ML20081B136
| ML20081B136 | |
| Person / Time | |
|---|---|
| Site: | Vogtle  |
| Issue date: | 03/13/1995 |
| From: | Lamberski J GEORGIA POWER CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, TROUTMANSANDERS (FORMERLY TROUTMAN, SANDERS, LOCKERMA |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#195-16493 93-671-01-OLA-3, 93-671-1-OLA-3, OLA-3, NUDOCS 9503160053 | |
| Download: ML20081B136 (67) | |
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.jws DOCKETED USHRC e
March 13 1995
. 95 WiR 14 AII W, i
UNITED STATES OF AMERICA 0FFICE cf sf CRETARY 00CKETING y jER sh NUCLEAR REGULATORY COMMISSION BPAliCh R-fore the Atomic Safety and Iicantina Raned
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1 In the Matter of
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Docket Nos. 50-424-OLA-3
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50-425-OLA GEORGIA POWER COMPANY,
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etal.
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Re: License Amendment
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(Transfer to Southern (Vogtle Electric Generating
)
Nuclear)
Plant, Units 1 and 2)
)
)
ASLBP No. 93-671-01-OLA-3 GEORGIA POWER COMPANY'S REPLY TO INTERVENOR'S ff f RGAL LICENSE TRANSFER AIIFGATION -
I I.
INTRODUCTION.
Georgia Power Company (" Georgia Power" or " Company") hereby submits its reply
. to Intervenor's " Phase I" Findings of Fact and Conclusions of Law, which were filed on February 24,1995 ("Intervenor's Findings"). Georgia Power Company's Proposed Findings of Fact and Conclusions of Law with respect to Intervencr's Illegal License Transfer i
Allegation were filed on February 13,1995 ("GPC Findings"). NRC Staff Proposed Findings of Fact, Conclusions of law, and Order in the Form of an Initial Decision were filed March 6,1995 ("NRC Findings").
Intervenor's Findings contain numerous misrepresentations and mischaracterizations of the hearing record. In particular, Intervenor's Findings demonstrate a continued propensity ko 0
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l to contort statements by selectively paraphrasing and by failing to present the Board with a reasonable interpretation of the record evidence. Also, Intervenor improperly relies on
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evidence which was not admitted or which cc, admitted only for a limited purpose.
Moreover, Intervenor ignores the Board's prior rulings which established the parameters for the scope of the illegal license transfer hearing. Intervenor's Findings are a far cry from the balanced findings requested by the Board in its Memorandum and Order (Schedule for Phase II), dated January 18,1995, which stated that the parties' Wiay should not " cite evidence or portions of documents without placing the citation in full context." In this reply, Georgia Power identifies the more egregious of Intervenor's improprieties.
Because Intervenor's Findings continue Intervenor's practice of misrepresenting the facts and ignoring prior Board rulings, Georgia Power again requests that the Licensing Board impose sanctions upon Intervenor.1' Georgia Power requests that the Board sanction Intervenor by stnkmg the following sections of Intervenor's Findings, which contain particularly egregious transgressions: III.B, H, J, K, L, M, T, Y, Z, II, JJ, and OO; IV.E.3, 4,7,9,10,11,14, 20,26, and 27; V.G.I.(c); V.G.6.(a); and V.G.8. In addition, Georgia Power urges the Board to warn Intervenor that continued misrepresentations will result in l
dismissal of his petition.
l' Georgia Power previously addressed Intervenor's propensity for misrepresentation in Georgia Power Company's Motion to Strike Intervenor's Response to Georgia Power's Motion for Summary Disposition (October 14,1994) (" Georgia Power's Motion to Strike") at 2. 'Ihe Licensing Board was persuaded by some of Georgia Power's arguments concerning the failure to place evidence in its full context. Sag Ceria Power Comnany (Vogtle Electric Generating Plant, Units 1 and 2), LBP-94-37, 40 N.R.C. 288, 297 (1994)..
l s
In order to simplify the task of the Licensing Board in reaching a decision on the illegal license transfer allegation, this reply addresses Intervenor's Findings by section and -
l page number, cross-referencing in many places the GPC Findings and, to some extent, the NRC Findings.
II.
DISCUSSION OF INTERVENOR'S FINDINGS.
1.
fIH.A: " Background" (PP. 4-7)
Intervenor suggests, at 5, that Georgia Power did not disclose to the NRC tW it is a wholly owned subsidiary of a holding company. This suggestion is false. Sos, cA, GPC Finding 101.
Intervenor asserts, at 6-7, that Mr. Hobby "was assigned the responsibility of evaluating GPC's nuclear operations for Plant Hatch and the construction and start up of Plant Vogtle, Units 1 and 2, including the evaluation of timeli==, cost-effectiveness, quality of construction, as well as qualifications and competence of personnel." Intervenor's Findings at 6-7 (citing Hobby at 2). Mr. Hobby's prefiled testimony, at 2, states that as an assistant to the President of Georgia Power, he merely assisted in the review of Vogtle construction and start up efforts. Moreover, Mr. Hobby admitted during cross-examination that he had no line management responsibility for nuclear operations. Tr. 2324-25 (Hobby).
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2.
I HI.B:
Construction of Plant Vortie and the Decision to Hire Admiral j
HilldnSea" (PP. 7-8)
This entire section is based on the prefiled testimony of Mr. Hobby at pp. 2-4 which 1
was the subject of a Motion to Strike by Georgia Power. The Board ruled that this testimony j
would be admitted only as background information on the power relationships between The Southern Company and Georgia Power. Tr. 2193-94. Additionally, at 8 n.2, Intervenor relies on Intervenor's Exhibit 38 (Moion to Intervene, Comments, and request for Hearing of Oglethorpe Power Corporation in the SEC proceeding to form Southern Nuclear). This exhibit was not admitted into evidence. Tr. 2417.
I I
3.
I HI.E:
Ectahlich==nt of a Nuclear Operatine Comnany Task Force" (P.
10)
Intervenor's assertion that Mr. Addison and Mr. Farley jointly agreed that Mr. Farley would emerge as the chief executive of a newly formed nuclear operating subsidiary and that the management of the subsidiary would be located in Birmingham is fully addressed in GPC j
Findings 171-73.
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4.
5 IH. H: "Ractructurtne of Nuclear Operations" (PP.12-13)
I Intervenor misrepresents Mr. Hobby's testimony and falsely asserts that Mr. Baker i
l was not involved in the decision to name Mr. Mcdonald as Georgia Power's Executive Vice i
President. Intervenor's Findings at 13 n.3 (citing Hobby at 10-11). Mr. Hobby's prefiled testimony does not support this assertion and the record reflects that Mr. Baker and Georgia Power's CEO, Mr. Scherer, were involved in the decision. Tr. 1266,1270-71 (Mcdonald).
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5.
I IH. I: " Selection of SONOPCO ONicers" (PP.13-15)
Intervenor cites Mr. Scherer's 1988 deposition testimony for the proposition that the responsibility to staff and reconfigure Georgia Power's nuclear operations was left to the executive management of the SONOPCO operation. Intervenor's Findings at 13 n.4.
Mr. Scherer's testimony actually supports Georgia Power's case. He states that Mr. Mcdonald was the chief person responsible for the overall operation of SONOPCO. IL Mr. Scherer's reference to Mr. Mcdonald was in his capacity as Executive Vice President of Georgia Power Company. Intervenor also misrepresents, at 13 n.4, the deposition testimony of Mr. Addison. When asked who at Georgia Power was involved in the decision to move Georgia Power's nuclear operations to Birmingham, Mr. Addison's coriscted testimony states: "I lose track of whether Scherer or Dahlberg was CEO at the time. Whoever was the CEO would have been involved in it and Mcdonald certainly would have been involved in it.
Intervenor exaggerates at 14, Mr. Farley's involvement in the selection of Mr.
McCoy and of SCS vice presidents. Mr. Farley's involvement was limited. San GPC Findings 73, 74.
1 6.
I IHJ: "E-heu C-
==v Fik to Fs SONOPCO wa the SEC and Oglethorpe's Decision to Intervene" (PP.15-17)
Intervenor again relics, at 15-16, upon his Exhibit 38 which is not admitted into evidence. Tr. 2417. Intervenor quotes from a March 16,1988 memorandum from Mr. Tom i
McHenry to Mr. Mcdonald, Intervenor's Exhibit 37. -In so doing, without any basis j
whatsoever, Intervenor substantively changes the wording of the memorandum. Intervenor j
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l inserts the word " ignored" in the third sentence of the quoted language which does not a
j appear in Mr. McHenry's memorandum. This dramatically changes the intent of Mr.
i McHenry's statement from " task force activities... concentrated on... identification of any l
j overwhelming reasons why [SONOPCO] could not be formed" to." task force activities...
ignored identification of any overwhelming reasons...."
l Intervenor asserts, at 17, that no mention of the interim formation of a SONOPCO 3
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Project was discussed in the Company's SEC filing in June of 1988. This assertion is false.
i Moreover, the issue of whether or not Georgia Power improperly withheld information from the SEC was dismissed by the Board in its ruling on Georgia Power's Motion for Summary J
j Disposition. LBP-94-37,40 N.R.C. at 304-05. Intervenor also asserts that the NRC was i
i not informed in the June 1988 time frame that Southern Company was forming a SONOPCO i
Project in Birmingham. However, this matter has altsady been addressed by the Board. The t
j Board has specifically found that in July of 1988, the NRC was informed of a " nuclear i
operations transition organization" and that Georgia Power and SONOPCO Project personnel I
met repeatedly with ww tatives of the NRC to keep them abreast of all events pertaining i
j ta the phased formation of SONOPCO. Id. at 305-06.
l 7.
IIH.K: " Mcdonald Exhibits Hastility Towards GPC Executive Management" (PP.17-18)
Intervenor argues, at 17-18, that Mr. Mcdonald did not g.te with Mr.
Dahlberg's budget guidelines. This has nothing to do with any of Intervenor's issues. ' As i
Intervenor himself admits, Mr. Mcdonald reported directly to Georgia Power's CEO, Mr.
1 Scherer, at the time.
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8.
I III.L: " Georgia Power partially Discloses its Reorganization Plans ylth NRC Staff" (PP.18-19)
Intervenor continues to ignore the Licensing Boarti's rulings in arguing that the NRC was not advised of the location of the SONOPCO project. Intervenor's Findings at 19. This issue was dismissed by the Board in its ruling on summary disposition. LBP-94-37 40 N.R.C. at 305-06.
9.
5 III.M: " Staffing of the Hatch and Vogtle Projects and Fonnation of the SONOPCO Project" (P. 20) l Intervenor's assertion that staffing SONOPCO's Hatch and Vogtle Projects was essentially completed during a two-day period is a complete misrepresentation of the record.
This matter is accurately addressed in GPC Findings 271-79.
10.
I IILN: "Georelm Power daddas to fann NOCA" (PP. 20-25)
Intervenor asserts that "GPC's three highest ranking executives (Mr. Scherer, GPC's Chairman of the Board; Mr. Dahlberg, GPC President and CEO; and Mr. Baker, G.C's Senior Executive Vice President) unanimously agreed that GPC had to establish NOCA.
Intervenor's Findings at 20 21 (citing Tr.1193 (Dahlberg)). 'Ihis mischaracterizes Mr.
Dahlberg's testimony which was that he made the decision to set up NOCA and he consulted with Messrs. Baker and Head, and probably Mr. Scherer. Tr.1193 (Dahlberg).
While there is no dispute that the intent was to have NOCA monitor the performance of the nuclear plants once an operating contract was executed between SONOPCO and Georgia Power, there is also no dispute that such a contract never existed and that NOCA -
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' performed no activity which had any effect upon the safe operation of Vogtle. San GPC Findings 221-23; ang aho NRC Findings 83-85, 98-99.
Intervenor asserts, at 22 n.10, that Mr. Dahlberg'" flip-flopped" in his testimony concerning whether the SONOPCO Project was viewed by him as a separate entity. To the.
contrary, Mr. Dahlberg's testimony merely reflects how his view of the SONOPCO Project at the time he established NOCA was different from the way he viewed it after NOCA had been established. CDaulam Tr.1195 (Dahlberg).1gilh Tr. 1208,1211 (Dahlberg).
Intervenor states, at 25, that Georgia Power's top management decided to set up a separate monitoring group to commenz functioning as a separate organi= tion (citing Tr.
I 2311-15 (Hobby)) and that Mr. Dahlberg determined that NOCA was -=ry to provide the level of oversight he needed to properly manage the SONOPCO Project (citing Tr.1193 (Dahlberg)). 'Ihis is a mischaA^ ization of the testimony of both Mr. Hobby and Mr.
Dahlberg. 'Ihe record is clear that NOCA was established to perform certain monitoring functions once Southern Nadaar was naarntina the olants on behalf of r nreis Power. Sag, gg, GPC Findings 221-23. Even Mr. Hobby admitted that this was the case. Tr. 2311-15 (Hobby).
11.
IIH.O: " Formation of NOCA" (PP. 25-26)
Intervenor claims the December 27,1988 memorandum from Mr. Dahlberg announcing NOCA was " worded in accordance with his instructions...." Intervenor's Findings at 25 (citing Tr. 1190-91 (Dahlberg)). Contrary to this claim, Mr. Dahlberg actually testified that the letter was either written by or drafted for him. Tr. 1190-91 4
(Dahlberg). Moreover, Mr. Hobby admitted that it was he (Mr. Hobby) who drafted the letter. Tr. 2327-28.
1 12.
IIII.P: "Mr. Dahlberg's Iknited Knowledge of Nuclear Operations" (PP.
26-27) i Intervenor asserts that "Mr. Dahlberg's desire to form NOCA and to select i
Mr. Hobby as its general manager is consistent with the past practice of tie company."
Intervenor's Findings at 26. Intervenor's only support for this statement is a fo >tnote (n.12) which claims that Mr. Hobby was involved with assisting Georgia Power executives with managing nuclear operations. Contrary to Intervenor's assertion, it was not the practice of The Southern Company to establish such groups. Farley at 32-33.
Intervenor stretches the record in an attempt to establish that Mr. Dahlberg was not involved in Georgia Power's nuclear operations. Intervenor asserts, at 27, that Mr. Dahlberg was unaware that "Farley conducted weekly staff meetings...." However, Mr. Dahlberg testified that while he was aware Farley had " periodic" staff meetings, he wasn't aware that they were held weekly. Tr. I183.
Intervenor also contends, at 27, that because Mr. Dahlberg was unfamiliar with the term " dilution valve," he was not properly briefed on the OI investigation and findings concerning events involving those valves. Intervenor again misrepresents the record. Mr.
Dahlberg testified that he was aware that Mr. Mosbaugh had made an allegation about a dilution valve incident and that Georgia Power received a $100,000 fine for the incident. Tr.
I152 (Dahlberg). Mr. Dahlberg was also aware that OI found wilful wrongdoing and that those findings were rejected by the NRC Staff, li.
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Although Intervenor was able to establish that Mr. Dahlberg did not know some of l
the support personnel at the Birmingham co@ orate ofHce, Intervenor did not challenge Mr.
j Dahlberg on his knowledge of Plant Vogtle line management. Funhermore, the fact that Mr.
i Dahlberg was not familiar with terms such as "NUREG" or "LER," or even " confirmation of 1
j action letter," does not establish that he was not involved in management of nuclear j
operations.
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13.
I M.R: "Farley's Reaction to NOCA" (PP. 30-31)
I j
Intervenor recites, at 30, his recollection that during a meeting with Mr. Dahlberg, Mr. Farley said, essentially, it was not in the best interest of 'Ihe Southern Company to have j
one groep reviewing the work of another group in the system. This is consistent with Mr.
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Farley's recollection. Farley at 32-33. ' More significant is that Intervenor does not allege i
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that Mr. Farley was resoonsible for the decision to disband NOCA. Indeed, he was not.
Scc GPC Finding 227. 'Ihis was purely an internal Georgia Power matter which does not l
raise any issue of illegal license transfer and is otherwise outside of the issues which the 1
l Board's ruling on summary disposition (LBP-94-37, 40 N.R.C. 288) permitted for the a
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j hearing.
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14.
I M.S: " Staffing of NOCA" (PP. 31-33) 1 i
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Intervenor makes an admission against interest at 31 n.14. While Georgia Power can i
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make y sense out of the first sentence of this footnote, which is not supported by any i
citation to record evidence, the second sentence admits that "GPC's nuclear operations would 1
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continue to be managed by GPC after SONOPCO was incorporated and would continue to do j
j so until the license was trar sferred." This is true.
l Intervenor complains, at 32-33, that the SONOPCO Project prevented Mr. Hobby i
j from filling positions within NOCA, which prohibited NOCA from commencing its 1
l monitoring functions. - As in the case of the decision to disband NOCA, that which-j Intervenor complains of has nothing to do with Mr. Farley. Sga GPC Finding 226.
l Therefore, it is immaterial to the issues before the Board.
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15.
I III.T: "SONOPCO Project Board of Directors" (P. 34-35) i j
Intervenor flatly mischaracterizes the testimony of Messrs. Mcdonald and Dahlberg.
I Contrary to Intervenor's representation, the testimony of Mr. Dahlberg cited by Intervenor, 1
l at 34, does not state "[b]y 1989 a SONOPCO project da facto board of directors was i
l functioning...." His testimony clearly states that there was no " board of directors" j
functioning until Southern Nuclear was incorporated. Dahlberg at 8; Tr.1173-74 i
i (Dahlberg). Even after inwiyoration, the Southern Nuclear Board of Directors did not have l
any authority over licensed activities which were required by the NRC operating license to be i
j performed by the licensee, Georgia Power. Hairston at 36-38; Hairston Exhibits K and L;'
i Dahlberg at 8.
Intervenor also misrepresents that Mr. Mcdonald's prefiled testimony, at 21, states that there was a functioning board of directors in 1989. Mr. Mcdonald addressed the issue of a SONOPCO Project board of directors on pp.18-19 of his prefiled testimony. 'Ihere, i
Mr. Mcdonald explained that the Southern Company Management Council did Det act as a e
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board of directors for the SONOPCO Project and did not make management decisions, f
appoint or remove officers, or otherwise issue directions controlling the operations of the
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SONOPCO Project. Mcdonald at 18-19; act alan Tr. 1773-75 (Farley).
I A group of Southern Company managers who were expected to become the Southern Nuclear Board members did discuss matters concerning the budget and operation of Georgia Power's nuclear plants, but there is no evidence to support a conclusion thM this group made decisions concerning the operation of the plants.at 16.
I III.U: "Farlev becomes Executive Vice President - Nuclear" (PP. 35-36)
Intervenor asserts, at 35, that neither The Southern Company nor SCS had a position i
of Executive Vice President-Nuclear before March 1,1989 and the establishment of that i
position represented a fundamental alteration of The Southern Company's involvement with and control over GPC's nuclear operations. Intervenor cites no support in the record for this assertion and there is none. Neither The Southern Company, SCS, nor Mr. Parley controlled the nuclear operations of Georgia Power. The limited involvement of Mr. Farley and The Southern Company was well known and appropr: ate. Set st@ GPC Findings95-105, 145-55.
Contrary to Intervenor's suggestion, at 35, the March 30,1989 Synopsis article (Intervenor's Exhibit 89) does not state that Mr. Farley assumed overall responsibility for the 2/While this group did have some involvement in budget matters (Tr. 1176-77 (Dahlberg)),
Georgia Power's budget was controlled by Georgia Power management with appropriate oversight from Southern Company management. Dahlberg at 9-11..
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j operation of Georgia Power's nuclear operations. It states that he would be providing
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management and technical services. This by ne means establishes that Mr. Farley assumed i
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f control over the management of the nuclear plants. Em Georgia Power's respse to Section i
l IV.E.21, infra.
Intervenor, at 36, also mischaracterizes the testimony of Mr. Farley. Mr. Farley did i
not testify that he "had assumed full responsibility for briefing The Southern Company board i
about the status of... [ Georgia Power's] nuclear plant operations." Rather, Mr. Farley I
j testified that he would provide routine reports to the board and the CEO of Georgia Power i
would address matters ofimportance. Tr. 1851-52 (Farley).
1 17.
f III.V: "Farley's na=klan as Freentive Vice 7.J-"=0 is not diee*=amad with NRC before May 1990" (PP. 36-39)
The fact that the NRC was never provided written notice of Mr. Farley's position as i
j Executive Vice President-Nuclear of'Ihe Southern Company is not significant; there was no i
j requirement for Georgia Power to do so. Nonetheless, Mr. Farley's role in the SONOPCO i
l Project and his position of Executive Vice President were openly discussed and known to j
j NRC. Sm GPC Findings 145-55.
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Intervenor discounts the testimony of Mr. Mcdonald concerning what he and Mr.
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j Farley discussed with NRC Commissioners and Staff management on May 2,1990.
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Intervenor's Findings at 37. However, the contemporaneous documentation prepared by Mr.
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Mcdonald (i.e., his May 3,1990 memorandum (Mcdonald Exh. D, GPC Exh. 5)) speaks i
for itself and has not been challenged by Intervenor. It states that Messrs. Mcdonald and i
i Farley described to NRC officials "the involvement of Mr. Farley as Executive Vice 4
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l President of Southern Company and the services of the SCS Technical and Administrative Groups." Mr. Farley recalled that they spent more time talking with Mr. Stello, the j
Executive Director for Operations, and his staff than with the Commissioners. Tr.1861 (Farley).
18.
I IH.W: "Fhli Power IJcense Hearing" (P. 39-42)
Intervenor's assertion that Mr. Farley's involvement with the SONOPCO Project was not disclosed to the NRC is addressed in GPC Findings 251-60 with respect to NRC's inspection of Georgia Power's corporate. offices in December of 1988. As for the March 30, 1989 meeting, Mr. Farley's position as Executive Vice. President - Nuclear of The Southern Company and SCS was not discussed because Mr. Farley was not in the chain of command I
over Georgia Power's Plant Vogtle. San GPC Findings 169-192. Mr. Farley's role was otherwise openly discussed and known to NRC. San GPC Findings 145-55.
Intervenor further complains, at 40-41, that the NRC was not informed between l
November 1988 and March 30,1989 that Mr. Mcdonald no longer reported to Georgia Power's Chairman and CEO, Mr. Scherer, but rather reported to Georgia Power's President and CEO, Mr. Dahlberg. This matter is immaterial. NRC Staff Witnesses Rogge and l
l Allenspach stated that they did not attach any significance to that change. Tr. 2679-80, I
j 2691-92; anc alan GPC Findings 195,1%.
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19.
I III.X: "Oelsehame Onaaet-McP---Id's Rena
- Ins Dat=*E"In" (PP.
42-45)
Intervenor asserts, at 43, that Dan Smith advised Mr. Hobby that he attended the Commission's Vogtle Unit 2 full power briefing on Y sch 30,1989 and was upset over some of the testimony presented during the briefing. Mr. Smith's 4-12-94 Dep. at 28 indicates that Mr. Smith does not believe he actually attended the meeting, although he did recall reviewing a transcript of that meeting.
Intervenor contends that Mr. Smith had a concern regarding the reporting j
relationships within the SONOPCO project that continued into 1991. Intervenor's Findings at 43-44. However, both Mr. Smith's 4-12-94 deposition and his Hobby DOL hearing testimony indicate that once Mr. Williams issued his 5-15-89 memo, with the attached organizational chart, the reporting issue was put to rest. Smith Dep. at 36-37; Hobby DOL Tr. 886-87.
Intervenor's Findings, at 44-45 n.4, cites Intervenor's Exh.19, which has not been admitted into evidence.
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l 20.
IIH.Y: "Farlev Staff Masennec" (PP. 45-46)
I Intervenor's brief refers to SONOPCO project staff meetings generically as "Farley staff meetings" throughout this section. However, Mr. Hairston's testimony (Tr.1720) cited by Intervenor indicates that these were "SONOPCO project" staff meetings, r 9 "Farley" staff meetings and that these meetings began prior to the time Mr'. Farley assumed the 4
position of Executive Vice President-Nuclear of The Southern Company and SCS. l
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Intervenor grossly mischaracterizes and misrepresents Mr. Lang's testimony by '
3 stating that "Mr. Farley would initiate [the staff meetmg], and the first thing you would do is i
call on the presiding VP who had projects reporting to him and ask for plant status."-
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l Intervenor's Findings at 45-46 (citing Long 6-8-94 Dep. at 48 and 55).2' 'Ihe context of the quoted portion of Long's deposition is actually the time period after Southern Nuclear was i
i incorporated. Intervenor inappropriately edits the quote omitting that either Mr. Mcdonald et Mr. Farley would initiate the meetings Wiag on who was in'the office that day.i' s
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Intervenor asserts that " management direction discussed during the Farley staff l
meetings would then be passed by Mr. McCoy to the Vogtle project staff." 'Intervenor's Findings at 46 (citing Tr. 1945-46 (Shipman)). Here, again, Intervenor mischaracterizes the I
l record. Mr. Shipman, in fact, testified that these meetings were primarily status meetings.
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His tedimony in no way indicates that " management direction" was given during these i
meetings. Furthermore, in response to questions from Judge Bloch,- Mr. Shipman testified f
that he did not normally attend the weekly staff meetmgs with Mr. Farley. Tr.1945 1
(Shipman).
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Intervenor's representation that the weekly meetings were a " pivotal management i
j oversight mechanism over the nuclear plants" is baseless. This is a nusrepresentation of the
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i 2'Actually, the deposition pages cited by Intervenor indicate that the staff meetings began j
prior to Mr. Farley becoming Executive Vice President-Nuclear of The Southern Company and that Mr. Farley did not participate prior to that time.
i i' For the second time, Intervenor mischaracterizes the deposition testimony of Mr. Long.
Mr. Long's actual testimony is " Pat or Mr. Farley would initiate [the weekly staff meetings)...."
j Intervenor's misrepresentation should not be tolerated because this misrepresentation was j
identified previously in Georgia Power's Motion to Strike at 20-21.
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testimony of Mr. Farley who testified that the meetings were in part for the intended purpose of dispensing information throughout the orpaladon and also for the purpose of interaction i
among the senior staff of the Project. Tr.1848 (Farley); act Alan GPC Findmg 66.
i Intervenor's Findings, at 46 n.5, challenge Mr. Farley's testimony that the reason he.
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attended these SONOPCO staff meetings was to stay abreast of developments in anticipation
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of his becoming the Chief Executive of Southern Nuclear. Intervenor claims this makes no 3
sense because the ineviWon of Southern Nuclear and the transfer of the Vogtle and Hatch l
l licenses were still far off in the future. Intervenor's assertion assumes that, at the time, it i
j was known that transfer of operational authority to Southern Nuclear was far off in the future. There is no support for this assertion. Indeed, it was not anticipated that Phase I 1
would last as long as it did. Hairston at 25-26. Further, Intervenor's spin on the facts fails
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l to recognize there were additional reasons for Mr. Farley to stay informed, including that, as 4
a spokesman for The Southern Company, others in the industry would look to Mr. Farley to j
be knowledgeable about the status of the plants and events that had occurred at those plants.
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Scc, c&, Farley at 10. Also, Intervenor's argument (p. 46, n.5) is to some extent based on j
his belief that Mr. Farley retired in May 1992 when, in fact, he retired effective November i
1,1992. San Stipulation 31.
i 21.
I III.Z: "SONOPCO Project Management Practice Regnimd Mr. Farley i
to Receive Daily Briefings" (PP. 46-48) 1 i
i Intervenor attempts to discount, at 47 n.7, Mr. Shipman's corrections to his
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deposition testimony (GPC Exh. 25) that Mr. Hairston reported (in the line management i
sense) to Mr. Mcdonald who likewise reported to Mr. Dahlberg. Mr. Shipman's errata l.
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sheet, however, was admitted into evidence (Tr.1995) after Mr. Shipman explained his prior.
i confusion. San GPC Finding 285.
j
, "Oglethorpe Expnames A Concern About the Reporting.
j 22.
I IH.AA:
Relationship and Regnests GPC to Respond to the Concern" (PP. 48-50)
Intervenor repeats his contention that Mr. Dan Smith of Oglethorpe raised a question j
(which was followed-up by his subordinate at the time, Mr. Self) with Georgia Power l
concerning the reporting relationship of Mr. Mcdonald. As stated in Georgia Power's i
j response to Section III.X, agER, Mr. Smith concluded that Mr. Williams' May 15,~ 1989 i
memorande answered his question.
4 l
i 23.
I IH.BB: "Dahlberg Determiney 'Ihat He Must Meet With Farlev to 3
Resolve and Settle Mcdonald's Continued Refusal to Cooperate With i
NOCA" (PP. 50-51) 1j l
Intervenor's Findings argue that statements made by Mr. George Head support his i
position. Yet, Intervenor's only evidence of such statements is Mr. Hobby's testimony. The i
only instance where Intervenor does cite the testimony of Mr. Head is for the proposition j
that he believed Mr. Mcdonald reported to Mr. Dahlberg. In that case, Intervenor argues j
that Mr. Head should not be believed. Intervenor's Findings at 51 n.10. It's clear that j
Intervenor is being overly selective. In any event, the appropriate. conclusion is that i
)
Intervenor's argument does not establish that an illegal license transfer occurred.
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24.
5 HI.CC: " April 27.1989 Hobbv/ Head Memo" (PP. 52-56)
Intervenor's arguments in this section do not fairly represent the reconi. Intervenor cites Mr. Hobby's pre-filed testimony for the proposition that the April 27,1989 memo was supposed to address problems NOCA was having with SONOPCO. Intervenor's Findings at
- 52. However, Mr. Williams testified that he had instructed Mr. Hobby to prepare a memo about what NOCA's responsibilities were and why NOCA should continue to exist.. Tr.
2459 (Williams). Furthermore, Mr. Williams testified that the memo he received from Mr.
Hobby was not responsive to his request. Tr. 2460 (Williams).
Intervenor asserts, at 52,' that when Mr. Hobby showed his memo to Mr. Head that Mr. Head felt so strongly about the issues raised in the memo, he wanted to personally co-sign the memo. However, Mr. Head testified at the Hobby DOL hearing that he only signed the memo to help Mr. Hobby resolve some of his concerns, and in no way believed that the memo raised a regulatory concern. Hobby DOL Tr. 648 (Head) (admitted into evidence at Tr. 2374).
Intervenor asserts, at 52, 55, that Mr. Williams instructed Mr. Hobby to destroy all copies of the April 27 memo. However, Mr. Williams testified at the proceeding that he asked Mr. Hobby to reflect on the contents of the memo before sending it out and that he did l
not instruct Mr. Hobby to destroy all copies of the memo. Tr. 2460-61 (Williams).
Intervenor asserts, at 56, that Mr. Williams may also have shown the Hobby April 27 memo to Mr. Dahlberg. This is a mischarndzation of Mr. Williams' testimony which was that he did not believe he showed the memo to Mr. Dahlberg. Tr. 2462 (Williams). !
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_ _. _ _ _ _,. _ - ~. _. _. -_._.-----.- - -
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25.
I m.DD: "May 5.1989 "r7 Bat _ M"=-a mad Farlev" (PP. 56-57)
Intervenor asserts, at 56, that during the May 5,1989 meeting, Mr. Dahlberg raised '
the issues mentioned in the. April 27,1989 Hobby memo with Mr. Farley. ' Mr. Hobby's prefiled testimony, at 45, and the testimony of Mr. Williams (Tr. 2461-62) does not support the inference which Intervenor draws, i.e., that the reporting issue contained in Mr. Hobby's April 27,1989 memo was discussed with Mr. Farley on May 5,1989 and, as a result Mr.
Dahlberg "got beat up side the head."
Intervenor claims that "Mr. Dahlberg made the' decision to eliminate NOCA following his meeting with Mr. Farley." Intervenor's Findings at 57 (citing Tr.1229 (Dahlberg)).
- While this is an accurate statement, it should not be misinterpreted to mean that Mr.
Dahlberg made his decision because of Mr. Farley's comments. Sec, g, Tr. 1228-29 (Dahlberg).
26.
I M.EE: "Georein Power's Cornorate Cam and SONOPCO Proiect" (PP. 57-60)
Intervenor claims that the deposition testimony of Mr. W. Evans supports his argument that Mr. Farley was going to decide about matters related to the staffing of NOCA.
As discussed in GPC Finding 77, Mr. Evans' understanding is based on a conversation with his supervisor Mr. Glenn who had spoken with Mr. Baker. Of the three, only Mr. Baker attended the May 5 meeting. Mr. Evans' statements are inconsistent with Mr. Glenn testimony that Mr. Baker never told Mr. Glenn's what was said in the May 5 meeting.
Hobby DOL Tr. 522.
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j-27.
I M.FF:. "Perfonnance Indicators" (PP. (4-63) l Georgia Power addresses this issue in its response to Section V.G.7, infra.
1 i
j 28.
I M.GG: " Negotiations with Oglethorpe" (PP. 63-64) i
(
Intervenor restates his argument that Mr. Smith of Oglethorp had concerns about 1
l reporting. This is addressed in Georgia Power's response to Section III.X, agua.
l t
j 29.
I M.HH: "'nie Cannpany-wide Managesnent Review" (P. 65) 4 Intervenor contends that Mr. "Dahlberg excluded GPC's entire nuclear operations from [a Company-wide management] review" conducted in late 1989. As set forth in GPC i
Finding 79, Mr. Dahlberg explained during the hearing that the nuclear management was not included in this review beam the SONOPCO Project had just been formed and the nuclear
]
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officers essentially had been reviewed at that time. Tr. 1185-88 (Dahlberg).
i i
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30.
I m.H: "Georwin Power did not Prmam a Perfor--- Eval -*ta= for i
Mr. Mcdonald" (P. 65) f 1
Intervenor states that Mr. Mcdonald's performance evaluation was prepared by 1
f Alabama Power's President, Mr. Harris, and reviewed by Mr. Parley, and that l
Mr. Dahlberg was called upon to see if he wanted to add anything. Intervenor i
mischaracterizes the testimony of Mr. Farley which stated that Messrs. Dahlberg ud Harris
[
had an agreement on the preparation of Mr. Mcdonald's annual review which included the
]
l participation of Mr. Dahlberg by " editing it or changing it or joining in h." Tr.1863 '
i (Farley). The import of Mr. Farley's testimony is that there was an administrative l
l !
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arrangement berw Georgia Power and Alabama Power which had no effect on Mr.
McGonald's responsibilities to Georgia Power as an Executive Vice President.
i 31.
I IIIJJ: " Preparation of GPC's Nuclear Budget" (PP. 65-67).
Intervenor's selectively edits the testimony of Mr. Farley at the hearing suggesting that he exercised some approval authority over Georgia Power's budgets.I' Mr. Farley l
clearly explained to the Board that his role as an SCS and Southem Company officer was to "look at and review and give my best judgment as to whether those budgets were realistically prepared and I... so advised [Mr. Addison]." Tr.1783 (Farley); seg alag GPC Finding 91.
Intervenor cites the deposition testimony of Messrs. Wallace, Johnson and Jobe for the proposition that the 1990 Georgia Power nuclear budget was approved by Mr. Addison, i
CEO of The Southern Company, over the objection of Mr. Dahlberg and that the Georgia Power Management Council did not approve it. GPC Findings 86-93 address this matter in detail and explain that Southern Company's involvement in the budget process is normal, although the nuclear budget was never approved or disapproved by Mr. Addison over Mr. Dahlberg's objection. Further, as discussed in Georgia Power's response to Section i
V.G.I.(c), infIa, the Georgia Power Management Council did review the total 1990 budget including nuclear operations.
I' This selective editing is the same misrepresentation of testimony which the Board struck (in response to Georgia Power's Motion to Strike at 23) from Intervenor's Response to Georgia Power's Motion for Summary Disposition ofIntervenor's Illegal Transfer of License Allegation (October 4,1994). San LBP-94-37,40 N.R.C. at 297 n.13. -_
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32.
I III.KK: "Tennination of Allen Masbaugh" (PP. 67-68)
)
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Intervenor implies that Mr. Dahlberg received and acted on a recommendation from l
Mr. Farley to terminate Mr. Mosbaugh. 'Ihat is not the case. Mr. Dahlberg specifically.
i i
testified that he acted on a recommendation he received from Mr. Mcdonald, not
' I Mr. Farley. Tr. 1130-31 (Dahlberg).
i l
33.
I III.LL: "GPC's Management Council" (P. 68)
Georgia Power addressed Intervenor's issue concerning Mr. Mcdonald's reports to j
the Management Council. San GPC Findings 248-49. In addition, Mr. Mcdonald 1
participated in the December 28,1990 telephonic meeting of the Management Council. San 4
{
Intervenor's Exh.135 at 180.
1.
i 1
l 34.
I III.MM: " Nuclear Oversight Comunittee" (PP. 68-72)
]
Intervenor argues that the activities of Georgia Power's Board of Director's Nuclear i
Operations Overview Committee (" Director's Committee") demonstrate Mr. Farley's control over operations at Georgia Power's nuclear plants. Essentially, Intervenor argues that Mr.
Farley replaced Mr. Scherer as chief executive over Georgia Power's nuclear operations in.
li 1989 and that, in light of the activities of the Director's Committee, Mr. Farley would have
(
l been " involved in discussions related to operational issues." Intervenor's Findings at 69,71.
)
Intervenor urges the Licensing Board to infer that Mr. Farley's involvement with the i
Director's Committee extended beyond the activities actually reflected in the minutes of the t
Director's Committee. There is simply no reasonable basis for this inference.
i 1
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m.
- _. _,,, +..
m e
l As Intervenor notes, Mr. Dahlberg attended his first Director's Committee meeting on July 21,1988 and regularly attended Director's Committee meetings until he left Georgia Power. Intervenor's own demonstrative exhibit indicates a regular, continuous pattern of -
Mr. Dahlberg's involvement with this Board of Director's Committee, far more extensive i
than that of Mr. Farley. Mr. Mcdonald also regularly and frequently attended these i
Director's Committee meetings. These facts, as well as the content of the Director's Committee minutes, demonstrate Georgia Power's and Mr. Dahlberg's oversight of nuclear operations.
In Georgia Power's April 1,1991 response to the 2.206 petition, Georgia Power l
l-correctly pointed out the far greater involvement of Messrs. Mcdonald and Dahlberg with -
the Director's Committee.F The April,1991 response specifically referenced the time frame of May,1988 through December,1990, a period of time for which Intervenor's own demonstrative exhibit shows only three meetings attended by Mr. Farley. Georgia Power acknowledged these three meetings in its April,1991 response. And, contrary to Intervenor's averments, the record does not indicate that Mr. Farley's attendance was for any
- purpose other than to report on the status of the formation of Southern Nuclear.2i FIntervenor Exh. 48 at 7 (Intervenor misidentifies the pertinent page in his Proposed l
Findings at 70).
l l
I' Intervenor acknowledges that the Committee's July 31,1990 minutes expressly state that l
"Mr. Farley gave a status report on the formation of Southern Nuclear." The fact that Mr.
Farley is not specifically allocated time for a formal presentation at the other two meetings does j
not compel the conclusion that he did not provide the Committee members with an update on the status of Southern Nuclear's formation..
I f
,.m
,,,,,,...,.y y
-. ~,
y.m.,.,cy.,-,,
ymi
Intervenor's lack of perspective is highlighted by a brief review of a few of the Director's Committee's meetings.8' On May 23,1988, the Director's Committee rr.et with the President and Chief Executive Officer of the Institute of Nuclear Power Operations
("INPO") to discuss the areas needing improvement at Plant Hatch based upon an INPO evaluation. Many of the meetings include a review of the major problem areas of the nuclear plants and actions to be taken in response to those problems. Sag, cA, July 24, 1989 and July 31,1990 minutes. The results of the NRC's Systematic Assessment of Licensee Performance (SALP) reviews were presented to the Director's Committee (Minutes of January 30,1990 and January 29,1991 meetings). A specific meeting was held on April.
18,1990 to discuss the March 20,1990 Site Area Emergency at Plant Vogtle.
Organizational performance goals, including safety and aspects of performance, were discussed at many of these meetings. Significantly, these meetings involved the line nuclear operations officers, such as Mr. Mcdonald, Mr. Hairston, or Mr. McCoy, personally presenting both the achievements and the challenges associated with the Georgia Power nuclear plants. Recapitulation of Plant Vogtle performance as viewed by INPO and the NRC l
provided the Director's Committee with an independent view of performance trending (act, l
ca, October 13,1994 meeting minutes). In sum, the Board should find that these minutes i
forcefully demonstrate ongoing and detailed oversight of the performance of Georgia Power's plants from a licensed activity giptive, periodic reports from the nuclear officers, l
l l' The meeting minutes of the Committee (which are arranged in chronological order) were l-provided to the Board by letter dated January 23,1995 (from D. lewis) covering the period March 1988 through January 1991 and letter dated February 9,1995 (from J. Imnberski) covering the period between January 1991 and December 1994. l
i l
identification of the problems facing the plants and the efforts undertaken to address those
[
problems, and timely review of INPO and NRC evaluations.2/
As a final matter, Intervenor states that "the information provided to the Nuclear Director's Committee was never presented to GPC's Management Council...." Not only is this statement without foundation, it is also wrong. As the foregoing discussion i
demonstrates, the Director's Committee was presented information on the formation of l
Southern Nuclear. So, too, was the Management Council. Intervenor Exh.135, pp. 99, 102, 160, 172. Similarly, the Management Council discussed the NRC's review of the -
l March 20,1990 Site Area Emergency at Plant Vogtle. Intervenor's Exh.135, p.140. The j
same event was discussed at the Director's Committee meeting on April 18, 1990.
l Organizational goals for the Georgia Power plants were reviewed on December 4,1990 at the Management Council. Intervenor Exh.135, p.172. On January 29,1991, the actual j
1990 organizational performance as well as the 1991 organizational goals were presented to f
the Director's Committee.
l l
35.
I III.NN: "Mr. n hlh re's Rollance on the Crl=le Ma==== Plan to
{
Cover Georelm Power's R*==a=== to a Nuciame Accident" (PP. 72-73) i Intervenor alleges, at 73, that Mr. Dahlberg was out of touch with nuclear operations.
4 j
activities of Georgia Power, claiming that a Georgia Power Management Council discussion 2' Georgia Power observes that some of Intervenor's factual arguments run counter to Intervenor's ultimate position. "The Committee met three times after March 1,1989, before
[
Mr. Farley commenced attending the meetings. (J-15-89,4-27-89 and 5-15-89.) Moreover, between May 1988 and May 1989, Mr. Farley did not provide the Committee with a single i
briefing about the status of the formation." Intervenor's Findings at 72, item 5.
1,
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evidenced his desire to address nuclear accidents as part of GPC's Crisis Management Plan.
j Intervenor selectively quotes Mr. Dahlberg's testimony and mischaracterizes his actual l
actions. Intervenor also fails to recognize the specific purpose achieved by Mr. Dahlberg's 1
actions.
i In response to questions from the Board, Mr. Dahlberg testified that the Crisis Management Plan covered non-nuclear types of events; he simply desired at least some i
l reference to nuclear-type incidents in the Crisis Management Plan. Tr. 1237-1233 l
(Dahlberg). The NRC-approved Emergency Plan would take precedence, but at least the l'
Crisis Management Plan would reference the nuclear events. Tr.. 1233-1234 (Dahlberg).
i Therefore, he was not attempting to alter the Crisis Management Plan to accomplish what the
]
Emergency Plan already should accomplish, as alleged.
- }
Moreover, Mr. Dahlberg's testimony is supported by the Crisis Management Plan's i
provisions. By letter dated November 16,1994 from John Lamberski, the Board and the i
parties were provided the September,1992 Crisis Management Plan. As is evident on page 2 of the Plan, a " NOTE" under " Initial Actions" advises that "If crisis is of a nuclear nature, j
refer to Section VI-Nuclear Emergency Plans."Section VI explains that the Emergency Plans "in conformance with federal requirements as well as Plant procedures...specify how Georgia Power deals with declared emergencies at each plant." 'Ihe purpose of Section VI i
j was merely to " outline [] how those plans interface with this Crisis Management Plan."
l l
Sect;w VI explains that information regarding the progress of a nuclear accident flows from the Plant site to the emergency center in Birmingham. Mr. Mcdonald would serve as a liaison with the Management Council. Consequently, Mr. Dahlberg's instructions reflect due i I k
I
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l consideration for, and proper execution of, the NRC-approved Emergency Plan. In essence, l
the Crisis Management Plan builds on the EmerEency Plans' notification of Mr. Dahlberg and facilitates timely information dissemination to individuals (e.g., Management Council 1
]
members).
1 l
36.
I III.OO: " Outage Philosophv" (PP. 73-74) l Intervenor alleges that Mr. Joseph Parley " directed" Plant Vogtle's outage philosophy 1
l based on a transcript of an August 6,1990 conversation taped by Intervenor containing a i
statement of Mr. Ken McCoy to a group of Plant Vogtle Managen.T As we have seen.
5 l
with other allegations, Intervenor misrepresents the facts by taking statements out of context i
j and emphasizing snippcts of conversations. The fuller transcript tendered by Intervenor at i
f the hearing establishes simply that Mr. Farley engaged in discussions with Georgia Power I
officers about the scheduling philosophy for outges. Contrary to Intervenor's assertion, Mr.
j McCoy does not say that Mr. Farley directed what the outage philosophy would be for Plant i
Vogtle, nor can Mr. McCoy's statements be construed to that effect. Mr. Mosbaugh himself i
i admitted this on cross examination. Tr. 2135 (Mosbaugh). The transcript substantiates Mr.
1 j
McCoy's Pre-filed Testimony that he is confirming with the Plant managers what his j
expectations have been consistent with an established philosophy of operating to excellence.
The transcript also shows that the outage and planning manager, Mr. Beasley, confirmed that i
i I
1 8' Revised Exhibit 5, consisting of two pages (Tr. 2048-49). It should be noted that the i
Intervenor revised Intervenor's Exhibit 5 after the filing of Mr. McCoy's Pre-filed Testimony j
which explained the context and meaning of the recorded statements. McCoy at 14.
i
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4 the outage schedule was. optimal relative to the expected manpower. This allegation is addressed more fully in GPC Findings 68,69,281-84. Sam aho NRC Finding 115.
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37.
IIV.A: "What is the SONOPCO Project and is it sufficiently distinctive j
j from Georgia Power to Conditute a Separate Entity under Section 184 of j
the Atonde Energy Act anch that a Transfer of Control Could Occur?"
(PP. 77-79) l 4
l l
Intervenor argues that the SONOPCO Project was a distinct entity, an." association,"
)
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constituting a separate person us. der the Atomic Energy Act. This argument misses the mark l
l for two reasons. First, Intervenor ignores undisputed testimony that the SONOPCO Project i
1 i
was not a legal entity. 'Ihe SONOPCO Project was just a collection of organizations. Tr.
i 3
i 1273 (Dahlberg). There was no management of the SONOPCO Project Dat an. Rather, the -
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project was just a group of empicyees from different companies working at a common 1
i i
location. Tr. 1348-49,1468-69 (Mcdonald). Second, and more importantly, the l
3 SONOPCO Project did na; control the Vogtle licenses. Within the SONOPCO Project (i.n.,
)
within the conglomeration of different companies) were Georgia Power officers and.
l 4
employees solely responsible for liansed activities at Georgia Power's nuclear plants. SAE i
j GPC Findings 17, 21-25, 52.
1
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i 38.
5IV.C: " Wha
- is a Haldla= C-aany and How D= Its Cornorate j
Existence Differ freni Georgia Power?" (PP. 82-91) i' j
Intervenor argues that 'Ihe Southern Company may not exercise any control over Georgia Power Company. San Intervenor's Findings at 82-90. Apparently, this argument is
)
intended to respond to GPC Findings95-105, which explaired why the fiscal and system b
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pianning activities of'Ihe Southern Company, and the high-level oversight of that holding company, do not evidence any transfer of control. Intervenor's response, however, makes j
assertions that are not supported by the record or the law.*
First, Intervenor asserts that "[ajn ownership interest does not imply a. y ght to.
control or interfere with the licensed operator's management and control over plant
]
operations." Intervenor's Findings at 84. Intervenor bases this assertion on Drake v. Detroit i
Edison Co.,453 F. Sup.n.1123 (W.D. Mich.1978), involving a challenge to the sale of a 20% interest in a nuclear plant. Inkrvenor represents that in this case, "The court found that the plaintiffs did not have standing because the transfer of ownership did not amount to a transfer of control over the license...." Intervenor's Findmgs at 83 (citing Drakt, 453 F. -
Supp. at.1128-29). 'Ihere is no such finding in the DInks decision.2 Intervenor's assertion that ownership implies no right of control is also directly at odds with the SafstX Light case, which held that stock acquisition vested in the new owners a right of control (subject to conformity with the dictates of the licenses). Safety Light Corporation (Bloomsburg Site Decontamination), ALAB-931,31 N.R.C. 350,365 (1990).. It is similarly inconsistent with the Commission's " transfer of control" reviews performed every time a new holding company is created. San GPC Findings99-100.
i W Intervenor complains that Georgia Power has not previously asserted that 'Ihe Southern Company has legal authority to exercise control over an operating license issued by the Commission to one ofits subsidiaries. Intervenor's Findings at 82. Georgia Power briefed this issue for the first time in its proposed findings because during the hearing the Licensing Board expressed special interest in having the parties address the issue.
i
& There is also no such finding in the earlier case cited by Intervenor, Drake v. Detroit Miam Co., 443 F. Supp. 833 (W.D. Mich.1978). - _ - - -
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l Second, Intervenor suggests that Georgia Power's discussion of the legal authority of 4
l-a holding company is inconsistent with its position that Georgia Power, and Georgia Power's i
I CEO, have maintained full control and responsibility for Plant Vogtle. Sag Intervenor's i
Findings at 85; act alag Intervenor's Findings at 82.u' There is no inconsistency. While j
NRC precedents indicate that a parent holding company may indeed exercise a degree of l
j control over its subsidiaries, Georgia Power has never suggested that The Southern Company 1
i directs or controls licensed activities at Georgia Power's nuclear plants, such as the processes performed at the plant, the use of the plant or its equipment, or the manner in which the -
j j
plant would comply with NRC requiremer.ts. Neither Mr. Addison nor Mr. Farley has ever purported to direct such activities. Rather, Georgia Power's proposed findings explained l
why the general fiscal and system planning activities of The Southern Company, such as reviewing budgets and guiding the formation of a new subsidiary, and its high level corporate oversight, are appropriate. San GPC Finding 95. This explanation is germane because Intervenor's contention of improper control is based in large measure on these high level i
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l D' Intervenor states that Georgia Power has strongly denied that The Southern Company has ever exercised control of Georgia Power's nuclear operations. Since Intervenor's contention asserts that the SONOPCO Project illegally assumed control of these operations, Georgia Power is uncertain whether it has ever previously had occasion to address The Southern Company's
~
authority. Intervenor provides no citation. In any event, however, Georgia Power does not claim that 'Ihe Southern Company has ever exercised control over nuclear plant operations or licensed activities, as Georgia Power understands these terms. Rather, 'Ihe Southern Company exercises a degree of control over corpc, rate fiscal and system planning activities, commensurate with its authority to vote the common stock of the subsidiaries and its duty to manage its resource:. San GPC Findings95-105. !
corporate activities, rather than any involvement in directing plant operations or licensed activities.H' Finally, Intervenor claims that at the time the license for Plant Vogde' was issued, "NRC was under the impression that The Southern Company did not exercise control over Georgia Power such that their separate wiyui.e identities could be disregarded."
Intervenor's Findings at 86. There is rething in the record indicating what the NRC assumed when the Vogtle licenses were issued. Further, Intervenor's suggestion that exercise of control by a holding company would automatically destroy wryvi.te distinctiveness is wrong.u' On the other hand, there is every reason for the Staff to have assumed that 'Ihe Southern Company exercises some degree of control over its subsidiaries.
One of the reasons that public utility holding companies are regulated is that "their practices in respect of and control over subsidiary companies often materially affect interstate commerce in which those companies engage." 15 U.S.C. I 79a(a)(5). Indeed, "[a] [public utility] holding company, by statutory definition, is a conipany that controls or possesses a H'
Intervenor states, "Most troubling in this respect was GPC's statement in their brief before this Board stating that holding companies, such as The Southern Company, may have
' effective corporate control' over licensed activities." Intervenor's Findings at 85, Giting GPC Findings at p. 73. Georgia Power's proposed finding quoted a statement by the NRC Staff in SECY-94-280, which referred to the effective corporate control of holding companies over their subsidiaries, not over licensed activities specifically.
n' As the Sinn case cited by Intervenor makes clear, "The alter ego dcn.iiiiic and piercing.
the corporate veil are truly exceptional doctrines, reserved for those cases where the officers, directors, or stockholders utilimi the corporate entity as a sham to perpetuate a fraud, to shun personal liability, or to encompass other truly unique situations." Matter of Sims. 994 F.2d 210, 218 (5th Cir.1993). Further, there are many factors that are considered to determine if one corporation is the alter ego of another, including gross under-capitalization of the subsidiary and
{
disregard for wiyurate formalities. Id., n.12.
] 4
1 i
controlling influence over an electric or gas company." North American Co. v. SEC,327 U.S. 686, 697 (1946). "The dominant characteristic of a holding company is the ownership
.l of securities by which it is possible to control or substantially influence policies and management of one or more operating companies in a particular field of enterprise." Id. at i
701. The NRC Staff clearly indicated in this proceeding that it understands that holding companies exert influence over their subsidiaries (Tr. 2658-59 (Hood)), and there is no basis
)
to assume that the NRC Staff had any different understanding when Vogtle was licensed.
Scc LL, NRC Finding 150.
l 39.
f IV.E.1: " Selection of hiv to head SONOPCO" (P. 92) 1 This is simply a regurgitation of Intervenor's Prehearing Statement of Issues (December 12,1994) at 3. This assertion is fully addressed in GPC Findings 171 and 172.
40.
I IV.E.2: " Location of SONOPCO" (P. 92)
This issue is fully addressed in GPC Finding 173.
i 41.
I IV.E.3: "'Ihe Functionine of a SONOPCO Protect Board of Directors" (P. 92-93)
This matter is addressed in Georgia Power's response to hitervenor's Findings, i III.T, SONOPCO Project Board of Directors, p. 34-35, suma..
I-i l
42.
I IV.E.4: " Fader heads wealtiv staK SONOPCO Project Staff Meetings" (P. 93-94) i l
Intervenor repeats, at 93, the mischameterization of Mr. Iong's& position testimony i
l which is discussed'in Georgia Power's response to Section III.Y, muun.
j Intervenor also states that "These weeldy staff meetings represent'a key management i
l oversight mechanism covering all emerging and existing developments concerning the i
j management, operation, and administration of GPC's and APC's nuclear plants were -
i
)
discussed [ sic]." Intervenor's Findings at 93-94 (citing Tr. 1848-49 (Farley)).W 'Ihis 3
l misrepresents the testimony of Mr. Farley who testified that the meetings were in part for the e
intended purpose of dispensing information throughout the organization and also for the j'
purpose of interaction among the senior staff of the Project. Tr.1848 (Farley); ma ala2 4
GPC Finding 66-l l
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43.
I IV.E.5: " Fader visits GPC's Nuclear Plants to Addreas Changes in Personnel Evaluation and Cosapensation" (P. 94) 1 l
Intervenor states "As the chief executive over nuclear operations, Mr. Farley went to l
the [ nuclear plants) to discuss with plant managenunt changes in personnel evaluations and 1
l pay that were going to be implemented." Intervenor cites only the deposition testimony of.
I Mr. Dan Smith at pp. 50-51.E' As explained in GPC Finding 82, Mr. Farley's visits to i
j W This characterization is slightly different than the one Intervenor used in Section III.Y, j
addressed sgua.
}
E'Intervenor's characterization of Mr. Smith's deposition testimony is substantially different j
than appears in his Prehearing Statement of Issues (December 12,1994), at 6, wherein he cited j
it for the proposition that "Mr. Farley implemented Plant Vogtle changes in personnel evaluation 2
and pay...."
,i
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l nuclear plants in connection with system-wide changes to salary and incentive pay programs has nothing to do with NRC licensed activities.
]
44.
I IV.E.6:. "Farlev's Involve with the Staffine of SONOPCO" (P. 94-I 95)
Contrary to Intervenor's representation, at 95, Mr. Farley's prefiled testimony at 25-26 does not say "Mr. McCoy was hired because Mr. Farley, Mr. Mcdonald and other j
project employees felt that the position should be created." Georgia Power fully addresses Mr. Farley's involvement in Mr. McCoy's selection in GPC Finding 73. With respect to the l
selection of Messrs. Long and McCrary, GPC Finding 74 explains that the process used for i
their selection was quite typical of the way senior SCS personnel had always been selected and, contrary to Intervenor's suggestion, Georgia Power was involved in that process.
1 45.
I IV.E.7: "Farlev Controls Naclear Operating Negotiations with Oglethorpe" (P. 95)
Intervenor claims that "the key negotiations concerning GPC and Oglethorpe were conducted between Mr. Farley and Mr. Stacey." Intervenor's Findings at 95 (citing Farley at 33). This mischaracterizes Mr. Farley's actual testimony that he was not the chief negotinor on behalf of Georgia Power with Oglethorpe. While he believed that the most important part of the negotiation was between him and Mr. Stacey, others were involved and
]
the major portion of the negotiations were through Mr. Grady Baker and Mr. Fred Williams.
j Farley at 33; gg alag GPC Finding 181.
l.
i 4
i -
46.
I IV.E.8: "Oglethorpe Management Observes Farley's Involvement with i
GPC's Nuclear Operations" (P. 95-%)
Intervenor repeats again his contention that Mr. Dan Smith of Oglethorpe raised a
}
question concerning the reporting relationship of Mr. Mcdonald. As stated in Georgia Power's response to Section III.X, agga, Mr. Smith concluded that Mr. Williams' May 15, l
1989 memorandum answered his question.
i 4
i, 47.
I IV.E.9: "SONOPCO Project Managen Identify Farlev as Heading GPC's Nnclear Operations" (P. 96) i Intervenor boldly states that Mr. Shipman testified in his August 5,1994 deposition i
l that Mr. Mcdonald reported to Mr. Farley, without discussing the corrections to j
Mr. Shipman's deposition that were admitted by the Board during the hearing (Tr.1995) 1 l
after Mr. Shipman explained his misunderstanding. This is, in effect, a misrepresentation of j
Mr. Shipman's tesdmony. As stated in Georgia Power's response to Section III.Z., agua, i
i Mr. Shipmm% corrections to his deposition testimony (GPC Exh. 25) indicate that Mr.
j Mcdonald reported to Mr. Dahlberg.
1 1
j 48.
I IV.E.10: "GPC's Ma===*r of NOCA M*=*1fles Farlev as HeadI==
GPC's N=elaar Oner=#2
" (PP. 96-97)
?
J Intervenor asserts that both Mr. Hobby and Mr. Head had reached the same i
i conclusion that Farley headed GPC's nuclear operations. 'Ihis, however, ignores Mr. Head's 4
i testimony stating that he did not share Mr. Hobby's concern about who Mr. Mcdonald i
j reported to. Hobby DOL Tr. 648 (Head) (admitted into vidence at Tr. 2374) l l
-M-
!i 1
.. =.
4 i
49.
I IV.E.II: "Farlev Had Input to Mcdonald's Annual Reviews" (P. 97)
Intervenor states that Mr. Mcdonald's performance evaluation was prepared by 1
l Alabama Power's President, Mr. Harris, who discussed it with Mr. Dahlberg, and then gave 1
it to Mr. Farley for comment. 'Ihis assertion is somewhat different than the one Intervenor 1
makes in Section III.II, discussed sgua.u' neither of which are accurate, and it demonstrates Intervenor's lack of care for accuracy in his representations. As discussed in i
I response to Section III.II, the testimony of Mr. Farley actually states that Messrs. Dahlberg i
and Harris had an agreement on the preparation of Mr. Mcdonald's annual review which i
included the participation of Mr. Dahlberg by "edidng it or changing it or joining in it." Tr.
i 1863 (Farley). The import of nis statement is that there was an administrative arrangement between Georgia Power and Alabama Power which had no effect on Mr. Mcdonald's j
j responsibilities to Gangia Power as an Executive Vice President.
)
I I
i i
50.
5 IV.E.12: "Dahlberg Excludes Nuclear Penonnel From Casapany-wide l
Review" (P. 97) j Intervenor repeats his contention (ans Georgia Power's response to Section III.HH, i
j supra) that Mr. "Dahlberg excluded GPC's entire nuclear management from [a Company-i wide management] review conducted in late 1989. Intervenor asserts that this is a strong indication that Georgia Power's CEO was not involved in or in charge of nuclear operations.
]
Intervenor's inference is baseless. As set forth in GPC Finding 79, Mr. Dahlberg explained 3
i H' There, Intervenor states that Mr. Mcdonald's performance evaluation was prepared by 1
Alabama Power's President, Mr. Harris, reviewed by Mr. Farley, and then Mr. Da;tiberg was l
called to see if he wanted to add anything.
3 37 -
4
}'
4
L
.o l
l during the hearing that the nuclear management was not included in this review because the SONOPCO Project had just been formed and the nuclear officers essentially had been l
reviewed at that time. Tr. 1185-88 (NMW.
t 51.
I IV.E.13: "Dahlberg's Inability to Basolve GPC Nuclear-related personnel matters without Involving Farley" (PP. 97-98) i Intervenor again recounts his allegation that it was Mr. Farley who decided issues concerning the staffing of NOCA. 'Ihis allegation does not withstand close scrutiny. Ses f
Georgia Power's response to Section III.EE, agua.
j i
52.
I IV.E.14: "Farley Blessed GPC's Nuclear Operating Budget" (P. 98) i Intervenor again (gg Georgia Power's response to Section III.JJ, infra) selectively edits the testimony of Mr. Farley at the hearing by suggesting that he exercised some approval authority over Georgia Power's budgets. Mr. Farley clearly explained to the Board i
i that his role as an SCS and Southern Company officer was to "look at and review and give my best judgment as to wh::ther those budgets were realistically prepsed and I... so advised [Mr. Addison]." Tr.1783 (Farley); las alaQ GPC Finding 91.
53.
I IV.E.15: "Farley --d Adha= Anorove GPC's Portion of the SONOPCO Budget" (PP. 98-99)
Mr. Addison's involvement in the review of Georgia Power's budget was a matter r some discussion at the hearing and is fully addressed in GPC Findings 92 and 93. 1
.._.__._._._.__..._._,.,._.,__,_._.____.I
i l
1 4
j 54.
I IV.E.17: "Fa.-L rather *h== GPC BMs *=S m C=
==v Board on the Perfor==nce of GPC's Nuclear Plante" (PP.99-100)
)
.i j
The fact that Mr. Farley briefed the Southern Company. board about the status of I
2 Georgia Power's nuclear plants and was kept informed by SONOPCO Project personnel I
concerning the performance of Georgia Power's plants does not evidence an illegal transfer of control over licensed activities. San GPC Finding 177. Also, Mr. Farley testified that he would provide routine reports to the Board and the CEO of Georgia Power and would t
i address matters ofimportance. Tr. 1851-52 (Farley). Moreover, the record is clear that it i
i was the Georgia Power Board of Directors, not the Southern Company board, who exercised if i
oversight of Georgia Power's nuclear operations. Sag, g&, NRC Finding 148. Reports on the status of nuclear plant operations were made to the Georgia Power board by Georgia 1
Power officers. In addition, the Georgia Power board exercised oversight through its i;-
Nuclear Operations Overview Committee. Dahlberg at 18.
4 55.
I IV.E.18: "Farlev is Involved in GPC's p=** C'a=* before the Georeta Public " na C to N=be Issues" (P.100) a Intervenor claims that "Mr. Farley's control over nuclear operations extended to l
5 matters before the Georgia Public Service Commission ("PSC")." Intervenor alleges in i
support that Mr. Farley reviewed PSC data request responses and was copied on rate case j
documentation, and that Mr. Mcdonald refused to follow Mr. Dahlberg's instructions j-concerning performance standards and Mr. Farley resolved the matter.
i Mr. Joseph Farley, along w;th the Georgia Power nuclear officers in Birmingham l
1 were copied on data requests to Georgia Power and other documentation related to the 4
i l 3
Company's 1989 rate case. Intervenor Exhibit 46.2 His principal concern was that the requests were handled in an expeditious manner by the support group within the SONOPCO Project. Tr.1803 (Farley). Intervenor in.yyivyMy characterizes this involvement of Mr.
Farley as " control over GPC's nuclear operations."N Intervenor asserts that "Mr. Farley.
was copied on rate case documentation, while Mr. Dahlberg was not." The record l
establishes that the documentation referenced by Intervenor was prepared by Mr. Merv' Brown, an accounting manager in the services group in the SONOPCO Project,' who was designated as the single point of contact with the people in the SONOPCO Project and the people that were working on the rate case in Atlanta. Tr. 2577 (McCoy). Mr. Brown
]
).
prepared the subject memoranda and copied the SONOPCO Project / Georgia Power officers, e
j as well as additional individual: who were assisting Georgia Power personnel in' Atlanta.E' l
As a result, although Mr. Farley was copied on rate case documentation that was prepared 1
within the SONOPCO Project, there is no basis on which to conclude that Mr. Dahlberg was i
not provided either oral or written reports related to the rate case by Georgia Power employees in Atlanta.
4 Intervenor improperly cites deposition testimony of Mr. Gerald Johnson as support for his assertion that Mr. Farley resolved the matter of Mr. Mcdonald allegedly refusing to follow Mr. Dahlberg's instructions concerning a nuclear performance standard. Mr.
i EIntervenor refers to Exhibit 32 in his February 24, 1995 filing. In fact, Exhibit 46,
]
admitted into evidence for limited purposes (Tr. 2421), is the basis for Intervenor's assertions.
a 8 Intervenor's argument is Wally hard to accept when Mr. Hobby testified that Georgia Power's Mr. Dwight Evans was in charge of the Georgia Power rate case. Hobby at 43; NRC i
j Finding 80.
1' l
EMcCoy at 23, referring to Mr. Michael Barker.
)
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1 Johnson's testimony instead establishes that Mr. Farley, Mr. Mcdonald, Mr. Gilbert, "just about all the top management at SONOPCO as well as Ed Hicks and Michael Barker" made l
a joint decision to work on rebuttal testimony opposing a performance indicator. Johnson 1
i DOL Dep. at pp. 26, 39. Intervenor, therefore, does not have a factual basis for arguing 3
that the matter was finally resolved by Mr. Farley. Sac ahn Georgia Power's response to I
i
.Section v.G.7, infra; i
j Moreover, in this prwing the probative value of Mr. Farley's involvement in i
1 j
Georgia Power rate case matters is tenuous at best. San NRC Finding 81.
i l
b 56.
I IV.E.19: "Farter Identified as Top Executive to be Contacted by On-call l
Project Manager of GPC's Nuclear Plants" (PP.100-01) 2 l
Intervenor simply reproduces, at 100-01, his October 4,1994 response to Georgia Power's Motion for Summary Disposition in arguing that a telephone list provided to l
Mr. Mosbaugh in 1989 identifies Mr. Farley as the " top executive" to be' contacted in the i
event of an emergency. Intervenor fails to discuss the extensive testimony of Mr. McCoy who actually served as the " Corporate On-Call Project Manager" and the corporate l
l procedures used by the on-call project manager. San McCoy Supplemental Prefiled s
l Testimony at 2-4. Mr. Mosbaugh periodically served as the plant Vogtle Duty Manager, a position which was subject to plant Procedures. Mr. Mosbaugh's prefiled testimony at 5, i
1 l
does not discuss the On-Call Project Manager's practices pursuant to cur erate procedures.
r What Mr. Mosbaugh specifically addressed was his intended conduct if he, serving as the i
j plant Duty Manager, could not reach the On-Call Project Manager. Mr. Mosbaugh's 1
testimony, therefore, does not challenge t utensive testimony of Mr. McCoy, who, unlike e 1
(
i
(
.---.-..\\
l*
l l
i Mr. Mosbaugh, was qualified to discuss the corporate procedures with which he was familiar. Mr. Mosbaugh is simply wrong about how the corporate On-Call Project Manager used the telephone list. Intervenor's claim that Mr. Mosbaugh was instructed to contact those persons on the telephone list is not credible given Mr. McCoy's testimony.
Mr. McCoy explained that no instructions are given to the plant Duty Manager concerning who he should call if he can't reach the On-call Project Manager. This situation does not arise because the On-call Project Manager wears a beeper and is available at all times as part of his duty. Tr.1583 (McCoy).
57.
I IV.E.20: "GPC Exchades Rdine Nuclear Onerations Man==*rs from Its 10-K Form" (P.101)
Intervenor complains that Georgia Power failed to identify any of its nuclear officers in a 10-K report filed with the SEC in 1994 (relating to calendar year 1993).E' This 10-K i
i l
report is not relevant or probative of any issue in controversy. The Board ruled that exhibits i
1 admitted could be used for two purposes: 1) relative to anything mentioned in the hearing I
(Tr.1432-33), or 2) relative to Intervenor's respor.se to Georgia Power's summary disposition motion orovided the exhibit was within the issues identified for hearing (Tr.
1435). As far as Georgia Power can discern, this 10-K report was not discussed at the hearing (except for argument on its admission (sc Tr. 2420)), and it does not relate to any issue identified by Intervenor in his Prehearing Statement of Issues (December 12,1994).
Fur hermore, the 10-K report is not probative of whether there was an illegal transfer of E' The 10-K form to which Intervenor refers, but does not identify, is Intervenor's Exh. 40. i t
I
i licenses in the 1988-1991 ' time frame. Intervenor's thesis is that Mr. Farley improperly 4
exerted control over nuclear operations and that a transfer of control took place by the time Mr. Farley became Executive Vice President - Nudaar of The Southern Com_nany Ontervenor's Proposed Findings of Fact, p. 91). Mr. Farley assumed this position in March, 1
1989 and retired November 1,1992. Farley at 1,3. As a result, any omission in the 10-K form (which occurred in 1994) is too far removed from the relevant events.
58.
6 IV.E.21: "The Publication of Synonsis" (P.102) i Highlighting a snippet from the record, Intervenor places great significance on a statement from the March 30,1990 edition of Synopsis. Selectively paraphrasing the statement, Intervenor states that the article described Mr. Farley as having "overall responsibility" of Georgia Power and Alabama Power's " nuclear operations." The actual wording of the article is much more benign. The "overall responsibility" of Mr. Farley j
j discussed in the article was "for providing management and technical services for the nuclear i
power plants in the Southern Electric system." Intervenor Exh. 89 at p.1. Here, again, j
i l
Intervenor is taking liberties in characterizing Mr. Farley's high level oversight on behalf of the Southern Company as responsibility over " nuclear operations." The sarae article Ontervenor Exh. 89, page 2, column 2) specifically spells out Mr. Farley's primary role as "provid[ing] the leadership and support needed to get 2
SONOPCO off on the right foot. For the past few years, I have j
worked part time on the concept and, more recently, on the organizational structure for this project. I'll continue to give much of my attention to organizational issues.... It's important that we develop an appropriate ' fit' within our system. And once we're fully established, I want to ensure that we operate in s
2
l a way that brings added values to shareholders and customers alike...." (Emphasis added).
The detailed description contained in the article, therefore, more precisely describes Mr.-
Farley's role in the Southern Electric System than Intervenor's paraphrase. That description is consistent with Mr. Farley's role in the Southern System as understood by Mr. Dahlberg.
l Tr.1224-25 (Dahlberg). Mr. Dahlberg acknowledged that Georgia Power employees could j
have read the article to mean that Mr. Farley had overall responsibility for managing
]
operations at the nuclear plants, but that such a reading would have been inaccurate. Tr.
1226 (Dahlberg).
The fact that Mr. Farley approved the article is not at all surprising. Ms. Henry
~
testified that it was a general procedure employed at Southern Nuclear and the Southern Company Services at that time to have articles reviewed by most people mentioned in the article before publication. Henry Dep. p.16. In short, the full text of the article does not support the proposition advanced by Intervenor that Mr. Farley had assumed responsibility for nuclear operations at Georgia Power's nuclear plants. See aho NRC Finding 100.
59.
I IV.E.23: " Mcdonald's FaHure to Participate at GPC Managesnent CouncH Meetings" (PP.102-03)
Intervenor asserts, at 103, that if nuclear operations remained under the control of GPC, Mr. Mcdonald should have attended Management Council meetings and the Management Council should have exercised the type of oversight reflected in GPC's 2.206 response. As stated in GPC Finding 249, Mr. Mcdonald attended a number of Management l
-u-
1 Council Meetings and the Management Council did review nuclear matters, including budgets.
Moreover, Georgia Power's control over nuclear operations during the relevant time -
. period is well established by the oversight exercised by Georgia Power management and the Georgia Power Board of Directors and its Nuclear Operations Overview Committee. San GPC Findings 59-64.
60.
I IV.E.24: "Iack of Knowledge and Involvesnent of Georgia Power's CEO (Abdication of Responsibility") (P.103)
This issue is fully addressed in GPC Findings 189 through 192.
61.
I IV.E.25 "'Ibe Creation and Destmetion of NGCA" (PP.103-04)
Here Intervenor argues that Mr. Dahlberg established NOCA "to monitor the SONOPCO project." nere is no evidence to support this statement. As noted previously (sec Georgia Power's response to i III.N. Eutta), NOCA was formed to administer the i
operating contract and was to begin operations so as to be in a position to perform its monitoring ' unction once the contract was in place. However, no contract was executed and NOCA performed no activity which had any effect upon the safe operation of Vogtle.16 Intervenor states, at 104, that Mr. Dahlberg was " beat about the head" because j
l Hobby had prepared his memo. His statement is contrary to the record. First, it stretches I
l Mr. Hobby's testimony, which does not draw a causal link between Farley's reaction and the fact that the memo had been written. Second, Messrs. Farley, Dahlberg and Baker all dispute Hobby's hearsay account of the May 5 meeting. Sga GPC Findings 77,226-27.
i l l
1 1
L i
i
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Finally, Intervenor's suggestion that NOCA was disbanded because of Mr. Farley's j
comments is unsupported and incorrect. San GPC Findings 226-27.
62.
I IV.E.26: " Georgia Power Did Not Have Unfettered Access to Nuclear QattatinaLERI7aantL" (PP.104-05)
The first two bases for Intervenor's assertion do not suggest that Mr. Farley or The i
Southern Company were interfering with Georgia Power's access to SONOPCO Project personnel. Indeed, the record establishes that NOCA's difficulty obtaining access to-SONOPCO Project psicss.cl was due to Mr. Mcdonald's difficulty with NOCA. Tr.1480-81 (Mcdonald); act Slag GPC Finding 225. Likewise, with respect to PSC testimony concerning performance standards, the disagreement concerning the strategy for responding to the PSC position was essentially berm Mr. Mcdonald and Mr. Dahlberg. Dahlberg at i
- 17. Moreover, the record demonstrates that Mr. Dahlberg prevailed, dispelling any argument that Mr. Farley was in control. IL; aan slag Georgia Power's response to Section l
V.G.7, infra. Therefore, these allegations are not material to any issue in this proceeding.
Finally, the decision to relocate Georgia Power's nuclear operations to Birmingham did involve Georgia Power management. Soc GPC Finding 173.
l l
i 63.
I IV.E.27: " Georgia Power Last Control of SAER" (PP.105-06) l Intervenor asserts, at 106, that the failure to disclose the reporting chain of the SAER j
group to the NRC constituted a material omission. This issue is not one of the admitted issues in this proceeding and, therefore, should not be considered by the Board. In any -
l l
event, Georgia Power did disclose the SAER reporting relationship to the NRC prior to the I
l,
i j
l I
i
I t
j incorporation of Southern Nuclear. Sag, s&, the organizational ~ chart attached to Georgia l
Power's December 6,1990 letter to NRC attached to the Stipulations ' as Exhibit 17.
u l
l Georgia Power fully acknowledges that Southern Nuclear provided services, which i
included licensed activities, to Georgia Power in support of its nuclear operations. 'Ihe 1
principal e smples of this include the Technical Services group and the SAER group.
i However, these services were performed for Georgia Power by Southern Nuclear pursuant to a Nuclear Services Agrament which provided that (1) operating msponsibility for the plants j
)
l would remain under the dinct management and control of Georgia Power employees I
j (Hairston Exh. K, GPC Exh. 20), and (2) no officer or employee of Southern Nuclear would i
j interfere with the operation of Plants Hatch or Vogtle by the licensed operator. (Hairston i
Exh. L, GPC Exh. 21 at p. 23.) 'Ihese set vices are typical of those provided by service companies for their affiliates who operate nuclear plants and the NRC has never required a i
service company performing such services to be licensed. San GPC Findings 3 and 4.
1 Intervenor's bald assertion that Georgia Power was bypassed and lost authority and i
management control over the licensed activities of the SAER group is not supported by the i
I j
record.
s 1
64.
I V.G.1 " Omissions and Mismpresentations concerning the GPC Management Council" (PP.115-29) 1 i
(a) Mr. Mcdonald's Particination and Attendance at GPC M.marement i
)
Council Meetings (PP.115-19) t j
D' The " Stipulations" refer to Stipulations Relating to Allegations ofIllegal License Transfer, filed with the Board on August 1,1994, and admitted into evidence as GPC Exh. '1 (Tr.1252).
i i 1 i
1
F 1
Georgia Power acknowledges that Mr. Mcdonald did not attend mas of the I
Management Council meetings. However, as reflected in GPC Finding 249, Mr. Mcdonald attended a number of Management Coun61 meetings and the Management Council did review j
nuclear matters, including budgets.M' Georgia Power submits that the difference is not f
significant considering that Mr. Baker's statement was made on May 23,1990, and the last Management Council meeting Mr. Baker attended was March 14,1990 (ast Intervenor Exh.
137 at pp.128,131,134,137. Moreover, Georgia Power's April 1,1991 response to the 2.206 petition (Intervenor Exh. 48 at 5-6) was addressing Intervenor's assertion that Mr.
t Baker's deposition testimony acknowledged that Mr. Farley was the dC facta CEO of SONOPCO and that Mr. Farley was an officer of Georgia Power. 'Ihe point of Georgia Power's statement was that it was Mr. Dahlberg not Mr. Farley who was a member of Georgia Power's Management Council.
(b) Falea and Miet maine sent,ments ----..ine the cosi. wition of the Management Council (PP 120-22)
This issue is fully addressed in GPC Findings 240-42.
(c) Mielandine Statarunts conearnine GPC Manneement Council's Involvement with Nnetaar Oneratians (PP.122-29)
Intervenor asserts, at 123, that "the record establishes that the Management Council was not involved with nuclear organizational goals." This is false; the record clearly shows t
E' It should also be noted that the Management Council meeting minutes are not we==rily a complete account of what transpired at these meetings. Tr. 1099-1100 (Dahlberg).
1 l l
i that nuclear organizational goals were discussed with the Management Council on at least one i
occasion. San GPC Finding 249.
The exclusion of the nuclear organization from review in November 1989 is fully addressed in GPC Findings 79, 244.
Intervenor also claims, at 124, that Mr. Mcdonald never par:icipated in a.
Management Council review of a proposed nuclear budget in 1989 and thereafter. Again, Intervenor misrepresents the mcord notwithstanding that Georgia Power laid it out for him.
l San GPC Finding 249.
Intervenor inaccurately suggests, at 125, that Mr. Farley prepared the 1990 nuclear budget. The record is clear that Mr. Farley's role in the budget process was to "look at and review and give my best judgment as to whether those budgets were realistically prepared and I... so advised [Mr. Addison]." Tr.1783 (Farley); act 4152 GPC Finding 91.
Intervenor provides no evidentiary support for his convoluted reasoning, at 125, as to -
why the Management Council did not review the 1990 nuclear budget and it is contrary to the record. San GPC Finding 245. Intervenor relics, at 127, on the deposition testimony of Mr. Jobe. However, Mr. Jobe simply said that he had no specific mcollection of whether l
the 1990 budget went before the Management Council. Jobe Dep. at 42. Moreover, Jobe said that the standard operating procedure since 1982 had been for the Management Council l
to approve the budgets. Id. As discussed in GPC Finding 245, Intervenor's reliance (at 127-28 n.35) on the deposition testimony of Messrs. Hobby and Johnson is misplaced.
Intervenor makes much of the fact that the Management Council meeting minutes do i
not contain many references to detailed nuclear matters. Intervenor's Findings at 128 'Ihis l
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I 6
i is immatenal to any issue in this proceeding. Georgia Power clearly exercised control over i
j its nuclear operations through Georgia Power management and the Georgia Power Board of j
^
j Directors. Sec GPC Findings 59-64.
l Intervenor's assertion, at 128-29, that the SONOPCO Project board of directors i
j replaced the function of the Management Council has no support in the record. Sag, gg, l
{
Georgia Power's response to i III.T mgua.
?
i s
i 65.
I V.G.2: " Omissions and Misrepsumentations Related to Statements l
Concerning Georgia Power's Emergency Plan" (PP.129-38) f Intervenor contends that the Licensing Board should conclude Georgia Power l
l j
misrepresented the notification procedures in effect at the corporate office in the licensee's l
August 30,1994, letter to the NRC.M' Intervenor's Findings at 137. Intervenor's request i
rests on two bases: (1) "the only reasonable interpretation" of the eviparate notification procedures, and (2) the failure of Georgia Power to produce training records. Relative to the first basis, Intervenor asserts the following: (a) Georgia Power's response to the 2.206 petition in April,1991 stated that "Vogtle project emergency planning procedures require the
[ corporate) duty manager to notify senior corporate management, including both Mr. Dahlberg and Mr. Farley, in the event of a sig~nificant event at Vogtle" Qd. at 130, j
132), (b) Intervenor's assertion that a Corporate Emergency Telephone Directory (Intervenor
)
n' Intervenor did not properly raise the August 30 letter as an issue for hearing. The NRC Staff objected to the issue, stating that they could not find a corresponding issue set forth in Intervenor's Prehearing Statement of Issues. Tr.1568 (Barth). Georgia Power withheld formally objecting to the subject matter of emergency notification procedures in an attempt to respond to the Board's interest in this area. Tr. 1430,1569 (Blake)..
_ ~..
l Exh.- 126) instructs the On-Call Project Manager as to who is to be notified (Intervenor's Findings at 131) and (c) Mr. Mcdonald's testimony at hearing that the sentence in the April 1,19912.206 petition response was a "true statement." Intervenor argues 'there is no i
1 middle ground; either the 2.206 petition [ response of April 1,1991] contained a material i
false statement or the August 30,1994 correction contains a materially false statement." Id.
W IM.
1 Intervenor ignores the context of the two underlying statements. 'Ihe April 1,1991 4
response was used to support the proposition that Mr. Farley was not notified "in lieu of Mr.
Dahlberg." Intervenor Exh. 48, p.12. Georgia Power states in lugh the April 1991 and August 1994 transmitta's that Mr. Dahlberg and Mr. Farley in fact were contacted in the i
event of a significant event at Vogtle. Georgia Power has not retracted or modified its statement that Mr. Farley was contacted. Georgia Power has consistently represented to the NRC that the " actual practice regarding notification" consisted of a sequence of calls l
whereby the On-Call Project Manager notified the on-duty snyerate executive and, in turn, the corporate executive made further notifications to Mr. Dahlberg'and Mr. Farley. Georgia Power's August 30,1994 letter (Intervenor Exh.129) represents an appropriate effort by Georgia Power to correct the April,1991 statement by clarifying that the actual procedures (via the practice) did not specifically require notification of Farley.
1 l
Intervenor correctly identifies, at 130, the Administrative Procedure (VNS-EP-04, Intervenor Exh.125) and the section of that procedure (Section 4.1.1) which addresses the notifications conducted by the On-Call Project Manager. San Tr. 1586,1610 (McCoy).
However, Intervenor makes an incorrect interpretation of the Corporate Emergency
Telephone Directory in asserting that the directory specifically sets forth instruction as to
.who is to be notified within the four identified groups of personnel set out in Section 4.1.1.
]
Intervenor concludes that the telephone directory "would require the On-Call Project' Manager to attempt to contact all persons identified in a group when an asterisk is not affixed" to the group. Intervenor's Findings at 131. As Mr. McCoy testified, that is not the case. Tr.1601 (McCoy). Supporting Mr. McCoy's testimony, the " Indicated Notes" of the telephone directory explain that an asterisk means that the " primary" contact for the :
particular position is listed first, followed by all authorized alternatives. "If contacting an -
individual for this position, start with the primary. If the primary is unavailable, proceed I
with the alternates until an available person is located." Intervenor Exh.126, p. 80.
I_ogically, the absence of an asterisk does not imply that all individuals in the group must be called. For example, no asterisk appears for the " Director of Corporate Response" (a position covered by the Administrative Procedure). Intervenor Exh.126, pp. 4, 9,14,19, 24, 29 and 34. Based upon the telephone directory, Intervenor's position would dictate that multiple Directors of Corporate Response would be notified contrary to the goal of having clear lines of authority and the designation of a single person for response accountability. As Mr. McCoy observed, the asterisk is really aimed at positions lower down in the organization, where " duty people" were not assigned. Tr.1595-% (McCoy).
The Board should adopt GPC Findings 306 and 307 which recognize, infat alia, that the telephone directory is simply an aid to find phone numbers. The Board may conclude,
, l 1
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therefore, that the plain meaning of the written procedure (VNS-EP 44, Section 4.1.1) and -
the associated telephone list
- do not require Mr. Farley'to be contacted.
Mr. Mcdonald signed the April 1,' 1991 letter and, at the time of the hearing, testified he believed the statement in the letter concerning the notification of Mr. Farley was true. Tr.1428 (Mr. Mcdonald). Mr. Mcdonald retired over a year and a half ago, on June 1,1993. Stipulation 32; Mcdonald at 2. It was clear that Mr. Mcdonald was no longer familiar with the actual functioning of the emergency plan. Tr. 1572-73 (McCoy). l Given.
these facts, confusion by Mr. Mcdonald about the procedures is understandable, and was timely called to the attention of the Board. Tr.1438 (J. Bloch).
With respect to the alleged failure of Georgia Power to produce training records,.
Intervenor misconstrues the Board's November 9,1994 Order as broadly encompassing all training records associated with the Corporate Emergency Plan. Intervenor's Findings at 135. Intervenor is wrong. As explained by the Board, the request was for training documents related specifically to the t-ty-:-v notification. Tr.1567 (J. Bloch). It should be noted that Intervenor also mischaracterized Mr. McCoy's testimony concerning training records. Mr. McCoy testified that training is conducted in the syviste emergency organization on the emergency preparedness plan. Tr.1565 (McCoy). ' Annual training and associated records encompass persons involved with position-specific responsibilities under.
l the corporate emergency plan. Tr.1571 (McCoy). Intervenor inappropriately states, at 135, i
FIntervenor also argues, at 136, that the telephone directory required signature approval by Mr. McCoy implying a recognition that it was a mandaiviy procedure. Mr. McCoy testified that the only reason he signed it when it was reissued was "to assure myself that we are getting out a new updated telephone list once a quarter." Tr.1591 (McCoy). I l
~
i 1
that McCoy testified about specific training with respect to emergency notification procedures. Obviously, Intervenor is attempting to characterize Mr. McCoy's testimony as
,1 stating that training records, required to be retained by the licensee, are developed with i
respect to the On-Call Project Manager notification procedure. The record does not support 1
j Intervenor's assertion.
l Intervenor misrepresents Mr. McCoy's testimony by stating that he testified the 4
addition of Mr. Farley's name to the telephone directory was a " secretarial error."
i j
Intervenor's Findings at 137. Mr. McCoy's actual testimony is that he speculated Mr.
Farley was added to the telephone directory when he assumed broad duties for the Southern 4
Company in the area of forming the nuclear project; it would be logical that the organization would include his phone number on matters related to nuclear. Tr.1610 (McCoy). He did 3
characterize the addition of Mr. Farley under the heading " Georgia Power Management" as a clerical error. Tr.1588 (McCoy). The addition of Mr. Farley's name to this telephone j
directory does not establish that he controlled nuclear operations. Sag, u, NRC Finding a
i 112, 116.
t 4
66.
I V.G.3: "Mk ow==^melane Pertaintne to the Selection of SONOPCO j
Prolect Vice Presidents (McCrary and LonM" (PP.138-43) 4 Intervenor asserts that Georgia Power's October 3,1991 response to the 2.206 l
petition was inaccurate in stating that there was no inconsistency in the testimony Mr.
Mcdonald gave in the Yunker and Fuchkn and Hobby proceedings. Intervenor asserts that this is repeated in Mr. Mcdonald's prefiled testimony. Intervenor's Findings at 138.
Intervenor bases his claim on portions of Mr. Mcdonald's testimony in those DOL cases
which addmssed who else besides Mr. Mcdonald was involved in the selection process. As stated in GPC Finding 315,E' that question was not addressed in Georgia Power's October 3,1991 response to the 2.206 petition. Sag Intervenor Exh. 79 at 3-4. Intervenor's interpretation of Georgia Power's October 3,1991 response is unreasonable.
67.
I V.G.4: "Fale*Iv Ac=*e43ne in the 2.206 Petition R=nonse that Mr.
Hobby Was Given a Phaea I Oremat=*lon Chart (Ic==e 10)" (PP.143-46)
Intervenor acknowledges, at 144-45, that Mr. Mcdonald's testimony explains that the Phase I chart providal to Mr. Hobby by Mr. Williams on May 15,1989 did depict the reporting relationship of Mr. Mcdonald to Mr. Dahlberg during Phase I. However, Intervenor asserts, at 145, that such organization chart was not responsive to Mr. Smith's request. This has nothing to do with any issue in this proceeding. In any event, Mr. Smith testified that once he received the information, he believed that his concern had been msolved. Smith Dep. at 36-27; Hobby DOL Tr. 886-87.
Intervenor further asserts that Mr. Mcdonald falsely testified that he had a direct reporting relationship with Mr. Dahlberg since April 1988. Intervenor is correct; Mr.
Mcdonald only began reporting to Mr. Dahlberg in December 1988, not when Mr.
Mcdonald became a Georgia Power officer in April 1988. Dahlberg at 4; Mcdonald at 3.
This is nothing more than an innocent mistake on Mr. Mcdonald's part which was not caught by Georgia Power counsel at the hearing. Had it been pointed out to Mr. Mcdonald I
at the time, there is no doubt that he would have immediately corrected i'.
E' GPC Finding 315 incorrectly referred to Georgia Power's " April 1,1991" response to the 2.2% petition when it should have referred to the " October 3,1991" response..
i t
68.
I V,G.5:
"F lsdy Anmerting in the 2.206 Petition Response that Exhibk B-3 l
2 of the "U-1" SEC Milng Constituted a Phase I Organization Chart (Issue i
101" (PP.146 48)
Intervenor contends that the Exhibit B-2 organization chart attac$ed to the U-l SFf filing (Stipulation Exn. 6) is the organization that was in place prior to the formation of the SONOPCO Project.n' 'Ihis is true; this organization began with the double-hatting of l
(
Georgia Power and Alabama Power officers in April and May of 1988. San GPC Findings 18,19. Intervznor further claims that the Exhibit B-3 organization chart attached to the SEC l
l U-1 filing represents the organization that came into existence on November 1,1988. 'Ihis I
is maccurate. 'Ihe Exhibit B-3 organization chart depicts the time when Southern Nuclear is I
incorporated and, in the case of Vogtle, Georgia Power is the licensed operator with all officers in me line management chain of command being Georgia Power officers. San GPC.
Finding 17 (Phree II description). 'Ihis organization did not come into existence until January 1991, after Southern Nuclear was insyorated. San Stipulations 19, 20.
Mr. Meier assisted in the preparation of Exhibits B-2 and B-3.E' Meier Dep. at 25.
The purpose of Exhibit B-2 was to'show the organization as it evictM at the time of the U-I submittal in June,1988. Meier Dep. at 38. Exhibit B-3 represents the time frame after Southerr Nuclear was incorporated and became a sycrate entity, which began Phase II of the organizational transition, after 1990. Meier Dep. at 38-39. 'Iherefore, Exhibit B-2 does E' Georgia Power interprets Intervenor's reference to the SONOPCO Prcject to refer to the period after Georgia Power, Alabama Power and SCS personnel were consolidated in the l
Birmingham offices on about November 1,1988. San Intervenor's Findings at 5 n.l.
E' Exhibits B-1 and B-2 referred to in Mr. Meier's deposition correspond to Exhibits B-2 and B-3 of the SEC U-l filing, respectively.
depict a Phase I organization, and Eahibit B-3 does not represent the SONOPCO Project organi= tion on November 1,1988.
Intervenor araerts, at 147-48, that as of November 1,1988, Mr. Long was functioning as the Vice President of Technical Services, Mr. McCrary was functioning as the Vice President of Administrative Services, and Mr. Farley was the head of the SONOPCO '
Project. With respect to Messrs. long and McCrary, Intervenor is correct. ing, g&, GPC Findings 21-22. As for Mr. Farley, he was President of Alabama Power at the' time; he was the head of the SONOPCO Project only in the sense that he was asked by Mr. Addison to devote a portion of his time to guiding the formation of Southern Nuclear. San Stipulation Exh.10; Farley at 10-11. Georgia Power otherwise has already addressed Intervenor's Issue No.10 in GPC Findings 233-35, and the findings cited therein.
Intervenor also makes reference, at 148, to weekly staff meetings in which Mr.
Parley participated. This issue is addressed in GPC Finding 66. For the reasons stated in Georgia Power's response to i III.T, agua, Intervenor's assertion, at 148, that the SONOPCO Project bw:4 sf directors took the place of the Georgia Power Management Council has no support in the record.
69.
I V.G.6: "Cn f-Pr,_c MM=4 the C-
'- *= Durl== the Voetb Unit 2 Full Power IJcense Hearing" (PP.148-62)
(a)
Omie=Im of Mr. Hairston from the msnmeerJ hierarchv and Mr. Hairetan's subsequent coriKGon. Intervenor did not identify as one of his issues in his Prehearing Statement of Issues (December 12,1994) the omission of Mr. Hairston in the Vogtle chain of command in Mr. Mcdonald's statement at the March 30,1989 full power hearing. _
1
'Iherefore, Intervenor should not be permitted to argue this issue now. Moreover, this error was corrected shortly after the meeting by letter dated May 1,1989 from Georgia Power to -
NRC. Further, this matter was addressed in the NRC's Partial Director's Decision Under 10 C.F.R. I 2.206, 37 N.R.C. 314, 324-26 (1993), vacated, CLI-93-15,38 N.R.C.1 (1993).8 The NRC Staff found that the error was not significant because it did not believe the Commission would have reached a different decision had the error not been made. Also, q
the NRC Staffinformed the Canmission of the inaccurate information and of the Staff's
{
l intent to reply to the issue on the basis that the statement omitting Mr. Hairston was l
insignificant. The Commission concurred in that approach. Id. at 326. Finally, NRC Finding 144 states that the omission of Mr. Hairston did not mislead the NRC.
(b)
Mr. McDan=1d and Mr. Dahlhere mia.w- =-.: the s,am,i te structure and function that erietad when the full nower lieanne haarinen accurred. Mr. Dahlberg's statements at the March 30,1989 full power hearing, which are more accurately quoted in GPC Finding 189, were explained in GPC Findings 189-92. Georgia Power responded to Intervenor's assertions of Mr. Dahlberg's lack of knowledge of nuclear matters in its response to Section III.P., ag3 (c)
Omieelan of Mr. Farlev from the mann ement hierarchy. San Georgia Power's response to i III.W. 251 i
8 'Ihe NRC confirmed at the hearing that its conclusion in the Partial Director's Decision -
- that no illegal license transfer had occurred - was still valid. NRC Finding 138.
l -
i, i
j (d)
The d=4stion of Mr. Dahlhere as a %nde on manarer of Georria Power's 1
]
nuclear oneratiana" is miewine. Intervenor suggests that an adverse inference should be i
made against Georgia Power for failure to produce documentation evidencing communication j_
between Mr. Mcdonald and Mr. Dahlberg. As shown by GPC Finding 60, the contacts I
between Mr. Mcdonald and Mr. Dahlberg are well established in the record.
i 70.
I V.G.7: "Perfonnance Indicators 6 (PP.162-69)
Intervenor's Findings conceming performance indicators are premised on a false f
assumption: that Mr. Dahlberg instructed Mr. McDenald to prepare an alternative i
performance standard at their meeting on August 10, 1989. Intervenor states that "at the i
i conclusion of the meeting Mr. Mcdonald was told to prepare an acceptable performance i
indicator as an alternative to the indicators presented by PSC staff." Intervenor's Findings at 164. No basis in the record supports this inaccurate premise except for the hearsay i
testimony of Mr. Hobby. In contrast, the balance of the record, including the testimony of l
j Mr. Dahlberg and Mr. Mcdonald, demonstrates a much simpler and direct request - for Mr.
Mcdonald to provide assistance to others who were addressing alternative performance l
standards.
i i
The record establishes that before August 10,1989 Mr. Mcdonald opposed efforts of
)
l SONOPCO Project personnel providing information concerning performance standards to i
j staff level Georgia Power personnel in Atlanta. Mcdonald at 16. Mr. Hicks and Mr.
I '
Barker of the SONOPCO Project were told not to do any more work so far as performance i
j standards were concerned. Johnson Dep. at 29. On August 10, 1989, Mr. Dahlberg i'
! 1 l
I L
l
~
requested Mr. Mcdonald to assist in the development of performance standards. Tr. I105 (Dahlberg). But Mr. Dahlberg did not testify, nor did anyone else, that Mr. Mcdonald or the SONOPCO Project was tasked to pw Georgia Power's version of a +w--l-le performance indicator.E' To the contrary, the record reflects that Georgia Power sought the SONOPCO Project to develop rebuttal testimony which would include reasons for not t
l:
having a performance indicator at all. Johnson Dep. at 37-38; McCoy at 23-24. Mr.
Dahlberg al.m opposed nuclear performance standards (Tr. 1104; 1107 (Dahlberg)), and j
Georgia Power did not provide the Georgia PSC with a suggested standard. As Mr. Dahlberg testified, Mr. Fitzpatrick, a consultant, provided in his testimony suggested l
modifications and improvements to the standards proposed by the consultant for the Commission. Tr.1106 (Dahlberg).E' Mr. Michael Barker and others on the Vogtle and Hatch Projects assisted in preparmg and presenting rebuttal testimony for Mr. McCoy and Mr. Beckham, and their work product was used, at least in part, in Mr. Fitzpatrick's final testimony. McCoy at 23-24. In Mr. Dahlberg's view, Mr. Mcdonald "did as I asked him l
to do" following the August 10th meeting. Tr.1122 (Dahlberg).
E' In fact, Mr. Johnson testified that there had been several prior strategy meetings dealing with performance standards. Individuals would discuss their views on performance standards, including standards of other jurisdictions to see if those standards could be given to the Commission or used 'oy the Company. Johnson Dep. at 25, 29.
n' Mr. Fitzpatrick agreed that his own proposal in a Texas PUC proceeding included many of the same features as that proposed by the Commission's consultant, GDS, in the Georgia Power case. The numbers and background of the proposals, however, were significantly different. Ses Georgia PSC Transcript pages 3618, 3626-7. (The Georgia PSC record which was stipulated to by the parties was filed with Licensing Board by letter dated January 25,1995 from David Lewis.).. ---
i i
i l
At the tail end of the rate case, Mr. Dahlberg came to believe that the Commission 5
1 i
was going to impose a nuclear performance standard. Tr.1109 (Dahlberg). As a result, Georgia Power's legal brief expressly set out an alternative to the one proposed by the Commission's consultant on September 25,1989. Tr.1121 (Dahlberg); Initial Brief of Georgia Power before the Georgia PSC, Docket 3840-U, page 71 and Attachment A. As is readily observable, many aspects of Mr. Fitzpatrick's testimony are incorporated into the September 25,1989 alternative, including: broader acceptance' band, exclusion from i
comparison groups, and equal likelihood of reward and penalty. Id. at 72-75. Three days later, the Commission, in adopting the performance standard of the consultant, also broadened the acceptance band, included flexibility to exclude plants from comparison groups, and limited the maximum penalty to the maximum potential reward. San Georgia PSC May 1,1990 Order, p. 54.
Intervenor's false assumption that Mr. Mcdonald was tasked to develop a specific performance standard, rather than simply to provide support to ongoing efforta, is not surprising for a number of reasons. First, Intervenor relies on Mr. Hobby's testimony which is total hearsay and devoid of any direct observation or personal knowledge. Second, Intervenor takes liberties with the actual language in Georgia Power's April 1,1991, response to the Hobby /Mosbaugh 2.206 petition. He response states that "Mr. Dahlberg directed Mr. Mcdonald to take certain actions." Intervenor Exh. 48, p. 8. Intervenor's.
argument is fatally flawed because it hinges on the false premise that Mr. Dahlberg directed creation of an alternative standard, rather than what was actually done by Mr. Mcdonald -
assistance in developing rebuttal testimony which opposed the imposition of any standard.
il Mr. Mcdonald's actions were consistent with the Georgia Power strategy of opposing nuclear performance standards until, literally days before the Public Service Commission 1
j decision, Georgia Power laid out in a legal brief suggested revisions to the standard proposed by the Commission's consultant. Those revisions had already been identified by Mr.
j Fitzpatrick, a consultant to the Company, in testimony before the Commission on September 6
i-12, 1989.
Finally, Intervenor rails about "why an alternative performance standard was not j
available at the [ September 12,1989] hearing for submission to the Commission."
i j
Intervenor's Findings at 167-169. 'Ihis was the hearing at which Mr. Dahlberg testified that
{
Georgia Power had no intent of filing an alternative. Intervenor suggests that the reason was i
j because Mr. Mcdonald did not follow through on his August 10,1989 assignments from Mr.
j Dahlberg. Instead, what actually haapanad was that Georgia Power's strategy changed very b
late in the proceeding based on statements made by individual Commissioners. Sm, g&,
1 PSC Transcript pages 3571, 3579-80, 3584. The change in approach had no relationship to a
l Mr. Dahlberg's August 10 instructions to Mr. Mcdonald.
1 i
i l
71.
I V.G.8: "Genrein Power's imek of r==dae by the NRC is Sunaa= tad by the **d
=v of McCov mad FmM" (PP.169-72)
{
Separate from the issues of alleged false statements which the Intervenor presents the j
Board, Intervenor also assails the candor of two witnesses for the licensee, Messrs. McCoy 1
and Farley. For each, Intervenor points to one statement in the record and, as is apparent i
j' from reviewing the actual statements, omits tim context of the statement. First, Intervenor j
j represens that Mr. McCoy " instructed his staff not to be fully candid with the NRC. The 1
i
,,.- - _=
taped conversation of McCoy's comments speaks for itself." Intervenor then reproduces only a segment of Mr. McCoy's statement from his Rebuttal Exhibit A (ff. Tr. 2536).
i l
Intervenor inakes no reference to Mr. McCoy's testimony (Tr. 2597-601) concerning the i
i context of the taped discussions.
4 Once again, Intervenor attempts to mislead the Board with slight of hand. The i
statement of Mr. McCoy immediately following the segment reproduced by Intervenor is:
i j
"I'm not talking about not being open and that sort of thing. Obviously, in our business you l
4 live in a glass world. You have to be open [ inaudible]. What lead us into this situation is j
4 3
really just this kind of divisiveness." In addition, the full text of Rebuttal Exhibit A shows i
that Mr. McCoy was concemed about inter-department and cucpieidsite divisiveness - a j
lack of teamwork which constitutes a major weakness of any goal-oriented organization. Mr.
McCoy gave the Board the context of the statement:
1 The feeling I had [after the NRC inspection in August,1990] was that the
)
whole team was about to fall apart....So the context of this was like a father l
talking to the family, and that's what those comments were saying. I think it's j
very clear in that context. I think it was clear to everybody there what that context was. I made it clear that I was not talking about not being open and honest, but that we needed to support each other, not let this thing get us j
down, but pull togethcr and learn from it, learn what our weaknesses were, l
acknowledge those, and get on with it. And I think it was the right thing to j
say at that time.
Tr. 2600 (McCoy).
Second, Intervenor mischaracterizes Mr. Farley's candid acknowledgement of his
+
j emotions (anger and upset) concerning what Mr. Farley considered totally unjustified J
l allegations against people who he considered to have integrity. Tr. 1832, 1838-1839 (Farley). Intervenor's repiesentation that "not only did Mr. Farley not want employees such l
i 1 f
j
e 1
as Mr. Mosbaugh to be candid with the NRC, he did not even want such employees to even file certain concerns with the NRC" is a contemptible twist to the actual record. Mr.
Farley's statements clearly indicate that he was upset about the substance of the allegations -
j attacks on the honesty and integrity of people in whom he had confidence -- and not about i
i the fact that allegations had been submitted to the NRC. _ Tr. 1838-39 (Farley).
i Intervenor's attack on the candor of Mr. Farley and Mr. McCoy, based on the two I
examples proffered and the first-hand observations made by the Board as these gentlemen l
testified about them, is without merit or a good faith basis.
J i
i III.
CONCLUSION.
i For the reasons stated above, Georgia Power requests that the Licensing Board adopt i
)
Georgia Power Company's Proposed Findings of Fact and Conclusions of Law with respect i
i to Intervenor's Illegal License Transfer Allegation (February 13, 1995).
l 1
l i
i s
1 i
j i
}
M-l i
n
.+a...
]
8 Respectfully submitted, A u-_
Jam 5s E. Joinir '~
William N. Withrow, Jr.
John Laraberski i
TROUTMAN SANDERS j
Suite 5200 600 Peachtree Street, N.E.
Atlanta, GA 30308-2216 (404) 885-3360 Ernest L. Blake David R. Lewis SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.
Washington, D.C. 20337 (202) 663-8084 Counsel for Georgia Power' Company Dated:
March 13,1995 4
A _
DOCKETED USHRC i
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION-MAR 14 All:35 i
brore the Atomic hfety and iimmine hrd 0FFICE OF SECRE TARY
~
DOCKEriNG & MRVICE BRANCH
)
In the Matter of
)
Docket Nos. 50-424-OLA-3
)
50-425-OLA-3 GEORGIA POWER COMPANY,
)
etal.
)
Re: Iicense Amendment
)
(Transfer to Southern (Vogtle Electric Generating
)
Nuclear)
Plant, Units 1 and 2)
)
)
ASLBP No. 93-671-01-OLA-3 CERTIFICATE OF SERVICE
~
This is to certify that copies of the within and foregoing " Georgia Power Company's Reply to Intervenor's Illegal License Transfer Allegation" were served on all those listed on the attached service list by express mail delivery.
This is the 13th day of March,1995.
i
/
John Lamberski TROUTMAN SANDERS Suite 5200 600 Peachtree Street, N.E.
Atlanta, GA 30308-2216 (404) 885-3360 66 -
4
.. i
UNITED STATES OF AMERICA
+
l NUCLEAR REGULNIDRY COMMISSION o
Before the Atomic hfety and f imeine naard
)
In the Matter of
)
Docket Nos. 50-424-OLA-3
)
' 50-425-OLA-3 i
GEORGIA POWER COMPANY,
)
etal.
)
Re: License Amendment
)
(Transfer to Southern j
(Vogtle Electric Generating
)
' Nuclear)
{
Plant, Units 1 and 2)
)-
l
)
ASLBP No. 93-671-01-OLA-3 i
SERVICE LIST 4
' Office of Commission Appellate Administrative Judge i
Peter B. Bloch, Chairman Adjudication.
i Atomic Safety and Licensing One White Flint North j
Board
~ 11555 Rockville Pike U.S. Nuclear Regulatory Rockville, MD
-20852 Commission i
Washington, D.C. 20555 Stewart D. Ebneter l
Regional Administrator Administrative Judge USNRC, Region II James H. Carpenter 101 Marietta Street, NW Atomic Safety and Licensing Suite 2900 Board Atlanta, Georgia 30303_
i 933 Green Point Drive i
Oyster Point Office of the Secretary j
Sunset Beach, NC 28468 U.S. Nuclear Regulatory i
Commission j
Administrative Judge Washington, D. C. 20555-Thomas D.- Murphy ATTN:
Docketing and Services
{
Atomic Safety and Licensing Branch Board j
U.S. Nuclear Regulatory Charles Barth, Esq.
4 Commission Office of General Counsel i
Washington, D.C. 20555 One White Flint North Stop 15B18 Michael D. Kohn, Esq.
U.S. Nuclear Regulatory Kohn, Kohn & Colapinto, P.C.
Commission 517 Florida Avenue, N.W.
Washington, D. C. 20555 -
Washington, D.C. 20001
- Director, j
Office of Commission Appellate-Environmental Protection Adjudication Division One White Flint North Department of Natural i
11555 Rockville Pike Resources Rockville, MD 20852 205 Butler Street, S.E.
Suite 1252 Atlanta, Georgia 30334