ML20086T762
| ML20086T762 | |
| Person / Time | |
|---|---|
| Site: | Three Mile Island  |
| Issue date: | 03/02/1984 |
| From: | Blake E METROPOLITAN EDISON CO., SHAW, PITTMAN, POTTS & TROWBRIDGE |
| To: | |
| References | |
| SP, NUDOCS 8403070025 | |
| Download: ML20086T762 (63) | |
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? W _U UNITED STATES OF AMERICA -
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NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )
)
METROPOLITAN EDISON COMPANY ) Cocket No. 50-289 SP
) (Restart-Management (Three Mile Island Nuclear ) Phase)
Station, Unit No. 1) ,
)
NOTICE TO COMMISSION, APPEAL BOARD, LICENSING BOARD AND PARTIES I enclose for the information of the Commission, Boards, and parties involved with management capability aspects of this pro-ceeding documents related to the recent resolution of the pro-ceeding pending before the Federal District Court of the Middle District of Pennsylvania in which Met Ed, the former licensed operator of TMI-2, was charged with criminal activity at that unit in connection with primary coolant leak rate testing in late 1978 and early 1979. Counsel is informed that all that remains pending in that connection is a request by Met Ed that the grand jury materials be released to NRC and to Met Ed. The following docu-l ments are enclosed:
1 (1) Plea Agreement signed February 28, 1984.
(2) Stateiaent of Facts Submitted by - the United States.
I (3) Statement of Metropolitan Edison Company With Respect to Plea Agreement.
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l 8403070025 840302 PDR ADOCK 05000289 O ppg l
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s' I (4) Order signed by the Court on February 29, 1984.
(5) Statement by William G. Kuhns, GPU Chairman, February 29, 1984.
Licensee anticipates receiving early next week transcripts uf the February 28 and February 29 proceedings which will include argument by the United States Attorney and counsel for Met Ed and the Court's ccatement upon entering the enclosed order. Copies of the transcripts when they are received will be provided to the enclosed Service List.
Respectfully submitted, SHAW, PITTMAN, POTTS & TROWBRIDGE
- 7. 4,d George F. Trowbridge, P.C.
Ernest L. Blake, Jr., P.C.
Counsel for Licensee 1800 M Street, N.W.
Washington, D.C. 20036 (202) 822-1000 Dated: March 2, 1984 b
hELATED CUdRLSf'OriDiNGF.
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )
)
METROPOLITAN EDISON COMPANY ) Docket No. 50-289 SP
) (Restart-Managcment t
(Three Mile Island Nuclear ) Phase)
Station, Unit No. 1) )
CERTIFICATE OF SERVICE This is to certify that copies of " Notice to Commission, Appeal Board, Licensing Board and Parties" were served, by deposit in the United States mail, first class,. postage prepaid, to all those on the attached Service List, except that those marked with an asterisk were served by hand delivery, this 2nd day of March, 1984.
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Ernest L. Blake, Jr., P.C.
Dated: March 2, 1984 t
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UNITED. STATES OF AMERICA 1 NUCLEAR REGULATORY COMMISSION !
Before the Commission In the Matter of )
)
METROPOLITAN EDISON COMPANY ) Docket No. 50-289 SP
) (Restart Management (Three Mile Island Nuclear ) Phase)
Station, Unit No. 1) )
SERVICE LIST
- Nunzio J. Palladino, Chairman
- Administrative Judge U.S. Nuclear Regulatory Commission John H. Buck Washington, D.C. 20555 Atomic Safety & Licensing Appeal Board
- Victor Gilinsky, Commissioner U.S. Nuclear Regulatory Commission U.S. Nuclear Regulator'; Commission Washington, D.C. 20555 Washington, Dec. 20555
- Administrative Judge
- Thenas M. Roberts, Commissioner Christine N. Kohl U.S. Nuclear Regulatory Commission Atomic Safety & Licensing Appeal Washington, D.C. 20555 Board U.S. Nucleer Regulatory Commission
" James K. Asselstine, Commissioner Washington, C.C. 20555 U.S. Nuclear Regulatory Commiss_ n Washington, D.C. 20555
- Administrative Judge Ivan W. Smith, Chairman
- Frederick Bernthal, Commissioner Atomic Safety & Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Washington, D.C. 20555
- Administrative Judge
- Administrative Judge Gary J. Edles, Chairman Sheldon J. Wolfe Atomic Safety & Licensing Appeal Atomic Safety & Licensing Board Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Washington, D.C. 20555 .
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- Administrative Judge Mr. Henry D. Hukill Gustave A. Linenberger, Jr. Vice President Atomic Safety & Licensing Board
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GPU Nuclear Corporation U.S. Nuclear Regulatory Commission P.O. Box 480 Washington, D.C. 20555 Middletown, PA 17057 Docketing and Service Section (3) Mr. and Mrs. Norman Aamodt Office of the Secretary R.D. 5 U.S. Nuclear Regulatory Commission Coatesville, PA 19320 Washington, D.C. 20555 Ms. Louise Bradford Atomic Safety & Licensing Board TMI ALERT Panel 1011 Green Street U.S. Nuclear Regulatory Commission Harrisburg, PA 17102 Washington, D.C. 20555 Joanne Doroshow, Esquire ,
Atomic Safety & Licensing Appeal The Christic Institute Board Panel 1324 North Capitol Street U.S. Nuclear Regulacory Commission Washington, D.C. 20002 Washington, D.C. 20555 Ms. Gail Phelps
- Jack R. Goldberg, Esq. (4) ANGRY /TMI PIRC Office of the Executive Legal 1037 Maclay Street Director Harrisburg, PA 17103 U.S. Nuclear Rsgulatory Commission Washington, D.C. 20555 Ellyn R. Weiss, Esq.
Harmon & Weiss Maxine Woelfling, Esq. 1725 Eye Street, N.W., Suite 506 Office of Chief Counsel Washington, D.C. 20006 Department of Environmental Resources Michael F. McBride, Esq.
505 Executive House LeBoeuf, Lamb, Leiby & MacRae P.O. Box 2357 1333 New Hampshire Avenue, N.W.
Harrisburg, PA 17120 Suite 1100 Washington, D.C. 20036 John A. Levin, Esq.
Assistant Counsel Michael W. Maupin, Esq.
Pennsylvania Public Utility Hunton & Williams Commission 707 East Main Streat P.O. Box 3265 P.O. Box 1535 Harrisburg, PA 17120 Richmond, VA 23212 David E. Cole, Esq.
Smith & Smith, P.C.
2931 Front Street Harrisburg, PA 17110 1
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UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA -
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UNITED STATES OF AMERICA )
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vs. ) CRIMINAL NO. 83-00188
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METROPOLITAN EDISON COMPANY )
PLEA AGREEMENT The following plea agreement is entered into by and between the United States Attorney for the Middle District of.
Pennsylvania and the above-captioned defendant. Any refer-
, ence to the Government in this Agreement shall mean the office of the United States Attorney for the Middle District of Pennsylvania.
- 1. The defendant agrees to plead guilty to Count 2 of the Indictment which charges the defendant with a violation of Title 42, United States Code, Section 2273 and Title 10, Code of Federal Regulations, Part 50, Appendix B. The maximum penalty for the offense is a fine of $5,000.00, together with the costs of prosecution. At the time the guilty plea is entered, the defendant shall admit to the Court that the defendant is in fact guilty of the offense charged in that count.
- 2. The defendant also agrees to enter pleas of nolo contendere to Counts 4, 7, 9 and 10 of the indictment which 1
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D charge the defendant with violations of Title 42, United States Code, Section 2273 and Title 10, Code of Federal Regulations, Part 50, Appendix B and Section 50.71; that is, operating a utilization facility in violation of regulations promulgated by the Nuclear Regulatory Commission. The msximum penalty for each of the offenses is a fine of
$5,000.00.
- 3. The defendant also agrees to enter pleas of nolo contendere to Counts 5 and 8 of the indictment which charge the defendant with violations of Title 42, United States Code, Sections 2272 and 2131; that is, operating a utilization facility in violation of the conditions of its license issued by the Nuclear Regulatory Commission. The maximum penalty for each of the offenses is a fine of
$10,000.00
- 4. The Government agrees to bring no other criminal charges against the defendant arising out of its operation of the Three Mile Island Nuclear Power Station, Unit 2 which may have occurred up to and including March 28, 1979.
- 5. At the time the pleas described in paragraphs 1, 2 and 3 are entered, the defendant shall admit that Counts 2, 4, 5, 7, 8, 9 and 10 of the indictment charge offenses, the violations of which constitute crimes.
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- 6. The defendant understands that the total, maximum-possible sentence for all charges is the combination of penalties described above; that is, fines totalling
$45,000.00, together with the costs of prosecution.
- 7. The defendant understands that, for the purposes of sentencing only, a plea of nolo contendere is the same as and -
equivalent to a plea of guilty, subjecting the defendant to the same criminal penalties as a plea of guilty.
- 8. If the Court accepts the plea agreement pursuant to '
Rule 11, F.R.Crim.P., the parties agree that the appropriate sentence shall be the maximum sentence of fines totalling
$45,000.00.
- 9. After sentencing the Government agrees to move for dismissal of Counts 1, 3, 6 and 11 of the indictment.
- 10. The defendant agrees that as a material condition of this agreement the defendant shall place the sum of
$1,000,000 within five (5) business days after imposition of sentence in an interest bearing escrow account where it shall be maintained until final transfer is arranged pursuant to this paragraph. The money paid by the defendant pursuant to this paragraph shall pass absolutely and without condition for the use of and by the Pennsylvania Emergency Management Agency (PEMA) consistent with its enabling legislation to assist in emergency preparedness and planning in the
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Emergency Preparedness Zone specified by the NRC regulations, namely the area within twenty (20) miles of the TMI nuclear i station. In the event that PEMA is unable or unwilling to accept payment or in the event this payment cannot be used for the purposes set forth above, then this sum will be paid
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to a like or similar organization for like purposes which are mutually agreeable to the parties. In the event the parties cannot agree on the organization and purposes, then the matter shall be submitted to the Court for a decision as to both.
- 11. The defendant understands that any fines paid as a consequence of guilty pleas or pleas of nolo contendere are not tax-deductible from the defendant's corporate tax return.
The defendant further understands that any fines must be paid out of after tax profits and that such fines do not consti-tute a cost of doing business.
- 12. The defendant further agrees-that for the purposes of its corporate tax liability, any costs of prosecution assessed by the court and the payment described in paragraph 10, shall net be treated by the defendant as a cost of doing business, nor as an unavoidable expense. The defendant agrees and acknowledges that such costs of prosecution are a l
reasonably avoidabic expense and as such shall not be deduct- '
ible from the defendant's corporate pre-tax income.
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- 13. The defendant agrees that any fines, costs of prose-cution, or payments pursuant to paragraphs 1, 2, 3 and 10 shall be absorbed wholly and exclusively by the corporation and its stockholders. The defendant agreen that it shall in no way ask for, seek. or attempt to treat such fines, costs of prosecution or payments as an expense to be passed through to its rate payers or users of utility services.
- 14. All fines and court costs and costs of prosecution imposed by the court shall be payable to the United States Treasury in the form of a certified check, within 5 business days of the imposition of said fines and costs.
- 15. The defendant agrees that it shall submit to the United States Attorney an affidavit signed by the individual (s) responsible for the preparation of its and its affiliated companies' federal and state corporate income tax returns certifying that no deductions, credits, losses or the like were claimed for tax year 1984 by Metropolitan Edison or any af filiated company arising out of the monies paid pursu-ant to paragraphs 1, 2, 3 and 10 of this agreement.
- 16. At the sentencing the parties will be permitted to bring to the Court's attention, and the Court will be permitted to consider, all relevant information with respect to the defendant's conduct.
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- 17. The defendant agrees not to pursue or initiate any civil claims or suits against the United States of America, its agencies or employees, whether or not presently known to the defendant, arising out of the investigation or prosecu-tion of the offenses covered by this agreement.
- 18. The defendant understands that by its pleas of --
guilty and nolo contendere it waives any defenses, whether legal or factual in this case.
- 19. It is further understood and agreed that the status of any license held by the defendant is not affected by this agreement and is a matter solely within the discretion of the appropriate licensing authority. The defendant agrees that the Government may in its discretion, consistent with law, provide to any such licensing authority any documents and information in its possession.
- 20. The defendant specifically understands that the granting, renewal and denial of licenses to operate nuclear power plants rests exclusively and entirely with the Nuclear Regulatory Commission, which is not a party to this agree-ment.
- 21. The Board of Directors of Metropolitan Edison shall, as a condition of this agreement and a condition precedent to this agreement , pasc resolutions authorizing and permitting counsel for the defendant to make factual admissions,.stipu-
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lations and agreements concerning the defendant's involvement in the offenses charged such as may be required by Rule 11 F.R.Crim.P. and by the court for purposes of the entry of
- i such pleas. The Board of Directors shall also pass a resolu-
! tion authorizing counsel for the defendant to execute this agreement and such resolution shall~ certify:that the Board J
has' reviewed and approved this plea agreement in its entirety before adoption of any such resolution.
- 22. Nothing in this agreement shall bind any other stati i or local law enforcement agency.
! 23. This document states the complete and only' Plea i
j Agreement between the United States Attorney for the Middle i District of Pennsylvania and the defendant in this case, and a
l is binding only on the parties to.this agreement, supersedes all prior understandings, if any, whether written or oral, and cannot be modified other than in writing that is' sig ned by all parties or on the record in Court. The parties have
- agreed that the Government's statements at the time the pleas are entered shall. include specific, agreed upon language dealing with identified management personnel and with the so-I called TMI-accident'of March 28, 1979. No other promises or I
-inducements have been or will be made_to the defendant in connection with this case, nor_have any predictions or threats been made in connection with this plea.
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- 24. The original of this agreement must be signed by defen'se counsel and received by the United States Attorney's Office on or before 5:00 p.m., February 28. 1984, otherwise the offer shall be deemed withdrawn.
- 25. None of the terms of this agreement shall be binding on the Office of the United States Attorney for the Middle District of Pennsylvania until signed by defense counsel and until signed by the United States Attorney.
0w DATE A 3,i1W 1
huS hwuvw PAUL J. CUR N, Esq.
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U Counsel for efendant DATE / DAVID DXRT QUEEM United States Wtorney DDQ:pjh F
RuAihu GL m .ai C.WEtu, 6- . ,
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l UNITED STATES DISTRICT COURT *E t i"' 7 -2 P A :41 FOR THE MIDDLE DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA )
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- v. ) CRIMINAL NO. 83-00188
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METROPOLITAN EDISON COMPANY ) (Rambo, J)
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STATEMENT OF FACTS SUBMITTED BY THE UNITED STATES At a trial of this case, the Government would produce credible evidence to establish the facts contained in this .
Statement. This Statement does not describe all of the evidence the United States would introduce at trial, but contains essential .
portions thereof which it would offer in support of the charges to which the defendant is entering pleas. Under clearly established case law, a corporation can be criminally liable for the acts and omissions of its employees. The evidence would establish that a number of employees of the Metropolitan Edison Company engaged in
, the criminal activities charged in the indictment. However, the evidence presented to the grand jury and developed by the United States Attorney does not indicate that any of the following persons participated in, directed, condoned or was aware of the acts or omissions that'are the subject of the indictment:
William G. Kuhns Frederick D. Hafer Herman M. Dieckamp Richard Heward Robert C. Arnold Henry D. Hukill James S. Bartman Edwin E. Kintner Shepard Bartnoff James R. Leva n.
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Bernard H. Cherry ' Robert L. Long Philiip R. Clark w . Frank Man'ganaro Verner H. Condon '
Ernest M,ESchleicher Walter M. Creitz Ployd J. Smith Robert Fasulo s William A. Verrochi Ivan R. Finfrock Rcymond'Werts William L. Gifford Richard F. Wilson The above list of individuals includes all directors and officers of GPU Nuclear Corporation from its organization in 1982 to the date of the indictment and all directors mE the defendant company ~
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during the period covered by the indictment. 1 I
The indictment does not charge a'le al, nexus to the events of March 28, 1979, which have become commonly known as the Three Mile Island Unit 2 accident, and the plea's do,not constitute an admission of such a nexus.
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For the sake of clarity, a discus'sion of the evidence will be divided into separate sections, as follows: I. Regulatory and Operation Requirements; II. Review of Plant Operations from Licensure to October 18, 1978; III. Events of October 18, 1978; and IV. Events After October 18, 1978.
I.
Regulatory and Operation Requirements The Nuclear Regulatory Commission ("NRC") was the federal agency responsible for administering and enforcing the Atomic Energy Act.
'The Atomic Energy Act authorized the NRC to issue
' licenses to operate nuclear power plants and to prohibit the operation of any such plant except under and in accordance with a valid license.
To obtain an operating license from the NRC,-
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l Metropolitan Edison Company was required to develop a set of rules and procedures by which it agreed to operate Three Mile Island Nuclear Station, Unit 2. Metropolitan Edison was also subject to established standards for operation known as technical specifications. The technical specifications were mado part of Metropolitan Edison's license to operate TMI Unit 2 and became conditions of the license.
The operation of TMI Unit 2 required reactor coolant, which is essentially demineralized water, to: (a) keep the facility at a safe temperature; and (b) transfer heat generated by the nuclear reaction. To avoid the loss of' reactor coolant, the technical specifications limited the amount of leakage to one gallon per minute from unidentified sources. Such strict limits were established to enable company employees to monitor even slight increases in unidentified leakage -- which possibly consisted of dangerous pressure boundary leakage -- and to take appropriate preca'ationary action to avoid challenges to the integrity of the containment of reactor coolant.
If unidentified leakage exceeded the established limits, the technical specifications required Metropolitan Edison to take certain actions set forth in an Action Statement. The Action Statement required the company to reduce the leakage rate to within allowable limits within four hours of discovery. If that could not be accomplished, the Action Statement required
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Metropolitan Edison to commence a power reduction so that the facility would be in hot standby within the following six hours, and completely shut down within the following 30 hours3.472222e-4 days <br />0.00833 hours <br />4.960317e-5 weeks <br />1.1415e-5 months <br />.
Metropolitan Edison's license also required it to establish,.
implement and maintain appropriate procedures for surveillance tests. Among such tests was the reactor coolant system water inventory balance, commonly referred to by Metropolitan Edison employees as the leak rate test. The company's license required ir to demonstrate, by performance of the leak rate test, that -
reactor coolant system leakage was within allowable limits at least once every 72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> during steady state operation of the facility. Metropolitan Edison Company understood that the leak rate test was a primary means of detecting reactor coolant system leakage. If the leak rate test indicated that allowable limits of leakage were exceeded, Metropolitan Edison was required either to invoke the Action Statement, as described above, or disqualify the test by filing a written Exception or Deficiency,. as required by.
the company's procedures. In addition, Metropolitan Edison was required to retain for at least five years its records of surveillance activities to be conducted, including the leak rate test, and to make entries in its operating logs. relating to the conduct of surveillance. testing.
The United States would establish that Metropolitan Edison Company represented-to the NRC that it would operate TMI Unit 2 in. ,
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accordance with the license requirements described above; it also represented to the NRC that it had established a leak rate test that was capable of measuring in a meaningful way unidentified reactor coolant system leakage within the technical specification limits -- that is, one gallon per minute.
II. Review of Plant Operations from Licensure to October 18, 1978 Metropolitan Edison Company owned 50 percent of the Three Mile Island Nuclear Station. On February 8, 1978, the NRC issued Facility Operating License No. DPR-73 to Metropolitan Edison to possess, use and operate TMI Unit 2.
During the time period after the license to operate was issued and prior to October 18, 1978, Metropolitan Edison was engaged in operating TMI Unit 2 with a view to bringing the facility into commercial operation. The leak rate test was required to be performed during a substantial part of this period of time. Operations Department employees of Metropolitan Edison concluded during such period of time that the leak rate test was faulty because it did not accurately measure unidentified reactor coolant system leakage. Nevertheless, the employees responsible for supervising the performance of the leak rate test acquiesced in its continued use.
The United States would establish through expert testimony that the leak rate test at TMI Unit 2 was faulty because, among other reasons, the company-prepared calculation established in the surveillance procedure for measuring unidentified leakage was not correct. The only significant change in the calculation made by Metropolitan Edison occurred on March 16, 1979, some 12 days _
before the so-called accident. However, that change did not correct all of the errors in the calculation. Additional errors were discovered by the NRC during its investigation after the.TMI Unit 2 accident.
The leak rate test at TMI Unit 2 yielded widely varying results not confirmed by the state of the plant. Thus, results within the technical specification limits could often be achieved if the test were performed frequently enough. The company adopted a practice that a leak rate test was to be performed each eight hour shift. Because of the varying results obtained, the test was frequently performed more often. If the test showed leakage in excess of the limits established in the technical specifications the documentation was discarded. Test results indicating unidentified leakage within allowable limits were retained and filed as evidence of compliance with the leak rate 1
surveillance testing requirements. Nevertheless, Operations '
Department employees had little faith in the reliability of such-test results, including the results filed for NRC review.
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An Exception and Deficiency Procedure was instituted by the company to comply with its quality assurance requirements, including the conduct of surveillance testing. A Metropolitan Edison systems engineer would testify that the company was required to apply the Exception and Deficiency Procedure to any leak rate test result company employees decided to disqualify, for _
whatever reason. Contrary to such requirement, however, no Exception or Deficiency was ever filed for any of the numerous leak rate tests discarded. Moreover, Metropolitan Edison had '-
represented to the NRC, again to comply with its quality assurance requirements, that it would keep operating logs regarding plant operations that would include the starting and completion times, and the results, of all surveillance testing. No such logs were nept with respect to the leak rate tests which exceeded allowable limits.
Thus, virtually every record concerning the leak rate test which the company was required to create for the purpose of documenting compliance with the leak rate testing requirements showing unidentified leakage in excess of allowable limits was either discarded or not created in the first instance. Nor did the company inform the NRC of the problems it was experiencing with the leak rate test.
The highest Metropolitan Edison employee in the Operations Department of TMI Unit 2, the Supervisor of Operations, would
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i testify that the leak rate procedure was " functionally unusable, to tell what your leak rate in the plant really was," but as long as the operators "got a piece of paper that said less than one gallon a minute, they could file it." In fact, he would also testify that the leak rate tests that were within acceptable limits and being filed for-NRC review were as " worthless as the .-
ones being thrown away." In addition, the Supervisor of Operations required no change in the practice of discarding unacceptable leak rate test results, because he had no f aith . in-the reliability of the test. Instead, he relied upon the operators to visually scan the instrumentation on the console to actually determine the leak rate of the plant, and felt that such a procedure was adequate to meet the safety requirements.
However, the Supervisor of Operations would admit:
"That kind of scanning does not meet the legal requirement of the technical specification. The technical specification is a legal document, and as an engineer, I am imposed upon to make legal interpretation of those words, although they can be second-guessed by lawyers at any time, so I hesitate to say that this is a legalistic reading of it, but this goes the way I read it, and what I was doing with my own eyes and my own mind did not satisfy the legal requirement.
Q. And you-knew that?
A. And I knew that."
Thus, the Supervisor of Operations permitted the operators to determine the leak rate by visually scanning plant parameters,
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.. 1 despite his knowledge that such a procedure was not authorized by Metropolitan Edison's license for compliance with surveillance requirements. Indeed, a number of operations employees described
( the scanning procedure as a " quick and dirty' way of measuring the leak rate. At no time was the NRC informed of such practices concerning the leak rate test.
The control room operators at TMI Unit 2, who were responsible for performing the leak rate test, would testify that the practice of discarding unacceptable leak rate test results..and filing acceptable ones was carried out with the express knowledge of cupervisory personnel within the Operations Department, including the Supervisor of Operations, shift supervisors and shift foremen. One control room operator would testify that when he first began running the leak rate test in early 1978 and obtained a result for unidentified leakage greater than one gallon per minute, he gave the test to his shift foreman, who showed it to the shift supervisor. Shortly thereafter, the control room operator was approached by three supervisory employees in the Operations Department and was told by one of them in the presence of the others: "We do not want to see this shit."
None of the Operations Department employees could identify any other surveillaace test conducted at TMI Unit 2 that was treated in the same manner; that is, acceptable test results filed, unacceptable ones discarded, without other documentation
l created or notification to the NRC supplied. Nor could any employee point to any other surveillance test that was functionally inoperable without corrective action being taken.
In early October, 1978, TMI Unit 2's Superintendent of Technical Support first learned that there was a divergence of opinion as to the interpretation of the requirements of the leak rate technical specifications. Company personnel within the Operations Department took the position that an acceptable leak rate test once every 72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> met the intent of the requirements of the technical specifications. Thus, if intermediate leak rate tests were conducted and unacceptable results obtained, it was not necessary to invoke the Action Statenent. The Superintendent of Technical Support was advised by at least one shift supervisor that an interpretation requiring invocation of the Action Statement every time an unacceptable leak rate test result was obtained would cause shutdown problems. The Superintendent of Technical Support was not satisfied with the interpretation of the leak r:'- technical specifications as advanced by the operations staff, and decided to look into the matter further. However, his consideration of the matter was brought to a head as a result of ,
an NRC inspection of TMI Unit 2 on October 18, 1978.
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1 III. Events of October 18, 1978 l While conducting a routine inspection of TMI Unit 2 on October 18, 1978, an NRC inspector interrupted a conversation among Operations Department employees concerning " bad" leak rate tests. [A " bad" leak rate test was the shorthand description used by Opera. ions Departnent staff to refer to a calculated .
unidentified leak rate of more than one gallon per minute. A
" good" leak rate test, conversely, referred to a calculated unidentified leak rate equal to or less than one gallon per. .
minute.] Present were the Supervisor of Operations, two shift supervisors and a shift foreman. The inspector saw at least three leak rate printouts which showed excessive leakage. He asked why the plant had not entered the action Statement as a result of such tests, and was informed that the prevailing interpretation was that al.1 unacceptable leak rate tests conducted within 72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> of an acceptable one could be ignored. The NRC inspector indicated to Metropolitan Edison personnel that he found such an interpretation " shocking," and a fundamental misinterpretation of the safety requirement. He then conf ronted the Superintendent of Technical Support with his findings and received specific assurances that whenever the leak rate test showed that the unidentified leakage limit was exceeded, the plant would enter the Action Statement. The NRC inspector was not told of the problems Metropolitan Edison had been having with the leak rate test, nor m
with the conclusion of the operations staff that the test, as performed at TMI Unit 2, did not accurately measure unidentified leakage.
The NRC inspector would testify that the Superintendent of Technical Support agreed to implement the interpretation of the leak rate technical specifications as stated by the NRC inspector. ,
The Superintendent of Technical Support would testify that he agreed with the NRC inspector's interpretation and promised to instruct the operations staff accordingly. The Superintendent of Technical Support requested the Supervisor of Operations and certain shift supervisors to assist in assuring that the Operations Department of TMI Unit 2 received appropriate instructions. The Superintendent of Technical Support would testify that shortly after the confrontation with the~ inspector on.
October 18, 1978 he was advised by a shift supervisor that "we know how to get a good one", referring to the leax rate test.
Before concluding his inspection on October 18, 1978, the NRC inspector was shown at least two leak rate tests run on' October 18, 1978, after his discovery of the unacceptable ones, which showed that the plant was within the one gallon per minute limit for unidentified leakage. Expert testimony based upon scientific analysis of. plant-records would indicate that1 unrecorded water additions were made to the reactor coolant system during the course of _ three leak rate tests conducted on October- 18, 1978.
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A shift supervisor would testify that as a result of the October 18, 1978 NRC inspection a conference telephone call was made from the shift supervisor's office in the Unit 2 control room. Present in the shift supervisor's office and parties to the conversation were the Superintendent of Technical Support, the Supervisor of Operations, and two shift supervisors. The call was ,
made to either TMI's Station Superintendent or Metropolitan Edison's Vice-President for Generation, or both. The Station Superintendent and/or the Vice-President for Generation were- .
briefed on the situation at TMI Unit 2 concerning the leak rate test. During the conversation the cperations personnel alerted the Station Superintendent and/or Vice-President for Generation that because of the numerous " bad" leak rate tests obtained at Unit 2, the NRC's interpretation ot the leak rate technical specifications would result in repeated shutdown of the facility.
The company never advised the NRC that its interpretation of the technical specifications would repeatedly shut down TMI Unit 2. Nor would the NRC otherwise expect such consequences since it was not intormed that the leak rate test did not function properly.
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IV. Events After October 18, 1978 As a result of the events of October 18, 1978, Metropolitan Edison Company represented to the NRC that i.t would change its interpretation of the leak rate technical pecifications, and assure that its operators would invoke the Action Statement each time a leak rate test result indicated leakage above allowable ,
limits. The evidence at trial would show, however, that no such changes occurred with respect to the performance of the leak rate test. The measures taken by the company purportedly to instruct
. the operations staff on the proper interpretation of the leak rate technical specifications were wholly inadequate and ineffective.
In fact, the only instruction the control room operators recall as a result of the October 18, 1978 NRC inspection was a direction from a number of the shift supervisors and shift foremen to make sure that the " bad" leak rate tests were thrown away and not left lying around the control room. Furthermore, it was during this period of time, from October 18, 1978 until TMI Unit 2 was shut down on March 28, 1979, that numerous leak rate tests were intentionally manipulated by the unrecorded addition of water or hydrogen to-the reactor coolant c'rstem during the course of the tests, to obtain acceptable results. A summary of the measures taken by Metropolitan Edison in response to the events of October 18, 1978 follows.
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A. Oral Instructions The Superintendent of Technical Support would testify that he met with some members of the operations staff on October I or 19, 1978, to advise them of the correct interpretation of the leak rate technical specifications. However, not one Operations Department employee remembers any such instruction. As noted, the ,
only oral instruction the operations staff recall was a warning not to leave " bad" leak rate tests lying around the control room.
B. Licensee Event Report 78-62 On October 19, 1978, the Superintendent of Technical Support advised the NRC inspector that Metropolitan Edison was going to submit to the NRC a licensee event report dealing with the i technical specification violations discovered by the NRC inspector on October 18, 1978. Metropolitan Edison submitted a licensee event report to the NRC which purportedly described the events giving rise to the technical specification violation and explained what corrective action would be taken by the company to assure no reoccurrence of the reported violation. The report, however, incorrectly described the events of October 18, 1978. It also failed to inform the NRC of the substantial, long-standing problems the company was experiencing with the leak rate test.
The licensee event report represented that the following
i corrective action would be taken by the company:
"The appropriate personnel will be instructed on the requirements of the applicable sections of the T.S.
and the requirements to immediately invoke applicable action statements when the provisions of limiting conditions for operation are not met." -
However, only a few of the Operations Department employees recall either reading or seeing the licensee event report, even ,,
though virtually all initialed the sign off sheet accompanying the report. None of the employees remembers any training, formal or informal, on the proper interpretation of the leak rate technical specifications. Not one member of the operations staff changed his understanding of the leak rate surveillance requirements, or the method of operating the leak rate test, as a result of the licensee event report.
C. Operations Memo On October 20, 1978, the Supervisor of Operations issued a nemorandum to the Unit 2 shift supervisors and shift foremen purportedly advising them of the proper interpretation of the leak rate technical specifications. Similarly with respect to the oral instructions and the licensee event report, all Operations Department employees with the exception of one shif t foreman would testify that they-do not recall ever reading the memorandum. Not one member of the operations staf f changed his interpretation or method of operation of the leak rate test reg'airements as a result l
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of the October 20, 1978 memorandum. In addition, the Supervisor of Operations would testify that after he issued the memorandum, he never again conferred with any of his shift supervisors or shift foremen to determine that the leak rate technical.
specifications were being followed correctly.
Notwithstanding the failure of the company's measures to bring performance of the leak rate test into compliance with the technical specifications, on March 5, 1979, Metropolitan Edison represented to the NRC that the corrective action promised in the licensee event report had been taken.
D. Intentional Manipulation of Leak Rate Tests The vast majority of the control room operators, and four of the six foremen would testify that following the January, 1979 shutdown it became extremely difficult to get " good" leak rate tests within the one gpm limit for unidentified leakage, even though the test was being run repeatedly. During this period of time many leak rate tests that were filed were intentionally manipulated by the addition of hydrogen or water.
Four control rcom operators would testify that they added hydrogen to the make-up tank during the performance of leak rate tests to " influence" the results of the test. According to them and to other Operations Department employees, including a shift supervisor, the addition of hydrogen during the test made the l
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level in the make-up tank appear higher, thus making the unidentified leakage seem lower.
Despite the fact that much of the documentation concerning i
leak rate testing at TMI Unit 2 was systematically destroyed, NRC experts, experienced in analyzing data generated by nuclear power plants, have been able to (1) recompute the leak rate test, and .
(2) determine the frequency with which unreported water additionc were made during leak rate tests conducted at TMI " nit 2. They concluded that the recomputed leak rate test showed that .
unidentified leakage at TMI Unit e exceeded the technical specification limit for unidentified leakage of one gallon per minute during the period from January 8, 1979 through January 15, 1979. After a forced shutdown of approximately two weeks, January 15-30, 1979, for reasons unrelated to leakage in the primary system, unidentified leakage as recomputed by the experts under the leak rate test exceeded the technical specification limit a substantial number of times from mid-March of 1979 until March 28, 1979.
The NRC experts also concluded that approximately 30 unreported water additions occurred during officially filed leak rate tests in the period after the NRC inspector's visit on October 18, 1978 until March 28, 1979.
Finally, with regard to October la, 1978, the NRC experts concluded on the basis of available documentation that water was l l
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added during three leak rate tests run the morning of October 18, 1978, and that this water was not recorded or accounted for in the leak rate computation. At least two tests were thereafter shown to the NRC inspector on that date to satisfy him that the company had complied with the leak rate technical specifications.
E. Summary In summary, Metropolitan Edison provided no effective instructions or training to the operations staff on the . .
. requirements of the leak rate technical specifications. No supervisory personnel followed up on the events of October 18, 1978 to assure that the major changes agreed to were implemented.
As a' result, numerous leak rate tests indicating that unidentified leakage was above allowable limits continued to be destroyed. Many control room operators and several shift foremen would testify that for the time period following October 18, 197E until March 28, 1979, many more " bad" test results were obtained than " good" results. Yet, not a single " bad" leak rate test was filed in the company's official surveillance files. No entry into the Action Statement was made for leak rate tests showing unidentified leakage above allowable limits. Not a single Exception or Deficiency was filed for the leak rate test. No entry was made in any log reporting the starting and completion times and results of leak rate' tests showing unidentified leakage greater than one gallon per minute. Numerous leak rate tests 'were
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TMI Unit 2 would have entered the Action Statement on numerous occasions.
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s UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA pcgg7ED U ~. miC UNITED STATES OF AMERICA , ,,
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- v. ) CRIMINAL NO. 83-00188
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METROPOLITAN EDISON COMPANY ) (Rambo, J.)
STATEMENT OF METROPOLITAN EDISON COMPANY WITH RESPECT TO PLEA AGREEMENT The parties have executed a Plea Agreement which is i
before the Court for review. I join the Government in urging its approval in accord with Rule 11(e)l(A) and (C). I would like to present now the defendant's statement in support of the Plea Agreement and to present the defendant's plea of guilty to Count 2 and its offer of nolo contendere pleas to six other counts.
Your Honor, in connection with the Plea Agreement and today's proceeding,'the record must be clear on two very important points.
- The first is that the Plea Agreement provides that the defendant will plead guilty to Count 2 and only to Count 2.
When I present to the Court the fact basis for that plea, that i
statement will set forth the only matters which constitute an acknowledgment of guilty in this case.
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With respect to the nolo contendere pleas set forth in paragraphs 2 and 3 of the Plea Agreement, the Plea Agreement itself .
acknowledges, consistent with the case law, that acceptance of these pleas authorizes on'.y the same sentence as a guilty plea. In offering them, the defendant does not, however, admit any facts at all as to them, and certainly admits no facts to support any findings of guilt as to them. Under paragraph 9 of the Plea Agreement the Government is not pursuing the other four counts,
'ncluding i Count 11, the only one that charges a violation of the Criminal Code.
Second, the Government's fact statement is just a statement of what the prosecution contends it would prove if this case were tried. We have not had production of the testimony before the grand jury, even though we requested and filed a motion for such production. Accordingly, we are in no position even to try to refute the statement point by point. That is what trials are all about, and obviously there will be no trial if this Court accepts the Plea Agreement. I note, however, that the defendant in offering these pleas cannot and does not admit to all the facts set forth by Mr. Queen.
The indictment relates to the THI-2 plant and to matters occurring during roughly the last three months of 1978 and the first three months of 1979 in connection with a so-called " reactor coolant inventory balance" or leak rate test for measurement of unidentified leakage.
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s As indicated in official NRC documents, a limited amount of leakage is expected from equipment that cannot be made airtight, ,
and it may be impractical to eliminate such leakage. Accordingly,
! Technical Specifications at TMI-2 and other plants provided for certain limitations on different types of leakage such as
" identified" and " unidentified" leakage, and provided for tests to determine such leakage. The limitation relevant here is 1 gallon per minute for " unidentified" leakage. Although it is the l ' Company's position that the inventory' balance test, which is the subject of the indictment, wee not a test prescribed for i unidentified leakage by the TMI-2 Technical Specifications, nevertheless, it was one of the tests in a Company procedure and was used by Company employees for this purpose. It also appears now that this test, as used back then under the circumstances at TMI-2 and at some other nuclear plants, was not sufficiently accurate and meaningful to measure with precision actual un-identified leakage within a 1 gallon per minute liaitation.
Nonetheless, the evidence indicates, as the prosecutor has stated, ,
that Met-Ed employees continued to employ it in their efforts to measure unidentified leakage.
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Relying on the federal criminal law doctrine that employees -- even f airly low-level ones -- can bind the corporation which employs them, the indictment charges only Metropolitan 1
Edison Company. The indictment does not name any of the employees l
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d who committed the acts or omissions which are the subject of the indictment.
At any rate, when the indictment came down, the Company had to deal with it in the best interests of its shareholders, ratepayers and the public. The Company determined that, given this standard, and under all of the circumstances peculiar to this situation, the best course was to seek to dispose of this criminal case as quickly as possible. Such a disposition would let all the facta be known promptly to the NRC and the public while, at the ,
same time, this approach would enable the Company and its officers and employees to concentrate on the re-start of TMI-1, on the clean-up of TMI-2, and on the Company's business of supplying electric energy to its ratepayers as efficiently and cheaply as possible.
This matter ha's been pending in one forum or another for a long time. Thus, prior to the indictment there had been an NEC inquiry in the Spring of 1980, followed by some three and a half years of proceedings before three grand juries in this District.
After this indictment was returned, two months were spent by both sides briefing our motions to dismiss the indictment on legal grounds. Some options would, of course, be dropped under the disposition proposed today. Further litigation of all these charges would be long and costly and at trial could delay the progress of the resolution of issues that could impact the TMI-1 i
re-start administrative proceedings pending before the NRC.
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4 Given these obvious detriments and given the fact that the prosecution has indicated to us that it has grand jury -
testimony to show that Company employees at TMI-2 had, indeed, failed to treat the inventory balance test as not accurate and meaningful, the Company agreed with the Government that disposition of this case by this Plea Agreement was in order. The Plea Agree-ment, of course, speaks for itself. I would like now, Your Honor, to set forth on behalf of the defendant the facts which it admits and which provide, in accordance with Rule 11(f), the basis for the Company's plea of guilty to Count 2 of the indictme..c r1 set forth 1 in paragraph 1 of the Plea Agreement that is before the Court.
Count 2 of the indictment charges the Company with a violation of Title 42, United States Code, Section 2273 which in turn incorporates NRC regulations. The violation relates to the Company's establishment, implementation, and maintenance of a reactor coolant system water inventory bslance procedure. The Company pleads guilty to Count 2 on the basis of its admission of the following facts.
Count 2 of the indictment charges a violation of Title l
10, Code of Federal Regulations, Chapter I, Part 50, Appendix B. l 1
The Government has identified specifically Paragraph XI of these regulations as the provisions allegedly violated. Paragraph XI required the Company to establish a " test program . . . to assure that all testing required to demonstrate that structures, systems, I t 1 i
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and components will perform satisfactorily in service is identified and performed in accordance with written test procedures which .
incorporate the requirements and acceptance limits contained in applicable design documents." Paragraph XI further required that
"[t]est results shall include provisions for assuring that all prerequisites for the given test have been met" and that "[t]est results shall be documented and evaluated to assure that test requirements have been satisfied."
Prior to the period covered in the indictment, the Company issued pursuant to the above regulation a written test procedure which, according to the procedure, was to insure compliance with certain leakage limitations incorporated therein, l
by performance of a reactor coolant system water inventory balance test at least once per 72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> during steady state operation.
Employees of the Company stationed at TMI-2 and conducting such test were on notice that its procedure for performance of such test, as applied under the conditions and circumstances then existing at the Three Mile Island Nuclear Station Unit 2, did not accurately and meaningfully measure the amount of unidentified reactor coolant leakage within a 1 gpm limitation, which was one of the limitations listed in the procedure. Despite such notice, such employees of the company continued to use the procedure.
Accordingly, based on these facts, the Company admits that beginning some time prior to October 18, 1978, and continuing
d up to and including March 28, 1979, in the !!iddle District of Pennsylvania, the defendant company, knowing of the above-cited regulation, possessed and used a utilization facility, to wit, the Three Mile Island. Nuclear Station Unit 2, in violation of a regulation promulgated by the NRC.
In pleading guilty to Count 2 on the above-stated basis, the Company specifically does not admit the remaining allegations contained or incorporated in count 2 of the indictment.
Such allegations, which are not essential to the aforesaid offense, include the following:
The Company does not admit the allegation of paragraph 2 of Count 2 that NRC regulations required it to establish, imple-i ment, and maintain a reactor coolant system water inventory balance procedure to vemonstrate that unidentified leakage was within allowable limits. The Company's legal position in this regard has been set forth in detail in papers previously submitted to the Court. The Company also does not admit the allegation that its continued use of the inventory balance procedure was -- and we quote - "in an effort to generate results which appeared to establish that reactor coolant leakage was within allowable limits." In any event, as I have noted this allegation is plainly not an essential element of the offense charged.
Finally, paragraph 1 of Count 2 realleges and in-l
corporates twenty-three earlier paragraphs, many of which are not relevant to, and none of which is essential to, the charges in ,
Count 2 so -- without going into detail on each -- we simply state that the Compar/ does not admit to these allegations, i
i The Board of Directors of Metropolitan Edison Company has adopted a resolution authorizing the Plea Agreement, the making of this plea, and giving me authority to make this fact statement which is sufficient to support its acceptance by this Court.
Now, Your Honor, I would like to address Counts 4, 5, 7, 8, 9 and 10. These are the six counts to which, as paragraphs 2 and 3 of the Plea Agreement provide, the Company has agreed to plead nolo contendere. The government has recommended acceptance of these nolo contendere pleas.
For reasons which I now outline, this Court should accept such pleas to these six counts as authorized by Rule 11(b) of the Federal Rules of Criminal Procedure. Acceptance of nolo contendere pleas in these unique circumstances is plainly in the t
public's interest in the effective administration of justice.
- 1. Unlike most criminal cases, the disposition of these criminal charges by this Plea Agreement will not put the matter to i
rest. To the contrary, it will only be after this case concludes that the issues presented by this indictment will be addressed in ,
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depth. As Your Honor knows very well from other recent proceedings before this Court, the NRC is committed to investigate the facts ,
l surrounding these charges. As a practical matter, that investiga-l tion cannot and will not proceed until this cirminal case is !
concluded. It is also plain that the NRC's investigation is a far superior vehicle to a criminal trial in getting at all of the facts i
-- documentary, testimonial, and scientific -- and in assessing by expert and other testimony all of the ramifications of these eventi, which took place five years ago or more. In sum, Your Honor, the Company's goal that this matter be aired as fully and as promptly as possible accords completely with the public's interest that this occur. Acceptance of these nolo contendere pleas will enable the NRC's investigation to move ahead now and, after a comprehensive inquiry, conclude with appropriate findings.
- 2. In this same vein, Yo ur Honor, the Company too has long been committed to conducting a thorough investigation of its own of these charges. To this end the Company has commissioned the conduct of an independent investigation. Just as with the NRC's investigation, that inquiry cannot get off the ground until this criminal case ends.
In the interests of getting all of tne facts, we have sought discovery in this case of the grand jury testimony of the 40 or so present and former Company employees and of others who 1
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testified in secret before grand juries over the past almost four l years. The prosecution has resisted strongly our efforts at ,
discovery of this testimony. The conclusion of this case, which the Plea Agreement contemplates, will leave the Company free to pursue vigorously its own inquiry and also to cooperate with the NRC's investigation. In this regard, we note that _ 19 of the Plea Agreement provides that the prosecution may turn over to the NRC, consistent with law, all of its evidence. We hope that the govern-ment will make some of this material available to the Company but we are pleased that, at the very least, the NRC will receive it. I i
want the record to show that Metropolitan Edison has endorsed unequivocally that provision in the Plea Agreement.
In addition, in the interest.of making the complete investigative record available to the NRC and to the Company, we intend, should the Court accept this Plea Agreement, to move 6
immediately for release of the grand jury minutes to the NRC and to us. Although we recognize the limitations which recent Supreme Court cases impose on such Rule 6(e) applications, we feel strongly that, due to the unique nature of this case and the interests of both the NRC, the Company, and the public, this motion constitutes a sensible appeal to this Cour't's discretion.
- 3. Yet another basis for acceptance of these nolo contendero pleas is the fact that the Plea Agreement provides in
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paragraph 10 for the Company to make a substantial financial
! contribution toward the improvement of emergency preparedness ,
! planning in the area of the THI plant. The Federal Energy Management Agency has reported recently that local government's resources for such improved planning are not all that they cight be. It is, therefore, the Company's hope that its contribution of
$1 million -- which will not be tax deductible and which will not be borne in any respect by its customers -- will be a really
. meaningful one. The Company believes earnently that the public interest is better served by this payment than by spending large suas to finance a lengthy trial where the maximum possible fine, even if there were a conviction on all counts, could not exceed
$85,000 and probably could not as a matter of law exceed $55,000.
I stress here, Your Honor, that the concept of this substantial contributien was Met-Ed's proposal in the first instance. We are gratified that Mr. Queen accepted this approach. Both the i
Government and Met-Ed are committed to its implementation.
- 4. Metropolitan Edison Company, the defendant here, has since 1981 had no responsibility whatsoever for operating the TMI plant. GPU. Nuclear Corporation has had that responsibility since January 1, 1982. To the fullest extent possible, given the
! restraints created by the pendency of the grand jury proceedings <
! and this case on their ability to ascertain the facts, top management has addressed the problems of five years ago fully and effectively. When this case ends it intends to do more.
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l Specifically, as I have stated earlier, management is determined to pursue its own investigation. That inquiry, if unfettered by ,
lingering criminal charges, will, we hope, lead to a full under-standing of these events. The Company will then take appropriata action against those responsible for any willful violation of the Company's procedures.
- 5. A significant item for this Court's consideration of these nolo contendere pleas is the Company's and its top management's attitude toward and reactions to this matter. I present nok this compelling evidence.
Several lessons have been learned from this matter:
A. There must be stringent adherence to the use of procedures, and the results must be meticulously documented.
B. If a procedure does not produce mean-
. ingful and accurate results, the reasons for i
that fact must be promptly determined and the procedure corrected or a new procedure developed, and both the reasons for the corrective action taken and the technical basis for those actions must be carefully documented.
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l C. There must be continuous overview and audit of operational matters, with the overview ,
and audit functions reporting to senior manage- ;
ment, so that problems are not submerged.
D. There must be multiple reporting paths to assure that problems are flushed out into the open and resolved.
GPU Nuclear Corporation has developed its reorganized structure and staffing which it has presented to the NRC to achieve these results and, 1 am advised, these changes have been made. In addition, GPU Nuclear advised the NRC in November, 1983 that it intended to add three outside directors to its Board of Directors, who will serve a a Nuclear Safety and Compliance Committee and who will have outside operational audit services reporting directly to them. These three outside directors have been elected to the GPU Nuclear Board, and they held their initial meeting as a Nuclear Safety and Compliance Committee last Friday.
In addition, Mr. John F. O' Leary, formerly Deputy Secretary of Energy and prior to that Director of Licensing of the AEC, and now an independent energy consultant, has been elected as Chairman of the GPU Nuclear Board and he will bring additional i 1
oversight and insight to the management of GPU's nuclear af f airs.
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- 6. A further reason for accepting the nolo pleas, is the fact that the operators' omissions in regard to one of the ,
many tests -- including other tests for leakage in place at the company -- were not reflective of any widespread inadequacy. Thus, as the Government advised the Court, none of the operations depart-ment employees could identify any other surveillance text conducted i
at TMI Unit 2 that was treated in the same manner or that was functionally inoperable without corrective action being taken.
- 7. Considerations of judicial and prosecutorial economy are surely factors to be weigned, particularly where, as here, these considerations stand along with the other significant reasons I have outlined.
- 8. Acceptance of the Plea Agreement will also parait the Company and its management to devote all of their efforts to matters that affect the public interest, including seeking the contributions to finance the clean up effort in accordance with Governor Thornburgh's plan.
- 9. The indictment i.tself and the prosecution's statement of facts it believes it could establish in this case furnish yet another and important basis for the acceptance of these nolo l
contendere pleas. Specifically. the indictment on its face l
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suggests and Mr. Queen's statement on the record fully acknowledges that the individuals who constituted top management five years ago .
and who constitute top management now had no involvement whatsoever in the matters alleged in the indictment. Mr. Queen has told this Court that and I quote "the evidence presented to the grand jury and developed by the United States Attorney does not indicate that any f the following (24 named) persons participated in, directed, condoned, or was aware of the acts or omissions that are the subject of the indictment." Mr. Queen also noted in his state-ment that this list of 24 individuals includes all directors and officers of GPU Nuclear Corporation from its organization in 1982 to the date of the indictment and all directors of Met-Ed during the period covered by the indictment. This forthright statement, we submit, weighs heavily in favor of acceptance of the nolo contendere pleas. This clear statement establishes that in this case top management, including most notably Mr. Kuhns and Mr.
Dieckamp, who are, respectively, Chairman and President of General Public Utilities Corporation, are innocent of any wrongdoing. This fact distinguishes this case from most criminal cases involving a corporate defendant, and presents an additional basis for acceptance of the pleas.
- 10. Finally, candor requires that I inform this Court that the Company and the prosecution have some fundamental dis-agreements which, in the Company's view, bear upon the issue of 1 1
nolo contendere pleas. We do not and cannot comment at the present time upon the Government's statement insofar as it purports to be based on the grand jury testimony which we have not seen and which the Government has resisted producing to us. We must, however, comment briefly on what the Government says their experts have determined based on plant data alone. In this regard, I can inform the Court, that in a spirit of cooperation to get at the true facts, our independent nuclear engineering experts and the Govern- l ment experts have conferred, and resolved some but not all of our differences. If we had the opportunity to confer further, perhaps further differences might have been eliminated; but neither Mr.
Queen nor I felt that it was in the public interest to delay the final disposition of this matter. These scientific controversies to the extent they are of importance will be better dealt with in other forums more suitable to the resolution of scientific issues.
In its statement,'the Government asserts that its '
expert has recomputed the results contained in Company files of inventory balance or leak rate tests conducted by the operators, and such recomputed results show unidentified leakage for certain days in January and March 1979 of over 1 gpm.
As for the period January 8 through 15, our expert's 1 independent evaluation revealed that plant records indicate that this leakage was identified as being largely from small valves for the presurizer level instrumentation and was not therefore l
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"unid'entified" leakager that the leakage was being monitored by entries into the reactor building for inspection; and that the ,
sources of the leakage were targeted for repair at the first opportunity. The plant was shut down on January 15, 1979, as the Government stated, and the leaky valves were replaced before the plant was restarted.
As for March 1979, our experts have independently evaluated the plant data by several different methods all of which suppor't the conclusion that the daily average of the unidentified leakage did not exceed the one gpa limit in this peri.,3. Our experts also concluded that the Government's recomputations of the inventory balance tests are inadequate to reflect the actual unidentified leakage for several technical reasons. In addition, these Government recomputed results suffer from wide variations from day to day and even during the same day -- the same failing that rendered the Company'd origincl inventory balance test results
-- to use the Government's words - " inaccurate and meaningless" to begin with. In contrast, the results of our experts' computations of unidentified leakage do not vary erratically and only change in accord with the physical reality.
Since the indictment does not allege that the actual unidentified leak rate was over 1 gym at any time during the i
period under review, this controversy need not be resolved in thim proceeding.
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j The Government also asserts that its experts' studies also would show approximately 30 unrecorded water additions during ,
leak rate tests, two or three of which were allegedly made on the morning of October 18, 1978. This allegation relates essentially to Count 4 of the indictment to which the Company is offering to plea nolo contendere. It should be noted that under certain circumstances water additions are necessary to the operation of the plant. The Government has never contended that the addition of water'to the makeup tank during a leak rate test is in and of itself a violation of the regulations. In fact, the computer program at TMI-2 which carried out the inventory balance test calculations accounted for such water additions when the amount of the water added during the test was entered into the computer as input data. There were approximately 1300 water additions made over the period of 126 operating days from late September 1978 to .
March 28, 1979. In this time period, there were approximately 175 reactor coolant inv2ntory balance tests recorded. Our independent experts have studied the Government's experts' data and concluded that out of the large number of water additions in this period, they found only 4 clear instances where water additions were made and not included in the inventory balance calculations, none of which was on October 18. Moreover, three of these were recorded in the operators' log, but not included in the inventory test calculations.
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Our experts have identified a number of errors in
~ the reports of the studies furnished to us by the Government in this regard and we have so informed the Government. We also have informed the Government that its experts purport to discern such water additions by reliance on certain patterns in plant data which, according to our experts, do .ot permit the identification of small water additions with any degree of certainty, but rather may well be due to such expected system dynamics and fluctuations in plant conditions as reactor power changes and changes in let-down flow. For this and other technical reasons, our experts have concluded that there is an inadequate scientific basis for the Government's expert's assertions regarding water additions.
I reiterate that these outstanding scientific issues will not wither away as a result of the pleas we propose today but rather the pleas will clear the way for NRC and Company nuc$ ear engineers and consultants to address and resclve the issues in a prompt and meaningful way, free of the restraints of a criminal l
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1 f 11 Acceptance of the nolo pleaa also will clear the way l
for the NRC to proceed with its inquiries which hopefully will advance the cause of technically improving leakage detection and measurement methods which have been an industry-wide concern for some time. Thus, in the NFC's official 1973 Regulatory Guide 1:45 dealing with this matter, and on which the Standard Technical
Specifications in use at TMI-2 and elsewhere were based, the inventory balance test in issue here was not recommended by the NRC ,
for the measurement of unidentified leakage. The NRC's Standard Review Plan issued in 1975 is to the same effect. In January 1979, a high NRC official wrote to the Reactor Safety Branch in an internal NRC memorandum that the Regulatory Guide should be re-placed and that the Standard Review Plan " compounds the problems and in conjunction with inconsistent definitions in most technical specifications has led to confusion smong reviewers and others concerning RCPB leak detection requirements." In its reports on l
investigations of planta operated by other utilities, the NRC has recognized the existence of problems with the inventory balance test used at such plants at least as early as 1980. It is time for the Government and the industry to put these criminal charges behind us, deal effectively with the technical issues and clarify any remaining confusion in the regulations and the industry.
In connection with this Plea Agreement between the parties and the nolo contendere pleas offered to Counts 4, 5, 7, 8, 1
i 9 and 10, I am authorized by resolution of the Board of Directors of Metropolitan Edison Company to make the following statements in accordance with Rule 11: l l
- 1. The Company understands the charges to which these nolo pleas are offered and understands that the maximum penalty
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provided by law is a 45,000 fine on each of Counts 4, 7, 9 and 10 and a maximum fine of $10,000 on both Counts 5 and 8, for a total maximum fine on all six counts of $40,000. Those fines are embodied in paragraphs 2 and 3 of the Plea Agreement.
- 2. The Company understands that it has the right to persist in its plea of not guilty made in November 1983 and that it has the right to be tried by a jury and at that trial has the right to assistance of counsel, and the right to confront and cross-examine witnesses against it.
- 3. The Company understands and the Plea Agreement acknowledges that if these nolo contendere pleas are accepted by the Court there will not be a further trial of any kind, so that by l
1 pleading nolo contendere the Company expressly waives the right to l a trial.
These nolo contendere pleas are offered voluntarily and are not the result of force or threats or promises apart from the Plas Agreement which the parties have executed and which is before the Court. This Plea Agreement and the Company's offer of nolo contendere pleas resulted from discussiona between the United States Attorney and representatives of the Department of Justice and me and others in my firm.
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Your Honor, there is one final point that must be stressed here today. I make it in order to try as best I can to ,
keep the record straight. It is import Tnt to the Company, but it is equally if not more important to tt ablic. I refer to the so-called TMI-2 accident of March 28, 1979, and the suggestions raised in some quarters that this indictment and that accident have some legal connection. Any such suggestions are baseless. the Government has told this Court that this is not the case, and I
'repeak that for the record. In doing so, I quote the prosection's exact words. "The indictment does not charge a legal nexus to the events of March 28, 1979 which have become commonly known as the TMI-2 accident, and the pleas do not constitute an admission of such a nexus."
That wholly accurate statement made by the Government refers, of course, to all of the Company's pleks -- both the one guilty plea and the six nolo pleas.
For all of the reasons I have set forth, we join with the ,
United Statas in urging this Court to accept this Plea Agraenent which includes the im>osition of sentence.
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i i IN THE UNITED STATES DISTRICT COURT i FOR THE MIDDLE DISTRICT OF PENNSY@ANril -2 N :p
-R.a.
3,,j 5 S E R V , .
UNITED STATES OF AMERICA :
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CRIMINAL NO .'83ldO188 l
FI L E C
. HARRIS 6 *.lRG. PA.
METROPOLITAN EDISON COMPANY :
! LB 201984 DONALD R. BERRY, CLERX ORDER PER........ . . ....
DE"UTY CLERK AND NOW,_tbis 29th day-of-Februaryr 1984, I find the defendant corporation is acting voluntarily and not as a result of force or threats or promises apart from the plea agreement.
The Court further finds that the defendant understands its rights and the consequences of its plea and voluntarily vaives its right to trial.
The Court is satisfied that the j plea of guilty to Count 2 has a batia in fact and contains all of the elements of the crime charged. The Court therefore remits the revocation of the not guilty piec and accepts a plea of geilty to Count 2 And pleas of nolo contendere to Counts 4, 5, 7, 8, 9 and 10. I hereby direct the entry of a judgment of Ccilty on the plea on Count 2 and judgment of
- conviction on Counts 4, 5, 7, 8, 9 and 10.
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' Sylvia H. Rambo Udited States District Judge Dated: February 29, 1984.
l AO 72A - l (Rev. 8/82) l d
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. g o c0 M oc;0?NCS.
i ;c y. r-STATEMENT BY WILLIAM G. KUHNS, GDU CHAIRMAN, FEBRUARY 29, 1984
'84 MAR -7 P4 :41 The actions taken in the courtroom today involving the , ,,, ,,
settlement of the regulatory violations by Met-Ed at TMI-2~ ' <..mc'O$/vki' Siwace hring to a conclusion a major uncertainty that has existed for over four years.
The indictment was settled because it would not serve the purpose of either the company or the government to go through the costly and lengthy process of a trial and possible appeals, in light of the evidence presented. The public interest is
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better served by the earliest resolution of this and other open issues. By putting this matter behind us, we have reduced the uncertainties that stand in the way of TMI-I restart and the cleanup of TMI-2. Toward that end, our counsel today renewed our request to the court that it make public the grand jury records and evidence. This will enable us to complete our own ex3mination of the events and the NRC to conclude its regulatory investigatians.
Put very simply, the behavior identified by the U.S.
Attorney relating to the water inventory tests was totally unacceptable. There can be no question about that.
There are a number of additional significant things that should be pointed cut about the settlement:
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h First, the U.S. Attorney stated that the indictment does not l
charge a " legal nexus" between the testing inadequacies and the 1979 accident, nor do the pleas constitute an admission of such a nexus. He also stated that no evidence was found of improper behavior in any other surveillance testing at Unit 2. The Government's statement of facts also makes clear that there was no involvement of any kind by the officers and directors of GPU Nuclear or the Directors of Metropolitan Edison Company.
Next, the Government dismissed four counts of the in-dictment, including the one which charged Met-Ed with a violation of the general federal criminal code, as distinguished from the other counts which charged Met-Ed with violations of an NRC regulation or the TMI-2 license.
Finally, the settlement agreement provides one million dollars for use in emergency planning in the five counties around IMI. The company will not claim that sum for either tax or rate-making purposes.
As I said before, the behavior identified by the government is unacceptable. Such conduct will not ba tolerated. As part of the measures adopted by GPU Nuclear, safeguards are in place to ensure that such behavior cannot recur.
I The nuclear organization clearly is not the same as the one at the time of these events. GPU Nuclear has been formed and is now responsible for TMI.
'Its management has only nuclear responsiblities; 1
- Its chairman, president,. executive vice president and l the vice president in charge of TMI-1 and the director n
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. 1 of TMI-2 all have broad nuclear experience and joined the Company after the period covered by the indictment;
'The number of people in the nuclear operation has been more than doubled:
- The organization has been structured and procedures established to increase independent review and assessment.
This will assure regulatory compliance and the health and safety of the public.
And now I'll take your questions on today's court action.
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