ML20087L852

Util Safety Classification Group Brief Amicus Curiae Objecting to ASLB Distinction Between Regulatory Terms Important to Safety & safety-related

ML20087L852
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	12/23/1983
From:	Earley A UTILITY SAFETY CLASSIFICATION GROUP
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
OL, NUDOCS 8403280063
Download: ML20087L852 (38)

Text

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USCG, Dsctmbar 23, 1983 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD In the Matter of )

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! 'LONG ISLAND LIGHTING COMPANY ) Docket No. 50-322 (OL)-

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(Shoreham Nuclear Power Station, )

Unit 1) )

i UTILITY SAFETY CLASSIFICATION GROUP'S

- BRIEF AMICUS CURIAE Scott E. Slaughter, Esq. Anthony F. Earley, Jr., Esq.

! Peter S. Everett, Esq. Hunton & Williams Hunton & Williams 707 East Main Street 2000 Pennsylvania Avenue, N.W. P. O. Box 1535 Washington, D.C. 20006 Richmond, Virginia 23212 UTILITY SAFETY CLASSIFICATION GROUP Arkansas Power & Light Co. Northeast Utilities Service Co.

(representing also Mississippi Northern States Power Co.

Power & Light, and Louisiana Omaha Public Power District 3

Power & Light) Pacific Gas & Electric Co.

Baltimore Gas & Electric Co. Pennsylvania Power & Light Co.

Cincinnati Gas & Electric Co. Public Service Co. of Cleveland Electric Illuminating Co. Indiana Commonwealth Edison Co. Public Service Co. of

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Consolidated Edison Co. New Hampshire (representing of New York also the Yankee Atomic Electric _

Consumers Power Co. Power Co., Maine Yankee-Detroit Edison Co. Atomic Power Co., and Vermont i Florida Power Corp. Yankee Nuclear Power: Co.)

Florida Power & Light Co. Public Service Electric &

l Gulf States Utility Co. Gas Co.

Houston Lighting & Power Co. Rochester Gas & Electric Corp.

Illinois Power-Co. Southern California Edison ~Co.

Long Island Lighting Co. Sacramento Municipal Utility-Nebraska Public Power District District l~ Niagara Mohawk Power Corp. .SNUPPS Toledo Edison Co. (representing Union Electric-l Wisconsin Electric Power Co. Co., Kansas Gas & Electric' Wisconsin Public Service Co. Co.,' Kansas City Power & Light' Co., and Kansas Electric' .

Power Coop.,JInc.)

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i TABLE OF CONTEhTS P, ate TAB LE OF C ITATI ONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii I. IhTRODUCTION ...................................................... 1 II.

SUMMARY

........................................................... 2 III. REGUIATORY HISTORY AND INDUSTRY PRACTICE CONFIRM THAT THE TERMS ARE SYNOSTMOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. NRC Regulations ............................................. 5 B. NRC Guidance Documents and Reports .......................... 6 C. Industry Practica ........................................... 7 IV. THERE IS NO NEED TO EXPAND "IMPORTANT TO SAFETY" .................. 9 V. NRC STAFF EFFORTS TO CHANGE THE MEANING OF "IMPORTANT 3) SAFETY" HAVE PRODUCED CONFUSION AND INC(,NSISTENCY ................................................ 13 A. TMI-1 ...................................................... 13 B. The Denton Memorandum ...................................... 13

(

( C. Shoreham .................................................... 14 D. Recent Ad Hoc Efforts to Expand "Important to Safety" ................................................. 16

1. AWS Ru l emak ing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

2. EQ Rulemaking ........................................... 17

3. NRC Staff Actions ...................................... 18

4. Licensing and Appeal Board Actions ..................... 18 (i)

VI. EXTANSION OF IMPORTANT TO SAFETY SHOULD NOT BE ATIT.MPTED IN INDIVIDUAL ADJUDICATIONS . . . . . . . . . . . . . . . . . . . . . 20 A. NRC Regulations Should Be Expanded Only through Rulemaking .................................... 20 B. The Commission's Redefinition of "Important to Safety" Constitutes Informal Rulemaking Conducted in Violation of the Administrative Procedure Act .............................................. 24 C. The New Definition of "Important to Safety" Is Unconstitut ionally Vague . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 VII. CONCLUSION ....................................................... 28 4

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(ii) e e

TABLE OF CITATIONS d

CASES American Federation of Government Employees, AFL-CIO _

v. Block, 655 F.2d 1153 (D.C. Cir. 1981) ......................... 25 p American Postal Workers Union, AFL-CIO v. United States .

Postal Service, No. 81-2174, slip op.

(D.C. Cir. May 6, 1983) .......................................... 24 Cabais v . E gger , 6 9 0 F . 2d 234 (D . C . Cir . 19 82 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Chamber of Commerce v. OSHA, 636 F.2d 464 (D.C. Cir. 1980) .................................... 27 Ecology Action v. AEC, 492 F.2d 998 (2d Cir. 1974) ....................... 21 Ford Motor Company v. FTC, 673 F.2d 1008 (9th Cir.

1981), reh'g. and reh'g. en bene den. 673 F.2d 1010 (1982), cert. den. 103 S.Ct. 358 (1980) ..................... 23 Gibson Wine Co. v. Snyder, 194 F.2d 329 (D.C. Cir.

1952) ............................................................26j Cuardian Federal Savings and Loan Ass'n v. Federal Savings and Loan-Insurance Corp., 589 F.2d I-658 (D.C. Cir. 1978) ............................................. 26 1

't Long Island Lighting Co. (Shoreham Nuclear Power

(- Station, Unit 1), LBP-83-57, 18 NRC ,

(Partial Initial Decision Sept. 21, 1983) ..................... passim .3

' ' 3. .e Metropolitan Edison Co. (Three Mile Island Nuclear '.

Station, Unit No. 1), LBP-81-59, 14 NRC .

A 1211 (1981), aff'd, ALAB-729, 17 NRC 814 (1983) ....................................................... 13, 22

. x Montgomery Ward & Co. v. FTC, 691 F.2d 1322 * -

(9th Cir. 1982) .......................... ....................... 27 NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) .......................... 23-

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National Tour Brokers Ass'n v. United States, 591 F.2d 896 (D.C. Cir. 1978) .................................... 25

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I New England Power Company (NEP Units 1 and 2),

5.NRC 733, review declined CLI-77-14, 5 NRC 1323 (1977) ................................................ 22 PBR, Inc. v. Secretary of Labor, 643 F.2d 8 9 0 ( 1 s t C i r . 19 81 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Pacific Gas & Electric Co, (Diablo Canyon Nuclear Plant, Units 1 and 2), Docket Nos. 50-275 and y 50-323 (Aug. 23, 1983)........................................ 19, 22 Pacific Gas & Electric Co. v. FPC, 506 F.2d 33 (D.C. Cir. 1974) ................................................. 26 1

Patel v. INS , 638 F.2d 1199 (9th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 .

Pickus v. United States ?oard of Parole, 507 F.2d 1107 (D.C. Cir. 1974) ............. .............................. 26 Potomac Electric Power Co. (Douglas Point Generating Station, Units 1 and 2), ALAB-218, 8 AEC 79 (1974) ........................................................... 22 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), LBP-82-76, 16 NRC 1029 (1982) ............................................... 19, 22 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), Memorandum ans Order (slip. op.) (May 13, 1983) ................................. 19 SEC v. Chenery, 332 U.S. 194 (1947) ........ ............................. 23 7 ..

\. State of New Jersey, Department of Environmental Protection v. EPA, 626 F.2d 1038 (D.C.

Cir. 1980) .......................................................25-Tenneco 011 Co. v. FEA, 613 F. 2d 298 (TECA 197 9 ) . . . . . . . . . . . . . . . . . . . . . . . . . 27 Trans-Pacific Freight Conference of Japan / Korea

v. Federal Maritime Commission, 650 F.2d 1235 (D.C. Cir. 1980), cert. den. sub nom. Sea Land Service, Inc. v. Federal Maritime Commission, 451 U.S. 984 (1981) .............................................. 25 Vermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station), CLI-74-40,

• 8 AEC 809, clarified, CLI-74-43, 8 AEC 827 (1974) . . . . . . . . . . . . . . . . 21 3

(iv)

- - . _ . ~_ _ .

Statutes Page Administrative Procedure Act, Chapter 5, United States Code (1982) ................................. 4, 20, 25 5 U.S.C. $ 551 (1982) ............................................ 24 5 U.S.C. 6 553 (1982) ........................................ 25, 26 Regulations Page 10 CFR $ 50.34 ..................:...................................... 5, 6 10 CFR $ 50.49 ........................................................... 17 10 CFR $ 50.54 ............................................................ 5 10 CFR i 5 0 . 5 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 CFR Part 50, Appendix A .............................................

5, 6

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10 CFR Part 50, Appendix B ............................................ 5, 22 10 CFR Part 5 0 , Append ix R . . . . . . . . . . . . . . ! .~. i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 CFR $ 72.15(a)(14) ..................................................... 5 10 CFR Part 100, Appendix A ......................................... 5, 6, 7

%e 5

t (v)

I

4 Other Authorities t.

Federal Register Page 32 Fed. Reg. 10,213-8 (1967) .............................................. 5 34 Fed. Reg. 6599 (1969) .................................................. 5 36 Fed. Reg. 3255-60 (1971) ............................................... 5 36 Fed. Reg. 22,601, 22,604 (1971) ........................................6-38 Fed. Reg. 31,279 (1973) ................................................ 6 46 Fed. Reg. 57,521 (1981) ................................................ 16

47 Fed. Reg. 2 8 7 6 ( 19 8 2 ) . . '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 48 Fed. Reg. 1026 (1983) .................................................. 5 48 Fed. Reg. 2 7 2 9 ( 19 8 3 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1

i Regulatory Guides g Regulatory Guide 1.105, Rev. 1, Nov. 1976 ................................. 6 4

Regulatory Guide 1.105, Proposed Rev. 2,

/ issued for comment - Dec. 1981 ............:........................ 6

. \s Regulato ry Guide 1.118, Rev. 2, June 19 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Re gulato ry Guide 1.151, July 19 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Regulatory Guide 1.29, Rev. 3, Sept. ~ 1978 ................................ 10 Regulato ry Guide 1. 70, Rev. 3, Nov. 19 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 NUREGs Page I

NUREG-0420 ................................................................

. 7

[ NUREG-0422 ................................................................

. 7'

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(vi)

NUREG-0528 ................................................................ 7 NUREG-0742 ................................................................ 7 NUREG-0899 ................................................................ 7 NUREG-0936, Nov. 1983 ................................................. 13, 22 NUREG-0968 ................................................................ 7 Miscellaneous Pm I&E Information Notice 83-41 (June 22, 1983) .............................. 7 NRC Generic Letter 82-04 ................................................. 11 NRC Generic Letter 83-28 ................................................. 18 S E CY - 8 3 - 2 9 3 , Ju ly 19 , 19 8 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Staff Reports 'To The President's Commission On The Accident At Three Mile Island

[Kemeny Commission Report], Reports .

of the Technical Assessment Task Force, Vol. IV, October 1979 ............................................. 5 Minutes of CRGR Meeting Number 50, November 14, 1983............... 9, 27, 28 Letters Pag Memorandum to all NRR Personnel from Harold R. Denton, Director, NRR, NRC, November 20, 1981 ............................................. passim Letter to Robert E. Minogue, Directcr, NRR, NRC, from Nuclear Power Engineering Committee of IEEE, May 1982 ....................................... 8 Letter to William J. Dircks (NRC) from .

Utility Safety Group, August 26, 1983 ............................. 1

, Letter to William J. Dircks (NRC) from M.R.

Edelman, Atomic Industrial Forum, August 29, 1983 ................................................... 8 4

-(vii)

Letter to Shoreham Appeal Board from Richard J. Rawson (NRC)

December 20, 1983 ....................................... 1, 9, 27, 28

~

Letter to Shoreham Licensing Board from Edwin J. Reis (NRC), September 16, 1983 ........................... 1 Letter to Shoreham Licensing Board from Edwin J. Reis (NRC), September 2 0 , 19 8 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Letter to George L. Wessman, Chairman, ANSI, Nuclear Standards Board, from Walter H.

'D'Ardenne, Chairman, Ad Hoc Committee on Important to Safety, March 30, 1983 ............................... 8 C

C e

O (viii)

i i

I. INTRODUCTION The Utility Safety Classification Group (" Utility Group" or " Group")

consists of 39 electric utility companies who own over half of the planned or operating commercial nuclear units in this country. The Group formed in June 1983 to address the safety classification issue; its members were concerned that activities of the NRC Staff in various contexts were inconsistent with the historical interpretation of the regulatory term "important to safety."

The Group seeks a reasoned generic resolution of the safety classification

(

issue.1/

In the present proceeding,2/ the Group objects to the Licensing Board's distinction between the regulatory terms "important to safety" and

" safety related" and, in particular, to the Board's imposition of a license condition embodying a broad, new definition of "important to safety." The Utility Group members will be harmed by this decision and have not yet had an opportunity to defend their interpretation of "important to safety" in an ap-propriate forum. The Group believes it must make its views known here be-

\ '

cause, to date, the NRC Staff has not solicited the views of industry on this important issue.

1/ See, e.g. , letter to Shoreham Licensing Board from Edwin J. Reis, NRC Staff Counsel (Sept. 16,1983) (forwarding Utility Group letter to William J.

Dircks (Aug. 26, 1983)); letter to Shoreham Appeal Board from Richard J.

Rawson, NRC Staff Counsel (Dec. 20,1983) (forwarding information relating to the Utility Group).

2/ Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1),

LBP-83-57, 18 NRC (1983) (Partial Initial Decision Sept. 21, 1983) (here-inafter cited as PID).

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4 L

2-II. SLWfARY .

There are four crucial points:

(1) Group members have interpreted the terms "im-portant to safety" and " safety relatsd" as synonymous, and the NRC has licensed plants based on this interpretation.

(2) Any application of a broader definition of "important to safety" to Shoreham will have a substantial adverse impact on the nuclear power industry as a whole. As past practice indicates, the license condition Laposed on Shoreham will very likely be imposed on other l plants as well, resulting in vague and unnec-essary requirements.

(3) There is no demonstrable basis for such a drastic regulatory development.

(4) If a change of such magnitude is nonetheless to occur, it should not be enacted via adju-dicatory proceedings or Staff demands involving individual plants.

The Utility Group is committed to complying with NRC regulations' and to ensuring that nuclear power plants are constructed and operated safely.

Group members can and have been accomplishing these goals by interpreting the

( term "important to safety" synonymously with the teim'" safety related." This interpretation, the Group believes, is faithful to the original intent of the regulations, confirmed by longstanding practice, and safe. While "important-to safety" and " safety related" are synonymous, the Group recognizes that.the-NRC's statutory authority 3/ is not limited to safety related structures, sys-tems and components. Where a specific need for 'oroader regulation exists, the NRC has in the past regulated specific non-safety related areas (e.g., those involving fire protection and security).4/

3_/ In this brief,_the terms "NRC".and " Commission" are used to refer to both, the Nuclear Regulatory Commission and the Atomic Energy Commission.' .

4

"/ .Moreover, whils industry does not believe that an expanded definition of:

important to safet'y is a necessary regulatory development, utilities -agree

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The license condition imposed on Shoreham presupposes acceptance of an.

expanded interpretation of "important to safety." While the Group's members I

, have often voluntarily exceeded hTC requirements in order to give added assur-ance of safe and reliable operation, they have justifiably relied on the NRC's long-standing equation of "important to safety" and " safety related" in com-plying with the Commission's regulations. This is not a mattAr of little con-sequence. "Important to safety" appears throughout the NRC's regulations and guidance documents; thus an expansion of the term's scope would'substantially affect diverse and important aspects of the design, construction and operation of nuclear power plants.

Past NRC and industry practice in interpreting these terms synony-mously has permitted their application with the certainty and consistency nec-essary for any regulatory requirement. In contrast, the Shoreham Licensing Board, in endorsing a broader interpretation of "important to safety," has not provided guidance on what the new reading actually means -- on how industry and the NRC Staff are to comply with the expanded regulatory concept of "im-

,. portant to safety." It comes as no surprise, accordingly, that the NRC Staff

(- is now beginning to apply inconsistently the vague definition endorsed in the Shoreham proceeding to other plants. Moreover, license conditions similar to that imposed by the Shoreham Board are likely, in view of the Staff's prior (footnote continued) with the concept embodied in the Denton Memorandum (see section V.B. below)

~ that non-safety related structures, systems and components can and do play a role, in varying degrees, in the safe and reliable operation of nuclear plants and that they should be treated accordingly. But the NRC Staff has made no

, , convincing showing that this concept neede to be elevated to the level of a broad regulatory requirement under ths rubric of "important to safety" in order to provide reasonable assurance of no undue risk to the public health

( and safety.

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i practice, to become part of future licenses with or without additional adjudi.-

cation.

Finally, proceedings focusing on individual plants are not the place for the NRC to make radical, generic regulatory changes capable of affecting

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the licensing and operation of every nuclear power plant in the United States.

Such regulatory changes should be the subject of generic proceedings adequate to engage their complexities and potential impacts. Expansion of the scope of "important to safety" in an ad hoc fashion results in confusion and uncertain-( ty for the NRC Staff and industry. Such expansion is also inconsistent with the procedural requirements of NRC precedent and the Administrative Procedure Act.

III. REGULATORY HISTORY AND INDUSTRY PRACTICE CohTIRM THAT THE TERMS ARE SYNONYMOUS The terms "important to safety" and " safety related" were first used in the NRC's regulations in the early 1970s. Since then the Utility Group's members have interpreted and applied the terms synonymously. Nuclear power 1

plants were designed, built, licensed and operated in reliance on the equality of these terms. Regulations and guidance documents issued by NRC have been interpreted and used on this basis. Commitments and information have been provided to and accepted by the NRC using this language. As demonstrated in LILCO's brief, the record in the Shoreham licensing proceedings makes unmistakably clear that the. industry's interpretation of these two terms as .

synonymous was justified and inevitable given the NRC's use and applicat. ion of

, them.

A. NRC Regulations The record reflects that LILCO provided numerous examples of NRC regu-latory history and regulations equating the terms "important to safety" and

" safety related." The Group endorses the pertinent analysis in LILCO's brief and believes the following three examples are particularly compelling.

First, "important to safety," as used in the final version of Appendix A to 10 CFR Part 50, was substituted for a variety of other terms that had previously appeared in the proposed version of Appendix A, all of which re-ferred to features in the safety related set. Compare 32 Fed. Reg. 10,213-18 (1967) with 36 Fed. Reg. 3255-3260 (1971). The Federal Register notice accom-panying the final rule did not mention the substitution as a substantive change. 36 Fed. Reg. 3256.

Second, Appendix B to 10 CFR Part 50 applies solely to activities af-fecting the safety related functions of structures, systems and components that prevent or mitigate the consequences of an accident that could cause undue risk to the public health and safety. PID at 173, 209. The Appendix 3 rulemaking and related NRC regulations imply that Appendix B is simply a more detailed specification of the requirements contained in General Design Crite-rien (GDC) 1 of Appendix A to 10 CFR Part 50. See 34 Fed. Reg. 6599 (1969);

10 CFR 5 50.34(a)(7). Thus, the term "important to safety" in Appendix A, GDC 1, must be synonymous in scope and meaning with the term " safety related." See also 10 CFR S 72.15(a)(14); 48 Fed. Reg. 1026 (1983) (to be codified at 10 CFR S 50.54.5/

5/ The Utility Group also notes that the report of the Kemeny Commission concluded that the NRC's regulations only require the application of quality assurance to " safety related" equipment. PID at 564 (J-278). This conclusion confirms the historical interpret 1 tion of these terms shared by the industry and, until recently, the NRC Staff.

Third, the proposed version of Appendix A to 10 CFR Part 100 clearly.

equated the terms " safety related" and "important to safety," and used them interchangeably. See 36 Fed. Reg. 22,601, 22,604 (1971). Because there is no

~

indication in the preamble to the final Appendix A to Part 100 that the NRC either intended to alter the scope of its proposals or to distinguish between "important to safety" and " safety related," see 38 Fed. Reg. 31,279 (1973), no substantive change from the proposed version can be inferred.

B. NRC Guidance Documents and Reports .

Many NRC regulatory guides either explicitly or implicitly equate "im-portant to safety" with " safety related." Regulatory Guide 1.105, " Instrument Setpoints" (Rev. 1, Nov. 1976), which defines "important to safety" in terms of the Part 100, Appendix A safety functions, provides an unmistakable example of this equivalence.6/ A very recent example appears in Regulatory Guide 1.151, " Instrument Sensing Lines" (July 1983). The introduction to this guide explains that 10 CFR 5 50.34 and 10 CFR Part 50, Appendix A, GDC 1, contain certain requirements for structures, systems and components important to safe-ty. After stating these pertinent regulatory requirements, the guide de-scribes an acceptable method for complying "with the Commission's. regulations with regard to the design and installation of safety related instrument sensing lines . . . ." Regulatory Guide'1.151 at 1.

Similarly, Staff safety evaluation reports (SERs) routinely include statements equating " safety related" and "important to safety." -For example, in discussing GDC 2's seismic design requirements, the Staff typically s.tates in SERs that this GDC 6/ Regulatory Guide 1.105, Rev. 1, at 1.105-2; accord Regulatory Guide 1.105, Rev. 2 (issued for comment Dec. 1981); Regulatory Guide 1.118, Rev. 2 (June 1978) (adopting definition in Regulatory Guide 1.105).

o* _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ . _ _ _ _

requires that nuclear power plant structures, systems and components important to safety be de-

.. signed to withstand the effects of earthquakes without loss of capability to perform their safe-

~

ty function. These plant features are those nec-essary to assure (1) the integrity of the reactor coolant pressure boundary, (2) the capability to shut down the reactor and maintain it in a safe shutdown condition, or (3) capability to prevent or mitigate the consequences of accidents which could result in the potential offsite exposures comparable to 10 CFR 100 guideline exposures.7/

Thus, the Staff has defined "important to safety" plant features as those cov-ered in Appendix A of Part 100, which are the " safety related" set of struc-tures, systems and components. See also NUREG-0420 at 3-8 and NUREG-0528 at 3-6 (equating the terms in the context of missile protection under GDC 4).

Another recent example is I&E Information Notice 83-41 (June 22, 1983), entitled " Actuation of Fire Suppression System Causing Inoperability of Safety-Related Equipment" (emphasis added). The stated intent of the notice is to " alert licensees to some recent experiences in which actuation of fire-suppression systems caused damage to or inoperability of systems important to safety" (emphasis added). This notice clearly uses the terms "important to '

safety" and " safety related" interchangeably.

u C. Industry Practice There has been a startled reaction by industry.tolthe NRC Staff's~re-cent efforts to apply the term "important to safety" to non-safety related equipment and functions. The Committee on Reactor Licensing and Safety of the Atomic Industrial Forum (AIF) sent William J. Dircks a letter stating, in nortinent part:

7/ EA , NUREG-0420 at 3-1, NUREG-0899 at 3-1, NUREG-0528 at 3-1, NUREG-0742 at 3-1, NUREG-0422 at 3-1 (emphasis added); see also NUREG-0968 at 33-34 (analogous equation of terms in the Clinch River Breeder Reactor SER).

. M mo

8-Our [ safety classification] subcommittee is virtually l unanimous in its agreement that, with regard to inter-pretation of the regulations, the terms "important to safety" and " safety related" have been considered syn-onymous.

Letter from M. R. Edelman (AIF) to W. J. Dircks (NRC) (Aug. 29, 1983).8/

! Similarly, the Nuclear Power Engineering Committee of IEEE wrote ,

Robert E. Minogue, Director of the Office of Nuclear Regulatory Research, in i

May 1982,9/ making clear its view that expanding the scope of "important to safety" to encompass non-safety related systems would be contrary to the long-standing interpretation of NRC regulations by both industry and the Staff. Yet another example is a recommendation by the Nuclear Standards Board (of the American National Standards Institute) Ad Hoc Committee on "Important to Safety" that states as follows:

The current practice utilizing two major classi-i fications, safety related and nonsafety related,

for design, construction, testing and operation of nuclear power plants is acceptable and appro-

, priate. This has occurred with a meneral understanding and usage that the terms "Important to Safety" and " Safety Related" are equivalent in meaning.

Letter from Walter H. D'Ardenne to George L. Wessman.(Mar. 30, 1983) (emphasis e

added).10/ These industry statements of the historical equality of the terms are also reflected in recent NRC Licensing Board and Appeal Board rulings dis-cussed in section V.D.4.

T i

4 -

8/ See letter to Shoreham Licensing Board from Edwin J. Reis, NRC Staff

Counsel dated Sept. 20, 1983 (forwarding AIF letter).

4 9/ Burns et. al, ff. Tr. 4346, at Attachment 4.

10/ LILCO Exhibit 76. Although this exhibit was not admitted into evidence, LILCO is appealing its exclusion.

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IV. THERE IS NO NEED TO EXPAND "IMPORTANT TO SAFETY"

, The NRC Staff has not advanced any detailed basis for concluding that "important to safety" must be expanded beyond " safety related" equipment and systems in order to provide reasonable assurance of no undue risk to the pub-lic health and safety. To the contrary, after extensive scrutiny, the Shoreham Licensing Board concluded that LILCO, using the long-standing inter-pretation of "important to safety," had designed and constructed Shoreham safely, meeting or exceeding NRC requirements. PID at 148, 200. Thus a util-(

ity equating "important to safety" with " safety related" can meet the regula-tions, even as the Staff would now interpret them, by according appropriate significance to non-safety related structures, systems and components. More-over, the utilities in this Group who operate plants do so premised upon the same definitions LILCO used, and the Staff has not found safety problems as a result.11/

Utilities have always recognized that non-safety related structures, systems and components do play a role in the safe, reliable operation of nu-clear plants. As a matter of good engineering judgment and management, utilities apply quality measures to these non-safety related items commensu-rate with the function each performs.

11/ The Staff's recent notification to this Appeal Board confirmed the lack of any safety problem. See letter to Shoreham Appeal Board from Richard J.

Rawson, Staff Counsel (Dec. 20, 1983) (enclosing, inter alia, Minutes of CRGR Meeting Number 50 (Nov.14, 1983)). The NRC's Committee to Review Generic Re-

, quirements (CRGR) reviewed the safety classification issue and concluded that

, "[t]here is no clear and present safety problem that exists as a result of the j.

blurred usage of the terms 'important to safety' and ' safety related' and the frequent interchangeable and synonymous use of these terms in licensing safety

, reviews." Minutes of CRGR Meeting Number 50, at 2; see id. at 3.

1 10- 1 4 Also, the NRC has imposed precise requirements on particular .

non-safety related structures, systems and components when specific needs to do so have been identified. Significantly, in many instances, the non-safety related requirements focus on protecting safety related equipment rather than on imposing requirements on non-safety related equipment for its own sake.

For example, fire protection equipment is not generally safety related but is covered by 10 CFR Part 50, Appendix R in order to protect structures, systems and components important to safety (i.e... safety related).12/ Similarly, cer-tain design recommendations are made in Regulatory Guide 1.29, " Seismic Design

(

) Classification" (Rev. 3, Sept. 1978), for non-safety related (non-seismic cat-egory !) equipment that could adversely affect safety related equipment in a seismic event. Regulatory Guide 1.29 at 1.29-2.

Section 5 50.59-also bears on a facility's non-safety related aspects.

. This section requires licensees throughout the life of the plant to notify the-t NRC prior tu making certain changes in the facility or its procedures, and '

prior to conducting tests or experiments. Safety related and non-safety re-i lated modifications, tests and experiments must be evaluated under this provi-4

(- sion whatever definition of "important to safety" is used.

I Another example, Regulatory Guide 1.70, " Standard Format and Content of Safety Analysis Reports for Nuclear Power Plants," (Rev. 3, Nov. 1978), re-sults in a large number of non-safety related structures, systems and compo-nents being addressed in safety analysis reports (SARs) in varying degrees.

i See, e.g.,

PID at 714 (J-695). The Staff conducts its' review of these SARs in accordance with the Standard Review Plan. Thus, the Staff reviews the design

~

d l

12/ Appendix R uses "important to safety" and>" safety related" interchange-ably. 10 CFR Part 50, App'. R,.5 I.

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• and quality of a number of non-safety related items. See, e.g., PID at 798 (J-883, -884); 802 (J-895 to -898).

Further, once a plant operates, as do many plants owned by Utility Group members, technical specifications govern the' types of equipment that must be operable for a given plant condition. The technical specifications include requirements for certain non-safety related equipment. See, e.g., PID at 640-41 (J-498) (non-safety related turbine by-pass); 656-57 (J-546) (non-safety related drywell coolers).

In addition to NRC-sponsored measures, the industry is also taking

~

steps that will improve performance in non-safety related areas. INPO's Sig-nificant Event Evsluation and Information Network (SEE-IN) Program, endorsed by the NRC in Generic Letter 82-04,13/ provides for the central collection and screening of all events reported from both U.S. and foreign nuclear plants.

This program is net limited to safety related structures, systems and compo-nents. See, e.g., PID at 898 (K-126); 901 (K-136); 902 (K-137). INPO is now also responsible for the Nuclear Plant Reliability Data System (NPRDS). This computerized system, currently under development, contains data on the

, reliability of plant equipment that will allow all nuclear plants to introduce and receive failure data on individual pieces of safety related and certain non-safety related equipment. See, e.g., PID at 899-90 (K-131); 918-19 (K-178); 919 (K-182) .

4 Finally, individual utilitier, recognizing the role of non-ssfety re-lated equipment in the safe, reliable operation of their plaats, apply quality measures to non-safety related equipment. As LILCO's. testimony in this case reflects, utilities impose certain controls on maintenance performed in non-safety related areas. Although practices vary among utilities, common 13/ See Burns et al., ff. Tr. 4346 at 61.

i

- - - - - . - .,- r - #

{ measures include: (a) preventive maintenance programs for non-safety related. -

l-structures, systems and components, see, e m , PID at 918-19 (K-176 to -182);

(b) internal controls for procurement and testing of non-safety related equip-ment, see, e A , PID at 889 (K-104); 892-93 (K-115); (c) the same or similar work procedures for safety related and non-safety related activities, see, 4

e.g., PID at 588-89 (J-347); 599-600 (J-375, -379); (d) the same maintenance control forms for safety related and non-safety related items, see, e A , PID at 890-91 (K-107 to -110); (e) audit / review of non-safety related maintenance and maintenance records, see, n , PID at 891 (K-111); 893-94 (K-116, 117);

(f) the same process for safety related and non-safety related design activi-ties / modifications, see, e A , PID at 861-67 (K-33 to -47); and (g) training on subjects relating to non-safety related maintenance activities, see, e g ,

PID at 599-600 (J-375, -379).

i In addition, plant start-up test programs generally include integrated I

tests of major plant systems, both safety related and non-safety related.

See, e a , PID at 600-01 (J-383). Moreover, during plant operation, on-site-

, safety evaluation groups generally review, among other matters, operating ex-k perience, both plant-specific and industry-wide. In many instances, these re-views explore the role of non-safety related equipment in the event under in-l vestigation. See, eA, PID at 895 (K-120); 898 (K-128).

It must be emphasized that: _( 1) the activities discussed above pro-vide only representative examples of non-safety related quality measures", and (2) the activities discussed do not necessarily reflect what any particular utility does for non-safety related items; individual utilities exercise.their-

, judgment in selecting the measures they believe to be appropriate.- It is ap-parent, however, that utilities do take steps.to ensure the safe and. reliable operation of non-safety _related items. Given this reality, no need exists to .

,- - , ,- . - + , - - , - , - - +..p-.. ,~ . ,y a

E impose new regulatory requirements on non-safety related equipment by ex-panding the definition of "important to safety."

V. NRC STAFF EFFORTS TO CHANGE THE MEANING OF "IMPORTANT TO SAFETY" HAVE PRODUCED CONFUSION AND INCONSISTENCY A. TMI-1 The first prominent indication that the Staff believed "important to safety" should be construed more broadly than " safety grade" (or " safety re-C lated") came in the restart hearing for Three Mile Island Unit 1 (TMI-1).M/

Although both the Licensing Board and the Appeal Board accepted the Staff's new definition of "important to safety" in TMI-1, they apperently did not have the benefit of testimony from either the licensee or the rest of industry on the historical interpretation and application of this term.M/ Also, because the TMI-1 hearing focused narrowly on particular components and design re-quirements, the record did not consider the larger regulatory implications of an expanded definition of "important to safety."

B. The Denton Memorandum n e Denton MemorandumM/ elaborated on Staff testimony in the TMI-1 M/ Me'tropolitan Edison Co. (Three Mile Island Nuclear Station, Unit No. 1),

LBP-81-59, 14 NRC 1211 (1981), aff'd, ALAB-729, 17 NRC 814 (1983). The Staff may have been moved in part by the criticism leveled at it in the wake of TMI.

See PID at 564 (J-278); see also NRC Regulatory Agenda (Quarterly Report June-September 1983), NUREG-0936, Vol. 2, No. 3, at 99 (Nov.1983).

15/ There is no indication in the Licensing Board and Appeal Board opinion

. that any evidence was presented on the licensee's or industry's interpretation of "importent to safety."

M/ Goldsmith et al., ff. Tr. 1114 (Exhibit 1).

]

__ - - - . . . ~.

proceeding. It meant to establish a new and expanded (but hopelessly vague) sadefinition of "important to safety" for use by all NRR personnel. The ,

Shoreham Licensing Board found, as the record required, that the Denton Memo-

randum's expanded definition of "important to safety" differed from the his-torical construction of the term. PID at 546 (J-229), 547 (J-230), 549-51 (J-235 to -241), 554-55 (J-248 to -252), 749 (J-770) . The Denton Memorandum was never officially promulgated to the industry or even widely circulated

, within the NRC. PID at 169. Thus, the memorandum was not the product of the sort of process essential to determining whether an expansion of "important to

(

safety" was warranted, what the details of that expansion might be, and what effects such a change would have.17/

C. Shoreham 4

i The Licensing Board did not adequately explain its reasons for impos-ing the resulting condition on Shoreham, especially_given the Board's conclu-

sion that LILCO had more than adequately ensured the safe, reliable operation-I of the plant. E.g., PID at 177-78, 180. Nor did the Board provide LILCO with

\

useful guidance as to what it must do in the future to comply with the condi-i tion. This vagueness will be even more troublesome when there are attempts to l apply the Shoreham condition to other, dissimilar plants.

The imposition of a license condition on Shoreham' foreshadows signifi -

cant adverse effects on the members of this Utility Group. And while the new definition of "important to safety" will not cause "backfitting" problems; at

\

l t

17/ Mr. James Conran, who contributed substantially to the memorandum, claimed to have consulted with industry on the broader definition of "impor-tant to safety," but that testimony was refuted on the record,-PID at'549-50.

i (J-237, -238), and is further refuted by the existence of this Utility Group.

e i

b-

i i

1 l

Shoreham, PID at 178, the same will not necessarily be true at other plants, especially those which are currently operating. Operating plants may have

, been designed and reviewed to meet industry standards and NRC guidance docu-I ments older than those used at Shoreham. Thus, if Shoreham is the yardstick, older plants may have to backfit. At a minimum, each operating plant, as well I as each operating license applicant, may have to undergo the exhaustive scru-tiny of the impact of the definitional controversy that was conducted on the Shoreham record. Such plant-by plant scrutiny would severely tax finite in-dustry and NRC resources, yet would not result in any apparent safety bene-fits. See note 11 above.

l Finally, by imposing a license condition on Shoreham, the Licensing Board has created a situation that may effectively deprive subsequent appli-cants of an opportunity to be heard on the' safety classification issue. In the Group's experience, it is the NRC Staff's practice to use p.reviously is-sued operating licenses as the basic model for new licenses. Thus, if left standing, the Shoreham condition will almost certainly be included in subse-i quent operating licenses issued by the NRC. This would place many utilities who have plants nearing completion in an untenable situation. Faced with the imposition of a definition of "important to safety" broader' than the defini-tion used for the design and construction of the plant in question, a utility would have to pay a significant price to obtain a hearing on the issue. Since operating licenses are generally issued on the eve of plant operation, the utility would have to forego operation or accede to the definition while being heard.18/ The former course would impose substantial costs. The latter might 18/ Even if utilities receive adequate notice of an imminent license condi-tion, the precedent and regulatory momentum created by the Shoreham condition, if left standing, are likely to dictate the result of any challenge to a like condition imposed elsewhere.

16-5 l require extensive changes in programs 19/ (and, perhaps, the plant) despite a .

[ well-founded belief in the adequacy of the original design and construction.

Agency action that imposes substantial costs on members of the regulated pub-2 lic 'in the exercise of their rights is, at best, bad policy. It is particu-l larly distasteful when the regulated public has justifiably relied on a long-standing interpretation of a regulatory term -- an interpretation fos-tered by the NRC's own official pronouncements.

< D. Recent Ad Hoc Efforts to l Expand "Important to Safety"

1. AWS Rulemaking Preliminary versions of the Anticipated Transient Without Scram (AWS) rule contained supplementary information that would have classified i.

some non-safety related AWS prevention and mitigation equipment as "important

, to safety."2_0/ Such a requirement, had it been adopted, could have created substantial confusion. For example, the AWS rule places certain requirements on the standby liquid control system in-BWRs but does not require the system

,(

If the AWS rule had nonetheless classi-

~

1 to have automatic start capability.

1 fled the standby liquid control system'as "important to safety," GDC 20 would 19/ See PID at 733-34 (J-736) (documentation changes costly). -As the-Shoreham Board noted, these expenses have-already been borne by LILCO because l

of its earlier FSAR commitment to go beyond'what it believed was' required by the regulations. I_d .

.1 1

20/ See Enclosure A to SECY-83-293, dated July 19,_1983. A table entitl'ed.

" Guidance Regarding System and Equipment Specifications"' indicates that car-tain equipment need not be " safety related," but a footnote to the table i

states that "this equipment is in the broader class of structures, systems'and l components important to safety." This footnote appeared for the first time in. ~

this SECY document; the proposed AWS rule made no mention of "important to safety." See 46 Fed.'_ Reg. 57,521 (1981).

g,, - w v.,.. -.4. c- s -r- --- * " - * ' - - "* * '" " * '*

appear to have require'd automation in conflict with the apparent intent of the. l l

AWS rule itself. By the same token, other GDCs using the term "important to safety" may have imposed additional unintended requirements. Thus, the at-i temp't to inject "important to safety" into the AWS rulemaking provides a I prime illustration of disjointed and unreviewed efforts to define, on a case-1 by-case basis, a new category of equipment to which NRC regulations will apply. Fortunately, the reference to "important to safety" has been removed from the approved, but not yet published AWS rule.

2. EQ Rulemaking i In contrast, on January 21, 1983, the NRC promulgated a final rule on environmental qualification of electric componants (EQ), which by its terms applies to electric equipment "important to safety," including safety

~

related electric equipment and certain non-s'afe'y t related equipment. 10 CFR $

4 50.49(b)(2)(3). The addition of the term "important to safety" in defining the scope of the rule, and the addition of $$ (b)(2) and (3), were made after the close of the public comment period. 47 Fed. Reg. 2876 (1982); 48 Fed.

Reg. 2729 (1983).

The environmental qualification rulemaking does not provide an adequate basis for expanding the definition of "important to safety" to any equipment and functions other than, perhaps, those directly involved in that rulemaking. Most important, the EQ rule provides a functional definition of a-much narrower set of structures, systems and components than the broad catego-ry endorsed (without a functional definition) by the NRC Staff in the Shoreham proceeding and apparently embodied in the Shoreham license condition.2J/

21/ Compare Tr. 19,529-30 (Noonan) (little or no equipment in (b)(2) catego--

ry) with PID at 551-52 (J-242) (almcat everything in the plant).

l. -

i L j

I

3. NRC Staff Actions -

, A new, expanded concept of "important to safety" also appears in 4

Generic letter 83-28, dated July 8, 1983, issued as a result of the Salem in-

. cident. See Generic Letter 83-28, at 6 2.2.1.6. This letter indicates that utilities should have a broader classification category. Not surprisingly,

, the letter gives no guidance on the boundaries of this broader class. None exists.22/ Moreover, as already noted, utilities do not have, nor has the NRC 1

previously required, such a " broader class." Nonetheless, each ucility is now apparently expected to develop its own functional definitions of structures, systems and components "important to safety," and then apply some as yet undefined set of standards to that set. In a similar vain, NRC Staff review-i ers of operating license applications have begun to ask questions implying that applicants should have a broad classification category "important to safety." These recent questions appear designed to " encourage" applicants to abandon the traditional two-tiered safety related/non-safety related classifi-cation scheme.

s s- 4. Licensing and Appeal Board Actions The issue of important to safety has also been raised in a num-ber of individual proceedings with results inconsistent with the Shoreham Li-censing Board opinion. For example, the Appeal Board in the Diablo Canyon proceeding confronted contentions that "important to safety" had a broader meaning than " safety related." In discussing issues to be litigated in the

case during a prehearing conference, the Appeal Board noted that historically 22/ See PID at 551-52 (J-242,'-243); see also note 32 below.

. - - ,y --e p ,

4

~

there had been no distinction between " safety related" and "important to safe-ty":

1 We reviewed the history of this particular appli-cation, and whereas in the letter that was writ-i ten in 1981, which makes a distinction between items which are important to safety and items which are safety-related, and to the extent that such a distinction now exists, we do not believe that such a distinction was intended between General Criterion A and the items covered by Appendix B.

I j . ...

4

(~ So at that time [1974), the Staff explicitly

, ( and using the terminology "important to safety,"

agreed with the categorization of equipment, structures, systems and components (Seismic Cate-l gory I] established by the Applicant. I think the regulatory history is fairly well defined

here. If there is now to be a distinction made .

j between safety-related items and Laportant to safety, it is our opinion that it should not be applied retrospectively to the design phase of j the Diablo Canyon plant. i Pacific Gas & Electric Co. (Diablo Canyon Nuclear Plant, Units 1 & 2), Docket Nos. 50-275 and 50-323, Tr. D-67 to -68 (Aug. 23,1983) (emphasis added); see also Public Service Co. of New Hampshire (Seabrook Station, Units 1 and 2),

Memorandum and Order (slip. op.), at 2-3 (May 13, 1983).23/

In sum, the NRC Staff's ad hoc efforts to expand "important to safety"~

t l underscore the regulatory chaos that now exists with respect to the term.

Inconsistencies also exist among recent NRC decisions. ~ These developments re-flect the inevitable confusion created by. attempts to make sweeping generic regulatory changes through case-by-case adjudications.

t .

23/ In the Seabrook ' case, intervenors also attempted to raise a- contention i

concerning systems interaction and the classification of equipment "important i to safety" identical to the contention litigated in the Shoreham proceeding.

In contrast te Shoreham, the Licensing Board rejected this contention. Public

~

Service Co. of New Hampshire (Seabrook Station, Units'1 and 2), LBP-82-76, 16 l NRC 1029, 1061-62 (1982).

VI. EXPANSION OF IMPORTANT TO ,

SAFETY SHOULD NOT BE ATTEMPTED IN INDIVIDUAL ADJUDICATIONS The Staff's efforts to revise the regulatory definition of "important to safety" may be viewed from two perspectives: either the Staff is at-tempting to create binding policy through individual adjudications (TMI-l and Shoreham) or through informal promulgation of a binding " rule" (the Denton Memorandum). In either case, the NRC's actions run afoul of NRC precedent and the Administrative Procedure Act. In addition, the "important to safety" con-dition imposed on Shoreham offends due process. It is far too vague to pro-vide adequate guidance on what is required for the design, construction and operation of nuclear power plants.

A. NRC. Regulations Should Be Expanded Only through Rulemakina The redefinition of "important to safety" advocated by the Staff and endorsed by the Licensing Board constitutes a change in the NRC's regulations

, and amounts to the formulation of new rules for industry-wide application.

( .

This redefinition should have occurred, if at all, in a notice and comment rulemaking. It is well to be clear that the Utility Group is not yet endorsing rulemaking as a means of resolving the "important to safety issue; to date, the Group has not filed a petition for rulemaking. Our point is this: if a change in the meaning of a regulatory term is to be made, thereby expanding the scope of every regulation in which it appears, that change should be accomplished only through rulemaking.2_4/

24/ If the NRC Staff- were to recognize the historical equality of "important -

to safety" and " safety related," any concerns it has about quality measures for non-safety related items should be capable of resolution without ,

rulemaking. The NRC Staff has,-in the past, resolved issues of generic appli-(footnote continued)

-. -- . . - . - . _ - _ . . - . - . ._--- __ _ - =_. .__ ._

21-The NRC has long recognized that individual adjudications, which con - ,

sider the views of an intervenor group, an applicant and the NRC Staff, are generally inadequate to resolve generic issues:

In our view, a generic subject . . . should be resolved with the benefit of a wider spectrue: of views. This is not feasible in the ccafines of one adjudicatory l record.

Vermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station),

CLI-74-40, 8 AEC 809, 814-15 (emphasis added), clarified, CLI-74-43, 8 AEC 826 (1974). The NRC's practice of addressing " environmental issues common to many

(,

applications and handl[ing] them in ' generic' proceedings" has been applauded by federal courts. Ecology Action v. AEC, 492 F.2d 998, 1002 (2d Cir. 1974).

The policy considerations identified in Vermont Yankee are consid-erably more compelling where, as here, a significant change in long-standing industry and NRC interpretation and application of a regulatory term is ,

sought. The Appeal Board has recognized this:

[W]here, as here, the interpretation in issue is of long standing, and has received the endorsement of sev-eral different appeal and licensing boards, the rulemaking route makes especially good sense.

[W]hether or not this belief (in the inade-quacy of the long-standing interpretation] is meritori-ous is a question more appropriately explored in rulemaking where (1) all information bearing upon the matter can be received and evaluated (as it should be) on a generic basis; and (2) be it then concluded that

[a change should be made] specific standards can be prescribed for determining . . . whether and to what. .

the applicant must concern itself . . . .

(footnote continued) cability through the use of NUREGs or Regulatory Guides when the matter was clearly within the scope of existing NRC's regulations and limited in impact.

Thus, if the Staff could identify very precise safety concerns in the non-safety related area, it could determine whether it is appropriate to pro-coed through the use of guidance documents (NUREGs, Regulatory Guides- or the like) rather than rulemaking. Even this process, however, should include an. y opportunity for industry participation. -l

- - _ . .- .- - . . . .. . -. . . - . - . - - - ~_-

1- ,

1

; New England Power Co. (NEP Units 1 and 2), 5 NRC 733, 742-43, review declined. -

CLI-77-14, 5 NRC 1323 (1977). In view of the long-standing synonymous treat-

.. ment of "important to safety" and " safety related," the rulemaking route would 4

have" made "especially good sense" before the NRC Staff attempted a change in the NRC's regulations.25/

l l Finally, engaging essentitlly generic issues in individual licensing proceedings is inappropriate where, as is now apparently the case, rulemaking is about to begin. Metropolitan Edison Co. (Three Mile Island Nuclear Sta-tion, Unit 1), ALAB-729, 17 NRC 814, 889 (1983), quoting Potomac Electric Co. ,

(Douglas Point Generating Station), ALAB-218, 8 AEC 79, 85 (1974). Recently, the NRC has expressed an intent to include, as part of a rulemaking on the scope of Appendix B, an effort to " eliminate any possible confusion over the  ;

1 definition of the terms 'important to safety' and ' safety.related.'"

NUREG-0936, Vol. 2, No. 3, at 99 (Nov. 1983). According to this regulatory  ;

{ agenda, the rulemaking is scheduled to start in January 1984. The availabili-

ty of a forum in which all interested parties can participate militates.

l strongly against changing the historical interpretation of "important to safe--

I

('

ty" in the Shoreham proceeding or any other individual case.

Quite apart from NRC practices ~, general principles of administrative f law favor rule-making in resolving issues affecting large segments of the pub-d lic. As Professor Davis has emphasized, rulemaking allows'(a) agencies to-

gauge the impact of their action on all affected parties and (b) all members .

J 25/ In New England Power,'the Board was apparently influenced by'at'least j' four Appeal Board decisions endorsing a particular interpretation. ~Although

. TMI-1 and Shoreham do endorse a broader interpretation of important to' safety, many cases, some involving members of this Group, have explicitly'or implic--

l itly endorsed the equality of importatt to safety and_ safety related by li-censing plants designed and built using this assumption. g.-Diablo' Canyon l

and Seabrook, page 19 above. .

l l

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, .n- -v, av.,, r.- --n. . ~ . - . , . - , - . , - - - , , , , -

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of the regulated public to participate. Davis, 1 Administrative Law Treatise-j 9 6:38, 625 (2d ed.1979). Professor Davis concludes by observing that, since "rulemaking procedure has been so much strengthened during the 1970s, the rea-sons'for substituting rulemaking procedure for adjudication procedure for j major policymaking that needs a factual foundation have become overwhelming."

Id.

Moreover, although the NRC has discretion to change its regulatory re-quirements in individual adjudications,26/ this discretion must not be abused.

i

, NLRB v. Bell Aerospace, 416 U.S. 267, 294 (1974). Significantly, a recent so-

, k' ries of Ninth Circuit cases reversed agency policymaking that occurred in in-dividual cases rather than rulemaking. Ford Motor-Company v. FTC, 673 F.2d 1008 (9th Cir.1981), reh'g and reh's en banc den. 673 F.2d :1010 (1981), cert.

i den. 103 S.Ct. 358 (1982);,Patel v. Immigration and Naturalization Service, L

638 F.2d 1199 (9th Cir."1980). In Ford the Ninth Circuit ruled that FTC of-

! forts to revise (and in doing so to establish new) rules of widespread appli-cability had to be undertaken through rulemaking in view of the " national in-terpretation" of the Uniform Commercial Code the agency was seeking to

{ develop. Id. at 1010.27/ NRC's actions in the TMI and Shoreham proceedings 1

raise substantially similar concerns.

Consequently, if expansion (or clarification) of.the scope and meaning i

of "important to safety" is appropriate -- and the Utility Group thinks ~it.is i

j not -- only a rulemaking addressing all aspects and impacts of a new 1

26/ SEC v. Chenery, 332 U.S. 194, 203 (1947).

27/ 'The court may have also been troubled by the FTC's election to proceed

through adjudication even though rulemaking proceedings had been commenced.

Id. at 1012 n.2 (Reinhardt, J., dissenting from denial ~of rehearing en banc).

Analogous circumstances exist.here since the NRC's Regulatory Agenda indicates that relevant rulemaking proceedings.are imminent. -See page-22 above.

i

i

, definition can do the job. The complexities created by changing a term that

! pervades the NRC's regulations and guidance documents demand this treatment.

Continued efforts to address this issue on an ad hoc, fragmented basis will exac'erbate the existing confusion and inconsistency. Moreover, expansion of "important to safety" on a plant-by plant basis or through narrowly focused, piecemeal rulemakings would be an unjustifiable waste of time and resources.

B. 'The Commission's Redefinition of "Im-portant to Safety" Constitutes Informal Rulemaking Conducted in Violation of the Administrative Procedure Act As noted on page 20 above, the Shoreham record suggests that the NRC's redefinition of "important to safety" in the Denton Memorandum amounted to de facto rulemaking, conducted in violation of- the Administrative Procedure Act.

Under the APA, agency action is a " rule" if it constitutes the whole or part of [1] an agency statement of general or particular applicability and [2] fu-ture effect designed to [3] implement, interpret, or prescribe law or policy or describing the or-ganization, procedure or practice requirements of an agency . .. .

(s 5 U.S.C. 5 551(4)(1982) (emphasis added). Viewed in light of these criteria,28/ the development and promulgation of the "important to safety" redefinition in the Denton Memorandum amounte'd to the adoption of a rule.

First, the Denton Memorandum reinterpretation now constitutes the NRC Staff's statement of the regulatory requirements . applicable to all owners and opera-tors of nuclear power plants.29/ Second, the redefinition was undoubtedly 28/ The APA's definition should be broadly interpreted. American Postal Workers Union, AFL-CIO v. United States Postal Service, No. 81-2174, slip op.

at 20 n.8 (D.C. Cir. May 6, 1983).

29/ The NRC Staff's position in Shoreham that LILCO must embrace _the Denton Memorandum reflects a clear intent on the part of the Staff to implement'the memorandum as a binding rule. See PID at 726-27 (J-721).

intended to have prospective effect.30/ Finally, the memorandum interprets the legal obligations governing plant design, construction and operation, and in altering those requirements, prescribes new substantive criteria that must be m'et. PID at 554 (J-249).

Since promulgation of the Denton Memorandum constituted de facto rulemaking, the promulgation must pass muister under the APA's procedural re-quirements. It obviously cannot. The APA requires that agencies publish no-tice of proposed rules in the Federal Register and provide interested parties with an opportunity to comment. 5 U.S.C. SS 553(b), (c) (1982). These proca-(

dural safeguards are not mere window dressing; they represent the principal means through which the public can participate in the formulation of regulato-ry policy. See National Tour Brokers Ass'n v. United States, 591 F.2d 896, 902 (D.C. Cir. 1978). In disregard of these requirements, the Denton Memoran-dum "rulemaking" was largely a private matter; little advice or counsel was solicited of parties outside the NRC, e&, PID at 549-50 (J-237), 563 (J-275). This privacy cuts against the core of the APA. See, m ,

Trans-Pacific Freight Conference v. Federal Maritime Commission, 650 F.2d 1235, 1245 (D.C. Cir. 1980), cert. den. sub nom. Sea Land Service, Inc. v.

Federal Maritime Commission, 451 U.S. 984 (1981).

Nor does the Denton Memorandum " rule" fall within any of the exemp-tions to the APA's notice and comment requirements.E / Exemptions are 30/ See PID at 547 (J-230) (Mr. Denton's description of rationale in issuing memorandum); 554-55 (J-250, 251) (Staff headed towards systematic applica-tion).

I 31/ -Exemptions are disfavored, since they serve to insulate agency decisions j from public scrutiny. State of New Jersey v. EPA, 626 F.2d 1038, 1045-46 (D.C. Cir.1980); accord American Federation of Government Employees v. Block, 655 F.2d 1153, 1156 (D.C. Cir. 1981) .

, .- e- ,v - ,.4 c y .

- . _ - - = - _ , - - ~ ..- . ___ _

. . . =

4 l

! authorized if (1) good cause exists for dispensing with the rulemaking proce -

1 dures, or if (2) the rule interprets (but does not alter) existing regula -

i

tions, sets forth agency practices or procedures, or enunciates a non-binding i statement of general agency policy. 5 U.S.C. $ 553(b) (1982). The first ex-f emption requires that the agency explicitly find that good cause for dispensing with rulemaking exists, and that the finding and its explanation j accompany publication of the rules. 5 U.S.C. 5 553(b)(3)(B) (1982). The l Denton Memorandum has not done this.

J The other exemptions are also inapposite. Agency actions which "sub-(

4 stantially (affect] the rights of persons subject to agency regulations," as does the Denton Memorandum, should be subject to public comment. Pickus v.

United States Board of Parole, 507 F.2d 1107, 1112 (D.C. Cir. 1974). Re-viewing courts look to the practical effect of agency action; if it estab-lishes a " binding norm," it is not a mere policy statement. Guardian Federal ,.

4 Savings & Loan Ass'n v. Federal Savings and Loan Insurance Corp., 589 F.2d 658, 666 (D.C. Cir. 1978), quoting Pacific Gas &' Electric Co. v. FPC, 506 F.2d x

, 33, 38 (D.C. Cir. 1974). In light of the Staff's demand for a license condi-1 (N

tion based on the Denton Memorandum, PID at 726-27 (J-721), it is clearly in-

} tended to be a " binding norm."

Finally, any claim that the NRC's redefinition is merely an " inter-I pretive rule" must'also fail. Interpretive rules serve only to clarify exist-i ing regulatory and statutory authority; if a rule creates new requirements or expands existing obligations, it will be deemed legislative and. subject to 5 553. Gibson Wine Co. v. Snyder, 194 F.2d 329, 331-(D.C. Cir. 1952), cited with approval in Cabais v. Egger, 690 F.2d 234, 238 (D.C. Cir.'1982). 'Since

.the Denton Memorandum's self proclaimed " clarification" fundamentally altered l

the rules that have guided applicants and licensees since 1971 (see, e.g., PID i-l-

1 1

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1 I

at 553 (J-247); 554 (J'-249); 555 (J-251)), the memorandum could not have been.

simply interpretive.3_2/ This exemption may not be used to shield the memoran-dum from public scrutiny because, "although it serves as an interpretation of existing law, it also effectively enunciates a new requirement heretofore nonexistent for compliance with the law." Chamber of Commerce v. OSHA, 636 F.2d 464, 471-72 (D.C. Cir. 1980) (Bazelon, J. concurring in result only).

C. The New Definition of "Important to Safety" is Unconstitutionally Vague

( Due process requires that regulations and agency interpretations of these must be sufficiently clear and precise to allow a reasonable man to know what is required, and to permit the regulations to be applied consistently.

h , Montgomery Ward Co. v. FTC, 691 F.2d 1322, 1332 (9th Cir. 1982); Tenneco Oil Co. v. FEA, 613 F.2d 298, 303 (TECA 1979).

Years of working with the historical definition of "important to safe-ty" and of equating it with " safety related," have enabled industry and the NRC Staff to identify with sufficient clarity the requirements imposed on plant design, construction and operation. In contrast, the vague Shoreham li-cense condition fails to provide LILCO with any clearly discernable guidance on future obligations. See, e.g., PID at 177, 722 (J-711), 731-33 (J-731 to

-734). More important to the Utility Group, the new definition fails to pro-vide any guidance to companies who operate or are attempting to license other, different plants. As the Licensing Board found, the Denton Memorandum does 32/ Significantly, the NRC's CRGR concluded "that the proposed generic letter to licensees (requiring a broader important to safety set] represents imposi-tion of a previously unimposed requirement _of indeterminate magnitudo with an undefined burden on the resources of both industry and Staff." Minutes of CRGR Meeting Number 50, note 11 above, at 3.

not advance "any reasonably precise definition of what is included in the cat-i egory of important to safety," and is " wholly silent on what quality standards and quality assurance should be applied to that category of structures, sys-tems' and components." PID at 552 (J-243). As such, the memorandum fails to afford a reasonable warning of proscribed conduct, as due process requires.33/

. PBR, Inc. v. Secrerary of Labor, 643 F.2d 890, 897 (1st Cir. 1981). Like a motorist in a speed zone where the posted limit says " don't go too fast," the utility is at the mercy of the subjective whims of the regulator. This is impermissible. The breadth and complexity of the issue demand that guidance

(

on the term's new scope and meaning be provided through a generic proceeding, if there is to be a change in the historical practice.

VII. CONCLUSION The expanded definition of "important to safety" endorsed by the Shoreham Licansing Board substantially alters the requirements applicable to the design, construction and operation of nuclear power plants. The defini-tion was first hastily adopted by the NRC Staff in the TMI-l case in disregard I

of the plain language and history of the Commission's regulations.

~

i The error was then compounded by the issuance of the Denton Memorandum without benefit of notice and comment rulemaking. Now the Staff is attempting to implement the ill-conceived, vague definition in an gd hoc manner in individual licens-ing cases such as Shoreham. The Licensing Board's endorsement of these Staff efforts should be reversed. This is of particular concern to the Utility Group because the extraordinarily vague, open-ended license condition imposed by the Shoreham Board fails to identify what steps LILCO, much less other l t

33/ See note 32 above. ,

i l

)

applicants, licensees,' and the NRC Staff, must take to comply. In view of the

- broad spectru= of plants subject to the new "important to safety" definition, its potentially severe impact upon the regulated public and the confusion cur-rent-ly surrounding enforcement efforts, the Appeal Board should acknowledge the historical interpretation of "important to safety" as synonymous with

" safety related," and remove the Shoreham license condition.

Respectfully submitted, (TTILITY SAFETY CLASSIFICATION GROUP A A.d A A g'

'AhthonyF.farley,Jr.

A.

One of d e Utility Group's Counsel December 23, 1983 4