ML20063L484
| ML20063L484 | |
| Person / Time | |
|---|---|
| Site: | River Bend  |
| Issue date: | 02/15/1994 |
| From: | Wetterhahn M GULF STATES UTILITIES CO., WINSTON & STRAWN |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20063L475 | List: |
| References | |
| OLA, NUDOCS 9403070037 | |
| Download: ML20063L484 (32) | |
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.s hi+ C 94 FEB 16 P3 :55 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION tr. ci r <
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BEFORE THE COMMISS_T_OJ In the Matter of )
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GULF STATES UTILITIES COMPANY ) Docket No. 50-458-OLA
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(River Bend Station) )
BRIEF IN SUPPORT OF GULF STATES UTILITIES COMPANY'S APPEAL I. INTRODUCTION l i
In accordance with 10 C.F.R. S 2.714a, Gulf States Utilities company ("GSU") hereby appeals the " Memorandum and Order (On Petition to Intervene)," LBP-94-3 (" Order"), dated January 27, 1994, issued by the Atomic Safety and Licensing Board (" Licensing Board") in the captioned proceeding. The Licensing Board ruled (
that Cajun Electric Power Cooperative, Inc. (" Cajun" or !
" Petitioner") had standing to intervene and admitted one of the seven contentions (i .e. , Contention 2) proffered by Petitioner. As a result, the Licensing Board granted Cajun's petition for leave to intervene and request for hearing.
Because Petitioner lacks standing to intervene in this ,
I proceeding and because contention 2, the only contention admitted by the Licensing Board,F fails to satisfy the legal standards for F Herein, GSU does not address the remaining contentions proffered by Cajun. For the reasons' stated in the Order and (continued...) ,
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, admissibility of contentions, set forth in Nuclear Regulatory
-l Commission ("NRC" or " Commission") rules codified at 10 C.F.R. S i
2.714, the Licensing Board erred as a matter of law in granting l Cajun's petition to intervene and request for hearing. In !
accordance with 5 2.714a, the relief requested in this appeal must i
be granted, and the Licensing Board's' Order wholly reversed,- if either the standing or contention admissibility findings were not i in accordance with NRC requirements.
Specifically, as discussed in Section IV.A below, Petitioner lacks standing to intervene in the instant proceeding because its asserted concerns do not f all .within the " zone of- interests" l protected by the Atomic Energy Act and cannot be fairly traced to the license amendments at issue. As further demonstrated in Section IV.B, Contention 2 does not satisfy the standards for j admission of contentions specified in 10 C.F.R. $ 2.714 (b) (2) (i)-
(iii). In addition, the Licensing Board failed to analyze the interest and contention requirements for each of the two license-amendment proceedings separately. This led to a .d_e facto consolidation of the two proceedings without consideration of the requirements of 10 C.F.R. S 2.402. Therefore, GSU urges that the Order be reversed and this proceeding terminated. -l l'(... continued) in GSU's Opposition to Cajun's Contentions (dated September l 29, 1993), as well as during the Prehearing Conference, Cajun's remaining proposed contentions were properly rejected by the Licensing Board.
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o 'f In addition to the legal inadequacies of the Licensing Board's ;
order, policy considerations further underscore the importance of l Commission review of the instant appeal. If precedent is ;l i
established allowing petitioners to intervene in NRC adjudicatory l proceedings on the basis of purely economic interests and-issues, then the flood gates of litigation will be opened. The co-owners j i
of nuclear power stations increasingly will use the Commission's l adjudicatory processes to gain an advantage in commercial litigation. The unacceptable result will be a misdirection. of Commission focus and resources away from the resolution of I
legitimate health and safety issues. Furthermore, if petitioners ,
are allowed to intervene in operating license amendment proceedings . :
simply on the basis of their pecuniary interests, then the Commission's apparent policy of encouraging owners to employ ;
experienced nuclear plant operators at their facilities will-be i
effectively undercut by the prospect of costly litigation. l Moreover, the Licensing Board's improper admission of Contention 2 also could interfere with the Commission's orderly processes l regarding decommission funding and ownership arrangements by.
substituting a licensing board's ad hoc decisionmaking for generic, ,
Commission-supervised policymaking through rulemaking.2/ f s
i 2' The Commission currently is considering such processes. See infra note 26. !
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II. BACKGROUND q
. .i A. Nature of the Proceedina l On January 13, 1993, GSU filed two separate and distinct j i
applications with the NRC relating to Facility. Operating License. !
l NPP-47 (" operating license") for the River Bend Station - Unit 1 !
(" River Bend"). The first application sought the NRC's consent, j t
pursuant to 10 C.F.R. S 50.80, to a change of control over GSU and -
a conforming amendment to the operating license (in accordance with
'l NRC Staff practice) to reflect the change in control over the licensee (" merger application").F The second application sought ;
i a license amendment to reflect a change in the licensed operator of 3 the facility from GSU to Entergy Operations, Inc. ("EOI"), a i subsidiary of Entergy Corporation ("Entergy") '(" operator. '{
application").F The second application was'an adjunct of the '!
1 first; however, its approval by. the NRC was not a condition ,.
-t precedent to the merger of GSU and Entergy.
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i The . URC published two' separate notices in the Federal l Reaister, one for each application, on July 7, 1993 (58 Fed. Reg. !
36,423, 36,435, 36,436) providing an opportunity for interested members of the public to request a hearing and file a petition for -
leave to intervene in connection with each requested license [
amendment. Each notice contained a separate proposed determination ,
F See License Amendment --
Change in Ownership of Licensee, dated January 13, 1993.
F See License Amendment -- Change in Licensed Operator of the t Facility, dated January 13, 1993. ,
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a that the amendment involved no significant hazards consideration.
The NRC issued the requested license amendments on December-16, 1993, pursuant to.the Sholly provisions contained in 10 C.F.R. S-
- 50. 91 (a) (4 ) , GSU and EOI implemented the license amendments on N December 31, 1993, upon consummation of the GSU/Entergy merger. l Under the amendments, all of the Limiting Conditions for j Operation, Limiting Safety System Settings, and Safety Limits l i
specified in the Technical Specifications remain unchanged. The- l amendments do not change the ownership of the f acility. Nor do the l amendments change the source of funding for plant operation.
Rather, the merger application simply recognized the' decision by Entergy and GSU to combine their businesses and the operator application reflected the decision for EOI to operate River Bend.
i On August 6, 1993, Cajun filed a single documentl#
'f (hereinafter, " Cajun Petition") addressing the proposed finding of ;
no significant hazards consideration, as well as. petitioning for. .:
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intervention and a hearing, in response to the operator ;
application. As stated by Petitioner, the Cajun Petition only :
pertained to the proceeding involving the' amendment to authorize. !
EOI to operate River Bend: "this proceeding was initiated by the e
l' See " Cajun Electric Power Cooperative, .Inc. 's, { sic) Comments, .
Petition for Leave to Intervene, and Request for Hearing and l Conditions, on Notice of Consideration of ' Issuance of- i Amendment to Facility Operating License, Proposed No. !
Significant Hazards Consideration Determination and Opportunity for Hearing," dated August 6, 1993. >
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filing on January 13,.1993, by [GSU], which is a joint licensee of River Bend Nuclear Station with Cajun, of~GSU's recuest to amend the Piver Bend' Facility Operatina License NPF-47, to include as a !
1icensee fEOI1 . . . . " Cajun Petition at 1-2 '(emphasis added).2' Upon prompting by 'the Licensing Board at the Prehearing Conference, ,
Cajun, in an effort to expand the scope of its petition, expressed some generalized concerns with the merger application. However, a careful analysis of Cajun's pleadings and position on the record reveals that it is relying solely on its assertions regarding the operator application to supply the elements necessary for
- intervention, i e., the interest and contention requirements of S 2.714. The Licensing Board's reasoning . in its Order tacitly :
1 accepts this. ,
h B. Factual Backaround and Related Proceedinas !
GSU does not dispute the description of.the parties set forth in Section II of the Order. See Order.at 3-4. A number of points !
deserve emphasis, however. Cajun is an electricity generation and l l
transmission company that supplies 12 Louisiana cooperatives. In addition to other generating facilities, Cajun owns 30% of River s'
On August 17, 1993, Cajun filed an " Amendment" to its original Petition. Once again, Cajun's arguments pertained only to the operator application proceeding; " Cajun noted that it would raise additional matters with the Commission regarding the proposed amendment to the River Bend Operating Licensc nFF-47, which is intended to effect the transfer of operational !
responsibilities for River Bend from [GSU) to [EOI). . .
Cajun hereby amends its Comments to place before the Commission the full panoply of its concerns regarding the ,
proposed license amendment." Amendment at 1-2. 1
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Bend. Order . at 3. It has held this ownership interest since 1980 ;.
when the River Bend construction permit was amended to recognize j Cajun's ownership interest in the facility. GSU owns the remaining l 70% of River Bend. At the time Cajun filed its Petition, GSU [
I operated the facility for itself and on behalf of Cajun pursuant to ' !
a joint agreement under which GSU was entirely responsible for the ]
i safe operation of the facility. !
There are several other facts relevant to the present ,
proceeding that must be discussed in order to paint a balanced and j complete picture. First, as noted above, neither of the amendments !
affect the ownership of River Bend. GSU and Cajun continue, as in the past and as approved by the Commission, to own River Bend and ,
share responsibility for the facility's operating costs and the electrical output of the unit in proportion to' their ownership '
shares. After the merger, as recognized by ' the Commission in I t
Operating License Amendment No. 69, GSU no longer is a publicly owned utility.2/ Rather, GSU now conducts its business as a wholly !
i' owned subsidiary of the newly reconstituted Entergy Corporation, with its electric operations fully integrated into those of the !
Entergy System. It is important to note, however, that GSU is +
still operated as an independe.nt utility with its own revenues, expenses, assets, and liabilities. In addition, pursuant to l operating License Amendment No. 70, EOI, a subsidiary of Entergy j I' See Amendment No. 69 To Facility Operating License No. NPF-47, ,l Dkt. No. 50-458, December 16, 1993. j i
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i Corporation, has assumed GSU's role as. licensed operator.and has complete responsibility for safe operation of the facility under the terms of a River Bend Station Operating Agreement executed by EOI and GSU. Order at 3 . h' S Prior to issuance of the requested operator amendment, River Bend was operated solely by GSU pursuant to a longstanding agreement between GSU and Cajun. Under the Joint Ownership Participation and Operating Agreement ("JOPOA") dated August 28, 1979, as amended, 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 iudament over the construction, operation, and maintenance of River Bend.2' This fact.is important because Cajun had already delegated the responsibility for safe operation to the entity that was technically qualified.
z l' S_ee e Amendment No. 70 To Facility Operating License No. NPF-47, Dkt. No. 50-458, December 16, 1993.
2' Article 8.2 states that: "GSU shall have plenary authority to manage, control, maintain, and operate River Bend . . .-and :
shall take all steps which it deems necessary or appropriate ,
for that purpose." See Joint Ownership, Participation and j Operating Agreement Among its other
("JOPOA") at 57.
delegated powers is:
The execution and filing with the NRC and other l regulatory agencies having jurisdiction of ;
applications, amendments, reports, and. other documents and filings required in connection with licensing and other regulatory matters which GSU in >
its absolute iudament deems necessary or ,
appropriate, including but not limited to applications for extension or renewal of the terms of the Operating Licenses from the NRC. ;
Jf. at 26 (emphasis added).
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i The operating license application named GSU as the operator j and described GSU's technical qualifications for such'a role. The application did not seek any operational role for Cajun, which had delegated operating responsibility to GSU and, accordingly, [
contained no information on the technical- qualifications for 5 Cajun. Ultimately, in issuing the operating license for River Bend, the NRC found that GSU had the. technical qualifications to operate the plant, but, consistent with the application, made no such finding for Cajun. See Operating License at 1. Importantly, f none of Cajun's pleadings assert that its employees have the technical qualifications to operate a nuclear plant, or have raised [
safety issues during the entire period of operation. Neither has Cajun raised any specific examples of safety issues which would l arise because of operation by EOI instead of GSU. Cajun's j pleadings also provide no specific examples of how Cajun's access I
to the facility is changed because EOI is now the operator.
Moreover, it .is significant that EOI, as a subsidiary of i Entergy, is currently operating four other nuclear units: Arkansas- ;
Power & Light Company's Arkansas Nuclear One, Units 1 and 2
("ANO"); Louisiana Power & Light Company's Waterford Unit 3
("Waterford") ; and System Energy Resources, Inc. 's Grand Gulf Unit 1 (" Grand Gulf"). These facilities have been operated by EOI for f their owners under essentially the same contract as ' is now -in ~ j effect between GSU and EOI. EOI's operation of these other j facilities is important because there can be no question that it f
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~ has the technical qualification be discussed below, Cajun'does notL f seriously dispute this in its pleadings.
t Also important is a proper understanding of the "other'-
litigation" that has been initiated by Cajun against GSU. Cajun' !
would have the Licensing Board believe that there is no question- f that Cajun will prevail in its other litigation. Fee, e.a., Cajun.
Petition at 11 ("when Cajun prevails in the litigation . . . ").. A l more balanced view of the "other litigation" demonstrates that the chance of Cajun prevailing and obtaining "at least $1.6 billion" is entirely too speculative and remote to be of any consequence in. ,
determining the interest of the petitioner. Indeed, GSU is defending such. suits vigorously and has in fact counter-sued Cajun.
Moreover, the first of Cajun's civil actions is not . presently .
scheduled for trial' until later this year. The time for a definitive judgment in any of the litigation if either ' side exercises its rights to appeal' from any judgment -- a ' likely.
scenario --
is apt to be years in the future.N of interest to :
the Commission, Cajun has not asserted in its pleadings that GSU is not presently financially qualified. .
There is no proffer or reasoning to support the proposition !
that the NRC should assume for purposes of this proceeding that F Cajun has not identified a trial.date for the action filed by Southwest Louisiana Electrical Membership Corp. and Dixie.
Electric Membership Corp. in the Western District , of' Louisiana. See Cajun Petition at 19.
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Cajun will obtain a $1.6 billion judgment against GSU and/or-recision/ nullification of the JOPOA.W As discussed below,- to
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permit intervention based upon lawsuits previously initiated by a j petitioner would encourage litigants, as part of their litigation- !
strategy, to expand the " battlefield" to the NRC and raise what are
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essentially economic issues before the NRC. The Licensing Board's decision would allow petitioners to satisfy the NRC's requirements f regarding standing merely by filing a lawsuit'and thereby tying u'p .
the NRC's adjudicatory boards, as well as the Commission itself, '[
l with issues that have no relation to public health and safety. ,
e Cajun has failed to assert how GSU's merger with Entergy or ,
the operation of River Bend by EOI will adversely affect its i
interest in this proceeding. Even if Cajun were_ fully successful >
in its litigation against GSU, by Cajun's own admission the most i
drastic consequence would be the safe shutdown of River Bend. But l whether or not River Bend continues to produce . electricity is .
F Certainly, Cajun cannot be asserting that GSU's statements l filed with the Securities and Exchange Commission alerting its shareholders' and potential investors of the existence and :
potential ramifications of the Cajun litigation is recognition &
by GSU that Cajun's actions have merit. See Cajun's Petition !
at 27. GSU is only complying with legal and fiduciary -!
disclosure requirements. Any attempt to infer from such i disclosure an admission that Cajun will prevail is without merit. Moreover, the fact that the Federal' Energy Regulatory. ,
Commission ("FERC") heard testimony, inter alia, of the potential impact _of the litigation is of no consequence here as it only underscores that the agency with primary jurisdiction over economic consequences has considered the potential impact of the litigation on rates and that Cajun has j already had a hearing on its claims. In any event, FERC i approved the merger between GSU and Entergy. l l
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solely an economic concern that will'be affected by the outcome of ;
the litigation, not by the issuance of the license amendments. The I
NRC's interest is in the saf e operation and, if necessary, the safe shutdown of the plant. As will be discussed below, Cajun's litigious activities do not constitute an interest within the scope ;
of those cognizable by the NRC, i.e., public health and safety and environmental concerns.
III. ISSUES ON APPEAL In accordance with 10 C.F.R. S 2.714a, the issues on which an' appeal is taken by GSU are:
i (1) Whether the Licensing Board has erred in concluding that
" Cajun has met the requirements for standing." Order at ,
27; and (2) Whether the Licensing Board has erred in admitting Contention 2 "regarding a potential safety risk caused by under-funding of the plant's operator. . . " Order at 27. l A positive answer to either of these issues would require the reversal of the Licensing Board's admission of Petitioner as an intervenor and would negate the need for a hearing. i IV. ARGUMENT l
For the reasons set forth below, the Commission should reverse the Licensing Board's Order and deny Cajun's request for a hearing and petition for intervention. Two reasons support this outcome.
First, Cajun lacks standing to participate in either the operator or merger proceeding. Second, Cajun has failed to proffer a single admissible contention. As a result, the Order issued by the q
i Licensing Board in this proceeding departs from the requirements for intervention set forth in 10 C. F.R. S 2.714 (a) (2) and should be i
reversed. '
i A. The Licensing Board lias Erroneously Determined That Cajun !
Satisfies the Commission's Recuirements for Intervention
- 1. The Economic Injury Alleged by Cajun and' Recognized By The Licensing Board Is Not .t Encompassed By The " Zone of Interest" Protected by the Atomic Energy Act Or .
Cognizable Under Commission Regulations As a Permis_s_ible Basis For Intervention The Licensing Board's " Analysis of Standing," Order at 9-10, is fundamentally flawed at the outset due to a lack of precision in I
defining the scope of the instant proceeding. By rejecting the fact that two -- not one -- license amendment applications are at issue and collapsing both amendments into a single proceeding, the Licensing Board erroneously concluded that separate standing-(and a separate admissible contention) need not be established in connection with each license amendment.
The Licensing Board simplistically stated that _ "the two ,
amendments appear to be different facets of the same undertaking and do not require separate findings." Order at 9. It further explained "there is one nuclear power plant, one license being amended, and one part owner of that plant seeking to intervene." ,
i Lc!. The Licensing Board thereby failed to analyze the facts of each specific application before it applied the well-developed Commission precedents regard bg interest to each. Carried'to its
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logical conclusion,- under the Board's analysis, Cajun would be
-permitted to intervene in any matter involving River- Bend, regardless of whether it affected a specific Cajun interest in a manner cognizable under the Atomic Energy Act. Such a precedent ,
would extend to all co-owners of nuclear power plants.
The Licensing Board's observation that " Gulf States' view of the matter could double the litigation burden and ' costs, an unhappy result this agency normally seeks to avoid," id. at 9-10, completely ignores the appropriate mechanism under the Commission's rules for achieving the result desired by the Licensing Board,.
i.e., the consolidation requirements found in 10 C.F.R. S 2.402.
The Commission's rules permit consolidation only after a licensing board initially makes the findings for intervention in each-separate matter and thereafter weighs the criteria for consolidation. Use of the appropriate procedure is not an academic question. It has real consequences in this proceeding. It was, therefore, error for the Licensing Board not to have considered the ,
interest element separately for each of the amendments.
Assuming, arguendo, that the Licensing Board's' findings regarding standing and contention admissibility are correct, these -
findings must be examined in the context of the merger proceeding, i
1.e., the merger of GSU with Entergy. The Licensing Board's analysis of standing involves the purported ef fect of the naming of a new plant operator, id. at 22, but makes no finding that the
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i a:P merger of GSU with Entergy - conf ers an interest upon Cajun. As-noted previously, while one outcome of such a merger would be the opportunity to have EOI operate the facility, as a matter of law, the merger could have proceeded absent a-grant of the operator amendment. Moreover, Contention 2 relates to purported safety issues associated with operation of River Bend by EOI and'does not .
raise a contention relevant to the merger amendment. Thus, CSU should not be subject to a hearing on its merger with Entergy if Cajun has not satisfied the dual intervention requirements of standing and admission of a valid contention. The Licensing Board's erroneous analysis would subject the merged companies to an unwarranted hearing and the uncertainty that goes along with it.
Properly defined, the issue is whether the econ'omic interests (h, the alleged contract rights) asserted by Cajun are 4
sufficient to confer standing under the Atomic Energy Act.in each amendment proceeding at issue. The Licensing Board correctly ;
states that "[j)udicial tests of standing are applied in NRC proceedings to determine whether a petitioner has sufficient interests to be entitled to intervene." Order at 4. In accordance P
with judicial concepts of standing, a petitioner must show: (1)-
that he has personally suffered a distinct and palpable harm that ,
constitutes injury-in-fact; (2) that the injury fairly can be !
traced to the challenged action; and (3) that the injury is-likely to be redressed by a favorable decision. Luian v. Defenders of-I 1
Wildlife, U.S. , 112 S.Ct 2130, 2136 (1992);U' Sierrq i
Club v. Morton, 405 U.S. 727, '40-41 / (1972); Shoreham-Wadinct River- !
Central School District v. NRC, 931 F.2d 102, 105 (D.C. Cir.1991) ; l l
Dellums v. NRC, 863 F.2d 968, 971 (D.C. Cir. 1988). See A]g2 j Metrooolitan Edison Co. (Three Mile Island Nuclear Station, Unit ,
1), CLI-83-25, 18 NRC 327, 332 (1983) (petitioner must show that (a) the action sought in a proceeding will cause " injury-in-fact,"
and (b) the injury is arguably within the " zone of interests" protected by statutes governing the proceeding.)
Purely economic concerns, devoid of a meaningful nexus to safe l plant operation or shutdown, are not redressable by the NRC because ,
such concerns are beyond the " zone of interests" protectec by the f
Atomic Energy Act in a licensing proceeding. It is a long-held Commission view that a nuclear power plant's possible effect on a i D' In Luiau, the Court elav ated on the three elements for i standing: .
First, the plaintiff must have suffered an !
" injury in fact" -- an invasion of a legally--
protected interest which is (a) concrete and .
particularized . . .; and (b) " actual or imminent, not ' conjectural' or ' hypothetical,"
. . . . Second, there must be a causal ,
connection between the injury and the conduct complained of -- the injury has to be " fairly l
. . . trace (able] to the challenged action of ,
the defendant, and . . . th(e] result (of] the q independent action of some third party not i before the court;" . . .. Third,'it must be ;
"likely," as opposed to merely " speculative," l that the injury will be " redressed by a favorable decision."
112 S. Ct. at 2136 (citations and footnote omitted).
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" utility's solvency," is not encompassed by the Atomic Energy Act's
" zone of interests." Phila'delphia Elec. Co. (Limerick Generating l Station, Unit 1 and 2), ALAB-789, 20 NRC 1443, 1447, citina Public Serv. Co. of New Hampshire (Seabrook Station, Unit 2) , CLI-84-6, 19-NRC 975 (1984). It has never been successfully disputed that j
"[t]he protected interests under the Atomic Energy'Act relate to !
I radiological health and safety." Detroit Edison Company (Enrico :
Fermi Atomic Power Plant, Unit 2), LBP-78-11, 7 NRC 381, 385, j aff'd, ALAB-470, 7 NRC 473 (1978);U# -Portland General Elec. Co.
(Pebble Springs Nuclear Plant, Units 1 and 2), CLI-76-27, 4 NRC 610, 614 (1976) (alleged " interests" in avoiding the possibility of ;
-l future rate increases are not within the zone of interest protected by the AEA); Houston Lichtina and Power Co. (Allens Creek Nuclear Generating Station, Unit 1), ALAB-582, 11 NRC 239, 242 (1980) i (future economic interest in real estate does not confer' standing to intervene under the AEA or NEPA) ; Shoreham, LBP-91-1, 33 NRC at 22-23 (" economic concerns are more properly raised before state I economic regulatory agencies"); id. at 30 (a stated interest in obtaining sufficient amounts of electricity at reasonable rates is insufficient to confer standing) . While Cajun's economic interests may have been sufficient- to confer standing in an . antitrust proceeding, had one been initiated, its economic interest simply s
does not amount to a safety concern. I I
i D' In Fermi, the Licensing Board found that "the protected -l interests under the Atomic' Energy Act relate to radiological l health and safety." 7 NRC at 305.
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-l The Licensing Board's resolution of the " zone of interests" i test is based on the promise that " Cajun's stated interest in this !
I proceeding . . . is to protect its property, River Bend, from j l
radiological hazards arising from unsafe plant operation." Order i at 11. This premise is incorrect. Cajun's stated interests in this proceeding are purely economic in nature and are without a f legitimate nexus to " unsafe plant operation." There simply is no l basis upon which to conclude that Cajun's interest is to avoid .{
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" damage to property from nuclear-related accidents." Order at 11. l i
See Petition at 11, 18, 19, and 23.
i Cajun has not asserted that EOI will f ail to operate the plant i safely on its behalf. Rather, it alleges that, should the-lawsuit it initiated be successful, GSU hypothetically would not be in a ,
position to provide funds to EOI to operate River Bend. This f purely hypothetical situation would exist, however, even if GSU f still operated the facility.H' Thus, Cajun's interest is not. l sdversely affected by the amendment authorizing EOI.to operate the !
I unit. Cajun's interest is affected only if its co-owner is unable {
to meet its financial requirements, a matter unchanged by the i
amendments at issue. Looking at the situation objectively, Cajun's >
t interest is at least equally protected by an experienced nuclear {
i operating company whose judgments regarding safe operation are made l M' While a wholly owned subsidiary of Entergy, GSU will continue to function -- as before -- as an independent entity with'its l;'
own sources of revenue resulting from the operation of.its i power plants and the conduct of its other businesses.- .See suora Section II.A.
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9 independently from GSU and which must protect its reputation for safety-consciousness before the NRC. t Unlike the petitioner in Voatle, an analogous proceeding insof ar as it involves the proposed transfer of authority to a' non-l owner licensee, Cajun is without standing because its economic interests are not within the " zone of interests" protected by'the Atomic Energy Act. Specifically, in Voatle, the petitioner predicated his alleged injury upon contacts in the area near the plant (i.e., a periodic residence in a house located approximately [
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35 miles from Vogtle) and the assertion that management of the i
proposed plant operator lacks the character, technical competence, l
and integrity to safely operate the facility. Georcia Power Co. .
t (Vogtle Elec. Generating Plant, Units 1 and 2), CLI-93-16, 38 NRC' !
25, 33 (1993). Thus, the Voatle petitioner's economic / property e
interest was directly coupled with allegations of intentional corporate misconduct that increased the possibility of a I radiological accident and "otherwise represent an unsafe operating condition." Id. at 34.U' l 1 M' In ruling that petitioner had standing, the Commission stated I that "we simply cannot conclude.that-[ petitioner) would not l face increased risk of radiological injury from a ' formal i transfer of operating responsibility to an organization whose !
high-ranking officers are allegedly willing to violate safety. i regulations." Voctle, 38 NRC at 37. These factors,.or any similar allegations, are missing in the instant proceeding.
VoatLq, therefore, is distinguishable.
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Cajun's stated " interest" in this proceeding is " maintaining i i
the safe and reliable operation of River Bend." Cajun Petition at 11, 17. Although giving an obligatory nod to the word " safe," it i is clear in light of the remedy Cajun seeksW that Cajun's interest, as a 30% co-owner of the River Bend facility, is simply in assuring the continued output of electricity from River Bend at the lowest possible cost to the co-owners. Cajun's interest is I devoid of the necessary nexus to safe plant operation that links '!
its property / economic concerns to the " zone of interests" protected ,
by the Atomic Energy Act. The threat of harm to Cajun's [
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" interest," as set forth in its Petition, is that the-outcome of [
i the pending litigation, rather than issuance of the operator amendment, may force the plant to be shut down -- a purely economic concern unrelated to safety, and purely speculative at that. l Whether or not River Bend continues to produce electricity is (
of no concern to the NRC as long as the plant, if and when it can. f no longer be operated for any reason, can and will be shut down and :
maintained safely in a shutdown condition. As the Commission held .;
i in Shoreham, "LILCO is legally entitled under the Atomic Energy Act j i
and our regulations to make, without any NRC approval, an l irrevocable decision not to operate Shoreham. The alternative of. ;
i W As its relief, Cajun requests that "the NRC impose a license ;
condition "which would (a) require Entergy to extend its l credit to, indemnify and otherwise financially support GSU in l the event GSU loses the Cajun Litigation or the Texas l Litigation, and/or (b) require Entergy to fund EOI operation ,
of River Bend to ensure its safe and reliable operation !
. . . . Petition at 30.
{
i
,- - - I
' resumed operation' -- or other methods of generating electricity - .j
- are alternatives to the decision not to operate Shoreham and a_re j thus bevond the commission consideration." Lona Island Lichtina l Co. (Shoreham Nuclear Power Station, Unit 1) , CLI-90-8, 32 NRC 201, i
207 (1990) (emphasis added)). The Commission has "no authority to
~'
mandate operation of the facility." Id. at 208 n.4. Moreover, there is no change in ownership of or financial responsibility for ,
River Bend as a result of either the merger amendment or ~the !
t operator amendment. Should Cajun prevail in its litigation, the l
funds that are available to support safe shutdown of River Bend would be independent of the entity operating the. facility. Thus, I Cajun has not raised an issue as to the safe' shutdown or operation l of River Bend such as would constitute a cognizable interest under i i
NRC regulations governing intervention and judicial concepts'of f standing.
I
- 2. The Injury Alleged By Cajun And Relied l Upon By The Licensing Board Cannot Be !
" Fairly Traced" To. The Proposed {
Amendments And Is Too Speculative To j Support Intervention j 4
In attempting to satisfy the " zone of interests" and injury- l in-fact requirements prerequisite to intervention, both Cajun and l
the Licensing Board have engaged in groundless speculation. As a result, the allegations of injury cannot be " fairly traced" to the !
r I
operator amendment at issue here. Simon v. Eastern Kv. Welfare i i
Richts Oro. , 426 U.S. 26, 41-42 (1976). As the- Supreme Court added.-
later, "this requirement of a ' personal stake' has come to be !
- - . . - . -- .-m., _ . ,
understood to require not only a ' distinct and palpable injury' to the plaintiff, Warth v. Seldin, 422 U.S. 490, 501 (1975), but also a ' fairly traceable' causal connection between the claimed injury i I
and the challenged conduct." Duke Power Co. v. Carolina ,
Environmental Study Group, Inc., 438 U.S. 59, 72 (1978), citina Arlincton Heichts v. Metropolitan Housina Dev. Coro. , 429 U.S. 252, ,
261 (1977); Linda R.S. v. Richard D., 410 U.S. 614 (1973).
At bottom, the Licensing Board concluded that "[t]he amendment naming a new plant operator will install an alleaediv under-funded operator whose lack of funding may jeopardize the safe-operation of }
River Bend. According to Cajun, potential under-funding stems from ,
multiple legal actions against Gulf States that could cause f
considerable financial difficulty, including bankruptcy." Order at j 12 (emphasis added).E' But whether or not the plant is shut down f does not depend on EOI assuming responsibility for operation of '!
River Bend or even GSU becoming a wholly owned subsidiary of 'l Entergy, i.e., the issuance of either amendment. As previously noted, the responsibility for the costs of plant operation will remain with GSU and Cajun to the same extent as before and will not ;
i
-)
E' Similarly, Cajun asserts that if it is successful in ' its !
"other litigation," then River Bend micht be forced to shut l down. It is ironic indeed that Cajun is suing _ GSU in a !
different forum and complaining here that a judgment entered in that suit will have a significant economic impact giving .
rise to an interest in this proceeding. 1 j
i f
h
l
. .J f
be transferred to EOI.E Neither of the amendments have an effect
- on that responsibility.
l i
In addition to being unrelated to the amendments at issue, '
Cajun's purported injury --
f.e., plant shutdown due. to underfunding of EOI -- is too speculative to be the basis for intervention. It is well-established that an abstract, ,
1 hypothetical injury is insufficient to establish standing to intervene. Ohio Edison Co. (Perry Nuclear Power Plant, Unit 1), ;
LBP-91-38, 34 NRC 229, 252 (1991). Compare Cleveland Electric Illuminatina Co. (Perry Nuclear Power Plant, Unit 1, LBP-92-4, 35 .
NRC 114, 123 (1992) (An alleged future injury which is 4
realistically threatened and immediate, and not merely speculative, l may establish standing to intervene).
In this proceeding, the Licensing Board has relied on Cajun's assertion that its future success in "other litigation" may cause i
injury sufficient to satisfy NRC intervention requirements.
Cajun's - purported " injury" is the type of speculative assertion ;
that has been' ruled inadequate to establish standing. For example,.
allegations of cost overruns for plant construction have been i 1
deemed too speculative to support intervention. Enrico Fermi, 7 l l
i I
E The operator amendment application makes it clear that EOI .l claims no independent financial qualifications.
J
4-NRC at'392.B' See also Three Mile Island, 18 NRC at 333 (alleged injury from further participation of a certain NRC Commissioner).
The Licensing Board is incorrect-that "only Gulf States will. l be responsible for funding the plant under the current terms of the l i
merger agreement . . . Order at 13. The situation regarding funding. remains unchanged from that which existed before the filing !
of the amendments. Under the JOPOA, GSU remains responsible for- !
70% of any necessary funding; it looks to Cajun for the remaining l 30%. The operator of the facility is irrelevant to the facility's. j funding. The proposed amendments do not change the ownership of the f acility or the capabilities of the owners to pay for the costs ,
of its operation. Just as was the case prior to issuance of-the l amendments, GSU and Cajun, as owners of River Bend, continue to be responsible for the costs of operation of the plant now that the.
merger and the authorization of EOI to operate River Bend are i
t D' Indeed, Cajun may simply lose in its other litigation'. If that were the case, Cajun's purported reasons for a. hearing t would vanish. Alternatively, Cajun may be held liable on GSU's counterplaim for damages an issue not even raised,--
much less discussed, by Cajun. Also, the litigation could be.
settled. Even were Cajun to prevail, it would require further ;
speculation to postulate that the shutdown of the unit would be a necessary result :or that a court of , competent- 1
-jurisdiction would not allot funds sufficient for'GSU's share of the operation or safe shutdown costs. '
r
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effective.N The change in operator will have no plausible effect I on the revenue streams or obligations of either party.H' I 5
Cajun fails to explain how license amendments that will not change funding for the plant -- the sole concern it has raised in this matter -- affect its interest or adversely impacts GSU's financial qualifications as an owner of River Bend.U' Indeed, while Cajun attempts to give the impression that the two amendments ,
disrupt the financial status quo, GSU's financial qualifications (S 50.33(f)) will be utterly unaffected. The ability to safely shut down River Bend and maintain it'in a safe condition will not be adversely affected by the changes contemplated in the two proposed amendments. Cajun has not seriously disputed this. Thus, the Licensing Board is incorrect in concluding that denial of Cajun's Petition " contradicts the rationale of 10 C.F.R. S 50.33(f)
. . . . Order at 13-14.
U In the event GSU is unable, for whatever reason, to finance f' operation of the plant, Cajun has the right under the JOPOA to step in and provide funding for continued plant operations.
JOPOA at 72-73. ;
1 D' Despite the Licensing Board's assertion to the contrary, Cajun has not " supplied information to- establish that safety at the plant may be jeopardized by . . . a lack of oversight by Cajun." Order at 13. Neither Cajun nor the Licensing. Board have identified a single instance in which " oversight by l Cajun" has contributed to safe plant operation in the past nor how it could contribute to it in the future. Cajun has not '
supplied any information demonstrating.that its access'.to the facility or records regarding safe operation would in any way change as a result of EOI operation.
E' While Cajun alludes.to the capitalization of EOI, this is merely a " straw man." GSU is not relying on EOI for a demonstration of financial qualification.
. i
- 3. In Sum, Cajun's Petition for Intervention Represents an Effort to Obtain a " Deep- ~
Pocket" Defendant, Does Not Satisfy the Commission's Requirements Governing Jntervention, And Should Be Reiected.
At bottom, Cajun's petition for intervention alleges an f impermissible economic interest -- one that is not cognizable under a
the Atomic Energy Act due to the lack of a meaningful nexus to 3 protection of the public health and safety. Indeed, it is the obvious desire of Cajun to capture a " deep pocket" in the event it is successful in any of its litigation against GSU. Cajun's Petition is replete with references to enhancing Cajun's ability to collect a judgment against GSU by imposing financial responsibility for any judgment on_Entergy. See Cajun Petition at 16, 17, 21, 26, .
- 29. Any doubt as to the real basis for Cajun's Petition is [
dispelled by Cajun's request for a license condition (Cajun Petition at 26-30) which, inter alia, would " require Entergy to ;
extend its credit to, indemnify and otherwise financially support GSU" to ensure payment if Cajun is successful in unrelated litigation against GSU. Cajun Petition at 30. The Commission j should not condone Cajun's efforts to use the NRC regulatory process as a means of enhancing Cajun's chances of obtaining a ,
settlement or perhaps a " deep pocket" to satisfy a judgment.
B. Contention 2 Was Improperly Admitted In This Proceedina '
i Not only does Petitioner lack standing to intervene in this proceeding, it also has failed to proffer a single admissible !
contention. As explained below, the Licensing Board erred in f i
h admitting Contention 2 because the contention does not satisfy the !
requirements of 10 C.F.R. 5 2. 714 (b) (2) (1)-(iii) . l
- 1. The Heichtened Threshold Reauirements of (; 2.714 f
Prior to the Commission's amendment of 10 C.F.R. S 2.714 in 1989, patitioners in NRC proceedings had only to set forth the bases for their contentions with " reasonable specificity" to satisfy the contentions standard. See Union of Concerned Scientists v. United States Nuclear Reculatory Comm'n, 920 F.2d 50, 52 (D.C. Cir. 1990) ("UCS"). Moreover, the " basis" requirement 'was !
very loosely interpreted. See, e.a., Houston Lichtina and Power Co. (Allens Creek Nuclear Generating Station, Unit 1) , ALAB-590, 11 NRC 542, 547-48 (1980). In amending the regulation in 1989, 3 however, the Commission perceptibly heightened the basis and specificity thresholds set forth in S 2.714. The regulation now requires that proposed contentions include a " specific statement of the issue of law or fact to be raised or controverted," detail the.
alleged facts or opinion on which the prospective intervenor will rely, and contain sufficient information "to'show that a genuine-dispute exists with the applicant on a material issue of law or fact." 10 C.F.R. 5 2.714 (b) (2) (i)-(iii) ; M.QE, 920 F.2d at 52. -
i In the Supplementary Information accompanying- the 1989 .
amendments to S 2.714, . the: Commission emphasized that contentions ,
cannot be admitted when unaccompanied by supporting f acts. 54 Fed.
Reg. 33,168, 33,171 (August 11, 1989). Since enacting these ,
t
revisions, .the Commission ~ has pointedly rejected liberal ;
interpretations of the pleading requirements by licensing boards. ;
In Arizona Pub. Serv. Co. (Palo Verde Nuclear Station, Unit Nos.1,_
2, and 3), CLI-91-12, 3 4 NRC 149, 154 (1991), the Commission stated !
its intent that S 2.714 (b) (2) (i)-(iii) be interpreted strictly: "If-any one of these requirements is not met, a contention must be rejected." It further emphasized that (t]hese requirements are designed to raise the Commission's threshold for admissible contentions and to require a clear statement as to the basis for the contentions and the submission of more supporting information and references to specific documents and sources which '
establish the validity of -the contention. See 54 Fed. Reg.
33,168, 33,170 (August 11, 1989). ,
I.d. (emphasis added).
It is the responsibility of the petitioner, not the Licensing Board, to provide the necessary information to satisfy the basis requirements for the admission of its proposed contentions. Public-Serv. Co. of New Hampshire (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 a petitioner's contentions when the latter has failed to comply with the requirements of :
S 2.714 in providing a basis for. and sufficient information supporting a proposed' contention. Palo Verde, CLI-91-12, 34 NRC at !
155-56. See also Lona Island Lichtina Co. (Shoreham Nuclear Power ,
-- ,- ,e-
. _ m . . _ _ m - .
~
l 1
1
\
l Station, . Unit 1) , LBP-91-3 9, 3 4 NRC 27 3, 27 9 (1991) (Licensing Board i l
is "not free to assume any missing information in a contention").
In sum, the revised rules governing admissibility of ,
contentions, as well as Commission precedent, require precision in the pleading process -- in terms of basis, specificity, and ;
supporting facts. Where the facts relied upon in a statement of basis are inadequate, a contention should be ruled i4 admissible as i a matter of law. Substantial resources would be expended, and-no purpose would be served, by an evidentiary hearing on such a contention.
- 2. Cajun Has Failed To Provide Sufficient Information i
" To Justify Admission of Contention 2 I Contention 2 asserts that "[t]he proposed license amendments {
may result in a significant reduction in the margin of safety at -'
River Bend."U' The first fatal deficiency in the proposed ,
contention derives from Cajun's application and the Licensing Board's endorsement of an improper legal standard, i.e., " margin of safety" instead of adequate protection of the public health and i safety. The " margin of safety" is a standard related to whether a '
significant hazards consideration exists which, in turn, determines whether an amendment may be issued prior to the conclusion of a D' See " Cajun Electric Power Cooperative, Inc. 's,- [ sic] Amendment and Supplement To Petition For Leave To Intervene, Comments and Request for Hearing and Conditions," (" Cajun Contentions") .
dated August 31, 1993, at 11. +
t
t requested hearing. 10 C.F.R. S 50. 91(a) (4 ) .E' Here, the Licensing Board has recognized that significant hazards ,
consideration determinations are not before it,' but rather are lef t to the discretion of the Staff. See Section.II.B, suora. l l
Cajun not only employs the incorrect legal. standard in' Contention 2, it also fails to define or quantify the " margin'of :
i safety" that purportedly may be significantly reduced at ~ River I
Bend. Nor does the Licensing Board's decision provide the.
I requisite link between the amendment at issue and safe operation of l River Bend. In order to determine whether Contention 2 has
adequate basis, it is -- at a minimum --'necessary'to understand how Cajun purports to measure any "significant reduction in the j margin of safety at River Bend," (or, more correctly, reduction below the level of adequate protection) as well as the relationship f
of any such reduction to compliance with Commission regulations and/or the River Bend operating license. Even though Contention 2 ;
-i offers no inkling as to the answer to either threshold' question, '
q the Licensing Board overlooked. this deficiency and ruled that -
Contention 2 is supported by adequate basis.
i In addition to the application of the improper " margin of safety" standard, Contention 2 is plagued by a second fatal flaw:.
L it does not identify how a lack of financial' resources by E0I- could 4
M' See also 51 Fed. Reg. 7744, 7751 (1986) , " Final Procedures and .l Standards on No Significant Hazards Considerations." ;
-- ~ .
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i lead to a reduction in the " margin of safety" at River Bend.
Despite direct questioning on this point from Judge Lam (Tr. at 83-85), counsel for Cajun could not articulate any scenario -- much ,
1 less a credible one -- whereby the " margin of safety" would be j decreased were EOI to operate River Bend. Specifically, counsel ;
could not link a hypothetical lack of money with any unsafe operation by EOI. As noted previously, the necessary funds to shut down the plant and maintain it in a safe shutdown condition are the responsibility of.GSU and Cajun just as it was before the merger and the assumption of operator responsibility by EOI. See Louisiana 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). :
i Four purported bases ("a" through "d"), as set forth below, !
are identified by the Licensing Board in support of the proposition that " safety at River Bend will be jeopardized because the proposed new operator, EOI, will be under-funded." Order at 19. None of the four alleged bases are valid, for the reasons set forth following each of the four bases.
"a)- The proposed River Bend Operating Agreement runs only between Gulf States and EOI. Therefore, Gulf States ;
has the full obligation under the operating Agreement to l compensate EOI for River Bend operation and EOI cannot look to Entergy or Cajun for payment." Order at 19.
The Operating. Agreement between GSU and EOI does not impact the f
availability of funds for operation of River Bend and, therefore, I
P
____________j
A t
has absolutely no nexus to the claimed reduction in the " margin of '
cafety" at River Bend. The Operating Agreement does not change the pre-existing arrangements regarding the availability of funds for a
operation. Under the JOPOA, GSU and Cajun will continue, as in the past, to own River Bend and share responsibility for the facility's operating costs in proportion to their ownership shares, 70% and 30% respectively. This means that EOI is-only a conduit -- not a t
source -- of funds. The fact that "EOI cannot look to Entergy or.
Cajun for payment" is meaningless vis-a-vis the operation of River Bond.
t The Operating Agreement for River Bend is between EOI and GSU, i
acting for itself and as agent for Cajun. Under the Operating Agreement, EOI looks to GSU to provide the funds from itself and i Cajun to operate the facility. GSU has a contract with Cajun, the JOPOA, which requires Cajun to provide 30% of the necessary operating funds. These sources of funds for the operation of River Bend are not af fected by the operating Agreement and are absolutely no different than those whien existed prior to the filing of the 1
amendments. i "b) EOI is very thinly capitalized. If Gulf States ceases to make its Operating Agreement payments, EOI has no other sources of funds to maintain safe and reliable River Bend operation." Order at 19. !
-As explained above in response. to basis "a" cited by the' ,
Licensing Board, EOI only.is a conduit for funds provided by'the owners of River Bend. The financial qualification of EOI is not at
issue in this proceeding. The application to permit EOI to operate River Bend clearly sets forth the role of that entity' in the operation of the unit. It claims no financial qualification on the part of such an entity. Thus, a basis supporting a contention which seeks to assert that EOI is " thinly capitalized" is'merely a straw man.
The Commission looks to the financial qualifications of owners, not mere operators, of commercial nuclear power plants.
The financial status of River Bend is, at worst, unchanged by the ,
merger and likely is improved. #
an owner ceases to be financially qualified, Commission maulations govern continued operation of the subject facilit See 10 C.F.R. S 50. 54 (cc) . 1 Thus, the assertion that "EOI has no other sources of funds to maintain safe and reliable River Bend operation" is not germane to the instant proceeding and in no way affects the purported reduction in the " margin of safety" at River Bend. .Furthermore, the Commission has accepted the arrangement whereby a specialized nuclear operating company operates a nuclear power plant for its 4
owners on numerous occasions,H' each time without inquiry as to i capitalization of the operator to fund operation of.the unit --
should its owners fail to do so. As noted- above, such an-arrangement has positive effects on safe . operation of nuclear 6
D' Such arrangement are in place at Millstone, Arkansas Nuclear ;
One, Grand Gulf, Waterford-3, Farley, and Wolf Creek.
3
-. . .-. ~ - . .
I 1
units. To overturn thes.e precedents would have a negative impact ;
on safety.
The NRC's treatment of the issue of' financial qualifications f for electric utilities is dispositive of any assertion that GSU's l
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 either . that adequate funding will be available for safe ,
operation or that, in the absence of funds, plant operation will be i
stopped. See 49 Fed. Reg. 35,747, 35, 749 (1984). ,
i subsequent to the promulgation of the financial qualifications rule in 1984, the Commission and its adjudicatory boards have ,
rejected petitioners' attempts to link financial condition with l t
safety. For example,- in Public Serv. Co. of New Hamoshire !
(Seabrook Station, Units l'and 2), ALAB-895, 28 NRC 7 (1988), the ,
intervenors unsuccessfully sought a waiver 'of the Commission's !
financial qualifications rule, arguing that the 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:
i i
i
, . . . . , _ ~ _
[T]he Commission pointed out that a financial disability is not a safety hazard per.gg because the licensee is required under the Commission's regulations to cease operating 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 licensee would not, because of financial difficulties, be under pressure to take some safety shortcuts." Seabrook, CLI-88-10, 28 NRC at 600. l t
The Commission then cited its 1984 rulemaking proceeding, wherein it stated that "'[a] financial disability is not a safety hazard per se 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.'" J_d. at l
600, citing 49 Fed. Reg. at 35,749.E !
F 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 predictions." Public Serv. Co. of New Hampshire (Seabrook Station, Units 1 and 2), CLI-89-20, 3 0 NRC 2 31, 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 be (continued...)
l l
i i
t
! l i
Thus, the Commission has explicitly forbidden inquiry into i
financial qualifications under the circumstances present here. The i Commission should not allow the Licensing Board to overstep this j prohibition. This purported basis for Contention 2 must fail. l P
"c) Gulf States faces severe financial exposure from '
litigation with Cajun and from certain Texas regulatory ,
proceedings which could render Gulf States bankrupt and unable to make adequate payments to EOI to maintain safe .
and reliable River Bend operation." Order at 20.
As explained in greater detail in Section II.B, supra, the level of
" financial exposure" faced by the GSU is entirely too speculative to serve as the basis for Contention 2. Even putting the speculative nature of the purported basis aside, the level of
" financial exposure" facing GSU is without connection to EOI's operation of River Bend or the merger with Entergy, for that matter. As noted previously, the financial qualifications of GSU are unaf fected by the instant proceeding. Therefore, this basis is insufficient to support the assertion that the operator amendment ,
may result in a significant reduction in the " margin of safety at River Bend."
"d) Entergy views its obligations to support EOI in the I event of lack of funding from Gulf States to be very {
limited. Officials of Entergy and EOI have admitted that EOI would be forced to shut down River Bend if EOI lacked adequate funds." Order at 20.
Entergy's " views" on its obligations to support EOI are. not j relevant to the instant proceeding or the safe operation of River i F(... continued) issued. d ld. These requirements apply and are met by GSU with respect to the present matter.
I i
r Bend. As explained above, financial responsibility for the operation of River Bend' rests solely with'its owners -- GSU and I Cajun. The owners' obligations to support EOI have not changed as a result of issuance of ~the proposed amendments. Because both owners are electric utilities, their financial qualifications are i not subject to scrutiny. See Order at 21. Therefore, this :
purported basis also fails to support Contention 2, as it has no relationship to the amendments or continued safe operation of River Bend. Furthermore, the Commission previously failed to accept a Staff initiative which would have inquired into the necessity for a holding company to guarantee decommissioning costs, sending it- l back to the Staff for further study.E' i
None of the purported bases for Contention 2 challenge the technical competence of EOI to operate River Bend. This contention, as filed by Cajun and admitted by the Licensing Board, is entirely one that seeks to raise financial qualification issues -I relevant to the owners -- issues that are unaffected by the River Bend license amendments and, in any case, are beyond the purview of 1
l E' See SECY-93-075, " Issuance of an Advanced Notice of Proposed l Rulemaking on the Potential Impact on Safety of Power Reactor Licensee Ownership Arrangements," March 24, 1993; and Memorandum for J.M. Taylor (EDO) from S.J. Chilk (Secretary),
"SECY-93-075 - Issuance of an Advanced Notice of Proposed Rulemaking on the Potential Impact on Safety of Power Reactor Licensee Ownership Arrangements," April 28, 1993 (Commission disapproved publication of Advanced ' Notice of Proposed Rulemaking that would have - examined the organizational i structures of power reactor licensees and their corporate affiliates and considered whether increased assurance of funding availability for decommissioning is necessary).
the Licensing Board. Each of the purported bases is without a l i
nexus to the asserted "significant reduction in the margin of I l
safety" at River Bend resulting from issuance of the operator amendment at issue. These deficiencies render Contention 2 :
l inadmissible under the revised requirements of S 2.714. Therefore, j l
Contention 2 should be ruled inadmissible by the Commission.
l l
V. CONCLUSION .,
I Based on the foregoing, Petitioner lacks standing to intervene ,
in the instant proceeding and has failed to put forward a single l contention that satisfies the requirements of 10 C.F.R. S l l
- 2. 714 (b) (2 ) (i) -(iii) . By granting Cajun's Petition, the Licensing !
1 Board erred as a matter of law. For these reasons, the Order l
should be reversed, the petition for leave to intervene' and request j for hearing denied, and the proceeding terminated.
Respectfully submi ed,
/
d _. il Josepd]B. Knotts, Jr. l Mark J. Wetterhahn Kathryn M. Kalowsky
'WINSTON & STRAWN 1400 L Street, N.W.
Washington, DC 20005-3502 (202) 371-5700 Attorneys for Gulf States Utilities Company February 15, 1994
. ri :.:
, BEFORE THE ast UNITED STATES NUCLEAR REGULATORY COMMISSION 94 FEB 16 P3 SS ,
In the Matter of ) :
) qm , . , ,
GULF STATES UTILITIES COMPANY ) Docket No. 50-458-9LAq (,' , , f,p,3
) i iw (River Bend Station, Unit 1) )
CERTIFICATE OF SERVICE ,
I, Mark J. Wetterhahn, hereby certify that on this 15th i day of February, 1994, I served on the following, by first class mail, postage pre-paid, copies of " Gulf States Utilities Company's Notice of Appeal" and "Brief in Support of Gulf States Utilities Company's Appeal," both dated February 15,. 1994.
Ivan Selin, Chairman Dr. Richard F. Cole U.S. Nuclear' Regulatory Atomic Safety and Licensing ,
Commission Board Washington, D.C. 20555 U.S. Nuclear Regulatory- ;
Commission Kenneth C. Rogers, Commissioner Washington, D.C. 20555 ;
U.S. Nuclear Regulatory Commission Dr. Peter S. Lam '
Washington, D.C. 20555 Atomic Safety and Licensing.
Board Forest J. Remick, Commissioner U.S. Nuclear Regulatory ,'
U.S. Nuclear Regulatory Commission .
Commission Washington, D.C. 20555 Washington, D.C. 20555 Docketing and Services Branch E. Gail de Planque, U.S. Nuclear Regulatory ;
Commissioner Commission ;
U.S. Nuclear Regulatory Washington, D.C. 20555 Commission (Original plus 3 copies)
Washington, D.C. 20555 Office of Commission .
Samuel J. Chilk, Secretary Appellate Adjudication [
U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington,~D.C. 20555 B. Paul Cotter,-Jr., Esq. Edwin J. Reis, Esq. -
Chairman, Atomic Safety Ann P.'Hodgdon, Esq. j 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
James D. Pembroke, Esq.
Thomas L. Rudebush Duncan, Weinberg, Miller &
Pembroke, P.C.
1615 M Street, N.W. >
Suite 800 Washington, D.C. 20036 Victor J. Elmer Vice President - Operations Cajun Electric Power Cooperative, Inc.
10719 Airline Highway Baton Rouge, LA 70895 Donald W. Clements Gulf States Utilities Company P. O. Box 2951 Beaumont, Texas 77704 Robert B. McGehee, Esq.
Wise Carter Child & Caraway 600 Heritage Building P. O. Box 651 Jackson, Mississippi 39205
_, b.
&ffi
/ -
Mark JV Wett'erhahn i Counsel for Gulf States Utilities )'
Company February 15, 1994 -
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