ML20078B855
| ML20078B855 | |
| Person / Time | |
|---|---|
| Site: | 05000142 |
| Issue date: | 09/21/1983 |
| From: | Hirsch D COMMITTEE TO BRIDGE THE GAP |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8309270282 | |
| Download: ML20078B855 (13) | |
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CCHMITTEE TO BRIDGE THE GAP i9/21/83 1637 Butler Avenue, suite 203 . 00CKETED Los Angeles, California 90025 USNRC (213) 478-0829 5 SEP 26 Mi:i1 UNITED STATES OF AMERICA CFFICE OF SECRET'J '
NUCLEAR REGULATORY COMMISSION DCCKEiff4G & SERVRL ER = H BEFORE THE ATOMIC SAFETY AND LICENSING BOARD in the Matter of )
) Docket No. 50-142 THE REGENTS OF THE UNIVERSITY )
0F CALIFORNIA ) (Proposed Renewal of
) FaciIIty Li 'nse)
(UCLA Research Reactor) )
)
CBG REPLY TO NRC STAFF PETITION FOR RECONSIDERATION OF BOARD RULINGS ON CONTENTION Ii
- 1. Introduction ,
Contention il asserts that the UCLA reactor is no longer entitled to a Class 104 license because it is no longer used primarily for research and education but rather for sale of services, primarily to commercial firms.
CBG contends in this Contention that the original uses for which the reactor was licensed--research and education--have all but dried up over the years,
-so that in recent years it has been in violation of 10 CFR 50.22, which prohibits substantial use for sale of services, other than research and development or education and training, by Class 104 licensees-e 8309270282 830921 PDR ADOCK 05000142 G PDR
$]
r UCLA at first denied that there was any use of the reactor other than education. Three Boa rd Orders compelling more truthful answers led to release of UCLA documents making clear that the so-called " sole" purpose of the UCLA reactor, supposedly class instruction, actually represented only 30-50 hours per year of use, or ten percent of the reactor use, with 60% of use being by a single commercial firm engaged in ore assaying for mining conpanies. For exaqs le, in 1979 the reactor was used, according to those records (now Applicant's Exhibi t I) only 31 hours3.587963e-4 days <br />0.00861 hours <br />5.125661e-5 weeks <br />1.17955e-5 months <br />, whereas commercial use was 264 hours0.00306 days <br />0.0733 hours <br />4.365079e-4 weeks <br />1.00452e-4 months <br />.
Other UCLA records (e.g. Nuclear Energy Lab annual reports for 1976 and 1977, internally produced and not sent to NRC) indicated that the the original research and educational uses had largely dried up, leading to an attempt to find "new markets for reactor services." "The reactor is no longer new. and reactor physics research projects wi th the UCLA reactor have
- become non-existent. The advent of the Medical Cyeiotron on the UCLA campus '
has displaced the reactor in the field of medical radioisotope production."
Exhibit C-10, p. 2 The same internal documents expressed concern about the reactor being so old that i ts reactor users were " shopping elsewhere,"
and discussing measures to be taken to " attract more outside business." Jji,p.35 l
[ UCLA and the NRC Staff, in shotgun motions for summary disposition, 1
l argued that the contention should be dismissed because, they asserted.
l l
l It was irrelevant how the reactor was actually used. They declared that
- even though 60% of the use was by commercial firms and only 10% for instruction, 98% of the costs of owning and operating the reactor should be considered
- to be devoted to instruction, and only 2% of the costs devoted to all the other activi ties, which comprised the majority of the actual use.
t
CBG, in its response, pointed to the absurdity in such an a rgument , Indicating that its acceptance would be to nullify the Atomic Energy Act provisions and CFR provisions that set the " substantial use" test for determining eligibility for Class 104 licenses, if the argument were accepted, CBG said, UCLA could operate the reactor only 30 hours3.472222e-4 days <br />0.00833 hours <br />4.960317e-5 weeks <br />1.1415e-5 months <br /> per year for licensed purposes in education and research, and run it for sale of services 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day, more days than there are in a year before the cost allocation would exceed the 50% standard. CBG pointed to the history of the " substantial use" test and the clear linking of cost allocation to actual use, both in the regulation and in proper cost accounting methods.
The Board ruled that indeed such an interpretation by UCLA and Staff would lead to an absurdity, and that one cannot claim to devote more than 50% of the costs to an activity constituting less than 50% of the use.
It is this ruling which Staff, wi th Applicant's assent, attempts to overturn. .
They essentially argue that it is irrelevant how the reactor is actually used, what matters is solely what the Applicant says its purpose is.
They further argue, essentially, that the reactor is used when it is not used, and that that "down time" should be allocated excInsively to the 10% of "on time" attributable to instruction. CBG's response is that this is once again mere sophistry, a desperate attempt to cover-up the undisputable fact that the reactor is no longer primarily used for its licensed purposes, and that such a tortured interpretation still 1 cads to an absurdity and would totally nullify the law and regulations, as well as the clear intent of Congress.
-4 The Argument that it is Stated Purpose, Not Actual Use. That Matters Staff and Applicant essentially argue that one should ignore the actual data compiled by Applicant on true use of the reactor and determine the class of license purely on the basis of what Applicant says its real purpose is, even if the actual use clearly contradicts that self-serving statement, as it does in this case. This posi tion amounts to saying, look not at what I actually do but only at what I say I do.
CBG declarant and witness Leo Baefsky eloquently made clear that the function df cost accounting is dollar accountability, i .e. maki ng certain that moneys appropriated for certain purposes are indeed spent for those purposes and not for others. He said that given that principle of cost accounting, it was clear that the function of the UCLA reactor had .
dramatically shif ted over the years, but UCLA's cost accounting had failed to properly indicate that shif t, recording costs according to past uses rather than current uses. His review of the cost and use information led to a clear conclusion that commercial use had moved f rom an incidental activity, forvhich few costs should be attributed, to the primary activi ty, for which the majority of the costs must be attributed. (see Baefsky declaration, supplemental testimony) .
Applicant's own witness indicated that the actual use of the reactor was ,1:3 _ lust the opposi te order of its stated purpose. (Os t rande r ,
TR 98) . The utilization records of Applicant so indicate (see Applicant exhibit 1, and compilationof Applicant's data contained in CBGtestimony, included as attachment A in CBG's response of September 6) .
Appilcant attempts to assert that the regulation says that costs should be allocated according to stated purpose by the Applicant, not actual utilization. This is nonsense. The regulation says just the opposite, that the reactor will be deemed to be for commercial purposes "If the reactor is to be used so that more than 50X of the costs of owning and operating the facility is devoted to production of materials, products or energy for sale or commercial distribution, or to the sale of services, oth'er than research and developnent or education and training." emphasis added. Thus, purpose (a subjective matter) is defined in the regulation by an objective standard--use. Applicant attempts to reverse this , throwing out the objective, measurable usage in favor of a self-serving statement of purpose contradicted by the reali ty of usage. It is understandable that the Applicant would so desire that the true use be ignored, but such an interpretation is both legally wrong and would totally nullify the law. Were Apolicant's .
argument to be accepted (and i t is essentially that of Staff as well),
no reactor could ever be ineligible for a research and education Ilcense, no notter hav little research and education was actually done at the reactor and no matter how much sale of services took place, sc long as the licensee merely sent a letter to the NRC saying that their purpose was research or education, in other words, a reactor that was used one hour per year for education could be licensed as educational so long as its owner sent a letter to flRC saying its purpose was educational, even if thousands of hours per year were actually spent on commercial activi ty, were this absurd argument accepteo.
Staff and /pplicant misrepresent the statement of consideration for the regulation in qucstion by purporting to argue that the Congress and Commission intended to exempt all research reactors f rom commercial cons ide rati on. Just the opposite is the case. Research reactors could teve class 104 licenses so long as they were not used substantially for commercial uses. The language says that they could have class 104 licenses if they were used only for research and education; if they were used for non-licensed purposes, the class 104 license could not be given if such uses were substantial.
Staff and Applicant argue that such non-research and non-education uses are in cidental to the reactor use at UCLA. However, this is not the cese; instructional uses are incidental to the major reactor use, and research use is non-existent, by UCLA's own admission (see Exhibit C-15, astrander tes timony 19,114,135.)
UCLA continues to attempt to allocate only incidental, costs of operation to the primary usage of the reactor (sale of services) and to allocate all other costs to the incidental usage. This is contrary to the regulation, the statute, and basic accounting principles (see Baefsky testimony and declaration), and would make the law null and void.
The Assertion that the Reactor is Used When i t is tJot Operating This is a rather remarkable argument, assentially arguing that the reactor is used when it is not being used, because it is available for use. I t i s t rue tha t the reactor is currently used less than 5% of the year.
That is largely because it no longer serves any useful function. Of that 5%, only 1/10 of that is for the supposed sole purpose of the reactor--
educa ti on. UCLA and Staff now wish to argue that the remaining 95% of "down" time should be attributed to that .F4 of "on" time.
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'At first Staff argued that five of the NEL staffpeople had facQEty. teaching
. positionst and therefore their salaries should not be charged to the commercial side of. the operation. /fhis argument has since been dropped when ST aff learned
.it was in error,' that all but one "of the NEL staffpeople have no teaching appointment or responsibilities whatsoever, and the sole person who does has
-i only a part-time' appointment, .the rest of his time being devoted to non-instructional reactor matters,-primarily reace r operation for the commercial user.
It was mado clear on the record that if "down" time is to be considered (i.e., time when the reactor i:s not operating), it must be allocated
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on the same basis as operating usage.- It was testified further that consideration of "down time" was a " morass" because there was no objective way toaccurately
' quantify it, and that one would have to consider it for all users (commercial as well'as Instruction) which would more than cancel out any gain to the instructional activity. - For ' example, if one considered sample preparation
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and analysis time with' reactor off for classes, one would likewise. have to.
, compute sample preparation and analysis time for commercial users; Dr. Kalil testified that' he alone was at the reactor 60 hours6.944444e-4 days <br />0.0167 hours <br />9.920635e-5 weeks <br />2.283e-5 months <br /> per week doing such sample -
i preparation and analysis .for his Uranium West use of the reactor. The 3000 I.
such hours for-Dr. Kalil's business use of the reactor would thus more than compensate for.the few hundred srd aisalysis and preparation hours for classer.
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l TR 719-722, 254,564-5.
l l If UCLA wants to count for the Instructional category time when
- - the reactor is off but classes are doing sample preparation or analysis, L
!' then It.must do so:for commercial as well, in-which case the commercial use
. still is. far greater than the instructional. What UCLA :s really trying to
. . do through all of this is find some kind of' multiplier; by which it can expand 1-
- the true minimal instructional uses while not applying the multiplier to the t;
commercial uses which so outnumber the instructional use.
A good example of this is UCLA's attempt to add down time
.to the instructional use category. Mr. Ashcaugh testified that his extension class, for one of its twelve sessions, would come to the reactor for a tour.
That tour was less than three hours, yet Mr. Ashbaugh counted the entire twelve
. weeks of the class as " reactor dependent instruction," even though he tdtified that the rest of the class had nothing to do with the Argonaut and the class could easily be offered without the tour component. TR381-4,404 He testified that they counted the whole forty hour class as " reactor dependent" even if only one hour involved the reactor. TR 404 And he testified that to count this down time for instructional uses and not count it for commercial users would be " apples and oranges" and inappropriate. TR393-3,369-373,377-9.
The same thing was true for maintenance and related costs.
UCLA attempts to allocate all such costs to the 10% of use, although its own witnesses made clear that the reactor must be maintained safely for commercial i as well as instructional users, and it was made clear that maintenance and related costs must be allocated on the basis of use. TR 649-50,654,574, l Baefsky PS, TR 157.
In short, the reactor is used when it is being used. When it is not being used, it is not being used, if one were to count ancillary time (pre-start checkoffs, sanple preparation, sanple analysis, data reduction),
one must do so for all users alike. Since Dr. Kalil's Uranium West "down time" approaches 60 hours6.944444e-4 days <br />0.0167 hours <br />9.920635e-5 weeks <br />2.283e-5 months <br /> weekly, consideration of "down time" results still in commercial use far exceeding the instructional activity. The costs of owning and operating must be divided on the basis of its use; this is basic to cost accounting' and to the regulation and to do otherwise would nullify the intent-of Congress, which was explici t about i ts concerns that a reactor with a research or educational IIcense, such as that at a University like UCLA, not be permitted to use that reactor substantially for activities outside
those licensed. (UCLA's reference, once again, to General Atomics, af ter Judge Laurenson denied UCLA's motion to re-open the record to take evidence on that matter, is both ~ improper and misleading, attenpting to assert that the regulations only apply to non-universities, implying that a universi ty has carte bland to violate the regulation about non-licensed activi ties and only non-universities must obey. This is absurd.)
UCLA makes a specious argument about cost allocation at page 13, saying that if a facili ty forrrerly engaged in research and education switches over in a period of many years to primarily doing sale of services, but its total costs recain the same, none of those costs should be allocated to the activity which has become the primary use. Mr. Bacfsky made clear that this was incorrect from an accounting standpoint, because costs that were previosly consumed in support of the research and educational uses which had dried up were now being consumed in support of the sale of services, and must so be allocated in cost accounting. TR 696, 697-703.
The Staff and UCLA essentially are arguing that the reactor is at UCLA for the thirty hours a year that it is used for education and that
.the hundreds of additional hours per year are incidental. But in reality, the numbers of course make clear it is the instruction that has become incidental and research non-existent, and' that sale of services is now primary. To only allocate incidental costs to the primary activity, and all but incidental costs to the incidental activity flies in the face of the regulation and the basic principles of cost accounting.
They also argue that there is no profit involved, and p t they assert that the costs of operating the reactor for commercial users is $15 an hour but they charge $65 per port hour, clearly profit, if thei r cost accounting assertion is correct. Staff witnessPeterson asserts that there is no taxpayer subsidy, citing the Rebok declaration cited also by Applicant in its recent pleading;
yet it is clear that charging $65 an hour for a service that costs hundreds of dollars per hour to provide is clearly a taxpayer subsidy. One can't have it both ways--it is either a taxpayer subsidy or profit.
And the assertion by Rebok--who did not testify and whose affidavit is not in evidence--that UCLA policy is that it will provide services to outsido users on an at-cost basis so long as those services are not available elsewhere (i.e., to avoid unfair competition)--was clearly disputed at hearing where i t was indicated such services were available elsewhere.
CONC LUSION The history of Applicant and Staff's dealing with Contention ll has been long and tiresome. Applicant fi rst denied any commercial use at all,.despi te the clear evidence in i ts own records to the contrary.
When the documents surfaced, and af ter repeated Orders f rom the Board compelling more truthful responses and even threatening sanctions because of the non-truthful responses, UCLA began to call the commercial users of the reactor " extramural"or "non-academic " Indeed, the primary use of the reactor is non-academic .
It then tried to claim that it could allocate 98% of the costs
-to 10% of the use, thereby maintaining a class 1014 license even if at least 60% of the use was outside the IIcensed purposes. When theBoard rejected that, i t attempted to find a two-order-of-magni tude multiplier for the handful of instructional hours for which the reactor is actually used.
And finally Staff, on behalf of Applicant, requests the Board reconsider its ruling that if the reactor is used primarily for non-academic purposes it violates 10 CFR 50.22
O They say, essentially, ignore Applicant's own records that Irdicate actual use of the reactor is no longer according to the stated purpose or license requirements. They argue that a facility should be entitled to a Class 104 license--no matter how the license is actually used--so long as the Applicant says its purpose is research or education. Forget the fact that it does not operate the reactor according to the statd purposes, they say, ignore the fact that the reactor is barely used at all for the licensed purposes, and is primarily used for non-licensed purposes. At bottom, the Staff motion and the UCLA support thereof say give UCLA the requested license, whether they are entitled to it or not based on the record, solely because UCLA has requested the license. Surely more scrutiny than that is requi red by the regulations; that scrutiny, in the form of three days of evidentiary hearing, clearly indicates that the UCLA reactor is no longer used for the purposes for which it obtained its license. UCLA and Staff request the Boa rd ,
to ignore that fundamental fact.
The Congress and the Commission have set a substantial use" test for determining whether an Applicant is entitled to a Class 104 license.
The Board has ruled that that the " substantial use" test means what it says; 1
Staff and Applicant, fearing the application of the statute and the regulation, assert that "use" does not mean "use."
One should not lose sight of the fact that these years of li tigation, with detailed attempts to resolve the unanswered safety and other questions,
- i. all about a reactor used less than an hour a week for class instruction and for which reactor physics research has long since ceased. Even the production of medical is6 topes for the fledical School is no longer done, since the Med.. School has its own cyclotron now. These torturous years are being spent trying to determine whether a reactor used primarily by Uranium West for assaying commercial mining samples is worth the risk to a highly populated campus and densely populated surrounding urban area, its operators are entitled
to argue it is worth the risk. But they are not entitled to a Class 104 license for research and educational uses to which the reactor is no longer put.
CBG respectfully urges Lthat the Board, af ter studying the transed pt of the evidentiary hearing on this matter, the exhibits and testimony admitted therein, the proposed findings of fact and particularly the responses thereto, rule
'that the law and regulations mean what they say, as the Board has already ruled, and that the UCLA reactor, as indicated in Applicant's own records, is substantially .
used for sale of services, other than rescarch and developrent or education and training.
Re e tfully u i cd,
/ .
Tante Ili rsch President dated at Los Angeles, CA C0!ttilTTEE TO BRIDGE THE GAP
~
. this 21st day of September,1983
UNITED STATES OF AMERICA NUCIRAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of }
) Docket No. 50-142 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (Proposed Renewal of Facility License)
- DECLARATION OF SERVICE I hereby declare that copies of the attached:
CBG RZPLY TO llRC STAFF PETITl0f1 FOR REC 0f1SIDErvu l0H OF DOAFD iiULihG5 0:1 C0tlTENT10tl ll in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, postage prepaid, addressed as indicated, on this date: 21 September, 1983 .
John H. Frye, III, Chairman Christine Helwick Atomic Safety & Licensing Board Clenn R. Woods U.S. Nuclear Regulatory Commission Office of Ceneral Counsel 590 University Hall Dr. Emmeth A. Imsbke 2200 University Avenne Adninis trative Judge Berkeley, CA 94720 Atomic Safety & Licensing Board U.S. Nuclear Regulatory Commission Mr. John Bay .
Washington, D.C. 20555 3755 Divisadero #203 San Francisco, CA 94123 Glenn 0. Bright Aaministrative Judge Atomic Safety and Licensing Board huhCiyAtorney U.S. Nuclear Regulatory Commission City Hall Washington, D.C. 20555 1685 Main Street Chief, Docketing and Service Section Office of the Secretary .
Dorothy Thompson U.S. Nuclear Regulatory. Commission !!uclear Law Centcr i Washington, D.C. 20555 6300 Vilshi re Blvd, Suite 1200 Los Angeles, CA 90048
' Counsel for NRC Staff .
U.S. Nuclear Regulatory Commission Ms. Caroic Kagan, Esq. I Washington, D.C. 20555 Atomic Safety & Licensing Board Pancr1 I attention: th. Colleen Woodhead US tluclear segulatory Commission )
Uashingt D.C. 20555 '
William H. Cormier /
Office of Administ2a tive Vice Chancellor #
University of California 405 Hilgard Avenue
- Los Angeles, California 90024 Q[
President COMMITTEE TO BRIDGE THE CAP