ML20058M878
| ML20058M878 | |
| Person / Time | |
|---|---|
| Site: | River Bend  |
| Issue date: | 09/29/1993 |
| From: | Wetterhahn M GULF STATES UTILITIES CO., WINSTON & STRAWN |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#493-14348 OLA, NUDOCS 9310070100 | |
| Download: ML20058M878 (35) | |
Text
b f Eri ,
s*N 'l-u MiiR Utbrl UNITED STATES OF AMERICA
. NUCLEAR REGULATORY COMM,I S ,,
g 7 *1L.-
BEFORE THE /
f ATOMIC SAFETY AND LICENSIljG. BOARD,_,,,,;,; jf qt
, .w :n
- +.a. -y .
In the Matter of )
GULF STATES UTILITIES COMPANY Docket No. 50-4 5 8 - d7 5-
)
(River Bend Station) )
1 OPPOSITION OF GULF STATES UTILITIES COMPANY TO THE CONTENTIONS OF CAJUN ELECTRIC POWER COOPERATIVE, INC.
t
}
i Joseph B. Knotts, Jr.
Mark J. Wetterhahn l David M. Souders i
Winston & Strawn 1400 L Street, N.W.
Washington, D.C. 20005-3502 )
Counsel for Gulf States ;
Utilities Company '
l l
September 29, 1993 I
9310070100 930929 PDR Q
ADDCK 05000458 PDR 6gj i
TABLE OF CONTENTS INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. Commission Requirements for Admissibility of Contentions. . . . . . . . . . . . . . . . . . . . 2 i
II. The Cajun Contentions Only Relate to the Operator ,
Application. . . . . . . . . . . . . . . . . . . . 5 III. The Cajun Contentions. . . . . . . . . . . . . . . 7 A. Cajun's Proposed Contentions Are Explicitly Barred by Regulation. . . . . . . . . . . . . 7 B. Cajun's Proposed Contentions Are Otherwise Contrary to the Rationale on Which the Financial Qualifications" Rule Is Based . . . 8 C. Cajun Contention No. 1. . . . . . . . . . . . 11 D. Cajun Contention No. 2. . . . . . . . . . . . 15 E. Cajun Contention No. 3. . . . . . . . . . . . 18 i
F. Cajun Contention No. 4. . . . . . . . . . . . 20 l G. Cajun Contention No. 5. . . . . . . . . . . . 23 H. Cajun Contention No. 6. . . . . . . . . . . . 25 I. Cajun Contention No. 7. . . . . . . . . . . . 26 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . 27 l
l l
I i-i s
a TABLE OF AUTHORITIES CASES Arizona Public Service Co. (Palo Verde Nuclear Generating Station, Units 1, 2, and 3),
CLI-91-12, 34 NRC 149 (1991) . . . . . . . . . . 3, 4, 15 Arizona Public Service Co. (Palo Verde Nuclear Generating Station, Units 1, 2 and 3),
LBP-91-19, 33 NRC 397, anoeal denied on other arounds, CLI-91-12, 34 NRC 149 (1991) . . . 11 Duke Power Co. .(Catawba Nuclear Station, Units 1 and 2),
ALAB-687, 16 NRC 460 (1982), rev'd. in Dart on other arounds, CLI-83-91, 17 NRC 1041 (1983) . . 4, 16 Entercy Services. Inc. and Gulf States Utilities Company, Nos. EC92-21-000 and ER92-806-000 (Sept. 9, 1992) . . . . . . . . . . . . . . . . . 24 Florida Power and Licht Co. (Turkey Point Nuclear Generating Plant Units 3 and 4), LBP-89-15, 29 NRC 493 (1989) . . . . . . . . . . . . . . . . 8 Georcia Power Co. (Vogtle Electric Generating Plant, Units 1 and 2), LBP-91-21, 33 NRC 419 (1991),
appeal dismissed, CLI-92-3, 35 NRC 63 (1992) . . 3 Georoia Power Co. (Vogtle Electric Generating Plant, Units 1 and 2), LBP-92-32 (Nov. 17, 1992) . . . . 20 Kansas Gas & Electric Co. (Wolf Creek Generating Station, Unit 1), ALAB-424, 6 NRC 122 (1977) . . . . . . . 25 Lona Island Lichtino Co. (Shoreham Nuclear Power Station, ;
Unit 1), CLI-90-8, 32 NRC 201, (1990) . . . . . . 20 Lona Island Lichtina Co. (Shoreham Nuclear Power Station, Unit 1), LBP-91-35, 34 NRC 163 (1991) . . . . . . 4, 6, 16 Lona Island Lichtina Co. (Shoreham Nuclear Power Station, Unit 1), LBP-91-39, 34 NRC 273 (1991) . . . .. . 4, 22
- ii -
l l
o 4
Louisiana Enerav Services. L.P. (Claiborne Enrichment Center), LBP-91-41, 34 NRC 332 (1991) . . . . . . 16 Metropolitan Edison Co. (Three Mile Island Nuclear
(1983) . . . . . . . . . . . . . . . . . . . . . 14 '
Northern States Power Co. (Tyrone Energy Park, Unit 1), '
ALAB-464, 7 NRC 372 (1978) . . . . . . . . . . . 19 Portland General Electric Co. (Trojan Nuclear Plant), -
ALAB-534, 9 NRC 287 (1979) . . . . . . . . . . . 27 Public Service Company of Indiana. Inc. (Marble Hill Nuclear Generating Station, Units 1 and 2),
ALAB-316, 13 NRC 167 (1976) . . . . . . . . . . . 5, 27 Public Service Company of New Hampshire (Seabrook ;
Station, Units 1 and 2), ALAB-895, 28 NRC 7 (1988) . . . . . . . . . . . . . . . . . . . . . 9, 10 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), ALAB-920, 30 NRC 121 (1989) . . . . . . . . . . . . . . . . . . . . . 8 Public Service Comoany of New Hampshire (Seabrook Station, Units 1 and 2), ALAB-942, 32 NRC 395 (1990) . . . 4 Public Service Company of New Hampshire (Seabrook Station, '
Units 1 and 2). CLT-R8-10, 28 NFC 573 (1988),
reconsid. denied, CLI-89-3, 29 NRC 234 (1989) . . 8, 10 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), CLI-89-20, 30 NRC 231 (1989) _. . 10, 18 Sacramento Municipal Utility District (Rancho Seco Nuclear ;
Generating Station), LBP-92-23, 36~NRC 120 (1992) 16 Vermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station) , ALAB-919, 30 NRC 29 (1989) . . . 15, 22 Vermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station), LBP-90-6, 31 NRC 85 (1990) . . . 4, 8, 15 .
Wisconsin Elec. Power Co. (Point Beach Nuclear Plant, Units 1 and 2), ALAB-739, 18 NRC 335 (1983) . . . . . . 5 ,
i
- iii -
STATUTES 10 C.F.R. S 2.206 . . . . . . . . . . . . . . . . . . . . 27 10 C.F.R. S 2.714 . . . . . . . . . . . . . . . . . . . . 2, 3, 4 10 C.F.R. S 2.758 . . . . . . . . . . . . . . . . . . . . 8' 10 C.F.R. S 50.33 (f) . . . . . . . . . . . . . . . . . 8 10 C.F.R. S 50.40(b) . . . . . . . . . . . . . . . . . . 8 10 C.F.R. S 50.57(a)(4) . . . . . . . . . . . . . . . . . 8 42 U.S.C. S 2018 . . . . . . . . . . . . . . . . . . . . 25 42 U.S.C. S 2019 . . . . . . . . . . . . . . . . . . . . 25 t
MISCELLANEOUS e
49 Fed. Reg. 35,747 (1984) . . . . . . . . . . . . . . . 9, 10' 58 Fed. Reg. 16,246 (1993) . . . . . . . . . . . . . . . 27 6
)
a P
(
b k
i I
- IV -
1
)
).
UNITED STATES OF AMERICA NUCLEAR REGULATORY COBOEISSION BEFORE THE ATOKIC SAFETY AND LICENSING BOARD In the Matter.of ) [
)
- GULF STATES UTILITIES COMPANY ) Docket No. 50-458
)
(River Bend Station) )
OPPOSITION OF GULF STATES UTILITIES COMPANY TO +
THE CONTENTIONS OF CAJUN ELECTRIC POWER COOPERATIVE. INC. -
INTRODUCTION i
On September 15, 1993, the Atomic Safety and Licensing Board (" Licensing Board" or " Board") held a prehearing conference in the captioned matter during which counsel for Cajun stated that the seven contentions set forth in its August 31, 1993 filing were its final contentions. Prehearing Conference Transcript ("Tr.") l at 53. At the request of the Licensing Board, counsel for Gulf ,
States Utilities ("GSU") and the NRC Staff presented their preliminary responses to the contentions at- the prehearing :
conference. In accordance with the schedule established at the prehearing conference, GSU submits this written response to the Cajun contentions. '
In'short, Cajun has failed to satisfy-the Commission's requirements for admission of contentions. Specifically, Cajun has ;
not provided the bases for the proposed contentions, a statement of ,
alleged facts or expert opinion that support the contentions, or sufficient information to demonstrate a genuine dispute of a material issue of fact or law. In addition, Cajun's proposed
+ * . - - - - - . * ,e ,-- - - . . .
contentions either do not relate to the license amendment to reflect a change of control over GSU (" merger application") , or are clearly beyond the pennissible scope of issues before the Licensing Board. Indeed, a number of the contentions relate to contractual disputes with GSU -- claims that relate to the purported economic impact of litigation involving Cajun and GSU or the loss of contractual property rights purportedly associated with the transfer of operating authority to E0I (" operator application").
For these reasons, the Licensing Board should deny Cajun's petition for intervention and request for hearing as to both River Bend license amendment applications.
ARGUMENT I. Cou:missiqn Recuirements for Admissibility of Contentions.
The admissibility of contentions in these proceedings is to be determined in accordance with 10 C.F.R. S 2.714 (b) (2) , which provides, in part, that:
(2) Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted.
In addition, the petitioner shall provide the following information with respect to each contention:
(i) A brief explanation of the bases of the contention. i (ii) A concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing, together with references to those specific sources and documents of which the petitioner is aware and on which the petitioner intends to rely to establish '
those facts or expert opinion.
-3 -
(iii) Sufficient information (which may include information pursuant to paragraphs (b) (2) (i) and (ii) of this section) to show that a genuine dispute exists with the applicant on a material issue of law or fact. This showing must include references to the specific portions of the application (including the applicant's environmental report and safety report) that the petitioner disputes and the supporting reasons for each dispute, or, if the petitioner believes that the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the petitioner's belief . . . .
Section 2.714 (d) (2) provides that the Licensing Board shall refuse to admit a contention if:
(i) The contention and supporting material fail to satisfy the requirements of paragraph (b) (2) of this section; or (ii) The contention, if proven, would be of no consequence in the proceeding because it would not entitle petitioner to relief.
If any one of these requirements is not met, the contention must be rejected. Arizona Public Service Co. (Palo Verde Nuclear Generating Station, Units 1, 2, and 3), CLI-91-12, 34 NRC 149, 155 (1991).
These pleading rules specifically require a petitioner to explain the basis for the contention, provide a concise statement of the alleged facts or expert opinion which support the proposed contention, and provide suf ficient information to establish the existence of a genuine dispute with the applicant on a material issue of law or fact. Palo Verde, CLI-91-12, 34 NRC at 155-56; Georoia Power Co. (Vogtle Electric Generating Plant, Units 1 and 2), LBP-91-21, 33 NRC 419, 422-24 (1991), appeal dismissed, CLI-92-3, 35 NRC 63 (1992). The pleading rules do not permit the
3 i
d 4 -
r
]
filing of vague, unparticularized contentions. Duke Power Co.
(Catawba Nuclear Station, Units 1 and 2) , ALAB-687, 16 NRC 4'30, 4 6 8 (1982), rev'd. in Dart on other arounds, CLI-83-19, 17 NRC 1041 (1983); Lono Island Lichting Co. (Shoreham Nuclear Power Station, ,
Unit 1), LBP-91-35, 34 NRC 163, 167 (1991).
Moreover, it is the responsibility of the petitioner, not the Licensing Board, to provide the necessary infonnation to satisfy the basis requirements for the admission of its contentions. Public Service ComDany of New Hamoshire (Seabrook Station, Units 1 and 2), ALAB-942, 32 NRC 395, 416-17 (1990). !
Indeed, it is error for a Licensing Board to infer a basis for the petitioner's contentions when the petitioner has failed to comply with the requirement to provide a basis for the contention and to .
, i i provide sufficient information to support the contention. Palo Verde, CLI-91-12, 34 NRC at 155-56. Se_q also Lonc Island Lichting i h (Shoreham Nuclear Power Station, Unit 1), LBP-91-39, 34 NRC ;
273, 279 (1991) (Licensing Board is "not free to assume any missing information in a contention").
The rules require a showing that "a genuine dispute j exists with the applicant on a material issue of law or fact." 10 f
C.F.R. S 2.714 (b) (2) (iii) (emphasis added). Further, a contention will art be admissible where "if proven, [it] would be of no consequence in the proceeding because it would not entitle petitioner to relief." 10 C.F.R. S 2.714 (d) (2) . Sgt Vermont Yankee Nuclear Power Coro. (Vermont Yankee Nuclear Power Station) ,
I
LBP-90-6, 31 NRC 85, 91 (1990); Public Service C_qmpany of Indiana.
Im (Marble Hill Nuclear Generating Station, Units 1 and 2) , ALAB-316, 3 NRC 167, 170 (1976). Egg also Wisconsin Elec. Power Co.
(Point Beach Nuclear Plant, Units 1 and 2), ALAB-739, 18 NRC 335, 339 (1983).
The Cajun contentions fail to satisfy these pleading requirements. The plain text of the proposed contentions demonstrates the purely economic or contractual nature of the claims that Cajun is pressing in this matter. Therefore, the contentions are irrelevant and immaterial to this proceeding because they bear no relation to the scope of health or safety issues delegated to this Board for consideration by the Commission.
In addition, Cajun has failed to provide sufficient bases for any of its contentions. Finally, the contentions, even if proven, would not entitle Cajun to any relief. We discuss the materiality of the Cajun contentions to the operator application in Part II and the individual Cajun contentions in Part III below.
II. The Cajun Contentions Only Relate to the Operator Acolication.
Cajun states that it is amending its prior pleadings to "clarif [y] that it seeks leave to intervene in GSU's proposed ,
amendment related to the change in ownership of GSU and in GSU's proposed amendment to include EOI as a co-licensee with authority to operate the f acility. " Cajun Contentions at 6. Cajun's present
" clarification" was necessitated by Cajun's previous failure to
?
assert any interest or challenge any relevant aspect of the merger j application amendment such that intervention by Cajun would be permissible.1/ f The contentions proffered by Cajun do not support intervention on the merger application amendment. Indeed, the contentions set forth by Cajun, except in two possible instances, !
do not even mention the merger application and relate only to the proposed operation of River Bend by EOI. The only two instances which mention the merger application are Cajun's Contention Nos. 6 and 7. As discussed more fully below, however, these contentions are clearly immaterial and beyond the issues before the Licensing Board because they relate to ratemaking and/or antitrust matters and the enforcement of existing license conditions.
Thus, the proposed Cajun contentions cannot support Cajun's request for intervention in the merger application ,
amendment proceeding. Bald, conclusory allegations simply i
evidencing a desire to participate in an amendment proceeding are j insufficient to support intervention and contrary to the Commission's pleading requirements. Shoreham, LBP-91-35, 34 IEC 1/ This fact was pointed out by both GSU and the NRC Staff. Tr.
at 16, 41; Opposition of Gulf States Utilities Company to the Petition to Intervene and Request for a Hearing of Cajun Electric Power Cooperative, Inc., filed August 23, 1993 ("GSU i Opposition") at 2; IRC Staff's Response to Cajun's Petition to Intervene and Request for Hearing, filed August 26, 1993, at i 2-3 n.3. Cajun's proposed contentions do not correct this ;
omission.
I 6
= . - - <
e I
l 1
at 168.Z/ For these reasons, and for the reasons discussed below, l the Board should deny Cajun's request for intervention and a l hearing in the merger application proceeding.
III. The Caiun Contentions A. Cajun's Proposed Contentions Are Explicitly Barred by Reculation.
Underlying several of the Cajun contentions is the !
assertion by Cajun that EOI's financial qualifications are an issue for this proceeding. Specifically, it is Cajun's position that the Board should conduct a review of the financial qualifications of (
EOI as part of this proceeding. Tr. at 47. Cajun's demand for such a review is unnecessary, inappropriate, and contrary to the Commissions' regulations. I The operator application is clear that EOI claims no independent financial qualifications. Under the proposed amendments, EOI is not required to have such qualifications because, for purposes of financn., plant operations, EOI is simply ,
a conduit through which operating funds flow from the two electric
.itilities (GSU and Cajun) which do not require a financial !
qualifications review.
Further, a financial review of GSU or Cajun is outside i the scope of this proceeding and is expressly barred by the i Z/ Nor can Cajun cure the insufficiency of its contentions by simply including " Transfer of Ownership and Control" in the heading of its contention pleading. ;
Commission's regulations. Egg 10 C. F. R. S S 5 0. 3 3 ( f) , 5 0. 4 0 (b) , and 50.57 (a) (4) . Egg also Public Service Company of New Hamoshire (Seabrook Station, Units 1 and 2), CLI-88-10, 28 NRC 573, 600 ;
(1988), reconsid. denied, CLI-89-3, 29 NRC 234 (1989); Public Service Comoany of New Hampshire (Seabrook Station, Units 1 and 2) ,
ALAB-920, 30 NRC 121, 133-35 (1989). These regulatory provisions exempt electric utilities from the requirement that they demonstrate the financial qualifications necessary to conduct safe operation of the nuclear plant. If Cajun wishes to seek a waiver of these provisions, it must invoke the procedures of 10 C.F.R.
S 2. 758 (b) - (d) to do so. Otherwise, no intervenor may challenge a regulation, or the application of that regulation, in a specific ,
licensing proceeding. Vermont Yankeg, LBP-90-6, 31 NRC at 91 n . 9 ;
Florida Power and Licht Co. (Turkey Point Nuclear Generating Plant, Units 3 and 4). LBP-89-15, 29 NRC 493, 495 (1989).
B. Cajun's Proposed Contentions Are Otherwise Contrary to the Rationale on Which the " Financial Qualifications" Rule Is Based.
Even assuming for purposes of argument that a financial qualifications review is not barred by Commission regulations, there is no need to perform such a review here. As fully set forth in the Operator Application Amendment, dated January 13, 1993, at ,
i 12-13, the obligation for the costs of operation for River Bend i
remains as it is today -- the sole responsibility of the owners, GSU and Cajun, both electric utilities. Accordingly, the financial l qualifications of EOI are not at issue here. Therefore, gratuitous l l
statements by Cajun concerning EOI's financial status, 222, e.g.,
Cajun Contentions at 12 (EOI " thinly capitalized") , are irrelevant.
Further, the NRC's treatment of the issue of financial qualifications for electric utilities is dispositive of any assertion that GSU's financial condition, without more, constitutes a health or safety issue. Specifically, in promulgating its financial qualifications rule in 1984, the NRC eliminated any financial qualifications review for electric utilities in ,
connection with NRC operating licenses. The NRC found that for ,
electric utilities there is no proven link between financial qualifications review and safety, given that either adequate funding will be available for safe operation or that, in the l absence of funds, plant operation will be stopped. HER 49 Fed.
Reg. 35,747, 35,749 (1984).
Subsequent to the promulgation of the financial qualifications rule in 1984, the Commission and its adjudicatory boards have rejected petitioners' attempts to link financial ,
i condition with safety. For example, in Enblic Service Company of New Hamoshire (Seabrook Station, Units 1 and 2), ALAB-895, 28 NRC i i
7 (1988), the intervanors unsuccessfully sought a waiver of the i
Commission's financial qualifications rule, arguing that the i
bankrupt status of the licensee warranted a waiver of the rule. In ^
discussing the rationale behind the limitation on financial reviews, the. Appeal Board stated:
[T] he Commission pointed out that a financial ,
disability is not a safety hazard par Eg because '
the licensee is required under the Commission's regulations to cease :perating if necessary funds for safe operation are not available. Finally, it noted that concern for safe performance is not confined to those utilities with just financial problems and that safe operation is best ensured by other regulatory tools such as the NRC's inspection and enforcement process.
Seabrook, ALAB-895, 28 NRC at 13 (emphasis added). After the Appeal Board certified the question of financial qualifications, the Commission denied the waiver request. It reasoned that the underlying basis for conducting the financial review in the first place was "solelv to provide some added assurance that a license would not, because of financial difficulties, be under pressure to !
take some safety shortcuts." Seabrook, CLI-88-10, 28 NRC at 600.
The Commission then cited to its 1984 rulemaking proceeding, wherein it stated that "'{a] financial disability is not a safety hazard p_gr g_e because the licensee can, and under the Commission's regulations would be obliged to, simply cease operations if necessary funds to operate safely were not available.'" M. at 600, citina 49 Fed. Reg. at 35,749.3/
l' The Commission again emphasized that it "has consistently preferred to place its reliance on the ability of its inspectors to discern indicia of cost-cutting that could lead to a lack of safety rather than on its ability to make financial Dredictions." Biblic Service Company of New Hampshir_e (Seabrook Station, Units 1 and 2) , CLI-89-20, 30 NRC 231, 245 (1989) (emphasis added). The Commission also noted that the applicant would be required to comply with insurance and decommissioning plan requirements before the license would issue. M. These requirements apply and are met by GSU with respect to the present proceeding.
Thus, the Commission has explicitly forbidden inquity into the financial qualifications under the circumstances present here. The Board should not let Cajun now pursue an inquiry into financial qualifications as part of these license amendment proceedings.F Because Cajun has relied on a supposed lack of EOI's financial qualifications for its contentions, this Board should reject Cajun's proposed contentions.
C. Cajun Contention No. 1 states:
The proposed amendments fail to reflect the public interest and interests of co-Owners, wholesale customers and customers that may be affected by the outcome of the Cajun and Texas Litigation.
Cajun asserts that the Licensing Board should consider '
the effect of other pending River Bend litigation on the proposed amendment to permit EOI to operate River Bend. In prior memoranda filed with the Board, GSU objected to consideration of this issue because it is beyond the jurisdiction of this Board. It is well established that the issues sought to be raised by a contention must fall within the scope of issues specified in the Notice of Hearing. Arizona Public Service Co. (Palo Verde Nuclear Generating 9 On this point, the Staff's response to the Cajun petition could be read as accepting Cajun's argument that a lack of financial resources could af fect safety. Staf f Response at 6.
If so, this position is at odds with the Commission's regulations and decisions making clear that it does not rely on financial qualifications to assure safe plant operation.
As the Commission noted during rulemaking on the financial ,
qualifications rule, the licensee always has the option of plant shutdown. Cajun concedes here that EOI will shut down River Bend in the event there are insufficient funds to operate the plant safely. Tr. at 48.
1 ts
P
?
Station, Units 1, 2 and 3), LBP-91-19, 33 NRC 397, 411-12, gopeal l denied on other circunds, CLI-91-12, 34 NRC 149 (1991). Cajun fails r
to demonstrate how ics litigious activities in other fora constitute a material issue in this proceeding, i.e., a public !
health and safety or environmental concern. :
Specifically, Cajun has failed to explain how the River Bend litigation matters impact on a health or safety issue.F In prior pleadings and at the prehearing conference, the licensee has ,
shown that the responsibility for obtaining the funds for plant operation will remain with GSU and Cajun and will not be transferred to EOI. The two Droposed amendments have no effect on j that responsibility. i In its Contention, however, Cajun is asking the Board, i
among other things, to evaluate the litigation risks associated with Cajun's " Rescission Case" and " Nullity Case," and the " Texas Litigation"; to evaluate the potential net earnings loss and effect on bond ratings; as well as to predict generally the financial condition of Entergy and GSU under a panoply of potential .
F Also Cajun Contention Nos. 1 through 5 are based upon the purported injury to Cajun that will result when -- and only when -- parties adverse to GSU prevail in the River Bend ,
litigation. Sag Tr. at 24 (counsel for Cajun admitted that i the issue as to who will prevail in the other litigation is an "open question") . As Judge Cotter noted at the prehearing ,
conference, any relief given would be contingent on the ,
outcome of such litigation. Tr. at 76-77. For this reason, there is no relief that could be, or should be, entered by the i Board. Finally, the contingent nature of Contention Nos. 1 !
through 5 makes them too speculative to be admissible under !
the Commission's pleading rules.
3 i
u
i r
I l,
scenarios. According to Cajun, these evaluations are for the e
purpose of determining whether GSU will have the financial 7 resources necessary to continue to provide operating funds to River Bend. Yet, there is no demonstration as to how this litigation is .
tied to the present amendments. There are no safety implications i because, as the Commission recognized in Seabrook, a shortage of operating funds will merely cause the shutdown of the station.4/
At bottom, Cajun Contention No. 1 attempts to impose a review of the financial condition of GSU. This effort should be !
jected by the Board because, as noted above, such a financial review is outside the scope of this proceeding and is expressly barred by the Commission's regulations. ,
Nor does Cajun's lack of contractual privity with EOI result in a health or safety issue. GSU is the only River Bend Station licensee whose technical qualifications to operate River Bend have been determined by the NRC. The ultimate responsibility for the safe operation of the plant rests with GSU (and, EOI in the future). While Cajun is free to provide input into the operation :
s' At the oral argument, counsel for Cajun stated that the threat of the other litigation " call [ed) into serious question" the ability of GSU to fund EOI's operation of the plant or ability to maintain the plant in a safe shutdown condition. Tr. at
- 25. What Cajun fails to explain, however, is how or why this hypothetical situation is any different from the current situation where GSU is operating the plant. In other words, the ef fect of the litigation on GSU, and GSU's ability to fund l plant operations or plant shutdown, is unaf fected by EOI's status as the plant operator, even assuming that such assertions otherwise constitute a valid contention, which they do not.
l
of the plant, the licensed plant operator, regardless of whether it ,
is GSU or EOI, must analyze input and use its technically qualified judgment to operate the plant. The plant operators' actions are governed by the operating license and Technical Specifications as well as the underlying health and safety requirements, regardless of whether the operator has a direct contractual relationship with each plant owner.F Finally, the Licensing Board should disregard Cajun's assertion of some unarticulated public interest in the operator application amendment proceeding. It is well established that assertions of " broad public interest . . . however noteworthy, do not qualify [ petitioner) for intervention in [NRC) proceedings.
Metropolitan Edison Co. (Three Mile Island Nuclear Station, Unit 1), CLI-83-25, 18 NRC 327, 332 (1983).
3 F Similarly, GSU is perplexed by the Staff's assertion at the preliminary hearing that an owner, but not an operator (like ;
Cajun), has a specific " responsibility" for plant safety. Tr.
at 41, 69-71. With the exception of 10 C.F.R. Part 21
(" Reporting of Defects and Noncompliance"), GSU is not aware of any regulatory provisions that establish requirements that 4 an owner which is not an operator has any affirmative duties regarding plant safety. Part 21 requires certain reports by members of the board of directors of non-operating owners of information that comes to their attention of defects or a failure to comply. There is no requirement, however, that members of the board of directors of a co-owner must affirmatively seek out such information. Cajun has not cited the legal or regulatory basis for this proposed imposition of responsibility. Without such a basis, the contention fails to satisfy the Commission's standards. i l
l
- . . =. . - -
., 'h
.i t
D. Cajun Contention No. 2 states:' ,
The proposed license amendments may.
result.in a significant reduction in the margin of safety at River Bend.
In so far as-Cajun-challenges the Staff's proposed "no !
significant hazards consideration" determinations, Cajun's contention is immaterial to the issues before the Board. The "no ,
i significant hazards consideration" determination is a matter within the sole discretion of the Staff. Ee1 Tr. at 9; agg also Vermont ,
i Yankee, LBP-90-6, 31 NRC at 90-91; GSU Opposition at 8-11; Staff i Response at 9-31. !
Cajun asserts that this contention is related to !
" maintain [ing] Ithe) safe' and reliable operation of River' Bend." {
Cajun Contentions at 12. Although the contention includes the word i
" safe," it is clear that Cajun's stated interest (as a 30% co-owner I of the River Bend facility) is simply in assuring the continued output of electricity from River Bend at the lowest possible cost.
?
Cajun provides no basis to support the proposition in .r Contention No. 2 that the license amendments affect the " margin of ,
safety." Such " margin of safety" is neither defined by Cajun nor, ,
more significantly, related to compliance with the Commission's regulations or the operating license for River Bend. This omission .;
is fatal to the contention. Egg Palo Verde, CLI-91-12, 34 NRC at 155 (all petitioners must provide a " clear statement" of the basis i for the contention) ; Vermont Yankee Nuclear Power Coro. (Vermont Yankee Nuclear Power Station) , ALAB-919, 30 NRC 29, 44 (1989) 9 e
f
. l i
("when a postulated accident scenario provides the premise'for a i contention, a causative mechanism for the accident must be t described and some credible basis for it must be provided");
Sacramento Municinal Utility District (Rancho Seco Nuclear Generating Station) , LBP-92-23, 36 NRC 120,136 (1992) (the failure to provide a basis for the contention invalidates it) ; Shoreham, LBP-91-35, 34 NRC at 169-70 (failure to explain the basis for the contention renders it inadmissible) ; id. at 169-70 (same); Catawba, l ALAB-687, 16 NRC at 468 (NRC Rules of Practice do not permit "the filing of a vague, unparticularized contention").
In short, Cajun has failed to identify specifically how !
a lack of financial resources by EOI could lead to a reduction in ;
the " margin of safety." Despite direct questioning on this point ,
from Judge Lam (Tr. at 83-85), counsel for Cajun could not articulate any scenario -- much less a credible one -- whereby the
" margin of safety" would be decreased were EOI to operate River i
Bend. Specifically, counsel could not link a hypothetical lack of money with any unsafe operation by EOI. The necessary funds to ;
shut down the plant and maintain it in a safe shutdown condition ;
are the responsibility of GSU and Cajun today,.and will remain the responsibility of these two entities after the merger and the assumption of operator responsibility by EOI.E/ Sgt Louisiana l' There is a serious disjunction in Cajun's argument that "the resources of Entergy Corporation should be made available to
[GSU and Cajun) in order to maintain [] safe operation of the plant." Cajun's contentions relate, if at all, only to the (continued...) ;
l Enerav Services, L.P. (Claiborne Enrichment Center), LBP-91-41, 34
{
NRC 332, 338-39 (1991) (to be admissible. the petitioner must explain how the alleged deficiencies support the contention).
Cajun is not the licensed operator of the plant and has no say as to the ultimate issue of the continued operation of the plant from a health or safety perspective: that responsibility i
rests solely with the plant operator.2/ In contrast, a dispute l over the continued use of the facility for the generation of electricity is solely an issue to be resolved by the plant owners '
in an appropriate forum and is not an issue for litigation before the NRC. Finally, counsel for Cajun failed to explain how or why EOI's operation of the plant, as opposed to GSU's operation, I affects this hypothetical scenario. In other words, Cajun has no i more or less right today to direct GSU to take certain actions with ;
E'(... continued) amendment application to permit EOI to operate the plant.
Cajun's request for relief does not relate to the. operator application. Rather, the relief is directed at fundamentally altering EOI's relationship with Entergy.
E' At the prehearing conference, counsel for Cajun stated that [
the safe operation of River Bend may be af fected by EOI's '
operation of the plant because Cajun may not " permit" the plant to be shut down. Sag Tr. at 24 (Cajun, "as a 30 percent owner in the plant who wants the capacity out of the plant, no doubt would oppose the shutdown of the plant and it's unclear as to whether or not the shutdown would be allowed"); id. at 84 (Cajun's lack of consent would delay the shut down).
However, there is no question that the licensed operator has the authority to shut down the plant to protect the public ,
health and safety, regardless of whether Cajun has consented '
to such a shutdown.
t respect to plant operations than it will have after the license amendment has issued and EOI is operating the plant.
Interestingly, Cajun has not challenged the technical qualifications of EOI to operate the plant. As noted by GSU in [
prior memoranda, EOI is currently operating four other nuclear plants in the Entergy System under the same financial relationship ,
with the owners sought to be established for River Bend. !
Cajun Contention No. 2 unjustifiably presumes that Cajun or others will prevail in the litigation against GSU related to River Bend. Just as Cajun's assertion of economic injury is too speculative to support Cajun's standing, so is the same injury similarly too speculative as a basis for its contention.E' E. Cajun Cont.ention No. 3 states:
The proposed license amendment cannot be approved withoctt Cajun's consent. -
Cajun asserts that the Board should determine whether Cajun has " consented" to the filing of the operator application amendment. This is necessary, according to Cajun, to ensure that, ,
in accordance with the Joint Ownership Participation and Operating Agreement dated August 28, 1979, as amended, (" Joint Operating El GSU does not agree that a victory by Cajun or others in their litigation relating to River Bend would necessitate the shutdown of River Bend. Even if GSU lost all of the other litigation and, in addition, was forced into bankruptcy, that would not, in and of itself, mandate shutdown of the plant.
Indeed, the bankruptcy of Public Service Company of New Hampshire did not prevent it from obtaining a full-power license to operate the facility. Seabrqgh, CLI-89-20, 30 NRC at 245.
-,,,u-
+e-in -
Agreement"), River Bend is being operated in Cajun's "best !
interest." Cajun Contentions at 13. This is not a health or safety issue; therefore, it is not material to the license amendment issues before the Board. Even assuming that the Joint L Operating Agreement requires Cajun's " consent, " Cajun's interest is ;
protected by its contractual rights and its remedy lies in an action under the contract. f Moreover, the Board should reject this issue as inappropriate for this forum. There is no authority for resolving issues of state contract and agency law in license amendment proceedings.W Indeed, the Commission has steadfastly refused to become involved in such matters. Sag, e.g., Northern States Power CA_ (Tyrone Energy Park, Unit 1), ALAB-464, 7 NRC 372, 375 (1978)
("The requirements of State law are beyond our ken; such matters ,
are for the State regulatory commission").
In addition, Cajun's statement that continued operation of River Bend is in its best interests misses the nark. The
& Like Cajun's request that the Board evaluate the legal risks and potential financial impact of the other litigation, the present request that the Board resolve disputed issues of state law should give the Board pause. As Judge Cotter noted at the prehearing conference, Cajun is asking the Board to issue a decision based upon a very uncertain contingency, i.e., a decision based upon the assumption that Cajun or others will prevail in litigation involving River Bend. GSU submits that the Joint Operating Agreement is clear that it has the authority, as the sole operator of the plant, to seek an amendment to permit EOI to assume operation of River Bend.
To the extent that Cajun believes that such an amendment violates its contractual rights with GSU, Cajun has remedies l
for any alleged breach of the contract.
l l
i
.i
.. -t j
Commission does not have the authority to mandate operation of the I plant. Lona Island Lichtino Co. (Shoreham Nuclear Power Station,
.{
Unit 1), CLI-90-8, 32 IRC 201, 207 and 208 n.4 (1990). Cajun has f failed to identify how the issue of its consent to the operator application raises a valid health or safety concern.
i Finally, Cajun Contention No. 3 is also speculative in i i
that Cajun asserts that the plant "may" no longer be run in its i i
best interests. f F. Cajun Contention No. 4 states: }
l The proposed license amendments will l adversely af fect Cajun's rights regarding l the operation of River Bend. -l i
The remedy sought pursuant to this contention, according to Cajun, is the imposition of conditions that will " protect l Cajun's rights as a thirty percent co-owner of River Bend." _I_d . -i l
The purely contractual nature of Cajun's concern in this matter -i could not be more clear. The Commission has expressly held that j such matters are beyond its jurisdiction. Georola Power Co.
(Vogtle Electric Generating Plant, Units 1 and 2) , LBP-92-32, (Nov. ;
17, 1992), slip ap. at 3-4 ("it is settled law that this agency does not protect purely economic interests because they are beyond the zone of interests protected by the Atomic Energy Act of 1954, as amended" (footnote omitted)). Egg A1.gg GSU Opposition at 14-17 (and cases cited therein). Accordingly, matters relating to Cajun's contractual interests in River Bend are not material to this proceeding. ;
i
r f
Importantly, Cajun Contention No. 4 rests on Cajun's i assertion that granting EOI the authority to operate River Bend, so as to result in a " relationship, very different from that which Cajun negotiated, is totally unreasonab3a and is not in accordance with the JOPOA or good utility practice." Cajun Contentions at 15.E' Once again, Cajun attempts to place this Board in the position of determining the intent of the parties when they signed the Joint Operating Agreement; interpreting the terms of the Joint Operating Agreement; and deciding what constitutes " good utility nractice." Cajun's failure to cite any support for its position that the Licensing Board may undertake such an inquiry is r
telling.H' Nowhere does Cajun connect the operation of River Bend by EOI with any purported health or safety issue. Sag Cajun Contentions at 14-17. This failure to identify a health or safety issue, much less support the basis for any such contention with ,
sufficient information, is fatal. The reason for this glaring l omission is obvious: Cajun does not have any legitimate health or H' Cajun also asse .ts that Contention No. 4 is based upon the lack of GSU's authority to execute agreements for EOI to operate River Bend. Cajun Contentions at 17. Once again, this state law issue is beyond a Licensing Board's jurisdiction and expertise.
E' Indeed, nowhere in its supplement does Cajun provide any case la - support for the extraordinary expansion of Licensing Board jurisdiction sought here.
safety concerns with respect to EOI's operation of River Bend.H/
Cajun does not dispute EOI's demonstrated record of nuclear power plant operational experience. Egg GSU Opposition at 5-6.
Moreover, the two proposed amendments will not af fect the ownership of River Bend, or otherwise dilute Cajun's ownership rights. GSU and Cajun will continue to own River Bend, receive electricity, and share responsibility for the cost of the operation of the facility in proportion to their ownership shares, 70% and 30%, respectively.
Finally, the " detrimental impacts" set forth by Cajun provide no support for validating Cajun Contention No. 4. Cajun's asserted rights vis-a-vis plant operation involve no health or ,
safety concern. In any event, those rights will remain, as they are today, defined by the terms of the Joint Operating Agreement i
E' On this critical point the Staff also misses the mark with respect to the issue of Cajun's relationship with GSU and EOI.
The Staff assumes, without support, that Cajun's allegations of a " lessening influence" and a " limitation on [EOI's]
liability for operation of River Bend," are connected to safe operation of the plant. Staff Memorandum at 6. Cajun has never made such a connection. Sgg Vermont Yankee, ALAB-919, 30 NRC at 51 n.30 (failure to describe a causative accident i scenario and to provide a credible basis for the contention renders it merely " conjecture") . Indeed, the opposite is true
-- Cajun has stated on at least two occasions that it "does not necessarily oppose" the transfer of operational authority to EOI. Cajun Supplement at 12; Cajun Contentions at 17.
Because Cajun has not asserted any health or safety implications from the proposed transfer of operational authority, the Board should not assume, absent other evidence, such implications. Sag Shoreham, LBP-91-39, 34 NRC at 279 (Licensing Board is "not free to assume any missing information in a contention").
r l
4 that Cajun entered into with GSU.E' If Cajun believes the costs
~
of EOI's operation of River Bend may be excessive. Cajun has rights and remedies defined by its contract with GSU to challenge such costs. Egg e.g., Joint Operating Agreement at Article Eight, Section 8.5.4 (" Correctness of Costs"). Cajun's speculation as to potentially increased costs from the "ill-defined" nature of the relationship among Entergy af filiates and potential for additional administrative costs is idle speculation insufficient to support a valid contention.M/
G. Cajun Contention No. 5 states:
The proposed license amendments cannot be approved without certain license conditions.
Cajun requests the imposition of certain license conditions allegedly necessary "to protect Cajun's interests as a thirty percent co-owner of River Bend." Cajun Contentions at 17-
- 18. Contention No. 5 is not a valid contention but, rather, simply M/ Under the Joint Operating Agreement, Cajun and GSU agreed that GSU would act as the agent for Cajun and that GSU would have exclusive responsibility and may exercise its absolute iudgment over the construction, operation, and maintenance of River Bend. Joint Operating Agreement at Article Four.
Article 8.2 states that: "GSU shall have plenary authority to .
manage, control, maintain, and operate River Bend . . . and i shall take all steps which it deems necessary or appropriate for that purpose."
M/ Cajun's vague assertion of a limitation on EOI's liability for gross negligence or willful misconduct makes no sense.
Cajun's rights with respect to plant operation are set forth in the agreement that gave operational authority to GSU -- the Joint Operating Agreement. Any agreement by GSU with EOI cannot diminish Cajun's contractual rights with GSU with respect to liability for operation of the plant.
I a prayer for relief.B Cajun has failed to demonstrate with specificity how the absence of such conditions violates NRC i
regulations or existing license conditions, or why such conditions are otherwise necessary to protect public health and safety.
In addition, the eight license conditions proffered by Cajun may not be imposed by an Atomic Safety and Licensing Board ;
because they merely govern contractual relations between the parties. For example, to the extent that Cajun enjoys access to plant documents (such as INPO Reports) today, that same access will necessarily be afforded Cajun after EOI assumes operating I responsibility for River Bend. Sgg Joint Operating Agreement at Article Seven, Section 7.2 ("Information") (GSU shall keep the Co-owners informed as to planning and progress of construction, acquisition, completion, ooeration, maintenance, and decommissioning of the Joint Facility" (emphasis added)); ang also Entercy Services, Inc and Gulf States Utilities Comoany, Nos. EC92-21-000 and ER92-806-000 (Sept. 9, 1992) (Leventhal, J.) (FERC recognized that the merger would not affect Cajun's current contractual rights to information and access to River Bend).W B Once again, Cajun purports to discuss both amendments under Cajun Contention No. 5, but the substance of Cajun's discussion and the requested license conditions relate only to the operator application amendment.
W Indeed, at the prehearing conference, counsel for Cajun admitted that GSU's obligation to supply information and audits was contractual. Tr. at 27.
t b
d
~
.) '
j l
1 i
Cajun's proposed license conditions are obviously directed at protecting Cajun's financial or contractual interests in River Bend. But this Board's jurisdiction covers health and j l
safety issues. Tr. at 28 (statement of Judge Cotter). i i
Accordingly, these license conditions are not - material to this- .'
i proceeding and cannot form the basis of a valid contention.
l t
H. Cajun Contention No.-6 states:
l The proposed ownership amendment should {
be approved only with conditions adequate i to remedy its adverse impacts on the i Cajun /GSU Interconnection Agreement. j Cajun requests a hearing to consider the impact of the l
merger between GSU and Entergy on Service- Schedules, the Power l
Interconnection Agreement (" PIA") , construction obligations, access ,
rights, cost sharing mechanisms, and other matters relatino solely ]
to ratemakina. These issues are solely within the purview of the I Federal Energy Regulatory Commission ("FERC"). Egg 42 U.S.C.
SS 2018, 2019; Kansas Gas & Electric Co. (Wolf Creek Generating l Station, Unit 1), ALAB-424, 6 NRC 122, 128 n.7 (1977)' (concerns ;
about rates are not within the scope of interests protected by the {
t AEA). Cajun admits as much in its memorandum by stating that these i l
reviews are normally conducted by the FERC. Cajun Contentions at !
18-19. Sag also Tr. at 34. ,
In f act, Cajun raised these very issues with the FERC and -
they were considered by the agency with primary jurisdiction over I
M i
l f
4 l
such matters.M That the FERC found no need to schecLie a hearing on these purported issues is of no consequence. here.&
P If Cajun now believea that the FERC has erred in deciding these ratemaking issues, Cajun may seek judicial review. However, such ratemaking issues are not within the jurisdiction of the NRC.
I. Cajun Contention No. 7 states:
The River Bend license conditions must he enforced.
Cajun asserts that the Licensing Board should " evaluate" whether GSU is complying with License Condition No.10, relating to the provision of transmission services, and License Condition No. 12, relating to the provision of certain delivery points for electrical power. Cajun Contentions at 21. Contention No. 7 is ,
also not a valid contention but yet another prayer for relief.
Despite Cajun's disclaimer of not raising antitrust issues in this ;
proceeding (ggg Cajun Contentions at 6), Contention No. 7 seeks enforcement of the antitrust conditions of the River Bend Operating License. ,
J B To the extent Contention No. 6 raises antitrust issues, such matters are not within the health and safety jurisdiction of this Board and are, therefore, not material to this proceeding. Egg Response to Contention No. 7, infra.
& Nor is the fact that Cajun has failed to convince the FERC that a hearing is necessary on the purported rate issues raised by the GSU merger with Entergy of any consequence. Egg Cajun Contentions at 19; gag also Tr. at 33 (counsel for Cajun stated that "unfortunately the FERC in its wisdom determined that operational issues were not germane to its consideration !
in the merger proceeding") . Cajun may appeal any denial of its requests for hearings on the rate issues in accordance with the FERC rules of practice and applicable statutes.
F The antitrust implications (if any) of the merger of GSU and Entergy is the subject of a separate Federal Register notice.
SAq 58 Fed. Reg. 16,246 (1993). The Commission has long held that antitrust matters are not proper issues in a proceeding convened to consider public health and safety. Marble Hill, ALAB-316, 3 NRC at 170-71.
Finally, if Cajun believes that antitrust conditions in the River Bend license are not being met, its remedy is to petition for an enforcement action in accordance with 10 C.F.R. S 2.206.
J Portland General Electric Co. (Trojan Nuclear Plant), ALAB-534, 9 NRC 287, 289-90 n.6 (1979). Sgt also Tr. at 36-37.
CONCLUSION After a full and fair opportunity to submit its contentions, Cajun has failed to state a single valid contention a
f
d regarding either of the two license amendments sought by GSU. For this reason, the Licensing Board should deny Cajun's petition for intervention and request for hearing in its entirety.
Respectfully submitted, WINSTON & STRAWN Joseph . Knotts, Jr.
Mark J. Wetterhahn David M. Souders 1400 L Street, N.W.
Washington, D.C., 20005-3502 (202) 371-5700 Counsel for Gulf States Utilities Company September 29, 1993 l
l
.(
a c: ,r.
zit go N 5. e 1 UNITED STATES OF AMERICA
- NUCLEAR REGULATORY COMMISSION BEFORE THE '93 00T -1 P3 233 "- #
- 'l ATOMIC SAFETY AND LICENSING BOARD ddli [ { "
In the Matter of )
M " #* "
) Docket No. 50-458 GULF STATES UTILITIES COMPANY )
)
(River Bend Station, Unit 1) )
)
CERTIFICATE OF SERVICE I, Mark J. Wetterhahn, hereby certify that on this 29th day of September, 1993, I served on the following, by first class mail, postage pre-paid, (except for those designated by "*" who were served by Federal Express Delivery) copies of " Opposition of Gulf States Utilities Company to the Contentions of Cajun Electric Power Cooperative, Inc."
B. Paul Cotter, Jr., Esq. Edwin J. Reis, Esq.*
Chairman, Atomic Safety Ann P. Hodgdon, Esq.
and Licensing Board Mitzi A. Young, Esq.
U.S. Nuclear Regulatory Office of the General Counsel Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington,
~
D.C. 20555 Dr. Richard F. Cole Atomic Safety and Licensing James D. Pembroke, Esq.*
Board Thomas L. Rudebusch U.S. Nuclear Regulatory Duncan, Weinberg, Miller &
Commission Pembroke, P.C.
Washington, D.C. 20555 1615 M Street, N.W.
Suite 800 Dr. Peter S. Lam Washington, D.C. 20036 Atomic Safety and Licensing Board Victor J. Elmer U.S. Nuclear Regulatory Vice President - Operations Commission Cajun Electric Power Washington, D.C. 20555 Cooperative, Inc.
10719 Airline Highway Docketing and Services Branch Baton Rouge, LA 70895 U.S. Nuclear Regulatory Commission Donald W. Clements Washington, D.C. 20555 Gulf States Utilities Company P. O. Box 2951 Beaumont, Texas 77704
r
-l Robert B. McGehee, Esq.
Wise Carter Child & Caraway 600 Heritage Building P. O. Box 651 Jackson, Mississippi 39205
. A/,
fa XM/9 Mark'J. (tei>fiahn r
.Winston Strawn Counse or Gulf States Utilities Company September 29, 1993