ML20003G966

Transcript of Testimony Re Safe Const & Operation of Facility.Related Correspondence

ML20003G966
Person / Time
Site:	South Texas
Issue date:	04/27/1981
From:	Jordan D HOUSTON LIGHTING & POWER CO.
To:
References
ISSUANCES-OL, NUDOCS 8105040314
Download: ML20003G966 (12)

Text

"

i f ,35,e;g09 .

sl #

6!

71 0l 9;

o! UNITED STATES OF AMERICA 1l NUCLEAR REGULATORY COMMISSION 2i BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 3 -

6: In the Matter of: 5 7i 5 5i HOUSTON LIGHTING & POWER S 9l COMPANY, ET AL. 5 Docket Nos. 50-4980L 0 5 50-4990L 1 i 5 j' (South Texas Project, 5 3 Units 1 & 2) 5

4. I 5

6i 7'

8i TESTIMONY ON BEHALF OF HOUSTON LIGHTING & POWER COMPANY, -ET AL.

9, Ot OF 1

2l MR. DON D. JORDAN i 3

4!

5!

Gl o

2;

,w = -c, t:,

at :e gp.yr[l)sp - p ~

ll g ;muggi ie s Q ' %ww[

w e el ,

si .

9; si bt \ s.

0l ff l h i

810so4 0 '6M T - -

, I' 1

2:

3l 4i 5, UNITED STATES OF AMERICA 6 mCwAR RE TORY COMMISSION 7

0 BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 9l 10 l 11 ! In the Matter of: $

12 l 5 1 3 ', HOUSTON LIGHTING & POWER $

14 COMPANY, ET AL. $ Docket Nos. 50-4980L 15 ' 5 50-4990L 16 5 17 , (South Texas Project, $

ig ! Units 1 & 2) 5 19 l 5 20 i '

et TESTIMONY OF DON D. JORDAN 22 1 23 '

24 , Q. 1 Please state your name and occupation.

25 ;

26 ! A. 1 I mn Don D. Jordan, President and Chief Executive 27 !

28 j Officer of Houston Lighting & Power Company (HL&P) .

29 30 ! Q. 2 Please describe your educational and employment 31 !

32 i background.

33 ;

34 j A. 2 I received a BBA degree in industrial management 3

from the University of Texas in 1954. I received a las 37 38 ;l degree in 1969 from the South Texas College of Law.

39 ! I have been employed by HL&P since 1954. I joined the 40 1 41 ! Company as a Power Consultant in the Marketing Department 42 l 43 i and served in a number of administrative positions of increas-44 45 ing responsibility. In November 1971, I was elected Vice 46 47 President and Assistant to the President. Since then I have 48 !

49 been elected to the following positions: Group Vice President 50 '

51

I l

i l lI l 2L 3

4 '!

in January 1973; Board of Directors in April 1974; President 5:

6! and Principal Administrative Officer in December 1974; and 7'

8 President and Chief Executive Officer in April 1977.

9; 10 j Q. 3 What is the purpose of your testimony?

11 ,

12 ; A. 3 My purpose is to convey to this Board, the Nuclear 1 3

14 Regulatory Commission, and the public our corporate commitment 15 -

16 i to the safe construction and operation of the South Texas 17 l

{g ' Project (STP) and my personal commitment to that objective.

19 '

I am acutely aware that this Board has .been instructed 20 t 21 ! by the Commission to inquire into HL&P's managerial competence 22 23 < and character as they affect our ability to safely complete 24 1 25 'and operate the STP . These questions are extremely serious.

26 ,

27 l My testimony will describe some of the steps we have taken 28 !

29 i to assure that STP meets all applicable regulatory require-30 3*9 i ments. These matters will be discussed in much more detail I

32 in the testimony of other witnesses we will be presenting.

33 34 -

I believe the facts as set forth in my testimony, as 1 35 36 i . well as the testimony of others, will demonstrate that we i I 37 ! i l 38 i appreciate the magnitude of the task at STP, that we are l 39 i 40 i equal to it and that there is not, and never has been, any 41 l 42 { serious question as to our corporate integrity or competence.

43 !

44 i

Q. 4 As a matter of background, describe HL&P's busi-

! 45 46 , ness.

4 A. 4 We generate, transmit and distribute electric l 4 i 29 ,! energy in an area of approximately 5000 square miles in the 20 :

51 i l

i 1l 2

3l J

Texas Gulf Coast region. Houston is the largest city in our 5

6 service area; we also serve 157 smaller cities, villages and 8' communities. We operate generating stations with an installed 9l 10 net capacity of 12,115 MWe. We are the nation's sixth 11 i 12 l largest utility in terms of electrical sales, and we employ 13 14 more than 8,000 people.

15 16 ' Q. 5 Is HL&P subject to regulation by various govern-17 ,

gg ' mental entities?

To4 j~0 A. 5 Yes. EL&P is subject to regulation by the Public 21 Utilities Commission of Texas and also by 82 incorporated 22 23 municipalities most of which continue to exercise original 24 25 jurisdiction over EL&P's rates and services. Our activities 26 27 : are also regulated by many other state and federal agencies 28 29 ' with important safety and environmental responsibilities 30 31 i including EPA, the Corps of Engineers and, of course, the 32 i NRC.

33 Jo f Q. 6 Have business conditions over the past decade had 36 ,

a significant effect on HL&P?

! 37 1 38 ' A. 6 Yes. HL&P has seen, and is still seeing, an 39 40 i incredible increase in the number of customers we serve.

41 i 42 i During the 1970s the population of our service area grew by 43 i 44 l more than a million, and the number of customers rose by 45 i almosu 350,000. The average annual increase in customers

! 46 i 47 ! since 1977 has been about 70,000.

4g 49 !

50 j

, 51 l l  !

l 4_

lI 2

3 4'

5 This enormous growth has required that we undertake a 6

7l.

major construction program. The urgency of this task was 8l underscored by the fact that in 1975, when the construction 9

10 permits for STP were issued, virtually our entire system was 11 .

12 l dependent on natural gas as a fuel. As fuel prices rose and 1

13 14 restrictions on the use of natural gas became law, the 15 16 i company began vigorous efforts to change its generating 17 i gg ; system mix to a combination of coal, lignite and nuclear l*olj 20 fu 1. STP is a maj r component of our generation expansion 21 program. The importance of the Project to the welfare of 22 l 23 ! our region cannot be overemphasized.

24 !

25 Q. 7 Who are the executives of HL&P responsible to you 26 l 27 l for activities associated with the South Texas Project?

28 1 29 > A. 7 The HL&P executives with primary responsibility 30 ,

33 _ i are our Executive Vice President, Mr. George W. Oprea, and 32 i 33 l ur Vice President, Nuclear Engineering and Construction, 34 l Mr. Jerome H. Goldberg. These senior executives are with me 33 1 36 l today and will present testimony on aspects of the Project 37 38 for which they are responsible.

39 !

40 l Q. 8 How did you react to the NRC's enforcement action 41 i 42 : last year?

43 44 A. 8 Let me say, first, that Mr. Oprea kept me apprised 45 f the progress of the NRC's investigation and of the interim 46 i 4

4 findings of that investigation in late 1979 - early 1980.

49 '

50 51 1l 2.

3!

41 5; In particular, he informed me of his meetings with representa-6' 7 tives of Region IV of the NRC's Office of Inspection and 0

Enforcement and their preliminary conclusions.

10 Nevertheless, I was deeply disturbed by NRC Investiga-11 (

12 l tion Report 79-19 and the findings reflected in the Notice 13 ,

14 of Violation and the Order to Show Cause. Mr. Oprea and I 15 ,

16 , went to Washington immediately after issuance of the Notice 17 l Ig of Violation and Order to Show Cause to meet with Mr. Stello, 19 '

20 NRC Director of Inspec ion & Enforcement. I was im' pressed 29 by the concern which Mr Stello and his staff expressed 23 23 regarding the performanc at the STP and it was following 24 25 that meeting that I made e organizational changes I will 26 ,

27 I describe later. The advice I received from Mr. Oprea and 28 ,

29 our advisors was that, altho gh issue might be taken with 30 '

31 ' details in the NRC Investigat on Report (and the significance, 32 from a safety standpoint, of m y of the violations), careful 33 34 l 35 : study of the underlying causes 'ndicated a need for management 36 -

improvements which had to be fa d squarely. Of greatest 38 importance was the expansion and restructuring of our quality 39 40 l assurance / quality control organization. These changes will 41 '

42 { be described in detail in the testimony of Mr. Oprea, Mr. Frazar 43 l

44 l and Mr. Amaral.

45 1 46 l Q. 9 Were you kept advised of the Company's response 47 i 4g { to the NRC's Show Cause Order?

49 i 50 '

51 l  !

i 1

2; 3'

4i 5l A- 9 Mr Oprea kept me informed of the approach being 6I taken by the Company on all major aspects of the response.

7I 8! I was particularly interested in the question of how best to 9:

10 organize the QA/QC function, the first item identified for 11 I 12 i study in the NRC's Order. I met with Mr. Oprea and we 13 14 discussed various organizational alternatives. The testimony 15 16 , of Mr. Oprea and Mr. Amaral discusses the pros and cons of 17

g i each alternative. I concurred with Mr. Oprea for the reason 19 i stated in his testimony, that third party inspection had 20 21 serious drawbacks. I shared Mr. Oprea's conclusion that a 22 23 ' strengthened QA/QC organization on the part of both HL&P and 24 25 Brown & Root, Inc. (B&R) is essential and we have taken 26 27 , major steps in this direction.

23 l 29 , As part of our response to the NRC's Order, I decided 30 3g , to assign our most senior engineering-oriented executive, 32 ' Mr. Oprea, to essentially full-time service on the STP.

33 l His 33 '

33 broad range of experience in all of the Company's engineering 36 related activities is now largely focused solely on the STP.

3e 38 Mr. Oprea began his essentially full-time involvement in the 39 i 40 i Project in the summer of 1980 and that involvement will 41 !

42 , continue for an indefinite period.

43 !

44 l I also approved moving the head of our corporate QA 45 i department toithe STP site with full time responsibility for 46 -

47 '

48 the Project, reporting directly to Mr. Oprea.

49 i 50 i 51 j

~7-

i i

2; 3i .

4{ Q. 10 Has EL&P taken other steps to strengthen its 5i organization for construction"and operation of STP?

O A. 10 Yes. These are discussed in detail in Mr. Oprea's 9l {

10 testimony. I would like, however, to highlight one step 11 12 which has added significantly to our corporate capability.

13 l 14 After an intensive search, in which I actively participated 15 :

16 ; over many months, we obtained the services of a highly 17 i ig l experienced nuclear engineer with vast management experience sg, 20 ; in nuclear construction to assume major responsibility for 21 , the STP. Mr. Jerome H. Goldberg, a former Vice-President of 22 ;

23 ' Stone & Webster, is now our Vice President for Nuclear 24 l 25 ' Engineering and Construction, and his involvement is already 26 ,

27 i making a difference in our management of the Project.

28 l 29 ) Q. 11 What is your reaction to the charge that HL&P 30 l 31 ' has " abdicated its responsibility" to its contractors for 32 i 33 STP or failed to keep itself knowledgeable about necessary 34 ! construction activities.

33 l 36 j .

A. 11 I do not feel it is fair to state that HL&P 37 !

38 l " abdicated its responsibility" to its contractors or failed 39 i 40 to keep itself knowledgeable.

41 l ,

42 l As discussed in more detail in Mr. Oprea's testimony, 43 l 44 ; EL&P had established a substantial team of technical and 45 46 engineering personnel to manage the STP, particularly in 47 48 quality-related functions. Mr. Oprea and I communicated 49 50 :

51 !

l 4

Ll 2o l

l 3!

• l 4i I 5; frequently and there was nothing to indicate that there was j 6! any significant problem in QA/QC or, more generally, in our 7! 1 0' NRC compliance record. The NRC findings, however, did 9

10 i trigger a wide-ranging review of the adequacy of our manage-11 i 12 ment of the STP from which we have profited.

13 14 With our fossil projects, we had found that good results 15 16 could be achieved in constructing generating facilities by 17 i gg placing upon the contractor substantial responsibility for the construction of a generating facility that met standards f3 l 21 i of safety and reliability. We recognized from the outset, 22 23 ; however, that nuclear construction required more active 24 25 ' participation by the owner. This has become increasingly 26 '

27 ! apparent over the years in our STP program and has resulted 28 29 1 in the assignment of more highly qualified and motivated 30 31 , people in large numbers, as well as training and re-training 32 33 ; in the importance of quality performance.

34 ! I am persuaded that HL&P is fully aware of the absolute 35 l 36 .

necessity of providing guidance and programmatic direction 37li 38 to our contractors and that the changes we have instituted 39 i l 40 l are having the desired effect of making our presence felt in 41 l 42 , almost every phase of their work. Our recruiting program is 43 !

44 l aimed at further strengthening our role and visibility as 45 l Project manager. Our prospects are for an even stronger 46 ;

4 4

organization, and I expect further improvements in performance.

49 !

50 l 51 j i 4

I i

_g_

l L

2:

3l 4

5! Q. 12 Do you intend to play a continuing role in the 6i 7i oversight of STP?

8i 9: A. 12 Yes. I will continue to stay in touch with the 0'

,"yj other officers of the Company who are concerned with the

'2'

[3 ## 5*" ' particularly Mr. Oprea and Mr. Goldberg. In addi-

'4

- tion, I will continue to receive and review the regular L: -

L6 , written reports prepared by the B&R'and EL&P staff -- the L7 '

L5 l Consolidated Monthly Reports, as they are known.

L9 1 20 , Last year I participated in a " Quality College" program 31 yy i given by Mr. Philip Crosby, a noted quality assurance consul-2 That experience reemphasized to me the unique impor-4 tant.

J.3 15 tance of " building quality into" STP. I should note that it

.6, 27 i has been a published policy of EL&P that a strong, independent 23 i 29 ' quality assurance function shall be a point of every nuclear

, 30 -

l 31 - .

or fossil plant project. That policy, as published in all 32 i l 33 company QA Manuals, is attached. (Attachment No. 1).

34 I have also attended as many meetings as possible of 33 ;

the STP Management Committee (consisting of representatives 3/h l

3S of all of the co-owners) at which progress and problems are 39 ;

40 i reviewed. I will continue to do so.

41 i 42 I and other chief executive officers of our co-owners 43 t 44 l have met periodically with B&R management to review the 45 status of the Project. In the period since the NRC enforce-46 g

ment action, I have been in frequent communication with B&R 49 !

50 51 i u

1 I

l 1 i 2;

3i 4i 5  ! management. In joint meetings of the senior executives of 6:

7! HL&P and B&R, including their President, I have expressed my 8l concerns and emphasized my commitment to correcting the 9!

.0 l

,1 ! conditions noted by the NRC and to assure that the Project i '2 - I intend to remain

'3 ; meets our safety and reliability goals. j I

' *4 in close touch with B&R management.

.2  ;

.6 I will also continue to attend the significant hearings l

.7

.3 ;i and proceedings related to the Project, such as the meeting

.9 i 10 , held in August 1980 in Bay City by the NRC's Office of 1

Il i 12 + Inspection and Enforcement.

{3' 4 Q. 13 Do you have any concluding remarks?

25 I believe that we have made marked improve-A. 13 Yes.

!6 !

ments in STP in response to our own heightened sensitivity )

f 29 I to the complexities of a nuclear project and, frankly, as a 30 ,

31 ' result of the NRC's enforcement action. I am not saying  :

32 l 33 l that our problems are completely behind us. That would be 34 !

35 'I unrealistic in a job which depends for its success on thousands 36 i f human interactions each day. I can say, however, that we 37 38 will meet head-on any instance in which professional discipline 40 breaks down or full cooperation and candor anong the crafts, 41 42  ; supervision and management are impaired.

43 i 44 The extraordinary importance of the Project to each of 45 46 , the co-owners 'of the Project and to the public from both a 47 i power supply and safety standpoint will demand continued ,

48 I 49 i vigilance. I believe, however, that we can proceed with 50 j 31 '

L 2,

3' i

4 5' increased assurance that STP activities will be carried out 0l 7I in accordance with approved plans and procedures and in full 8

9i compliance with regulatory requirements.

0l 1' '

2i 3'

4

_ T. HUDSON:10:A s

6 7,

6\

9; O1 1

2 3

4 5

6' 7

.8

9 l i 0

1 i

2 i '

3;

.4 !

5

, ;6 i l ;7!

8 !

19 i

.0 l il i

'2 i ,

.'3 i i4 15 '

l 16

! 17 :

18 I i 19 l 10 i s1 l t i t

fa Houston ?tt^ * ?t *: 1 lll h' Lighting

& Power f  ?

\ ComJany j! Electric Tower

1. ! I PO Box r/00 i! n I-i .T Housten. Texas 77001 December 9, 1974 To All Officers and Department Heads:

A Quality Assurance Program has been authorited for implemen-tation within the Houston Lighting 5 Power Company. This Program defines requirements and provides methods of positive quality control in all engineering, procurement, construc' tion, and operation activities associated with the Company's nuclear and fossil power plants. The scope of the Progra= encompasses all applicable requirements of the Code of Federal Regulations, AS$1E Boilen and Pressure Vessel Code, and other appropriate industry recogni:ed codes and standards.

The authority to implement the requirements of the Quality Assurance Program is delegated to the Stanager - Quality Assurance who has the complete support of the Company's Executive Stanagement and will, by organi:stional arrangement, be kept free from cost and scheduling influences. His authority, as defined in this Program Stanual, extends to all quality assurance activities performed by and for Houston Lighting 5 Power Company. Decisions made by the blanager - Quality Assurance on such matters are made in the name of this Company, and may be overruled only by tLe Executive Vice President.

M~ ~~~-

D. D. Jordan President t