ML20062A995
| ML20062A995 | |
| Person / Time | |
|---|---|
| Site: | Byron  |
| Issue date: | 07/30/1982 |
| From: | Whicher J DEKALB AREA ALLIANCE FOR RESPONSIBLE ENERGY, SINNISSIPPI ALLIANCE FOR THE ENVIRONMENT (SAFE) |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML20062A998 | List: |
| References | |
| NUDOCS 8208040284 | |
| Download: ML20062A995 (15) | |
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, UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 00tMETED UWt
( BEFORE THE ATOMIC SAFETY AND LICENSING BOARD ,,
.), ' q 50 -3 F
In the Matter of ) ,-
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l' CO.fM0tMEALTH EDISON COMPANY ) Docket Nos. 50-454 l'
) 50-455 f (Byron Station, Units 1 and 2) )
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s s , DAARE/ SAFE'S REPLY TO RESPONSES OF COMM0tMEALTH r , .,, EDISON AND NRC STAFF TO ROCKFORD LEAGUE OF L' OMEN pwe.
VOTERS' PETITIONS FOR WAIVER OR EXCEPTION d/ i L,r . On July 6,1982, the Rockford League of Women Voters filed i
'.' , two petitions seeking waiver of or exception to NRC regulations 4 .) f i
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which generally exclude issues of financial qualifications, need
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for power and alternative energy sources from operating license 3 proceedings. On July 22 and 26, respectively, Commonwealth Edison ("CE") and the NRC staff responded to the League's petitions.
DAARE/ SAFE hereby replies to those responses.
' DAARE/ SAFE is also filing herewith a motion asking the Board to consider the League's petitions jointly with the similar
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- ,3 petitions being filed herewith by DAARE/ SAFE.
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A. The League's Petitions Are Properly Supported by Affidavits.
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/ CE's argument (Response at 3-5), that the League'
( petitions are not properly supported by affidavits, is not wocthy of serious consideration. In addition to an affidavit of counsel, il of the 13 exhibits supporting the League's petition relating
[g to financial qualifications ("FQ Petition") are themselves 820804028405000454 820730 1 -:PDR O ADOCK PDR m
a f fidavits , sworn expert testimony, or pre-filed and subsequently sworn expert testimony.*/ Likewise, two of the three exhibits supporting the League's petition relating to need for power and alternative energy sources ("NFP Petition") are pre-filed expert testimony in state regulatory commission proceedings. The League's petitions thus amply satisfy the affidavit requirement's purpose t, ensure that petitions are supported by competent and probative evidence .
B. The League's FQ Petition Demonstrates A Prima Facie Case of Special Circumstances.
- 1. CE's Ability To Finance The Construction Of Byron Is Within The Scope Of This Operating License Proceeding.
The NRC staff argues that the " primary concern" raised by the League's exhibits - whether CE is financially able to complete construction of Bryon - is "outside the' scope" of this opero.ing license proceeding. (Response at 6-7.) That question was, according to the staff, " decided at the construction permit stage" and may not now be "relitigate {d] ." Id. at 7.
b Exhibit M is an affidavit; Exhibit D is an excerpt from a transcript of sworn testimony; and Exhibits A-C, I and K are
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pre-filed expert testimony, subsequently sworn to in Illinois Commerce Commission ("ICC ') proceedings . Exhibits E, H and J are also pre-filed expert testimony before the ICC, not yet sworn when the League filed its petitions, but subsequently sworn as reflected in the transcripts attached to DAARE/ SAFE's petitions. Although the NRC staff was apparently unaware that all this testimony had been or soon would be sworn (see Staff Response at 4 n. 7), CE certainly knew, since CE is a party to the ICC proceedings - indeed, two of the League's exhibits (A and B) consist of the testimony of CE's own witnesses, s
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r This position confif cts with prior NRC representations as construed and relied upon by the United States Court of Appeals for the Seventh Circuit in refusing to compel a 52.206 proceeding to revoke the construction permit for Byron. Rockford League of Women Voters v. NRC, 679 F.2d 1218 (7th Cir. 1982).
As described by the Court, the League's request for a $2.206 p ro cee ding, filed in November 1980, alleged a number of safety issues relating to Byron "and that Commonwealth Edison did not have enough money to solve the safety problems that the League had identified." 679 F.2d at 1219.
The Court noted that in. denying the League's reques t, the Director of Nuclear Reactor Regulation " stated that all of the issues raised by the League were being or would be considered in I the pending proceeding on Commonwealth Edison's application for an operating license." Id.
d (Emphasis added.)$/
Thus, the Court understood the Director to represent that "all" issues raised by the League's petition - including CE's
- alleged inability to finance safe construction of Byron - would
- he considered in the operating license proceeding.
In re fusing to compel n 62.206 proceeding, the Court relied i
i on this understanding:
The Commission is in the midst of one proceeding dealing with the Byron plant, the licensing l
! */ The Court added that the Director also " rejected the League's suggestion that consideration of these issues would be prejudiced by the investment that Commonwealth Edison would have sunk in the construction of the plant by the time the Commission was ready to act on its application for an oper-i ating license, or by the alleged inability of Commonwealth Edison to spend more money on safety." 679 F.2d at 1219.
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r proceeding, in which the safety issues that trouble the League will be considered and in which hearings are about to start .... We cannot say that the Commission must launcE another proceeding on the same issues at the same time ...
Id. at 1222. (Emphasis added.)
In other words , the Court understood that the League's safety concerns - including the impact on public safety of CE's difficulties in financing construction of Byron - would be considered in the operating license proceeding, and on that ground refused to order a 52.206 proceeding to address the "same issues."
If these issues are now ruled outside the scope of this operating license proceeding, the Court will have been seriously misled. The NRC staff cannot have it both ways - it cannot deny a $2.206 proceeding on the ground that financial issues will be considered in the operating license hearing, only later to declare those very issues "outside the scope" of the operating license hearing. Even absent any judicial involvement, such a
" catch-22" would be unfair. When, as here, a court has relied on the initial representation to deny judicial relief, the NRC is duty-bound to honor its commitment. To do otherwise would be an affront to the Court.
Accordingly, the Board should rule that issues of CE's financial dif ficulties in completing construction of Byron are l
l within the scope of this operating license proceeding.
- 2. The League's FQ Petition Demonstrates Prima Facie That CE Lacks The Requisite Financial Qualifications.
To trigger this Board's certification to the Commission un de r 10 CFR 5 2. 758(b) , the League need present only a " prima facle" case, i.e., evidence which, if unrebutted by other evidence, shows the existence of "special circumstances."
On all three of the League's financial arguments - CE's financial straits (FQ Petition at 4-6), ICC rate rulings (id. at 6-8), and cost over-runs (id. at 8-10) - neither CE nor the NRC staff offer any evidence to rebut the League's extensive expert testimony. CE's Response devotes less than one page (p. 10) to general assertions about the ICC, and says nothing at all in response to the League's other two financial points. Although the NRC staff goes through the motions of addressing each of the I.eague's financial contentions (pp. 6-10), each staff argument boils down to a claim that the League has not sufficiently linked CE's acknowledged financial difficulties to any threat to public health and safety (id. at 8, 9, and 10.)
Thus the League has more than made out a prima facie case on its three financial arguments. The only question genuinely at issue is whether the League has shown a sufficient " link" between CE's financial straits and some resultant threat to public health and safety. To that issue we now turn.
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- 3. CE's Financial Difficulties Jeopardize Public Health and Safety.
The NRC staff's principal argument is that the League's FQ Petition "has not shown that a nexus exists between the Applicant's alleged financial difficulties and the safety of the By ron facility. " (Staff Response at 5-6; see also id. at 8, 9, 10, 10-13.) This argument, in turn, rests on two basic assumptions:
(a) that CB would respond to financial difficulties not by " cutting corners" in construction but by postponing, cancelling or selling part of Byron (id, at 7); and (b) that NRC inspection and enforce-ment efforts suffice in any event to protect the public health and safety (M. at 11).
i CE's argument likewise invokes these two assumptions. (CE Response at 8, 9-10.) CE goes further, however, claiming that the League's arguments on these points "have already been consi-dered and rej ected by the Commission." (Id. at 8.)" In contrast to CE 's overs tatement, the NRC staff suggests merely that the League's arguments "were considered in generic terms in the Commission's rulemaking." (Staff Response at 7.) DAARE/ SAFE agrees: the Commission did not consider the specific context of l
CE and the Byron plant. It is precisely that specific context -
l the "special circumstances" here - which calls for an exception to the general rule that financial qualifications will not be
' considered in operating license proceedings.
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7-(a) The Cancellation Presumption The NRC staff's assertion that CE would respond to financial difficulties by postponing, cancelling or selling part of Byron is based on actions elsewhere by other utilities (Staff Response at 7) and on an NRC financial reviewer's statement that th e s ta f f would so "as sume . " (Petersen Affidavit at 2.)
But this Board need look neither to other utilities nor to nere assumptions. Instead, it may and should consider CE specifically, and how CE has in fact responded to its financial difficulties. Such an inquiry reveals a " prima facie" case that CE's response at Byron - as at other CE plants - has been precisely to " cut corners" in an effort to complete construction despite CE's financial difficulties.
This is suggested in part, as the League's petition notes, by CE's " psychological and institutional" resistance to cancellation o f By ron , CE's current freeze on nuclecr-related employment, and CE's shoddy construction practices at LaSalle. (FQ Petition at 10- 11.)
ttore broadly, as amplified in DAARE/ SAFE's petition filed herewith, CE has responded to its financial difficulties by two different strategies. At LaSalle and Byron, CE's approach has been to speed up construction - and in the process to cut corners.
(DAARE/ SAFE FQ Petition at 5-90.) In contrast, CE's approach at Braidwood has been to " stretch out" construction. (Id. at 6 note.) /
- / Resulting safety violations at Braidwood are beyond the scope of this reply and of DAARE/ SAFE's FQ Petition relating to Byron.
8-The result of CE's " speed up" approach at LaSalle and Byron has been repeated, documented " corner cutting" - especially in quality Assurance and Quality Control. (Id. at 5-10; see also League's Answers to CE Interrogatories for League Contention lA, filed July 6,1982, at 1A-1.) As noted in DAARE/ SAFE's FQ petition, cutting corners on QA/QC saves substantial sums in the short run: not only is the QA/QC budget itself reduced, but far more importantly, CE's skimping on the QA/QC avoids expensive delays, repairs and retrofits . (Id. at 6 .) Thus, as explained th ere in , the primary " nexus" or " link" between CE's financial difficulties, on the one hand, and jeopardy to public safety, on the other, is the fact that CE's financial difficulties lead CE to attempt to rush LaSalle and Byron into service. To acconplish that objective, CE shortchanges QA/QC and pressures its contractors to do likewise.
Ilhile CE's QA/QC shortcutting thereby alleviates CE's current financial difficulties, the long run result is intolerable:
jeopardy to the public health and safety.
(b) Inadequate NRC Inspection And Enforcement Efforts With Respect to CE.
The NRC staff response argues that even " assuming NRC inspection efforts fail to identify every noncompliance, it remains the most direct means" to protect the public. (Response at 11.)
This is not very comforting. In this instance, the staff's
" assumption" is not an assumption but an obvious, documented truth: NRC inspection efforts indisputably do not detect every
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9 noncompliance. (DAARE/ SAFE FQ Petition at 11.)
Gi.ven that recognition, the staff's assertion that NRC inspections are the "most direct" means - even if true - is beside the point. The issue is not what means are the best, but what means are sufficient. NRC inspections might well be the "most direct" means, yet still fail to provide reasonable assurance that CE can or will build and operate Byron safely. Examination in this operating license proceeding of CE's financial qualifications is a necessary additional means to protect public health and sa fe ty .
In fact, when one examines the specific context here -
the utility involved (CE), the NRC inspection and enforcement arm (Region III), and Byron itself - one finds ample cause for concern that NRC inspection and enforcement efforts do not suffice to p ro tec t the public.
The "special circumstances" relating to the utility and the NRC cnforcement arm involved here are demonstrated by the very NRC investigative report cited by CE in its own defense. (CE Response at 10-11, attaching July 19, 1982 letter from James G.
Keppler to Cordell Reed, enclosing NRC Region Ill Reports Nos.
50-373/ 82-35 (DETP) and 50-374/82-06 (DETP).) That report, contends CE, " demonstrates the lack of merit regarding the substance of the League's claim, regarding the impact on safety o f Edison's alleged financial difficulties." (CE Response at 9.)
In fact, as detailed in DAARE/ SAFE's FQ Petition filed herewith, that report ignored significant, documented evidence of a substantial QA breakdown with respect to the HVAC equipment
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4 at LaSalle - a breakdown which went undetected by NRC inspectors, was not adequately corrected because CE (despite knowledge of the breakdown) pressured the llVAC contractor to meet plainly unrealis-tic QA deadlines, and which was reported in detail to Region III in ample time to be addressed in the investigation. (DAARE/ SAFE FQ Petition at 7-9.)
This report was so inadequate - and the allegations it failed to investigate so significant -
that when Region III's recommendation for a full-power license for LaSalle came before the NRC on July 27, the Commission voted to delay granting the license until at least August 5, pending review of these allegations. (Chicago Tribune, July 28, 1982, p. 1.)
It may well be that on August 5, or on some later date, the Commission will determine that these particular allegations need not prevent operation of LaSalle. Regardless, this entire episode demonstrates the "special circumstances" of inadequate inspection and enforcement by Region III with respect to CE, and of CE's financially motivated rush to bring its plants on line, t.1d resultant CE QA/QC shortcutting. Indeed, CE's reported public reaction to even the brief delay required by the NRC for '
l review of the LaSalle HVAC allegations was that it will cost
" millions o f dollars . " (Id.)
l There is also extensive evidence of continuous - and contin-f uing - CE QA/QC shortcutting at Byron set forth in DAARE/ SAFE's
! FQ petition filed herewith. This includes at least one major QA/QC breakdown resembling the HVAC problem at LaSalle in a i number of disturbing respects - including the NRC's failure to detect longstanding noncompliance. (DAARE/ SAFE Petition at 10-11.)
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. Thus, specific evidence relating to NRC Region III, CE and Byron demonstrates precisely what the staff claims not to be aware of: " instances in which a utility's financial constraints or limitations led to decisions or actions detrimental to safety."
(Petersen Affidavit, attached to NRC Staff Response, at 2.)b/
In short, the League (and DAARE/ SAFE) have made out a
" prima facie" case that the purpose of the new NRC regulations on financial qualifications - to eliminate an issue not generally likely to affect public health and safety - would not be served by applying those regulations to this particular proceeding. The "special circumstances" present here call for a waiver of or exception to those regulations, and this Board should certify the League's petition to the Commission for a ruling.
C. The League's NFP Petition Demonstrates A Prima Facie Case of Special Circumstances.
The NRC staff argues that the League's NFP Petition is "both procedurally and substantively unjustified" under the ALAB-678 decision readmitting the League to this case. (Staff Response at 2.) Neither claim has merit.
Procedurally, the League fiied its NFP Petition and contentions on July 6, 1982, based primarily on expert studies first made
- / Relying on the same affidavit, the NRC staff Response contends that the League has provided "no specification as to the amount" of operating expenses associated with unresolved safety issues, "nor a showing that the Applicant could not meet the costs.
when necessary." (Staff Response at 11.) For a specification of amounts , including specific amounts for each unit at Byron, see the League's FQ Petition, Exhibit J at 15, 17. As to CE's financial difficulties, see page 5 above.
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. available on June 22 (NFP Ex. A) and June 23 (FQ Ex. E), 1982.
This significant new evidence postdates both the Byron FES (April 1982) and the ALAB-678 ruling (June 1982). In these circumstances, the League can hardly be faulted for not filing its petition and contentions sooner.
Substantively, the League's strong prima facie case that there is no need for the power to be generated by Byron stands whoily unrebutted and is not in genuine issue.
The only remaining issue posed by the responses of the NRC staff and CE is whether operation of Byron is environmentally and economically superior to alternative energy sources. On this issue, too, the League's " prima facie" case is sufficient to require certification of the question to the Commission for decision.
The staff's major argument - that Byron would replace older, more expensive fossil plants - relies on general studies considered l by the Commission in issuing the new regulations. (Staff Response at 8.) The principal flaw in this argument is its failure to take account of the "special circumstances" here: CE's contractual l obligation to buy far more coal than it will need in the future, whether Byron is operated or not (League FQ Ex. E at 12-13), and CE's special difficulties in utilizing yet another large nuclear plant for " load following," given the unusually high proportion of its output already generated by nuclear units (id. at 8-11).
These "special circumstances" - not considered by the Commission in its generic rulemaking - completely alter the comparative N
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. economics of Byron vs. CE's older coal plants. (Id. at 12-14, 17.)
The staff's argument is further flawed for failure to consider the additional "special circumstance" that Byron is not - as the Commission assumed generically in the rulemaking - complete.
Ilundreds of millions of dollars remain to be spent before completion of Byron. (League FQ Ex.11 at 11, Schedule 3, p. 1.) In contrast, CE's older fossil plants are already completed and capitalized.
Any theoretical fuel cost advantages of Byron are thus further erased by its enormous remaining capital costs.
The staff's further argument, that conservation and cogen-eration would first be used by CE to take off-line its older fossil plants (Staff Response at 8), likewise ignores the effect of CE's coal contracts, its load following problems, and the fact that Byron is not yet complete. In contrast to the generic assumptions made by the Commission in the rulemaking, the "special circumstances" here are such that it would be economically rational for CE to use conservation and cogeneration, not to displace operating coal plants, but rather to avoid the expense of completing and operating Byron.
This point is underscored by the testimony of cogeneration expert John Martorella. Even under " business as usual" conditions -
i.e., with no affirmative effort by CE to encourage cogeneration -
i CE has underestimated the cogeneration possibilities for its (League NFP Ex. A, Seniors Exh. 6.0 at 2, service territory. 3.)
The amount of CE's underestimate - up to 100 MW (id. at 9) -
could by itself entirely eliminate CE's proj ected " shortfalls" i
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.- of 41 ffW and 70 MW below its desired reserve margin during the 1985 and 1990 peak demand periods. (FES-OL at 2-6.) If CE were to take serious steps to promote cogeneration, the amount of electricity which could be produced by this environmentally and economically superior alternative to Byron could of course be far greater.* /
CE's argument that nuclear plants are environmentally superior to coal plants (Response at 14) is similarly flawed, i.e.,
it ignores altogether the potential for conservation and cogener-ation and CE's contractual and " load following" needs to retain a significant percentage of fossil fuel capacity in any event.
CE's economic argument - that Byron "should" produce relatively cheap electricity sometine in the 1990's (Response at 13) -
likewise ignores CE's coal contracts, its load following needs, and the fact that huge sums remain to be spent before Byron could even begin operation.
In sum, the League has made a " prima facie" case that there io no need for the power to be generated by Byron and that there exist environmentally and economically superior alternatives to By ron . Thus the purpose of the new regulations - to exclude issues which would not tilt the NEPA cost-benefit balance -
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The Governor's Office of Consumer Services is currently pre-paring, and anticipates having by September, expert testimony on the amount and cost of cogenerated electricity which could be stimulated in CE's service territory, as well as additional testimony on load management and other relatively inexpensive, non-polluting conservation technigues. (" Governor's Office of Consumer Services' (on behalf of Seniors') Statement of Planned Studies for Phase II of the Construction Case,"
Illinois Commerce Commission No. 80-0706.
.o would not be served by applying the new regulations in the "special circumstances" of this case.
CONCLUSION For the reasons stated in the League's petitions and in the
, fo regoing , the League has made a " prima facie" case that the purposes of the new NRC regulations on financial qualifications, i
need for power and alternative energy sources would not be served by applying them in this case. The Board should therefore certify the question of waiver or exception to the Commission for its decision.
DATED: July 30, 1982 Respectfully submitted, Douglass W. Cassel, Jr.
Jane M. Whicher by: a. .
ObD.
Jane M. Whichhr Attorneys for DAARE/ SAFE with respect to issues of financial qualifications, need for power and alternative energy sources Douglass W. Cassel, Jr.
Jane M. Whicher 109 North Dearborn Chicago , IL 60602 (312) 641-5570
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