidence concerning ECAR ^

, betrays an ' unfortunate insistence on rejecting whatever facts do not ' accord with the Staff's stubborn adherence

.to its predetermined conclusion: although the record quite clearly shows' that ECAR projects continually-

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increasing reserves from 1981 through 1983, so muc* so that ' Consumers' own Mr . Heins formally ' retracted his earlier- concern over " dwindling ECAR reserves" (Heins Affidavit, May 19,1977,' .p . 4) , the Staff refuses to -

credit that fact but instead tries to evade the fact by postulating a series of completely unsupported chimeras

-(51 43,- 47) .

A 'similar tendency to ignore facts. inconsis tent with the Staff's predetermined position appears throughout -

0 its discussion of the Consumers-Dow relationship. For.

example, paragrapns-52, 53 and 31 almose completely ignore c

the several hundred pages -of' testimony by Messrs . Temple l

and Oreffice concerninglnot only- the enormity of. the -gulf between Dow's and Consumers ' negotiating! positions but also L the fact, a'dmitted by! Consumers in discussibns with Dow

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l- e,. g. , : Tr. . 2457-59), that acceptance-of virtually any.

f of the contractichanges1 demanded by Dow--and possibly essential to Dow's :further; participation 'in' the Midland

-project--will~. seriously : tilt the cos t-benefit balance away from.the : Midland plant. LInstead, the' Staff ignores out-x  ;

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fright the Board's June' 15. 1977 discussion of'possible antitru'st. violations in the Dow-Consumers centract and--

incredibly,' we think--glosses over the explicit Temple /

Oreffice testimony.that Consu=crs' litigation threats were

' the : dominant ' factor in Dow's reluctant. de' cision' to continue '

" officially"; supporting the Midland project, by claiming

. (Y5. 58-60) ~ that. the -litigation threats are perfectly normal. aspects-of~a business relationship and that it is quite all right for Dow = to shade its testimony in these proceedings,.as 'a result of such threats . It is hard to believe that the: Staff really regards conduct described by.Dow's counsel as " blackmail" and by Mr. Oreffice as i

" extortion" as (in the. Staff's words) "one of the risks associated-with doing busi. ness." .

The things described above'are by no means p

an inclusive list of the' Staff's tendency to avoid the o4 facts in. favor. of unsupp~o rted conclusions and regurgitations .

i of-Consumers': statements. _Even.so, they indicate the fatally

'flawedTnature of the Staff's Proposed Findings. Those Find-ings - are even ' core seriously 7 flawed tur repeated flat errors .

of fdct.- For example, the Staff asserts that the ACRS hasi

- submitted an Lacceptable Supplemental Report and that all of:the'ACRS' "other problems" are insignificant (15-10, 73-u

'77,_-146-60,1166). ThetStaff ignores outright the, fact 4that-

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. :this Board specifically1 advised the ACRS onfJanuary 28, 1977 that the . Supplemental- Report Jwas not xadequate, and has x

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creceivef from the!ACPS not the :fdrther clarification

.m. , H requested, but rather:'a flat refusal' to; respond; <The: Staff , >

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, Kal'o?ignoresitheE s f act5that both its own Mr. Crocker and

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Consumers 'E Mr. Keeley l testified

that itzis: impossible to

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.say,:at? this. point uhether,.or how,n or at what^ cost out-

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,istandingiACRS and=QA-QC problems.)can bk resolved +(Tr.' 1054 -

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56, '3711-12,) 3718-19,; 3756 58,14217-21,- 4259-61)--even -

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though ~ the L cost ~of resolving those problems may be' sub'stan-- i' 1

tial indeed,and Consumers may'actually not.be~abl~e to afford m

t ;that'costGTr. 1054-56,.4265-66, Midland Intervenors ' . Exhibits y 4 3,f.68),iand even though continued construction will foreclose- 1 e

proper resolution of those problems-(Tr.. 1066-68).- The Y

' Staff claims.. that:Dow's1 support for the Midland project i

~ - 'is unquessionedL(it-61-62):, even'though kr. Temple. squarely; .

q Ltestiifie'd :thati alcost anything" could .cause that teenuous

support to? evaporate

(Tr. > 323): and evenL though the Staff ,

4 litself. recognihesi(1 57) thatJif:a farther review of the  ?

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project were :conductedtby 'Dow: today, the result might very p, m y w'ellib'efaldecisfon.to exercise:Dow's " realistic option" d4 if(Tr. ?2432 ;{251'6/,12522, 2524,12730) of withdrawing from the g'

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Midland p}roj ect and = suing'.'ConsumersJfor, breach of contrac.t.

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The75taff? claims (that1 Consumers 'can pay ;for the Midland v

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thouhh its.'own.Mr. Meltz was unwilling' '

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.. .- a L 1, ico attribute ?")ny?; degree Jof1 certainty"ito lsuch a conclusion- +

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Consumers itself has indicated that-its ' financial ability' ,

to: finish the; pr(ect is at best margin' l a . (see i 48 of

.our Proposed Findings). Remarkably, the Staff blithely rejects the alternative of a. smaller Midland. facilitf in-favor'of? operating the proposed plant at lesu than=its *

. rated output (!1 87-90)', even though' its own Mr.. Crocker

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explicitly told the-Board.that the Staff's positien was

'.not realistic (Tr. 4231-32); similarly, the Staff insists that the' cost-benefit balance will not be tilted by increased investment-even though Mr. Crocker' conceded otherwise (Crocker Testimony, fol . Tr. 4177, p . 3) and-Consumers (Tr.~1066-68, Midland Intervenors' Exhibit 3) has-admitted otherwise.

Finally, the Staff repeatedly .(if 88, 102,~103,.

112, 126,!131, 132,-135) indulges in the palpable legal' erroriof'considering " sunk costs."' Even-apart from our position that11n a suspension hearing of this kind the c'osts .of suspension are as a matter of law not to be

- considered' : the sunk costs the Staff repeatedly drags in--and~which it-admits are the'only bases on which it can reieci Intervenors' alternative to the Midland plant' (TT:126,5132)'--are specifically precluded by both [

- Aeschliman, . 547f 5.2d at -532 n.20, Land Union of Concerned ScientistsivM AEC,l499-F.2d 1069,'.1084 n. 37 (D.C. Cir.

1974). .

Iciis-disturbing, to say.the least, that the Staff's-L blind: adherence to! its predetermine'd conclusion is: so vehe-

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t ment that itLinsists.on changing-the law if there.is no "

. other way to -reach the result it wants .

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' THE STAFF'S OWN FINDIMGS'

DO NOT: SUPPORT ITS CONCLUSION. . 4 l We :have . pointe'd, out: that the Staff's - Findings are:both inaccurate"and ' incomplete, and ride roughshod L

over the-Lfacts'and the~ law'inealmost every area. Even so,-we think-it highly significant'that'the Staff's own -

-Findings plainly do not support a conclusion that con- .

struction should continue. The Staff admits:

that ' Consumers' .derating 'of Palisades- and

, capacity-sales'to municipalities and coo'pera- . -

tives.should be ignored (Y 36), which means that.as Consumers' Mr.-Heins admitted, a

-sus. pension will not; impair Consucers' reserves l (see Tr.1696-97,1840-41) ;

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that present ECAR reserve margins are within the-desired one-day-in-ten-years LOLP criterion, which results in:the.same conclusion;(1 42);

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'that3"it'is uncertain'whether Dow would again conclude that the Midland plant is economically preferred if the revised: nuclear fuel cost data-

-;[already=of record] were used," so~ that the essen-

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tlaltelements fof Dow support and Dow : economic: '

benefit. may .welli already. have disappeared: (1 57) ; -

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, - - . that(the~c~ostlof the Mid1cnd plant may reach

$2 billion .'(71.68, 79) , at which time any

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Dow economic benefit will. definitely have l} , Edisappeared; andL , .

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thatJ. completion of the Midland plant by the "

-end of 1984' is mosc unlikely to :be prevented r-by any: suspension _(Vi 69-70, 72, 80), so that

. a suspension will~ not ' prevent completion of

' the plant if that is the course suggested by

- the.,ultimate ' cost-benefit ' analysis .

.Those Findings. establish both that a suspension will not

genuinely 1 impair;completionfo'f the project and that at v

.present. the true econot:iic benefits of - the project are er.tra-p, ' ordinarily. dubious. . Standing alone,1 that is more than enough r: -

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.to .requ' i re ~a inmediate I halt to' construction--even withcut

[taking[into account : the Consumers-S taff udmissions ' (discussed 3

- labove)$ thaticontinuediconstruction will tend"toJ foreclose alternatives and, on- the] Staff's ' own reasoning .~(see 5 ,126) ,- <

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s tilt Ane cost-benefit- Lanalysis .* On th'e Staff's own reasoning _

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• C;0f Lcours'e a both!of "these . points..are forcefully. buttressed by

- >c  ; ~ ' the Appe' l.. Board?si emphatic: language in'LConsunes LPower Co '

' (Midland Plant,: Units-1D&. 2), ALAB-395,15 NRC- .

21977)f,2 Slip 0p.-at 13-14 n .

(April.28, g ,% /

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I-then,.it'is: unwarranted and contrary to coc=onisonse to allow a

'Consuners to, pour further milliens.of dollars into the Midland-

- project while ~ its fate remains very much an open question; Respe'ctfully' submitted,

/ U. lY'tY - i ? t<

On Dof tra Attorneys,'for inte;;vanors other i n'Dow Chemical Cotgdny; cc: SERVICE LIST -

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F S Myron'M.CCherry Peter A.': Flynn One' IBM Plaza u

Suite 4501 . .

tChicagor Illinois'.60611:

- (312) 565-1177'

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SERVICE LIST s

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.Dr. Emmeth A'. Luebke 4

Dr . J . Venn Lee ds f 4 W

~ Atom' c Safety- and .  : Atomic. Safety and Licensing 1 Board . Licensing Board; U.S'. Nuclear Regulatory ~U;S. Nuclear Regulatory

. Cocmis sion .

Commission Washington, D. C. 20555 Washington, D. C. 20555 Frederic. J. Cciufa'1,' Esq. . Richard K. Hoeffling, Esq. .

Chairman U.S. Nuclear Regulatory Commission

. Atomic Safety and  ; Washington, D. C. 20555 Licensing Board ,

'U.S. Nuclear Regulatory:

Cocmission .

Lee Nute, Esq.

Washington , - D. C. 20555 General Counsel's Office Dow Chemical Company

!!idland, Michigan 48640 R.-Rex Renfrow, Esq., III Isham Lincoln & Beale One' First National Plaza C. R. Stephens, Chief 42nd Flocr- Docketing and Services Section Chicago, Illinois 60603 . Office of the Secratary

• U.S . liuclear Regulatory Cocmission '

Washington, D.-C. 20555 Mrs.' Mary Sinclair

'^

-5711 Summerset.

Midland, Michigan 48640 I . .

Mr.; Steve J Gadler, P.E.

2120 Carter' Avenue-L St.~ Paul, Minnesota 55108 I

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