ML20054J053
| ML20054J053 | |
| Person / Time | |
|---|---|
| Site: | Pilgrim |
| Issue date: | 03/18/1982 |
| From: | Kenny P MASSACHUSETTS, COMMONWEALTH OF |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20054J047 | List: |
| References | |
| EA-81-063, EA-81-63, NUDOCS 8206280020 | |
| Download: ML20054J053 (29) | |
Text
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United States of America Nuclear Regulate ry Commission j
In the Matter of
)
E.A. #81-63 BOSTON EDISON COMPANY
)
(Docket No. 50-293)
(Pilgrim Nuclear Generating )
(License No. DPR-35)
Station Unit #1)
)
)
Submission of Massachusetts Executive Office of Energy Resources, In Response to Notice of Proposed Imposition of Civil Penalties, Proposing a Compromise Of The Civil Penalties Pursuant to 10 C.F.R.
E2.205(g), and/or Requesting Pursuant to 10 C.F.R. 82.206(a) That The Penalties Be Compromised, Remitted Or Mitigated, And/Or Requesting Participation As An Agency Of An Interested State Pursuant To C.F.R. 82.715(c) In Order To Offer Such Proposal Or Request.
3
' 8206280020 820610 PDR ADDCK 05000293 O
I.
SUMMARY
The Executive Office of Energy Resources of the Commonwealth of Massachusetts (E0ER) is the agency of the Massachusetts State Government responsible for the development of State energy policy.
On January 18, 1982, by a letter from Richard C. DeYoung, Director of the Office of Inspection and Enforcement (hereinafter
" Letter"), the Nuclear Regulatory Commission transmitted to Boston Edison Company a " Notice of Violation and Proposed Imposition of,
Civil Penalties" relating to alleged. violations of NRC regulations at the Pilgrim I Nuclear Generating Plant at Plymouth, Massachusetts.
The Notice proposed the imposition of $550,000 in civil penalties, and provided, inter alia, in accordance with 10 C.F.R. 52.205 an opportunity to " request remission or mitigation of the penalty."
It stated that the penalty could be enforced in court "unless compromised, remitted, or mitigated."
The time for Boston Edison's answer has been extended to March 19, 1982.
E0ER believes that the purposes of the Atomic Energy Act and of the NRC enforcement program will best be served if the residents living within the service area of Boston Edison Company and of the i
other utilities which purchase generating capacity from Pilgrim I, are Ale ~ to benefit from any sanctions inposed on the 14ran=aa because of such violations. EDER purposes that the NRC, under its authority to w Jw, rani.t, or mi.tigate civil pan =1Has cauce Boston Mann Coupany to make payments to EDER for the purpose of providing energy related WR s to said residents t
as desribed herein. EDER hereby petitions tha Nn<lae Regnlarnry Chasion to pen:it E0ER to intervene as a party in said civil penalty proraaMng, that alternative methods of disposition of Boston Edison Coupany's obligation to pey the Civil Penalty as discussed herein be approved, and that payment of any Civil Penalty by the Cmpany be stayed until disposition of this petition.
II.
DESCRIPTION OF E0ER's SUBSTANTIVE REQUESTS E0ER requests that NRC require Boston Edisori Company to finance a home weatherization/ conservation program in an amount equal to any civil penalty imposed by NRC in connection with operation of the company's Pilgrim I nuclear generating unit in this proceeding.
Such expenditure would be in lieu of final impostion of the proposed penalty or in fulfillment of the penalty obligation.
Customers within the service area of Bosten Edison Company and other utilities which receive power directly from the Pilgrim I unit under long term contracts would be eligible for the benefits of the program.
NRC is requested in its final order to include a reduction, remission or mitigation of the proposed penalty, in connection with an order to Edison to make payment for the public service program as proposed by E0ER of an amount equivalent to the portion of the penalty so remitted, mitigated or reduced.
Should NRC decline to issue such an order, or ebch to do so without the advance agreement of Boston Edison Company, E0ER requests that NRC issue its final penalty order in the alternative, ie.
the specified civil penalty is to be paid unless payment for the proposed public service program is made by a certain date.
The Commonwealth of Massachusetts, Executive Office of Energy Resources has experience in administering funds made available to the State under a consent order from an oil company in a U.S. Dept. of Energy petroleum price over-charge case.
The monies made available in that case were used to fund Citizens Conservation Corporation (CCC) a non-profit corporation founded to operate a model-family housing
i energy service program.
The model corporation is engaged in designing and implementing a program of energy conservation in multi-family buildings which are occupied by low and moderate income residents.
Activities include cpordinating f
comprehensive energy audits and arranging of private financing j
for landlords of multi-family buildings.
Loans are subsidized by interest income of the corporation and by loan guarantees of.
the corporation.
An educational program is provided for landlords, tenants and building managers to familiarize them with energy conservation techniques.
The model corporation l
arranges with banks providing loans under the program to provide rebates to tenants as a portion of the actual dollar savings realized as a result of reduced consumption in accordance with a formula submitted to and approved by E0ER.
The intent of the program is to show that disincentives to energy conservation experienced by both apartment build'ing
~
owners and tenants, especially in buildings where the cost of heat is included in the rent, can be overcome.
Because landicrds can include increased fuel costs in the rent they usually have little incentive to conserve.
Tenants do not own their homes and have little incentive or opportunity to add energy saving capital improvements to their dwellings.
They also do not have immediate or highly visible reductions in their fuel costs if such costs are included in rent payments.
The program described above can help overcome these problems through education and financial incentives.
]
h service area included in the proposed extended programs includes urban areas with a high prqportion of multi-fa=ily rental dwellings.
Assistance provided to the customers of Boston Edison Company and the other Massachusetts Utilities which rely on the Pilgrim I power plant will reduce consumers overall energy bills, and,
will reduce the region's dependence on imported fuel oils (which are used both for home heating and electric utility purposes).
I The Massachusetts Executive Office of Energy Resources is empowered by its enabling statute, Massachusetts General Laws Chapter 25A, Sec. 6 to receive grants from Federal and private sources for energy related purposes which would include the program listed above.
E0ER indeed has experience in administering grants involving the model corporation referred to above and has worked closely with local fuel assistance vendor agencies in cooperative projects in the past.
E0ER can receive funds either directly from a private donor or through a Federal agency.
E0ER in the past has received funds from Federal and private sources which have been subcontracted or granted by E0ER to other governmental and private recipients under guidelines established by the Grantor and/or by EOER.
E0ER's current program with CCC originated as a private grant from Chevron, USA to E0ER in partial discharge of Chevron's obligations under a consent decree with the U.S. Dept. of Energy.
EOER received the grant pusuant co its statutory authority to do so under Mass. General Laws Chapter 25A, Section 6 and contracted with CCC for CCC to receive a major portion of grant funds to administer the program.
EOER, by this petition requests that s4mfim additional funding be provided to E0ER by 3oston Edison
Company so that E0ER may contract with CCC to expand the funding available for the program and the service area as described herein.
III.
E0ER's PROCEDURAL REQUESTS E0ER understands that Boston Edison Company has sought and obtained an extension of one month after Feb. 19, 1982 to reply to the proposed civil penalty.
E0ER is not aware of any request for a hearing made by Boston Edison Company pursuant to 10 CFR 2.205 (e) or any decision of the Company to pay the proposed civil penalty.
However proper disposition of the civil penalty proceeding requires E0ER's participation at this time and stay of payment of any civil penalty, so that alternative disposition of payments in lieu of a civil penalty may be considered prior to deposit of any funds in the U.S. Treasury.
E0ER believes that the Director of the Office of Inspection and Enforcement (hereinafter " Director") can take cognizance of, and act in pursuit, of this submission on all l
or any of a number of bases, namely:
t 1.
that this is a suggestion by a de facto l
l interested party, or amicus curiae, that he exercise his authority to " compromise any civil penalty," pursuant to 10 C.F.R. 82.205(g), by offering a compromise of the kind proposed here; 2.
that this is a request, pursuant to 10 C.F.R.
l l
52.206, for the Director to take action under 10 C.F.R. 52.203, or otherwise, to compromise, remit, or mitigate the proposed penalty in the-
manner proposed here; 3.
that this is a request for participation by an agency of "an interested State" within the meaning of, or by analogy to, 10 C.F.R. 82.715(c), mandating such participation, at least where a hearing has been ordered (see 10 C.F.R. 82.700), so that the State can
" advise the Commission," " propose findings,"
and otherwise advocate the particular remedial outcome proposed here; 4'.
if for some reason none of the above options is deemed appropriate that this is a petition for leave to intervene pursuant to or by analogy to 10 C.F.R. 32.714, in which case the State would want the opportunity t'o supplement this filing in accordance with that section.
In short, in view of the well accepted " role of states... in NRC proceedings" (See, e.g., Pacific Gas and Electric Company (Diablo Canyon Units 1 and 2)), ALAB-583, 11 NRC 447, 449 (1980),
the specific mandate for state participation under 10 C.F.R. 52.715(c) if a hearing is ordered, the specific commitment in the " General Policy and Procedures for NRC Enforcement Actions,"
Appendix C to 10 C.F.R. Part 2, to consider State actions "in selecting the enforcement sanctions to be applied," 47 Fed.
Reg. 9990 (March 9, 1982), the timeliness of this submission (compare Pacific Gas and Electric, supra), and the growing attitude of respect at the federal level for the concerns and interests of the states (see State of the Union Message, January 26 1982, Cong. Rec. p.H51, 54
), this submission and its J
proposals should be accepted and acted upon on the merits by the Director and, as appropriate by the Commission or its-other officers.
E0ER has no means, other than the alternative procedures referred to above, to protect its interests.
A final order of the NRC dismissing, reducing or demanding payment of the proposed civil penalty without provision for use of the proceeds requested by EOER will prevent such proceeds from being used for the purposes requested by E0ER.
As described herein E0ER has experience in administering profframs similar to those proposed in this proceeding.
E0ER's participation is necessary for EOER's position on such programs to be developed and for the NRC to develop a sound record or other basis for decision.
E0ER's interest is not represented by any other party to the proceeding.
While E0ER's participation may broaden the issues to be considered in the instant proceeding E0ER contends that consideration of the issues raised by E0ER will not materially delay final disposition of the proceeding.
IV.
E0ER's STANDING TO PARTICIPATE and NRC's AUTHORITY to l
GRANT RELIEF REQUESTED l
i NRC practice and case law adopt a test of the standing of a party to participate in NRC licensing and enforcement proceedings similar to judicial standards.
A party must allege injury in fact and an interest asserted must not be beyond the l
zone of interests protected by the Act.
See Drake v Detroit-1
- i Edison co.
453 F. Supp. 1123 (1978) (economic interest of utility cooperative member in preventing higher utility rates to be caused by cooperative's joint ownership purchase of an interest in nuclear power plant was an economic interest not within the scope of the Atomic Energy Act; protection of health and safety was a principle purpose of the Act).
EOER submits that.its participation in these proceedings
~
~
meets these tests...
I-
- 2..
First, E0ER's interests are not merely economic in nature.
Massachusetts Statutes 1979, c. 796 which established E0ER as a state cabinet secretariat set forth the following policy at Mass. St. 1979, c.
796, s.l.
Section 1.
(A) "The general court (state Legislature) hereby determines: that energy shortages and the high cost of energy have created economic dislocations and hardships, including loss of jobs, closing of businesses and general economic stagnation or deterioration in the commonwealth, causing the commonwealth to be dependent, to an inordinate.
degree, upon insecure and exceedingly costly hydrocarbon fuel products of various types imported from abroad; that the handling and burning of such hydrocarbon fuel products pollutes the air and water of the commonwealth; and that the aforesaid' conditions constitute a threat to the health, safety, welfare, and convenience of the commonwealth and its citizens.
(B)
It is the purpose and oolicy of this chapter including the bonding provisions to protect the people of the commonwealth in their right to the conservation, development, and utilization of natural resources to promote the health, safety,
_9_
welfare, and convenience of the commonwealth and its ci'tizens by reducing the dependence of the commonwealth and its citizens on the use of hydrocarbon fuels; to promote the development of alternative energy and energy conservation; to enhance the l
natural environment and protect the public from air and water pollution by reducing excessive use of hydrocarbon fuels; to enhance the economic development of alternative energy and energy conservation-related industries in the commonwealth, thereby t
reducing unemployment and economic blight; and to relieve the consumers of the commonwealth from excessive dependence on unreliable and costly sources of hydrocarbon fuels imported from abroad, thereby affording them greater protection against supply curtailments of energy sources necessary for their health, safety, and welfare."
(Emphasis added)
~
Boston Edison Company and the Massachusetts utilities which purchase generating capacity from Pilgrim I will be forced to rely more heavily on hydrocarbon fuels during the period Pilgrim I is out of operation to correct the alleged health and safety related deficiencies for which the civil penalty is proposed.
This increased reliance on hydrocarbon l
l fuels imposes the health and safety dangers referred to in Mass. St.
1979, c. 796, s.1 and adversely affects the' interest j
of E0ER in administering its duties under Mass. St.1979, c. 796.
. Ihe' MCexercising its broad mehm-ity to mitigate proposed penalties tnder 10 CFR 2.205 and 42 USC 2282 shouldTecognize an opportunity t@
l
relieve the health and safety burdens imposed by reliance on hydro-carbon fuels.
Requiring or permitting funds originally intended for a civil penalty to be spent instead on weatherization programs will tend to reduce the reliance of Pilgrim I's ultimate consumers on hydrocarbon fuels for their home energy needs, including electric heat. This reduction in hydrocarbon fuels will in turn relieve the burdens on public health and safety referred to above.
Such issues are proper health and safety issues to be considered by NRC in this proceeding.
E0ER, given its responsibilities.under Mass. St. 1979
- c. 796 is a proper party to represent the interest of the state in proceedings to urge such a program be funded.
Also many of the utility customers to be benefitted by the weatherization program proposed by E0ER live in the vicinity of the Pilgrim I plant, a class of persons whose health and safety interests are traditionally recognized as having standing in NRC proceedings.
See Florida Power and Light Company. 10 NRC 183(1979) and Virginia Electric Power Comoany, 6 AE C 631(197 3).
Such persons bear the risk of any safety hazards originating from the plant and share in the economic hardships and unsafe reliance on unreliable sources of hydrocarbon fuels for replacement power when the plant is shut down '
for safety repairs.
Since the risks encountered arise from energy production and since the costs incurred as a result of safety-related shutdowns are borne through energy bills, it seems logical to have the alterna-tive payment program.: directed to energy related uses.
Our experience in this field, particularly with the Chevron refund referred to above, is that conservation /weatherization projects are an efficient use of such funds.
They can be low enough per unit to cover a significant number of residences, yet still have enough impact to provide a noticeable improvement.
Moreover to the extent that they may. help educate the public as to the cost / benefit calculus. on such energy efficiency expenditures, they fulfill the national goal, as well as a goal of nuclear power use, of reducing the nation's demand for hydrocarbon fuels, as well as reducing peak electrical demands 1
so that nuclear cnd other powsr plants can be used more officiently.
That states are the logical entity to administer such a pro-posed alternative is not only-self-evident, but well-established in recent precedents.
Thus in'both the Chevron case supra, and the recent Alkek and Adams cases 47 Fed. Reg. 4583, the Department of Energy has looked to the United States for similar purposes.
Judicial remedies have also used the states as a vehicle.
See West Virginia v.,Pfizer; 314 F. Supp. 710, S.D. N.Y., Affd 440 F. 2d 1079, cert den 404 U.S. 871 (1971); Cmaant Agreement in U.S. v.
Occidental Petroleum (E.D. Calif. No. Civ. S.-79-989 MLS. (Feb. 9, 1981)
EPA water pollution case; provides inter a'lia, payments to or with approval of state "in full discharge and release...for all claims and penalties".
For the reasons stated above E0ER is a proper party to represent the interests of the Commonwealth of Massachusetts and such persons in pursuing a weatherization program to reduce hydrocarbon fuel dependence aggravated by the operation of Pilgrim I.
Second, even if E0ER's interests in these proceedings were to be construed as " economic" in nature.the NRC has ample authority to consider E0ER's request.
The policy of Congress in enacting the Atomic Energy Act is stated at 42 USC 20ll(b) includes a policy that "the development use, and control of atomic energy shall be directed so as to promote world peace, improve the general welfare, increase the standard of living, and strengthen free competition in private enterprise," (emphasis added) 42 USC 2012(g) states a Congressional finding that " funds of the United States may be provided for the development and use of atomic energy under conditions which will provide for the common defense and security and oromote the general welfare."
(emphasis added).
42 USC 2013 states a purpose of the Act to effectuate the policies set forth above (in 42 USC 2011) by providing for
"(c) a program for Government control of the possession, use, and production of atomic energy and special nuclear material... so directed as to make the maximum contribution to the common defense and security and the national welfare..." (emphasis added).
42 USC 2201 authorizes the Commission to "(c) make such studies and investigations, obtain such information, and hold such meetings or hearings as the Commission may deem necessary or proper to assist in exercising any authori.y provided in this chapter,
' or in the' administration or enforcement of this chapter or any regulations or orders issued thereunder."
In several of its functions under the Atomic Energy Act the NRC considers factors beyond narrowly defined health and safety issues.
See for example, the anti-trust review provisions of 42 USC 2135, environmental determinations of issues raised under the National Environmental Policy Act, and determinations as to the financial qualifications of applicants.
42 USC 2282 and the NRC's regulations in 10 CFR 2.205 explicitly permit the NRC to compromise and mitigate Civil Penalties.
E0ER submits that it does not strain the intent of the Atomic Energy Act for the NRC to compro-mise or mitigate a proposed Civil Penalty 1n 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 issues involved with compromising, remitting or mitigating a proposed civil penalty are not entirely separate from economic considerations and are distinguishuable from more traditional safety related proceedings..A civil penalty has an obvious intended economic impact on the party against whom the civil penalty.is imposed and in a proportionally less significant'way, upon the receipts of the U.S. Treasury.
Under the statutory provisions cited above, the public welfare of the ' local area and standard of living affected by the proposed 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.
The determination of Boston Edison Company's culpability for i
alleged improper operation of the plant and the details of reme-dial activities, if any, to be taken by the Company are safety related issues which are severable from the question of how civil penalty funds or funds paid in lieu of a civil penalty are to be spent. It is these later issues which E0ER's petition seeks to address,. interests which embrace not only the health and safety of the Massachusetts residents in need of weatherization assistance but also their standard of living and general welfare.
1.
Even if NRC waro to datermine that E0ER did not have standing as of right to intervene in this proceeding, NRC practice is to exercise broad discretion in allowing permissive intervention.
See Portland General Electric Comoany, 4 NRC 610 (1976) and Public Service Co. of Indiana,11 NRC 438 (1980).
b I
5 A
a Section 234 of the Atomic Energy Act, 42 U.S.C. g2282, and the NRC Regulations. 10 C.F.R. 2.205(d), (e), (f), (g) and (h), clearly give the Commission, the Director, and other appropriate officials, full discretion to compromise, mitigate, or remit civil penalties, as long as their actions do not violate other provisions of law, or otherwise abuse that discretion by contravening the basic purposes of the underlying statute.
"Indeed, such decisions, whether made by administrative agencies or prosecuting attorneys, have historically been deemed to lie at the very heart of the executive discretionary decision-making process and beyond the scope of judicial review."
Drake v.
Detroit Edison Co.,453 F. Supp. 1123, 1131 (W.D. Mich. 1978).
Nothing in the statute precludes, discourages, or otherwise stands in the way of NRC's use of its discretion to compromise, mitigate, or remit as a means of realizing its statutory and en-forcement goals through locally suggested alternatives.
As the Commission itself has said in a closely.related context, "Since Congress did not provide any further guidance in this area, the question of how to exercise that authority has been left to agency discretion....
It is well settled that NRC has been given an incomparable. degree of discretion....
Civil penalty authority is one area recognized as committed to agehey discretion....
[ Citation omitted)" Atlantic Research Corporation CLI-80-7, 11 NRC 413, 421 n.20 (1980).
Precedents in Other Agencies:
Where the Atomic Energy Act has committed a subject to NRC discretion, and does not provide guidance, the Commission has looked to "the practices of other agencies with similar responsibilities. "
Atlantic Research Corporation, supra, 11 NRC at 421.
-In implementing Section 234 of the Atomic Energy Act, one of the key agencies which NRC has found " enlighten
?
ing since the legislative history of Section 234 indicates that Section 234 was modeled after similar provisions contained in those statutes," Atlantic Research Corporation, supra, 22 NRC at 423, is the Federal Trade Commission ("FTC").
The practices and precedents at the FTC provide a clear precedent for the action requested here.
The FTC Operations Manual's section on Settlement and Consent Judgments states:
" Settlement of civil penalty actions involving orders may seek remedies in addition to, or in lieu of, monetary penalties, e.g.,
corrective advertising."
(Emphasis Added) FTC Operating Manual, Chapter 12, 55.5, page 20 (Release No. OM12-4 (2/21/80)."
In fact the cases make clear the substitutability of the remedial actions and the civil penalties.
In U.S. v Womack Nurserv, a case brought under the FTC Act, the Consent Decree called for a small penalty and a much larger rem edial fund but l
provided that any balance in the remedial fund "shall be paid to the Treasurer of the United States as additional civil i
penalties," S. 15, Consent Decree, Civil Action No. 1-81-421, U.S. Dist.
Ct., E.D. Tenn., Nov. 24, 1981.
Almost identical is U.S. v Atlantic Industries, Civil Action No. 78-956-SMA, U.S. Dist.
Ct.,
S.D. Fla., August 17, 1979.
Of course, since the FTC is normally represented by the Department of Justice in court enforcement actions (and was a party to the two cited examples), such an approach is presumbly acceptable to Justice, which is also responsible for any court enforcement proceeding, and compromise and settlement of such a proceeding, arising out of an NRC civil penalty order.
See, 42 U.S. Code 32282(c).
Similarly, the Department of Energy's Economic Regulatory Administration Enforcement Manual directs its personnel to include among the " criteria to determine when it is appropriate to solicit a compromise of civil penalties... the effectiveness of the other remadial action ordered as a result of the violation."
- See, e.g.,
Consent Order with Standard Oil of California, Office of Special Counsel, Case No. RCVA00001, paragraph 507.
In fact, in the negotiated settlements entered into by DOE's Office of Special Counsel as of November 30, 1981, presumably pursuant to the instructions cited, there have been only $2,712,500 of civil penalties, and $3,567,068,120'of other remedies, indicating a heavy reliance on a variety of other discretionary remedial approaches in settlement of cases that might otherwise have generated substantial civil penalties.
a
r vens:. stave e,srenwsuc-w.vsemeaR wgev.----nx) cesaiocigg too qQ/ - -
1 su--arized the purposa of civil p:nnlaties cs "e=phcsi:ing the i.por:cace of... strict complian:e... sti=ula:ing the taking of promp:
crree:ive s
action, and.. de: erring future noncecpliance."
Atlantic Research Cono-I ra:1:n, suprs.11 P.C a: ?.2 5.
M has called f:: an enfer:tmen: pelicy that encourage (s) licensees to consent to, rather than contest enforcement l
actions;" Public Service Company of Indiane (Marble Hill, Units 1 and 2),
CLI-80-10, 11 NRC 438, 441 (1980).
We submit that the proposal made here will not comply with these policies but will enhance them. The notice of violations in this case sets forth a list of compliance failures which suggests that past sanctions, including civil penalties, have not fostered the " strict compliance" desired by NRC.
" Unacceptable breakdowns in the managemen:
(
and control of safety related activities," " submittal of false informa-tion to the NRC " and " loss of redundancy in certain protection cir-cui:s as a resul: of improperly planned =ain:enance activities" (letter
- p. 3), if proven, are the type of ac:ivity which migh: bring into doubt not only the integrity of the particular facility, but the entire NRC enforcement process.
Any step which helps stimulate such cor.pliance' fulfills the statutory purpose.
We believe that most license s opdra:E.ng e
power reactors are, as regulated utilities, sensitive to the concerns and attitudes of their customers, the neighbers of their facilities
~
and the state and local officials where they operate.
To the extent- -
that NRC's enforcement activities stimulate locr.1 attention' to the licensec's compliance performance, they can add the force of local suasion to NRC's demands for strict compliance, inus any remedial action by NRC which has noticeable local dimensions increases that attention and enhances the ability of a given enforcemen: action to-n P-
}
_-___n stimulate strict compliance and prompt corrective actions in th's future.
The size of the proposed penalty here suggests that the deterrent effect on both this licensee and other licensees was a major focus of the Office of Inspection and Enforcement in proposing this penalty.
E0ER does not propose to lessen this impact. In fact, the prospect that a licensee's violation might incur the wrath not only of
- NRC, but of local third parties with an interest in supporting and encouraging the NRC's imposition of the highest possible penalty amounts, should increase the desire of a licensee to avoid connaitting violations and thus the deterrant value of a civil penalty proceeding.
It is important to note that the NRC's civil penalty authority contains no suggestion that the penalty payments are intended to compensate NRC for the costs of enforcement, and the agency receives no direct fiscal benefit from the penalties paid.
Contrast 7 U.S.C.
1359(a) (peanut marketing penalties depostted in special account administered by Secretary of Agriculture); 33 U.S.C. 83121(k) (oil l
. pill penalties to enforcement and clean-up fund).
Thus there is no,
reason in connection with its own mandate for NRC to-insist that penalty amounts be paid to the U.S. Treasury if its enforcement goals can be not or enhanced by payments to others.
The agency policy in favor of consented to, rather than contested, enforcement actions, so that it can concentrate " resources on actual O
field inspections and related scientific and engineering work, as opposed to the conduct of legal proceedings." Public Service Company of Indiana dubra, 11 NRC at 441, would also be well served by the proposal made here.
Certainly, a licensee which is contemplating contasting all or part of s
.f a
c* prtptccd civil penalty would htva to ecrafully ctusidtr a c ttic=ent option which would allow it to pay into a state administered public service program benefitting those affected by its facility.
It would give the licensee a tangible way of showing its concern -- perhaps its increased concern -- for the welfare of its neighbors.
In sum it adda a new and useful arrow to NRC's negotiating quiver which may in some, and perhaps many, cases be the one which hits the target of a consent settlement and avoid the time, trouble, and expense of a contested adjudication.
For the reasons stated, the Massachusette Executive VI Conclusion.
Office of Energy Resources requests that this submission be accepted and considered by the Director and by such other officials as may be appropriate, that any final imposition, payment, compromise, mitigation, or remission of civi penalties against Boston Edison ordered, received, cllowed, or agreed to only after a decision has been made as to the proposals herein, and that these proposals be accepted and inicuded as part of any further action by the NRC or its officials Should NRC wish further refinement or details in this proceeding.
o 0
s of the proposed alternative payment, or otherwise wish further facts or argu:nent relating to the issues raised, t.he State requests the oppor-tunity to file futher supporting snaterials and/or to participate in a conference or hearing, preferably informal, with respect to the matters raised.
I affirm that the above petition of the Executive Office of Energy Resources has been subscribed to by me in the capacity specified below with full authority, that I have read it and know its contents, that to the best of my knowledge, information and belief the statements made in it are true, and that the petition is not interposed for delay.
Patrick J. Kenny General. Counsel Executive Office of Energy Resourec The Commonwealth of Massachusetts Boston, Mass. 02108 Tel. (617) 727-0538 i
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Attachment A 1
Proposal to the U.S. Nuclear Regulatory Commission Regarding Alternative Use of proposed Civil Penalty of Boston Edison Company Concerning Operation of Pilgria Unit No.
1.
Massachusetts Executive Office of Energy Resources (E0ER) i Problem Definitions i
l The impact of the energy crisis in Massachusetts is unquestionable and profound for millions of elderly, handicapped, i
and low-income working families who are currently spending up to
~
twenty-five per cent of their income on energy costs.
This crisis threatens to get worse in the future as energy prices and inflation continue to increase while government conservation and fuel ~ subsidy programs have been greatly reduced.
The problem of energy supply is made more serious by demand and cost factors.
The cold climate and scattered population in Massachusetts requires us to use almost 40% of our total energy-consumption for space heating alone.
Much of this heat is needlessly wasted.
A recent survey by the Boston Redevelopment Authority (1981) showed that less than 14% of the residents sur-veyed intended to insulate their homes before the coming winter season, despite the fact that over 38% had to change their expen-diture patterns in order to meet their heating bills.
Over 65%
had bills exceeding $650 per year (1980) and over 47% had heating bills exceeding $850 per year.
One of the reasons that there is such a lack of conservation activity in Boston stems from the fact that 69% of the city's housing stock are rental units.
Statewide, 42.9% (U.S.
Census Bureau, 1980) of sll units are rental households and of these, approximately 500,000, or 25% of the total housing stock, are units in multi-family apartment buildings with five units or more.
The problem is particularly serious in rental housing since many low-income people are tenants, thereby linking the energy problem directly to the quality of life of the. poor.
Y This high proportion of renters in the Commonwealth is par-ticularly disturbing in relation to the Nation as a whole since only one-third of the total U.S.
population are renters.
Assuming that the average consumption per rental unit is the equivalent of 1194 gallons of oil per year (Technical Development Corporation, 1981), the total cost to the rer.tal population in the Commonwealth is approximately $746 million per year at
$1.25/ gallon.
If 25% of the energy used in heating these s
buildings could be saved, the economy of the Commonwealth could expect to save in aggregate, at least $186 million per year.
The lack of adequate incentives for landlords or tenants to make these cost-effective energy conservation improvements has created serious personal hardships for hundreds of thousands of low-income, handicapped, and elderly persons on fixed incomes who are unable to take advantage of these conservation measure s.
It has also had a serious impact on the Commonwealth's general eco-nomy as more and more local dollars unneccessarily flow out of the state.
In an effort to create viable alternatives to these dilem-mas, E0ER has developed model pilot programs involving lease-purchase agreements, energy services contracts, shared savings programs, icw-interest revolving loan poels, and tax-exempt muni-cipal revenue bond financing.
In developing these model programs, E0ER has worked in cooperation with the Mass Municipal Association (MMA), the Citizen's Conservation Corporation (CCC),
end Hampden, Hampshire, Berkshire, and Worcester counties.
To overcome the disincentives to energy conservation currently experienced by landlords and tenants, EOER and Citizen's Energy Corporation (CEC) have developed a model multi-family energy services corporation, Citizen's Conservation Conservation (CCC), which acts as a third party financing agent.
The purpose of the CCC program is to demonstrate that with an attractively packaged program, multi-family building owners will have a strong incentive to make energy conservation improvements where none would have otherwise been made.
The principal incen-tive to the landlord is that the program is designed so that the landlord's total annual costs for participating in the CCC program will be equal to, or less than, what his annual energy costs alone would have been without the energy conservation measures.
After the loan has been repaid, the building owner will continue to reap the benefits of lower energy costs and will have a considerably improved building. The principal incentive to tenants is that a portion of the annual savings is set aside as tenant rebates.
This helps to stabilize the tenants' energy or rental costs over the period of the loan.
As a result, both the landlord and the tenants are able to benefit by participating in l
the CCC program.
By helping to stabilize energy costs, many l
marginally profitable rental housing units may be saved from further disinvestment, abandonment, and in some cases, arson.
i
4 II.
Program
Background:
Citizen's Energy Corporation (CEC) established the Citizen's Conservation Corporation (CCC) in 1981 with an initial grant of
$100,000 to cover the costs of the pilot project.
The pilot pro-ject involved 58 dwelling units located in Boston.
These funds, deposited in an interest bearing account at a designated bank, were used to secure the obligations of the building owners'and to cover the costs of the program design and implementation.
In addition to these funds, E0ER is currently providing CCC with $312,538 to expand the pilot project to other locations in the Commonwealth.
These funds were made available to E0ER from Chevron. USA in par-tial discharge of Chevron's responsibilities under a consent order with the U.S. Department of Energy in litigation arising out of alleged petroleum price overcharges by Chevron.
EOER proposes to use,the proceeds of the proposed payments from the Boston Edison Company to expand the services offered by CCC l
under the current program.
The geographical area eligible for ser-vice under the program would be extended to include the entire Massachusetts retail service territory of Boston Edison Company, the Massachusetts retail electric subsidiaries of Commonwealth Energy System, Eastern Utilities Associates, and the Massachusetts munici-pal light departments who purchase power from Pilgrim I (see attach-ment B).
E0ER, with CCC, will designate communities within the abovementioned eligible service territories as the first target areas for expanding the E0ER-CCC program.
Furthermore, the program will be designed to use these funds as reasonably as possible to reduce the electricity consumption of program par-ticipants in these service areas.
III.
Program
Description:
Citizen's Conservation Corporation has developed a system of outreach by working with existing neighborhood organizations within a given community.
CCC works jointly with the organizations and provides logistical support as needed. Such support would include, but is not restricted to the following:
A)
The plan as it relates to landlords and tenants B)
Distribution of program announcement flyers C)
Conduct information meetings in the neighborhood D)
Provide application forms for prospective progran participants Upon completion of all outreach activities, the important follow-up measures are implemented.
This incluides such tasks as:
A)
Follow-up contact with landlords B)
Arrange a preliminary building walk-through n' )
Insure that all building data is collected
'1 )
Complete the landlord and tenant application forms I
t e
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E)
Establish that 50% of the tenants are eligible for fuel assistance subsidies F)
Establish that building modifications can be done cost-effectively for approximately $1/ square foot of usable space G)
Qualify the building for a technical audit or issue a building rejection CCC will deposit, in an interest bearing account of the designated bank, the amount equal to the costs of the cost-effective modifications, according to recommendedations prepared by an independent energy auditing firm.
CCC will determine in advance, through accepting bids and obtaining commitments from independent local contractors, the specific costs f or each selected multi-f amily building.
CCC will present to the bank the name of, and any relevent financial information about the owner of each selected building.
The bank will obtain any further information it requires to process a loan for the benefit of each building owner.
Funds will be issued in accordance with standard procedures for home improvement loans, with the exception being that little or no collateral will be required of the landlord to secure the loan.
CCC will make all of the arrangements with the building owners, and oversee the work to ensure performance.
CCC will contribute a por-tion of the interest earned on the deposit used to secure the loan to offset the interest charged to the building owner for the loan.
CCC, in cooperation with the participating bank, will designate the term of the loan, which will be based on achieving the goal of matching anticipated annual fuel costs, without conservation improvements, to the total cost of the debt service payments, plus the reduced fuel costs, plus the other administrative costs of the progr(
Every sonth, the bank will sonitor and collect payments from each of the building owners.
The owner will be paying a single amount to the bank, based on a partially variable formula.
The first element will be the fixed monthly amount of interest and principal on the loan.
The loan includes building modifications as well as other CCC program services.
By recovering program costs in this manner, CCC will become a self-sufficient operation indepen-dent of grant cycles.
The second element will be determined by CCC, with its consultants, and will be equal to the difference between hypothesized fuel costs without the conservation measures, and the fixed amount.
The second element will be adjusted according to degree day variations and fuel price changes.
CCC will notify the bank of such adjustments, and the bank will in turn notify the building owners.
From the amount of the second element, the bank will pay a monthly amount for fuel costs to each fuel dealer servicing each i
building; for convenience of administration, all fuel payment
d arrangements will be on a " budget" system to equalize payments over the entire calendar year.
Also from the amount of the second ele-ment, the bank will pay on a periodic basis to the tenants of each building, whose names will be supplied to the bank by CCC, an amount designated by CCC.
This amount is the " tenant rebate" which provides an incentive for the tenant to actively practice conser-vation in their homes.
Finally, through a separate contract with a local energy firm, CCC will teach tenants in selected buildings how to conserve energy.
This energy firm will monitor the program's progress, and act as a mediator between tenants and building managers regarding energy matters.
After the loan note has been repaid to the bank, the owner will receive his fuel bill directly, including the substantial 30-50%
savings over what he otherwise would have been paying.
The bank discontinues paying the fuel dealer and providing rebates to the tenants.
The deposit used to secure the loan will be available to secure another loan to a new building owner, thus creating, in effect, a revolving loan pool.
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Scalon, <EauacAu.4//s 02168 Margaret N. it. Clair um m.a 5 a*w reoruary 25,1982.
Retail Se: rice Areas of Boston Edison Company, Co onwealth Energy Systen, Eastern Utilities Associates, and various Municipalities in the Comnonwealth.which Purchase Generating Capacity from Pilgrim Unit fl.
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Bocton Edison Service Area (41)
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Acton Medfield Arlington Medway Ashland Millis 3edford Milton 3ellingham Natick 3oston Needham Brookline Newton Burlington Norfolk Canzen Sharon Carlisle Stoneham Chelsea Sherborn Dedham Somerville Dover Sudbury East Boston Walpole Framingham t Waltham Holliston Wayland t'opkinton Watertown Lexington Weston Lincoln Westwood Maynard Winchester Woburn I
Cc=nenwealth Enerrv Service Area (20)
(A) C h nvealth Electric Co=pany (3) Cambridge Electric Light Co.
New Bedford District Cambridge Acus'cnet Lakev lle Dartmouth Mattapoisert Fairhaven New 3edford Freetown Westpor:
Fivmouth District Carver Famoroke Duxbury Flymouth Kingston Fly =pton Marion Rochester Marshfield Scituate Wareham Eastern Utilities Associates Service Area 3rockton District (17)
Aven Hanever Abington Hanson 3ridgewater Norwell 3rockton
?ambroke Cohasset Rockland s
Easton Sc2.tuate East Bridgewater Stoughton Halifax West Bridgewater Whittnan Fall River District (5) ll Dighton Fall River Somerset Swansea Wastport i
1 l
Municipalities with Contracts for. Pilgrim I Nuclear Energy' (Boston Edison)
Boylston Municipal Light-Boylston Eolyoka Gas and Electric-Holyoke Hudson, Stow l
Eudson Light and Power Littleton Light and Water - Litca. econ and Boxborough Marblehead Municipal Gas Marblahead and Electric Middleborough Gas and Middleborough and Lakevilla Electric North Attleboro Municipal North Attleboro l
Electric Light Pcabody Municipal Light - Peabody and South Lynnfield Randing Municipal Light - Reading, North Reading, Lynnfield and Wilmington Shrewsbury Municipal Shrewsbury Light Secr:.ing Electric Light - Starling Tcmpleton Municipal WaNbeldMunicipal
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Wakefield Electric Wast Boylston Municipal Light Rat Boylston Wastfield Gas and Electric Westfield 1
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