ML20080R785
| ML20080R785 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 02/22/1984 |
| From: | Simpson J KANSANS FOR SENSIBLE ENERGY |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-OL, NUDOCS 8402280412 | |
| Download: ML20080R785 (15) | |
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.a NYC UNITED STATES OF AMERICA I4 fEh 24 Arbj5 NUCLEAR REGULATORY COMMISSION r re, .-
U$$rf;f?l?: 1 Before the Atomic Safety and Licensing Appeal Boardf"#
In the Matter of )
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KANSAS GAS AND ELECTRIC COMPANY, et al. ) Docket No.
. ) 50-482 OL (Wolf Creek Generating Station, )
Unit No. 1) )
Motion of Kansans for Sensible Energy to Have Status as Intervenor and Financial Qualifications Contention Reinstated.
On June 23', 1982, Kansans for Sensible Energy (KASE) filed its appeal with the Appeal Board asking that KASE be reinstated as an intervenor and that its contention re-garding the financial qualifications of the applicants also be reinstated in the proceedings before the Atomic Safety and Licensing Board.
KASE's contention that was dismissed by the Licensing Board was as follows: "Due to increased and underestimated costs the applicant does.not have the financial ability to either operate or decommission the Wolf Creek facility."
On June 28, 1982, the Appeal Board entered a Memorandum and Order in which it ordered that the appeal of KASE be held in abeyance pending further order of the Appeal Board.
In that order the Appeal Board indicated that it was holding B402280412 840222 PDR ADOCK 05000482 O pg e
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F the appeal of KASE in abeyance pending judicial action in the case of New England Coalition on Nuclear' Pollution, et
'al'. v. Nuclear Regulatory Commission, et al. (No . 8 2-15 81)
~w hich was pending before the Court of Appeals for the District of Columbia Circuit.
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On February.7, 1984, The Court of Appeals for the District of Columbia Circuit decided the above desribed case and invalidated the rule which was the basis for the dismissal of KASE by the Licensing board in this matter. A copy of the court's opinion in that case is attached hereto.
i KASE and the other petitioners contended in their appeal, along with other issues, that the invalidated rule was not supported by its accompanying statement of basis and fact as required'by 5 U.S.C. 553 (c) . The court agreed and remanded the rule to the Nuclear Regulatory Commission. See
.p.-3 of the court's opinion.
Since the rule adopted by the NRC, which was the basis for the dismissal of KASE and its contention, is invalid, 1the regulation'that existed prior to the adoption of the in' validated rule is back in effect. There fore , KASE's con-tention and intervention as originally admitted by the board are valid.
Because.the above desribed case has been decided, KASE asks the Appeal-Board to decide upon KASE's appeal, to reinstate KASE as an intervenor in the proceedings before the Licensing Board, and to reinstate KASE's contention 2
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i regarding the financial _ qualifications of the applicants.
Additionally, KASE asks.that the-Appeal Board order the 1 Licensing Board not to grant the operating. license sought by the applicants until the_ licensing board has completed the
, proceedings regarding KASE's contention.
Respectfully Submitted, L lb . I : e _v
_J6hn M.' Simpso'n Attorney for KASE 4350 Johnson Drive, Suite 120 Shawnee Mission, KS 66205 Telephone (913) 384-9144 Dated AA , 1984.
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. Notiest TFJs opir.!on'is rahltet to fercal redston Unis are t[ fore pub!!:t'Jen reyauted tr. t.he Fede.rs.3 Repertar or U.S.Arp.D.C. Reporta.
to ::ot!fy the C:ork.of trir for:=r.! circ.ra is cider that corrections may 1,e cade befers the bound vclu=os go to press.
NU$iPDhIll,1PShDlITiUIb}1PldB FCR 751E DISTRICT OF. c0 LUM 2IA CIRCUrr No. 82-1581 NEW ENGLAND COALIDON ON NUCLEM POLLVDON, ET AL., Pl'.IITIONERS
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NUCLEAR REGULATORY CO20!!s5!0N AND THE UNITED STATES oF AMEalcA, REsPONoENTs . . CAR 0uNA POWER & LIGHT CO., ET AL., INTERVENORS Petition for Review of Order of the - ' Nucles.r Repilatory Commission i Argued February 28,1988 Decided Februs:77,1984 l i' t billiam S. Jorcar, III, with whom Diane Currar. w'as ' on the brief, for petitioners. . 1 Marjorie S. Nordlinger, Attorney, Nuc1est Reguhtory ih l Commissfon, with whom E. Leo Slaggie, s.nd Kay L. R c - , E!ils ef ecsts rr.ust be f.M w!!h!n 14 days nfiar entry ef ,'ud; nent. The court la):s w! h disfuor upon tr.etions to fJe tille cf cr.s. cut cf t!:ns.
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man, ' Attorneys, Department of Justice,'were on the brief, for respondent.s. James B. Hamlin, witli whom Jay E. Silberg was on
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the brief, for inten enor. Befora MIKVA, EDWARDS, and SCAMA, Circuit Judges. Opinion for the Court Sled by Circuit Judge ScAUA. ScAuA, Circuit Judge: The New England Coalition on N: clear Pollution (NECNP) and othen-ine!uding Kan.ans for Sensible Energy-(Kr.r.sas being a state ~ where
. an application for a license to operate a nuclear generat-
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ing station is currently pending)-petition under 28 U.S.C. 5 2842(4) (1976) for review of a rule of the Nuclear Regulatory Commission. Elimination of Review of Financial Qualifications of Electric Utilities in Li. ceu ng Hearings for Nudear Pcm;cr Plants, 47 Fed. Reg. 13,750 (1982), 10 C.F.R. pts 2 and 50 (1983). In the
- asps.ct here under challenge, the rule. amends the Com-mission's Rules of Practice for Domestic Licensing Pro-
- eeedings,10 C.F.R. Part 2 (1982), and its substantive requirements governing Domestic Licensing of Production ^
and Utilization Facilities,10 C.F.R. Part 50 (1982), to eliminste the need for applicants who are electric utilities to establish their Snancial qualineations.2 Petitlenen contend (1) that the rule contravenes a ' requirement of financial quali5 cations review contained in the Atomic Energy Act, in particular il103(b) and IS2(a), 42 U.S.C. Ii 2188 (b) and 2232(a) (1976); (2) that an interpretation of the Act which would grant the Com-mission authority to eliminate the requirement of fnan-
- The rule also requires power reactor I!censees to obtain on-site property damage insurance, or to provide an equiva-
. ledt form of protection (e.g., letter of credit, bond, or self.
Insurance), from the time that the Comm!ssion f..st issues 1n operr. tint license for the rescior. This portion of the .le is not challenged, !s se.verable, and !s therefore no: a:N:ed by' the present opinion. In our subsequent discussion, references to the rule pertain only to the chrJlcnged portion.
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i 8 c!al quali5 cation'would produce an unconstitutional dele. ! gation of legislative power; (3) that the Commission's ' conclusions that no link exista between Snancial qualifi- .. cations and safety, that current inspection efforts can assure safety, and that utilities can meet the costs of construction lack substantial evidence in the record; (4) that the Commission's failure .to disclose the factual - be. sis underlying its decision precluded effective comment'; and Anally (6) (implicit in petitioners' discussion of the . last two points combined with their challenge to the rule as being arbitrary and capricious) that the rule is not supported by its accompanying statement of basis and .. purpose, as required by 6 U.S.C. I 553(c) (1982). We agree with the last, and accordingly remand the nile to the agency. ' I ,. Since 1968, the Commission's rules have required that . . applicants for licenses to construct or operate nuclear power plants provide the following f'inancial information: Information suflicient to demonstrate to the Com-mission the Anancial qualiScations of the applicant to carn out, in accordance with the regulations in this chapter, the activities for which the parmit or license is sought. If the application is for a construction per-mit, such information shall show that the applicant - possesses the funds necessary to cover estimated con-struction costs and related fuel cycle costs or that the appilcant has reasonable r.ssurance of obtaining the necessary funds, or a combination of the two. If the
. application is for an operating license, such informa-tion shall show that the applicant possesses the funds necessary to cover estimated operating costs or that i
- the applicanf has reasonable assurance of otisining the necessary funds, or a combination of the two.
With respect to any production or utilization facility of a type described in i 50.21tb) or i 50.22 [facili- l ties fer ir.dustrial or commercial purposes), cr a test- : ing facility, the following specific re6,uirements shall - apply: I
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If the applica' tion is for an operating license, such Information shall show that the applic' ant possesses
- or has reasonable assurance of obtaining the funds necessary to cover the estimated costs of operation for the period of the license er for 5 years, whichever is greater, plus the estimated costs of permanently shutting the facility down and maintaining it in a safe condition. .
10 C.F.R. I 50.33(f) (1982). . On August 18,1981, the Commission published a notice of proposed rulemaking, announcing that it was con-tempiating amendment of the foregoing requirements and
- ailled provisions, to eliminate them entirely with regdrd to electric utility applicants for construction permits;'
and either to eliminate them entirely or to limit their applicatien to demonstration of financial ability to cover decommissioning costs, with regard to electric utility ap-plicants for operating licenses. Tinencial Qualifcationst Domestic Licensing of Production and Utilkation Facili. ties, 46 Fed. Reg. 41,786 (1981). The proposal was said to be based upon two premises. First, that " regulated e!ectrie utilities (or those able to set their own rates) . will be s.ble to meet the costs for safe construction and operation of a nuclear production or utilization facility." Id at 41,788. The Commission explained: [S]uch utilities are usually regulated by state and! or federal economic regulatory sgencies, and gen-erally recover the costs of constructing ger.erating facillties through the ratemaking process, subject to the oversight of such state and/or federal agencies. As a. result, reasonable ecsts necessary to meet a
- utility's obligations (including NRC imposed safety
- requirements) are normally recovered through this 1
ratemaking process. See, e.g., TPC v. Hcpe Natural
. Gas Co., 320 U.S. 591 (1944); Bluef.' eld Wcter
. Works and Improvement Co. v. Public Senke Com-mhsicm of the State of West Virgiria,269 U.S. 679 .
(1923). Thess landmark cour . decisier.s es:ablished
- the principle that public utility corranissions are to s
f p .. s , estab!!sh a utility's rates such that all reasonable costs of serving the public may be recovered assum-
.ing prudent management of the utility. "
Id, The second premise assertedly justifyiO the proposed rule was that there was no demonstrated relationship be-r tween onancial quali$ cations and tafety, dirset insp _ tion and enforcement being a more efective means of achiev-ing the latter goal. In the Commission's words:
'[Tjechnical reviews and inspxtion efforts are effec- .
tive, direct methods of discovering deficiencies that . could affect the public health and safety. Whlie anal- !
- vais of fmancial cualifications has b+en viewed in the j
'past as possibly a'n additional method of determining :
an applicant's ability to satisfy safety requirements, l experien tween the NRC's review of an applicant's financial l- , qualincations and the applicant's ability to safely constrvet and operate a nuclear power plant. Id. This latter point by itself, of course, could not ex-plain the rule which the Commission was proposing-i.e.,
.. a rule that " retain [e] . . . current review under i 50.S8 (f) of applicants for any production or utilization facility 11-46 cense, if such applicanta are not electric utilities."
Fed. Rw. at 41,788. The Commission was not, evidently, 1 anerting that in its view onancial quali6eation require- ' ' ments were utterly useless, but only that their question-
- e. bit eliectiveness, combined with the peculia.r character- '
istics of public utilities that assure solvency, arguably justify elimination of the requirement 4 for that partic-ufar category of applicant. If sustained by the facts, that was a reasonable ,enough approach: even if a statutory mandcte for review of financial qualifications exists (an issue we need not decide), it does not preclude the adop-tion of approptinte generalized criteric that wculd render some cau by-case evaluations unnecessary. See Heckier
- v. Campbell.108 S. Ct.1952,1954 (1sSSh Cf. Permont Yankee Nuefcar Potter Corp. v. NRDC,435 U.S. 519, 535 6
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o' - 6 n.13 - (1978) ; Parmian Basin Area Rate Cctes, 390 U.S. 747 (1968).. Opponents of the propose <1 rule attacked it on various grounds, but the most conce'rted attack was upon the premise that.a public utility's regula'id status suures adequate funding. That was controverted both in prin-ciple (for example, through reference to the refusal of some regulatory commissions to permit rate charges for - > construction work in progress ("CWIP"), J.A. at 150, and to the political pressures affecting rate-setting, J.A. at 137 39) and through the citation of specine instances in which needed funding was not forthcoming and Enan-
'cial dir'iculties were exparienced (c.p., J.A. at 14S-46; .
149,150 51). After receiving and considering comments, the Commis-sion issued its 5nal ra!e on March 81, 1982, adopting precisely the course it had proposed (without the alterna-tive provision for rataining Snancial qualiScation require-ments with regard to decommiuioning costs:). In its statement of basis and purpcse accompanying the rule, the Commission responded to the attacks upon its major premise of public utility solvency as follows: As to the nrst elimination of thepoint raised Ansncial qunby !!$ cations review, thec Commission does not and any reason to consider, in . a vscuum, the general ability of utilities to Snance the construction of new generation facilities. Only when joined with the issue of nda;uate protection of ' l the public health and safety dus this issue become padinent. As to this, the commenters' swond point, l the Commission in its Sect, rook decision indicated its
- support for the substan'ee of the proposed rule-
! ':This option remains under consideration "In the context
. of [a] reneric rulemd.ing [on cecommissioning) now being conducted. Until that [is cotr.pleted), the Commission has
. concluded ths.t it is premature to include r.r.y final deelston on de:om=issioning in this Enal rule on f.ntaciti qualif.ca.
tfons." 47 Fed. Eer. 18,751 (1952). 1 . . e
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eliminatleti of the Anancial quallnections review be-cause of th'e' lack of any demonstrable link betwcen public health and safoty concerns snd a utility's abil- - ity to make the requisite Snancial showing. The actual financia.1 situation analy:*! in that case has not changed. There is no evidence that t.be safety - of the public has ken adverzeiy rdected by Public Senice Company of New Hampshire's (PSONH) di!nculties in obtaining Snancing. It is true that to raise capital, PSCNH has sold part of its ownerahlp in the Seabrook pla.nt, but such ection dces not have any demonstrable link to any afety.problen.s. Simi- , larly, citing WPPSS' experience is not convincing, be:ause WPPSS' respons4 (e.nd that of most other utilities encountering financial difficulties) has b>an to postpone or cancel their piants, actions clearly not ** inimical to public health and safety under the Atomic Energy Act. 47 Fed. Reg. at 13,751. II In aaying that it found it unnecessary "to consider, in
~a vacuum, the general ability of utilities to Snance the constructJon of new generation facilities," the Commis-sion chose to abandon, rather than defend, the Srst prem-ise of its proposed rule. As we have noted, that premise- -
was e.ssential because it explained why public utilities could . reasonably be treated differently, which was the whole object of the rule. In its place, the Commission has inserted the factual obsenation that when certain public utilitf licensees have encountered Snancial di!?iculties-they have deferred or cancelled their construction p!ans rather ths.n skimp on' safety related features. It is not an adequate substitution, because wo fail to see any ra-tional connection between that obsenation end the li-centecs' character cs public utiHties. It may be possible to believe (though we do not pass upon the ppint), as the Comm!ssion evidently believed when it hsued its prc- ' posed rule, that the very nature of government rate L n a.mo
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[ 8 regulation-a c'ompact whereby the utility surrenders its
. freedom to charge what the market will bear in exchange for the state's anurance,of adequate profits-assures 8-nancial stability for public utilities. But the mere fact j that some public utilities, when Snancially unstable, chose
. to abandon or defer proposed nuclear facilities instead 3
of completing them inadequately, does not !ead to the con-
! elusion that all anancially unstable public utilities, as op-l peced to other Srms in that situation, will generally do so; nor do we see any a prori reason to believe that would be the case. In short, in refusing to consider "in a vacuum, the general ability of utilities to finance. the .
construction of ne.v generation facilities,'" the Commis-sion has abandoned what seems to us the only rational buis enunciated for generally treating public utilities differently for the purpose at hand. The final nile continues to rely upon the :.econd prem-ise set forth in the proposal, i.e., that financial quallSea-tions review has net been demonstrably successful in mHting safety concerns, and that direct inspection and enforcement are more efiective. But it does not rely Upon that premise clone-and indeed, such exclusive reliance
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, would be irrational, since it would only support a nale eliminating Snanefal qualifications review er.'.frely, and not a ru!e exempting public utilities. Assumins that the Commission had the choice between Ending Snancia!
. qualineations review eniversally worthless and Snding that electric utilities are generally so financially compe.
tent as to render Anancial qualineations review for them suprfluous, "it cannot adopt one and apply the other. To do so is the essence of arbitrary and c2pdeious ae. tion." Squaw Tranelt Co. v. United Stctes, 574 F.2d 492. 496 (10th Cir.1978). While the petitieners may not have standing to complain of this rule's undednelu.
! s!ventss. they assuredly do have standins to comn!ain that the reason which the Commissic.. gave for its . ::icn .
-the lack of demonstratal eTectiveness of financial qualifications review (its original second premise) ccnn.
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I bined with the observation (substituted for its original Brst premise of ut!!!ty solvency) that Snancially die-tressed public utilities have cancelled or deferred their - projects-makes no sense. For all we kn'ow, had the Commission been forced to rely upon the second premise , alone it might have foimd that insufBeient. .We must af. firm its action on the baals of the reasons assigned or not - at all. So# SBC v. Cher.<ry Corp., 318 U.S. 80, 87-88 (1948). In order to comply with the "precadure required by ,
. law," 5 U.S.C. ! 70G(2) (D), an agency . rule must be ac-companied by a statement of basis and purpose, 5 U.S.C.
155S(c), which demonstrates a " rational connection be-tween the facts found and the choice made." Burlingfors Truck Linee, Inc. v. United States. 371 U.S.156,168 '
-(i9621'(principle applied under corresponding APA pro-vision governing adjudication); Waimkiewicz v. Depart-ment of Treesurit. 670 F.2d 296, 301 (D.C. Cir.1981)
(per curiam). That fundamental requirement has not been met here. Since the other. challenges raised by peti-
-tioner do not, even if valid. preclude all action that the
- Commitsion may take in connection with this ralemaking, -
we need not consider them here. "[W]here agency ac- - tif n must be set aside as invalid,- but the agency is still , legally free to pursue a valid course of action, a review- ; ing court will ordinarUy remand to enable the agency to enter' a new order after remedying the defects that ! vitiated the original action." Willicms v. Washington l
?.fetropolitan Area Transit Conur.ission. 415 F.2d 922, .
939 40 (D.C. Cir.19681 (en bane) (footnote omittad), cert. denfad. 393 U.S.1031 (19691: Ciffs of Cleveland v. FPC. 525 F.2d S45, S56 n.80 -(D.C. Cir.1976). . Accord- ' ingly ,we remand the ru'e to the Commission for further ' proceedings consistent with this opinion. Petition granied. , r
.n-a.m..,
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.y-s-, UNITED STATES OF AMERICA i
' NUCLEAR REGULATORY COMMISSION Before'the Atomic Safety and Licensing Appeal Board In the Matter of )
)
KANSAS GAS AND ELECTRIC COMPANY, et al. .) Docket No.
) 50-482 OL (Wolf Creek Generating Station, )
Unit _No. 1)- ) CERTIFICATE OF SERVICE This is to certify that copies of the foregoing " Motion of Kansans for Sensible Energy to Have Status as Intervenor and Financial Qualifications Contention Reinstated" was served by
. deposit in the United States Mail,- first class, postage prepaid,
-this J A day of February, 1984, to all those on the attached Service List.
M ht - Jb5n M. Simpson ' DATED: February 2 2 , 1984 t
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A 1 UNITED STATES OF AMERICA NUCLEAR RECULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )
)
. KANSAS GAS AND' ELECTRIC COMPANY, et al.) Docket No.
) 50-482 OL (Wolf Creek Generating Station, -)
Unit No. 1) ) SERVICE LIST Sheldon J..Wolfe, Chairman Atomic Safety and Licensing Atomic Safety and Licensing Appeal Board L Board Panel U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington,.DC 20555 HDr. George C. Anderson Docketing and Service Section Department of Oceanography Office of the Secretary University of Washington U.S. Nuclear Regulatory Commission Seattle, Washington 98195 Washington, DC 20555 C. Edward.Peterson, Esquire Kent M. Ragsdale Assistant General Counsel General Counsel
- Kansas Corporation Commission Missouri Public Service Commission State Office Building -'4th Floor P.O. Box 360 Topeka, Kansas 66612 .Jef ferson City, Missouri 65102 Dr. Hugh C. Paxton. Atomic Safety and Licensing Board
- 1229 -'41st Street U.S. Nuclear Regulatory Commission Los~ Alamos, New Mexico 87544 Washington, DC 20555
-Myron Karman, Esquire A. Scott Cauger, Esquire Deputy-Assistant Chief Assistant General Counsel Hearing Counsel Missouri Public Service Commission Office of'the Executive P.O. Box 360
.. Legal Director Jefferson City, Missouri 65102 U.S. Nuclear Regulatory Commission Washington, DC 20555 I Eric A..Eisen, Esquire Jay E. Silberg Birch, Horton, Bittner & Monroe Shaw, Pittman, Potts & Trowbridge 1140 Connecticut Avenue, N.W. 1800 M. Street, N.W.
. Washington, tX: 20036 Washington, DC 20006 p
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~ Service List' Page 2-Alan S.'Rosenthal, Esquire _ Dr. John II. Buck Atomic Safety and Licensing Atomic Safety and Licensing
; Appeal Board. .
-Appeal Board
~TU.S.. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission
_j. . Washington. DC 20555 Washington, DC 20555 Brian P. Cassidy,. Esquire Thomas S. Moore, Esquire Federal Emergency. Management Agency ' Atomic Safety and Licensing Region I . Appeal Board J. W. McCormack POCl! U.S. Nuclear Regulatory Commission Boston,. Massachusetts.02109 Washington, DC 20555
' Mary M. Stephens, Director A. Rodman Johnson
, Nuclear Awareness Network, Inc. 820 Quincy, suite 418 1347 1/2 Massachusettes Topeka, KS 66612 Lawrence, KS 66044 l-t J
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