ML20054J046
| ML20054J046 | |
| Person / Time | |
|---|---|
| Site: | Pilgrim |
| Issue date: | 06/18/1982 |
| From: | Kenny P MASSACHUSETTS, COMMONWEALTH OF |
| To: | Palladino N NRC COMMISSION (OCM) |
| Shared Package | |
| ML20054J047 | List: |
| References | |
| DD-82-04, DD-82-4, NUDOCS 8206280015 | |
| Download: ML20054J046 (7) | |
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.$calen,. l{aJaucbusdla C2/C8 Margaret N. St. olair (617) 727 4732 s.u.wy June 18, 1982 Hon. Nunzio J.
Palladino Chairman U.
S. Nuclear Regulatory Commission Washington, D.C.
20555 RE:
Boston Edison Company, Pilgrim Nuclear Station, Docket No. 50-293, DD-82-4
Dear Sir:
On May 28, 1982 Mr. Richard C.
DeYoung, Director, Office of Inspection and Enforcement, N.R.C.
issued a Director's Decision DD-82-4, under 10 CFR 2-206 which denied a request of the Executive Office of Energy Resources of the Commonwealth of Massachusetts (E0ER).
E0ER had requested by submission dated March 18, 1982, supplemented on April 22, 1982, that the NRC cause the benefit of'the proceeds of a $550,000. proposed NRC civil penalty be transferred to E0ER.
The civil penalty in question had been proposed by the NRC Inspection and Enforcement staff against Boston Edison Company on January 18, 1982.
The penalty was proposed because of the a11 edged improper operation of the Company's Pilgrim Generating Station Uniu No.
1, in Plymouth Massachusetta.
EOER desires to use the 9550,000. procee'ds to finance a weatherization/ conservation program for multi-family dwelling inits occupied by low income families in the retail service area of Boston Edison Company and of the other Massachgusetts utilities which purchase generating capacity from Pilgrim Generating Station, Unit No.
1.
This program is described on pages 1 through 5 and Attachment A of the March 18, 1982 E0ER submission.
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Page 2.
E0ER hereby requests that the Commission review and reverse the Director's decision.
The decision is based on errors of both law and fact.
The decision is an abuse of discretion within the~ meaning of 10 CFR 2-206.
Indeed it is fundamentally flawed in that it incorrectly denies the very discretion of the NRC to act in favor of the E0ER request.
Also, and of equal if not greater importance, E0ER's request is an innovative proposal which would enhance the enforcement efforts of NRC.
Clearly, it is worthy of review on a policy level by the full NRC Commission.
The basic reason for the Director's denial of the E0ER request is not a reasoned and carefully considered analysis by the Director as to hos the Commission should exercise its discretionary powers under Section 234 of the Atomic Energy Act to compromise, mitigate or remit the proposed penalty.
On the contrary the Director's denial is based on the assertion that the NRC lacks any discretion to grant the request.
See page 2 of the Director's decision.
"For the reasons which follow the NRC lacks the requisite legal authority to take the action requested and the petition must be denied."
See also page 3 of the decision "The Commission is, thus without authority to cease regu-latory powers for a purpose not fairly encompassed by its regulatory purposes."
The basic " reason" stated in the Director's short six page deci-sion for the a11 edged legal incapacity of NRC to grant the relief requested'is stated on pages 3 and 4 of the opinion.
Page 3 of the i
decision states "Rather, the regulatory actions of this agency must be grounded in considerations of radiological health and safety and the common defense and security.
The Commission is, thus without authority to exercise regulatory powers for a purpose not fairly encompassed by its regulatory purposes.
The petition here does not suggest that the action it wants the NRC to take is in any way related l
to radiological health and safety purpose (sic) of the civil penalty action taken here.
There is in fact no rational connection between the fundamente1 regulatory purposes of the action taken against Boston Edison Company and the petitioner's proposed program."
The above quoted statements from the Director's decision are an i
l incorrect statement of the law and do not accurately characterize l
E0ER's requested relief.
E0ER's March 18, 1982 submission at Section IV "E0ER's Standing to Participate and NRC's Authority to Grant Relief Requested",
p.
7 through p.
16;Section V entitled " Consistency With Sound NRC Enforcement Policy",
p.
17 through 19, and the entire April 22, 1981 E0ER Supplement to its March 18, 1982 filing describe the l
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Page 3.
authority of the Commission to exercise its' compromise, remission, and mitigation authority under Section 234 of the Atomic Energy Ac t to g ra n t the relief requested.
Without repeating all the arguments presented in the March and April 1982 E0ER submissions, the points raised in the above quoted language from The Director's decision may be refuted as follows-First, E0ER does not request NRC to take a " regulatory action" not grounded "in considerations of radiological health and safety and the 3
common defense and security."
As footnote No. 4 to~ the Director's decision on pg. 3 states "Nonetheless, it (EOER's request) is closely related to an enforcement action and prior to its formal filing the petitioner (E0ER) had been informally advised by NRC that it could achieve a definitive resolution of its request by invoking the (10CFR) 2-206 process."
In fact E0ER's March 18, 1982 submission was styled in the alternative, as a 10 CFR 2-206 petition or as a petition to intervene in the on going 10 CFR 2-205 civil penalty proceeding pending against Boston Edison Company.
Thus E0ER's request is based upon NRC's civil penalty powers in Sec. 234 of the Atomic Energy Act as enforced against a nuclear power plant operator, a power that is unquestionably related to " considerations of radiological health and safety and the common defense and security."
The mitigation, remission, and compromise of such civil penalties is an explicit re gu-latory power of the NRC contained in the text of Sec. 234 of the Atomic Energy Act and in 10 CFR 2-205.
The Company was accused of a radiological health or safety violation in the NRC Inspection and Enforcement staff's January 18, 1982 proposed civil penalty.
EOER is petitioning the NRC to mitigate, remit, compromise or dispose of the proceeds of the penalty in a manner which will enhance the remedial and deterrent effects of the civil penalty as to radiological health and safety compliance by Boston Edison Company and other plant operators.
The Director's decision disparages this remedial and deterrent impact.
On-page 4 of the decision he speculates that this impact, would actually be lessened if the company could " bask in a public per-ception that it was contributing money for the benefit of the surrounding community...."
E0ER submits that this cursory speculation by the Director as to the fact of deterrence is an implied admission i
that there is no legal bar based on statutory construction or case precedent which would deny the rational connection between NRC's civil j
penalty powers and the relief requested by E0ER.
Rather, there is i
only a factual question as to the effectiveness of the remedial and deterrent actions suggested.
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l Page 4.
The Director's decision does not really question the likelihood' that E0ER's proposal would create a third party constituency interested in the effective enforcement of the Commission's enfor-cement powers and encourage violators to settle penalty proceedings without costly and time consuming litigation.
See pg. 17 through 19 o f E0ER's Ma rch 18, 1982 submission and pg. 15 through 18 of E0ER's 3
April, 22, 1982 submission.
Indeed, as page 1 of the Director's deci-sion notes, the electric utility company in this case tendered its payment of the proposed civil penalty without waiting for a formal order imposing the penalty.
As is explained in more detail below there was somewhat of a race between the company's early tendered check in payment of the penalty and E0ER's March 18, 1982 submission to reach the proper desk at NRC during the day of March 19, 1982.
The pendency of E0ER's request did not delay prompt compliance by the Company.
On the contrary the Company. tendered payment early.
Also the Director's decision does not question the remedial effect that E0ER's request would provide the customers of Boston
]
Edison Co. and of the other utilities which purchase generating capa-city from Pilgrim Unit No. 1, many of whom live in the vicinity of the j
p lant.
See pg. 10 of the March 18, 1982 E0ER submission.
Second, the Director's decision misconstrues the scope of the statutory purposes and policies guiding the NRC action requested by E0ER.
Radiological health and safety need not be the sole concern of NRC in mitigating, compromising and remitting civil penalties.
Indeed the Director's decision admits that the " common defense and security" are proper considerations for NRC action.
As pointed out in Section IV, pages 7 through 16 of E0ER's March 18, 1982 submission, the safety-related shutdowns at Pilgrim Unit No. 1 require the displace-ment of nuclear power by costly fossil fuel' substitutes including imported petroleum.
The statutes cited in that section of E0ER's submission demonstrate the security, health ard safety interests of l
the Federal and State governments in mitigating dependence on imported petroleum and show that there is ample policy guidance in the body of Federal energy law to gu ide discretionary LRC policy in this area.
i While NRC's authority to impose civil penalties is rooted in its regulation of radiological health and safety, the power contained in Section 234 of the Atomic Energy Act to compromise, remit or mitigate penalties contains no expressed limitations.
The policy guidance of Congress in enacting the Atomic Energy Act and its amendments shows a broad policy concern of Congress to " improve the general welfare, increase the standard of living" (42 USC 2011(b)); to provide federal funds "to improve the general welfare" (42 USC 2012(g)); and to. pro-vide a government program for " control of... production of' atomic energy...so directed as to make the maximum contribution to' the common defense and security and the national welfare..'.." (42 USC 2011(c)).
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Page 5.
As mentioned on pg. 12 of the EOER March 18, 1982 submission the issues involved with compromising, remitting or mitigating a proposed civil penalty are not entirely separate from economic considerations and are distinguishable from more traditional safety related pro-ceedings.
A civil penalty has an obvious intended economic impact on the party against whom the civil penalty is imposed.
The public welfare of the local area and standard of living affected by the pro-posed civil penalty are proper concerns of the NRC in determining the amount and disposition of a civil penalty or of payments made in lieu of civil penalty.
It does not strain the intent of the Atomic Energy Act for the NRC to compromise or mitigate a proposed civil penalty in a manner which provides economic benefit to customers of the affected generating plant and residents of the area concerned with the safety of the plant.
The power of an agency to mitigate, compromise or remit a civil penalty is exercisable with broad discretion.
See Drake v.
Detroit Edison Co.,
453 F.
Supp. 1123, 1131; Atlantic Research Corporation, 11 NRC 413, 4 21 and other cases as cited on pg. 14 et seq.
of the E0ER Ma rch 18, 1982 submission.
E0ER's request is rationally con-nected to sufficient radiological health and safety considerations, general health, safety and security consideretions, and general welfare considerations, each analysed separately and in combination, to guide NRC discretion to grant E0ER the relief requested.
Page 5 of the Director's decision states that there is another separate legal bar to the NRC's participation in E0ER's plan, that "NRC lacks the legal authority to do anything other than transfer to the U.
S. Treasurey monies collected as civil penalties" citing 31 USC 484 and 10CFR 2-205(1)).
The Director's decision at pg. 5 goes on to state "NRC could not legally evade this requirement through a scheme whereby penalties already paid to NRC would be remitted upon condition that they are paid to a person or entity other than the U.
S.
l Treasury."
This statement ignores the expressly stated power of NRC in sec. 234 of the Atomic Energy Act and in 10 CFR 2-205 to remit (ie.
pay back) civil penalties.
l l
E0ER's understanding of the chronolo*gy of the receipt of Boston l
Edison Company's check proferred in early payment of the NRC proposed penalty is as follows.
Boston Edison Company was required to respond l
to the January 18, 1982 NRC Inspection and Enf orcement staff's pro-posed civil penalty on March 19, 1982.
Such response could have challenged the proposal with a refusal to pay the penalty, or it could simply have left the penalty unchallenged.
The Director, Office of Inspection and Enforcement then could have proceeded formally to impose the civil penalty for later payment.
Instead the Company chose to submit a check for $550,000. in payment of the proposed penalty on March 19, 1982.
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Page 6.
EOER had expressed its intention to submit its request in a letter to Leonard Bickwit, Esq., NRC General Counsel on Feb.
8, 1982.
The Company was informed of that request.
At the suggestion of Mr.
Parrish, Mr. Bickwit's assistant, E0ER submitted its formal request en March 18, 1982.
The EOER request was delivered to a commercial air freight company on March 18, 1982 to be delivered on March 19, 1982 to (1) the Office of the NRC Secretary, the (2) Region I Regional Administrator, and (3) the Director, Office of Inspection and Enforcement, with copies to counsel for Boston Edison Company and the Office of the Massachusetts Attorney General.
When the undersigned became aware on the morning of March 19, 1982 that Boston Edison Co. had sent a representative to Washington that day to deliver the check in payment of the proposed civil penalty, I endeavored through a series of telephone calls and telegrams to NRC (copies of which are enclosed) to determine the phy-sical location of the check, its status, and the status of E0ER's sub-mission, and to urge NRC not to process the check in any manner which would compromise E0ER's request.
At 4:00 p.m.
on March 19, 1982 I received a return telephone call from Mr. Brockett on Mr. DeYoung's staff informing me that both the Company check and the E0ER submission were on his desk and that the check had not been processed.
l In a subsequent conversation with Attorney Andrew Grasso of the NRC Office of the Executive Legal Director in April 1982, I was assured that the proceeds of the Company's check were deposited in a fund over which the NRC retained discretion.
Thus until receipt of the May 28, 1982 Director's decision it was EOER's understanding that nothing would be done with the check which would prejudice E0ER's position, and that the handling of the check would take account of E0ER's proposal.
Whatever processing the check received, it or its proceeds l
l should have been put in a derosit fund account with the Treasury to be paid out at the discretion of NRC or to otherwise keep the disposition of the proceeds within NRC control.
See General Accounting Office l
Procedures Manual, Title 7, Sec. 4.10 (6) and the discussion of a similar procedure involving the U.S.
Dept. of Energy in Citronelle -
Mobile Gathering, Inc.
v.
Edwards.
U.S. Temporary Emergency Court of Appeals, Jan. 21, 1982, slip opinion at pg. 12.
In any event NRC has I
authority to request the Treasury to return, pursuant to 31 USC 725, i
funds " erroneously received and covered."
As pg. 2 of the Director's decision points out, E0ER'had been informec that it could achieve a definitive re s olu c ion of its request by invoking the 10 CFR 2-206 pro-cess.
Inadvertent processing of a check by NRC staff in a manner l
which would put the proceeds beyond the descretionary control of NRC, prior to re s olu tion of E0ER's request, if done at all, would be a simple mistake easily remedied.
4 Page 7.
For the reasons stated above E0ER believes that the NRC Inspection and Enforcement Director was mistaken in determining that NRC lacked the statutory authority to grant E0ER the relief requested.
The refusal of an administrative official to entertain a mitigation request on the erroneous belief that he has no statutory authority to grant the request, is reviewable even though the ultimate decision to grant the request ir discretionary.
See U.S.
v.
One Buick, 463 F.
2d 1168, cert. denied, 409 U.S.
980; Cotonoficio Bustese v.
Morgenthau, 121 F 2.d 884.
Thus E0ER urges the NRC Commission to review and reverse the decision of the Director.
In addition to the technical legal propriety for full NRC Commission review of the Director's denial, broad policy con-siderations suggest that the matter should be reviewed by the full Commission.
E0ER has suggested a significant addition to the arsenal of enforcement weapons at NRC's disposal.
E0ER's proposal has attracted wide Congressional and public support and attention.
Thus it should be reviewed at the highest policy making level of the NRC, the full Commission.
Sincerely,
/
Pjttrick J.
Kenny General Counsel ec:Each NRC Commissioner NRC Inspection and Enforcement Director NRC General Counsel l
NRC Secretary Boston Edison Company enclosures: Feb.
8, letter Kenny to Bickwit March 18, 1982 E0ER submission March 19, 1982 E0ER telegram to DeYoung March 31, 1982 letter DeYoung to Kenny April 22, 1982 E0ER submission May 28, 1982 NRC Director's decision PJK/jg
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