ML20004E307
| ML20004E307 | |
| Person / Time | |
|---|---|
| Issue date: | 06/03/1981 |
| From: | Bickwit L NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | |
| Shared Package | |
| ML20004E300 | List: |
| References | |
| REF-10CFR9.7, TASK-RICM, TASK-SE SECY-81-317A, NUDOCS 8106110527 | |
| Download: ML20004E307 (4) | |
Text
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June 3, 1981 i
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S SECY-81-317A
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RULEMAKING ISSUE (Commission Meeting)
For:
The Commission From:
Leonard Bickwit, Jr., General Counsel Subiect:
SECY-81-317 - Proposed Rulemaking to Eliminate Need for Power and Alternative Energy Sources Issues in Operating License Proceedings in the Absence of Special Circumstances Discus sion :
We support the policy objective of the Staff proposal in SECY-81-317 to restrict NEPA review of need for power and alternative energy source issues at the OL stage, However, we find the rationale for Staff's proposal in SECY-81-317 confusing and, to the extent that we understand it, legally deficient.
We propose that the Commission consider an alternative rationale that would accomplish the same objective.
Our reason-ing and proposed alternata.ve rationale follow.
l The nature of'the required NEPA review of need for power and alternative energy sour-es at the OL stage was described by us in some detail in SECY-81-208 (copy attached).
The Commission, by separate rulemaking, has already eliminated NEPA alternative site review at the OL stage.
The l
rationale for this final rule was that the economic and environmental costs of constructing a new base-load facility on an alternative site would virtually always exceed any differential environ-I mental advantages of operating the new facility.
In this analysis the environmental and economic I
Contact:
Mar tin G. Mal sch, CGC, 41465 SECY NOTE:
This paper is identical to advance copies that were distributed to Comission offices on June 3,1981.
>8106110 50
2 costs of constructing the nuclear plant are considered " sunk" and ignored.
This so-called
" sunk cost" rationale cannot be used to support the proposal in SECY-81-317.
That it cannot is best seen by examining a hypothetical contention that would be struck down by the Staff's proposal.
Let us suppose that an intervenor in an OL proceed-ing were to argue that there is new information, not considered in the NEPA review at the CP stage, that nuclear plant A is no longer needed to satisfy increased electrical energy needs and is justified.
if at all, as a substitute for fossil plant B, an existing unit in applicant's system.
Intervenor further argues that plant B will be operated with less environmental impact than plant A, and that continued operation of B rather than operation of A should be examined in detail in the OL NEPA r eview.
As can be seen, the " sunk cost" rationale is not applicable here because both plants A and B are already constructed, and a typical NEPA review would compare the environmental costs and benefits of operation of both plants without regard to
" sunk" construction costs.
It is unclear to us how Staff reaches the conclusion in SECY-81-317 that this alternative can be dis-missed from serious case-specific consideration.
SECY-81-317 does not rely on any comparative environmental evaluations.
Thus SECY-81-317 would lead to rejection of our hypothetical contention even conceding that intervenor may be correct that operation of fossil plant a sculd be envirommentally preferable to operation of nuclear plant A.
Staff does argue that these alternative energy source matters should be resolved at the CP stage.
While this seems to be a desirable result, as a policy matter, the fact remains that issuance of an OL does require consideration of alternatives under NEPA, and there is no NEPA case law that we are aware of (certainly none is cited in the paper) that would authorize an agency to refuse to consider new tr. formation bearing on alternatives merely because of the existence of a prior NEPA review on an earlier proposal for the same project.
3 Staff also notes that experience indicates that nuclear plants are in fact operated after they are constructed.
This strikes us as irrelevant unless Staff argues in addition that in each such case operation was fully justified, considering the environmental and economic costs and benefits of the plant and alternatives, and that what was true in the past will also hold true for the future.
No such arguments are offered.
Staff also suggests that this alternative would be beyond the NEPA rule of reason.
This " sounds attractive, but there is no explanation of how Staff reached this conclusion.
We don' t see how commenters can be expected to comment intelli-gently unless the Staff rationale is fully set for th.
' heoretical way out of this difficulty would One c
be to support the proposition in SECY-81-317 by focusing directly on the actual policy issue --
should a utility ever be prohibited from operating a completed nuclear power plant which satisfies all requirements of the Atomic Energy Act?
We suspect that those who support the objective of SECY-81-317 do so out of a simple conviction that the immediate consequences to the utility and its investors, and the longer term consequences to the j
utility's ratepayers, of a refusal to allow a ccmpleted nuclear plant to operate and go into the utility's rate base would be so severe that only j
the most serious and irreparable environmental problems enuld justif*, the refusal.
NEPA allows the Ccmmission to take these kinds of considerations into account in evaluating alterna-tives at the OL stage, and nothing in NEPA dictates how the policy. choice described above should be resolved.
We propose that the Commission request l
Staff to perform an analysis of this alternative rationale.
Such an analysis would examine conse-quences to a utility, investor s, and ratepayers of not allowing a completed nuclear plant to operate and reach a general conclusion whether these conse-quences could likely be outweighed by other environ-mental considerations.
This analysis could then be used in the notice of proposed rulemaking.
We believe that such an analysis could be put together from existing materials and that no delay of any consequence in issuance of the proposal need result.
l l
4 l
One final minor matter.
This paper deals only with NEPA issues.
The reference to " safety" impacts in the notice of proposed rulemaking should be deleted.
gfen~w.h CE
(' C3 Leonard Bickwit, Jr.
General Counsel
Attachment:
SECY-81-208 DISTRIBUTION Comissioners Comission Staff Offices Exec Dir for Operations ACRS ASLBP ASLAP Secretariat l
e
.