ML20070M160

Answer in Opposition to Miami Valley Power Project 821223 Memorandum & Motion for Notification of Future Communications & Prohibition of Further Improper Ex Parte Contacts.Nrc Correspondence & Certificate of Svc Encl

ML20070M160
Person / Time
Site:	Zimmer
Issue date:	01/07/1983
From:	Wetterhahn M CINCINNATI GAS & ELECTRIC CO., CONNER & WETTERHAHN
To:	NRC COMMISSION (OCM)
References
NUDOCS 8301120333
Download: ML20070M160 (27)

Text

{{#Wiki_filter:y <r' ' ". 00CKETED USHRC I '83 - M010 A!0 :58 UNITED STATES OF AMERICA-NUCLEAR REGULATORY COMMISSION-Before the Commission In the Matter of ) ) The Cincinnati Gas & Electric ) Docket No. 50-358 Company, et al. ) ) (Wm. H. Zimmer Nuclear Power ) Station) ) APPLICANTS' ANSWER TO MIAMI VALLEY POWER PROJECT'S SUPPLEMENTAL MEMORANDUM AND MOTION FOR NOTIFICATION OF FUTURE COMMUNICATIONS AND PROHIBITION OF FURTHER " IMPROPER EX PARTE-CONTACTS" On December 23, 1982, the Miami Valley Power Project ("MVPP") submitted a supplemental memorandum in support of a petition for reconsideration filed on August 20, 1982 to reopen the record in the captioned proceeding to considei eight new contentions related to quality assurance. The instant pleading was entitled Supplemental Memorandum In Support Of Miami Valley Power Project's Petition For Reconsideration Of Commission Order Of July 30, 1982, And Motion For Notification Of All Future Communications Regarding The Third-Party Program, As Well As A Prohibition Of Further Improper Ex Parte Contacts ("MVPP Supplemental Memorandum"). MVPP argues that a number of unrelated matters, including the Commission's Order to show cause and Order Immediately Suspending Construction (CLI-82-33 (November 12, 1982)) (" Order to Show Cause"), an allegation P 8301120333 B30107 PDR ADOCK 05000350 i that the. Office of Inspection an'd Enforcement is unable to carry out adequately 'its functions at the Wm. H.. Zimmer Nuclear Power Station ("Zimmer Station"), that the Commission's denial of another intervenor's motion regarding a proposed extra layer of review of NRC actions under the Order to Show Cause and a meeting held' between The Cincinnati Gas & Electric Company, et al. (" Applicant" or "CG&E") and Region III to discuss implementation of the Order to Show Cause which is argued to be an impermissible g parte contact, support its motion to reopen the operating license proceeding. Applicants oppose the motion as groundless. Applicants also submit

that, under the standards established by the Nuclear Regulatory Commission

("NRC" or " Commission"), MVPP counsel has failed to live up to the standards of candor required of attorneys appearing before the Commission. MVPP has failed to submit any authority for filing this supplement to its motion for reconsideration nor sought leave of the Commission to do so. Applicants submit that, under the NRC Rules of Practice it is a prohibited filing and should be stricken. When viewed in its totality, the 1/ It is well-settled that supplemental arguments beyond the pleadings permitted by the Rules are impermissible and should be stricken. Consumers Power Company (Big Rock Point Nuclear Plant), ALAB-636, 13 NRC 312, 321-22 (1981); Long Island Lighting Company (Shoreham Nuclear Power Station, Unit 1), LBP-81-18, 14 NRC 71, 72-73 (1981); Houston Lighting and Power Company (Allens Creek Nuclear Generating Station, Unit 1), Docket No. 50-466 CP " Memorandum and Order" (July 19, 1982) (slip op. at 3).

i.

• present petition ^ represents merely a vehicle to bring to~the-Commission -complaints that MVPP might have with= regard to f

actions taken by the Staff in the Zimmer docket in the manner. directed.by the Commission. or to reargue matters, both ; procedural and. substantive, which have already been fully considered and disposed of. In any event,'were the Commission to consider the petition and motion, they ' are -. without merit and should be denied.. Initially, MVPP relies upon the statements made by the Commission in its Order to Show cause which supported its. actions specified therein as a basis for further evidentiary hearing in the docket. This argument is specious. The remedies warranted by the factual situation before the Commission have already been set by it in Section IV of the Order to show cause. These steps, if properly implemented, have been determined by the Commission to be satisfactory to respond to the problems perceived by the NRC as described in the Order to Show cause. The Commission has, inter alia, suspended safety-related construction and required a t systematic reappraisal of construction management and required an overall plan for resumption of safety-related. construction. The steps mandated by the Commission approach the relief previously requested by

MVPP, but yet it i

continues to press for evidentiary hearings on matters which have been largely mooted by the recent Commission action, i.e., litigating the validity of the Commission's basis for imposing this Order. In order to. concentrate _on the completion of the Zimmer Station, Applicants hive chosen not to contest the Order to Show cause and to comply with its provisions. 2/ The first steps in that effort have already been undertaken. In these circumstances, Applicants can see'no responsible basis for litigating in an adjudicatory proceeding the historical basis for such Commission action. Moreover, inasmuch as the ~ Commission has repeatedly stated that it wishes to be kept fully informed of the situation at Zimmer in order that it can provide guidance and direction when

needed, the Commission's recent intervention demonstrates that it is fully aware of all developments and an adjudicatory hearing would serve no purpose.

Moreover, the Commission has held that where a licensee consents to enforcement

action, a

hearing is not only unnecessary but is contrary to Commission policy. Thus, in Public Service Company of Indiana (Marble Hill Nuclear Generating Station, Units 1 and 2), CLI-80-10, 11 NRC 438 (1980), the Commission denied an intervenor's request for a hearing on an order by the Director of the Office of Inspection and Enforcement suspending construction at the site, where the licensee did not challenge the Director's order. The Commission determined that it could lawfully preclude litigation of the matters resolved by the l -2/ Applicants' Answer to Show Cause Order and Order Immediately Suspending Construction (December 7, 1982). t licensee's consen't to the Director's order and explained'its rationale as follows:: We believe'that public health'and safety is. best served by . concentrating inspection and. enforcement resources on actual-field inspections and related scientific and engineering

work, as opposed to conduct.of. legal. proceedings.

This consideration. calls for a policy that encourages licensees to' consent to, ,rather than

contest, enforcement

" actions. Such a policy would-be thwarted if licensees which consented to enforcement actions were routinely _ subjected to formal proceedings possibly leading to more severe or different enforcement actions. Rather than consent and risk a hearing on whether more. drastic relief.was. called

for, licensees would, to protect their own interests, call for a hearing on each enforcemer.t order in order to ensure that the possibility of less severe action would also be considered.

The end result would be a major diversion of agency -resources from project inspections and engineering investigations to the conduct of _I_d. at 441-42. (Emphasis hearings. d supplied.) The Commission should refuse to require Applicants to adjudicate at a hearing precisely those issues which it has resolved without a hearing by consent to the Show Cause Order. MVPP raises the matter of welder qualification as providing a basis for its petition, citing as authority a July 17, 1982 newspaper article appearing in the Cincinnati Enquirer. Initially the quoted article was written July 17, 1982. As admitted by MVPP, this matter was considered by the Commission prior to formulating the relief contained in its Order to Show Cause. 3_/ Therefore, for the reasons-discussed previously, it cannot be supportive of further hearings. Moreover, Region III is alreadyl proceeding with a full investigation of the matter. 4/ No useful purpose to be derived from considering this matter in an adjudicatory hearing has been shown. The second assigned ground relates to the statements made by representatives of Region III to the Commission at an October 28, 1982 briefing which led to its November 12, 1982 Order. As discussed previously,- the response of the Commission to these statements is set forth in its Order to. Show Cause. An adjudicatory hearing as requested by MVPP would divert Staff resources from the responsibilities assigned by the Commission. The hiatus in construction activities should give the Staff an opportunity to " catch up" with its various on-going tasks at the Zimmer Station. Moreover, the Commission has pledged to augment the Staff's resources in order to assure compliance with its regulatory function. Thus, these statements of the Staff which are _3_/ MVPP Supplemental Memorandum at 3. -4/ In a letter dated October 27, 1982, the Region III Administrator directed CG&E to provide certain documentation concerning qualification of welders. On November 15,

1982, CG&E responded to this request stating that all relevant documentation had already been provided to Region III.

CG&E attached to its letter a list of the relevant documents. 5/ Public Meeting, Status of Zimmer Investigation, October 28, 1982, Tr. at 98. taken out of. the context' of subsequent Commission ' action cannot support the petition. No ' adjudicatory hearing is t warranted based upon-this matter. MVPP next attempts -to reargue the merits ' of a motion decided by the Commission in its Order ~ dated December 23, 1982- (CLI-82-40). MVPP has already been heard by the Commission on this matter. MVPP submitted a brief in support of the relief requested. S The Commission denied the motion and found the provisions for public participation instituted by Region III ensures consideration of public views and is consistent with Commission precedent.1 The Plan of Action sent by Region III to interested commentors, including the attorney of record for MVPP, and the conduct of a January 5, 1983 meeting to discuss comments received regarding the proposed selection of the independent entity 1 to review CG&E's management of the Zimmer project totally refute MVPP's arguments. The next reason cited for support for the requested. relief is the conduct of a November 17, 1982 meeting between Applicants and Region III regarding the details of the implementation of the Commission's Order to Show Cause. The -6/ Miami Valley Power Project's Response in Support of Zimmer Area Citizens-Zimmer Area Citizens of Kentucky and the City of Mentor Petition for Appointment of a Consultant to Monitor the Third Party Audit and Petition to Establish a Detailed Structure for Public Participation Throughout the Audit (November 30, 1982). J/ Order of December 23, 1982 (CLI-82-40), slip op. at 3. meeting was neither improper under the Commission's rules or the Administrative Procedure Act nor otherwise sinister. The NRC has never tried to keep the subject matter'of the meeting secret from MVPP.. In fact, the NRC Staff's minutes of the meeting are appended to the MVPP pleading. MVPP alleges that this meeting which took place between the NRC Staff and representative of CG&E and the Bechtel Corporation's Ann Arbor Power Division ("AAPD") represents an illegal ex parte . communication under both the Administrative Procedure Act and the Commission's Rules.-- In fact, the plain language of the Commission's rule dealing with ex_ parte communications, 10 C.F.R. S2.780, and 'the cases applying that rule establish that thid meeting was not prohibited. Moreover, MVPP's quotation of the Commission's regulation omits significant portions of its text which results in a serious mischaracterization of the regulation. The Commission has held that this type of mischaracterization by attorneys will not be tolerated in its proceedings. The Commission's regulation regarding ex parte communications, 10 C.F.R. S2.780, provides: (a) Except as provided in paragraph (e) of this

section, neither (1)

Commissioners, members of their immediate staffs, or other NRC officials and employees who advise the Commissioners in the exercise of their 8/ MVPP Supplemental Memorandum at p. 9. quasi-judicial functions will request or entertain' off the record except from each other, nor- (2) any party.to a proceeding for the issuance, -denial, amendment,

transfer, renewal, modifi-cation, suspension, or revocation of a license or

permit, or any

officer, employee, representative, or any other person directly or indirectly acting in behalf

thereof, shall submit off the record to Commissioners or such staff members, officials, and employees, any

evidence, explanation, analysis or

advice, whether written or

oral, regarding any substantive matter at issue in a proceeding on the record then-pending before the NRC for the issuance,

denial, amendment,

transfer, renewal, modification, suspension, or revocation of a

license or permit. For the purposes of this

section, the term

" proceeding on the record then pending before the NRC" shall include any application or matter which has been noticed for hearing or concerning which a hearing has been requested pursuant to this part. As the plain language of this regulation establishes, the contacts prohibited by this rule are those between a party to a proceeding and " Commissioners, members of their immediate staffs, or other NRC officials who advise the Commissioners in the exercise of their quasi-judicial functions." The rule prohibits ex parte communications to members of the Commission and its employees involved in the decision-making process; it clearly does not prohibit a communication between the Applicants and members of the Commission's regulatory Staff. The Commission has consistently held that communications involving the Staff are not within the scope

r of the ex parte prohibition. For example,-[in Public Service Electric Company of -Indiana, Inc.. (Marblel Hill Nuclear- . G e n e r a t i n g -' S t a t i o n, Units ; = 1. and L 2), - ALAB-4 9 3,. - 8 NRC 253; . (1978), intervenors allege'd' that-they. had: been' prejudiced by '- ex parte communications-between the: Applicant:and the: Staff. In rejecting the intervenors'. argument,.the Board stated: The short answer-is, of; course,.that the communications intervenor decries are permissible. Litigants. may confer and cooperate with-one another;.what is proscribed (in the absence of all ' interested parties) is their discussing ~f - matters -in litigation with members o at 269 (emphasis'in~ original). -Id. the Board. See 10 C.F.R. $2.780. Similarly, in an order issued. October 5, 1978 in General Electric Company. (Vallecitos Nuclear -Center General Electric Test Reactor), Dockets 50-70 ' and ' 70-754, the Atomic Safety and Licensing ' Board -found.that.the Commission's rule against g parte communications did. not apply to meetings between representatives of the Licensee and the Staff. The. Board stated: As we understand it, 10 C.F.R. S2.780 prohibits ex carte contacts with the Commissioners, members of their immediate

staffs, or other agency i

employees who advise the Commissioners in the exercise of their quasi-judicial functions. -Nothing before us indicates that any of the communications complained of ' was with Commissioners, members of their immediate staffs, or with. any persons who advise the i Commissioners in - the exercise of their quasi-judicial functions. It appears to us that all of these contacts have'been between the Licensee and the Commission's Regulatory Staff (a party 2-to this proceeding, and in no way I

c 11'.-- Iinvolved in ~ advising ~ theE Commissioners. l ~ ."in the exercisefof their quasi-judicial- _ functions").--Slip op..at 1-2 :(emphasis inLoriginal).- 1 l' Further,;.in Jan J order issue ( July.12, 1979' in ' Puget ~ Sound -Power : C Light Company' et al. :(Skagit Nuclear _ L Power. 3 - Project, Units :1-and 2), Dockets.50-522 and 50-523, the -Atomic. Safety and. Licensing _ Board found that.certain'. ' I -meetings and. conferences between..the Staff and. applicant'did i not Lconstitute ex parte icommunications. - As. the Bo'ard. l stated:' s Under the. Commission's prohibition l against ex parte communications at' 10-0 CFR _ S 2. 7T0, a prohibited. g parte communication must relate-to- -the . exercise of a quasi-judicial function -- a function which does not belong to:the -Staff to whom the_ applicants are p communicating. Slip op. at 2.

Thus, in order to fall within -the scope of the

} Commission's rule prohibiting ex parte communications, the i discussion must be between a party and a member ^ of. the t i Board, or a Commission official engaged in a quasi-judicial a function. Here, the discussions' involved the Applicant'and l S members of the Commission's regulatory-Staf f.

Thus, I

1 .i 9/ MVPP has suggested the Commission's Order of November i 12, 1982 delegated certain authority to the Region III Administrator and that this delegation has given the Administrator the role of a "decisionmaker." MVPP Supplemental Memorandum at 13. It is well established that the duties and functions of the regulatory Staff and the decisionmakers are independent of each other. Cleveland Electric Illuminating Company, et al. (Perry Nuclear. Power Plant, Units 1.and 2), ALAB-298,_2 NRC l t ~(Footnote _9/ continued on next page) l 4 e~,, - - ---n ,,-w ,..r-< -n ,m -s N w --., -men-,,---m v, e-- ,--v,r< , -,., +,, - - + -.. ~.. --,------~--,.------,.v-~ --v -w,- v

F y 3 ', s the regulation.:and the. under .the. plain ' language' ~ of - Commission's:-decisions, interpreting 1 it,_ the discussions between the Commission's : Region-III and representiatives of 7 ' CGSE" and AAPD 'do.not.-fall 'within' the-! scope 'of the prohibition _again'st_ex parte communications.E I MVPP has attempted to obscureithis'by~exising'a part of the 'relevart language of the _ regulation. MVPP's quotation-e regulation.11/' omits a significant. portion of the~ - Specifie, ally, 'it has deleted the portion of the; regulation-j f which states that it applies'only to " Commissioners, members 4 ~ immediate

staffs,

.or. other NRC officials and of their employees who advise the Commissioners in' the exercise of their quasi-judicial functions." The cases. discussed above make clear that this is key language in determining _ the - scope of the rule. i' J/ (Continued) i I 730, 737 (1975); New England Power Company, et al., (NEP Units 1 and 2), LBP-78-9, 7 NRC 271, 279 (1978). These Staff functions are regulatory and not quasi-judi'cial in nature. Id. Further, the_ Applicants consent to the provisions oT the order eliminat'ed the necessity or possibility of any quasi-judicial proceeding. See pp. 4-5, supra. The ' rule against ex parte communications does not apply. V 10/ The language of the Administrative Procedure. Act 4 provisions prohibiting ex parte communications also limits the scope of ru E to a member of the body comprising _the agency, administrative law judge, or other employee who is or may be expected to be involved in the decisional process. 5 U.S.C. 5557(d). ll/ MVPP Supplemental Memorandum at 11-12. l 4 h,-.-,w,.. ...,,--e,-.,,- r. n, ,---n .,n-w-,r- > -. ~ r.,*e,,---m>;,--,_ 5 <.y-------m-----w-y.o.r yw, v

.,1 ' 13 _- -By ' deleting this portion of-10 C.F.R. 52.780(a), MVPP ' has - ~ attempted.to' create ~ the. erroneous ' impression tihat' the ] rule. applies,to all2 staff communications. The. Commission has indicated that it will-not' ! tolerate such attempts to. ' mischaracterize regulations by. selective quotation.- In - Tennessee Valley Authority (Hartsville Nuclear Plant, Units 1A,-2A, 1B and 2B), ALAB -40 9, 5 NRC 1391 (1977), a party.. quoted a portion of.a Commission regulation and substituted asterisks for crucial words in the middle.of the. quotation. In chastising that party, the Board stated: By reason. of. this deletion,- the entirely incorrect impression was-t conveyed that the terms of the section are consistent-with TVA's argument j .An administrative. adjudicatory body, no less than a court, has every right to expect total abstinence from such practices upon the part of those who .l appear before it. Put another way, we should be free to assume that, in a i brief or other submission, nothing will be excised from a quoted passage unless its lack of relevance to the question ] under discussion is beyond substantial dispute. The line between zealous advocacy and overreaching harassment is a narrow one. TVA's counsel have plainly reached that ) line in their submission now before us. They should take care that it not be overstepped in the future. Id. at i 1395-96. (Footnotes omitted, emphasis supplied) MVPP has likewise attempted to create the entirely f c incorrect impression that it allegation of ex parte t . 7,, - n--. y--. .m,- ,v,.-.-m- ---.,..s.-..-_me. m,_,~

14 - communications. is supported by the Commission's regulation by. deleting significant language contained -in the regulation. The Conenission,. of course, is fully aware of the language of the Commission's Rules of Practice and could not be led to an erroneous conclusion.by such a-. transparent ploy. This, however,does not excuse MVPP's behavior. N The mere fact that representatives of the Bechtel Power Corporation attended a portion of the meeting in order that they might directly discuss implementation of the order is certainly not improper in any way nor grounds for the relief requested.NI MVPP has taken parts of the discussions completely out of context. MVPP implies that a part of'the discussion dealing with Bechtel's relationship with the utility is improper under the Order to show Cause. A review of that order would quickly indicate that once the independent reviewer had been chosen and its recommendations 12/ In the Hartsville decision, the Board characterized Applicant's submission as "an artless attempt to conceal pertinent matter" and noted that the Board was fully familiar with the Commission's Rules of Practice. The fact that there was no possibility that this omission would go undetected, the Board stated, does not, however, excuse the omission. 5 NRC at 1396, n.6. -13/ The fact that Region III requested Bechtel to address its performance at another project as part of its presentation should not be startling. In fact, it is surprising that the attorneys for MVPP would find this other than a requirement in that they chose to comment on this aspect of Bechtel's qualifications to assume the tasks under the Order to Show Cause. (See letter dated December 15, 1982 to Mr. Keppler, Regional Administrator, Region III from GAP on behalf of MVPP at pp. 11-29.) submitted and acted

upon, there is no need for total separation between it and Applicants.

This is particularly true if Bachtel becomes the experienced outside organization chosen to assist CG&E in the completion of the facility. Applicants would note that MVPP's attorneys have already raised this very same issue with Region III. The letter from Region III, a copy of which is attached, discusses the charges made in greater detail and places the matter in perspective. Again, this appears to be an attempt to have the Commission consider matters it has delegated to its Staff. Conclusion For the foregoing reasons, the requested relief should be denied. Respectfully submitted, CONNER & WETTERHAHN, P.C. Mark J. Wetterhahn Counsel for Applicants January 7, 1982 14/ MVPP also alleges that an invitation for Bechtel to ~ communicate directly with the NRC violates a " key provision" of the Order to Show Cause which requires that all exchange of correspondence between it and CG&E be sont to the NRC. By its own terms, there is no prohibition against contacts with the NRC. Neither is there any warrant for MVPP's charges of " collusion" by Region III in an attempt to circumvent the Commission's will. Such scandalous charges made without a semblance of foundation should be stricken.

1. v" "%'o JAN 3 1983 UNITEJ STATES

~ NUCLEAR REGULATORY COMMISSION n b REGION 111 b[ 790 ROOSEVELT ROAO Q GLEN ELLYN ILLINOIS 80137 o DEC 3 01982 Docket No. 50-358 Government Accountability Project ATIN: Thomas Devine, Esq. Institute for Policy Studies 1901 Que Street, N.W. Washington, D.C. 20009

Dear Mr. Devine:

This is in response to your letter to me of December 21, 1982 regarding the November 24, 1982 Memorandum for Region III Files prepared by Stephen H. Lewis, Region III Counsel, on the November 17, 1982 meetings between Region III and Cincinnati Gas and Electric Company (CG&E) and among Region III, CG&E and the Ann Arbor Power Division of the Bechtel Power Corporation (Bechtel). Your letter requests an explanation of how you were "so severely misled" by Mr. A. Bert Davis, Deputy Regional Administrator, about the matters that would be covered in the November 17 meeting. Mr. Davis had advised you in telephone conversations that the purpose of the meeting with CG&E was to explain the Commission's November 12, 1982 order and to provide technical clarifications, as necessary. The NRC staff felt that such a meeting was important in order to assure that CG&E fully understood the significance of the order, the rationale behind it and the matters that should be addressed in its plans for implementing the order. An afternoon meeting among CG&E, Bechtel, and Region III was also scheduled, since CG&E had advised the Commission by letter dated November 10, 1982 that it had arranged for Bechtel to "become a joint manager with CG&E (licensee)

Thomas Devine, Esq. 2 DEC 3 ^ 582 of the project until its successful completion." In that letter,.CG&E had stated that Bechtel would make "an initial assessment of the project.which will take approximately three weeks, during which Bechtel senior people will assess the project's problems and design an approach and staffing plan for resolving the problem? and completing the project." The purpose of Bechtel's inclusion in the afternoon meeting was for the staff to gain an understanding of Bechtel's proposed role and how that role fit into the requirements of the order and to impress upon Bechtel and CG&E the " competence" and " independence" standards which Bechtel would have to meet in order to be approved as an independent reviewer of CG&E's management of Zimmer under Section IV.B(1) of the Commission order. The staff specifically wented Bechtel and CG&E to under-stand that their submittal would have to address whether deficiencies which the NRC staff has identified with Bechtel's performance at Midland argue against a finding of their capability to assess' effectively CG&E's management. I believe that Mr. Davis' statements as to the purpose and scope of the meeting were consistent with what was covered at the meeting, as reflected in the Memorandum and the above discussion. I cannot, therefore, agree with your assertion that you were misled by Mr. Davis as to the purpose or scope of the i November 17, 1982 meeting. You also question whether Bechtel's statement.that If... (Bechtel] is retained to assist CG&E in management of construction of the facility,... (it] would normally expect to discuss its findings with CG&E before bringing them to NRC's attention. (Memorandum at 4) indicated an inconsistency with the above-cited provision of the Commission's order. The staff understood Bechtel to be referring to its role as " joint menager" of the project, rather than its role as independent reviewer of CG&E's management, and did not offer any comment at the meeting La response to Bechtel's statement. In any event, under the Commission's order any recommend-ations or other correspondence between the independent management reviewer and CG&E would have to provided simultaneously to the NRC staff. We view the Order to be applicable to written and not oral exchanges between CG&E and the independent reviewer (s). In summary, I disagree with your assertion or implication that there was anything improper about the November 17, 1982 meeting. Although it is apparently GAP's opinion that the meeting should have been open to the public, I believe that circumstances will justify at certain times, and did justify in this case, the holding of closed enforcement meetings between the NRC, staff and a licensee. 4 I w e,.-

Thomas Devine, Esq. 3 The NRC staff does plan to offer opportunity for public comment on the critical CG&E submittals under the November 12, 1982 order and to entertain questions from the public following meetings among CG&E, the independent reviewer (s), and the staff (see Zimmer Plan of Action, attached to my December 22, 1982 letter to you and others). I believe that these procedures will offer adequate opportunity for public comment on CG&E's submittals. Sincerely. ='h WN amas G. Kappler Regional Administrator cc w/ltr dtd 12/21/82: E. A. Borgmann, Senior Vice President. Engineering Services and Electric Production J. R. Schott, Plant Superintendent J. D. Flynn, Manager Licensing Environmental Affairs Department DMB/ Document Control Desk (RIDS) Resident Inspector, RIII Harold W. Kohn, Power Siting Commission Citizens Against a Radioactive Environment Helen W. Evans, State of Ohio Robert M. Quillin, Ohio Department of Health Thomas Applegate Dave Martin, Office of Attorney General Mark Wetterhahn, Esq. Jerome A. Vennemann, Esq. Gretchen Hummel, Ohio Consumers' Counsel James R. Williams, State Liaison Officer, Ohio Disaster Services Agency l l t I

JAN 3 1983 GDVERNMENT ACCOUNTABluTY PROJECT Institute for Policy 5tuclies 1901 Que Street. N.W., Washington. D.C. 20009 (202)234 0382 December 21, 1982 l Mr. James G. Keppler i Regional Administrator United States, Nuclear Regulatory Commission Region III 799 Roosevelt Road Glen Ellyn, Illinois 60137

Dear Mr. Keppler:

I am writing to seek your explanation for the con-tents of the enclosed November 24, 1982 memorandum from Stephen H. Lewis for the Region III files. The memorandu= summarises a November 17, 1982 meeting between Region III, Cincinnati Gas and Electric ("CGGE") and the Bechtel Ann Arbor Power Division ("AAPD"). The contents of this memo-randum deeply disturbed me, in light of previous conversa-tions with Mr. Davis of your staff. It raised serious questions in my mind whether your office has been communi-cating in good faith with the Government Accountability Project (" GAP"). The background for my concerns are as follows: On November 15, 1982

1. learned of an upcoming meeting be-tween the NRC staff and CG&E, to discuss the Commission's November 12 shutdown order.

I immediately contacted your office to seek permission for the public to observe this meeting. As you recall, previously on October 19, you had permitted the general public to attend an enforcement meeting in order to honor the Commission's pledge for informed public oversight in the absence of reopened j licensing hearings. After first being told you were in a meeting, I called again and was informed that you had just left town but would call when you returned to Chicago. When I per-l sisted, Mr. Davis took the call. He denied my request for l public attendance but promised to consult with you per-sonally when I protested. Mr. Davis emphasised that DEC23fon

2-

...y.

Mr. Keppler December 21, 1982 contrary to GAP's previous suspicions, this was not a "backroom meeting" to make any " secret deals" or. arrange- ~ ments of which the public should be informed. The next day Mr. Davis reaffirmed your decision to exclude the public from the meeting. He stated that the meeting had to be closed for you to frankly and without inhibition i explain the Commission's November 12 shutdown of Zimmer. He added that the meeting would provide technical clari-fication of the terms in the Commission's November 12 Order. 1 I took Mr. Davis at his word and defended your decision as reasonable to media and other public representa-tives who were concerned. After receiving the November 24 memorandum it is clear that I'was mistaken. The memo-l randum states that representative of Bechtel's AAPD attended the afternoon portion of the November meeting. According i to the memorandum, at the meeting Region III advised, j inter alia,that in any proposal for AAPD to assume third-i party oversight duties at Zimmer, CG&E should explain AAPD'S own management capabilities in light of its performance at the Midland station. (In less than two weeks 1,000 Bechtel AAPD employees would be laid off at Midland due to a QA breakdown strikingly similar to the disaster CG&E wanted it to audit at Zimmer.) Further,the NRC advised AAPD that if selected it should feel free to discuss issues directly ) with the NRC without going through CG&E. AAPD responded that if selected to help CG&E manage construction of Zimmer, the third party normally would bring its findings first to the utility. The memorandum does not disclose any NRC objection to AAPD's intention. (November 24 Memorandum, at 3-4.) In our opinion, this memorandum indicates that Mr. Davis' reassurances were inaccurate in the end. In effect, the NRC staff counseled CGEE on how to obtain approval.of Bechtel's competence before the utility even submitted the choice. It is hard to imagine Region III rejecting CG&E's proposal if it is tailor-made to the specifics of your suggestions. Further, the Region III position that AAPD should " feel free" to communicate with the NRC before CGEE, either relaxes the terms of the Commission's November 12 order or at best outlines to CG&E a way to circumvent a key provision. Section IV.3. (1) (a) of the November 12 order requires that "a copy of the independent organiza-tion's recommendations and all exchanges of correspondence, including drafts, between the independent' organization and CG&E shall be submitted to the Regional Administrator at the same time as they are submitted to the licensee."

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L' 4V. f.+ s r ..) ^, i i, }c 1' s Mr. Keppler. -3, De ember 21, 1982 Inouropinion['thereisl'ittle question that ~ " correspondence" covers oral discussion as sell as written communication. Even if Region III's advice were linguistically correct, however, the<NRC suggestion-and silence when Bechtel tentatively declined the advice--- inf ers 'an acceptable method to circumvsr.t the intent of the Movember 12 Order by transfsrring the " independent" review ~~ ' to a cooperative partnership. (Be chtel 's..announc emen t that it would reject the ERC's advice if it assumed con-sr.ruction responsibilities' also underscores the conflict-of-inierest. concerns we. raised.in our' December 15 con.m e nt s, if thE same 'organisation managess both. quality verification eand, subsequent rework / construction.) I A t g j $Mr MKe ppre t, it appears that-Regien III is partici- , pating Tn' a,p'rocess that t. will' 1:*.troduce a new definition ' to ;t,he English lang'dage?-one. where "i'ndependence" is ^ synonomcds-with "co11osion." - It is understandable why . 'thejprocess is.lieing co'nducted in sacrit } We at GAP i f you to u;Jen up the, third-party reform to the f p.mplora 'tablic' that must / live with"its con' sequences.i Further, l 3 I ?for' GAP to take future Region TII reas:2urances at face ;' i i vtitie, it is essential than you explain how I,was so. ~ ~ '/ sevirely misled if your of fice 'decit fwith"me;in good;t V . 'i f ai t h.. 1 i 4 N ~ .\\. ,-7 s \\ ,, 'i / s8 Sincier ely a m, ', h .s "y m \\ 7 '8 j h. -h, : \\ t s g'> _ .u, _ 2. . e .t e_ q ,,. Thomas Devine' ' i. Legal Director, s Jf -h S s ~ o s y r t - s-- l h, e t .s \\i i' /

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,,4 . ~?~' M. G ....c =.r 2 NDt0RANDUM TOR: Region III Files q, TRON: Stephen 11. Lewis, Regional Counsel, Region III .' x: SU3 JECT: NOVEMsIR 17, 1982 MEETING CT REGION III VITH CINCINNATI ...r - GAS & E22CTRIC AND 3ECHTEL REGARDING CLI-82-33, "0RDIR TO.yDg" v. .....: ), 5HOW CAUSE AND' ORDER IMMEDIATILY SUSPENDING CONSTRUCTIGN': _

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.--.. ;. : a ~.- .v. a; m., ~.-A-.: : . Following the Cosumission's November 12, 1982 order suspending safety-related, e.pi. -% 2 - ".' construction'st:the Zimmer'p! ant and direeting Cincinnati Gas & Electric ..F.4% .-ip-J.':*?!! Company (CGEE) to undertake certain actions prior to NRC consideration of resumption of safety-related construction, meetings were held on November 17. .C M", 1982 in Cincinnati hetween hRC Region III and CG&E and among Region III, CG&E.;;...'.t13 and the Bechtel Ann Arbor Power Division (AAPD).. The purposes of the meetings n..' h_ -f were to explain the order and discusa CG&E's planning for implementation. e The 2.'.s P. . Region met with CG&E alone in the morning and with CG&E and AAPD together in

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Participants in the morning meeting were: ,, J,f- - ~ . ;.,. a CGLE -. Villiam Dickhonor President - - - -- U.,- - - Earl Borgmann, Vice President Villiam Moran, General Counsel .._. J.. Mark Vetterhahn, Outside Counsel -{ tgtC, Rezien III James Keppler, Regional Administrator Robert Varnick, Director, Office of Special Cases Dorwin Hunter, Section, Leader, Zimmer Section, Office of Special Casse ..r Stephen Lewis, Regional Counsel ' V.. n. - . :. ir: W Joining the above participants for the afternoon meeting wors: g.,.,,. ';h Howard Wahl, Vice President and General Manager, AAPD Bill Monry, Vice President and Deputy General Manager, AAPD .?+" George Jones, proposed Project Manager for APPD work at Zimmer ~ M'Td'$r 3 J '. n Mr. Kappler opened the meeting with a discussion of the considerations vyt - *:hk which led to the issuance of the Comeission order. He noted that the Cocueission and staff were particularly concerned about rework. growing ,'.V E out of the Quality Confirmation Program (QCP) being undertaken prior to ' Js

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A Regina III Files 2 November 2&, 1982 Mr. Dickhonor described atops that had been undertaken by CGEE, both before and after the order, with respect to Zimmer construction. He stated that personnel at the site had been further cut back, and that there were now approxis.ately 700 people at the site, of whom 200 were craftspersons. The QCP is, however, continuing. He advised that the CG&E soard of Directors would be meeting on Nosember 18, 1982. He toeplained that CG&E has not always been provided copies of allegations sent by GAP to the NRC. NRC participants stated that CG&E would have to receive the Regio tal Administrator's approval of the independent entity selected to conduct the revies of CG&E's management of the Zisumer project (Paragraph IV.3(1) of the . - l . order). CG6E edvised NRC that prior to the order it had already arranged for AAPD to conduct a review of CG&E's management of the project,and that AAPD had commenced its review. NRC advised CG&E that we would not prevent .i AAPD from continuing with this review, but that CG&E was proceeding at its own risk until the Regfonal Administrator has approved the selection of j AAPD. Das approval determination would be based upon a written submission free CG&E to the Regional Administrator setting forth: (1) AAPD's cap-abilities to perform the management review,L (2) whether AAPD (and Bechtel, generally) has the necessary independence of CG&E (e.g., whether Bechtel has performed work, and if so of what type, for CG&E), and (3) the nature of the review that AAPD would undertake under Paragraph IV.B(1). Paragraph IV.3(2) of the order was discussed. NRC emphasized that the quality verification plan could be submitted only after the Regional Administrator had approved the CG&E recommendations regarding management of the Zimmer project - (Paragraph IV.E(1)(b)). NRC clarified that we would expect CG&E to use an outside entity (eA, AAPD) in preparing the plan for verification of plant quality. That outside entit~ should be free to conclude that the QCP is insufficient to verify the quality of construction of the plant. CG&E indicated that it was their present intention to use the services of AAPD in the preparation of the comprehensive quality verification plan (and in the construction management of the facility). The staff stated that the order did not preclude the use of the same outside party to perform the management review and to assist in the preparar. ion of the quality verification plan. CG&L also inquired whether the order would preclude the use of AAPD as the entity per-forming the audit to verify the quality of construction (Paragraph IV.3(2)(a)). The NRC stated that the order would not preclude the use of AAPD as the auditor, inasmuch as AAPD "did not perform the activities being audited." De NRC agreed that the review under paragraph IV.3(1) was to be focused on management of the Zimmer project including its QA program and quality verifi-cation program, and was not intended to be a review of the content of the QOP. 'Ihe review of the content of the QCP was to be part of the preparation of the comprehensive plan under Paragraph IV.3(2)(a). O e

. M,., '. P u g... n. s t a Regies III Files 3 November 24, 1982 De NRC edvised CG&T. that the quality verification audit under Paragraph IV.3(2)(a) was not to be confused with the independent verii'ication of design adequacy (typically conducted by reviewing a " vertical alice" of the plant), which would be required of CGEZ at some later data prior to any issuance of an operating licenne for the facility. Paragraph IV.3(3) of the order was discussed. NRC stated that if CGEE sought to have the order " relaxed" to permit the resumption of certain safety-related construction activities, it would have to demonstrate to the Regional Administrator that any work sought to be permitted: (1) is not related to any quality verification concerns which have been raised and (2) will include adequate controla. 4 The NRC stated that if CGEE should determine that the facility will not be ab?.s to meet any applicable codes and standards, it should proceed promptly to propose to the NRC alternative engineerina basu for demonstrating acasptability. Any consideration of deviations free the A5ME Code would have to involve the cognizant Code. Commaittees and the National Board of Boiler and Pressurs Vessel Inspectors. Mr. Dickhonor requested that the NRC be prepared to act promptly on any request CG&E sight file for permission to proceed with identified construction activities. Mr. Xeppler indicated that NRC would give high priority to any such request and would seek to act on it as promptly as possible. CG&E asked for an early meeting with Region III on the September 24, 1982, " Demand for Information" issued under 10 CTR 550.54(f) with respect to " Miami Valley Power Project's Petition to suspend Construction of the 2ioner Station " dated August 20, 1982. The purpose of the meeting would be to clarify the "Damand." [The requested meeting was held on November 22,1982.] CGEE advised the NRC that it will shortly send the NRC a letter advising of certain activities which it believes are not prose.ribed by the order _ and asking for the Regional Administrator's concurrence that CG&E may continue with those activities. (A letter was sent on November la,1982 and a revised letter on November 22, 1982.) In the afternoon, AAPD joined CG&E and the NRC for discussions. The focus of the meeting was on the following areas: 1. CC&E should be sensitive to NRC's concerns with AAPD's performance at Midland and should reflect in the document submitted with respect to approval of AAPD the capabilities of AAPD to assess effectively CC&E's management. e

..R Ja wife A* ,m.g.., November 2&, 1982 h Region hII Tilaa l 2. The NRC advised AAFD that, if selected to eenduct the review of CGkIhis it should feel free to discuss mattsrs with respect to t management, review directly with MRC, without having to go through CG&I. The NRC sophasized that AAPD, if selected, should consult with the 3. Authorized Nuclear Inspector, the National Board of Boiler and Pressure Vessel Inspectors and other entitles involved in assessing the adequacy of construction of the Zimmer facility. AAPD emphasized to the NRC that it would strive for open cosamunication among itself, NRC, and CG&E. If AAFD is retained to assist CGEE in management of construction of the facility, AAPD would normally. expect to discuss its findings with CG&E before bringlag them to NRC's ettention. AAFD hopes to complete its initial assessment of CG&E's ennagement and to make recommendations to CGEE within three weeks. It.is already on site sad has begun its review. Mr. Xeppler stated that the NRC intends to hold meetings that would be open to the public at appropriate stages in the implementation of the order. N. n -e steph n H. Lewis Regional Counsel cc: W. Dircks, IDO N. Denton, NRR R. DeYeung, IE G. Cunninsh.m, ILD e l .~. O l g.

~ ' UNITED' STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter.of ) ) The Cincinnati Gas & Electric ) Docket No. 50-358 Company, et al. -) ) (Wm. H. Zimmer Nuclear Power ) Station)- ) CERTIFICATE OF SERVICE I hereby certify that copies _of'" Applicants' Answer to Miami Valley Power Project's. Supplemental Memorandum and Motion ~ for Notification of Future Communications and Prohibition of Further ' Improper Ex Parte Contacts " dated January 7, 1983, in the captioned matter, have been served upon the following by deposit in the United States mail this 7th day of January, 1983: Alan S. Rosenthal, Chairman Dr. Frank F. Hooper Atomic Safety and Licensing Chairman of Resource Appeal Board Ecology Program U.S. Nuclear Regulatory School of Natural Commission Resources Washington, D.C. 20555 University of Michigan Ann Arbor, MI 48104 Stephen F. Eilperin Atomic Safety and Dr. M. Stanley Livingston Licensing Appeal Board Administrative Judge U.S. Nuclear Regulatory 1005 Calle Largo Commission Sante Fe, NM 87501 Washington, D.C. 20555 Chairman, Atomic Safety Howard A. Wilber and Licensing Appeal Atomic Safety and Board Panel Licensing Appeal Board U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington, D.C. 20555 Chairman, Atomic Safety Judge John H. Frye, III and Licensing Board Chairman, Atomic Safety and Panel Licensing Board U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington, D.C. 20555

Charles A. Barth, Esq. David K. Martin, Esq. ' Counsel'for the NRC Staff Assistant Attorney General Office of the Executive Acting Director Legal Director _ Division of -U.S. Nuclear Regulatory Environmental Law Commission Office of Attorney General Washington, D.C. 20555 209 St.' Clair Street Frankfort, Kentucky 40601-Deborah Faber Webb, Esq. 7967 Alexandria Pike George E. Pattison, Esq. Alexandria, Kentucky 41001 Prosecuting Attorney of Clermont County, Ohio Andrew B. Dennison,-Esq. 462 Main' Street Attorney at Law Batavia, Ohio 45103 200 Main Street Batavia, Ohio 45103 William J. Moran, Esq. Vice President and Lynne Bernabei, Esq. General Counsel Government Accountability The Cincinnati Gas & Project /IPS Electric Company 1901 Q Street, N.W. P.O. Box 960 Washington, D.C. 20009 Cincinnati, Ohio :45201 John D. Woliver, Esq. Docketing and Service Branch Office of the Clermont County Secretary U.S. Nuclear-Community Council Box 181 Regulatory Batavia, Ohio 45103 Commission Washington,'D.C. 20555 Brian Cassidy, Esq. Regional Counsel Stephen H. Lewis, Esq. Federal Emergency U.S. Nuclear Regulatory Management Agency Commission Region I Region III John W. McCormick POCH 799 Roosevelt Road Boston, MA 02109 Glen Ellyn, Illinois 60137 ' May J. Wetterhahn cc: Robert F. Warnick Director, Enforcement and Investigation NRC Region III 799 Roosevelt Road Glen Ellyn, Illinois 60137}}