ML20077F998
| ML20077F998 | |
| Person / Time | |
|---|---|
| Site: | Vogtle  |
| Issue date: | 12/05/1994 |
| From: | Hobby M AFFILIATION NOT ASSIGNED |
| To: | |
| Shared Package | |
| ML20077F984 | List: |
| References | |
| OLA-3, NUDOCS 9412160144 | |
| Download: ML20077F998 (48) | |
Text
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1
.i PREFILED TESTIMONY OF MARVIN B.
HOBBY Q:
PLEASE STATE YOUR NAME AND ADDRESS.
A:
Marvin B. Hobby.
I reside at 925 Melody Lane, Roswell, Georgia.
Q:
HAVE YOU EVER BEEN EMPLOYED BY GEORGIA POWER COMPANY
("GPC") ?
A:
- Yes, I was employed by GPC from 1971-1979 and again from 1985-1990.
Q:
CAN YOU DESCRIBE YOUR EDUCATIONAL AND NUCLEAR BACKGROUND BEFORE JOINING GPC?
A:
I received a B.S.
from Mercer University in 1968 in Natural Science with a concentration in physics.
Thereafter, I worked at the Oak Ridge Associated Universities from 1968-1971 where I received additional training in nuclear physics, radiochemistry and nuclear biology.
Q:
CAN YOU DESCRIBE YOUR NUCLEAR EXPERIENCE AFTER YOU FIRST JOINED GPC?
A:
Initially, I was employed by GPC as the first Director of the Edwin I.
Hatch Visitors Center at Plant Hatch in 1971.
In 1973, I was selected to become the Assistant to the Ad Hoc Executive Committee, which consisted of the President and four other executive officers of the company.
In 1976, I became the company's first Consumer Affairs Coordinator.
I left the company'in 1979 and rejoined GPC in 1985.
l Q:
CAN YOU STATE YOUR NUCLEAR EXPERIENCE BETWEEN 1979 AND 1985?
A:
In 1980, I was hired by the Institute of Nuclear Power Operations ("INPO") as Communications Manager.
After being on the job one day, I was asked to become Staff Assistant to Admiral E.
P. Wilkinson, the President and Chief Executive Officer ("CEO") of INPO.
I was subsequently promoted to the position of Assistant to the President and Secretary of the Corporation.
In 1984, I was loaned by INPO to serve as Project Manager of the Congressional Education Program of the newly formed 9412160144 941205 PDR ADOCK 05000424 0
f i
Nuclear Utilities Management and Resources Committee
("NUMARC").
In this position, I reported to the Chairman of NUMARC, Mr.
J.
H.
- Miller, Jr.,
who was also the President of GPC.
(I also reported to E.
R.
McGrath, then Executive Vice President of Consolidated Edison.)
In 1985, Mr. Miller asked me to return to GPC as Assistant to the President, which I did.
Q:
WOULD YOU PLEASE STATE YOUR DUTIES AS ASSISTANT TO THE PRESIDENT OF GPC?
A:
My duties were to assist the Preeident with executive management of all company operations.
In 1985, the company was in the process of constructing both nuclear units at Plant Vogtle.
The President spent a conciderable amount of time ensuring the proper construction of the plants (timeliness, cost-effectiveness and quality) and ensuring that the company recruited well qualified, competent personnel.
I assisted him in reviewing the Vogtle construction and start-up efforts.
During this period, I also prepared the monthly operating report on all of GPC's generating facilities, which was presented to the Board of Directors.
Q:
DURING THIS PERIOD, DID ANYONE AT GPC EVALUATE THE EFFECTIVENESS OF THE PLANT VOGTLE CONSTRUCTION EFFORT?
A:
Yes, in 1985 Mr. Miller asked me to recruit Admiral Wilkinson -- who by then had retired as President and CEO of INPO -- as his Executive Consultant to prepare an independent evaluation of Plant Vogtle's construction and staffing.
Admiral Wilkinson accepted and subsequently produced a lengthy evaluation of every aspect of the plant's construction and staffing.
Q:
DID ADMIRAL WILKINSON TRAVEL TO PLANT VOGTLE TO DO THIS REVIEW?
A:
Yes, many times.
Q:
DID YOU ACCOMPANY ADMIRAL WILKINSON ON THESE VISITS TO PLANT VOGTLE?
A:
I accompanied him on, I believe, all of his trips to Plant Vogtle.,
T I
Q:
DID ADMIRAL WILKINSON KEEP MR. MILLER INFORMED OF HIS EFFORTS?
A:
Yes, he did.
I was present during almost all of the discussions between Admiral Wilkinson and Mr. Miller.
Q:
DID ADMIRAL WILKINSON MAKE ANY FORMAL RECOMMENDATIONS TO GPC?
A:
Yes.
In early 1986, Admiral Wilkinson presented his overall findings and recommendations to Mr. Miller.
Q:
DID ADMIRAL WILKINSON TALK WITH YOU IN ADVANCE OF HIS MEETING ABOUT WHAT HE INTENDED TO REPORT TO THE PRESIDENT?
A:
I specifically recall him telling me that he thought the team heading up the construction of Plant Vogtle was not exclusively dedicated to Plant Vogtle and GPC's objectives there, and that he felt that the company needed to make a significant change in the top management.
He told me that he was particularly concerned that if he told Mr. Miller that the top management of Plant Vogtle needed to be replaced, Miller might ask him for replacement recommendations.
Admiral Wilkinson and I discussed several candidates but could not come up with someone suitable.
At that point, Admiral Wilkinson asked me if I would be willing to serve as his second in command if he headed the project.
I told him I would if the company wanted me to.
Q:
DID YOU DISCUSS ADMIRAL WILKINSON'S RECOMMENDATIONS WITH MR.
MILLER?
A:
Yes. Admiral Wilkinson and Mr. Miller met in private.
Admiral Wilkinson left the meeting to catch a plane and tossed me a copy of his notes, telling me that they covered what he had said to Mr. Miller.
A few minutes aft.er Admiral Wilkinson left, Mr. Miller came into my of fice anr1 asked me if I knew what Admiral Wilkinson was advising.
I told him I had just read his notes.
Mr.
Miller then asked me if I would be willing to go to Plant Vogtle and serve as Admiral Wilkinson's number two person.
I told Mr. Miller that I would do so if that was what the company wanted me to do.
He then told me that he was going -
F l
1 to approve Admiral Wilkinson's recommendation that he take over the Vogtle project.
He said he was going to discuss it with the CEO, Mr. Scherer, and that he did not anticipate opposition.
Q:
DID YOU EVER LEARN IF MR. MILLER SOUGHT MR. SCHERER'S APPROVAL FOR NAMING ADMIRAL WILKINSON TO HEAD THE VOGTLE PROJECT?
A:
Yes.
Mr. Miller told me that Mr. Scherer had approved Admiral Wilkinson taking over the Vogtle project and that we needed to start making plans for the Admiral's arrival.
He said that Mr. Scherer was going to tell Mr. Addison of his decision as a courtesy.
Q:
DO YOU KNOW IF ADMIRAL WILKINSON WAS TOLD WHETHER MR.
SCHEP.ER APPROVED THE ADMIRAL'S TAKING OVER THE PROJECT?
1 A:
- Yes, Mr. Miller asked me to handle discussions with Admiral Wilkinson and to communicate to the Admiral that Scherer approved.
I contacted Admiral Wilkinson and told him that Scherer had approved the decision.
Q:
DID ADMIRAL WILKINSON TAKE OVER THE VOGTLE PROJECT?
A:
No.
After I made the arrangements for Admiral Wilkinson's arrival, Mr. Miller came by my office and told me that Mr.
Addison objected to Admiral Wilkinson and I was to cancel the arrangements that were made.
Q:
WHEN DID THIS OCCUR?
A:
In the Spring of 1986.
Q:
WHO WAS IN CHARGE OF NUCLEAR OPERATIONS AT GPC IN 1986?
A:
James P.
O'Reilly, the Senior Vice President, who reported to the Executive Vice President, Richard Kelly, who reported to the President, Mr. Miller.
Q:
DID MR. MILLER RETIRE FROM GPC?
A:
Yes, in November 1907.
1.
Q:
HOW DID THIS AFFECT YOU?
A:
At the time Mr. Miller told me that he and Mr. Scherer had discussed placing power generation responsibility under Mr.
Baker and that I would be assigned to assist him in that new role, since he had little experience in that area.
In the fall of 1986, Mr. Baker became responsible for Nuclear Power and Nuclear Operations.
During.the transition, I remained Assistant to the President and was named Assistant to Mr.
Baker, the Senior Executive Vice President.
Q:
DID YOU EVER BROACH THE SUBJECT OF A SOUTHERN SYSTEM NUCLEAR OPERATING COMPANY WHILE YOU WERE AT GPC?
A:
Yes, when I was Assistant to the President and Assistant to the Senior Executive Vice President, I suggested to Mr.
Miller that we re-open discussions about a system-wide nuclear operating company.
The Southern System established a Business Strategies Task Force in early 1987.
GPC's representative on the Task Force was Elmer Harris, Executive Vice President.
I contacted Mr. Harris, who was willing to present the idea to the senior management of The Southern Company.
The Business Strategies Task Force agreed to include the nuclear operating company concept as a part of its agenda. Soon thereafter, a special task force to study the feasibility of establishing a nuclear operating company was set up.
Q:
WHO SERVED ON THIS TASK FORCE?
A:
I was selected from GPC and George Hairston and Bob Gilbert were selected from Alabama Power.
In addition, we had an attorney from Balsh Bingham (Alabama Power's law firm), Bob Buettner, who met with the Task Force and was in reality a functioning member of the Task Force.
Q:
DID THE TASK FORCE MAKE ANY RECOMMENDATIONS CONCERNING A NUCLEAR OPERATING COMPANY?
A:
Yes.
We presented our recommendations to the Business Strategies Task Force and were then invited to present them at a meeting of Southern System executives in July 1987.
5-
7 i
Q:
WHAT WAS THE OUTCOME OF THIS MEETING?
A:
The System executives accepted our recommendation and established another Task Force to begin to implement our recommendations.
Q:
WERE YOU ASKED TO SERVE ON THIS SECOND TASK FORCE?
A:
Yes, by Mr. Harris, but I declined.
Q:
DO YOU KNOW HOW PHASE II OF THE TASK FORCE WAS STRUCTURED?
A:
Yes.
A group of executives was identified.
The Chairman of that group was Grady Baker, Senior Executive Vice President of GPC.
Also in the group were Bill Dahlberg, President of Southern Company Services, and Bill Whitt, Executive Vice President of Alabama Power.
Reporting to the Phase II Task Force was a working group headed by Pat Mcdonald of Alabama Power and staffed by Mr. Thomas McHenry from GPC, Lou Long from Southern Company Services and Bob Gilbert from Alabama Power Company.
Q:
WHEN MR. MCHENRY WAS ASSIGNED TO THIS TASK FORCE, DID IT HAVE ANY EFFECT ON YOUR POSITION AT GPC?
A:
Yes.
Mr. McHenry and I basically rotated jobs on a temporary basis.
He became Assistant to the Senior Executive Vice President and I, while officially retaining my title as assistant to Mr. Miller and Mr. Baker, became the functional Manager of Nuclear Support.
Q:
WHO TOLD YOU OF THIS CHANGE?
A:
Grady Baker.
Q:
IN MAKING THIS CHANGE, COULD YOU TELL ME THE SUBSTANCE OF YOUR CONVERSATION WITH MR. BAKER?
A:
Mr. Baker told me I was going to switch jobs with Mr.
McHenry on a temporary basis and I would go to Nuclear Operations to work for Mr. O'Reilly as Manager of Nuclear Support.
He told me that after my experience in line management he would consider recommending me as Vice President of Administration for the new operating company.
V,
's :
Q:
-WHEN DID THIS " JOB SWAP" OCCUR?
A:
I was informed about~it'sometime in late August or early September 1987.- But the complete. turnover of these new responsibilities occurred only after returning from an.
October meeting of the World Association of Nuclear Operators in Paris, which the company had' asked me to attend.
Q:
WHO DID YOU REPORT TO AS MANAGER OF NUCLEAR SUPPORT?
A:
Mr. O'Reilly.
Q:
WHAT WERE YOUR DUTIES?
A:
I was responsible for the Human Resources, Information Services,. Records Management and Technical Procurement functions of Nuclear Operations.
In this position, I approved all corporate organization change notifications submitted to the Nuclear Regulatory Commission ("NRC") and served as the administrative contact with INPO.
In i
addition, I represented-Nuclear Operations on several f
company committees and acted as the Administrative Manager of Nuclear Operations Corporate Emergency Response Team.
Q:
WERE YOU EVALUATED BY MR. O'REILLY IN YOUR JOB AS MANAGER OF RUCLEAR SUPPORT?
A:
No.
Mr. Baker did the evaluation.
But as we reviewed it he remarked that Mr. O'Reilly had commented on my work and said-that he liked my performance and thought I was doing a very good job.
Mr. Baker said that he was pleased with how well I performed in line management.
Q:
CAN YOU IDENTIFY THE DOCUMENT MARKED AS'INTERVENOR'S EXHIBIT 12?
A:
Yes.
It is a copy of my 1987 performance evaluation prepared by Mr. Baker.
Q:
HOW LONG DID YOU WORK FOR MR. O'REILLY?
A:
Until he resigned from the company in February 1988.
-7
-.~
r Q:
WHO REPLACED MR. O'REILLY?
A:
Mr. Head was named as his successor.
At the same time I was named Manager of Nuclear Support Services.
In addition to the responsibilities I had previously, I was given responsibility for Nuclear Security, Financial Services and performance indicators.
I was also became GPC's liaison with the co-owners of Plants Hatch and Vogtle.
Q:
TO WHOM DID YOU REPORT?
A:
Morris Howard, and he reported to Senior Vice President, George F.
Head.
Q:
HOW WAS THIS CRANGE IN RESPONSIBILITIES ANNOUNCED TO THE NUCLEAR OPERATIONS DEPARTMENT?
A:
Mr. Head called a meeting with all employees to discuss the change.
Q:
DID HE DISCUSS THE EFFORTS TO FORM A NUCLEAR OPERATING COMPANY AT THAT MEETING?
A:
Yes, he did.
He stated to us that we were to do our jobs as if there were no discussions going on about a nuclear operating company.
And he told us he had been given assurance by Mr. Baker, head of the Task Force, that he would be consulted personally before any decisions were made and that he would take part in the Task Force's deliberations and decisions.
Q:
AFTER YOU WERE NAMED MANAGER OF NUCLEAR SUPPORT SERVICES, WHEN WAS THE NEXT TIME YOU HEARD FROM THE NUCLEAR OPERATING COMPANY IMPLEMENTATION TASK FORCE?
A:
I believe it was in early March of 1988.
Len Gucwa, who was Manager of Licensing at GPC, got a call from, I believe, Southern Company Services telling him to appear in Washington for a meeting with the NRC about the operating company concept.
I got involved only because my management was very unhappy that they were not consulted about this trip.
Mr. Head had just taken over responsibility for Nuclear Operations and Mr. Howard had just taken over as Manager of Nuclear Operations Services and was Mr. Gucwa's boss.
Neither Howard nor Head was given advance notice of 8
the meeting.
Instead, Mr. Gucwa was told to attend the meeting by someone outside of the usual chain of command.
Q:
AFTER YOU WERE NAMED MANAGFD. OF NUCLEAR SUPPORT SERVICES, WAS THERE AT ANY TIME A DISCUSSION OF YOUR CHANGING JOBS?
A:
Yes.
Messrs. Head and Howard had become very concerned about the performance of George Bockhold, General Manager of Plant Vogtle.
They were especially concerned about his truthfulness in keeping the Corporate office informed of operations at the plaat.
In my presence, Mr. Head asked Mr.
Howard if he would consider going to Plant Vogtle as General Manager.
When Mr. Howard agreed, Mr. Head asked him who he would recommend to be put in overall charge of Corporate Nuclear Operations, and Mr. Howard recommended me.
Mr. Head agreed.
We were working toward that change.
Q:
WHY DIDN'T THAT CHANGE MATERIALIZE?
A:
Before Mr. Head assumed responsibility for Nuclear Operations, INPO had done an evaluation of Plant Hatch.
One of the findings was that the operators were not proficient in Emergency Operating Procedures.
As a result, INPO recommended that both units at Plant Hatch be shut down for a period of time until the operators could be adequately trained on the use of Emergency Operating Procedures.
Consequently, the Corporate office had to focus on Plant Hatch.
Q:
AND THEN?
A:
The Board of Directors of The Southern Company met.
Mr.
Scherer called and asked me to put together some information and deliver it to him at The Southern Company.
He told me to leave it with one of the secretaries since he would be in a Board meeting.
Mr. Scherer told me that he briefed the Southern Company Board and that after that he and Mr.
Addison met with the President of INPO.
Q:
WHAT HAPPENED NEXT?
A:
Mr. Scherer called a meeting of his senior staff the next day and informed us that the decision to shut down the units had been made.
He said the shutdown would allow us to complete the training without distractions.
-9
i i
I
)
Q:
DID EVERYONE IN THE GROUP AGREE?
A:
No.
I don't think anyone agreed.
But Mr. Scherer was the i
boss and we did as he said.
L Q:
WHO WAS RESPONSIBLE AT GPC FOR COORDINATING THE RESPONSES TO l
THE INPO PINDINGS?
A:
I was, and I worked closely with Plant Hatch personnel and Corporate personnel to develop corrective action plans.
I Q:
DID ANY CHANGE IN MANAGEMENT OCCUR AT THAT TIME?
A:
Yes.
We were informed that R.
P.
Mcdonald from Alabama Power would become the next Executive Vice President of GPC with responsibility for Nuclear Operations.
Q:
DID THE ANNOUNCEMENT OF MR. MCDONALD AS THE NEW HEAD OF NUCLEAR OPERATIONS COME AS A SURPRISE?
A:
Yes.
I do know that my bosses Mr. Head and Mr. Howard were not aware of the impending change.
And, we were told by Mr.
Head that he would have a voice in deliberations on the nuclear operating company concept and would keep the staff in nuclear operations informed.
Q:
WHEN DID THIS OCCUR?
A:
Mr. Mcdonald was elected Executive Vice President in April 1988.
Q:
A:
- Yes, I first met Mr. Mcdonald in the early eighties while I was at INPO, and I worked with him there until I left INPO in 1984 and also when I worked at NUMARC.
Q:
DO YOU KNOW IF MR. HEAD WAS INVOLVED IN THE DECISION TO SELECT MR. MCDONALD?
A:
He told me he was not conculted and that he didn't know until the decision had bet.. made.
I reminded him of his commitment to our Nuclear Operations staff saying that he was supposed to be involved in any decision related to the
- 10
r-
]
i 1
operating company.
He said that Mr. Baker would not even discuss the work of the committee with him.
Q:
DID YOU HAVE ANY RESPONSIBILITY FOR CORPORATE NUCLEAR SECURITY?
A:
Yes, when Mr. Howard became Manager of Nuclear Operating Services, I became Manager of Nuclear Support Services and had responsibility for Corporate Nuclear Security.
In that section, I had a Manager, two professional employees and a secretary.
After Mr. Mcdonald came to GPC, he made it very clear that the oversight role that the Corporate office had been performing in GPC nuclear operations was over.
The Corporate office would only provide a supporting role.
Q:
DID THE CHANGE FROM OVERSIGHT TO SUPPORT AFFECT YOUR NUCLEAR SECURITY GROUP?
A:
It meant that I had more staff than I needed.
Specifically, two of our people -- Messrs. Fuchko and Yunker -- did not have enough to do under this new arrangement.
And as I walked around Nuclear Operations, I would see them at the coffee counter, talking and generally not doing any work.
I discussed this with their manager who told me that there wasn't any work for them to do and that they were getting restless and anxious.
After considering the problem, I,
in the presence of Mr. McHenry, suggested to Mr. Mcdonald that we should do one of the following:
- 1) reassign them to another job in Nuclear Operations; 2) find work for them outside Nuclear Operations; or 3) as a last resort, outplace them.
I did not feel it was fair to Mr. Fuchko, Mr. Yunker or the company to leave them hanging out with nothing to do.
Mr. Mcdonald's response was that he had just come to GPC and wasn't going to start off by firing people.
I brought the subject up with him at least twice during April or May, but the answer was the same.
Q:
WHEN IS THE FIRST TIME YOU FELT THAT MR. MCDONALD WAS NOT RESPONSIVE TO GPC SENIOR MANAGEMENT?
A:
In the summer of 1988, when we were working on the budget for 1989.
All departments in GPC had been given targets for the '89 budget by the President, Mr. Dahlberg.
Several of us met in the 14th floor conference room at the 333 Piedmont Building.
After discussing the proposed budget, Mr.
Mcdonald asked if there were any objections to it.
No one 11
1 responded.
He turned to me and asked if I had any comments.
I said that what concerned me was that the targets Mr.
Dahlberg had given us for the 1989 budget had been exceeded by a good bit.
Mr. Mcdonald responded that he didn't work for Bill Dahlberg, so the targets didn't matter to him.
Q:
DID MR. MCDONALD WOTK FOR MR. DAHLBERG AT THAT TIME?
A:
Not directly.
Mr. Mcdonald reported to GPC's CEO and Chairman of the Board (Mr. Scherer), but the budget being developed would be implemented after Mr. Scherer retired as CEO and Mr. Dahlberg would become CEO in early 1989.
So when this budget went into effect, Mr. Mcdonald anticipated that he would be reporting to Mr. Dahlberg.
Q:
DO YOU KNOW IF MR. BAKER RECOMMENDED YCU FOR POSITION OF VICE PRESIDENT OF ADMINISTRATIVE SERVICES AT SONOPCO?
A:
He did.
Q:
WHEN WERE GPC'S NUCLEAR OPERATIONS TRANSFERRED TO BIRMINGRAM?
A:
November 1, 1988.
Q:
WERE YOU INVOLVED IN THE SELECTION OF THE SONOPCO PROJECT PERSONNEL?
A:
No, I was not.
I learned from Mr. McHenry that most of the selections were made over a couple of days when Mr.
Hairston, Mr. Beckham and Mr. McCoy met at the 270 Peachtree Building.
Mr. McHenry told me that they took organization charts and filled in the names of the staff.
Mr. McHenry told me he was called into the meeting because they came across unfamiliar names and wanted to consult Mr. McHenry about job assignments for those employees.
Q:
AFTER GPC'S NUCLEAR OPERATIONS WERE TRANSFERRED TO BIRMINGHAM, WHAT WERE YOUR DUTIES?
A:
I remained on the 14th floor of the 333 Piedmont Building.
I was asked by either Mr. Hairston or Mr. Mcdonald to coordinate administrative matters, such as paper work in outprocessing employees who chose not to relocate to Birmingham.
1
- 12 1
Q:
WHAT WAS YOUR RELATIONSHIP WITH MR. MCDONALD AT THIS TIME?
A:
Very good.
I talked to him often on the phone, gave him status reports on what I was doing and how we stood with handling the loose ends.
He kept me informed about events in Birmingham, and discussed a section 210 lawsuit that'had been filed by two of the employees who were not offered jobs in Birmingham.
Q:
WHO WERE THOSE TWO PEOPLE?
A:
John Fuchko and Gary Yunker.
Q:
DID YOU KNOW THESE TWO INDIVIDUALS?
A:
Yes.
They worked in our Nuclear Security section and at one time that section reported to me.
In fact, they were the two people I had asked Mr. Mcdonald to let me take personnel action on back in April or May of 1988.
Q:
DID YOU DISCUSS ELEMENTS OF THE CASE WITH MR. MCDONALD IN NOVEMBER OR DECEMBER?
A:
Yes.
He called one day to get information about a potential witness -- Mike Craven.
Mr. Craven was a Nuclear Operations employee who seemed to be friendly with Messrs. Fuchko and Yunker.
Mr. Mcdonald said he was very interested in knowing what Mr. Craven would say in the lawsuit and asked me if I could give him any insight about Craven.
I was unable to because I didn't know the man well.
In the course of the conversation, Mr. Mcdonald told me they had found a way at Alabama Power to make sure of what i
employees said in labor cases and to the NRC.
I didn't know j
what he was talking about so I asked him.
He told me that the Nuclear Regulatory Commission's Office of Investigation
("OI") had been looking into an issue at Plant Farley for some time.
I don't remember the specifics but I believe he said it had to do with I&C technicians.
He said Alabama Power had learned to go to potential witnesses or to people that OI might talk to and tell them that if they agreed not i
to discuss the case with anyone without Alabama Power Company's lawyers present, then Alabama Power would pay for any legal expenses the individual might incur.
He said they further warned the employee that if they met with the OI or anyone who had a suit against the company without an Alabama
- 13 l
Power attorney present, that they would have to hire their own attorney and pay their own bills.
He told me that when you told an employee making $40,000 to $50,000 what an attorney charges per hour and how many hours might be involved in such cases, you were assured that the employee would take you up on your offer.
He said that was one of the reasons the OI investigation at Plant Farley was taking so long -- that the employees at Plant Farley would not tell the NRC anything.
Q:
WHO DID YOU REPORT TO IN NOVEMBER-DECEMBER 1988?
A:
Mr. Baker.
Q:
DID YOU HAVE ANY DISCUSSION WITH MR. BAKER ABOUT THE TRANSFER OF GPC'S NUCLEAR OPERATIONS TO SONOPCO?
A:
Yes.
Before Nuclear Operations was transferred to Birmingham, Mr. Baker spoke to me about forming an interface group between GPC and SONOPCO and the Joint Owners to monitor the performance of GPC's nuclear plants. He told me to take my time and get back to him with my thoughts on the idea, which I did.
Q:
WHAT DO YOU MEAN BY JOINT OWNERS?
A:
Although GPC has four nuclear units, it does not own them 100%.
Other utilities and government divisions own a percentage of each of the plants.
The owners are Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia and the city of Dalton.
The contracts between the Joint Owners and GPC specify GPC as the operating agent for all owners.
Q:
DID YOU SPEAK WITH MR. BAKER AGAIN ABOUT MONITORING GPC'S PLANTS?
A:
Yes.
He invited me to his office and told me that he and Mr. Dahlberg had discussed the matter and decided to form such a group to monitor SONOPCO's performance.
He said that the group would report to George Head.
Mr. Baker told me that I did not have the job.
He said he had received requests from several people to head up such an organization and he didn't know whether I would be picked or not.
Mr.
Baker told me I had some pretty stiff competition for the job since several people had expressed interest in such a
- 14
position.
He specifically mentioned that Len Gucwa, the former GPC Manager of Licensing, had indicated an interest in this position.
He told me that Mr. Head would decide who would head the group.
Q:
WHAT HAPPENED NEXT?
A:
Mr. Head told me that he, Mr. Baker and Mr. Dahlberg had discussed the matter and that Mr. Dahlberg had decided to establish a group reporting to Mr. Head to monitor SONOPCO.
Mr. Head told me that when he accepted the position he had told Mr. Dahlberg that he wanted me to be General Manager and that Mr. Dahlberg agreed.
Q:
AND WERE YOU NAMED' GENERAL MANAGER OF THIS GROUP?
A:
Yes, Mr. Dahlberg wrote a memo to all Executive Officers on December 29, 1988, which named me General Manager of Nuclear Operations Contract Administration ("NOCA").
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 13?
A:
It is Mr. Dahlberg's memo establishing NOCA.
Q:
DID YOU ATTEND A MEETING IN THE CORPORATE OFFICE ON JANUARY 2,
1989?
A:
Yes.
Q:
WHAT WAS THE MEETING ABOUT?
A:
As I mentioned earlier, Fuchko and Yunker had filed suit against the company alleging employer discrimination because they had raised safety allegations against the company. The meeting on January 2 was for prospective witnesses in the case to go over the facts and to go over the testimony for each witness.
Since both of these gentlemen had worked under me, I was contacted as a witness in the case.
Q:
WHO ATTENDED THIS MEETING?
A:
There were probably 18 to 20 people.
I remember that Mr.
Mcdonald attended as did Charles McCrary, SONOPCO's Vice President of Administrative Services; Morris Howard, former 15 -
4 Manager of Nuclear Operations Services; Bob Scherer, the CEO; John Lukehart who was Messrs. Fuchko's and Yunker's manager; and several lawyers from Troutman Sanders.
Q:
WHAT HAPPENED AT THIS MEETING?
A:
The meeting began by the lawyers giving all of us an overview of the case and of the allegations made by Messrs.
Fuchko and Yunker.
At some point, they passed out outlines of the major point each witness would be expected to make during testimony.
I read over my outline and discovered that it said that in August 1988 I tried to terminate Fuchko and Yunker because there was not enough work for them, but that my recommendation was vetoed by Mr. Mcdonald.
I raised my hand then and said that the statement misrepresented the facts in two instances.
The first was that I had not tried to terminate Fuchko and Yunker but had proposed finding other work for them either in our department or in another department of GPC.
Only as a last resort were they to be let go.
The second error in the statement concerned the date I was supposed to have made these recommendations to Mr. Mcdonald -- August 1988 -- when in fact the event had occurred some time in April or May.
The month was an important point since due to the reorganization Messrs. Fuchko and Yunker no longer reported to me after the end of May.
And I knew that they did not raise safety issues until much later -- after they had quit reporting to me.
Q:
DID YOU GET A RESPONSE TO YOUR OBJECTION?
A:
Yes, the attorney conducting the meeting asked why I hadn't gone ahead with the actions I proposed.
I told him that Mr.
Mcdonald would not allow me to do anything.
Q:
AND MR. MCDONALD WAS AT THE MEETING?
A:
Yes, he was sitting to my right.
Q:
DID HE SAY ANYTHING?
A:
Yes, he said, "I don't know what hes talking about, he's never talked to me about that."
16
l l
Q:
AND DID YOU RESPOND TO MR. MCDONALD?
A:
No.
A Troutman Sanders lawyer said that the discrepancies would be taken up when the large meeting broke into subgroups to discuss each individual's testimony in more detail.
Q:
DID ANYTHING ELSE HAPPEN IN THE BIG MEETING?
A:
- Yes, Mr. Mcdonald got up, went over his testimony in the case and described how employees for the SONOPCO project were selected.
He stated that Vice Presidents selected General Managers, General Managers selected Managers, Managers selected Supervisors, etc., and so on down the chain.
He described it as a tier.
Q:
DID YOU HAVE ANY REACTION TO THAT?
A:
Yes.
I thought it was totally false.
Q:
DID YOU DISCUSS YOUR CONCERN ABOUT MR. MCDONALD'S PROPOSED TESTIMONY WITH ANYONE?
A:
Yes, we broke into subgroups and went over the testimony in greater detail.
At the end of the meeting, an attorney for Troutman Sanders approached me and told me that there was a problem concerning the testimony Mr. Mcdonald would give relative to my wanting to take personnel action against Fuchko and Yunker and to what I was prepared to testify.
I told him that I thought we had a bigger problem than that because what Mr. Mcdonald had described concerning personnel selection was not the way I understood the process.
In effect, I told him that in two areas, I thought Mr. Mcdonald was not telling the truth.
Q:
CAN YOU IDENTIFY THE LAWYER?
A:
I believe his name is Jesse Schaudies.
Q:
WHAT DID THE LAWYER SAY?
A:
He said that they would listen to the testimony that Mr.
Mcdonald gave on the stand and then come back and tell me so that I could change my testimony accordingly.
- 17
i Q:
DID YOU AGREE TO THAT?
A:
No.
I told the attorney that I didn't care what Mr.
Mcdonald said on the stand; when I raised my right hand, I was going to tell the truth so I didn't need to know what Mr. Mcdonald testified to.
Q:
WHAT DID THE LAWYER SAY?
A:
He said, "Okay," and walked away.
Q:
DID YOU DO ANYTHING IN RESPONSE TO THE CONVERSATION YOU HAD WITH THE LAWYER?
A:
Yes.
I was concerned that I could be placed in the position of contradicting the testimony of an Executive Vice President of the company and felt very uncomfortable being placed in this position.
I knew Tom McHenry was also scheduled to testify but was unable to attend the January 2nd meeting.
I knew that, if my recollection of events was accurate, he too would be placed in the position of contradicting Mr. Mcdonald.
I knew Tom well, knew he would tell the truth and knew he would not like being in that position.
So, on January 3rd, I called Tom McHenry.
I told him what happened the previous day and said I was calling for two purposes:
first, to check with him on my recollection of the facts in the matter; and second, if my recollection of the facts was correct, I wanted to alert him that he too could be placed in the position of offering testimony that contradicted Mr. Mcdonald's testimony.
Q:
A:
He confirated that my recollection of the facts was correct and Mr. Mcdonald's account was in error, and he was disturbed by the lawyer's comment and thanked me for a heads-up on the situation.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 14?
A:
Yes.
It is an affidavit signed by Mr. McHenry that was submitted to the NRC as an exhibit to the 10 C.F.R. 2.206 petition filed by Mr. Mosbaugh and me.
- 18
Q:
DOES MR. MCHENRY'S AFFIDAVIT ACCURATELY REFLECT THE EVENTS AS YOU REMEMBER THEM?
A:
Yes.
Q:
DID MR. MCDONALD TESTIFY IN THE CASE?
A:
Yes, he did.
Q:
WERE THE DISCREPANCIES YOU RAISED PRIOR TO THE HEARING RESOLVED?
A:
Not to my knowledge.
After the meeting on January 2nd, I was not contacted about the testimony and no one ever mentioned it to me again.
Q:
WHEN YOU WERE NAMED GENERAL MANAGER, WERE YOU GIVEN A PROMOTION?
A:
Yes.
I was given a two-step promotion from a Level 18 to a Level 20, which meant I also received a substantial raise.
Q:
WAS YOUR OFFICIAL TITLE GENERAL MANAGER, NUCLEAR OPERATIONS CONTRACT ADMINISTRATION?
A:
No.
My official title was Assistant to the Senior Vice President and General Manager, Nuclear Operations Contract Administration.
Q:
WHO WAS THE SENIOR VICE PRESIDENT?
A:
George Head.
Q:
WAS A JOB DESCRIPTION EVER WRITTEN FOR THIS NEW POSITION?
A:
Yes.
l Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 15?
A:
It is the Position Questionnaire prepared by the Human Resources Department establishing my new job description.
- 19 j
i l
i Q:
'HOW ARE POSITION
SUMMARY
AND RESPONSIBILITIES DEFINED IN INTERVENOR'S EXHIBIT 15?
A:
The summary states that the employee manages the contract for operating the company's nuclear power plants; is responsible for performance goals, accountability, long-range nuclear planning and budgets; and is responsible to the Joint Owners for the operation of the company's nuclear power plants.
My responsibilities are listed as follows:
(1)
To manage all aspects of the contract with SONOPCO to achieve the safe, dependable and cost-effective operation of our nuclear power plants; (2)
To establish reasonable goals, accountabilities and budgets for nuclear operations that support GPC's Business Management Plant; (3)
To monitor nuclear operations to ensure performance supports GPC's Business Management Plan; (4)
To serve as the primary interface between GPC and SONOPCO and between GPC and the Joint Owners in nuclear operation matters; (5)
To be the primary interface with other company operations, including top management, and with the Public Service Commission on matters related to nuclear operations including budget, financial planning, prudence and performance.
Q:
DOES THIS DOCUMENT REFLECT THE MAJOR RESPONSIBILITIES YOU WERE ASSIGNED WHEN YOU BECAME GENERAL MANAGER OF NOCA?
A:
Yes.
I should note that when Mr. Head and I went over this document we jointly agreed to change Number 2 from "To establish..." to "To recommend to executive management....."
We both felt the latter was more descriptive of the process.
Q:
WHY WAS IT MORE DESCRIPTIVE?
A:
Because NOCA had an oversight role reporting up to Mr.
Dahlberg.
20
)
{
Q:
DID YOU HAVE ANY STAFF WHEN YOU BECAME GENERAL MANAGER OF NOCA?
A:
Just a secretary.
Mr. Head asked me what I thought it would take to do the job and I suggested that, in addition to the secretary, we would need two Performance Engineers, one for Plant Hatch and one for Plant Vogtle, and two Nuclear Administrators, basically budget people, one for Plant Hatch and one for Plant Vogtle.
Q:
DID GPC AUTHORIZE YOU TO INCREASE YOUR STAFF?
A:
Yes, Mr. Head told me that he and Mr. Dahlberg had discussed staffing and had approved four people plus the secretary.
Mr. Head and I agreed to stagger the hiring as our work load increased.
Q:
WHO DID YOU HIRE?
A:
We hired two nuclear administrators, Don Proctor and Gerald Johnson.
Q:
WHAT ABOUT THE PERFORMANCE ENGINEER POSITIONS?
A:
When I was in Nuclear Operations at GPC with performance engineers reporting to me, I got to know a very good young engineer named Michael Barker. In 1968 he was doing work similar to the work envisioned for the Performance Engineer at NOCA.
He was transferred to Birmingham with Nuclear Operations in November, 1988.
I talked to Mr. McCoy, the Vice President of the Vogtle Project, and expressed an interest in Mike Barker joining our group as a Performance Engineer.
Mr. McCoy told me that SONOPCO's policy was that transfers would only be approved if the transfer position was a promotion.
My understanding is that that was not a Georgia Power policy - - but a SONOPCO policy imposed on Georgia Power personnel.
Q:
DO YOU KNOW IF IT WAS DETERMINED IF THE POSITION WAS A PROMOTION?
j A:
We had not done a position description, so I could not give Mr. McCoy an immediate answer.
I had the position 1
21 j
l
description written and it came to a Level 13.
That would have been a promotion for Mr. Barker.
Q:
A:
No, I saw Mr. McCoy's boss, Mr. Hairston, in the GPC cafeteria and I discussed it with him.
I told him about my conversation with Mr. McCoy.
Q:
DID MR. HAIRSTON APPROVE THE TRANSFER?
A:
No.
Instead he told me something to the effect that Pat Mcdonald was on a mission from Mr. Addison and he (George Hairston) hated for me to get caught in the middle.
He said I would lose.
Q:
WHAT DID YOU DO WITH THIS INFORMATION?
A:
I went back and talked to Mr. Head.
We decided the only way around this problem was for us to be totally above board and handle the position the way any other job would be handled.
We decided to post the job and make it available to anyone in GPC.
That way, the rules of GPC would apply and we would be free from the arbitrary policies being developed at SONOPCO.
Q:
DID YOU POST THE JOB?
A:
Yes.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 16?
A:
It is the authorization for posting the position of Nuclear Performance Engineer.
It was approved by the Senior Vice President, Mr. Head, and the Senior Vice President of Administrative Services at Georgia Power, Jack Causey.
Q:
WHAT HAPPENED AFTER THE JOB WAS POSTED?
A:
We had several -- maybe 20 or so -- applicants respond. Most of them were from the SONOPCO project.
After the posting closed, Human Resources brought the list of applicants to me along with their personnel files, and I selected three candidates to interview.
- 22 m
Q:
WHO WERE THESE CANDIDATES?
A:
All three were from SONOPCO:
Mike Allotta, Tom Penland and Mike Barker.
Q:
THEN WHAT HAPPENED?
A:
I called the Human Resources representative back and gave her the names of the candidates I wanted to interview.
Q:
WHAT WAS HER RESPONSE?
A:
She said she would get in touch with SONOPCO and arrange the interviews.
1 Q:
DID SHE ARRANGE THE INTERVIEWS?
A:
No, sir.
She called me back and said there was a problem at SONOPCO because Mr. Mcdonald did not agree that the position l
should be a Level 13 and therefore he was not going to allow anyone from SONOPCO to interview for the job.
After talking to GPC Human Resources, I called SONOPCO Human Resources and they confirmed that Mr. Mcdonald was obstructing the interviews because he disagreed with the level we had posted.
Q:
DID MR. MCDONALD RAISE AN OBJECTION ABOUT THE LEVEL OF THE JOB AT THE TIME YOU POSTED IT?
A:
Not to my knowledge.
Certainly not to me and not to the staff I talked to in Human Resources.
Salary Administration at Georgia Power had already determined what the proper level was and there was nothing improper about how they had arrived at the salary level.
They used their normal procedures.
The Senior Vice President at GPC had approved the position as a Level 13 as had the Senior Vice President of Administrative Services.
- 23
Q:
DID YOUR NOT BEING ABLE TO INTERVIEW HINDER YOUR EFFECTIVENESS IN MONITORING THE PERFORMANCE OF GEORGIA POWER'S NUCLEAR UNITS?
A:
Absolutely.
The Performance Engineer we were trying to hire would be in a key position to monitor the performance of Georgia Power's nuclear plants.
Without a knowledgeable and experienced engineer on board we could not adequately do the job.
Q:
IN THIS PROCESS OF TRYING TO FILL THE PERFORMANCE ENGINEER POSITION, DID YOU BECOME AWARE THAT AN ACQUAINTA'fCE OF MR.
BAKER HAD AN INTEREST IN WHO YOU SELECTED FOR ThE JOB?
A:
Yes.
Q:
WHAT WAS THAT INTEREST?
A:
Mr. Baker called and told me he understood that I had a position open for a Performance Engineer.
He said that someone at his church -- the Druid Hills Baptist Church --
approached him and asked if he could provide any assistance in getting an employee at SONOPCO considered for the job.
Q:
DID MR. BAKER IDENTIFY THE PERSON?
A:
Yes.
Stephanie Little.
Q:
WHAT HAPPENED NEXT?
A:
Mr. Baker asked me what was going on, and I explained that SONOPCO was holding up the interview process.. He asked me if Stephanie Little had applied and wanted to know what her chances were of being selected.
I told Baker that the job would amount to a five-step promotion for Ms. Little and added that her resume was not among the three qualifying resumes.
He told me to go ahead and hire the best person and that I should not be influenced by his call.
- 24
1 i
Q:
WHEN DID THIS OCCUR?
A:
I recorded the call in my phone log:
March 22, 1989, at 8:34 a.m.
Q:
IF I UNDERSTAND CORRECTLY, DURING THIS CALL MR. BAKER TOLD YOU TO GO AHEAD AND HIRE THE BEST PERSON FOR THE PERFORMANCE ENGINEER JOB.
IS THAT CORRECT?
A:
Yes.
Q:
DID ANYONE ELSE, IN YOUR PRESENCE, OBJECT IN ANY WAY TO THE FORMATION OF NOCA?
A:
Yes.
I met with Mr. Mcdonald on January 3, 1989, the date after the meeting to go over testimony in the Fuchko/Yunker case, and he asked me to do something.
I told him I would be glad to but I had to first alert my boss.
He asked what I was talking about.
I went and got Mr. Dahlberg's memo creating NOCA and showed it to him.
He said he would have no part of it and, if such an organization needed to be set up, he would do it and he would choose the staff.
- Later, Mr. Farley objected to the creation of NOCA.
Q:
WHEN DID MR. FARLEY OBJECT TO THE CREATION OF NOCA?
A:
On January 31, 1989, a meeting was called at Peachtree-DeKalb Airport -- in a conference room at The Southern Company hangar.
I recall Mr. Farley, Mr. Mcdonald, Mr.
Dahlberg, Mr. Edwards and others attended.
Q:
WHAT WAS DISCUSSED?
A:
The discussion centered around Oglethorpe Power's objections to the formation of SONOPCO.
Oglethorpe had filed an intervention with the Securities and Exchange Commission (SEC).
During the course of the discussion, I specifically remember Mr. Edwards stating that since the company had established NOCA as the new interface with SONOPCO that there might be some opportunity to make progress with Oglethorpe.
At that point, Mr. Mcdonald spoke up and asked what interface group.
Mr. Edwards stated he was referring to the creation of NOCA.
Mr. Mcdonald said we didn't have an interface group..
Mr. Farley then addressed the group and'said that having one Southern company division oversee and monitor another was not in our best interest.
Q:
WAS MR. FARLEY REFERRING TO NOCA?
A:
Absolutely.
That's what Mr. Edwards was talking about, that's what Mr. Mcdonald was talking about, that's what Mr.
Farley was talking about.
Q:
WHAT WAS THE RESOLUTION AT THAT POINT?
A:
There was no resolution.
Mr. Farley made his statement and later the meeting was adjourned.
Q:
WHAT WAS MR. FARLEY'S POSITION IN THE SOUTHERN COMPANY SYSTEM AT THE TIME OF THAT MEETING?
A:
Mr. Farley was President and CEO of Alabama Power Company.
Q:
DID OGLETHORPE POWER OWN ANY PORTION OF ALABAMA POWER'S PLANTS?
A:
No.
Q:
WHEN NOCA STARTED TO FUNCTION, NHAT WERE YOUR PRIORITIES FOR ACTION?
A:
We were in a rate case and were receiving a great many requests for information from the Public Service Commission (PSC).
These requests required responses within a very short period of time.
When I took over we were dealing with a backlog of several months as well as trying to keep current with new requests.
Q:
BRIEFLY, HOW DID YOU RESPOND TO THESE REQUESTS?
A:
Most of the material we needed to respond to the requests was no longer at GPC's corporate headquarters, having been transferred to SONOPCO's Birmingham offices or relocated to the plants.
When requests came in, we logged them in and formally requested SONOPCO to help in formulating a response.
When they did, we evaluated its responsiveness
- 26
and completeness, and, if it passea, I approved and sent it to Regulatory Affairs to transmit tc tha Commission.
Q:
DID YOU HAVE ANY PROBLEMS IN GETTING THIS INFORMATION TO THE COMMISSION ON TIME?
A:
We had major problems.
We were instructed by Mr. Mcdonald to contact only one person at SONOPCO, Tim Marvin, who was not a GPC employee.
Although my staff and I knew where the information was, who had it or who would know the answer to a question, we were prohibited from directly contacting GPC employees at SONOPCO (or any other SONOPCO project employees), since all requests had to go through Tim Marvin.
This restriction resulted in a bottleneck at SONOPCO and in our not getting information from SONOPCO in time for us to meet our commitments to the Public Service Commission.
Q:
DID YOU LEARN WHO ELSE AT THE SONOPCO PROJECT WAS REVIEWING THE REQUESTS?
A:
Yes.
I learned that Mr. Parley and particularly Mr.
Mcdonald wanted to review every PSC data request coming to SONOPCO.
It is my understanding that at least one of them if not both of them reviewed every request to determine whether SONOPCO could answer it, what portion they would not answer, whether an answer was needed, etc.
If Mr. Mcdonald was out of town or tied up with other matters the response was delayed or not initiated.
Finally, when a response was prepared by SONOPCO, it required approval by Mr. Mcdonald or one of his Vice Presidents before it could be transmitted to GPC.
On several occasions when I attempted to get a particular response I was told that it had been prepared but was sitting on a vice president's desk or on Mr. Mcdonald's desk for days and could not be transmitted until it was approved.
We only had 30 days from the time the request arrived at GPC to get the response back to the Commission and, given the number of requests, delays in responding to any given request hindered the process.
Q:
WERE YOU UNDER PRESSURE AT GPC TO GET THESE RESPONSES BACK TO THE COMMISSION ON TIME?
A:
Significant pressure.
The Vice President of Accounting, Mike Harreld, held a meeting every Friday to diseass the status of the rate case.
At every meeting it was brought to
- 27 O
G
my attention that we were not getting responses back to the Commission on time.
I explained the problems we were having with SONOPCO but, this didn't get the responses to the Commission any faster.
Q:
DID YOU HAVE MANY DEALINGS WITH MR. EVANS, THE EXECUTIVE VICE PRESIDENT?
A:
Yes.
Mr. Evans was in charge of the rate case.
We met several times --sometimes more than once a week -- so I that I could keep him abreast of what we were doing.
Q:
DO YOU KNOW IF MR. FARLEY MET WITH GPC MANAGEMENT ABOUT THE DELAYS IN PROCESSING THE PSC DATA REQUESTS?
A:
Mr. Evans told me that he met with Mr. Farley and Mr.
Mcdonald, who told him I was the source of the delays.
They said that SONOPCO gave the responses to NOCA and that my group held them up.
Q:
DID MESSRS. FARLEY'S AND MCDONALD'S STATEMENT PRESENT AN ACCURATE ACCOUNT OF THE DELAY?
A:
Absolutely not.
Q:
HOW DO YOU KNOW?
A:
As soon as Mr. Evans mentioned this to me I instructed Gerald Johnson to do an audit of when requests came in to our office, when they were forwarded to SONOPCO, when they returned from SONOPCO, and, if there was a delay, for him to identify and document the cause of the delay.
As an accountant and a very conscientious employee, he kept a meticulous audit.
Q:
WHAT DID THE AUDIT SHOW?
A:
It showed that not one delay could in any way be attributable to NOCA or to me.
Q:
DID MR. EVANS EVER AGAIN MENTION MR. FARLEY TO YOU?
A:
Yes.
I was up on the 24th floor, the Executive Floor, one day when Mr. Evans told me he had heard that Mr. Farley and s
Mr. Mcdonald were out to get me fired, and he said that I ought to be aware of it.
Q:
WHAT DID YOU DO WITH THIS INFORMATION?
A:
I mentioned it to Mr. Head.
We talked frequently.
I also informed him that Mr. Farley and Mr. Mcdonald were telling Mr. Evans that I was the source of the delay in the data requests going to SONOPCO.
Q:
A:
Yes.
He tried to set up a meeting with Mr. Mcdonald to discuss all these issues.
Q:
DID SUCH A MEETING OCCUR?
A:
No.
Mr. Mcdonald cancelled the meeting we scheduled and refused to schedule another date.
Q:
HOW DID GPC RELATE WITH ITS JOINT ONNERS?
A:
We had established a Joint Committee on Power Generation that had members from Oglethorpe Power, MEAG and GPC.
GPC had two members:
one from Fossil'and Hydro and one from Nuclear.
I was the member from Nuclear.
The committee met-monthly and in addition I talked to representatives from OPC and MEAG several times a week to answer their questions or keep them up to date on something.
Q:
WHERE DID YOU GET THE INFORMATION YOU PROVIDED TO THE JOINT OWNERS?
A:
There are two different answers to that.
First, for our regularly scheduled monthly meeting, we had Performance Engineer Michael Barker come over from SONOPCO and brief the Committee on the performance of our units and the status of our budget.
Second, there were requests in the interim about the status of the units or where we stood in an outage, etc.
That kind of information I could not get from SONOPCO, although I requested it repeatedly.
I also got calls from executives at GPC wanting to know specifics about outages, our plans, budget, whatever.
When Oglethorpe Power learned that we in
- 29
F l
NOCA were getting no daily information from SONOPCO, they j
hooked me to the Oglethorpe E-Mail System.
I received almost all of the information about the operation of our units on a daily basis from oglethorpe Power.
SONOPCO management would not cooperate.
Q:
WERE THE QUESTIONS YOU GOT FROM OGLETHORPE POWER LIMITED TO PLANT STATUS, OUTAGE STATUS, THAT TYPE OF THING?
A:
No.
Oglethorpe Power's Director of Power Generation, Dan Smith, asked me several times who Mr. Mcdonald reported to.
They were very concerned and were afraid that the company could be in violation of its NRC license and FSAR requirements.
Q:
HOW DID YOU ANSWER THE QUESTION?
A:
It was a tough question for me.
I had developed the same concern, but I had not expressed it to Oglethorpe Power.
I continued to pass along the official GPC line to Oglethorpe:
Mr. Mcdonald reported to Mr. Dahlberg.
Q:
DID YOU BELIEVE THAT MR. MCDONALD REPORTED TO MR. DAHLBERG?
A:
I was concerned that Mr. Mcdonald reported to Mr. Farley.
As events progressed, I became more and more convinced that this was so.
It was not that one day I thought Mr. Mcdonald reported to Mr. Dahlberg and the next day to Mr. Farley.
It took time to observe.
By the spring of 1989, I was convinced that Mr. Mcdonald reported to Mr. Farley.
Q:
WHY DIDN'T YOU TELL OGLETHORPE THAT?
A:
This was an internal GPC matter that we needed to resolve.
I was working with my boss, Mr. Head, to try and resolve it.
I know Mr. Head had been talking to the President and CEO, Mr. Dahlberg, about some of the concerns we had.
But when I talked to repre.sentatives of Oglethorpe, I was not just representing Marvin Hobby or NOCA, I was representing GPC.
And, I shoula add, I had been alerted by Mr. Williams that we faced a potential lawsuit from oglethorpe Power over Plant Vogtle and SONOPCO.
In fact, Oglethorpe Power had intervened in the SEC petition filed to incorporate SONOPCO.
So, with these circumstances in mind, I would not and did not express my personal opinion to Oglethorpe.
I was,
l careful not to interject my opinion or observations in discussions with Oglethorpe.
Q:
DID OGLETHORPE RAISE THE REPORTING ISSUE MORE TRAN ONCE?
A:
Oglethorpe raised the issue with me on sever =' lifferent occasions.
Q:
DID OGLETHORPE POWER EVER EXPRESS THE REPORTING RELATIONSHIP AS A REGULATORY CONCERN?
A:
On more than one occasion.
Dan Smith told me that he attended the Full Power Hearing for Plant Vogtle Unit 2 on March 30, 1989.
When he returned from the hearing, he called me and was very upset at some testimony presented during the hearing and told me that Oglethorpe was going to request a tape of the hearing.
He called me back later to tell me that the NRC did not tape such proceedings but transcribed them and that he was going to order a transcript and would give a copy to me.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 17?
A:
It is a portion of the transcript of the March 30, 1989 Full Power Hearing with the NRC Commissioners, which was sent to me by Mr. Smith.
Q:
DOES THIS DOCUMENT HAVE HANDWRITTEN COMMENTS ON IT?
A:
Yes.
The comments came from Oglethorpe and were on the document when Mr. Smith sent it to me.
Q:
WHAT WERE MR. SMITH'S CONCERNS ABOUT THE TESTIMONY AT THE FULL POWER HEARING?
A:
Mr. Smith expressed two main concerns.
First, Mr. Smith was concerned that Mr. Mcdonald continued to state that he reported to Mr. Dahlberg.
Mr. Smith did not believe that and did not believe the organization GPC presented to the NRC at the hearing was in fact the way GPC's nuclear organization worked.
Second, Smith was concerned that when pressed several times about the reporting structure -- specifically, how far the Plant Manager at Vogtle was in the organization from the CEO,
i l
l
Mr. Mcdonald gave the chajn of command and left out one I
entire layer of management and ignored Mr. Farley's role.
He left out Mr. Hairston, the Senior Vice President.
I l
believe what concerned Mr. Smith the most in this regard was not Mr. Mcdonald's omission, but that the omission was not corrected by the numerous GPC executives and managers listening to Mr. Mcdonald's assertion about the organizational structure.
Mr. McCoy was there, Mr. Bockhold was there and Mr. Dahlberg was there.
No one spoke up, l
Q:
DID MR. SMITH RAISE THE ISSUE OF THE SONOPCO REPORTING RELATIONSHIP TO YOU AS A REGULATORY CONCERN AGAIN?
A:
Yes, but I should add, whenever Mr. Smith raised the issue to me it was in terms of his being afraid that we were'not complying with the terms of our NRC licenses which concerned him a great deal.
He raised the reporting relationship to me again as a regulatory concern sometime before April 27.
He told me that he and some colleagues were at a hotel in the Atlanta area when they ran into Mr. Rogge, the NRC resident l
inspector at Plant Vogtle.
Mr. Rogge mentioned to Mr. Smith l
that the NRC was sufficiently concerned about the reporting relationship that it was contemplating stationing a resident inspector in Birmingham to assure themselves of what was going on.
I reported the conversation between Mr. Smith and me to the company in my April 27, 1989 memorandum.
Q:
CAN YOU IDENTIFY JOINT STIPULATION EXHIBIT 34?
A:
Yes.
It is a copy of my April 27th memo.
At the bottom of i
page 7 it states:
)
Oglethorpe is very concerned about this issue and they feel NRC is concerned.
A Region II NRC employee suggested to Oglethorpe that NRC was so concerned that they might seek to put a resident inspector in Birmingham to see what was going on.
Q:
DID THE TIME COME WHEN OGLETHORPE FORMALLY REQUESTED CONFIRMATION FROM GPC ABOUT WHO MR. MCDONALD REPORTED TO?
A:
Yes.
- 32 I
Q:
HOW DID THIS HAPPEN?
A:
Oglethorpe had raised this' concern to me many times.
Based on the information I was able to present, Oglethorpe must not have been satisfied, and during an April 1989 meeting of the Subcommittee on Power Generation, Dan Smith, Oglethorpe's representative, presented a formal request to 1
confirm who Mr.. Mcdonald reported to and what Mr. Farley's role was.
Q; WHAT DID YOU DO AFTER RECEIVING MR. SMITH'S FORMAL REQUEST OF THE REPORTING RELATIONSHIP?
A; I prepared a memo to Mr. Williams setting forth the exact requested made by Mr. Smith during the Subcommittee meeting.
Q:
CAN YOU IDENTIFY JOINT STIPULATION EXHIBIT 33?
A:
Yes.
It is a copy of the memo I sent to Fred Williams setting forth Oglethorpe's request for information about who Mcdonald reported to and Mr. Farley's role in the SONOPCO project.
Q:
DID YOU ASK OR INSINUATE TO MR. SMITH TRAT HE RAISE THE REPORTING ISSUE?
A:
No.
Q:
DID YOU RECEIVE A RESPONSE FROM MR WILLIAMS AFTER YOU TRANSMITTED JOINT STIPULATION EXHIBIT 34 TO HIM?
A:
Yes.
Mr. Williams responded with a memo which I gave to Oglethorpe Power.
Q:
CAN YOU IDENTIFY JOINT STIPULATION EXHIBIT 35?
A:
It is a memo Mr. Williams provided to me in response to Mr.
Smith's request.
Q:
DID YOU PROVIDE THIS MEMO TO ANYONE?
A:
Yes.
At the May meeting of the Subcommittee.
As I recall, Mr. Smith could not attend, so I provided the response to his representative, Dave Self.
- 33
Q:
DID MR. SELF REVIEW THE DOCUMENT?
A:
Yes.
He read the document and said it was not responsive to Oglethorpe's request in that it did not specify what Mr.
Farley's reporting relationship was and it did not show his relationship to the Board of Directors.
Q:
YOU MENTIONED EARLIER THAT YOU AND MR. HEAD HAD REQUESTED A MEETING WITH MR. MCDONALD TO SEE IF YOU COULD WORK OUT SOME OF THE PROBLEMS YOU WERE HAVING BETWEEN SONOPCO AND NOCA.
DID YOU MAKE ANY PROGRESS IN THAT REGARD?
A:
Mr. Mcdonald would not meet with us.
I continued to discuss our problems with Mr. Head and he assured me that he had discussed them with Mr. Dahlberg several times.
- Finally, about the end of April, Mr. Head told Mr. Dahlberg that he was going to Birmingham and to talk with Mr. Mcdonald and see if they couldn't straighten things out.
But Mr. Dahlberg asked him not to.
He said he wanted to discuss the matter with Mr. Farley before Mr. Head went to Birmingham.
Q:
WHEN WAS THIS MEETING BETWEEN MESSRS. FARLEY AND DAHLBERG TO TAKE PLACE?
A:
I learned that the meeting was scheduled for May 5, 1989 from three difference sources: 1) Mr. Head told me Dahlberg was going to meet with Mr. Farley to resolve the issues Mr.
Head had raised.
2)
According to Corporate Concerns, Dahlberg and Baker were going to meet with Farley on May 5 to discuss a corporate concern raised by employees at Plant Hatch about a transfer to the Vidalia District which SONOPCO had blocked. I learned of this when Corporate concerns called me for help in resolving the issue. 3) According to Fred Williams, Dahlberg, Baker and Farley were to meet and discuss a list of problems GPC and SONOPCO had -- problems Williams asked me to identify in a memo.
Q:
DID YOU MEET WITH MR. BAKER BEFORE THE MAY 5, 1989 MEF. TING?
A:
Yes.
At the request of Mr. Head, I met with Mr. Baker and told him Mr. Head and I would like to meet with him before he discussed the GPC/SONOPCO problems with Mr. Farley.
He j
refused.
At that time I told him that the rumor was out that Mr. Farley and Mr. Mcdonald were out to get me fired.
- 34 i
He jumped out of his chair, threw his arms in the air and said, "Well, Hobby, what can I say," then walked out of the room.
Q:
YOU SAID YOU LEARNED ABOUT THE MAY STH MEETING FROM CORPORATE CONCERNS.
WHAT BROUGHT THIS ABOUT?
A:
Bill Evans, one of Lee Glenn's investigators in Corporate Concerns, called me because they had personnel at Plant Hatch who wanted to transfer to the Vidalia District but were blocked by SONOPCO from doing so.
Q:
DID YOU MAKE A RECORD OF YOUR CALL FROM MR. EVANS IN YOUR TELEPHONE LOG?
A:
Yes.
It is the entry on April 24th at 2:15 p.m.
Q:
WHAT WAS DISCUSSED BETWEEN YOU AND MR. EVANS?
A:
Mr. Evans described the content of the Employee Concern, asking me to do what I could to resolve the issue in my capacity as the interface between GPC and SONOPCO.
I told him I was having my own problems with SONOPCO refusing to allow people to transfer or even be interviewed for a position.
I spoke to him about the difficulty I had had filling the job of Performance Engineer.
He told me that Mr, Dahlberg and Mr. Baker were going to discuss this Employee Concern with Mr. Farley on May 5 and he wanted to know if I wanted to add anything to that Corporate Concern.
I had sent Mr. Williams a list of some of the problems we at GPC were having with SONOPCO and had included a discussion of the difficulty of filling the Performance Engineer position.
I extracted that portion and provided it to Mr.
Evans to include.in his report to Mr. Baker.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 18?
A:
This is the document that Mr. Evans prepared in order to brief Mr. Baker on the Corporate Concern so he could discuss it with Mr. Farley.
- 35
Q:
DID MR. EVANS SPECIFICALLY TELL YOU THAT THE MEETING WOULD BE ON MAY 5?
As Yes.
Q:
DID YOU DISCUSS ANY OTHER CONCERNS YOU HAD WITH CORPORATE CONCERNS MANAGEMENT?
A:
Yes.
I knew the head of Corporate Contarns, Lee Glenn, and we had discussed my difficulties in getting cooperation from SONOPCO several times as well as my concern that Mr.
Mcdonald was receiving management direction from Mr. Farley.
When I brought the (above-mentioned] document to the Corporate Concern office, Mr. Evans and Mr. Glenn invited me into their conference room and we discussed everything in more detail.
Q:
DID THEY UNDERSTAND THE CONCERN YOU HAD ABOUT THE REPORTING RELATIONSHIP OF MR. MCDONALD AND THE SONOPCO PROJECT?
A:
Yes.
Q:
YOU ALSO MENTIONED LEARNING ABOUT THE MAY STH MEETING FROM MR. WILLIAMS.
HOW DID THIS OCCUR?
A:
A week or so prior to May 5th, Mr. Williams called me and said that Mr. Dahlberg had asked him to develop a list of the problem areas batween GPC and SONOPCO so that he could discuss them with Mr. Farley on May 5.
Williams asked if I could prepare him a lis*. of problem areas my group was experiencing with SONOPCO.
He asked me to do it quickly so that he would have time to brief Mr. Dahlberg.
I wrote him a memo detailing the problem areas.
Q:
CAN YOU IDENTIFY JOINT STIPULATION EXHIBIT 34?
A:
Yes, it is the memo that I wrote to Mr. Williams detailing our problem areas and raising the question about who Mr.
Mcdonald reported to.
Q:
A:
Yes.
I tried to keep Mr. Head fully informed on what we were doing in NOCA.
When I wrote this memo which formally
- 36 i
6 e
I raised the reporting issue in a company document, I took it to Mr. Head for him to read.
He read the memo and told me he also wanted to sign it.
My signature line was already on the memo so I had to go.back downstairs and get my secretary to add.his signature line.
Q:
DID MR. HEAD TELL YOU WHY HE WANTED TO SIGN THE MEMO?
A:
Yes.
He said he agreed with my comments and felt so strongly about these issues that he wanted to sign the memo.
Q:
WHAT HAPPENED AFTER MR. HEAD SIGNED THE MEMO?
A:
I hand-carried the memo up to Mr. Williams' office.
..He read the memo in my presence, and when he finished told'me to destroy all copies of the memo.
He said that Oglethorpe Power had been raising this concern about who Mr. Mcdonald reported to and we could not have this memo in our files.
Q:
WHAT WAS YOUR RESPONSE TO MR. WILLIAMS?
A:
I told him that I was raising a regulatory concern and that he should not order me to destroy all copies of the memo, Q:
WHAT HAPPENED NEXT?
A:
We talked about the reporting relationship matter for a period of time, then he took a copy and handed me back the original.
He said he was going to Birmingham the next day to meet with SONOPCO representatives.
He assured me he was going.to discuss some of the problems with them but he would not let them see a copy of the memo.
He also said he would destroy the copy that he had after he discussed the problems.
He told me again to destroy all copies of the memo.
Q:
WHEN YOU DISCUSSED THE REGULATORY CONCERN, WHAT WAS THE SUM AND SUBSTANCE OF THAT CONVERSATION?
A:
Mr. Williams told me that he thought the NRC had been briefed on the SONOPCO organization and that if the NRC ever raised the issue we would just show them an organizational chart..
1 i
l i
)
l i
Q:
WHAT DID YOU SAY DURING YOUR DISCUSSIONS ABOUT THE REPORTING RELATIONSHIP?
A:
Mr. Williams and I talked about why -- if Mr. M xtald reported to Mr. Dahlberg -- Mr. Dahlberg didn't gast pick up the phone and tell Mr. Mcdonald what to do.
Why did Mr.
Dahlberg have to go to Mr. Farley?
I 4
Mr. Williams and I discussed the selection of the President of The Southern Company and how Mr. Addison had been selected.
He said that support on The Southern Board was divided between Mr. Addison and Mr. Farley.
He said that i
Mr. Farley and Mr. Mcdonald had worked closely together for f
a number of years and if Mr. Dahlberg and Mr. Mcdonald came
]
to an impasse, it would be brought to Mr. Farley's attention.
He said if that happened, Mr. Addison'was not in a position to solve the problem.
He said if push came to shove, Mr. Addison could not get Mr. Farley fired, and i
neither could Mr. Farley get Mr. Addison fired.
J He also stated to me that there was a lot of interest in the Southern System about who would replace Mr. Addison as President of The Southern Company.
Williams said several people were in the running, including Mr. Dahlberg, but no l
one wanted to bring up a problem that might escalate to l
involving Mr. Addison, since Mr. Addison would have a l
significant recommendation to the Board concerning his successor.
Q:
WAS THIS THE FIRST TIME YOU HEARD THAT.THE BOARD OF THE SOUTHERN COMPANY WAS DIVIDED IN ITS SUPPORT FOR MR. ADDISON?
A:
No.
Dwight Evans had mentioned that to me earlier in 1989.
Q:
AFTER MR. WILLIAMS INSTRUCTED YOU TO DESTROY ALL COPIES OF THE MEMO, WHAT DID YOU DO?
A:
I went upstairs and reported the conversation to Mr. Head.
i Q:
WHAT WAS MR. HEAD'S RESPONSE?
A:
He said, " Destroy all copies," but added that I should not interpret that to mean that I should destroy ths original: I should hold onto the original.
i l
I i
- 1
)
I 1
l s
a j
Q:
WHAT DID YOU DO?
A:
I followed Mr. Head's advice, I destroyed the copies and kept the original.
Q:
DID YOU DISCUSS YOUR APRIL 27TH MEMO WITH MR. WILLIAMS AGAIN?
A:
The next day. I was anxious to learn how the meeting Mr.
Williams planned to attend in Birmingham was progressing.
~
So, late Friday afternoon, I called Mr. Williams' office and asked his secretary if he had returned from Birmingham.
She said he had and I asked for his home telephone number so I could call him there.
She gave it to me and I called Mr.
Williams.
Q:
DID YOU MAKE NOTATIONS OF THAT CALL IN YOUR TELEPHONE LOG?
A:
Yes.
The April 28, 1989 entry.
Q:
CAN YOU IDENTIFY THE ENTRY AND DECIPHER IT?
A:
Yes.
It begins:
"F.
Williams - mtg - Beckham, McCoy, sometimes Hairston and Meyers."
This note indicates that the meeting'in Birmingham was attended by Messrs. Williams, Beckham, McCoy, Meiers and sometimes by Mr. Hairston.
The next notations states: "Had 1 prvos at GPC - 1 at SONOPCO."
This notation indicates that Mr. Williams stated that there had been one previous meeting at Georgia Power and one in SONOPCO.
The next notation is: "GPC - all agreed - doesn't need nuc.
exp."
This entry reflects Mr. Williams's statement that everyone at the meeting agreed that Georgia Power did not need nuclear expertise in its Atlanta offices.
The next notation is:
" Edwards worried about memo."
This notation references Mr. Williams' statement to me that Bob Edwards of the Troutman Sanders law firm, told Mr. Williams that he was worried about the April 27, 1989 memo I gave to Mr. Williams.
The final notation states:
" Williams will rewrite memo -
get rid of orig."
This final entry reflect Mr. Williams' statement to me that he would rewrite the memo and he wanted.
me to make sure the original as well as the copies were all destroyed.
Q:
DID YOU FOLLOW MR. WILLIAMS' INSTRUCTION TO GET RID OF THE ORIGINAL?
A:
I did not.
Q:
DID YOU CONTINUE TO HAVE CONCERNS ABOUT TO WHOM MR. MCDONALD REPORTED AFTER SUBMITTING THIS MEMORANDUM TO MR. WILLIAMS?
A:
Yes.
~
Q:
A:
Yes.
I called Morris Howard, a former NRC Regional Administrator who had previously worked for GPC.
I discussed my concern with him and asked him if he thought that I had an obligation -- a legal obligation -- to inform the NRC of my concerns.
He didn't really give me an answer that I was comfortable with.
He didn't settle the issue for me.
So I got a copy of the Code of Federal Regulations to determine if I had an obligation to report this to the NRC.
I still could not determine whether I did or didn't.
I decided to contact Admiral Wilkinson and prepared a letter explaining what had happened and asking for his advice.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 19?
A:
Yes, it is the letter I sent to Admiral Wilkinson.
Q:
DID ADMIRAL WILKINSON RESPOND?
A:
By phone.
We talked and he told me that he thought that I should attempt to resolve my concern internally.
He suggested that I work with Oglethorpe Power and with others in the company to come to a resolution.
2
- 40
Q:
EARLIER YOU MENTIONED A MAY 5, 1989 MEETING BETWEEN MESSRS.
FARLEY, DAHLBERG AND BAKER.
DID YOU EVER RECEIVE ANY FEEDBACK ABOUT WHAT OCCURRED AT THE MAY STH MEETING 7 A:
Yes, on May 8th.
I received a call from Bill Evans, the Corporate concerns investigator, who proceeded to tell me that the Performance Engineer job I wanted to fill had been discussed at the May 5th meeting and that Mr. Farley would make the call about whether to fill it.
Q:
I CALL YOUR ATTENTION TO YOUR PHONE LOG.
CAN YOU EXPLAIN THE MAY 8TH ENTRY AT 16:24?
A:
It reflects the call from Mr. Evans of Corporate Concerns.
The note says "H.
G.
B.
talked to Lee Glenn, warm and congenial," meaning that Mr. Baker discussed the transfer issue with Mr. Glenn.
The next entry states, "no answer yet, Farley to provide, Farley makes call," meaning that Mr.
Baker was not able to tell them whether I would be able to interview people for the job because Mr. Farley would make that decision.
Q:
AND WERE YOU ALLOWED TO FILL THE POSITION OF NUCLEAR PERFORMANCE ENGINEER?
A:
No.
Q:
HOW DID YOU LMARN THAT YOU COULD NOT FILL THAT POSITION?
A:
Mr. Head retired in May 1989, and Kerry Adams took his position.
I had little contact with Mr. Adams between May 1st and May 22nd.
Then on or about May, 23 1989, Mr. Adams and his assistant, Dan Shannon, came to my office to convey a message from Mr. Baker that I was to hire no more people.
Q:
DID MR. ADAMS AND MR. SHANNON JUST SHOW UP AT YOUR OFFICE OR DID THEY CALL FIRST?
)
A:
Mr. Shannon called.
The call in my phone log is an 8:31 a.m.,
May 23, 1989 entry.
1 I
- 41 4
Q:
DID MR. ADAMS OR MR. SHANNON GIVE YOU A REASON WHY YOU COULD NOT FILL THE POSITION OF PERFORMANCE ENGINEER?
A:
No they did not.
They just said that Mr. Baker had asked them to relay the message.
Q:
NOW DIDN'T YOU TESTIFY EARLIER THAT MR. BAKER HAD SPECIFICALLY TOLD YOU TO HIRE THE BEST PERSON FOR THIS POSITION AND THAT YOU'D RECEIVED MR. BAKER'S APPROVAL ON MARCH 22, 1989?
A:
Yes.
Q:
DID YOU EVER DISCUSS WHAT OCCURRED DURING THE MAY STH MEETING WITH ANYONE?
A:
In January, 1990, Fred Williams offered me a severance package in exchange for my voluntary resignation from GPC.
I asked him what would happen if I did not accept the package.
He said the company would reorganize and abolish my job.
I asked him why.
He said that after the memo I had written on April 27, 1989, I was not going to get any more support from the senior management of GPC.
He said that Mr.
Dahlberg either took my memo to his meeting with Mr. Farley on May 5th or else he discussed the issues in my April 27th memo with Mr. Farley on May 5th and Mr. Williams said Mr.
Dahlberg had gotten " beat up side the head" by Mr. Farley.
He said after that I would not be getting any more support from the senior management of GPC.
Q:
WHEN YOU ASSUMED RESPONSIBILITY AS GENERAL MANAGER, NUCLEAR OPERATIONS CONTRACT ADMINISTRATION, WERE YOU ASSIGNED ANY RESPONSIBILITY FOR THE PERFORMANCE STANDARDS ASPECT OF THE RATE CASE?
A:
Yes.
First, our strategy was that GPC would oppose the imposition of performance standards.
Second, working with the law firm, a consultant to the law firm and personnel within GPC and SONOPCO we were developing an alternative performance indicator program that would enable us to place a proposal on the table.
42
Q:
DID SONOPCO PROJECT MANAGEMENT EVER OBJECT TO WORKING ON AN ALTERNATIVE PERFORMANCE INDICATOR?
A:
Yes.
The work was proceeding well when we learned that the two engineers from SONOPCO (Michael Barker and Ed Hicks) --
who incidentally were GPC employees -- were told they could no. longer come to Atlanta to work on performance indicators because Mr. Mcdonald did not approve.
His position was that we would only oppose the imposition of any performance standard and not propose an alternative for the PSC to consider if the latter decided to impose a performance indicator.
Q:
WHO WAS IN OVERALL CHARGE OF THE RATE CASE?
A:
Mr. Dahlberg was ultimately in charge.
But the man who managed the rate case for Mr. Dahlberg was a GPC Executive Vice President, Dwight Evans.
Q:
DID YOU EVER TALK TO MR. EVANS ABOUT THE DEVELOPMENT OF THE ALTERNATIVE PERFORMANCE STANDARDS?
A:
Yes, I discussed it with him several times.
One day Mr.
Evans walked up to me and told me I was going to get more help from Mr. Mcdonald in the future and that I was going to get more help in dealing with Mr. Mcdonald.
I asked him what he was talking about and he told me that Mr. Dahlberg and Mr. Mcdonald had had a major disagreement over performance standards and that Mr. Mcdonald had withheld the support of his personnel in Birmingham.
He said Mr. Mcdonald and Mr. Dahlberg talked on the phone and got into a heated discussion.
He said that Mr. Mcdonald then drove to Atlanta and they held a meeting on August 10 late in the day, and that the discussion between Mr. Mcdonald and Mr. Dahlberg got so heated that Mr. Mcdonald broke the chair he was sitting in.
Mr. Evans told me he felt sure that Mr. Mcdonald was going to provide us the support on the alternative performance standards after this meeting.
Q:
WHAT HAPPENED NEXT?
A:
After that I was alerted that there was to be a meeting in Birmingham and it was requested that I name someone to
- 43 4
m
attend.
I was told it would be best if that person was not me.
I sent Gerald Johnson.
Q:
DID YOU GET ANY FEEDBACK ABOUT WHAT HAPPENED AT THE MEETING?
A:
Yes.
When Mr. Johnson returned from the meeting he briefed me on it.
He said that when the meeting began Mr. Mcdonald said he was not going to let SONOPCO play any role in preparing testimony about an alternative performance indicator program -- in defiance of what Mr. Dahlberg had instructed.
I was told that Mr. Farley attended the meeting and provided direction as to how the SONOPCO project would handle the issue.
The information I received from the meeting was that Mr.
Farley would decide what role GPC employees at the SONOPCO project would play in developing alternative performance standards -- not Mr. Mcdonald -- even after Mr. Mcdonald had received specific instructions from Mr. Dahlberg.
Mr. Johnson's report to me was confirmed by another participant in the meeting, Mike Barker, a GPC employee within the SONOPCO project, who also told me of Mr. Farley's involvement at the meeting, and the fact that he directed Mr. Mcdonald as to how SONOPCO would respond.
Q:
WHAT WAS THE STATUS OF THE DISCUSSIONS BETWEEN GPC AND OGLETHORPE POWER IN AUGUST 1989 CONCERNING THE FORMATION OF SONOPCO?
A:
They were at a stalemate.
In fact, it was my understanding that no negotiations were scheduled to resolve their respective differences.
t Q:
WHO DID YOU LEARN THAT FROM?
A:
Dan Smith of Oglethorpe Power.
Q:
DID THAT SITUATION CHANGE?
A:
Yes.
Mr. Smith approached me and told me he still had great concerns about who Mr. Mcdonald reported to and he said he had done all he could to get the matter resolved.
He told me that it was to Oglethorpe's benefit to try to resolve all the differences with GPC relative to SONOPCO and to try to get SONOPCO incorporated as quickly as possible, and that
- 44 i
our respective companies should focus on nuclear and ignore other areas of dispute.
Mr. Smith suggested that, if GPC was willing to separate the nuclear issue from all other issues being discussed between GPC and Oglethorpe, then he would be willing to begin discussions with me to resolve all issues surrounding SONOPCO.
Q:
DID YOU BEGIN NEGOTIATIONS WITH MR. SMITH?
A:
I went to Mr. Baker's office and told him about the proposal I received from Oglethorpe.
He immediately went to the phone and called Tom Kilgore, Senior Vice President at Oglethorpe.
After the conversation, Mr. Baker approved my discussions with Mr. Smith with one condition.
He said that we had to keep the discussions between Mr. Smith and me confidential and not let Mr. Farley or Mr. Mcdonald learn about them.
Q:
DID THIS RESTRICTION COMPLICATE YOUR NEGOTIATIONS WITH MR.
SMITH?
A:
Yes.
We had to be very careful who knew we were negotiating.
That limited the resources I could call on.
And, Mr. Farley scheduled a meeting with Mr. Stacey, the CEO of Oglethorpe, around the first of November, and we had to take steps to make sure that Mr. Stacey did not divulge our deliberations to Mr. Farley.
Additionally, because we had to keep my involvement secret, Oglethorpe and Georgia Power reached an understanding that any agreement we came to would be transmitted to Georgia Power as if the proposal was coming from Oglethorpe Power.
We also determined that we would only transmit the document one time and that iterations of the proposed agreements would secretly receive Georgia Power's tentative approval, and the finalized approved draft would be transmitted to Georgia Power only once.
Q:
DID YOU KEEP YOUR MANAGEMENT APPRISED OF THE PROGRESS BETWEEN YOU AND MR. SMITH?
A:
Yes.
I had periodic meetings with Mr. Baker to advise him of our progress.
He usually invited Fred Williams to sit in on these meetings.
- 45 4.. -
I also sent a draft copy of the proposed agreements to the Georgia Power law firm, Troutman Sanders, and asked them for their comments before a finalized document was transmitted from Oglethorpe to Georgia Power.
Q:
CAN YOU IDENTIFY INTERVENOR'S EXHIBIT 20?
A:
This is the review of the draft proposal transmitted to me by Mr. Bob Edwards of the law firm.
Q:
DID YOU SHARE THIS OPINION OF THE LAW FIRM WITH MR. SMITH OF OGLETHORPE?
A:
Yes, I had to.
Mr. Smith kept all the proposed agreements on his computers at Oglethorpe, so any changes resulting from the law firm's review had to go to Mr. Smith so that he and I could discuss the possible changes prior to him incorporating them into the agreements.
Q:
DID MR. EDWARDS COMMENT ABOUT THE REPORTING RELATIONSHIP IN HIS REVIEW OF THE PROPOSED AGREEMENTS WITH OGLETHORPE?
A:
Yes.
Mr. Edwards proposed language that should be used to
" avoid any accusation that SONOPCO is operating the plants without a license."
Q:
DURING THE MIDDLE OF YOUR NEGOTIATIONS WITH OGLETHORPE, DID ANYTHING UNUSUAL HAPPEN?
A:
- Yes, Dan Smith told me that Oglethorpe had learned that I was going to be removed from my position at Georgia Power.
No one at Georgia Power had told me this, I learned it first from oglethorpe.
Q:
WHO TOOK OVER THE ROLE YOU PLAYED IN THE OGLETHORPE NEGOTIATIONS?
A:
I learned that John Meier became the primary person who took over the negotiations I had initiated. c os.
~
Q:
A:
Yes.
Mr. Meier was not a GPC employee, he was a Southern Company Services (SCS") manager at the SONOPCO project and reported directly to Mr. Farley.
Q:
AFTER YOU LEFT THE COMPANY, WAS THE ISSUE OF TO WHOM MR.
MCDONALD REPORTED AGAIN BROUGHT TO YOUR ATTENTION BY ANYONE?
A:
Yes, some time in January of 1991, I received a call from Dan Smith who told me that he had attended a meeting between SONOPCO and the NRC on January 11, 1991.
He related to me several statements that Mr. Mcdonald had made which in effect said that prior to December, 1990, Mr. Farley had no responsibilities over Administrative Services and Technical Services at SONOPCO.
And I believe the impression was left with the NRC that Mr. Farley had no authority over plants Hatch, Vogtle and Farley or Georgia Power personnel.
Mr.
Smith told me he did not believe that to be true.
My response to him was that I couldn't believe that at this point in time Mr. Mcdonald would make those statements, and I asked Mr. Smith to forward me a copy of the transcript, which he did.
Q:
AMONG THE RESPONSIBILITIES AS GENERAL MANAGER OF NOCA WHICH YOU LISTED EARLIER WAS ONE DEALING WITH BUDGETS.
DID YOU HAVE ANY INPUT INTO THE 1990 NUCLEAR BUDGET?
A:
No.
But, I was called repeatedly by representatives of Oglethorpe asking for information on it.
Q:
DID YOU EVER GET A COPY OF THE PROPOSED 1990 NUCLEAR BUDGET?
A:
Yes, Oglethorpe Power sent me a copy.
Q:
DID YOU EVER HAVE DISCUSSIONS WITH THEM ABOUT THE BUDGET?
A:
Yes.
After they had provided me a copy of the budget, they called several times to learn if it had been approved.
I did not know.
After they called in early December, 1989, I called Mr. Jeff Wallace in Resource Management and asked him the status -- he was basically head of the budgeting process.
He told me the budget had been approved by the Southern Company management group and that Mr. Dahlberg had not been pleased with it and brought the matter up to Mr.
Addison.
But, Mr. Addison said, "That's it."
I asked where 47 a
e,
)
referring to Mr. Dahlberg.he got that inforination anl e man himself,a When I finished the phone call
}
call the extension I had just dialed.and asked the I asked him to-that he got the same answer as I had justHe did and told me received.
xll efh y Nap 9tn B.~ Wobby g
~ 48 -
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