ML20041E874
| ML20041E874 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 03/04/1982 |
| From: | Palladino N NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML20041E875 | List: |
| References | |
| REF-10CFR9.7 SECY-82-089, SECY-82-89, NUDOCS 8203150202 | |
| Download: ML20041E874 (95) | |
Text
<l NUCI.ZAR REGULATORT COMMISS2CN OIf,.,
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COMMISSION MEETING Igg h, w of.
PUBLIC MEETING BRIEFING AND POSSIBLE VOTE ON STAFF
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RECOMMENDATIONS IN DIABLO CANYON PROGRAM PLAN AND-INDEPENDENCE OF AUDIT l
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UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY' COMMISSION 3
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PUBLIC NEETING 5
BRIEFING AND POSSIBLE VOTE ON STAFF BEC0 EMENDATIONS 6
IN DIABLO CANYON PROGRAM PLAN AND 7
INDEPENDENCE OF AUDIT.
8 9
Room 1130, 10 1717 H Stree t N.W.,
11 Washington, D.C.
12 Thursday, March 4,
1982 13 14 The Commission met at 10:00 a.m.,
pursuant to 15 notice, Nunzio Palladino, Chairman of the Commission, 16 presiding.
17 COMMISSIONERS PRESENT:
18 Nunzio Palladino.
19 John Ahearne.
20 Victor Gilinsky.
21 Peter Bradford.
2?.
Thomas Roberts.
23 24 STAFF AND PRESENTERS SEATED AT COMMISSION 25 TABLE:
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leonard Bickwit.
2 Samuel Chilk.
3 Forrest Remick.
4 William Dircks.
I 6
R. Engelken.
7 R. Vollaer.
8 J. Murray.
9 to AUDIENCE SPEAKERS:
11 Frank Miraglia.
12 13 STAFF PARTICIPATING THROUGH TELEPHONE E00K-UP4 14 R. Faulkenberry.
15 J. Crews.
16 P. Morrill.
17 T. Sishop.
18 19 20 21 22 23 i
24 25 ALDERSON REPORTING COMPANY,INC.
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t DISCLAIMER
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This. is air unofficial transcript of a meeting of the United States Nuclear Regulatory Consission held on-March *4, 1982 in the Cocaission's offices at 1717 H 5 treat, N. W., Washington, D. C.
The meeting was open to public attendanca and observation.
This transcript l
- has not been reviewed, corrected, or edited, and it may contain inaccuracies..
The transcript is intended. solely for general infomational purposes.
l As provided by 10 CFR 9.103, it is not part of the forinal or infomai record of decision of the matters discussed.
Expressions of opinion in
.this. transcript do not necessarily refTect final deteminations or
- 8, J eliefs.
No pleading or other paper may be filed with the Commission in b
any proceeding as the result of or addressed to any statement or argument
- contained herein, except as: the Conmission may auth'orize.
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PR0CEEDINGS 2
CHAIRMAN PAllADINO:
Good morning, ladies and 3 gentlemen.
The meeting vill please come to order.
4 The topic of today's meeting is Briefing and 5
Possible Vote on Staff Recommendations in Diablo Canyon 6 Program Plan and Independence of Audit.
7 By way of background, in November 19th, 1981, 8 the Commission ordered the suspension of PGCE's Diablo 9 Canyon license to load fuel and conduct tests up to 5 10 percent rated power, pending satisfactory completion of 11 a number of specified actions.
12 (Noise from microphones.)
13 I should add now that we have had that 14 interruption, that we are in telephone communication 15 with Region V personnel and on the other end of the 16 lin e, I understand, are Bobby Faulkenberry, Chief, 17 Reactor Construction Projects Branchs Jesse Crews, 18 Director, Division of Resident Eeactor Projects and 19 Engineering Inspections Phillip Morrill, Resident 20 Inspector; and Tom Bishop, Acting Chief, Construction 21 Branch.
22 They are available to respond to questions, 23 and I understand the telephone line will be open 24 throughout the meeting.
This is a voice-actuated 25 telephone, so when they are speaking, the rest of us ALDERSoN REPORTING COMPANY,INC.
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should listen, and then we can turn it over to whoever 2 else wants to speak.
And I guess that noise was 3 probably interference associated with conversation.
4 Returning to the background, among the actions 5
that I indicated earlier was verifica' ton of the 6 adequacy of implementation of all seismic 7 surface-related work performed prior to June 1978, used 8 in the design process for safety-related structures, 9
systems and components.
to The Commission 's order also required the 11 Licensee to submit to the NRC a detailed program for the 12 conduct of the proposed seismic design verification and 13 information concetning the technical competence and 14 independence of the proposed participants in the seismic 15 verification program.
16 The NRC Staff has reviewed the scope and l
17 technical adequacy of phase 1 of the Diablo Canyon 18 seismic design verification program proposed by Pacific 19 Gas & Electric, the technical competence and corporate 20 qualifications of the contractors proposed by PGEE to 21 implement this program, and the financial, 22 organizational and professional independence of proposed 23 contractors.
24 The Staff has prepared a report which 25 addresses the scope of its reviews, findings and At.DERSON REPORTING COMPANY,INC,
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conclusions and recommendations with respect to program 2 adequacy and contractor competence and independence.
3 The Staff met on several occasions with the 4 Licensee and representatives of the Governor of 5 California, and Join t Intervenors.
6 In addition, the Staff has conducted a number 7 of inspections of the Licensee's activities, and has had 8 a number of technical observers witnessing the conduct 9 of the ongoing design verification work at the offices to of PGCE and its proposed contractors.
11 At this time I would like to first check to 12 see if our colleagues are on the line, and then see if 13 any of the other Commissioners have opening comments, 14 and then turn the meeting over to Mr. Dircks.
15 Can I have a confirmation of that, Bobby 16 Faulkenberty?
Are you on the line?
Can you hear us?
17 MR. FAULKENBERRY:
Yes, Mr. Chairman, we hear 18 you people loud and clear.
19 CHAIRMAN PALLADINO:
Are all of the 20 indu.iduals on the line that I indicated earlier?
21 MR. FAULKENBERRY:
Yes, they are.
22 CHAIRMAN PALLADINO:
Any others there?
23 (Laughter.)
24 MR. FAULKENBERRY:
No.
25 CHAIRMAN PALLADINO:
Okay.
Thank you.
ALDERSoN REPORTING COMPANY.INC,
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1 Now let me see if any of my fellow 2 Commissioners have opening' comments they would like to 3 make.
4 COMMISSIONER AHEARNE:
Just one.
At some 5 point in the presentation I would like to,be reminded of 6 all our definitions of phase 1 and phase 2, and how they 7 mesh together.
8 MR. DIRCKS:
Let me comment we sent our 9
recommendations down in the SECY 82-89 document dated' 10 March 1st. What we would like to see, if possible, come 11 out of the Commission review of this is, of course, an 12 approval of the Staff recommendations, as where we're 13 going f or whatever decision the Commission may make in 14 this matter, so that we could get out of the mold of 15 reviewing qualifications and program plans and firms, 16 and then get to the real issue that started us off on 17 this whole episodes namely, a look at the design of the 18 plant and the safety of the plant.
19 What we have been doing thus f ar is 20 principally getting to what we have defined as the 21 preliminaries; the firm, the qualification, the 1
22 independence and reviews and cereviews of program plans.
l 23 What we would like to see happen is an 24 approval of the approach, another approach, so that we l
25 can get the work underway.
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Harold will review the work that the Staff has 2 done thus far. Bob Engelken is here to reinforce the 3
complete notion that the Staff has worked very closely 4 on this matter in'the region in NRR, and we have 5 representatives of ICE here to show that approach, too.
6 Ha rold, did you want to -- Bob, did you want 7 to say anything to begin?
8 MR. ENGElKEN No, sir.
9 MR. DIRCKS:
Harold, l'f you would then start to off.
11 NR. DENTON:
What I would like to do is 12 summarize the highlights from the report that we have 13 provided you.
14 If I could have the second slide on the 15 handout, please.
16 (Slide.)
17 What I will cover basically what was proposed 18 by PGCE in response to the Commission's order.
I will 19 try to summarize briefly what they have proposed.
I 20 vill summarize the views that we obtained from 21 representatives of the Governor and the Joint 22 Intervenors, and I will give you our conclusions based 23 on hearing the various views of the parties and our 24 recommendations.
25 On the third slide, the FGCE plan that was ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-2345
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submitted had essentially two elements in it with regard 2 to phase 1.
3 (Slide.)
4 Commissioner Ahearne, you had raised the 5 question about phase 1 and phase 2. What we are talking 6 about today is phase 1, but I will turn to phase 2 at 7 the end of the presentation.
8 Phase 2 was basically a verification of 9 nonseismic-related aspects of the plant, and phase 1 was to selected to respond to the seismic deficiencies that 11 were found originally.
12 The program that was proposed by PGEE did two 13 things:
It proposed to do two things, look at the 14 effectiveness of the GA program itself by reviewing what 15 QA procedures and control documents were in effect at 16 the time the --
17 COMMISSIONER AHEARNE:
Harold, I hate to 18 interrupt you, but you said all the seismic work would 19 be covered in phase 17 l
20 MR. DENTON:
Yes.
21 COMMISSIONER AHEARNE:
The paper you sent up, 22 SECY 82-89, says that the seismic service-related l
23 contracts in effect af ter June '78 will be covered in 24 phase 2.
25 MR. DENTON:
Yes, that's correct.
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MR. DIROKSt So 1 does not cover all the 2
seismic?
3 MR. DENTON:
That's right.
I stsnd 4 corrected.
There's been a change from what we 5 previously agreed to, that's right.
I just ga f/ a 6 broad-brush treatment and I should not have used the 7 word s "sil seismic. "
It was seismic pre '78; as you 8
correctly point out.
9 So the intent of the proposed program plan was 10 to first look at the contracts that have been issued by 11 PGCE for seismic design-related matters pre '78; see if 12 those contracts required conformance to a QA program; 13 and then look at the results of those service-related 14 contracts and see if someone could find the QA-related 15 criteria have actually been met.
16 In effect, look at the implementation of the 17 QA process during the design.
18 The second part of the program I have listed 19 on this slide, called verifiestion of seismic design, 20 was instead'of just looking at the paper and the 21 contracts, to actually select some structures, select 22 some systems, do an independent analysis of the design 23 of those structures and systems based on the as-built 24 drawings, and see whether or not the design could be 25 verified from a seismic standpoint.
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1 Where it could not be ve rified, the program 2 was to issue what they called errors and open items 3 reports for each one of those items, and then to the 4 extent that the errors that were found to have generic 5 implications, to continue down those chains and find 6 what other systems or structures might be designed 7 improperly.
8 So I have just put in very rough form here the 9 elements of their proposed program plan and described f.n 10 detail in the company's submittal and we have summarized 11 it in our report.
12 The management proposed for this program shown 13 on the next slide --
14
( Slid e. )
15
-- basically PGCE proposed that R. L. Cloud 16 and associates perf orm the reverification and R. L.
17 Cloud C Associates would be in charge of all the details 18 of performing the plan.
He had retained some 19 consultants to assist him in various areas, such as B.
20 F. Reedy C Associates, to assist in the QA area.
The 21 Cloud firm was to do most the independent calculations 22 in the other areas, and they also left open the 23 possibility of hiring additional consultants as needed.
24 When the program was initially started, the 25 number of errors that were known wer e small, and Cloud 's ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-234S
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firm was small.
I think he employed about five 2 professionals when this effort kicked off.
It's tripled 3 in size since that time, but still relatively a small 4 firm, and a lot of part-timers are still associated with 5
the Cloud firm and with the Reedy firm.
6 PGCE did propose to use Teledyne in an audit 7 role.
Telodyne's role as proposed by PGCE was to be 8 limited to an audit of some of the work being performed 9 by Cloud.
Teledyne was not to actually perform the to work, but was to audit the work, and they have provided 11 resumes of six or seven individuals who would be 12 involved in that audit of Cloud's work.
13 To give you a feel for what has been 14 identified to date by the Cloud effort -- and we pointed 15 out to the company that the Cloud effort was going at 16 the company's risk, tha t we had not approved Cloud as a 17 contractor. But the next slide --
18 COMMISSIONER AHEARNE:
Is the senior vice 19 president -- is that Mr. Maniatas?
20 MR. DENTON:
Yes, it is.
21 (Slide.)
22 I have circulated a classification of the 23 errors and open items I found to date, and you should 24 have those.
I intended to classify these errors and 25 open items together where they are the same generic ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W. WASHINGTON. D.C. 20024 (202) $54-2346
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type, such as f ailure to account for thermal expansion.
2 I have listed in the handout I provided
- 3 separately as one ites, but there might be a number of 4
joints, for example, where that item was found to 5 apply.
But depending on how you count these, if you 6 count them the way PGCE is now counting them, there is a 7 total of 111 errors or open items which have been found 8 through this program. 97 of them have been found by 9 Cloud.
PGCE has identified 14-areas.
10 CHAIRMAN PALLADINO You say this is just 11 counted by PGr.E?
12 MR. DENTON:
Yes.
13 CHAIRMAN PALLADINO:
Do you concur with this?
14 MR. DENTON:
Yes, I do. And I brought it up 15 just to show there are differences in ways to count 16 these, and whether or not you lump them together; the 17 list that we provided you this morning, I think, had 58 18 categories of errors.
19 Within those 58 categories there are subsumed 20 these 111 items, and I make the note tha t there could be 21 some confusion as to how you count these.
So I would 22 say the $8 categories are the way that we prefer to keep 23 up with findings, and then some of the categories have t
l 24 more than one element counted in them.
l 25 The dif ference between errors and open items ALDEASoN REPORTING COMPANY,INC,
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on this cha rt-- errors are ones which are discrepancies 2
which'in the view of the originating contractor have 3 been found to exist.
So in the Cloud case, he's found 4
97 discrepancies.
Six of these he thinks he's been 5 satisfied really do exist.
The other 91 are still being 6 evaluated by PGCE and he's awaiting information back 7 from PGCE to see if in fact his findings will stand up 8 or not in those areas.
9 PGCE has found 12 areas or discrepancies they 10 have classified as errors, and there are two additional 11 possibilities that they are sti11'looking at.
This 12 program is still ongoing, and in the part where they are 13 looking at the systems and structures that were 14 identified in their program plan.
15 CHAIRMAN PALLADINO:
Harold, I'm not sure I 16 understand these open items completely.
.If the design l
17 wer e complated, why would there be still analyses being 18 evaluated?
19 MR. DENTON4 I looked upon the open items as a 20 potential error where, on first blush, by Cloud the 21 extent to which they have looked into it has not 22 appeared to conform to the applica tion.
So they send 23 that back to the company with their preliminary finding l
24 and copies to us, and the company then takes a look at 25 it to see whether or not some information was not taken ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. O.C. 20024 (202) 554-2346
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into account or additional information was available.
2 They sent whatever their views are back to Cloud, and 3 then Cloud, based on that information, either classifies 4 it as an error or it becomes a resolved item.
5 CHAIRMAN PALLADINO:
Maybe I misunderstood.
I 6 thought you said were beino evaluated by PGCE.
At least 7 those 91.
Or there was communication between Cloud and 8 PGCE.
9 MR. DENTON:
They have been sent from Cloud 10 to PGCE.
11 CHAIRMAN PALLADINO:
And ther vill be 12 evaluated, I guess, by Cloud when the information 13 becomes 14 MB. DENTON That's correct.
15 COMMISSIONER GILINSKY:
Are the 14 items which 16 were referred to PGCE by Cloud?
17 MR. DENTON:
No, these have been found 18 independently by PGCE as a result of their own 19 independent looking back, and they have informed us of 20 those 14 21 COMMISSIONER AHEARNE:
Do you have an 22 additional set of items which would be classed as 23 " identified by Cloud, analyzed by PGCE, PGCE concluded l
24 they were not an error, and Cloud agreed with that 25 conclusion"?
I i
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W._ WASHINGTON. D.C. 20024 (202) 554 2345
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1 MR. DENTON:
I don't have it today.
2 COMMISSIONER AHEARNE:
Well, I thought you 3
said that Cloud sent to the NRC at the same time it sent 4 to PGCE this open item list.
5 MR. DENTON:
I don't have that information.
6 Let me ask if Bob or Dick has it.
The system has not 7 gotten to the point of resolving and keeping up with 8
it.
We will keep such information and such statistics, 9 but I don't have it today.
10 COMMISSIONER AHEARNE:
The 91 was identified 11 by Cloud.
It wasn't counted by the NBC in the amount 12 you have?
13 MR. VOLLMER:
That's right.
tt was Cloud's 14 identification of potentially open errors or open items.
15 CHAIRMAN PALLADINO:
And they didn't identify 16 for you the ones closed and not found to be in error?
17 MR. VOLLMER:
Not as yet.
18 MR. DENTON:
The system is auditable and we 19 are just getting into a mode of keeping these types of 20 sta tistics, and they will eventually show all factors.
21 It's taken a while to set up a system that identifies 22 every potential finding identified by Cloud and then 23 Cloud 's disposition of it, but tha t inf orma tion will be 24 available.
25 COMMISSIONER AHEARNE:
I'm not really clear on ALDERSON REPORTING CCMPANY. INC, 400 VIRGINtA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2346
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the connection, and so could you go over it again, 2 between the 58 items that you have listed here, and this 3 is a summary of errors found to date, and there seem to 4 be 58 items.
On the summary of discrepancies, you have 5
18 errors.
6 HR. DENTON I'm afraid the numbers will lead 7 to confusion.
They are intended to represent the sa m e '-
8 population.
9 COMMISSIONER AHEARNE:
I really have two 10 points:
11 One is the compression of 111 to 58, and I 12 understand your point that there are some -- I guess on 13 58 there are some lumpings which in the other list are 14 identified as separate items. What I'm more confused by, 15 though, is that on the chart you only have 18 errors, 16 and this says 58 errors, and so now it sounds like this 17 58 is compressed to 18, and I'm really confused.
I didn't mean 18
!B. DENTON:
Well, I debated 19 to divert this information from the main topic today, 20 which is the contractor gets in flux, and I wanted to l
l 21 give you tae benefit of a snapshot of what we have.
We 22 have been keeping an internal NRC list class 1f ing f
l 23 either errors or open items as they come in.
Tha t 's th e l
24 58 list.
l 25 Now those 58 are either errors or open items, ALDERSoN REPORTING COMPANY,INC, I
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and we have put a date beside it and we have an internal 2 recordkeeping system.
Now in the last few weeks PGCE 3 has started a better system of account 1L; and their 4
sy.stea on the same issues counts now 111,'and I've just 5
tried to show on the si,ide on the wall the results of 6 PGCE's classification system, and I have handed out the 7
internal NRR recordkeeping system on the same 8 p op ula tion,. a nd they should be seen as errors or open 9 items.
10 MR. MIRAGLIA:
I was going to try to put this 11 document in its perspective for the numbers on the 12 chart.
This document was prepared by the Staff.
13 CHAIRMAN PALLADINO:
Which document are you 14 talking about?
15 MR. MIRAGLIA :
The summary of errors 16 containing 58 items.
This was done by going through the 17 semi-monthly reports that are provided by the utility to 18 us in response to Commission' order, as well as going i
19 back to some of the previous meetings where some errors 20 were discussed.
Ihere are some groupings and lumpings, 21 as Harold has described.
There are multiple items in 22 some of these things.
23 PGCE was requested at the February 3rd meeting 24 with the Staff to develop a tracking system tha t would 25 categorire and keep track of all the items identified by ALDER $oN REPORTING COMPANY,INC.
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Cloud or themselves and come up with an ultimate 2 disposition.
In developing the error-open item report, 3 they have classified. error as being something that an 4 independent calculation has been performed and a 5 decision has been made that ar error exists.
6 The system would further have to be evaluated, 7 each error, to put then in certain classes, and these 1
8 are defined in the semi-monthly report.
The definitions 9 of error, the class of error and open items.
10 We independently had just tried to list these 11 things, and we are using error in a different context, 12 and our list is regresentative of errors and open items.
13 NR. DENTON:
I didn't intend to focus on the 14 numbers today as being germane to the decision.
It's to 15 give you the impression that a large number of design 16 errors are being found which require such greater effort 17 than we anticipated three months when we first began 18 this exercise.
19 COMMISSIONER AHEARNE:
I think slowly, and I 20 like to try to understand information that helps me 21 reach final conclusions.
22 MR. DENION:
I think I cannot add much to what 23 Frank said.
But we can talk about this further.
24 COMMISSIONEE AHEARNE:
One other quection?
25
'Jo uld it be fair to therefore conclude thet it ALDERSoN REPORTING COMPANY,INC,
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is your judgment that the 111 items are contained with 2
the 58, but that you don't actually know; there might be 3 some mismatch?
4 MR. MIRAGLIA:
We haven't done a one-to-one 5 comparison, but the orders of magnitude we are in 6 agreement with.
7 HR. DENTON:
There are a few items out of 8 kilter and we have been keeping them from one source 9
while the other tracking system got running.
But I 10 think the key part of these is it does show that errors 11 made by PGCE on the original d'esign of this plant are 12 continuing to be found in large numbers by Cloud and by 13 PGEE themselves, and the number of errors is not 14 confined to the few that we originally talked about, 15 when there were three or five or 13, in some of our 16 earlier discussions.
It is now the very large number.
17 And in view of this, it leads me to think that the 18 program is going to continue as they look through 19 systems and structures to find this kind of thing.
20 It does begin to unravel a bit some of our 21 earlier thoughts about how defined these types of errors 22 might be within the PGCE design system.
23 Let me go next and summarize the views of the 24 representatives of the Governor and the Joint 25 Intervenors on the next slide.
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(Slide.)
2 3
4 5
6 7
8 9
10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 ALDERSON AEPORTING COMPANY,INC, Ni132MYPM /Yik Etr/
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1 I think the view of the other parties was that 2 any auditor selected by PGEE unilaterally would not have 3 the confidence of the intervenors or the public that 4 they represent.
They maintain that all parties should 5 agree on a list of auditors to do this type of work and 6
that the NRC itself should select the auditor from such 7 a list.
8 COMMISSIONER AHEARNE:
Now I gather, then, 9 that this comment refers to Cloud leaving Teledyne.
Is to that ccrrect?
11 MR. DENTON:
I think it would include all of 12 them, yes.
13 COMMISSIONER AHEARNE Were either of those or 14 all of those on the list of contractors that were 15 originally submitted?
16 MR. DENION:
Teledyne was on the original list 17 as a possibility, and the intervenors and the Governor's 18 representatives pointed out that they had not done an 19 in-depth study but they were listed as a possibility for 20 such an audit.
21 They also would see no distinction between 22 Phase I and Phase II at this point.
In other words, as 23 we said earlier, we originally envisioned tha t Phase II 24 could be done prior to fuel loading and, depending on 25 the results of Phase I, Phase II, which would deal with ALDERSoN REPORTING COMPANY,INC,
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the post-78 seismic and the non-seismic aspects, could 2
be done during the fuel loading.
They would maintain 3
that in view of the increasing number of problems found 4
there should be no distinction between Phase I and Phase 5
II.
6 The company has proposed a Phase II progLam 7 similar to their Phase I program and in their Phase II 8 program they would put Stone and Webster in the position 9
that Teledyne is now in in their Phase I program, 10 whereas they would continue to rely on Cloud to perform 11 the Phase II program and they would have Stone and 12 Webster in an audit position as they now have Teledyne 13 in an audit position.
14 CHAIRMAN PALLADINO:
You are not asking us 15 today for that Phase II decision?
16 MR. DENION:
No.
I think, however, once we i
17 decide on Phase I we need to move expeditiously on Phase 18 II so we would have the results of that program 19 available as soon as we can get them.
20 CHAIRMAN PALLADINO:
Are you going to propose 21 a Phase II action for the Commission?
l 22 MR. DENTON:
Not today except as it relates to 23 this Phase I approach.
l l
24 CHAIRMAN PALLADINO:
Are we going to get it in 25 time so that you do not feel we are holding you up?
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MR. DENTON:
Phase II really was not covered 2
by the Commission's scope.
It was covered in the letter 3 I sent to the Licensee, and my thought was that whatever 4 you do, whatever you approve on Phase I ve would conform 5 Phase II to and get moving on Phase II because we have 6 not given the company any approval for the Phase II 7 program either.
8 CHAIRMAN PALIADINO:
Refresh my memory.
Did 9 the order call for the Commission to approve the Phase 10 II auditor?
11 MR. DENTON:
No.
My memory is it only dealt 12 with the Phase I aspect.
13 MR. BICKWIT:
I believe the NRC was to make 14 its decision both with respect to Phase I and Phase II.
15 CHAIRMAN PALLADINO:
With regard to the order?
16 MR. BICKWIT:
Yes.
In neith'er case was it 17 specified that it would be the Commission itself.
l 18 COMMISSIONER AHEARNE:
But I would raise the 19 point that the order did not make clear that separation 20 of Phase I and Phase II in the sense that the' Phase II 21 was covered by your letter, but the order included the 22 statement that the NRC may impose additional 23 requirements prior to fuel loading.
24 Ihis may include some or all of the 25 requirements spec 3fied in the letter to PGCE dated ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W., WASHINGTON. D.C. 20024 (202) $$.-2345
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November 19.
So I do not think we reached the 2 conclusion that definitely this'was not part of that.
3 Could I ask you to just go back over, just for 4 a minute, the structure proposed for Phase II?
I 5
realize that is not necessarily the issue here today, 6 but depending on where we come out on the other --
7 MR. MIRAGLIA:
Perhaps I can help you.
Could 8
you go back to the organization.
9 (Slide.)
10 4
The Phase II program would be essentially the 11 same as this activity, except in the audit required it 12 would be Stone ard Webster Engineering, as the utility 13 proposed in their Phase II program.
And in the bottom 14 line, "Others as required", there is a box that says 15 Stone and Webster Engineering to do the mechanican te non-seismic aspects of -the review.
17 COMMISSIONER AGEARNE:
But the rest of it 18 would be the same?
19 MR. MIRAGLIA:
Yes.
The difference between 20 Phase II and Phase I is the seismic post-1978 internal 21 PGCE and then some audit of the post-79 activities 22 across the board.
23 COMMISSIONER AHEARNE:
I thought it wa s 24 service-related arross the board -- non-seismic 25 service-related.
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MR. MIRAGLIA:
Non-seismic service-re3ated 2 pre
'78, and then there was a sampling of the post-1978 3 activities just to get a feel that everything was okay.
4 CHAIRMAN PALLADIN04 In Pnase II I thought I 5 heard Mr. Dircks say -- and maybe I misunderstood him --
6 or maybe it was Harold who said Stone and Webster was 7 going to replace Teledyne.
8 MR. DENTON:
That is sort of the way I 9 understood the presentation, but I will defer to Frank.
10 MR. MIRAGLIA:
The Phase II action plan was 11 submitted about mid-January and Teledyne was still in 12 the picture.
13 CHAIBMAN PALLADINO:
On Phase II would 14 Teledyne be the auditor under their proposal?
l 15 MR. MIRAGLIA:
Yes.
16 MR. DENTON:
Let us look while we go on.
I 17 think I mentioned Phase II mainly for the point that 18 they intend to have Cloud still in the prime 19 responsibility for Phase II, and if you do not buy it in 20 Phase I today I assume you would not buy it in Phase II.
21 COMMISSIONER AHEARNE:
The reason I raised the 22 question is that I felt the organiza tional structure 23 needs clarification because both Teledyne and Cloud play 24 a central role in both Phase I and Phase II and how we 25 cone out in Phase I with respect to them clearly is ALDERSON REPORTING COMPANY. INC.
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going to have a good chance of affecting Phase II.
2 (Slide.)
3 3R. DENION:
We tried to see if we could get 4
the parties to the bargaining table, so to speak, to 5 develop a list.
We were not successful.
The company 6 considers that their proposed organization of auditors 7 are fully responsive and they see no need to develop a 8 list to select from, so we were not able to accommodate 9
the first three recommendations of the other parties 10 with regard to developing a list and having the 11 Commission choose.
12 But I think it is a key point because, as 13 Commissioner Ahearne said, Teledyne was on their 14 potential list of people.
We talked about Phase I and 15 Phase II and how they related and how our options are 16 open, I believe, with regard to Phase II and the extent 17 to which it should be completed.
18 Another major point of the other parties was 19 that the program should include construction 20 activities.
We had excluded construction activities l
21 originally and still think that they shculd be excluded 22 based on what we kno w, becacse that is where our 23 inspection program has been heavily focused was those 24 aspects of construction.
t 25 COMMISSIONER GILINSKYa What do you mean by ALDERSoN REPORTING COMPANY, INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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construction activities?
2 MR. DENTOMs Receipt of materials, 3 concrete-pouring, as opposed to verifying the design of 4 the plant.
It was shipped to the site.
The program, as 5 proposed by PGEE, did not deal with the adequacy of 6 construction in those construction details and that is 7 an area in which we have traditionally focused a lot of 8 our inspection attention.
Based on that inspection 9 record we do not think the program plan should extend 10 into construction.
Perhaps Bob would like to address 11 that.
12 COMMISSIONER GILINSKY:
I thought we had 13 agreed, at least informally -- at least I thought Cloud 14 was doing this or planned to do it -- that those systems 15 which were being examined would be followed through the 16 process right into the plant.
17 "R.
DENION:
Ihey are looking at as-built 18 systLms when they do their independent verification, but 19 they do not necessarily look back at the strength of the 20 concrete and the.valls and the building and those kinds 21 of receipt of materials and all those elements of a QA 22 program that go with construction as opposed to design.
23 MR. ENGLEKENs The ongoing construction 24 inspection program that we had at the plaut since the 25 beginning of construction, in accordance with the ALDERSON REPORTING COMPANY,INC, c@ VI@NIA AR $% CEDJC'@T@A @l>@> 883 68i8) GPAtr3')
28 1
Inspection and Enforcement manual, calls for frequent 2 on-site inspections of the construction as it takes 3 place and that was done, as it is with all other plants.
4 COMMISSIONER GILINSKY:
You are talking about 5
the general quality of the construction?
6 MR. ENGELKEN Yes.
7 COMMISSIONER GILINSKY:
But what about, say, 8
some particular ites, restraint of some sort, which you 9 are analyzing, following through the design chain?
Will to you then look to see that it is in fact in the right 11 place?
12 MR. ENGELKEN s The Cloud verification effort 13 is looking at the as-built systems selected -- a 14 sampling of as-built systems, yes.
15 MR. DENTONs From the design aspect they are 16 not independently sampling the materials to see if they 17 Comply with standards.
18 COMMISSIONER GILINSKYs The ones that are l
l 19 chosen for review in the design review are then followed
[
l 20 all the way down the chain into the plant?
l 21 MB. DENTON4 They use as-built drawings when 22 they do their verification, but they do not go back and 23 verify the materials but it is to verif y th e design, so l
24 to speak.
25 COMMISSIONER AHEARNE:
You would verify it ALDERSoN REPORTING COMPANY,INC.
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was the right place, but you did not try to verify 2 whether the materials in there had met certain 3 specifications?
4 MR. DENTONs Heat treatments and those sorts 5 of things that go with the mate rials.
But it does go 8 all the way back to the plant for design verification..
7 CHAIRMAN PALIADINC4 These items that were not 8 covered presumably were covered by QA?
9 MR. DENTONa Right, and so the other parties 10 would prefer that the program plan go into every QA 11 criteria and cover not only design but the usual 12 construction aspects that require a b' roader program.
13 The next comment of the parties was that the 14 sampling plan should be expanded.
The program plan, as 15 proposed, covered certain systems and certain 18 structures.
The other parties thought it did not l
17 examine enough sample subpiping or systems.
18 We have adopted this comment to some extent 19 because we did not think that the program plan did use i
20 statistic sampling methods to the extent that it could 21 have, and one of our conclusions will be that whoever 22 does this program plan should expand the use of sampling 23 criteria for a possible.
24 And then their last comment was that all the 25 QA criteria should be covered by the program plan, ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AS O,W., WASHINGT@No $.@. M4 G8@QMYG
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somewhat related to their view that the program plan 2 should include construction activities.
3 So to the extent we can exclude from the 4 program plan certain construction activities you exclude 5 some of the QA criteria, such as receiving and stripping 6 and verificationand those sorts of detail.
7 CHAIRMAN PALLADINO:
Harold, in reading 8 SECY-82-89 I somehow had the feeling there was more 9 accord among the parties than would appear in this to list.
Is that correct?
In other words, was I reading 11 too optimistically with regard to the accord?
12 MR. DENTON:
I think we have accommodated a 13 fair fraction of their problems with the programs and by 14 that I mean the parties, to some extent, the problems 15 the parties have are the same problems we had.
So we 16 did push to have the program plan include certain 17 aspects of Westinghouse's input, for example.
18 We did include the sampling criteria.
You 19 will find on the next slide that we are moving in a l
20 number of areas in the direction that they have said, 21 but I think with regard to these others we did not adopt 22 all their recommendations.
l l
23 (Slide.)
i 24 COMMISSIONER AHEARNE:
Harold l
25 OHAIRMAN PALLADINO:
I was just going to ask l
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which one of these were the items that you did not 2 achieve accord on.
3 ER. DENTONs I guess it depends on how you see 4
them.
5 CHAIRMAN PALL'ADIN0s Or accommodation.
6 MR. DENTON:
Let me go to the next one and 7 come back to this one.
8 COMMISSIONER AHEARNE:
Could I then ask my 9 question?
In reading through the transcript of a 10 meeting recently sent -- Darrell Eisenhut recently sent 11 to us the transcript of the meeting on February 17 with 12 the representative of the Governor of California and the 13 Joint Intervenors.
Reading through that the conclusion 14 I would reach is the areas of main dispute would be 15 disagreement on the auditors because of the process by 16 which they are chosan. a disagreement that Phase I and 17 II are separate, a belief there really should be just 18 one, and a disagreement on the scope -- that it should i
19 be expanded.
20 Is that essentially correct?
21 MR. DENTON:
Well, they are the ones that I f
22 have highlighted also.
i i
23 COMMESSIONER AHEARNEs Yes.
l 24 CHAIRMAN PALLADIN0a However, on scope I l
25 gather there has been some accommodation.
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COMMISSIONER AHEARNEa Well, I thought th e 2 accommodation is more with respect to the use of -- the 3 greater use -- that we will rely on a greater use of 4 statistical methods in developing this sampling plan.
5 But that is not what I meant by scope.
6 By scope I gather they were making the 7 argument that you and Commissioner Gilinsky had just 8 discussed, namely that they should be viewed in the same 9 category as South Texas and Midland areas where we 10 should now essentially review the entire Q A approach.
11 MR. DENTON:
We seriously considered all the 12 comments and asked ourselves is our warm feeling about 13 the quality of construction due to inadequate sampling 14 by the NRC, and if in fact you were to launch a major 15 reverification program would we begin to find the 16 hundreds of errors that we found on the design 17 verification process.
18 And after Region I and the others have talked 19 about it, we think we at least have a basis for settino 20 aside those construction activities for the scope of 21 inclusion in this program that we did not have for 22 setting aside the design aspects, which we essentially 23 did not audit in this kind of structure.
But it is a 24 f air question to ask because of the relatively small 25 percentage of construction activities that we do sample.
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The next page tried to summarize where we come 2 out with regard to some of the issues.
In reaching 3
these decisions we used the criteria that you have 4 provided the Congress for looking at independents and 5 looked in detail at the technical competence of the 6 contrac tors -- their independence, their financial 7 relationship.
8 With regard to the program plan itself we 9
thought there were at least three areas where it needed 10 to be beefad up.
One, as I mentioned, we needed to be 11 sure that the people such as Westinghouse had actually 12 used the correct Hosgri spectrum in their design and the 13 company had not proposed to do any more than verify that 14 correct information had been sent to Westinghouse, for 15 example.
16 We proposed the program at least establish 17 that it was received within Westinghouse and got into 18 their design process and not just assume the transmittal 19 was sufficient.
20 We also think these statistics can be employed 21 in devising the sampling plan in a number of areas, that 22 it cannot substitute f or judgment in picking systems 23 throughout, but the program plan was silent, by and 24 large, on its use of statistics in a number of areas we 25 think that could profit from a hard look to see to what ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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extent questions and reliability can be answered through 2
the design program.
3 Third, we wanted to sample some structural
~
4 elements that it did not get into, and these are spelled 5 out more in our report.
6 In looking at the technical competence of the 7
proposed organization, we found that the Cloud 8 organization has had to grow consider bly.
I make the 9
point that it has tripled.
The reorganization is 10 small.
I do not think either Cloud nor Reedy have 11 robust technical capabilities and that they are not 12 large, such as General Atomics was in the previous case 13 I mentioned, or they were not large 14 architect-engineering firms.
15 They are rather small.
16 CHAIRMAN PALLADINC:
You say they are small, 17 Harold.
Does that imply inadequate in numbers?
18 MR. DENION:
It is hard to say it is 19 inadequate.
I just think it would take a lot longer for 20 them to do a civen job, and'since they do not have s 21 permanent infrastructure that is used to doing nuclear 22 design sort of work, it is much harder for us to audit 23 and come to some conclusion on when two-thirds of the 24 organization has been hired very recently and they have 25 not developed the kind of infrastructure that it takes ALDERSoN REPORTING COMPANY. INC.
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to make a reverification program run smoothly and we are 2 spending a lot of time looking at it.
~
3 So if that were the only issue, I would not 4 say smallness by itself would be a decision criteria.
5 We looked at the amount of stock owned by the peopl(
6 employed in the companies, the relationship that their 7 relativas nar have had to PGCE or any members of their 8 household.
In all those kinds of areas it seems to us 9 that Reedy and Teledyne are inseparable.
10 Ieledyne, of course, is a very large company.
11 They do have a $1.2 million contract with PGCE to look 12 at PGCE's response in 79-02.
We looked at that and 13 really did not think that their work on 79-02 affected 14 their sbility to do a design verification.
It is more 15 of a hardware verification of pipe supports and anchors.
16 CHAIRMAN PALLADIN0s Is that not part of the 17 reverification?
18 MR. DENTON:
I did not see it in quite the l
l 19 sane area.
20 MR. VOLLMER I think, as Harold indicated, 21 there was more adequacy of hardware to do the effective 22 design job, whereas this is more oriented toward the l
23 adequacy of the design itself.
I think they do touch on 24 one another, but I think they are reasonably separable.
l 25 CHAIRMAN PALLADINO:
Is that contract ongoing i
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or through?
2 MR. VOLLMERs If it is not th rough, I think it 3
is near completion.
4 MR. DENTONs I think it is practically 5 completed, if not complete.
6 CHAIRMAN PALLADIN04 What fraction of their 7 annual business is $1.2 million?
8 MR. DENTON:
Let me ask Dick if he has been 9 able to establish that.
10 MR. VOLLMER:
Of course for the fraction of 11 Teledyne's business it is minute.
In the fraction of 12 the engineering services we have not gotten the actual 13 revenues, but in terms of size, they employ 200 people, 14 so you could guess that at a minimum it is a several 15 million dollar business that they do and this contract 16 was over a fair period of time -- more than a year -- so 17 that it could be construed as a significant fraction, 18 perhaps a quarter to a third of --
19 CHAIRMAN PALLADIN04 You say it could be a 20 quarter or a third or what of Teledyne's business?
l 21 MR. VOLLMER:
Of the services -- the services 22 arm alone.
I think it is -- I am saying that would be --
23 MR. DENION:
I do not think we know the 24 f ra ction.
25 MR. VOLLMER:
As I say, they employ 200 people.
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CHAIRMAN PALLADIN04 It s more likely $1.2 2 million.
3 MR. VOLLMER With 200 people, $20 million 4
would be a likely volume of business, in wnich case this 5
would be -- a few percent is what I meant to say.
6 CHAIRMAN PALLADINO:
You mentioned stock 7 earlier.
As long as I had interrupted you, in your 8 writeup you indicate that one member of Reedy owns 500 9 shares, which came out to $10,000, and you said Teledyne 10 owns 400 shares that came out to $3,000.
Is that 11 because they are different shares or are the numbers 12 vrong -- I mean, dif ferent kinds of shares?
13 MR. DENTON:
I do not know.
Let me ask Dick.
14 CHAIRMAN PALLADINO:
It is not significant.
15 It is a minor point.
16 MR. DENTON:
I would have to check it out.
17 CHAIRMAN PALLADINO:
Okay.
It is small, I 18 gather, under the capitalization.
19 3R. DENION:
The way we approached Teled yne, 20 ve looked at their annual report to see what sort of 21 stock ownership they reported and they said less than 22 some fraction of the company's assets were in stock and 23 we did not stop there.
We went back and asked them, 24 well, do you own any and, if so, tell us how much.
And 25 tha t was their response.
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00MMISSIO'NER AHEARNE:
In addressing the 2
question on Teledyne, I noticed in the SECY paper you 3
make the statement:
"However, Teledyne has not 4 demonstrated that they possess experience in the 5 analysis of major nuclear power plant structures or in 6 soil dynamics."
7 57 question would be, given the role that they 8 were identified, were they asked to demonstrate whether 9
they had experience in this?
10 MR. VOLLMER:
I would like to answer that.
I 11 think the conclusion -- the findings and conclusions we 12 have here were based on the resumes that we,re provided 13 to us and I think it is our feeling, based on past work 14 that Teledyne has done that they do have these 15 qualifications.
They have not been cited as members of 18 this team and so I think we were thinking that ther 17 should augment their professional qualifications to 18 accommodate this.
19 COMMISSIONER AHEARNE:
But there is a 20 difference between augment, meaning provide additional 21 resumes for people they have, or augment to go out and 22 hire additional people.
I would have read this as being 23 our attendant con lusion that they do not have people 24 who have this axperience, and just from previous 25 contacts, with experience with some of the work they ALDERSoN REPORTING COMPANY,INC,
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have done, I would have concluded that they might have 2 had that.
3 MR. VOLLMER:
What I meant to say is that they 4 have not demonstrated it, i.e.,
by giving us resumes of 5 these people.
We think they have them and they should 6 supply them.
7 CHAIRMAN PALLADIN0a There is another place in 8 here where you say we recommend that Teledyne retain 9 additional expertise with knowledge and experience in 10 the design analysis of major nuclear power plant 11 structures and soil dynamics.
12 I gather that was a recommendation of Bob 13 Martin?
14 MR. DENTONa We only looked at the resumes, 15 and for the program that they have they did not have the 16 necescary people with these skills.
17 COMMISSIONER AHEARNE:
My point is, I did not 18 think they were asked to demonstrate that they had 19 people with those skills, given the role they were 20 originall,y identified to play.
21 MR. DENTON:
I think we thought they should 22 have some representation of these skills in their audit 23 role, and while they were heavy on systems, they relied 24 on structure and part of the reverification was 25 structure, and so we thought even within the seven that ALDERSoN REPORTING COMPANY,INC.
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they needed 2
COMMISSIONER AHEARNE:
I guess I would have 3 difficulty in resching the understanding how you reached 4
the conclusion that the Chairman just cited, which does 5 say that the NRC Staff recommends that Teledyne retain 6 additional expertise.
7 MR. DENTON:
Assigned, perhaps acquire --
8 whatever the right word would be.
9 MR. VOLLNER:
I have been told, Harold, to 10 clear up the other point that the stock -- one block of 11 stock is preferred and the other is common.
The reason 12 for the difference, we vill verify that.
But that 13 should take care of that value discrepancy.
14 15 16 17 18 19 20 21 22 M
24 25 ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (8Ei) 554 2345
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NR. DENTON:
Now the issue that we looked at 2
was Cloud's level of business with PGCE.
He had, of 3 course, been involved with Diablo Canyon prior to this 4
time in his role with Westinghouse.
So he had some 5 oversight in the design of Westinghouse while he was at 6 Westinghouse, oversight of some of the design of 7 Westinghouse-supplied equipment.
But he had had at 8 least three projects with PGCE prior to the time that he 9 took on the reverification effort.
10 These three projects included pipe whip 11 restraints, seismic interactions program, and a program 12 in the seismic capability of nonseismically-designed 13 components.
So he had been working for PGCE prior to 14 this time and then when the reverification program 15 began, the fraction of his revenue that came from PGCE 16 vent up even higher.
17 We don't see evidence in this program that 18 this prior financial dealings have prejudiced the 19 results, and to the extent we have been looking at the 20 way he has been developing this 111 or 93 items or 21 whatever the right number is --
22 (Commissioner Gilinsky left the hearing at 23 10:58 a.m.)
24 But it raises so many questione in so many 25 people's mind that he was so dependent on 'GCE before ALCERSoN REPORTING COMPANY,INC,
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this got started, that there might be some subtle 2 influence lingering, and based on this we considered 3
this level of business is sufficiently prejudicial that 4
they should revamp their organization.
5 CHAIRMAN PALLADIN0s Harold, was any of that 6 work, work that's going to be reviewed, the prior work 7 by Cloud?
This Cloud revenue of 48 percent prior to 8 the reverification program, was that work that would be 9 involved in review?
10 MR. DENTONa It's not directly within the 11 scope of the reverification effort.
It's certainly 12 related, but it's not the subject of the reverification.
13 CHAIRMAN PALLADINO:
Is it related closely so 14 that it could conceivably influence the consultant or 15 the Cloud Associates?
16 MB. DENTON:
I think that's -- in our view, if 17 I can go to the next slide, taking all this into 18 account, we think that the responsibility f or the 19 performance of the review should rest with someone other 20 than Cloud, and that someone other could be someone as i
21 Toledyne.
22 (Commissioner Gilinsky returned to the meeting 23 at 11:00 a.m.)
24 And I think this would in large measure 25 eliminate the need to worry about the a8 percent or the ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) $54 2345
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70 percent, of his programs.
2 On the one hand, you don't want a system where 3 you exclude people from doing work just because they are 4 small and they have done prior work, if they are 5 actually extremely competent. But because of all the 8 issues that I have cited here, I would recommend tha t 7 back in that first slide that we showed of organization, 8 that someone such as Teledyne be assigned the role for 9
the performance of taa reverification.
10 I would le: them adopt, to the extent that 11 they evaluate and are willing to adopt, the work that's 12 already been doce, but require that they not adopt it 13 carte blanche, but that they do an evaluation and come 14 to their own conclusion about whether or not their work 15 satisfies the program plan.
18 COMMISSION ER GILINSKY:
They would take 17 r es ponsibili ty ?
18 MR. DENION:
They would be responsible and 19 provide a decision to the Commisson and PGCE that within 20 the scope of the actions ordered by the Commission, that 21 they find this plan as modified f rom this outcome to be 22 in conformance with the application.
23 COMMISSIONER AHEARNE:
With respect to that 24 chart, then, you would suggest putting another firm in 25 place of program management; is that correct?
That's ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 2346
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what you just said.
2 MR. DENTON:
If we could go back to the 3 proposed organiration chart.
4 (Slide.)
5 I see sliding a firm such at Teledyne right 6 under -- between Cloud and PGCE, giving them the 7 primary responsibility -- giving them the 8 res pon sibili ty, and to the extent that they want to 9 reevaluate and adopt the work to date, they could do so.
10 COMMISSIONER AHEARNE:
Well, this is a 11 reverification program?
12 MR. DENTON:
Yes.
13 COMMISSIONER AHEARNE:
So we are addressing 14 who we would agree would be the company who would be 15 running the program?
16 MR. DENTON:
Yes.
17 COMMISSIONER AHEARNE:
So whether you slide 18 them over or put them in that block, they would be the 19 program manager; is that not correct?
20 MR. DENTON:
Yes.
21 CHAIRMAN PALLADINO:
Let me raise a question.
22 How could they be an independent auditor if they are th e 23 program manager?
24 COMMISSIONER AHEARNE:
The program is the 25 independent audit procram.
The independent ALDERSoN REPORTING COMPANY,INC.
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reverification program, is it not?
2 MR. DENTON Yes.
Maybe the --
3 3R. DIRCKS4 However you treated Cloud, or 4
implici tly however he was treated, he would move out and 5 Teledyne or a firm such as that firm would move in.
6 MR. DENION:
There is an existing plant design 7
and Cloud has been preparing that plant design to 8 commitments made in the application.
He's been finding 9
problems with it.
He's been working for PGEE.
The 10 company has proposed we treat that as an independent 11 auditor.
12 I think what I'm saying is, let's pick someone 13 else to have the responsibility for verifying for the 14 Commission that the design either meets or doesn't meet 15 the application; that's ' Cloud's work has been very 16 useful for tne company, it's developed a long list of 17 things, bot when it comes to having the responsibility 18 for technically saying that this plant does meet the 19 a pplication or not, have someone such as Teledyne in 20 that role.
21 CHAIRMAN PALLADINO:
Well, the relationship 22 between the two is not quite clear to me at the moment.
23 COMMISSION ER GILINSKY :
Well, this could be 24 eliminated.
25 CHAIRMAN PALLADINO.
I appreciate that.
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COMMISSIONER AHEARNE:
I'm not sure.
2 CHAIEMAN PALLADINO:
We're trying to 3 understand it.
One of the proposals is that Teledyne 4 goes in where it says " program management," and then I 5 was trying to get a feel for what that implied, and 8 Teledyne then would have to go -- be the one that finds 7 or directs that there be found all the errors, and any 8 open items, and see that they are properly evaluated.
9 MR. DENTON I guess I'd stay cway from trying 10 to direct the company as to how to make th e 11 arrangements, other than to say that the responsibility 12 for the performance of the program directed by the 13 Commission rests with someone such as Teledyne now, and 14 then leave it to the company as to whether they wanted 15 to retain Cloud to work for the company to help solve 16 these problems that he's already identified or that they 17 somehow -- whether a company such as Teledyne wanted to 18 hire Cloud under whatever controls and scope that they 19 were given to do it ; but anyway, make it clear this is 20 the firm that had the final say when it came to auditing 21 and performing the program.
22 CHAIRMAN PALLADINO:
I had somehow gotten the 23 idea from this that Cloud was really in a sense working 24 for PG6E and Teledyne is overseeing it, and you're 25 saying it could be either way.
l l
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COMMISSIONER AHEARNEs In the chart that you 2 haveon the screen, the role that Teledyne was playing a 3
role for PGEE?
~
4 MR. DENTON4 Yes.
5 COMMISSIONER AHEARNE:
Is that correct?
And L
6 not an essential element in the order or your letter.
7 MR. DENTON:
That's correct. I think Teledyne 8 was sort of a -- playing a role as providing a second 9 opinion to PGEE on the adequacy of Cloud's performance.
I i
10 COMMISSIONER AHEARNE:
Fine.
So if you say 11 tha t Teledyne is the one -- we have not got that yet 12 then whether or not the company maintains some 13 engineering service's independent review is really up to i
14 them?
15 MR. DENTON:
Yes.
16 COMMISSIONER AHEARNE:
But if Teledyne were 17 the one in charge of this independent program, clearly 18 they could not at the same time be performing the second 19 opinion for the company; is that correct?
j 1
20 MR. DENTON4 Yes, tha t is the wa y I sa w it.
21 The company could choose to continue with Cloud for 22 their own purposes.
Just to identify and correct 23 COMMISSIONER AHEARNE:
They could swap these 24 two.
They could put Cloud up where Teledyne now sits, 25 and you have no problem at that stage, because that's l
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not part of your program?
2 MR. DENTON:
That's fight.
3 COMMISSIONER AHEARNE.
How about Reedy?
You 4 had mentioned in your quick summary that there was some 5 concern about Reedy being small and also having e
6 involvement 7
NR. DENTON:
Reedy has some an independence 8 where Cloud did not influence his effort.
9 COMMISSIONER AHEARNE:
How about financial 10 positich?
11 MR. DENION:
He had no prior involvement with 12 PGCE.
13 COMMISSIONER AHEARNE:
The volume of this 14 business with respect to --
15 MR. DENTON:
I think it is going to be a large 16 fraction of his new business, but that will be the case 17 almost with any small company who enters it cold. But I 18 did not consider that a barrier.
Eeedy, to me, was 19 sufficiently independent and had no prior involvement, 20 and as a result could report to a contractor like Cloud 21 in the Q A area.
22 MR. DIRCKS:
But you're saying essentially 23 whoever that firm is, Teledyne or some other firm would 24 e ssentia lly make those decisions regarding the work of 25 Cloud and Reedy in this whole process.
If the ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W, WASHINGTON, D.C. 20024 (202) 554-2346
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{
1 r espo nsibili ty shifts --
l 2
CHAIRMAN PALLADINO:
Let me ask you a related 3 question.
It's conceivable Teledyne would like to say, 4 although we would like to have Cloud Associates help us, i
5 PGCE may also be retaining Cloud Associates on doing 8 some other things.
i 7
Is there a possibility of conflict of interest 8 in that relation?
9 HR. DIRCKS:
I think you are going to be i
[
10 relying on Teledyne or another firm for that 11 independence. They could very well use whatever work f
12 Cloud has done for the basis for their own findings, I
13 subject to satisfying your own need for their 14 independent review.
15 They could accept Reedy's work, but you're 16 putting the burden on them to make the certification 17 that the plant has been built.
18 COMMISSIONER AHEARNE:
Let me see if I can j
19 understand something that I think is inherent in what 20 you said.
If I understand it correctly,you would l
21 believe that if PGEE hired Teledyne to be this program 22 manager and all of the necessary arrangements which we 23 have required for keeping us informed and so-forth, were 24 accommodated, that that would be satisfactory, even if f
25 Teledyne would then say that the work that Cloud has i
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done -- that is the checking over the correspondence, 2 any of the trails he has followed, they will accept in 3
place.
You do not see either our order or your letter 4 as requiring thi's so-called independent program manager 5 to be the people who actually did that comparison, and 6 you would be willing to accept that comparison having 7 been done by Cloud?
Is that correct?
8 MR. DENTON:
In an ideal world, I'd prefer 9 that it be done by someone like Teledyne from scratch; 10 but recognizing that a lot of work has been 11 accomplished, a lot of problems have been identified I
12 that our own auditing of it does not see, that we should 13 throw it out altogether, I would be willing to let 14 Teledyne adopt, to the extent that they evaluate it, 15 whether or not it conforms with the program plan that we 16 ultimately did.
And I.ould see that in some areas it 17 may have to be augmented because it did not includ'e the 18 sampling statistical approach, some of the structural 19 elements that didn't go to Westinghouse.
20 But to the extent tha t Teledyne was 21 independently able to find that it satisfied the program 22 we want, I would let them adopt it and let them decide.
23 And what I think I'd be getting that way is there are 24 many technical questions about seismic design, about 25 damping factors, and differences between the calculated ALDERSoN REPORTING COMPANY. INC.
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results that call for judgments, as whether the system 2
meets criteria or no t, let Teledyne make th ose 3
decisions, once they have reviewed what Cloud did.
They 4
may disagree technically on some aspects of Cloud's 5
reverification of the program.
And I think it puts the 6 Staff so that we don't have to agree or cisagree with 7 every little aspect of a company like Teledyne, that 8 when you're buying a large company with a lot of 9 competence who has a lot of nuclear codes, approved QA 10 programs, and that sort of thing, that it's a lot easier 11 for us to turn it over to someone in that sense.
12 MR. DIRCKSs I think the point you should 13 stress -- and I think you have mentioned it already 14 it's not sure Teledyne would want the contract or get 15 the contract.
You're saying a firm "such as Teledyne."
16 COMMISSIONER AHEARNE:
I've got several more 17 questions on that line, but before I get exactly to that 18 one, let me ask you, if Teledyne or whoever were to be 19 in that position, whose decision would it be whether or 20 not they (a) accept what Cloud has done; or (b) continue i
21 having Cloud do the remaining part of that review?
22 1R. DENTON:
I'd see it as the contractor 23 having selected --
24 COMMISSIONER AHEARNE:
Colely, for example.
25 So therefore there would be no opportunity for PGCE to ALDERSoN REPORTING COMPANY,INC, oX) VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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say, well, we've already paid for this work, you are 2 going to have to accept it, or we are not going to allow 3 anybody else other than Cloud to continue in this.
That 4 would not be
'.5 MR. DENTON:
I would certainly think that 6 should be the casa.
7 COMMISSIONER AREARNE:
Okay.
Getting to the 8 point that Mr. Dircks just mentioned, your memo 9 recommends a contract "such as Teledyne."
So far today to I have heard no name other than Teledyne and it's not 11 clear to me what process you would be proposing to 12 follow.
13 Let us suppose we accepted the 14 recommendation.
What is the process you would then 15 propose to f ollow if it is really not Teledyne that is 16 being proposed, but some unspecified listt 17 MB. DENTON:
Well, I have been reluctant to 18 specify a rontractor in view of the fact that even in 19 our cwn contracts, we make a great effort to assure that 20 all competent bidders can bid on that sort of thing. So 21 I thought we should agree on what the criteria were and 22 if today the Commission agrees it should be a large firm 23 such as Teledyne with that degree of independence and 24 capability, then we could make sure that that is who is 25 selected by the company. And if they wanted to select l
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Teledyne or one of the other large firms in the country, 2
I would let them, and we would make sure that they 3
satisfy us that they are like Teledyne.
~
4 COMMISSIONER BRADFORD:
Why did you use the 5 phrase "such as Teledyne"?
6 MR. DENTON:
They were the one the company had L
7 proposed as an auditor already.
8 MR. DIRCKS:
They are also in the list of 9 firms that came in originally.
to CHAIRMAN PALLADINO:
We were going to select.
11 Why not select Teledyne or some other firm?
12 MR. DENTON:
That is certainly an option.
13 CHAIRMAN PALLADINO:
The only thing that makes 14 me question whether we can, is whether they will.
15 MR. DENTON:
That is why I have said "s u c h-16 as."
I have not reviewed the qualifications of every 17 A-E firm and how much they would charge.
18 COMMISSIONER AHEARNE:
Have you discussed with 19 Teledyne whether they would accept this role?
20 MR. DENTON:
We have discussed this type of 21 role and why it was not set up this way with,Tel3 dyne 22 and with PGCE and I guess it is my view that if PGCE 23 wanted them in this role, Teledyne would accept it, and 24 they are in this other role because that is the role 25 PGCE hired them to be in as an auditor.
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COMMISSIONER AHEARNE:
Is it your impression 2 that if we would say as an auditor we will accept 3 Teledyne that the company would turn us down?
4 MR. DENTON:
No.
I think the com pany wants to 5 get on with the program that is approved, and would do 6 almost anything except meet with the other parties to 7 agree on the list and approve that contractor.
8 (Laughter.)
9 COMMISSIONER AHEARNE:
I guess I was somewhat i
10 surprised the phrase "such as."
It has taken all of us 11
-- and you know it even more than we do, because you 12 have been enmeshed in all of these negotiations, 13 discussions, reviews -- but it has taken us so long to 14 get to this point, that to be faced with we will now go 15 out and try to establish another list of companies and 16 another list of reviewers, is a shock.
17 MR. DENTON:
The company's position is that 18 they are proposing to fully satisfy us in their mind in 19 what is required under the order. They understand that 20 we have been wrestling with this concern.
They put 21 Teledyne in that audit role, hoping that would temper 22 some of our concerns about Clcud and would still 23 maintain that that is an adequate system.
24 CHAIBMAN PALLADINO:
Harold, would it bother 25 you if the order did not say "such as Teledyne" and just l
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said "Teledyne"?
2 MR. DENTON:
No, not at all.
3 MR. DIRCKS:
You are right, you get to a 4 certain point, but it seems to me that when we tell 5 somebody to go out at all costs and make a contract with 6 somebody, there is a certain limit that you do not want 7 to push this agency over.
8 CHAIRMAN PALLADINO:
I thought we basically 9 said we were going to pick the auditor, and we did not 10 seem quite at the point of picking him. And I said, t
11 vell, if we think this is the one we want and they seem 12 willing -- I do not mind saying subject to their 13 achieving a satisfactory --
I 14 MR. DENTON:
I think th e real issue that 15 boiled down wa s, was the Commission going to accept 16 Cloud or not, and if not Cloud, there are a number of 17 relatively large engineering firms that could be called 18 upon.
19 COMMISSIONER AHEAPNE:
We are what?
Five 20 months, six months?
And adding another continuation of l
21 the process i
22 MR. DENTON:
I was not able to get the company l
23 to propose Teledyne as the one.
They understand our i
24 concerns with Cloud.
They have been made aware of it.
25 They have stuck with their proposal.
i i
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COMMISSIONER BRADFORD:
Other than the 2
comp'any's lack of enthusiasn for it, what is the Staff's 3 assessment of the proposal, that there be some type of 4
joint selection process?
5 MR. DENTON I thought that there did not seem 6 to be any obvious reasons why it could not have worked.
7 But we started down that approach in November, and the 8 Governor did provide a list of about a dozen companies 9
that he thought might fulfill that role and PGCE thought 10 that it was an unnecessary step, and the selection was 11 quite adequate.
12 MR. DIRCKS4 I think we got a feeling f rom the 13 Commission at that point that that was not the role that 14 was going to come down, anyway.
15 COMMISSIONER AHEARNE:
I think that is right.
16 MR. DIRCKSs It was discussed then and it was 17 rejected.
18 COMMISSIONER AHEARNE:
I thought tha t we had 19 reached at least a tentative conclusion that the Staff 20 would review various of the company's proposals, and if 21 they found it acceptable and if they found the 22 modifications acce ptable, they would come to us.
23 COMMISSIONER BRADFORD:
Was Teledyne on that L
24 list?
25 TR. DENION:
Yes.
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CHAIRMAN PALLADINO:
Can we go on?
2 MB. DENTON:
Then, just to finish off on the l
3 Staff recommendations chart if I could go back to the 4 last one.
5 (Slide.)
6 I had already mentioned some of the areas in 7 which we thought the program plan needed to be expanded 8 and thought that wheever does this work, th en, the 9 program plan would also have to be expanded to. include 10 the evaluation of previous work already done and 11 additional verification based on the results of that, 12 that the same company should also look a t the corrective 13 actions that are proposed by PGCE to fix the problems 14 that are found, and that they would provide the 15 Commission or PGCE with a report both on the 16 deficiencies found and the adequacy of the corrections 17 and that they would have a reporting system that would 18 provide information to all parties at the same time and 19 have auditable records just to keep the area as clean as 20 possible.
21 (Commissioner Bradford left at 11:20.)
22 CHAIRMAN PALLADINO:
Can I ask a question 23 about the auditable records?
That would presume that 24 the independent auditor could check with PGCE and see if 25 there were any questions of accuracy as long as they ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2346
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kept an auditable trail.
2 Now would they also, when they send it out fo r 3
anybody 's question or comment in draft form, would they 4
also send it to the NRC?
5 MR. DENTON:
I would prefer that whatever they 6 send out go to all parties at the same time.
7 CHAIRMAN PALLADINO:
Is that clear?
8 MR. DENTON4 I would like to see that be a 9
part of the program that such an auditor would do is to that any formal correspondence of any type --
11 CHAIRMAN PALLADINO:
Including transmittal 12 drafts?
13 MR. DENTON:
Yes, that all written material go 14 to all the parties at the same time.
15' (Commissionar Bradford returned at 11:21.)
16 CHAIRMAN PALLADIN04 If we could make tha t 17 clear I think that would help.
18 MR. DENTON Yes, that is right.
19 MR. DIRCKS:
I think what you are saying in 20 regard to the program plan is that the program plan that 21 was reviewed by the Staff you found it acce ptable that i
22 these modifications -- there would be no need to send 23 out another program plan for another round of review and 24 ve essentially find this program plan acceptable with 25 these modifications.
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3H. DENTON:
To follow up with what Bill is 2 saying, I think if you agreed that a contractor such as 3 Teledyne in this type of program plan was acceptable, 4 the company could
- 9. hen inform us that they would like 5 Teledyne in this role, that they have modified their S plan here, and that then this aspect would -- the work 7 that began in a form known to be approved.
8 CHAIRMAN PALLADINO:
Harold, maybe I do not 9 remember the area well enough.
You said that they would 10 select Teledyne, and I guess my impression was that we 11 were going to approve the selection of whoever l' is.
12 MR. DIRCKS:
It is not Teledyne.
They have 13 come in with another name, and then we would have the 14 right to review it in the light of criteria.
15 CHAIRMAN PALLADINO:
By using words such 16 Teledyne we would be giving the Staff authority to say 17 as long as you are doing it the same way, we leave it to 18 you.
19 COMMISSIONER GILINSKY:
Even in the case of 20 Teledyne I assume we are going to approve the basis on 21 which they would be retained, the precise roles.
22 MR. DENTON:
We would look at their system to 23 be sure people within Teledyne did not have previous 24 PGCE involvement and those sorts of things.
25 So as I mentioned, Teledyne had only given-six ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2346
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or seven resumes to the Staff in their previous auditor 2
role, and if they take on this kind of role they would 3 have to assign a lot more people to the program.
4 COMMISSIONER AHEARNE:
Could I ask you to 5 refresh my memory here and tell me, one way from your 6 chart, your item number 2, can you clarify what that 7 means?
That is your second bullet.
8 CHAIRMAN PALLADINO:
On recommendatf ns?
9 COMMISSIONER AHEARNE:
Yes.
10 MR. DENTON:
let us assume that we have an 11 approved -- with some modifications -- PGCE's plan and 12 not the contractor.
13 COMMISSIONER AHEARNEa Right.
14 MR. DENTON:
So then if the contractor were 15 not Cloud I would want the contractor to evaluate the 16 work that had previously been done by Cloud or Reedy or 17 any other consultants that Cloud had hired and give him 18 the flexibility of adopting those to the extent that he 19 was able to find that they fully complied with the 20 program plan that you approve.
21 COMMISSIONER AHEARNE:
That, though, I thought 22 was your first item under your third bullet. I thought 23 the evaluation of previous work was what you just 24 described and I wanted to make sure I understood wha t 25 you have -- adoption results pending to date, pending l
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results of Commission order.
2 Is that separate from --
3 MR. VOLLMER:
This is in the framework of 1
4 expanding the program.
I 5
MR. DENTON:
I was trying to say that no carte 6 blanche adoption of what Cloud had done without looking.
7 COMMISSIONER AHEARNE:
So rather than adoption 8 of results, it is no adoption of results?
9 MR. DENTON:
Yes, no adoption unless they have 10 been evaluated against whatever the criteria of the 11 program plan were and were fully adopted by that 12 contractor.
13 COMMISSIONER.GILINSKY:
I wonder if this is this is not part of the decision we f ace today, 14 not 15 but it would help me think about the subject.
Coul'd you 16 just say a word about what it is we would review at the 17 end of this process?
In other words, how much work 18 would we do and who would it?
19 MR. DENTON:
I would say that perhaps there 20 would be hundreds of modifications that may have to be 21 made in the facility as a result of this.
They would be 22 found by some contractor.
PGEE would propose 23 modifications to fix these errors.
This contractor 24 would review them and say yes, they have now restored 25' the plant to what we thought it was originally.
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Nov Dick has retained the services of 2 Brookhaven National lab to assist us in auditing these 3
types of changes, both from a structural and systems 4 point, so I think Dick has about four people full-time 5
from Brookhaven and they have a number of assistants 6
a ssis ting them, collecting information both to do audit 7 calculatioas.on the structure and on the piping systems.
8 So by the time the contractor has completed 9 his task of reviewing these modifications proposed by 10 PGCE we will audit selected structures and systems to be 11 sure we now agree also that they meet the application.
12 We would write a safety evaluation report and 13 that would be the basis upon which the Commission could 14 decide that the plant has been restored to the condition 15 it was originally thought to be in.
16 COMMISSIONER GILINSKY Thank you.
17 CHAIRMAN PALLADINO:
Any other questions?
18 COMMISSIONER AHEARNE:
Yes, I have one other 19 question.
If we go down this route and if the company 20 does propose Teledyne and contractual arrangements look 21 acceptable to the Staff, I suppose that then does mean i
22 (a) we would similarly be on the path of modifying the 23 Pha se II proposal.
Is that correct?
24 MB. DENTON:
Yes.
25 COMMISSIONER AHEARNE:
It would seem that the I
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logical -- is there anything wrong with concluding that 2 the logical way to do Phase II would be just to continue 3 that same arrangement?
4 MR. DENTON:
That is right, and since they 5 have proposed Stone and Webster to play a role in Phase 6 II, I would imagine that if you adopt a contract such as
't 7 Teledyne for Phase I, Stone and Webster would their 8 choice to play that role in Phase II.
That is a program 9 I.would like to see kicked off so we can begin to get 10 those results in at an early date.
11 COMMISSIONER AHEARNE:
It might be a little 12 more likely that Teledyne could manage a Stone and 13 Webster effort rather than the small Cloud firm managing I
14 that.
15 MR. DENTON:
I think part of the issue with 16 Cloud is it was thought to be a small seismic problem L
17 when he was originally selected by the company, and they t
18 did not go to a very large outfit and did not realize 19 the scope of the job and really did not perceive that 20 his prior involvement would be a problem.
21 COMMISSIONER AHEARNE:
I do not t hink any of 22 us really understood the scope.
23 COMMISSIONER BR ADFORD:
Speaking of scope, 24 there seems to be a point in issue as to whether the 25 program can expand beyond the seismic, and the l
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intervenors have said some sampling of non-seismic areas 2 is appropriate, and you have said you feel not yet.
i 3 What would it take to trigger an expanded program, in 4 your view?
5 COMMISSIONER AHEARNE:
Could I add to that?
l 6 The program does cover non-seismic because Phase II in l
t 7 particular is all service-related areas.
So it is 8 beyond that.
9 MB. DENTON:
I see triggering this Phase II 10' program along the structural lines, the lines we are 11 talking about here, in the very near future so that by 12 the time the Phase I program was complete we have made a
'13 lot of headway in Phase II and we would have that 14 available.
15 So what it takes to trigger Phase II --
l 16 COMMISSIONER AHEARNE:
No.
He has gone beyond 17 Phase II.
I am just qualif ying the question to point 18 out that Phase II does include service-related 19 non-seismic.
20 COMMISSIONER BRADFORD:
John is right, and my 21 concern in particular is on page 5, and the trouble is 22 there are about three page 5s, but it is the summar of 23 the points made by the Governors and the Joint 24 Tntervenors and a page later the Staff's response to it is their point number 3 and your response 25 that ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2346
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number 3 as' well.
2 And in your response you say implementation of 3 the proposed program might lead to an expanded scope, 4 depending on the problems found, but that the problems 5 found to date do not, in your view, justify an expanded 6 scope.
7 What I am looking for is some feel for what it 8 would take to compel an expanded scope.
9 MR. DENTON We vill not know whether there 10 are problems in these other areas or not until we get 11 into them, and tha t is why I focused on kicking off 12 Phase II and maybe it would begin to provide information 13 in other areas because certainly Phase I is focused on 14 seismic and you would not expect it to show errors, 15 except incidentally, in the other aspects of the design.
16 COMMISSIONER AHEARNE:
But actually even. Phase 17 II, which is the non-seismic service contracts, are 18 still unlikely to directly address the additional areas 19 where some of the widening scope would have taken you.
20 Isn't that correct?
21 MR. DENTON:
Yes.
22 COMMISSIONER AHEARNE4 So I guess Peter's 23 question would be would you see anything likely to be 24 coming out in either Phase I or Phase II that would 25 really lead you to address that widening scope?
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MR. DENTON:
There is one other part of Phase 2 I that could lead me that way.
Reedy is doing an audit 3 of the implementation of the QA program within each i
4 company that played a role, and they are auditing the 5
PGEE design process.
j 6
So depending upon what Reedy finds and 7 concludes about the adequacy of PGEE's own engineering 8 adherence to CA principles, that could lead to an 9 expanded scope, and I think the report of Reedy on PGE.E 10 is very important.
11 I think we have two reports from Reedy so far, 12 don't we?
13 MR. VOLLMER:
We have more than two on the 14 seismic-related subcontractors.
~
15 MR. DIRCKS:
Why don 't you discuss what Reedy 16 is doing, because I think it is going right to this 17 point you are raising.
18 MR. VOLLMER:
Reedy has looked at at least 19 four of the service contractors that were used in 20 seismic design, and of those he has found two or three, 21 I believe, that did not have an adequate QA program at 22 the time, and at least one I recall -- ESS -- that he 23 thought did have program controls commensurate with the 24 work chat was beira done.
25 C O M M IE.'..3ER BRADFORD:
These are all in the ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024(202) 554 2345
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1 seismic design area?
2 MR. VOLLMER:
These iare the seismic-related 3 service contractors that were pr.rt of this original 4 process.
5 Now Reedy is also looking at the controls that t
6 PGEE used in the QA area to try to determine, in the 7 Phase I scope, whether or not the design process of 8 deciding whether it was indeed done correctly, and I 9 think in this area as well as the sampling plan that has 10 been condurted for the evaluation of structures and i
11 piping and so on, I think there is an opportunity to i
12 determine whether or not there are generic deficiencies 13 either in the technical work that was done or the'QA 14 work that vas done that would lead to an expansion.
15 MR. DENTON:
I think the point being that PGEE 16 did not have a set-aside seismic design group, so when i
17 Reedy is auditing how well they did in their seismic
[
18 design you would expect the same conclusions to apply to 19 any engineerino they did, and they just relied on their 20 engineering organization to properly incorporate seismic 21 aspects.
22 So I think Reedy's look at PGEE's engineerinq l
23 organization conformance would be the tipoff as to 24 whether the work done by PGEE had to be broadened.
25 COMMISSIONER BRADFORD:
My sense of what has ALDERSON REPORTING COMPANY,INC,
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i 1
happened today is that each look we have taken has 2
broadened the program that we thought we needed to 3
follow to some degree, and if the Commission today or in 4 the next week or so approves this as the scope of the 5
program, I gather from what you just said that it will 6 impact -- that may j ust be another plateau.
It is still 7 possible that there is an extended program beyond that 8 if some of the pieces of this program turn out to be --
9 MR. DENTON:
I think the questior. fou are 10 rai sing is, when PGCE did its design and it acted as the t
11 AE in this area, where the type of errors we have seen I
t 12 to date due to the uniqueness of the seismic aspects and 13 their unfamiliarity with how to treat them, or was there 14 some more fundamental breakdown within PGCE.
I think we 15 will not know that until we either get Reedy's report or 16 get further into Phase II, except for the parts that l
1/ have been inspected over the last decade or so.
18 MR. VOLLMER:
I think also the Staff has not 19 had an opportunity to evaluate the items that have been 20 resolved as being errors to see if they fall into common i
21 bins that can be ascribed as generic or some deficiency 22 which may be prevalent th ro ugh o u t the whole design.
23 These things have been coming up in numbers 24 rather rapidly and until we get verified errors we are 25 not doing our focused review of the meaning of some of I
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1 these errors.
2 COMMISSIONER GILINSKYa Could I a sk you how 3 large an effort do you expect on Teledyne's part?
You 4 have talked about their extensive resources and so on.
l 5
MR. DENTON:
I would expect somethinq on the 6 order of 50 to 60 employees f ull-time until the effort 7 was completed.
8 COMMISSIONER GILINSKY Now this is counting 9 those persons who are presently in the reverification 10 work?
l 11 MR. DENTON:
Coun ting the original seven they i
12 have proposed to audit.
13 CHAIRMAN PALLADIN0s These are professional 14 people?
15 COMMISSIONER GILINSKY This is 50 or 60 16 Teledyne employees.
17 MR. DENTON:
That is the level of effort, I t
18 think, such a reverification effort requires, and as you 19 can tell, it is double or triple what is now being put 20 on it by Reedy and Clc ud.
I think it ha been 21 undermanned in view of the large number of problems tha t 22 are being found.
I 23 But each time we find a problem that then sets 24 off a process for modification and review and that takes 25 further effort.
So I see this problem continuing.
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COMMISSIONER GILINSKY:
So this would not be a 2 matter of putting in a few supervisors at the top?
You 3 are really talking about a very hefty effort.
4 MB. DENTON:
That is right -- a major 5 commitment of resources by Teledyne if they were to take I
6 it on.
7 CHAIEMAN PALLADINO:
Any further questions?
8 Well, let me ascertain whether or not the 9 Commission feels it is in a position to vote.
The 10 question that is before us, I believe, is whether we 11 approve or not approve the recommendations presented in l
12 the SECY paper 82-89.
And starting at the bottom of I
13 page 3 and going on to page 4,
there are documents where 14 they recommend that a contractor with little prior 15 financial involvement or large, experienced staff, such 16 as Teledyne, be given the responsibility for the I
17 performance of Phase I.
18 They point out that the contractor's role 19 should include a number of items listed on page 4 and to 20 reflect that to implement such a rola, Teledyne, if 21 selected, would need to considerably augment its current 22 assignment of technical resources, especially in the 23 civil structural areas of nuclear power plant design.
24 I call first to see whether or not this is a 25 motion on which we ought to act.
John?
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COMMISSION ER AHEARNE:
Well, I would modify 2 somewhat.
In reading the order that we put out on this 3
back in November, we said the NRC would make its 4 decision on the proposed companies and, of course, 5 Teledyne has not been proposed, so where I would come 6 out is that I would reject the proposal the company has 7 made.
8 I would accept a proposal the company would 9 make if they were to propose Teledyne, based upon what 10 has been said.
11 (laughter.)
12 I am saying th a t I reject the proposal the 13 company has made, and I would accept a proposal if the 14 company were to propose Teledyne, and subject to the NBC 15 Staff agreeing that the contractual arrangement was 16 satisfactory.
17 I also notice that what our order said was as 18 soon as practicable, following app. oval of the company, 19 then the NRC would make its decision on the 20 acceptability of the program plan.
So you have 21 indicated a number of modificatiens that you would ike 22 in the program plan and for myself I find those ones 23 that I would certainly agree with.
24 But as I read our order, after the company is 25 chosen and the company is to submit the revised program 1
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plan which the NRC again has to agree to, and I would 2
agree to the revisions of the program plan as it stands 3
with revisions that you have indicated.
4
- 58. BICKWITs I would just like to say that 5 while those conclusions certainly are conclusions that 6
the Commission could adopt, the Commission is not 7 constrained to move in that direction.
It can modify 8 its order at any point.
It can decide Staff should 9 approve these matters as opposed to the Commission, 10 consistent with the order 11 COMMISSIONER AHEARNE:
I stayed away from 12 saying that they should come back to the Commission.
13
'What I am really saying is that if the company 14 were to propose Ieledyne and Teledyne were to propose 15 the revised program plan, then I v'ould be quite l
16 satisfied with the Staff reviewing the contractual 17 arrangement.
If the contractual arrangement was 18 satisfactory and met all the criteria that the 19 Commission has already laid out, and the revised program 20 plan meets wha t they have said, then the Staff could go 21 ahead and approve it.
l 22 CHAIRMAN PALLADINO:
Harold, was Teledyne a 23 party to the revised program plan in any way, or were 24 they at least a member?
25 MR. DENTON:
They were not a party to ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE.,3,W, WASHINGTON. D.C. 20024 (202) 554 2346
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development of the plan and they saw the approval of the 2 plan being something between parties other than 3 themselves, and then they would audit Cloud 's 4 performance of that plan.
5 So they did not, in m y view -- and maybe Dick 6 could comment -- take a view with regard to whether the 7 plan was fully responsive to the Commission order.
They l
8 did not see that as within the proposed 9
COMMISSIONER AHEABNE:
If they were chosen i
10 they might then propose modifications?
l 11 MR. DENTON:
Yes.
12 CHAIRMAN PALLADIN0a I am not contradicting 13 what you proposed.
I think there would be value in 14 first accepting the recommendations, then perhaps taking 15 another vote, stating that if the Applfcant proposes 16 Teledyne we would approve Teledyne.
17 COMMISSIONER AHEARNE:
I would vote on the 18 amendment first.
I would vote on the amendment first.
19 CHAIRMAN PALLADIN0s The main thing is I do 20 not want to lose all the other things that are in the 21 amendment.
l 22 COMMISSIONER AHEARNEa Well, if the Commission 23 were not to agree with Teledyne, then I, at this stage, 24 would not be prepared to approve an audit.
25 COMMISSIONER GILINSKYs What would you then l
ALDERSoN REPORTING COMPANY. INC.
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1 propose, John?
2 COMMISSIONER AHEARNEa What I propose is the 3
Commission direct or say it is our conclusion that we 4 have rejected the proposal the company has made.
I 5
COMMISSIONER GILINSKY But what if the 6 Commission did not approve Teledyne?
Where does tha t 7 leave you?
8 COMMISSIONER AHEARNE4 Then PGEE vould have to 9
propose another company.
to CHAIRMAN P AL LADIN04 And they would have to 11 come back and we want the Staff to come back to the 12 Commission f or the decision on '- - on whether we go along 13 with the company.
14 This, as I read it, would allow them to pick 15 any company like Teledyne -- whatever that means.
16 COMMISSIONER AREARNE:
Yes.
17 CHAIRMAN PALLADIFO:
And you are saying you do 18 not want to delegate that to the Staff?
19 COMMISSIONER AHEARNE:
Not given all the 20 difficulties we have had getting this far.
21 CHAIRMAN PALLADINO:
One of the problems I 22 have is every time something has to come back to the 23 Commission it is a three or four week proposition.
24 COMMISSIGXER AHEARNE:
That is why I say I am 25 willing to accept not coming back with that set of ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 564 2346
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constraints which, after five months, there should be no 2 surprise.
3 CHAIRMAN PALLADINO:
What I am saying is if 4 there is not a contract worked out with Teledyne, then 5
the Staff has to develop and work with PGCE and develop 6 another organization they think would be qualified and 7 then come back for approval.
Is that it?
8 COMMISSIONER AHEARNE4 Yes, but my sense, i
9 given particularly the last meeting that was held with to the intervenors and the parties on February 17, which 11 was just barely two weeks ago, and even if the Staff did i
12 not come to us, they would take at least a week to reach 6
13 a ronclusion that the fact tha t they had to come back to 14 the Commission on this issue seems not to have added i
15 auch more than a week in this particular case.
16 So I would not think tP.at as far as an' i
17 additional company they would have to go through the 18 same level of review on qualifications, the same level 19 on conflict of interest.
I would think that can be done 20 fairly soon.
21 COMMISSIONER GILINSKY:
I am inclined to 22 accept the recommendation that was made to us.
I do not 23 think you can assume that Teledyne -- here is a company 24 with 200 professionals --
25 COMMISSIONE3 AHEA RNE:
Teledyne Engineering l
r ALDERSoN REPORTING CoMPAhY. INC.
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Serrices.
2 COMMISSIONER GILINSKY:
Well, that i. who is 3
involved here, and it is a Teledyne division -- would 4 necessarily be in a position to take a job as large as 5 the one you are talking about on short notice.
But 6
perhaps they are.
7 I would leave that to the Staff to work.out.
8 CHAIRMAN PALLADINO:
You are proposing that we 9 approve the recommendations as made by the Staff?
10 COMMIESIONER GILINSKY:
Yes.
11 COMMISSIONER BRADFORDs Let me put a somewhat 12 dif ferent approach on the table.
I would suggest giving 13 the interested parties a week to see if they could agree 14 on a firm, and I would put it in terms of being a large, 15 capable AE firm -- and I do not think I would use a 16 phrase such as Teledyne -- just so that they would have 17 open hunting.
18 But the reason I suggest that is if it were to 19 work out it would be a small price to pay in terms of 20 avoiding difficulties later on.
A t the moment, the 21 situation, as I understand it -- and I hope the Staff 22 will correct me if I am wrong -- is that Teledyne was on 23 the Governor's list.
It is objected to by the Joint 24 Intervenors.
It may or may not be acceptable to PGCE.
25 To the extent that the process can move l
l l
l i
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forward somewhat cooperatively, the scope of future 2 litigation in the licensing hearing seems to me to be 3 limited accordingly, and the potential f or delay there 4 seems to me to be an awful lot more than the week or 5
whatever time we might give it at this end.
8 CHAIRMAN PALLADINO:
Well, Peter, to try to 7 keep the issue as clear as we could, we could pass this 8 and then you could propose that as a corollary that says 9 you would like the Staff to take a week before this is 10 implemented to try and bring the parties together.
11 That would not interf ere with this order.
12 That would be a separate direction that the Commission 13 would take.
14 COMMISSIONER BRADFORD4 Fair enough.
15 COMMISSIONER AHEARNE:
Would it be consistent, 16 then, Peter with your approach that if they could not 17 reach agreement in a week that then they could go ahead?
18 COMMISSIONER BRADFORD:
Yes.
l 19 COMMISSIONER ROBERTS:
It might or might not 20 affect my decision, but I would like to know what PGEE 21 and Teledyne think of this recommendation.
22 23 l
24 25 ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE. S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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COMMISSIONER AHEARNEa Since you have 2 mentioned that you have been trying to get PGCE to make -
3 it, I think you do have the answer.
i 4
ER. DENTON:
You mean the Staff's 5 recommendation or Commissioner Bradf ord's recommendation?
6 COMMISSIONER ROBERV :
No, not Commissioner 7 Bradford 's.
What is PGEE's reaction to this proposed 8 recommendation?
9 MB. DENTON My assessment is tha t they would 10 go along with it if the Commission so ordered, even 11 perhaps if Teledyne were not quite their preferred 12 choice for this, b=cause they are very interested in 13 getting an approved plan and work under way so they can 14 actually make modifications and depend on that it will 15 be the right system.
?
16 So they are very anxious to get the 17 Commission's approval, and I think if offered the choice
,18 on Teledyne they would make every effort to consummate
't 19 such a contract with them.
So I think they would be 20 receptive to it, but they would not volunteer it.
21 COMMISSIONER AHEARNEa I thought you said 22 earlier that you had tried to get them to make that 23 recommendation.
24, MR. DENTON:
Yes.
25 COMMISSIONER AHEARNE:
So they do have some l
l ALDERSoN REPORTING COMPANY. INC.
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recommendations to it?
2 MR. DENTON:
They thought it was unnecessary.
~
3 They prefer it the way it is and they wanted a 4 Commission decision before modifying it.
5 CHAIRMAN PALLADINO:
Tom, how do you see --
6 COMMISSIONER ROBERTS:
I am just uncomfortable 7
with the concept of our approaching naming specific 8 contractors.
9 COMMISSIONER AHEARNE s-You feel that would not to be --
11 COMMISSIONER ROBERTS:
I think that is 12 inappropriate for us to do.
I think we can give some 13 guidelines, but I do not think it is appropriate for us 14 to tell PGEE to select Teledyne.
15 COMMISSIONER GILINSKY:
We are not doing that.
16 COMMISSIONER ROBERTS:
Under John's we would.
17 CHAIRMAN PALLADINO:
So you are saying the 18 recommendations as outlined by the Staff would be 19 acreptable to you?
20 COMMISSIONER ROBERTS:
I think so, yes.
21 COMMISSIONER GILINSKY:
Is that a caucus?
We 22 can caucus on this side.
23 (Laughter.)
24 CHAIRMAN PALLADINO:
First of all, I gather --
25 I would prefer to go along with the recommendation.
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1 COMMISSIONE3 AHEARNE:
I am willing to go
~
2 along with the recommendation too.
3 COMMISSIONER ROBERTSa Is it appropriate for 4 us to hear from a representative of the licensee?
They 5 may not be prepared?
They may not be in the audience.
6 COMMISSIONER AHEARNEa I am sure they are here.
7 (Laughter.)
8 COMMISSIONER ROBERTSs Would that be 9 appropriate?
I want to know their reaction to the 10 proposed Staff recommendation.
It is reluctantly yes?
11 Is it screaming and crying that we are abusing them?
I 12 just want to get some feel. Is that legitimate '
13 MR. BICKWIT:
I think it is reasonabin.
I 14 think you need a piece of information.
If th ay happen 15 to be here I do not see any problem with getting it from 18 them.
17 MR. DENTONa Representatives of the company 18 are here.
19 CHAIRMAN PALLADIN0a Does that bind us to hear 20 anyone else?
21 MB. BICKWITa I do not believe it does.
22 COMMISSIONER GILINSKY:
It does not bind us, 23 but I would sug7est if we are going to hear from one, 24 whether we are required to or not 25 CHAIRMAN PALLADIN04 Okay.
Based on the i
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advice --
2 COMMISSIONER ROBERTS:
Would it be appropriate 3
for me to walk out the door and meet with one of their 4 representatives, or is that worse?
5 (Laughter.)
6 MR. BICKWIT You have a question which only 7 one party to this particular matter can answer.
If you 8
want to put that question to him, I think you can put 9 that question to him.
10 CHAIRMAN PALLADINO On advice of counsel, and 11 hearing no objection from the Commission, I would 12 propose that if we have a qualified representative --
13 (laughter.)
14
-- I wonder if we might have the individual 15 identify himself or herself, and then have Commissioner 16 Roberts pose his question.
17 COMMISSIONER AHEARNE:
Speak into the 18 microphone.
19 MR. HOCH:
Yes, I think Mr. Denton 20 cha racte rized the company --
l 21 CHAIRMAN PALLADINO:
Identify yourself, and l
22 don 't make a comment until we ask you a question.
23 MR. HOCHs My name is John Hoch.
I am project 24 manager for the Diablo Canyon project for Pacific Gas &
25 Electric Company.
l l
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CHAIRMAN PALLADINO:
Commissioner Roberts has l
l 2 a question he'd like to address to you.
3 COMMISSIONER ROBERTS:
Could you ive me the 4 reaction of PGCE to this proposal that we are being 5 offered by the Staff?
Are you familiar with the 8 proposal?
Or recommendation?
7 MR. HOCH:
Yes.
8 COMMISSIONER ROBERTS:
Could you give me your 9 company's reaction?
10 MR. HOCH:
I think the company will cooperate 11 wholeheartee'.y on this ' proposal.
I think M r. Denton 's 12 characterization of being anxious to get on with the 13 program is completely accurate.
14 COMMISSIONER ROBERTS:
Thank you.
That's all 15 I have.
18 CHAIRMAN PALLADIN04 Does any member of the i
17 Commission have a similar question to address to the 18 Joint Intervenors or Governor Brown?
19 COMEISSIONER BRADFORD:
I would.
To the t
20 extent they feel they have a response that they want to I
21 make.
22 CHAIRMAN PALLADINO:
Is there a representative 23 of Governor Brown's office, or the Joint Intervenors?
24 Would you identify yourself?
25 MR. BROWN:
?.y name is Herb Brown, and I ALDERSoN REPORTING COMPANY,INC.
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5 83 1
represent the Governor of the State of California, and I 2
will not speak until I get a question.
3 CHAIRMAN PALLADINO:
I will ask that the same 4
question be addressed -- do you want the same question?
5 COMMISSIONER ROBERTS:
I have no question.
6 (Laughter.)
7 CHAIRMAN PALLADINO:
All right.
Peter?
8 COMMISSIONER BR ADFORD:
I would just ask if 9
you have any response to make to the proposition as 10 endorsed by the company?
11 MR. BROWN:
Well, I think the Commission is 12 making a mistake by not adopting a very straightforward 13 approach that was proposed by the Governor since last 14 October, which would simply be to have all the partiec 15 try to work out an agreement on a half dozen or more
'16 companies, and then have the Commission itself make the 17 choice.
18 The reason we feel so strongly about that is 19 that this Commission 's responsibility is to the public.
20 It's a fiduciary to the public trust.
The public is 21 affected by the decision, and the public 's confidence 22 and credibility in a decision that affects it is of 23 paramount importance; and because of that I think the 24 Commission is causing for itself somewhat of an 25 undermining of its own posture.
I think the Commission ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W, WASHINGTON. D.C. 20024 (202) 554 2345
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has gone to commendable lengths over the last f ew months a
4 2 on this issue, but it simply has not confronted the most 3
simple issue of all and that would be that we simply let 4
the Commission choose and be accountable for the 5
selection of a single company to take on the 6 responsibility.
7 The Governor's secretary said in San Francisco 8 several times that we are really confronted with a 9 unique opportunity.
So infrequently has it been that 10 the Intervenors in a case and the state affected by it 11 have come to the Commission and said, "We trust you on 12 this issue.
You take the responsibility and make the 13 choice."
It's a unique opportunity for cooperation, and 14 one in whi=h we have the greatest assurance the 15 Commission and the State could work cooperatively.
16 So insofar as there have been private 17 decisions made over the last few months, and insofar as 18 the Staff has nade a recommendation that hasn't follow 19 the Governor's process of openness, we think the 20 Commission is making a mistake, and we really cannot 21 agree with that.
22 CHAIBMAN PALLADINO:
Thank you.
23 MR. BROWN.
Thank you.
1 24 CHAIRMAN PALLADIN0s Is there any 25 representative of the Joint Intervenors here that would I
t i
l l
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1 like to respond to a similar question?
2 MR. BROWN:
To my knowledge, there is not a 3 representative.
4 CHAIBMAN PALLADINO:
Okay, thank' you.
5 Well, then, I guess we come back to the basic 6
question:
is the Commission in favor of adopting the 7 recommendations proposed by the Staff?
8 COMMISSIONER BRADFORD:
What disposition were 9
you making of my --
10 (Laughter.
11 CHAIRMAN PALLADIN0s My intention was, Peter, 12 after we vote on this, then we will see if anyone such 13 as yourself had another point that you would like to 14 have us act on and relate it to this issue, and I would 15 entertain that motion, and we could take a vote on that.
16 So I am not eliminating --
17 COMMISSIONER BRADFORD:
The dilemma you create 18 for me is that I have to vote yes or no on this package 19 without knowing whether it includes mine.
You knov 20 Roberts' Rules better than I do.
21 (Laughter.)
22 COMMISSIONER AHEARNE Knowing full well that 23 in the Roberts Rulec ?f Order, the amendment gets voted 24 on first.
25 (laughter.)
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ME. BICKWITs That is correct, and we are not 2 bound by Roberts Rules of Order.
3 CHAIRMAN PALLADINO:
I have learned that 4 since.Would you like to amend it first before you vote?
5 COMMISSIONER BRADFORD:
If you wouldn't mind.
6 (Laughter.)
7 CHAIRMAN PALLADINO4 How would you propose to 8 amend it?
9 COMMISSIONER AHEARNE Let's see, now.
Which l
10 amendment would take precedence?
Yours or mine?
I am 11 choosing a specific company and you are --
12 CHAIRMAN PALLADINO:
Well, yours came first.
13 COMMISSIONER BRADFORD:
You mada yours first.
14 I am perfectly happy to have it voted on.
15 CHAIRMAN PALLADINO:
Do you want to move yours?
16 COMMISSIONEH AHEARNE:
Yes.
I propose, as I l
17 said, that we essentially say that if PGCE were to 18 propose Teledyne we would accept it and drop the "such 19 as" in the Staf f recommenda tion.
20 COMMISSIONER ROBERTS.
I don't have any real 21 basic disagreement with that.
22 CHAIRMAN PALLADINO:
Now, my problem is if 23 they came back with Teledyne I would approve it also.
24 But I am tryinc not to limit the Staff.
25 COMMISSIONER AHEARNE:
Yes, I understand.
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CHAIRMAN PALLADINO:
So if I vote against it, 2
I do not want it interpreted that --
3 COMMISSIONER AHEARNE:
I understand.
4 COMMISSIONER ROBERTS 4 I am in exactly the 5 same situation, Mr. Chairman.
6 CHAIRMAN PALLADIN0s So those that would 7 support the amendment?
8 (One aye.)
9 CHAIRMAN PALLADINO:
Those that would reject 10 the amendment?
11 (Chorus of nays.)
12 CHAIRMAN PALLADINO:
Three and one abstaining; 13 is that right?
Okay.
Peter.
How about your amendment?
14 COMMISSIONER BRADFORD:
Well, let's see.
15 Should I restate it?
16 CHAIRMAN PALLADINO:
Yes.
17 COMMISSIONER BRADFORD:
I would allow the 18 parties a period of a week to see if they can agree on 19 either an individual firm or on a short list of firms 1
20 from which the Commission could choose one.
And at the 21 end of that week, if there has been no agreement, I take 22 it thc-Commission would have to go ahead and resolve the 23 matter another way.
.i 24 It would have been better, I think, to follow 25 the process I am suggesting over a longer period of l
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time, because the time is short and it is clear what the 2
result would be if there is no agreement.
But I still 3 think it is worth making an effort.
4 CHAIRMAN PALLADINO:
I do understand efforts 5 were made.
I am not saying we should not make more 6 efforts.
7 COMMISSIONER BRADFORD:
They were made in the 8 context in which the company, I think, believed that 9 Cloud would be the auditor.
10 CHAIRMAN PAllADINO:
If I understand 11 correctly, you would add to the recommendation made by 12 the Staff that the Staff make an effort, a concerted 13 effort, to try to get the parties together to agree, 14 either on a proposed auditor or to come up with a list 15 of auditors from which the NRC would make a selection; 18 and that that effort be intensely pursued for a week.
17 And if at the end of th'e week, it does not appear that 18 can be accomplished, then they would be free to go ahead e
19 with the rest of this.
20 Are you ready to vote on that question?
21 I must say personally I would say if it could 22 be accomplished, it would be a very worthwhile step.
I 23 know I hate to delay anything another week, but I think 24 it may be a very fruitful week, and it really does not 25 stop any of the work that I understand is still in P
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1 progress.
2 COMMISSIONER AHEARNE:
I would agree with that.
3 CHAIRMAN PALLADINO Tom?
4 COMMISSIONER ROBERTS:
I abstain.
5 (Chorus of ayes.)
6 CHAIRMAN PALLADINO:
So we have four for, and 7 ona abstention.
Now are there any more amendments?
8 COMMISSIONER AREARNE:
I have a question of 9 clarification for Harold, or to Bill.
10 If I read the recommendation where do I find 11 the changes to the program plan that you have said that 12 you were going to require?
13 MR. V3LLMER:
They were in the viewgraph, in 14 the body of the report.
15 COMMISSIONER AHEARNE:
No, the list of 16 recommendations that were being asked.
I believe the 17 Chairman was about to propose we endorse the 18 recommendations, and I was trying to find where in the 19 recommendations we would end up agreeing to the 20 modifications that you proposed in the program plan.
21 MR. DENION:
We did not pull them all 22 to7 ether.
They are all in the report itself, and I put 23 three on che slide, and I do not have them listed.
24 COMMISSIONER AHEARNE:
I could not even find 25 an item in your list of recommendations.
l ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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MR. DENTONa They would be the th ree principal 2 areas of the ones that were on the slide.
3 COMMISSIONER AHEARNEa There are a list of six 4 i te m s.
You are recommending that a contractor such as 5 Teledyne, et cetera, and then the contractor's role 6 should include the following.
There does not seem to be 7 any part of the recommendation that would address 8 modifying the program plan.
9 MR. DIRCKS:
I think we incorporated that into.
10 the seventh point.
There are three points, and that 11 point on the viewgraph.
12 COMMISSIONER AHEA R:lE Well, I would make an 13 amendment, and my amendment would be that what you are 14 now asking to be voted on, that you incorpora te the 15 modifications of the program plan that they recommended.
16 CHAIRMAN PALLADIN04 I propose an amendment be 17 made to incorporate the modified version of the modified 18 review plan that we discussed earlier as part of the 19 recommendation.
20 Are you ready to vote?
All in favor?
21 (Chorus of ayes.)
i 22 CHAIRMAN PALLADINO:
All opposed?
23 Any other question or point of modification or 24 amendment?
Okay, are we ready to vote then for the 1
25 amended recommendation which contains two amendments, ALDERSoN REPORTING CoMPAh(. INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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one having to do with the week effort, an intensive 2
effort for one week.to try to' bring the parties 3
together, and the other one being that the modified 4
review plan be included in the recommendation?
5 Would all those in favor indicate by saying 6 aye?
7 (Chorus of ayes.)
8 CHAIRMAN PALLADINO:
No?
9 COMMISSIONER ROBERTS:
I do not understand 10 what you are doing.
l 11 (Laughter.)
l 12 CHAIRMAN PALLADINO:
Well, having modified l
l 13 MR. BICKWIT:
You have to vote on what you 14 modified.
15 CHAIRMAN PALLADINO:
Now we have got to vote 16 on the modified motion.
There were two modifications.
17 COMMISSIONER ROBERTS:
Okay.
Which one are 18 you calling on?
19 CHAIRMAN PALLADINO:
We voted on the two i
l 20 amendments.
Now we are voting on the amended --
21 COMMISSIONER B0BERTS:
The way Peter made his 22 first proposal, I thought these veere going to be two 23 dif ferent circumstances.
24 CHAIRMAN PALLADINO:
I did not perceive it as 25 amendments, but he called it amendments.
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1 COMMISSIONER ROBERTS:
You even said you could 2 not vote on the first issue until you knew how we were 3 going to act on the second.
4 COMMISSIONER GILINSKY:
We have gotten verf 5 parliamentary here.
6 COMMISSIONER ROBERTS:
Incidentally, it 's Col.
7 Robert, with no S.
You said my rules of order.
It's 8 Robert.
9 (Laughter.)
10 CHAIRMAN PALLADINO:
As I understood what we 11 were doing, it was proposed that these various issues be 12 taken up as amendments.
We took them up as amendments.
13 The amendment on being specific with regard to Teledyne 14 failed.
The amendment with regard to making an intense 15 effort for one week to try to bring the parties together 16 passed.
The amendment to have a modified review plan 17 passed to include those in the recommendations.
18 So now we have the amended version of the 19 recommendations.
Are we prepared to accept them?
That 20 is the vote I was calling for.
And I think we had four 21 acceptances, and I was interested in your vote.
22 COMMISSIONER ROBERTS:
My vote is negative.
23 CHAIRMAN PALLADIN0s You vote against it.
24 Okay.
25 COMMISSIONER GILINSKYs What would you have us ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 564-2345
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1 do?
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COMMISSIONER ROBERTS:
I would delete the 3 portion about the intense week of activity to get some 4
joint agreement.
5 COMMISSIONER GILINSKY You only abstained on i
6 that one.
7 (Laughter.)
8 COMMISSIONER ROBERTSa For the record, my vote 9
is no.
10 COMMISSIONER BRADFORDa It has gotten worse as 11 time goes on.
12 CHAIRMAN PALLADINO:
I think clarifying your 13 case --
14 COMMISSIONER ROBERTS:
I will be happy to 15 clarify.
16 CHAIRMAN PALLADINO No, no.
You seem to have 17 clarified it now.
18 COMMISSIONER GILINSKYa It is that change that 19 b others you, rather than the rest of the Staff's 20 recommendation.
21 COMMISSIONER ROBERTS:
That is correct.
22 COMMISSIONER GILINSXY You do not want a week 23 of discussion and trying to come to agreenent?
24 COMMISSIONER ROBERTS (Inaudible.)
l 25 COMMISSIONER GILINSKY:
I think it is worth ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W. WASHINGTON. D.C. 20024 (202) 554 23A6
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saying that is a proposal which has the backing of the 2 Commission, and those who are engaged in the process 3 ought to understand that.
4 3R. DIRCKS:
After a week of intensive effort, 5
whether we succeed or do not succeed, what happens 6 then?
Do we come back?
7 COMMISSIONEB AHEARNE:
I think the Chairman 8 said that in his description.
Did you not?
9 MR. DIRCKS:
Well, if we succeed, we can go 10 with the jointly-approved contractor.
If we do not 11 succeed, we can go back to the original plan?
12 CHAIRMAN PALLADINO:
Yes.
13 MR. BICKWIT:
And if you come up with a short 14 list, then what is the procedure?
15 CHAIRMAN PALLADINO:
Well, I gather the short 16 list, the Staff would be able to pick a company such as 17 Teledyne.
18 MR. BICKWIT:
It will be the Staff that picks?
19 COMMISSIONER AHEARNE:
And you some time in 20 the future will come back to us after that is resolved 21 with phase 2 and tell us what is happening?
22 MR. DENION:
Yes.
I 23 CHAIRMAN PALLADINC:
Anything more to come l
24 before us on this?
25 Okay.
If not, thank you very much.
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
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1 (Whereupon, at 12 :10 p.m.,
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