ML20054H882
| ML20054H882 | |
| Person / Time | |
|---|---|
| Site: | Washington Public Power Supply System, Satsop |
| Issue date: | 06/16/1982 |
| From: | Harold Denton Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML20054H871 | List: |
| References | |
| DD-82-06, DD-82-6, NUDOCS 8206250133 | |
| Download: ML20054H882 (12) | |
Text
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$ k[ .. kh - D1r DD 6 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION
, , Harold R. Denton, Director In the Matter of )
Docket Nos. 50-509 WASHINGTON PUBLIC POWER 50-513 SUPPLY SYSTEM (10 CFR 2.206)
(WNP Nos. 4 & 5) )
DIRECTOR'S DECISION UNDER 10 C.F.R. 2.206 Nina Bell, on behalf of the Coalition for Safe Power, Portland, Oregon, has filed two petitions under 10 CFR 2.206 that request certain actions with respect to two nuclear projects for which the Washington Public Power Supply System (WPPSS) holds construction permits. In its petition dated November 30, 1981, the Coalition requested that the Director of Nuclear Reactor Regulation issue an order to show cause why the construction permit for WPPSS Nuclear Project (WNP) No. 4 should not be revoked on the basis of an alleged " material false statement" in WPPSS' July 1981 application for an extension of the WNP No. 4 construction permit. The Coalition has filed another petition, dated March 16, 1982, under 10 CFR 2.206 which requests that WPPSS be ordered to show cause why the construction permits for WNP Nos. 4 and 5 should not be revoked, because WPPSS has announced its intention to terminate its participation in the two projects. For the reasons set forth in this decision, the Coalition's e petitions are denied.
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I. WPPSS DID NOT MAKE A " MATERIAL FALSE STATEMENT" IN ITS APPLICATION FOR EXTENSION OF THE WNP N0. 4 PERMIT. 1 On July 21, 1981, WPPSS submitted an application for extension of the latest completion dates for construction of WNP No.1 and WNP No. 4. O WPPSS assigned the following reasons as bases for extending the permits:
" Subsequent to the issuance of the construction pemits delays in the construction of WNP-1 and WNP-4 have occurred. The primary factors causing these delays are as follows:
- 1. Changes in the scope of the projects including increases in the amount of material and engineering required as a result of regulatory actions, in particular those subsequent to the TMI-2 accident.
- 2. Construction delays and lower than estimated productivity which resulted in delays in installation of material and equipment and delays in completion of systens necessitating rescheduling of preoperational testing.
- 3. Strikes by portions of the construction work force.
- 4. Changes in plant design.
- 5. Delays in delivery of equipment and materials." 2_/
1/ The application consists of a three page letter from G. D. Bouchey, WPPSS Director of Nuclear Safety, to H. R. Denton, Director of NRR, and an affidavit signed by Mr. Bouchey. See Attachment C to the
! Coalition's Petition (Nov. 31,1981). With respect to WNP No. 1, the application requests an extension of the latest completion date under Construction Permit No.CPPR-134 from January 1,1982, to June 1, 1986. The application requests an extension of the latest l
completion date for WNP No. 4 under Construction Permit No.
CPPR-174 from December 1,1985, to June 1,1987.
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'O 4 Q c. g On October 26, 1981, WPPSS formally advised the staff that the WPPSS Board of Directors had voted to defer further construction of WNP Nos. 4 and 5 until June 30, 1983, "because of difficulties in simultaneous
, financing of all five of our plants now under construction, given the current high interest rates and bond market conditions." 3/ ypp33 subsequently withdrew its July 21, 1981, application insofar as it requested an extension of the WNP No. 4 constructior. permit in view of its deferral of the project's construction. 4/
The Coalition claims that WPPSS made a material false statement in its July 21st application because WPPSS omitted any mention of cash flow difficulties affecting the completion date of WNP-4. The Coalition points to a study prepared for WPPSS that examined options to slow the pace of construction on WNP Nos. 4 and 5 as a way to reduce the burden t
of near-term funding requirements. See WPPSS, Alternative Evaluations -
WNP 4/5 (March 25,1981) (Attachment A to Coalition petition). The Coalition also notes that the WPPSS Managing Director proposed a one-year moratorium on construction of WNP Nos. 4 and 5 in May 1981 to the WPPSS Board of Directors as a way of easing WPPSS' immediate financial burdens.
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-3/
Letter from R.L. Ferguson, WPPSS Managing Director, to H.R. Denton, DirectorofNRR(Oct. 26,1981).
-4/
Letter from J.W. Shannon, WPPSS Director of Safety & Security, to H.R.Denton,DirectorofNRR(Dec. 31,1981). WPPSS indicated in i this letter that it might reapply for the extension of the WNP f i
No. 4 permit after June 1983. WPPSS has since announced termina-tion of the project. See note 10 infra.
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o r e Q The moratorium would also provide an opportunity to re-examine WPPSS' need to build the two prc % cts. See Speech of Robert Ferguson,1 Power Lines
[WPPSS newsletter] at 3-6 (June 12,1981) (Attachment B to Coalition
, petition). The WPPSS Board of Directors approved the one-year moratorium on construction. See Coalition Petition at 3 (Nov. 30,1981). The Coalition charges that, by omitting any reference to the foregoing facts, WPPSS made a material false statement, because these facts indicate " cash -
flow difficulties" affecting the completion date for WNP No. 4. Consequently, the Coalition urges the construction permit for WNP No. 4 should be revoked for this alleged offense.
Although the Coalition's petition might otherwise be considered moot because WPPSS has withdrawn the extension application for WNP No. 4, the substance of the Coalition's petition should be addressed to dispel the notion that WPPSS committed the alleged violation. Moreover, withdrawal of the application would not in itself absolve WPPSS of responsibility for a material false statement had one been made. Under the circumstances here, WPPSS did not make a material false statement.
The Commission's authority to take enforcement action for material false statements derives from section 186 of the Atomic Energy Act of 1954, as amended:
"Any license may be revoked for any material false statement in the application or any statement of fact required u.nder section 182, or because of conditions revealed by such application or statement of fact or any report, record, or inspection or other means which ,.
would warrant the Comission to refuse to grant a license on an original application . . . . " 42 U.S.C. 2236(a).-
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The Comission addressed the meaning of the term " material false statement" in its decision in Virginia Electric & Power Co., (North Anna Power Station, Units 1 & 2), CLI-76-22, 4 NRC 480 (1976), aff'd, 571 F.2d 1289 (4th Cir.1978) (hereinafter VEPC0). In VEPC0, the Comission determined that material false statements encompass material omissions.
4 NRC at 489-91. Knowledge of falsity is not necessary for liability for a material false statement. 4 NRC at 486. With respect to the materiality of an omission, the Comission stated:
"By reading material f alse statements to encompass omissions of material data, we do not suggest that unless all information, however trivial, is forwarded to the agency the applicant will be subject to civil penalties. An omission must be material to the licensing process to bring Section 186 into play . . . .
[D]eterminations of materiality require careful, comon-sense judgments of the context in which information appears and the stage of the licensing process involved. Materiality depends upon whether information has a natural tendency or capability to influence a reasonable agency expert." 4 NRC at 491.
In the context of an application for extension of a construction permit, WPPSS' omission of a specific reference to its financial burdens and its planned delay of construction to ease those burdens did not constitute a material omission.
No specific form of application is required, but the Comission's regulations indicate that good cause for extension of a permit cause may be shown by pleading "among other things, developmental problems attributable to the experimental nature of the facility or fire, flood, explosion, strike, sabotage, domestic violence, enemy action, an act of the elements, and other acts beyond the control of the permit holder, as a basis for extending the completion date." 10.CFR50.55(b).
No particular analysis or detailed evaluation of the reasons supporting an extension is specified, though, of course, the applicant risks denial i ,,_.,Jesacuem OFFICIAL RECORD COPY USGPO.1981-330
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tp 3 of the application if the showing of cause is stated too summarily or excludes mention of additional reasons that would warrant extension.
In this instance, WPPSS briefly stated several common reasons contri-
, buting to delays in completion of WNP Nos. i and 4. Although WPPSS did not specifically mention financial considerations as a cause of delays in construction of WNP No. 4, WPPSS lists " construction delays" as one of the " primary factors" that caused its inability to meet the completion date and that would thereby justify an extension. Given the general state of the nuclear industry, the staff would consider
" construction delays" to include delays caused by, or planned to alleviate, financial constraints. The staff has considered a number of extension applications in the past few years that have attributed delays in construction to economic conditions or financial considerations. See note 7 infra. The staff was generally aware that WPPSS was facing significant burdens in attempting to finance construction of its five nuclear projects. The financial strain and the decision by the WPPSS Board of Directors in June 1981 to slow construction of WNP Nos. 4 and 5 were reported in the trade press. 5_/
Financial considerations leading to a planned reduction in construction activity do not pose in themselves a safety issue that l'
-5/ See, e.g., WPPSS Construction Bonds Were Downgraded Only A Bit by Standard & Poor's, 22 Nucleonics Week No. 25, at 9-10 (June 25, 1981); Last Week's Downgrading of WPPSS Construction Bonds, 22 Nucleonics Week No. 24, at 12 (June 18,1981).
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w would have tended to cause the staff to look at WPPSS' application for extension in a different light. N Moreover, the planned delay due to financial considerations could well have been an acceptable justification for the requested extension. Extension applications have been granted in the past when applicants have requested extension of the facility completion date on the basis of financial constraints that slowed construction schedules. 7/ -
This was not an instance in which, after the filing of the application, the staff had requested information about or had expressed an interest in a certain subject matter concerning the application and the applicant had failed to fully and accurately respond to the staff's request for information. And, it should be noted, the staff was informed of developments regarding construction of WNP No. 4 after WPPSS tendered the
--6/ Cf. Elimination of Review of Financial Qualifications of Electric Utilities in Licensing Hearings for Nuclear Power Plants, 47 Fed.
Reg. 13750, 13751 (March 31, 1982).
-7/
See, e. . , Orders Extending Construction Completion Dates, 46 Fed.
Reg. (Dec. 29, 1981) (Callaway plant); 46 Fed. Reg. 56264 (Nov.16,1981) (Waterford Station); 46 Fed. Reg. 46032 (Sept.16, 1981) (Hope Creek Station); 46 Fed. Reg. 29804 (June 3, 1981) ~
(Limerick Station); 44 Fed. Reg. 29547 (May 21,1979) (North Anna Station).
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. w -e 4 dc, application in July 1981. 8,/ In view of the general state of the industry and the particular circumstances surrounding WPPSS application, the staff was not mislead by omission of a specific reference to
- financial constraints in the extension application. The staff does not find that WPPSS should be charged with making a " material false statement" in its July 21st application. The Coalition's petition dated November 30, 1981 is denied. 4'/
8/ The NRR project manager was informed by telephone in August 1981 that WPPSS was considering more extensive deferrals of construction on WNP No. 4, and generally kept himself appraised of the situation via telephone calls, media reports and site visits (for other reasons) in September and October 1981. On the basis of the uncertainties surrounding WNP No. 4's future, NRR had not initiated any review of the extension application. After the WPPSS Board approved deferral of construction of WNP Nos. 4 and 5 until June 30, 1983, WPPSS informed NRR of the construction deferral. See supra note 3. Eventually, WPPSS withdrew the extension application. See supra note 4.
-9/ Even if the omission had been found to be a " material false statement", permit revocation would not necessarily follow.
Although section 186 of the Atomic Energy Act authorizes revocation for material false statements, it does not compel revocation.
Rather, the Commission is empowered to impose the remedy it deems fit for the gravity of the offense, and could impose enforcement sanctions ranging from a notice of violation (10 C.F.R. 2.201) to civil penalties (10 C.F.R. 2.205) to appropriate orders (10 C.F.R. 2.202 & 2.204). Any attempted suspension or revocation of the permit would also be subject to the second chance doctrine of section 9(b) of the Administrative Procedure Act. 5 U.S.C. 558(c);
see also Atomic Energy Act 5 186b, 42 U.S.C. 2236(b).
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i .y (R II. NO C0!1PELLING REASONS WARRANT REV0 CATION OF THE PERMITS FOR WNP NOS. 4 AND 5.
The Coalition's latest petition, dated March 16, 1982, requests that WPPSS be ordered to show cause why the construction permits for WNP Nos. 4 and 5 should not be revoked on the basis of the WPPSS Board of Directors' adoption of a resolution terminating the projects. In these particular circumstances, an order is not warranted, and, therefore, the Coalition's petition is denied.
The WPPSS Board of Directors adopted the resolution terminating the projects on January 22, 1982, and soon thereafter WPPSS infomed the Executive Director for Operations of its intention to conduct a two-phase plan for termination. N Initially, WPPSS intends to attempt to sell the plants to a new owner. If WPPSS finds that it is unlikely that the projects can be sold in their entirety, WPPSS may attempt to sell plant equipment and materials in some other manner. WPPSS intends to retain the construction permits at least during the first phase of its termination plan that calls for an attempted transfer of the projects to a new owner. The construction permits for WNP Nns. 4 and 5 would otherwise expire by their own terms in 1985 and 1986 respectively.
The Coalition's petition is based on WPPSS' intended termination of the project owing to financial considerations. H.owever, termination of the projects does not itself pose any hazard to
-10/ See Letter from R.L. Ferguson, WPPSS Mar. aging Director, to W.J.
liircks, ED0 (Feb.1,1982) (Attachment B to Coalition petition dated March 16,1982).
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3r Q % .D public health and safety that would require issuance of an order to show cause.11/ Although the NRC has no interest in seeing that WPPSS salvages a portion of its investment in the projects, there
, is no reason for the NRC to obstruct WPPSS' efforts when public health and safety is not affected by WPPSS' actions. 12/
The staff recognizes that a similar petition under 10 C.F.R. 2.206 has been granted on one occasion. See Northern States Power Co.
(Tyrone Energy Park, Unit 1), CLI-80-36,12 NRC 523 (1980). El The staff's action in that instance does not compel, however, the same result here. In Tyrone, the co-owners of the project announced no specific plans to find another owner of the project and indicated no desire to retain
-11/ See Northern Indiana Public Service Co. (Bailly Generating Station, Nuclear-1), CLI-78-7, 7 NRC 429, 433(1978), aff'd sub nom. Porter County Chap. of the Izaak Walton League, Inc. v. NRC, 606 F.2d 1363 (D.C. Cir. 1979). In the recent statement of consideration concerning the Elimination of Review of Financial Qualifications of Electric Utilities in Licensing Hearings for Nuclear Power Plants, 47 Fed. Reg. 13750, 13751 (March 31, 1982), the Conunission noted, "WPPSS' response (and that of most other utilities encountering financial difficulties) has been to postpone or cancel their plants, actions clearly not inimical to public health and safety under the Atomic Energy Act."
-12/ Of course, any transfer of the construction permits would require the Commission's approval. See Atomic Energy Act Q 184, 42 U.S.C.
2234,10 C.F.R. 50.54(c) & SIGO.
-13/ The Order to Show Cause was published at 45 Fed. ' Reg. 42093 (June 23,1980); the Order Revoking Construction Permit was published at 46 Fed. Reg. 11746 (Feb. 10, 1981).
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the construction permit. E Moreover, the co-owners consented to revocation of the Tyrone permit. See Order Revoking Construction Permit, 46 Fed. Reg. 11746 (Feb. 10, 1981). The circumstances surrounding the termination of
, WPPSS' participation in WNP Nos. 4 and 5 are different. WPPSS wants to retain the permits in the hope that it may be able to transfer the projects to a new owner. Such action, subject to Commission approval, is lawful, and WPPSS' plans to preserve the present status of the plants appear reasonable. E The issuance of an order to show cause is not required in these circumstances to abate some hazard to public health and safety.
Although fonnal termination of the permits may be appropriate at some future date, no compelling reason exists to take such a step at this time.
III. CONCLUSION WPPSS made no material false statement in its application for extension of the WNP No. 4. No substantial health and safety issue warrants issuance of an order to show cause. For these basic reasons, the Coalition for Safe Power's petitions dated November 30, 1981, and
-14/ The permittees' cancellation of the Tyrone project was based largely on the Wisconsin Public Service Commission's denial of the necessary state certificate to construct the facility.
-15/ See letter from R.L. Tedesco, Ass't Director for Licensing, Ifivision of Licensing, NRR, to R.L. Ferguson, WPPSS Managing Director (Attachment C to Coalition petition dated March. 16,1982).
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w i; q 6 March 16,1982 are denied. As provided in 10 C.F.R. 2.206(c), a copy of this decision will be filed with the Secretary for the Comission's review.
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kli.R. Conte j Harold R. Denton, Director Office of Nuclear Reactor Regulation Dated at Bethesda, Maryland -
this 16thday of June,1982.
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