ML20096C714

Nuclear Regulatory Commission Issuances for October 1995. Pages 111-180

ML20096C714
Person / Time
Issue date:	12/31/1995
From:	NRC OFFICE OF ADMINISTRATION (ADM)
To:
References
NUREG-0750, NUREG-0750-V42-N04, NUREG-750, NUREG-750-V42-N4, NUDOCS 9601180208
Download: ML20096C714 (194)

Text

, _ _ _ _. _ _ _ _ _ _ _ _. _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _.. _ _ _ _ _ _ _ -. _ _ _ _ _ _ _ _. _ _. _ _ _. - - _ _. _ _ _

i j

i 1

4 i

i f

i l

NUREG-0750 t

Vol. 42, No. 4 l

Pages 111-180 J

w sa:>:Sen syg:n:g;.<sp::v"$$t < 25'n W{MW* * ~:MM5*M9W S::3 '

MPi-e

>wyown ~ m.mn-y l

i:'::.

4

?. :.,

x.

.s.

g l

3

1. CMMiss(CNHs;804NCes!

~

$:?:

~ October 1995

^

s q:

g

.. s: ;.

-a.4...._:c; x.

p ~.:. - -

g "' ;,.

• g a

E

O' N

g-*i r,

U.S. NUCLEAR REGU

' TORY COMMISSION i

lv(6 8\\

I l

9601180208 951231 PDR NUREG 0750 R PDR

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

I Available from Superintendent of Documents U.S. Government Printing Office P.O. Box 37082 Washington, DC 20402-9328 A year's subscription consists of 12 softbound issues.

4 indexes, and 2-4 hardbound editions for this publication.

i Single copies of this publication are available from National Technical Information Service Springfield, VA 22161 i

Errors in this publication may be reported to the Division of Freedom of information and Publications Services Office of Administration U.S. Nuclear Regulatory Commission 1

Washington, DC 20555-0001 (301/415-6844)

l l

NUREG-0750 Vol. 42, No. 4 Pages 111-180 NUCLEAR REGULATORY COMMISSION ISSUANCES October 1995 l

This report includes the issuances received during the specified period from the Commission (CLI), the Atomic Safety and Licensing Boards (LBP), the Administrative Law Judges (ALJ), the Directors' Decisions (DD), and the Decisions on Petitions for Rulemaking (DPRM).

The summaries and headnotes preceding the opinions reported herein are not to be deemed a part of those opinions or have any independent leget significance.

U.S. NUCLEAR REGULATORY COMMISSION '

1 Prepared by the Division of Freedom of Information and Publications Services Office of Administration U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 (301/415-6844)

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

i i

4 i

2 t

COMMISSIONERS Shirley A. Jackson, Chairman Kemeth C. Rogers b

l L

1 l

B. Paul Cotter, Jr., Chief Administrative Judge, Atomic Safety and Licensing Board Panel 4

1 4

l

CONTENTS Issuances of the Nuclear Regulatory Commission i

GEORGIA INSTITUTE OF TECHNOLOGY (Georgia Tech Research Reactor)

Docket 50160-Ren (Renewal of License No. R-97)

MEMORANDUM AND ORDER, CLI 95-12, October 12,1995... I11 PORRAND GENERAL ELECTRIC COMPANY (Trojan Nuclear Power Station)

Docket 50-344 MEMORANDUM AND ORDER, CLI-95-13, October 12,1995... 125 YANKEE ATOMIC ELECTRIC COMPANY (Yankee Nuc! car Power Station) j Docket 50-029 l

MEMORANDUM AND ORDER, CLI-95-14, October 12,1995 -.... 130 Issuances of the Atomic Safety and Licensing Boards CLEVELAND ELECTRIC ILLUMUNATING COMPANY, et al.

(Perry Nuclear Power Plant, Unit 1)

Docket 50-440-OLA-3 (ASLBP No. 90-605-02-OLA)

MEMORANDUM AND ORDER, LBP-95-17, October 4,1995... 137 SEQUOYAH FUELS CORPORATION and GENERAL ATOMICS (Gore, Oklahoma Site Decontamination and Decommissioning Funding)

Docket 40-8027 EA (ASLBP No. 94-684-01-EA)

(Source Material License No. SUB-1010)

MEMORANDUM AND ORDER, LBP-95-18 October 26,1995 150 Issuance of Director's Decision SEQUOYAH FUELS CORPORATION (Gore, Oklahoma Facility)

Docket 40-8027 DIRECTOR'S DECISION UNDER 10 C.F.R. $ 2.206, DD-95-21, October 23,1995.

167 l

iii

ll l

l 4

l I

Commission lSSuanCOS i

.I i

l 1

l a

---

e

_m.'

Cite as 42 NRC 111 (1995)

CLl-9512 i

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION COMMISSIONER:

t Shirley Ann Jackson, Chairman in the Matter of Docket No. 50-160-Ren (Renewal of License No. R-97)

GEORGIA INSTITUTE OF TECHNOLOGY (Georgia Tech Research Reactor)

October 12,1995 He Commission considers the appeal of an Atomic Safety and Licensing Board decision, LBP-95-6, 41 NRC 281 (1995), which granted a request for intervention and for hearing on an application submitted by the Georgia Institute of Technology (Georgia Tech), and admitted two contentions. In a previous order, CLI-9510,42 NRC 1 (1995), the Commission remanded one contention to the Board. The Commission denies the appeals by Georgia Tech and the Nuclear Regu:atory Commission (NRC) Staff, and affirms LBP-95-6, finding that the Petitioner meets threshold requirements for standing and an admissible contention.

RULES OF PRACTICE: STANDING TO INTERVENE For standing, a petitioner must allege a concrete and particularized injury that is fairly traceable to the challenged action and likely to be redressed by a favorable decision.

' This Deciswn was made by Chairman Jackson under delegated authority as authonzed by NRC Reorganizauon Plan No I of 1980. after consultanon with Comnussioner Rogers Comnussioner Rogers has stated his agreement with this Decision.

l 111 i

-. ~

RULES OF PRACTICE: STANDING TO INTERVENE To derive standing from a member, an organization must demonstrate that the individual member.has standing to participate, and has authorized the organization to represent his or her interests.

RULES OF PRACTICE: STANDING TO INTERVENE Unless there has been a clear misapplication of the facts or law, the Licensing Board's judgment that a party has established standing is entitled to substantial deference.

RULES OF PRACTICE: STANDING TO INTERVENE A presumption of standing based on geographic proximity may be applied in cases involving nonpower reactors where there is a determination that the proposed action involves a significant source of radioactivity producing an obvious potential for offsite consequences. Whether and at what distance a petitioner can be presumed to be affected must be judged on a case-by-case basis, taking into account the nature of the proposed action and the significance of the radioactive source.

RULES OF PRACTICE: CONTENTIONS A contention must include a specific statement of the issue of law or fact to be raised or contmverted, a brief explanation of the bases of the contention, and a concise statement of the alleged facts or expert opinion that support the J

contention, together with references to those specific sources and documents on which the petitioner intends to rely to prove the contention. The petitioner must also demonstrate the existence of a genuine dispute with the applicant on a material issue of law or fact.

ATON11C ENERGY ACT: LICENSEE'S CilARACTER As part of its licensing and oversight responsibilities, the Commission may consider the adequacy of a licensee's corporate organization and the integrity of its management. The past performance of management may help indicate whether a licensee will comply with agency standards.

i i

112 l

ATOMIC ENERGY ACT: LICENSEE'S CliARACTER Allegations of management improprieties or lack of " integrity" must be of more than historical interest: they must relate directly to the proposed licensing action.

MEMORANDUM AND ORDER I.

INTRODUCTION Thk. ;,oceeding concerns an application by the Georgia Institute of Technol-ogy (Georgia Tech) to renew the license for the Georgia Tech Research Reactor (GTRR). In LBP-95-6,41 NRC 281 (1995), the Atomic Safety and Licensing j

Board grar,ted a request by the Georgians Against Nuclear Energy (GANE) for intervention and admitted two contentions. Pursuant to 10 C.F.R. 5 2.714a, Georgia Tech and the NRC Staff appealed the Board's decision. On appeal, Georgia Tech argues that GANE lacks standing, and both Georgia Tech and the NRC Staff contest the two admitted contentions. In a previous order, the Commission remanded one of the contentions to the Board. CLI-95-10,42 NRC 1 (1995). The Commission now affirms LBP-95-6 in all other respects.

II. BACKGROUND On September 26, 1994, the NRC Staff published in the Federal Regisfer a notice of opportunity for hearing on a license renewal application filed by Georgia Tech.2 The renewal would extend by 20 years Georgia Tech's license to operate the GTRR, located on Georgia Tech's campus in Atlanta. GANE filed its initial petition for leave to intervene on October 26,1994.8 in a Memorandum and Order dated November 23, 1994, the Licensing Board found that GANE had not demonstrated standing, but pursuant to 10 C.F.R. 5 2.714(a)(3), pro-vided GANE an opportunity to amend its petition, and scheduled a prehearing conference. GANE timely filed an amended petition on December 30, 1994.*

Attached were the affidavits of forty-four individuals, claiming health and safety concerns about tl.e GTRR, and stating their interest in having GANE represent 2" Georgia insuruie of Technology Considerauon of Apphcanon for Renewal of Facihry L.icense." 5t fed Reg i

49.088 (sept 26.1994t 3 See Georgians Against Nuclear Energy Petioon for leave to Intervene in Consideranon of Apphcanon for Renewal of Facihry tjcense (* Pennon")(oci. 26.1994) 4 Arnended Peuunn for leave to Intervene in ConsiJeration of Apphcanon for Renewal of racihty ljeense

("Arnended Penuan")(Dec. 30.1994t 113 l

them. The affidavits contained the individuals' home and work addresses, and the distances from the addresses to the reactor site. The Amended Petition also set forth GANE's ten contentions.

Because none of the affiants claimed membership in GANE, the Licensing Board conducted a telephone conference call to inquire whether any of the forty-four individuals v/cre GANE members. In the conference call, GANE representative Ms. Glenn Carroll informed the Board that several of the individ-uals indeed were members. The Board then authorized GANE to supplement its Amended Petition to identify the organization members. GANE in response Sled a supplemental affidavit of Mr. Robert Johnson, who affirmed his mem-bership in GANE, and attached a copy of his application for membership.5 Both Georgia Tech and the NRC Staff opposed GANE's intervention on the grounds that GANE lacked standing to intervene and failed to submit an admissible con-tention.

In LBP-95-6, the Licensing Board agreed with GANE that its standing could rest on the interests of member Mr. Robert Johnson, who works approximately i

W mile from the reactor, and believes his " life and health are jeopardized" by the reactor's continued operation.' The Board reasoned that Mr. Johnson works within sufficient proximity of the reactor that he can be presumed to be affected by operation of the facility. 41 NRC at 287. In addition, the Board found sufficient for standing the statement of GANE's representative, Ms. Glenn Carroll, that she drives by the reactor "a couple of times a day." 41 NRC at 289 n.5.

The Board also admitted two of GANE's ten submitted contentions. One admitted contention challenges the GTRR's security (Contention 5), and the l

other alleges that management problems at the GTRR render the facility unsafe (Contention 9). The Board found the security contention admissible,. on the ground that even if the existing GTRR security plan, complies with Commission regulations, regulatory authority exists to temporarily modify the security plan to account for special circumstances -in this case, security enhancements alleged necessary for the 1996 summer Olympic Games in Atlanta. 41 NRC at 291-

96. The Board also found GANE's management contention admissible, because it raised pertinent material questions about the GTRR's director and current management organization. 41 NRC at 295-99. The Board found GANE's other eight contentions inadmissible. 41 NRC at 299-308.

Georgia Tech and the NRC Staff appealed the Licensing Board's decision.

Georgia Tech also requested the Commission to stay discovery pending the appeal. The NRC Staff joined in the request for a stay. On June 9,1995, 5 Georgians Against Nuclear r.ncrgy supplemental Affidavit of Robert Johnson Afhrnung Membershipin GANr.

(Jan. I3.1995).

• Affiamt. Roberi Johnson at 1. attached to GANE's Arrrnded Pention 114

the Commiss' ion issued a temporary stay of discovery on GANE's security contention.7 A month later, in July, the Commission vacated the Licensing j

Board's origmal ruling on the admissibility of the security contention (Contention 5), and remanded that contention to the Board for reconsideration in the light of j

the new facts. CLI-95-10, supra. The Commission also lifted as unnecessary 1

the earlier-imposed temporary stay of discovery on the security contention.

The Commission now addresses the other issues, GANE's standing and its management contention, which remain pending on appeal from LBP-95-6.

III. ANALYSIS A.

GANE's Standing l

Under section 189a of the Atomic Energy Act (AEA), the Commission must grant a hearing upon the request of any person "whose interest may be affected by the proceeding." 42 U.S.C. 6 2239(a). To determine whether a petitioner has alleged a sufficient interest to intervene, the Commission has long applied judicial concepts of standing. Cleveland Electric illuminating Co. (Perry Nuclear Power Plant, Unit I), CLI-93-21,38 NRC 87,92 (1993)(Perry). For standing, the petitioner must allege a concrete and particularized injury that is fairly traceable to the challenged action and likely to be redressed by a favorable decision. See generally Lujan v. Defenders of Wildlife,1I2 S. Ct. 2130,2136 (1992); Perry, 38 NRC at 92. Injury may be actual or threatened. Kelley v.

Selin, 42 F.3d 1501,1508 (6th Cir.1995); Wilderness Society v. Griles, 824 F.2d 4,11 (D.C. Cir.1987). To evaluate a petitioner's standing, we construe the petition in favor of the petitioner. See Kelley v. Selin,42 F.3d at 1508.

An organization may base its standing on either immediate or threatened injury to its organizational ivterests, or to the interests of identified members.

Warth v. Seldin, 422 U.S. 490, 511 (1975); flouston Lighting and Power Co. (South Texas Project, Unia 1 and 2), ALAB-549, 9 NRC 644, 646-47 (1979). To derive standing from a member, the organization must demonstrate

{

that the individual member has standing to participate, and has authorized the organization to represent his or her interests. Ilouston Lighting and Power Co.

(Allens Creek Nuclear Generating Station, Unit 1), ALAB-535, 9 NRC 377, 390-96 (1979).

At the heart of the arguments on standing in this case are the parties' esti-mations of the geographic area that could be affected by an accidental release of radiation from the Georgia Tech reactor. Georgia Tech submits that even a worst-case accident at the reactor, as depicted in the GTRR's Safety Analysis 7 order issums Housekeepmg stay uune 9,1995) 115

= _ _ _

Report (SAR), cannot affect public health and safety beyond a 100-meter radius.'

Georgia Tech therefore argues that Mr. Johnson and Ms. Carroll are beyond the

" zone of danger" for the GTRR.' GANE, on the other hand, believes that a serious accident at the GTRR could result in radiation escaping the containment building and dispersing at least 1/2 mile, to "where [GANE member] Rob Johnson works.

. [ilf the wind's blowing in that direction."S Re Licensing Board concluded that Mr. Robert Johnson, whose office is approximately 1/2 mile from the reactor site," works close enough to the GTRR to be presumed to be affected by operation of the facility." 41 NRC at 287.

The Board also found that GANE's standing alternatively could be derived from GANE representative Ms. Glenn Carroll, who drives by the reactor "a couple e times a day." Id. at 289 n.5.

r Unless there has been a clear misapplication of the facts or law, the Licensing Board's judgment that a party has established standing is entitled to substantial deference. GulfStates Utilities Co. (River Bend Station, Unit 1), CL1-94-10,40 NRC 43,47-48 (1994). "[W]c are not inclined to disturb a Licensing Board's conclusion that the requisite affected interest.

has been established unless it appears that that conclusion is irrational." Portland General Electric Co.

(Pebble Springs Nt. clear Plant. Units 1 and 2). ALAB 273,1 NRC 492, 494 (1975)."

He Licensing Board's judguu. that GANE has shown sufficient interest for standing is reasonable. A presumption of standing based on geographic proximity may be applied in cases involving nonpower reactors where there is a determination that the proposed action involves a significant source of radioactivity producing an obvious potential for offsite consequences. See Sequoyah Fuels Corp. (Gore, Oklahoma Site), CLI-94-12,40 NRC 64,75 n.22 (l994) (SFC); Armed Forces Radiobiology Institute ! Cobalt-60 Storage Facility),

ALAB-682,16 NRC 150,153-54 (1982) (AFRI); Northern States Power Co.

(Pathfinder Atomic Plant), LBP-90-3,31 NRC 40,43 n.1,45 (1990). Cf. Lujan, 112 S. Ct. at 2142-43 n.7. Whether and at what distance a petitioner can be presumed to be affected must be judged on a case-by-case basis, taking into 8 Georgia Tech's Nouce of Appeal from the ASLB's Memorandum and order daied Apnl 26.1995 (Cmwgia Tech Appeal Bnef) at 8 (May 11.1905).

j

'Scr id at 8-il.

" Georgia Tech Rescuch Reactor Preheanng Conference Transcript av 89 (January 31-Irbruary 2. ;995)("Tran-senpt"h ser alto Transcnpt at 81.82.105.108 only Georgia Tech rdses standing on appeal 7he NRC staff does not.

H Quoring Northern Stairs Poner Ca (Praine Island Nudear Generaung Plant. Uruts I and 2). ALAB 107. 6 ALC i

188. 193 (1973). aff'd on other ground.v. CL1-73-12, 6 ALC 24l (1973), off'd suh nom SP/ v AEC. 502 F 2d 424 (DC. Cir.1974L See also Deperne Leght Cu (Beaver Valley Power stauon. Unit 1). ALAB 109,6 ALC i

243,244 (1973h cf Drguua Elecinc and Pourr Co (North Anna Power Stanon. Umts I and 2h ALAB-522. 9 HRC 54. 57 n.5 (1979).

I16

.. _.. _ ~ _.

account the nature of the proposed action and the significance of the radioactive source. See 5FC,40 NRC at 75 n.22; AFRI,16 NRC at 153-54, Here, for threshold standing purposes, the Board found it neither "extrava-gant" nor "a stretch of the imagination" to presume that some injury, "which wouldn't have to be very great," could occur within 1/2 mile of the research reactor," He Board noted that Georgia Tech's own SAR describe accident scenarios in which noble gases could be dispersed beyond the reactor site. LBP-95-6,41 NRC at 287. Under questioning by the Board, the GTRR's director conceded that noble gases would escape the steel containment building if the reactor core melted." Georgia Tech stresses that such hypothetical scenarios described in the SAR are simply " incredible" because they would first require three independent redundant safety systems to fail." The Board, however, was not convinced that a combined failure of three systems altogether strains cred-ibility. The Board's view is not " irrational." See River Bend, 40 NRC at 47-48. At the threshold standing stage, the Commission will not disturb the Board's presumption that some injury could occur within a V2 mile radius of the reactor.O Alternatively, the Licensing Board reasonably held that GANE's standing can be based on Ms. Glenn Carroll, a GANE member who daily " drives by" the reactor." See North Anna, 9 NRC at 57 (recreational canoeing in vicinity of plant sufficient for standing); Pathfinder, 31 NRC at 45 (regular commute once or twice a week past plant site to be decommissioned found sufficient to establish requisite interest that petitioner might be affected by decommissioning). Ms.

Carroll's commute presumably brings her even closer to the reactor site than V2 mile. Like Mr. Johnson, Ms. Carroll can be presumed to frequent regularly a geographic area potentially at some risk of radiation releases, and therefore to have a personal stake in the license renewal proceeding.

1 B.

GANE's Management Contention A petitioner for intervention must proffer at least one admissible contention.

See 10 C.F.R. 5 2.714(b)(2) and (d)(2). A contention must include a specific statement of the issue of law or fact to be raised or controverted, a brief

)

U Transenpt at 10.

U Id at 22 21

"/d at 23-24. Georgia Tech Appeal Bnef at 8 9.

U Georgia Tech mgues that Mr. Johnson joined GANE too late -i e., after GANr's request for a hearmg - to serve as the source of GANE's standing But, as the Board found, there is ample eviden e that GANE considered Mr. Johnson a member, and that Mr Johnson actively participated in GANE affairs. pnor to GANE's request for a heanng See LBP 954, di NRC at 288-89. By contrast, there is no evidence thai GANE contnved M.r Jotmson's membership merely to sustain standmg. The Comnussmn dechnes to rest its standing deternunanon on the techmcahty of when he signed his membership card. Cf South Trias. At.AB 549. 9 NRC at 649 "Transenpt at 35 l

l 117 4

r a

~

explanation of the bases of the contention, and a concise statement of the alleged facts or expert opinion that support the contention, together with references to those specific sources and documents on which the petitioner intends to rely to prove the contention. Additionally, the petitioner must present sufficient information to show a genuine dispute with the applicant on a material issue of j

law or fact. Proffered contentions must fall within the scope of the issues set I

forth in the notice of the proposed licensing action. See Public Service Co. of Indiana (Marble Hill Nuclear Generating Station, Units I and 2), ALAB-316, 3 NRC 167,170-71 (1976).

An intervenor need not, however, prove its case at the contention stage. The tactual support necessary to show that a genuine dispute exists need not be in l

affidavit or formal evidentiary form, or be of the quality necessary to withstand a summary disposition motion.l? What is required is a " minimal showing" that material facts are in dispute, indicating that a further inquiry is appropriate.38

'Ihe Licensing Board admitted only two of the ten contentions proffered by GANE. One admitted contention (Contention 5) alleges deficient physical security at the GTR.R. New facts received after the Board's decision may have rendered this contention moot. The Commission therefore has remanded the security contention to the Board for reconsideration. See CLI-95-10, supra.

The only contention remaining before us, Contention 9, alleges that manage-ment problems at the GTRR are so great that public safety cannot be ensured.

Specifically, GANE alleges that:

1) The Commission in the late 1980s shut down the reactor for safety reasons following a cadmium ll5 contarnination incident that arose from poor management. The same management is still in place.

2) The current director of the GTRR is the same director who in 1987 withheld information from the NRC about the cadnuum-Il5 contanunation incident.

3) A safety officer who advised the NRC of the cadmium incident was later demoted and left the GTRR claiming harassment.

4) Smce the cadmium incident, the GTRR has been restructured. The restructunng has incred the authonty of the director over the Office of Radiation Safety.

5) Although the GTRR safety officer can report directly to individuals with higher authority than the director, he may be reluctant to do so because he works for the director and "the threat of reprisal would be a huge disincentive to defying the director."

Amended Petition at 10; see also Petition at 5.

37 Rner Bend. 40 NRC at ?l: Fmal Rule. Rules of Pracuce for Domesuc Licensmg Proceedings - Procedural Changes in the Hennng Process. 54 Fed. Reg 33.168. 33.171 ( Aug.11.1989)

I

• Id 118

1 i

GANE's central concern appears to be that there is a need to restructure the GTRR's management to make radiation safety personnel " independent" of l

the director, and to ensure independent oversight over the director's office.8' GANE believes that the GTRR director withheld safety-related information from the NRC, and was responsible for alleged retaliation against radiation safety personnel who reported the cadmium-115 contamination incident to the NRC in the late 1980s. GANE alleges that management changes after the 1987 incident further "consolidat[edj the power under the harasser,"20 making it less likely that radiation safety personnel would feel free to report safety concerns. GANE also questions the effectiveness of the Nuclear Safeguards Committee, a committee of twelve safety experts tasked with monitoring the GTRR's operations ' Because j

2 the GTRR's management is now "being put forth again to be re-okayed," GANE 1

requests that the current structure not be reapproved.22 In accepting the contention, the Board noted that GANE had presented 1

I evidence of a serious incident in 1987, allegedly involving the GTRR's current director, and that simply because the NRC Staff had been satisfied with the resolution of the incident, a party is not precluded from now raising the adequacy of the reactor's management, particularly when this is the first time a member of the public could seek to adjudicate the management issue. See LBP-95-6,41 NRC at 297.

Both Georgia Tech and the NRC Staff stress on appeal that GANE has failed to demonstrate any problem with the GTRR's current management, and at best points only to a 1987 incident that was long ago investigated and resolved to the NRC Staff's satisfaction.23 The Staff rejects any link between the cited 1987 cadmium-115 incident and a license renewal to authorize future operations.24 Staff explains that the cadmium incident resulted in an exhaustive review by the NRC Office of Investigations (OI), and that by November of 1988, the NRC Staff had determined that the Licensee had corrected any major deficiencies and should be permitted to restart.25 Staff thus concludes that GANE "must show something in recent history which would give you a reason to think that the j

plant is not being operated safely or may not be expected to operate safely in the future."26 Georgia Tech argues that because "[t]he Commission has approved the current management, and as long as the GTRR continues to operate within I'Transenpa at 365 2*lJ at 399 28See id. at 349-50. 396-97.

12See id at 398 23 See Georgia Tech Appeal Bncl at 16-18. NRC staff's Peution for Commmmn Review and Appeal of the Atornic safety and lxensing Board's Preheanng Conference order of Apnl 26.1995 (Staff Appeal Bnef) at 26-28 (May 11.1995) 24 Staff Appeal Bnef at 29 25 Transenpi at 373.

26 j,, 377.

f I19

the regulations, the Board has no basis upon which to act."27 Both parties also claim that, having admitted the contention despite a lack of factual basis, the Board now improperly has allowed GANE discovery to attempt to uncover a basis for the contention.2:

At the outset, the Commission rejects Georgia Tech's broad claim that a li-cense renewal proceeding is per se an inappropriate forum in which to raise management allegations. As part of its licensing and oversight responsibilities, the Commission may consider the adequacy of a licensee's corporate organiza-tion and the integrity of its management.2' When relevant, the Commission has evaluated whether a licensee's management displays the " climate," " attitude,"

and " leadership" expected." In deteimining whether to grant a license (or, by logical extension, to renew a license), the Commission raakes what is in effect predictive findings about the qualifications of an applicant.38 The past perfor-mance of management may help indicate whether a licensee will comply with agency standards.32 When a licensee files a license renewal application, it repre-sents "an appropriate occasion for apprais[ing].. the entire past performance of [the] licensee."2) Of course, the past performance must bear on the licensing action currently under review.

Moreover, the NRC Staff conclusion in 1988 that Georgia Tech had corrected all deficiencies and could be permitted to restart operations is not itself enough to preclude GANE from raising questions about the GTRR's management, particularly in the absence of any clear prior opportunity for GANE to pursue claims at a hearing. A Staff conclusion alone does not defeat the right to litigate a contention. River Bend,40 NRC at 52.

Allegations of management improprieties or poor " integrity," of course, must be of more than historical interest: they must relate directly to the proposed licensing action." Accordingly, this proceeding cannot be a forum to litigate whether Georgia Tech made mistakes in the past, but must focus on whether 27 Georgia Tech Appeal Hnef at 2.

2A Sec staff Appeal Bnef at 29-32; Georgia Tech Appeal Bnef at 1718 29 5cc Georgio Power Co. (Vogtle Electric Generaung Plant. Umts 1 and 2). CL1-9.Ll6. 38 NRC 25,30 (1993) t Vogtle).

• Vogrie. CLI-9.Ll6. 38 NRC at 31. Alciropoluan Edswn Co. (Three Mile Island Nuclear stauon. Umt 1). CLI-85-9. 21 NRC 1118. I137 (TAfr), ag'd sub nom in re Three Afde Idand AI<rt. Inc. 771 F.2d 720 (3d Cir.1985).

cerr denied. 475 U s.1082 (1986).

31 Ser Vogde. CLI93-16. 38 NRC at 31.

'3 5ee tJ at 31. Itamim Tesung laboratones. Inc., 2 ALC 423, 428 (1964 (llamim). ag'J sub nom. Itamim l

Testmg leborasories v. AEC. 357 F 2d 632 (6th Cir.1966) 33 flamIm. 2 AE.C at 428 M Sec. r a. Detrots Eduon Co (Ennco termi Atonne Power Plant. Umt 2). LBP 78 il. 7 NRC 381. 386. og'd, ALAB-470. 7 NRC 473 (1978)(whether Detroit Edison volated Comnussion regulanons in the past not within scope of proceeding on adding new ownerst TAtl. CLl45-9. 21 NRC at 1128 (1985)(personnel changes numted the sigmficance in restart proceedings of leak rate falsificanons from 6 years before).

l i

120 q

l l

i

the GTRR as presently organized and staffed can provide reasonable assurance of candor and willingness to follow NRC regulations.

Here, while the question is a close one, the Commission declines to disturb the Board's finding that GANE's management allegations are relevant to the proposed license renewal. This is a proceeding to extend a license for 20 years.

GANE seeks assurance that the facility's current management encourages a safety-conscious attitude, and provides an environment in which employees feel they can freely voice safety concerns. GANE's allegations bear directly on the Commission's ability to find reasonable assurance that the GTRR facility can be safely operated. If GANE can prove that the GTRR's current management either is unfit or structured unacceptably, it would be cause to deny the license renewal or condition renewal upon modifications.

Contrary to suggestions by Georgia Tech and the NRC Staff, this is not a case l

where the Licensing Board simply relied on a years-ago incident to allow GANE an opportunity to uncover additional information through discovery. Although the Board expressed some concern about GANE's ability to have obtained documents that may have " buttress [ed]" the contention, the Board clearly found the information GANE actually submitted, as clarified and further detailed in j

the prehearing conference, a sufficient basis for the contention.35 The Board's view of the contention is reasonable.

GANE's allegations may well turn out to lack any factual substance, and i

if so, they will not survive summary disposition. But as required by the Commission's contention rule, GANE at this stage has presented " alleged facts or expert opinion"3' and made a " minimal showing" that material facts about the j

GTRR's management organization are in dispute and that further inquiry may be appropriate. GANE refers not just to the 1987 cadmium incident, but also to the NRC inspection and investigation reports on the incident, the GTRR's own SAR in support of its license renewal request, newspaper articles, and, significantly, to at least one expert witness in support of the contention.

Although the cadmium-II5 incident that GANE highlights is far from recent, it was a significant Severity Level 111 violation that resulted in two immediately effective suspension orders, an NRC investigation, an enforcement conference, and a civil penalty,37 and ultimately was attributed to management failures that "could have resulted in very serious safety consequences."3" The incident involved allegations of harassment and reprisals by Georgia Tech management 35 See LDP-95-6. 4i NRC al 297-98.

3*See 10 C F R. I 2.714tbx2) 37 See Georgia Insuture of Technology, order Modifying License. Effecuve immediaiely. 53 Ird Reg 2663 (Jan.

29. 1958); Georgia insutute of Technology. Conhrmatory order Modifying Licenw. Effecove Irnmediately. 53 hd. Reg. 9718 (Mar 24.1988L NRC ofhee of Invesuganon Report No. 2-88-003. Enforcement Acuon 88 32 38 See letter to Dr. J P. Crecine. President, Georgia Tech, from Malcolm Ernst. Acung Regional Administrator.

NRC, at 3 (Nov 15. 1988).

121

against employees who reported safety concerns to the NRC. Rese allegations led to an extensive NRC Office of Investigations (OI) review that proved inconclusive." GANE takes the view that the management problems leading to the 1987 incident remain and indeed have been exacerbated by more recent changes in the GTRR management structure.

He 1987 incident is not one in which all of the principal individuals alleged to have played a role have since left the facility or moved to positions unassociated with day-to-day operations. Compare TMI, CLI-85-9,21 NRC at 1128 (personnel changes diminished significance of violations alleged to have occurred 6 years before). The GTRR director at the time of the 1987-1988 events continues as the facility's director, responsible for ensuring the safe day-to-day

- operation of the reactor." GANE alleges that the reactor operator responsible for the cadmium incident also remains at the facility.*'

in light of what GANE calls the "public history" of alleged reprisals against

- employees who report safety issues,42 GANE's contention particularly raises questions about the appropriateness of having the manager of the Office of Radiation Safety work under and directly report to the GTRR director, an arrangement depicted in the management hierarchy chart found in the GTRR's SAR. GANE points to this chart on the facility's management organization as indicative of the need for " checks and balances" to ensure that radiation safety personnel will not hesitate to report safety concerns, GANE also concludes, based on the GTRR SAR that the director's office lacks sufficient independent oversight, and indeed now receives less independent review than at the time prior to the cadmium incident. Ahhough select officers other than the director - Georgia Tech's President, and the Vice President for Interdisciplinary Affairs, for example - have authority to shut down the reactor, GANE claims these individuals may either lack (1) the nuclear physics expertise or (2) sufficient day-to-day knowledge of ongoing reactor affairs to recognize a need to shut down operations or take other corrective actionM D OI did however, conclude that one of the reasons two health physics techmcians were hred was "specificaHy related to [their) discussmg or reportmg potenual health and safety concerns with [the] NRC." NRC office of Investigations Report No. 2-88-003 at 6. The report also charactenzed the general GTRR environrnent as comiucive i

to potencal repnsals, and in a severe state of disharmony due to poor managemem at aH levels. Ser Lener to J P.

Crecine, President, Georgta Tech, from Milcolm Ernst. Acting Regional Adnunistrator. NRC, at 2-3 (Nov 15, 1988).

"Sce S.ifety Analysis Rerort for the $ Mw Georgia Tech Research Reactor (sAR) at 156 (Apnl 1994).

4' 5cc Transenpt at 339 (estmg January 1994 "Alternanves" magazine article),

42 Transcnpt at 10 44,346-47. GANE beheves that the current director was personally responsible for repnsats against the indmdual who allegedly reported the 1987 contammation incident GANE bases its behef upon a November 1987 newspaper article in the Atlanta lournal-Con.vrrrurwn, enutled "Radiatmn expert rzsigns to protest changes at the Neely Nuclear Research Cemer

• Transenpt at 342.

43 /J. at 395-96,398 The NRC Staff in a reteni Board Nouncanon (9515) advises that effecove october 1.1995, the posmon of the Vice President for lmerdisciphnary Affairs was replaced with the posanon of the Dean of the College of Engincenng The t.icensmg Board has requested the parties to comment on whether this orgamzational fConnnued) 122 4

w e

To support its position that the GTRR's current management setup is inap-propriate, GANE seeks to call as a witness an individual with the Environmental Protection Division of Georgia (EPD), who informed GANE that the EPD had strongly objected to the GTRR's management changes.44 GANE asserts that the EPD "may have expressed problems with [the changes) and may have been overruled by the NRC, who I think ultimately did sanction these changes."45 In addition, GANE informed the Board that it gleaned information about problems associated with the management changes from an anonymous " expert" witness who once worked for the GTRR director, but resigned after being demoted, al-legedly in retaliation for protesting his position being made "unindependent."4' GANE also relies upon magazine articles on the GTRR, including one article that refers to the cuaent manager of the GTRR Office of Radiation Safety as

" confirm [ing] that the setup which has his department under the control of the i

director is unusual.""

In response, Georgia Tech stresses the oversight role of the Nuclear Safe-guards Committee, comprised of twelve independent safety experts charged with reviewing and approving all safety matters.48 The Licensing Board, however, surmised that the descriptions in the SAR (cited by GANE) depict the Nu-clear Safeguards Committee and the various officers tasked with overseeing the director as " appear [ing] to exercise audit-type functions, as claimed by GANE (Tr. 349), rather than day-to-day operational functions." LBP-954,41 NRC at 296. GANE notes from the SAR that one of the Nuclear Safeguards Committee's chief functions is to review " reportable occurrences."" GANE, though, fears that the Nuclear Safeguards Committee will not be able to pro-vide adequate independent oversight if " reportable occurrences" are not reported to it.$o In sum, the Commission declines to second-guess the Licensing Board's decision that GANE satisfied the minimum threshold for showing that material facts about the current GTRR management are in dispute. GANE has raised change has any ugmficant effect upon Contention 9 See Mer..orandum and order dffect of organuational Changes on Contentmn 9) (sept. 26.1995). We leave to the Licensing Board the task of assessmg the significance of this change.

'4 Transcript at 342-43, 367.

45 /d at 343 46 Transenpt at 35154 GANE does not wish to unveil this person but hopes that he will of his own accord overcome tus " fear to cone out and discuss these issues about the reactor " After being informed by the Board that this mdividual could be subpoenaed. GANE told the Board to disregard this potential witness as a basis for the contention because he had not consented to malung his knowledge public, Transenpa at 365.

""Checkmg out the Honest Spot on Campus," Creame leapng at 28 (Dec 17.1994K As evidence of recent problems at the GTRR. GANE refers to one inspecnon ieport provided by the NRC staff on a 1994 violaiion.

See Transcnpt at 329. 336,338 (refernng to inspection Repon 50 160/94 01) d'Geoigia Tech Appeal Bnef at 16.

4"See sAR ai 158 SoTransenpt at 349-50.

123

._.-m

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

i i

i questions about the appropriateness and effect of an alleged " consolidation" of authority by the GTRR director over the office of radiation safety, and 3

the adequacy of independent oversight over the director's office. Whether I

. the present GTRR management's structure and staffing satisfy all Commission requirements and provide reasonable assurance that any past failings are unlikely j

to be repeated are matters left for the Licensing Board's consideration when i

the merits of the dispute are reached, either on summary disposition or after a hearing.

{

IV. CONCLUSION

{

l Ibr *.he reasons stated in this Decision, the appeals by Georgia Tech and the j

NRC Staff are denied, and the Licensing Board's order in LBP-95-6 is a[/irmed, i

l It is so ORDERED.

For the Commission JOHN C. HOYLE Secretary of the Commission Dated at Rockville, Maryland, this 12th day of October 1995.

i l

124 1

i

.~

. ~-. --

Cite as 42 NRC 125 (1995)

CLI-95-13 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION COMMISSIONER:

Shirley Ann Jackson, Chairman 8 in the Matter of Docket No. 50-344

)

i PORTLAND GENERAL ELECTRIC COMPANY j

(Trojan Nuclear Power Station)

October 12,1995 j

The Commission decides that under Citizens Awareness Network v. NRC,59 j

F.3d 284 (1st Cir.1995), the Licensee is not required to halt its substantially j

completed Large Component Removal Project (LCRP), but finds that the Li-censee cannot conduct any further " major dismantling" of the Trojan facility

)

until final NRC approval of the Trojan decommissioning plan, thus restoring i

effect to the NRC's pre-1993 interpretation of its 1988 decommissioning rules.

REGULATIONS: DECOMMISSIONING Re NRC will exercise its enforcement discretion and not halt a substantially completed Large Component Removal Project (LCRP): where both the Licensee and the NRC Staff have prepared safety analyses that conclude that the LCRP presents no undue risk to public health and safety; where the party seeking to j

stop the LCRP has failed to ask for a hearing in a timely fashion; where the balance of harm to the parties does not weigh heavily against either party; and where there will be an opportunity for a hearing on the remaining 99% of the i

decommissioning plan.

3 This Deciuon was made by Chairman Jackson under delegated authority, as authonzed by NRC Reorganization Plan No, I of 1980. after consultanon with Conutussioner Rogers. Comnussioner Rogers has stated his agreement

=

with his Decision.

125

i a

l NEPA: ENVIRONMENTAL ASSESSMENT in some limited cases, NRC Staff review of a Licensce's preliminary environ-4 mental document may satisfy the requirement for an Environmental Assessment.

i REGULATIONS: DECOMMISSIONING Where the radioactivity involved in a Licensee's LCRP is only 1% of the facility's total nonfuel radioactivity, halting further dismantling at the facility l

pending fmal decommissioning plan approval gives ample effect to a court decision concerned that the " decommissioning plan approval process" should be followed before "the actual decommissioning activities are already completed []."

4 i

MEMORANDUM AND ORDER L INTRODUCTION The Commission has before it the question whether the First Circuit's decision in Citizens Awareness Network v. NRC,59 F.3d 284 (1st Cir.1995),

prevents t'urther decommissioning activities at the Trojan reactor which is owned by the Portland General Electric Company ("PGE"). We recently solicited public comments on this question. See 60 Fed. Reg. 46,315 (Sept. 6,1995).

The Don't Waste Oregon Council ("DWOC") and other groups opposed to PGE's current decommissioning activities (" Petitioners") have asked for a halt in these activities, pending NRC approval of a dccommissioning plan for Trojan.

- PGE seeks to proceed with its decommissioning activities, including its Large Component Removal Project or "LCRP," which currently is nearing its end.

The Commission has decided that under Citi: ens Awareness Network PGE cannot conduct any further " major dismantling" of the Trojan facility until com-pletion of the NRC's decommissioning plan approval process. The Commission has also decided not to interfere in PGE's completion of its LCRP, which is almost done and affects just 1% of (nonfuel) radioactivity from the plant. The LCRP " involves the removal of Trojan's four steam generators and the pressur-izer from the containment building, preparing the components as transportation packages, and transporting the component packages from the Trojan site.

See PGE's Sept. 18,1995 Comments at 1.

]

11. IIACKGROUND As recounted in Citi: ens Awareness Network, prior to 1993 the Commis-sion interpreted its regulations on decommissioning (10 C.F.R. 69 50.82,50.75, 126

51.53, 51.95) to require Commission approval before a licensee may in the course of decommissioning make " major structural changes to radioactive com-ponents of the facility or other major changes.,," 53 Fed. Reg. 20,418, 24,025-26 (1988).2 In 1993, the Commission issued a Staff Requirements Mem-orandum altering this interpretation and permitting licensees to take any decom-missioning action authorized under their licenses in advance of decommissioning plan approval, including actions that could be justified under 10 C.F.R. 6 50.59.

See Citizens Awareness Network,59 F.3d at 289.

In Citizens Awareness Network, the First Circuit struck down the Commis-sion's interpretive change as " arbitrary and capricious" because in the court's view it had not been adequately explained, it had not been preceded by notice-and-comment or any form of hearing, and it was " seemingly irrational." 59 F.3d at 291-92. The court's ruling has the effect of restoring the Commission's pre-1993 interpretation of its decommissioning rules.

Ill ANALYSIS AND DISCUSSION The Petitioners, including DWOC, have stated their opposition to further decommissioning at Trojan in court filings and comments to the agency. In their view the Commission should order an immediate halt to the LCRP. If the LCRP presented a significant safety problem, the Commission would clearly have the authority to issue such an order and would unquestionably exercise it.

However, both the Licensee and the NRC Staff have prepared safety analyses that conclude that the LCRP presents no undue risk to public health and safety.

j DWOC has not shov any flaws in these analyses.)

)

DWOC does say that Citi: ens Awareness Network renders further work on the LCRP in violation of the Commission's pre-1993 rule interpretation. But that is not obviously correct. PGE argues that there are significant differences between the Trojan LCRP and the Yankee Nuclear Power Station removal program at issue in Citi: ens Awareness Network PGE points out that the LCRP affects less than 1% of nonfuel residual radioactivity from the plant, in contrast to the 2 See lang Irland Lighting Ca (shoreham Nuclear Power sianon. LJnit 1). CL1-9 -2. 33 NRC 61. 73 n.5 (1991);

Sacramento Munictpal Utilirr Durnct (Rancho Seco Nuclear Generanns ianon). CL192 2. 35 NRC 47,61 n.7 s

(1992).

3 Pennoners allege that the NRC has not prepared an EA or an EIS for the LCRP in comphance with the Nanonal Environmental Pohey Act and that the LCRP must he halted for this reason alone. See Currens Awarrness Netwri. 39 FJJ at 292-93. Wlule it is true that the NRC has not prepared either document for the LCRP, the NRC will prepare the apprepnate document for the decomnussiomng plan. In addition. PGE prepared an environmental review ("ER") of the LCRP. wluch found that the impacts of the LCRP were within the Els issued in connecuon with the operanon of Trojan and the GEIS issued by the NRC in connecuon with deconunissioning in general. The NRC staff reviewed tius ER and found n to be accurate and acceptable The NRC review of the ER is adequate for purposes of NEPA comphance at this point See fnends of the her v. TERC 720 F 2d 93.

10408 (D C. Cir.1983).

127

90% affected by the program at Yankee. PGE argues that the Trojan program therefore does not violate the Commission's pre-1993 decommissioning rules.

The Commission finds this question a close one. Removal of the four Trojan steam generators and the pressurizer undoubtedly has to be characterized as a " major structural change," and these components do contain some residual radioactivity. On the other hand, PGE is correct that the radioactivity involved in the LCRP is only a miniscule part (1%) of Trojan's total (nonfuel) radioactivity.

In this sense it could be concluded that the Trojan LCRP is not a " major" segment of the decommisioning process to which the Commission's decommissioning regulations should be strictly and literally applied.

The Commission need not resolve this question definitively, however, because there are several additional reasons why the Commission should not interfere with the LCRP. PGE entered upon the progra'm in reliance upon the NRC's assurance, given prior to the Citi: ens Awareness Network decision, that it complied with the Commission's regulations. In contrast to the component removal program at the Yankee Nuclear Power Station that led to the Citi: ens Awareness Network litigation, no parties requested an NRC hearing on the Trojan LCRP. While PGE continued its implementation, DWOC and the other petitioners participated in a st.Ne-law process for review of the LCRP and made no effort, until September 25, to seek any relief from the NRC. PGE in the meantime incurred substantial costs and now faces the prospect of losing favorable contracts, incurring additional costs, and idling its trained work force, should the program be summarily halted.

In addition, the Citi: ens Awareness Network court itself did not direct the halt of preliminary removal and transport operations already under way. liere, i

PGE reports that ine program to remove and transport off site the Trojan steam generators and pressurizer is about 70% complete and, if not stopped by the Commission, will be fmished by late October or early November 1995.

Because the LCRP remains in compliance with all NRC safety requirements, the Commission believes that fairness and the public interest will best be served by not taking any action to interrupt this program on the eve of its completion. See Heckler v. Chaney, 470 U.S. 82l, 831-32 (l985); Union of Concerned Scientists

v. NRC, 711 F.2d 370, 383 (D.C. Cir.1983).

Any further significant decommissioning activities beyond the LCRP must await completion of the NRC approval process for the Trojan decommissioning plan. This restores effect to the Commission's original interpretation of its d commissioning rules, as required by Citizens Awareness Network. and the Commission expects PGE to comply with that interpretation. When (and if) the NRC Staff is prepared to issue an order approving the Trojan decommissioning plan, the Commission intends to follow its pre-1993 practice of giving notice of an opportunity for an adjudicatory hearing on the plan. The Commission intends to order an expedited hearing process.

128 l

l I

The Commission believes that, with 99% of Trojan's nonfuel radioactive contamination still in place, halting further major dismantling at Trojan pending final decommissioning plan approval gives ample effect to the concern of the Citi: ens Awareness Nerwork court that the " decommissioning plan approval process" be followed before "the actual decommissioning activities are already completed []" 59 F.3d at 292.

IV. SUSIA1ARY In summary, the Commission will not require PGE to halt its LCRP, which is stated to be completed within the next few weeks. However, the Commission expects PGE to adhere to current NRC decommissioning rules and to take no further decommissioning actions involving major dismantling at Trojan until final NRC approval of the Trojan decommissioning plan. 'Ihe Commission directs PGE to inform the Commission promptly, within no more than 14 calendar days, of the steps it is taking to come into compliance with the reinstated rule interpretation announced in this Decision.

It is so ORDERED.

For the Commission JOHN C. HOYLE Secretary of the Commission Dated at Rockville, Maryland, this 12th day of October 1995.

1 129

.~

.~.

Cite as 42 NRC 130 (1995)

CLI-95-14 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION COMMISSIONER:-

Shirley. Ann Jackson, Chairman' In the Matter of Docket No.50-029 YANKEE ATOMIC ELECTRIC COMPANY (Yankee Nuclear Power Station)

October 12,1995 On remand from the First Circuit Court of Appeals, the Commission holds that the Court's de:ision (Citizens Awareness Network v. NRC,59 F.3d 284 (1st Cir.1995)), reinstating the NRC's pre-1993 decommissioning policy, requires issuance of a notice of opportunity for an adjudicatory hearing on the Yankee NPS decommissioning plan. The Commission directs the Licensee to inform it promptly of the steps it will take to come into compliance with the reinstated rule. The Commission notes that NRC regulations prohibit Yankee Atomic from conducting further major dismantling or decommissioning activities until after completion of the hearing process.

REGULATIONS: DECONINIISSIONING The NRC has defined " major dismantling" under the 1988 regulations as

" major structural changes to radioactive components of the facility or other major changes..." See 53 Fed. Reg. 24,018,24.025 (1988) (" Statement of Considerations," 1988 decommissioning rule).

I

' This Decision was made by Chaarrnan Jackson under delegated authonry, as authonzed by NRC Reorganization Plan No. I of 19t40, after consultation with Comnussioner Rogers. Comnussioner Rogers has stated his agreement with this Decision.

130

REGULATIONS: DECONINIISSIONING Under the Commission's pre-1993 interpretation of its 1988 decommissioning regulations, a nuclear power plant licensee may not conduct major decommis-sioning activities prior to final NRC approval of a decommissioning plan.

REGULATIONS: DECO.\\f511SSIONING Prior to 1993, the Commission had consistently interpreted its 1988 regu-lations on decommissioning as requiring an adjudicatory hearing prior to the NRC's final approval of a licensee's decommissioning plan.

REGULATIONS: DECON1511SSIONING A licensee's argument that the NRC's provision of an adjudicatory hearing on a previously approved decommissioning plan may result in financial hardship to the licensee due to decommissioning delays, does not excuse the Commission from providing a meaningful remedy to effectuate a Court of Appeals decision.

REGULATIONS: DECON1511SSIONING Where a Court of Appeals has recognized in its decision that a licensee has virtually completed major decommissioning of a nuclear power plant, but that a continued removal of radioactive material will continue to pose safety and health questions, the NRC considers itself duty bound to take the only action available tu a that gives meaning to the Court's decision - provide an i

adjudicatory hearing on the licensee's decommissioning plan in accordance with the Commission's pre-1993 interpretation of its regulations.

MEMORANDUM AND ORDER I.

INTRODUCTION This matter is before the Commission on a remand from the United States Court of Appeals for the First Circuit. See Citi: ens Awareness Network v.

NRC,59 F.3d 284 (1st Cir.1995). The Commission issued a Federal Register notice soliciting public comments on how it should implement the remand order.

See 60 Fed. Reg. 46,317 (Sept. 6,1995). The Citizens Awareness Network

("CAN") has filed comments asking for a hearing on the decommissioning I

plan for the Yankee Nuclear Power Station (" Yankee NPS"), which is owned and operated by the Yankee Atomic Electric Company ("YAEC"). However, 131

that decommissioning plan has already been approved by the NRC Staff -

albeit without an adjudicatory hearing. In its comments, YAEC argues that the Commission should not hold such a hearing.

In light of the First Circuit's decision, the Commission has decided that it must reinstate its pre-1993 interpretation of its decommissioning regulations.

See generally 60 Fed. Reg. 46,317 (Sept. 6,1995). Pursuant to this interpre-tation, and for the reasons stated below, the Commission will issue a Notice of Opportunity for an adjudicatory hearing on the Yankee NPS decommission-ing plan. The Commission intends to order an expedited hearing process. In the meantime, in accordance with the pre-1993 interpretation, the Commission expects YAEC not to conduct any further " major" dismantling or decommis-sioning activities until final approval of its plan after completion of the hearing process.2 See Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), CLI-91-2, 33 NRC 61, 73 n.5 (1991); Sacramento Municipal Utility Dis-trict (Rancho Seco Nuclear Generating Station), CLI-92-2, 35 NRC 47,61 n.7 (1992).

j l

II. IIACKGROUND Briefly, on several occasions from late 1992 through early 1994, CAN asked the NRC to offer an opportunity for an administrative hearing regarding decommissioning activities being conducted by YAEC at the Yankee NPS. These activities were known as the Component Removal Project or "CRP."

The Commission denied each of CAN's requests, based upon a new inter-l pretation of its decc.nmissioning regulations, issued on January 14,1993, and j

CAN sought review of the last denial before the First Circuit. On July 20, 1995, the First Circuit issued a decision that held that the Commission had im-properly changed its interpretation of its decommissioning regulations. Citi: ens Awareness Network, 59 F.3d at 292. The First Circuit remanded the case to the Commission after finding illegal the Commission's 1993 shift in policy and its failure (1) to hold a ficaring on the CRP activities and (2) to issue either an Environmental Assessment ("EA") or an Environmental Impact Statement

("EIS") on the CRP. Citi: ens Awareness Network, 59 F.3d at 291-92, 292-93, 294-95.

In response to the First Circuit's decision, the Commission issued a Federal Register notice (1) advising the parties and the general public that it did not intend to seek further review of the Citi: ens Awareness Network decision; (2) 2 As expla ned m the statemem of considerations accompanymg the NRC's 1988 decommissiomng rule. "rnajor dis-manthng" means "mayw structural changes to rashoacuve components of the facihty or other major changes 53 Fed Reg 24.018. 24,025 (1988) 132

advising the public that it understood the decision to require a return to the interpretation of NRC decommissioning regulations that were in effect prior to January 14,1993; and (3) asking for public comments on whether the Commission should order Yankee Atomic to cease ongoing decommissioning activities pending any required hearings, and any otter matters connected with this issue.

III. PUBLIC CO51NIENTS The Commission has received numerous comments from both members of the public and industry organizations, including CAN and YAEC, the two parties to the Citizens Awareness Network lawsuit. In its comments, CAN argues that the NRC should hold formal adjudicatory hearings on the Yankee decommissioning plan based upon the language in the First Circuit decision and on its own generalized concerns about the alleged hazards associated with decommissioning.

YAEC, on the other hand, argues that the First Circuit's requirement of a hearing on remand is moot, because the CRP has been completed, and that the First Circuit's NEPA remand is moot because the NRC Staff issued an EA when it approved the Yankee NPS decommissioning plan, which included i

a review of the activities conducted under the CRP.3 Moreover, YAEC points out that the NRC Staff has already approved its decommissioning plan, see 60 Fed. Reg. 9870 (Itb. 22,1995), and argues that nothing in the First Circuit's decision invalidates that approval. Finally, YAEC argues that "no useful safety or environmental purpose would be served" by halting decommissioning pending a hearing and that such a halt would " greatly increase the costs to the ratepayer."

IV. ANALYSIS The question before the Commission on remand is not whether YAEC's current decommissioning activities are safe or environmentally benign but whether they are legal. Under the Commission's pre-1993 interpretation of its 3 The hrst Circuit issued the Onzen. Awarenert decision on July 20.1995. exactly 4 months after the day that YAEC now informs us the " lass sd.edukd CRP activity imuated dunng the last phase of the CRP' was completed See YAEC " Response to Request for Addinonal Informanon"(sept 25.19951 (filed in this docket) But YAEC neser claimed before the First Circuit that its March completion of the CRP rendered CAN's gnevance mont or mformed the Court of the CRP's compicuon Therefore. YALC is ill-posmoned to sl.um mootness now. after the hrst Orcuit has issued its deempn urk! with additional decommissiomng work remaimng to be dime Sec 59 F.3d at 293 n 8 The Comnussion agrees with YAEC. however. thal the claimed lack of a NEPA review has been rendered moot by the subsequent preparauon of the LA associated with the NRC staff's review of the Yankee decomnumomng plan But CAN may soll raise NEPA issues in any heanng request it files.

133 I

I i

j l

i i

regulations, now reinstated, YAEC may not conduct " major" decommissioning activities prior to final NRC approval of a decommissioning plan. And under the Commission's consistent pre-1993 practice, final decommissioning plan approval came only after an opportunity for an adjudicatory hearing. In this case, the NRC approval of YAEC's plan was not preceded by an adjudicatory hearing -

a fact that CAN stressed at the " informal public hearing" conducted on August i

16,1994, at Greenfield, Massachusetts. See generally Transcript of August 16, 1994. Thus, the NRC's approval of the Yankee NPS decommissioning plan cannot be accorded further legal effect, pending a hearing opportunity.

We now turn to YAEC's principal arguments why the Commission should not hold hearings on the decommissioning plan. First, YAEC maintains that

"[t]his matter could be remedied if the NRC were to publish a full explanation of the policy change

." Yankee Atomic Comments (Sept. 15,1995) at 2-3.

However, that option is unworkable. The First Circuit not only found the new rule interpretation unexplained, but also " seemingly irrational" and incapable of cure without a full hearing or rulemaking proceeding. See 59 F.3d at 291-92.

Whether or not the First Circuit was correct in its view, its decision is the law that the Commission must follow on remand in this case. Therefore, the Commission i

could not simply reinstate the 1993 policy, certainly not any time soon, and certainly not fast enough to avoid a decision whether to halt YAEC's current decommissioning activities at Yankee NPS.4 In fact, it is quite possible that the Commission's currently pending proposed rule change on decommissioning will be ready for issuance before a rulemaking on the old policy could be perfected.

Thus, the Commission declines YAEC's invitation to attempt to comply with the First Circuit decision by codifying through rulemaking the now-invalidated 1993 policy.

In addition, YAEC argues that the Rancho Seco decommissioning proceeding (the only proceeding in which a hearing was actually initiated) constitutes merely a " precedent of one" for the proposition that decommissioning plan approval requires a prior hearing. YAEC argues that its decommissioning plan can be distinguished fram the only other plans that were subject to the previous opportunities for a hearing, namely the Ft. St. Vrain and Shoreham plans, because unlike those plans the Yankee plan does not require the NRC to grant any amendments to the Yankee NPS license. See section 189a of the Atomic Energy Act,42 U.S.C. 9 2239(a)(requiring hearings on license amendments).

These arguments are unpersuasive. First, YAEC essentially concedes that its case is indistinguishable from Rancho Seco, where the Commission did not allow major dismantling prior to a hearing on the proposed decommissioning plan.

See Sacramento Afunicipal Utility District (Rancho Seco Nuclear Generating d The Comnussion ordmanly is not free to issue a new rule months from now and pve it nunc pro tunc or retroucuve effect See Rowen v Georgenmn Umverun #mpirut. 488 U s 204. 208-09 099D 134

l l

Station), CLI-93-12, 37 NRC 355 (1993). Second, the Commission did not offer the Shoreham and Ft. St. Vrain plans for public hearing on the basis of any amendments they might have invo!ved. Rather, those plans (like Rancho I

Seco's) were offered for hearing for the purpose of approving the licensee's overall plan for decommissioning. Approval of any amendments (or changes l

to the plant's technical specifications) was incidental to the approval of the process and goals contained in each plan. Third, YAEC's facts are incorrect:

the Shoreham decommissioning plan, like the Yankee NPS plan, did not involve the issuance of any license amendments.

Finally, YAEC points out that the First Circuit did not address the Yankee NPS decommissioning plan, as such, in Citi: ens Anureness Network because that issue was not before the Court. Moreover, argues YAEC, the NRC has already approved the Yankee decommissioning plan, which places it beyond review now. But the Commission cannot accept the rath formalistic response to Citizens Anureness Netwvrk that YAEC urges because, with the completion of the CRP, YAEC's position would result in no remedy at all for CAN on j

remand and would require the Commission to ignore the First Circuit's clearly i

expressed view that CAN should receive a hearing opportunity prior to further major dismantling at Yankee NPS See Citi: ens Anureness Network,59 F.3d at 292 ("Why offer the public an opportunity to be heard on the decommissioning plan if the actual decommissioning activities are already completed?").

'Ihe First Circuit was fully aware that the CRP was virtually complete, but nonetheless expected the Commission to offer CAN some relief on remand:

We recognue that this holdmg comes too late to prevent much of the CRP activity. There remains. however.. ignificant amount of radioactive matenal and structures at the Yankee NPS site, the removal of which will continue to affect CAN members. This continued removal will undoubtedly contmue to pose health. safety. and environmental questions.

thereby requiring StC oversight and NEPA compliance, 59 F.3d at 293 n.8. The Commission can only understand this statement to mean that CAN remained entitled to whatever process it was still possible for the Commission to offer. While it is true that YAEC's activities until now have proceeded according to the NRC's own view of its regulations, that view has now been struck down by the First Circuit. The Commission considers itself duty bound to take the only action available to it that gives meaning to the Court's decision: provide an adjudicatory hearing on YAEC's decommissioning plan in accordance with the pre-1993 interpretation of our regulations.

Understandably, YAEC expresses some frustration that it may suffer finan-cially if hearings on its decommissioning plan result in decommissioning delays.'

I other commenters. mcludsng the states of Massachusetts. vermont, and Rhode Island, have expressed sinular cost-based concerns.

135

Much of what YAEC alleges seems tied to a speculative fear that South Carolina authorities may again close the Barnwell waste disposal facility. Nonetheless, because of the Commission's court-directed change of course and YAEC's claim of financial hardship, the Commission in its hearing notice will direct an expe-dited hearing process in this case.

The long and short of this situation is that the Commission and YAEC lost this lawsuit in the First Circuit. Possible delay and financial impacts flowing from that defeat cannot excuse the Commission from providing CAN a meaningful remedy to effectuate the court's decision.

V.

CONCLUSION In sammary, the Commission holds that Citi: ens Awareness Network's rein-statement of the pre-1993 decommissioning policy requires issuance of a notice of opportunity for an adjudicatory hearing on the Yankee NPS decommissioning plan. Until that plan gains approval after the completion of the hearing, NRC regulations do not allow YAEC to conduct further " major" decommissioning activities at the Yankee NPS facility. The Commission directs YAEC to inform it promptly, but within no more than 14 calendar days, of the steps it is taking to come into compliance with the reinstated rule interpretation announced in this Decision.

It is so ORDERED.

For the Commission JOHN C. HOYLE Secretary of the Commission 4

Dated at Rockville, Maryland, this 12th day of October 1995.

136

l l

I I

r i

i l

l Atomic Safety and Licensing Boards Issuances ATOMIC SAFET( AND UCENSING BOARD PANEL l'

l B. Paul Cotter, Jr.,* Chief Administrative Judge James R Gleason,* Deputy Chief Administrative Judge (Executive)

Frederick J. Shon,* Deputy Chief Administrative Judge (Technical)

Members I

Dr. George C. Anderson Dr. Rchard F. Foster Dr. Kenneth A. McColiom Charles Bechhoefer*

Dr. David L. Hetrick Marshall E. Miller l

Peter B. Bloch*

Ernest E. Hill Thornas S. Moore

• I G. Paul Bollwerk lil*

Dr. FrarA F. Hooper Dr. Peter A. Morris Dr. A. Dixon Calhhan Elizabeth B. Johnson Thomas D. Murphy

• Dr. James H. Carpenter Dr. Charles N. Kolber*

Dr. Rchard R. Parizek Dr. Rchard F. Cole

• Dr. Jerry R. Kline*

Dr. Harry Rein Dr. Thomas E. Elleman Dr. Peter S. tam

• Laster S. Rubensteen Dr. George A. Ferguson Dr. James C. Lamb Ill Dr. David R. Schenk i

Dr. Harry Foreman Dr. Emmeth A. Luebke Dr. George F. Tdey

• Permanent panel members I

-. =

b N

Cite as 42 NRC 137 (1995)

LBP-95-17 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION l

ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:

Thomas S. Moore, Chairman Dr. Richard F. Cole Dr. Charles N. FePaer in the Matter of Docket No. 50-440-OLA-3 (ASLBP No. 90-605-02-OLA)

CLEVELAND ELECTRIC ILLUMINATING COMPANY, et al.

(Perry Nuclear Power Plant, Unit 1)

October 4,1995

'Ihe Licensing Board grants the Intervenors' motion for summary disposition in this proceeding involving a license amendment to remove from the facility technical specifications the schedule for the withdrawal of reactor vessel material surveillance specimens.

STATUTORY CONSTRUCTION: GENERAL RULES Because Appendix H of Part 50 is legislative in character, the rules of interpretation applicable to statutes are equally germane to determining that regulation's meaning. I A Sutherland. Statutory Construction 5 31.06 (5th ed, 1992).

137

STATUTORY CONSTRUCTION: GENERAL RULES Where the meaning of a regulation is clear and obvious, the regulatory language is conclusive and we may not disregard the letter of the regulation.

We must enforce the regulation as written.

STATUTORY CONSTRUCTION: GENERAL RULES We may not read unwarranted meanings into an unambiguous regulation even to support a supposedly desirable policy that is not effectuated by the regulation as written. See 2A Sutherland, Statutory Construction $ 46.01 (5th ed.1992).

STATUTORY CONSTRUCTION: GENERAL RULES To discern regulatory meaning, we are not free to go outside the express terms of an unambiguous regulation to extrinsic aids such as regulatory history.

Aids to interpretation only can be used to resolve ambiguity in an cow >ocal regulation, neser to create it in a unambiguous one.

MEMORANDUM AND ORDER (Ruling on Motions for Summary Disposition)

In CLI-93-21, 38 NRC 87 (1993), the Commission reversed and reman'ded our ruling in LBP-92-4,35 NRC i14 (1992), that Ohio Citizens for Responsible Energy (OCRE) and Susan L. Hiatt, lacked standing to intervene in this operating license amendment proceeding. Thereafter, we admitted the Intervenors' sole proffered contention. As admitted, that con'ention states:

The portion of Amendment 45 to License No. NPF 58 wtuch remosed the reactor vessel material specimen withdrawal schedule from the plant Technical Specifications to the Updated Safety Analysis Report violates Section 189a of the Atomic Energy Act (42 USC 2239a) in that it depnves members of the public of the nght to notice and opportunity for a heanng on any changes to the withdrawal schedule.

We then invited the Intervenors to file a motion for summary disposition on their contention and the Applicants to file a cross-motion for summary disposition.

Those motions are now before us. The NRC Staff opposes the Intervenors' motion and supports the Applicants' cross motion. For the reasons set forth below, we grant the Intervenors' motion for summary disposition and deny the Applicants' cross-motion for summary disposition.

138

l A.

Our earlier ruling on standing in LBP-92-4 set forth the regulatory j

background underlying this license amendment proceeding and we need not repeat that history here. It suffices to note that section 182a of the Atomic Energy Act (AEA), 42 U.S.C. (2232(a), requires that an application for a nuclear power plant operating license include technical specifications for the facility. It further provides that the technical specifications become part of the operating license.1he Commission's regulation,10 C.F.R. Q 50.36, implements l

the statutory directive and generally describe the types of items that must be included in the technical specifications.

i

(

In 1987 the Commission initiated a program designed to encourage licensees to improve voluntarily the technical specifications of their facilities. As part of that program, the Staff issued Generic Letter 91-01 (Jan. 4,1991) providing guidance on the preparation of a license amendment to remove from the technical specifications the schedule for the withdrawal of reactor vessel material surveil-lance specimens. Specifically, the letter explains the function of the surveillance capsule withdrawal schedule and its relationship to other surveillance require-ments designed to prevent reactor vessel embrittlement. It then states that it is duplicative to retain regulatory control over the schedule through the license amendment process because the Commission's regulations in 10 C.F.R. Part 50, Appendix H, 9II.B.3 already reauire that a licensee obtain NRC approval for any changes to the withdrawal schedule. Finally, the generic letter provides that a licensee must commit to maintain the specimen withdrawal schedule in the updated safety analysis report.

i The Intervenors' contention challenges the procedural consequences of re-moving the material surveillance specimen withdrawal schedule from the Ap-plicants' technical specifications. They assert that such action deprives them of notice and an opportunity for hearing on future schedule changes in violation of the hearing provisions of section 189a of the Atomic Energy Act. In its summary disposition motion, the Intervenors state that their contention raises this single legal issue and that there are no factual matters in dispute.

Initially, the Intervenors assert that the withdrawal schedule traditionally has been part of the facility technical specifications and that, because of the hearing requirements of section 189a, technical specifications could be changed only after notice and an opportunity for hearing on the proposed change. Next, the Intervenors state that the amendment removing the withdrawal schedule from the technical specifications permits the Applicants to change the schedule without any notice or public participation even though 10 C.F R. Part 50, Appendix H, 6 II.B.3 of the Commission's regulations requires the NRC to review and approve the changes to the withdrawal schedule. Thus, according to the Intervenors, the only effect of the amendment is to remove the public from the process in violation of section 189a.

139

i In support of their argument, the Intervenors rely upon Union of Concerned Scientists v. NRC,735 F.2d 1437,1451 (D.C. Cir.1984), for the proposition that section 189a requires hearings on material licensing issues and Sholly v. NRC, 651 F.2d 780,791 (D.C. Cir.1980), for the proposition that an action granting a licensee the authority to do something it otherwise could not have done under existing authority is a license amendment within the scope of section 189a. He Intervenors then argue that the agency action at issue violates the Atomic Energy Act in that changes to the reactor vessel material specimen withdrawal schedule, which the NRC's regulations make matenal by requinng prior approval by the NRC, will be de facto license amendments, but will not be formally labeled as license amendments and noticed as such in the Federal ReFister with opportunity for a hearing.

Changes to the reactor vesset material specimen withdrawal schedule, with approval by the NRC, will give Licensees the authority to operate in ways in which they otherwise could not. Thus, they are de facto license amendments, and the public must have notice and opportunity to request a heanng. Anything less is in violation of the Atomic Energy Act.3 l

In opposing the Intervenors' summary disposition motion, the Applicants and the Staff agree that the Intervenors' contentiori raises a single legal issue and that there are no factual matters in dispute. Both parties also take the same position regarding the substance of the Intervenors' motion.

The Applicants and the Staff first argue that neither section 182a nor 10 C.F.R. 6 50.36 requires that the withdrawal schedule be included in the facility technical specifications. Specifically, they assert that the statute and regulations give the agency broad discretion in determining what information should be included in technical specifications. Additionally, they assert that applicable agency precedents provide that information such as the withdrawal schedule, which is unrelated to conditions or limitations required to obviate an abnormal situation or an event giving rise to an immediate threat to public health and safety, should not be placed in the technical specifications. And, because the j

withdrawal schedule is not required by statute or regulation to be included in the facility technical specifications, the Applicants and the Staff maintain that there is no basis for requiring it to remain there even if it traditionally has been included in the technical specifications in the past.

Next, the Applicants and the Staff argue that the removal of the withdrawal schedule from the technical specifications, with the consequence that future changes to the schedule are without notice and an opportunity for a hearing, does not violate the hearing provisions of the Atomic Energy Act. For their part, the Applicants assert that section 189a requires a hearing only as to issues that are material to the agency's license issuance or amendment decision. Rey I Motion for Smmary Dnpositmn (Feb 7,1994) at 4 5 [ hereinafter Inservenors' Motmn) 140

argue that here the withdrawal schedule is not material to the agency's license issuance decision so it can be removed without running afoul of section 189a. In support of their argument, the Applicants do not independently seek to establish the immateriality of the withdrawal schedule to the license issuance decision.

Rather, the Applicants rely solely upon the Staff's assertion contained in the Staff's answer to the Intervenors' motion that the withdrawal schedule is not material to the Staff's license issuance decision. Finally, the Applicants argue that, because the withdrawal schedule is not material to the license issuance decision, the schedule properly can be removed from the technical specifications and future changes in the schedule will not be de facto license amendments that are outside the Applicants' licensing authority.

Similarly, the Staff does not directly challenge the legal proposition asserted by the Intervenors that agency action granting a licensee permission to operate in ways in which it otherwise could not, is a licensing action within the meaning of AEA section 189a and that a change in the withdrawal schedule is such an action.

Rather, the Staff argues that the removal of the withdrawal schedule from the facility technical specifications does not violate the hearing provisions of section 189a because all changes in the withdrawal schedule do not require prior agency approval and therefore such changes are not material to the agency's license issuance decision. Contrary to the Intervenors' argument that the withdrawal schedule is material to the agency's license issuance decision because the Commission's regulations require NRC approval of changes to the withdrawal schedule, the Staff asserts that the Intervenors have misinterpreted 10 C.F.R. Part 50, Appendix H,6II.B.3, and that the regulation is ambiguous. According to the Staff, the regulatory history of Appendix H, which it presents through a Staff affidavit and a Staff memorandum to the Commission, SECY-83-80 (Itb.

25, 1983), shows that the Commission intended to incorporate the applicable American Society for Testing and Materials (ASTM) Code into the regulation.

Further, the Staff asserts the regulatory history establishes that changes to a withdrawal schedule that conform to the ASTM Code need not be submitted to, and approved by, the agency. Rather, the argument continues, only changes to the schedule that do not conform to the applicable ASME Code, and hence the regulation, "would likely require prior Commission approval in the form of a license amendment."2 Thus, the Staff argues that the withdrawal schedule can be removed from the technical specification without violence to section 189a.

B.

We need not belabor the arguments of the Applicants and the Staff that the removal of the withdrawal schedule from the facility technical specifications does not violate section 182a of the Atomic Energy Act or 10 C.F.R. 6 50.36.

The Intervenors concede this point and readily admit that removal of the 2 NRC staff Response to intervenors' Monon for summary Disposanon (Mar. 7.1994) at 27 (heremafter NRC staff Response]

141

withdrawal schedule from the technical specifications does not violate any legal strictures.

He Intervenors do not agree, however, with the Staff's additional assertion that this admission is fatal to their motion for summary disposition. According to the Staff, the fundamental issue here is whether the withdrawal schedule is required by law or regulation to be included in the facility technical specifica-tions, if not, the Staff claims there can be no basis for requiring the withdrawal schedule to remain in the technical specifications and the Intervenors' summary judgment motion should be denied. De Intervenors, on the other hand, argue that the focus of their contention is not on whether the withdrawal schedule remains in the technical specifications and that the "Intervenors are not insist-ing that the schedule be included in the Technical Specifications."3 Rather, the Intervenors assert that their contention deals with the loss of hearing rights en future changes to the withdrawal schedule in violation c' AEA section 189a as a consequence of the challenged license amendment.

Conttary to the Staff's assertion, the Intervenors' concession, i.e., that the removal of the withdrawal schedule does not violate the Commission's regulations, is not fatal to their motion. Similarly, the issue whether the withdrawal schedule is required by law or regulation to be included in technical specifications is not the fundamental question before us. Rather, the only issue before us is the one presented by the Intervenors' contention. That contention focuses exclusively on the asserted violation of AEA section 189a hearing rights caused by future changes in the withdrawal schedule without notice and an opportunity for hearing due to the removal of the schedule from the facility technical specifications. As the Commission stated in reversing our earlier ruling that the Intervenors' lacked standing, "[wlith the license amendment in effect, future changes to the withdrawal schedule no longer require notice and an opportunity for a hearing under section 189a."4 Thus, the fundamental issue before us is whether the lack of notice and opportunity for hearing on future changes to the withdrawal schedule violates the Intervenors'section 189a hearing rights. And, the parties' approach to this AEA section 189a hearing rights issue 5 has further narrowed the question to whether a change in the withdrawal schedule is a material license issuance decision.

The Intervenors' argument in support of this question is premised on the legal proposition announced in Union of Concerned Scientists v. NRC, 735 F.2d at 1451, that section 189a requires a hearing on issues material to the agency's licensing issuance decision. fiom this premise, the Intervenors argue that,' because 10 C.F.R. Part 50, Appendix H, 6 II.B.3 requires revisions in 8 tntervenors' Motion at 6 d CLI.93-21. 38 NRC at 93

• Sn supra pp. I40 4l 142 l

1 l

the withdrawal schedule to be approved by the NRC prior to implementation, changes in the schedule are material licensing decision issues and, as such, can only be made in conformance with section 189a after notice and an opportunity

{

for hearing. De linchpin of the Intervenors' argument, therefore, is their assertion that the Commission's regulations require prior agency approval of any changes to the withdrawal schedule.

In opposing the Intervenors' position, the arguments of both the Applicants and the Staff accept the Intervenors' premise that material licensing issues trigger section 189a hearing rights. They both argue, however, that future changes to the withdrawal schedule are not material licensing issues. He Staff reaches this conclusion by arguing that the Intervenors have misinterpreted the Commission's regulations and that Appendix H does not require that all revisions to the withdrawal schedule be submitted to the agency for approval before implementation. He Applicant reaches this same conclusion by relying exclusively on the Staff's assertion that revisions in the schedule are not material.

Hus, the crux of the Staff's opposition, and, in turn, the Applicant's opposition to the Intervenor's argument, is the Staff's interpretation of the Commission's regulations. Accordingly, resolution of the Intervenors' summary disposition motion rests upon the proper interpretation of Appendix H, 9 II.B.3. If the Intervenors' interpretation is correct, then their summary disposition motion must be granted and the Applicants' cross-motion must be denied. Contrarily, if the Staff's interpretation is correct, then the Intervenors' motion must be denied and the Applicants' cross-motion must be granted.

C.

The starting point for analyzing any regulation is the language and i

structure of the regulation itself,' here Appendix H of Part 50 titled " Reactor Vessel Material Surveillance Program Requirements." Because Appendix H is legislative in character, the rules of interpretation applicable to statutes are equally germane to determining that regulation's meaning.' Herefore, in construing any part or section of Appendix H, 6 II.B.3, that portion of the regulation may not be considered in isolation but must be considered in reference to the entire regulation so as to produce a harmonious whole.8 In doing so, we first turn to the text of the Commission's regula' ion.

Section I, of Appendix H, labeled " Introduction," begins by stating that the purpose of the material surveillance program is to monitor changes in the fracture toughness properties of ferritic materials in the beltline region of reactor vessels resulting from neutron irradiation and the thermal environment. It next indicates

'long Island Liglitmg Co. (shoreham Nuclear Power Stanon, Ume 1) At.AB-900. 28 NRC 275. 288. rewew decimed. CLiss-11. 28 NRC 603 (19n8) See Pennsylvama Welfare Department v. Davenport. 495 U.s 552.

557-58 (1990)-

7 i A sutherLind, Staturury Construcnon i il 06 (5th ed 1992).

s 2A id l 46 05 143

that fracture toughness test data from the material specimens in surveillance capsules periodically withdrawn from the reactor are to be used as described in Appendix G of Part 50. That Appendix specifies, inter alia, the fracture toughness requirements for reactor vessels. The introduction for Appendix H j

concludes by stating that editions E 185 73, -79, and -82 of the ASTM Code l

" Standard Practice for Conducting Surveillance Tests for Light-Water Cooled Nuclear Power Reactor Vessels" referenced in Appendix H have been approved for incorporation by reference by the Director of the Federal Register and that notice of any changes to the material incorporated by reference will be published in the Federal Register.

Section II of the regulations, titled " Surveillance Program Criteria," first provides in paragraph A, that no surveillance program is required for reactor vessels for which it can be conservatively demonstrated that peak neutron fluence at the end of the design life of the vessel will not exceed 10t7 2

n/cm. For reactor vessels that cannot meet this requirement, paragraph B provides that they must have their beltline materials monitored in accordance with Appendix H.

Subparagraph B.1 then states:

l That part of the surveillance program conducted prior to the hrst capsule withdrawal nmst j

meet the requirements of the edition of ASTM E 185 that is current on the issue date of the ASTM Code to which the reactor vessel was purchased. Later editions of ASTM E 185 may be used, but including only those editions through 1982. Rr each capsule withdrawal after July 26,1983, the test procedures and reporung requirements must meet the requirements of ASTM E 185-82 to the extent practical for the con 6guration of the specimens in the capsule.

Nr each capsule withdrawal prior to July 26,1983 either the 1973, the 1979. or the 1982 edition of ASTM E 185 may be used.

Subparagraph B.2 then details the various requirements for the placement and attachment of surveillance capsules in the reactor vessel followed by Subparagraph B.3, which states:

[a] proposed a ahdrawal schedule must be submitted with a technicaljustufcati<m as specsped in f $0 4 The proposed schedule must be approsed prior to implementation \\ emphasis supphed).

Finally, paragraph C of section II addresses the requirements for integrated surveillance programs for multiple reactors. The last part of Appendix H, section III, titled " Report of Test Results " sets forth the vanous reportmg requirements j

for the surveillance program.

In support of their argument that changes to the withdrawal schedule are ma-terial licensing issues, the Intervenors argue simply that "the plain language of Appendix H requires licensee submittal of the schedule and prior NRC approval 144

..- _~

of the schedule before implementation."' The Staff, on the other hand, argues that the language of section II.B.3 is ambiguous and that the meaning of the provision must be found in its regulatory history. Specifically, the Staff asserts that the regulation "does not explicitly address changes to an approved schedule, nor does it indicate that prior approval is required for any change to an approved schedule, no matter how insignificant."80 As previously mentioned, the Staff claims that the regulatory history of Appendix H indicates that only changes in the withdrawal schedule that do not conform to the applicable ASTM Code need to be approved by the agency prior to implementation.

Contrary to the Staff's argument, however, its claim that Appenctix H is ambiguous cannot be squared with the plain meaning of the regulation. On its face, section II.B3 clearly and unambiguously states that "[a] proposed withdrawal schedule must be submitted" to the agency and "[t]he proposed schedule must be approved prior to implementation." This language cannot reasonably be understood to mean anything other than what it plainly says, i.e.,

the NRC must approve proposed schedules before they are implemented.U As the Supreme Court has stated in interpreting a statute a court should always turn first to one, cardinal cannon before all others. We hase stated tirne and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: " judicial inquiry is complete."l2 Thus, where, as here, the meaning of the regulation is clear and obvious, the regulatory language is conclusive and we may not disregard the letter of the regulation. Rather, we must enforce the regulation as written. Similarly, we may not read unwarranted meanings into an unambiguous regulation even to support a supposedly desirable policy that is not effectuated by the regulation as written.U Further, to discern regulatory meaning, we are not free to go outside the express terms of an unambiguous regulation to extrinsic aids such as i

regulatory history. Aids to interpretation only can be used to resolve ambiguity in an equivocal regulation, never to create it in an unambiguous one.

In this instance, however, the Staff would disregard the plain meaning of the regulation to invent an ambiguity where none exists. It does this in a transparent

'Intervenors' Answer to NRC staff Response to Intersenors' Monon for sununary Disposinon and Lneensees' Cross Monon for sununary Disposition (Apr. $.1994) at 4

'"NRC staff Response at 19 20 0 Cf San Lua Obtspo Mothers for Peace v NRC.151 F 2d l287. I'\\0 (D C Cst.1984). sucated m part and reh's en banc granted em other usses.160 F 2d 1320 (1985); ofJ en banc.189 Y 2d 2% s ert dented. 479 U.s 923 (1936)

U Connectucut Natsonal Bank v Germaun. 503 U s 249. 253-54 \\\\992> (quonng Ruhm v United States. 449 U.s.

424. 430 (1981); (atations onvited)1 See Reses t Ernst & Young.122 L. Ed 2d 525. 535 (1993); United States v ClarA. 454 U s 555, 560 t1982). Hoisc v Smith,452 U s. 473. 483 (1981)

U See 2A Sutherland, supra, i 46 of 145

~

1 I

attempt to avoid the consequences of the plain meaning rule, thereby permitting it to delve into regulatory history in an attempt to support an argument that section i

II.B.3 of Appendix H only requires agency approval of proposed withdrawal j

schedules that differ from the schedules contained in the incorporated ASTM Code. According to the Staff, the regulation is ambiguous because it does not explicitly address changes, including insignificant changes, to an already approved schedule. To make the regulation conform to its ambiguity argument, however, the Staff necessarily reads a word into section II.B.3 that is not there. It seeks, in effect, to insert the word " initial" before the term " proposed withdrawal schedule"in the first sentence of the regulation to convey the meaning that there only can be one withdrawal schedule for a reactor vessel and that any change j

or revision to that one schedule, or even a new subsequent schedule, is an amendment to the single, original schedule. Only by this unwarranted insertion j

of a word into the regulation can it rationally be argue! that the regulation is ambiguous.

But neither any imagined word nor any ambiguity is in the regulation. When the words of section II.B.3 are given their ordinary meaning, the regulation speaks to the very circumstances the Staff recites. In simple and straightforward language, the regulation states that a proposed withdrawal schedule must be submitted to the Staff and approved before implementation. By definition, a schedule that is " proposed" is one that is offered "for consideration, discussion, acceptance, or adoption."" Thus, under its literal terms, a new schedule or any change to an already implemented schedule, significant or otherwise, must be considered a " proposed" schedule and, as such, inust be submitted to the agency and approved prior to implementation. This is what the plain words of the regulation say and this is what it means. Accordingly, section II.B.3 is unambiguous and there is no need to consult the regulatory history of the provision to discern its meaning as the Staff argues.

Nonetheless, assuming arguendo that the language of this regulation is ambiguous so that we may turn to the regulatory history of the provision to j

aid in its interpretation, we still dc not find the Staff's argument persuasive. As originally promulgated, Appendix H specified the number of capsules and the specific withdrawal schedules to be followed." It also provided that "[p]roposed withdrawal schedules that differ from those specified in paragraphs a. through

f. shall be submitted, with a techiical justification therefor, to the Commission for approval. The proposed schedule shall not be implemented without prior Commission approval."i* In 1983, the Commission amended the regulation

" nebster's Third New Internatwnal Dwtwnary 18l9 091l y "See 10 C F.R. Part 50. Appendis H. I11 C 3 a f 0974t 16 14 at 3 g 146 l

l l

essentially to its current form." Specifically, it deleted the withdrawal schedules from the original version and in their place incorporated by reference in section l

II.B the various editions of the ASTM E 185 Code, including Table 1 of each of those editions that contains a withdrawal schedule." At the same time, the Commission changed the provision dealing with agency approval of nonconforming schedules to state that "[a] proposed withdrawal schedule must be submitted witn a technical justification therefore to the Director, Office of Nuclear Reactor Regulation, for approval. The proposed schedule must be approved prior to implementation."" Subsequently, in 1986 the latter provision was again amended to its current form when the Commission, by referencing 10 C.ER. 650.4, sought to standardize document submission requirements throughout the agency's regulations.

The Staff is correct that the 1983 amendment of Appendix H incorporated by reference the various editions of the E 185 ASTM Code (including Table 1 of those editions) into the regulation. The introduction to Appendix H and the l

agency response to certain public comments on the proposed rule that are part of the rulemaking record 2i> make that clear. There is absolutely no regulatory history, however, to support the remainder of the Staff's argument that Appendix H, 9II.B.3 means that only those changes in a proposed withdrawal schedule that do not conform to the applicable ASTM Code E 185 Table I need to be approved by the agency before implementation.:' The Commission's 1983 deletion of specific withdrawal schedules from the original regulation and its j

incorporation by reference of various ASTM Code withdrawal schedules - a substitution of qualitatively similar but quantitatively different schedules - does not advance the Staff's argument. The Staff's argument overlooks the fact that along with this change the Commission deleted the provision that specifically limited any requirement for prior agency approval of schedules only to those that differed from the schedules set forth in the regulation and substituted a l

new comprehensive requirement that the agency approve all proposed schedules "Sce 10 C F R. Part 50, Appendix H (19M)

'8 See Proposed Rule. 41 Fed Reg 75.536,75.537 (1980)(noung deletion of withdrawai schedules from regulation "because the requirements for withdrawal schedules contained in the 1979 edinon of ASTM E 185 provide sausfactory entena for scheduhng surveillance informanon gathenng").

"10 C F R. Part 50, Appenda H. I11 B 3 (194) 20 See NRC staff Response at 23 & n 32.

21 in suppen of its argument deahng with the regulatory history of Appenda H. the staff parually rehes upon an affidavit of several staff members. Sec. < g. NRC staff Response at 20 ("tslome of the regulatory history for Appendia H is provided in the attached affidavit") To the estent that the affidavit contains more than a recitauon of pnmary sources of regulatory hutory, ie, final rules, proposed rules, statements of consideranons.

and matters in the rulemakmg record, it is not a legiumate source of regulaicry history Only contemporaneous regulatory history can redect the intent of the Comnussion that promulgated the regulanon Sec. r x. Remlution Tnur Corp. v Cmfed Emanctal Corp. 57 F.3d 1231.1242 (3rd Car 1995) subsequent revisiomst hutory is not vahd regulatory history. Ser Sullnwr r FmArlarem. 496 U s 617. 632 (1990)(? Arguments based on subsequent legulauve history. hke argumenes based on antecedent futunty. should not be taken senously.

. ) (scaha. J.

concurring in part).

1 1

1 147 l

l

prior to implementation.22 The amendment of this provision imparts a meaning to Appendix H,6 II.B.3 exactly the opposite of the meaning the Staff asserts.

Indeed, only if the 1983 amendment of the nonconforming schedule provision had retained the gist of its original form would the Staff argument have any plausibility. Thus, even if we accept for the sake of argument that section II.B.3 is ambiguous so that we may turn to the regulatory history to aid in its construction, the Staff's interpretation finds no support there. In sum, the text of section II.B.3 of Appendix H, even when read in conjunction with the selected portions of regulatory history relied upon by the Staff, simply cannot be read reasonably to mean that only those proposed withdrawal schedules that do not conform to the applicable ASTM Code need be approved by the agency prior to implementation. Moreover, as should be obvious, the Commission's policy on improving facility technical specifications cannot alter the plain language or meaning of Appendix H.22 D.

For the foregoing reasons, the Intervenors' motion for summary dispo.

sition is granted. Correspondingly, the Applicants' cross-motion for summary disposition is denied. Our grant of the Intervenors' motion, however, does not invalidate the license amendment at issue or require that the withdrawal schedule be returned to the technical specifications. The Intervenors are not insisting that the withdrawal schedule be included in the facility technical spec-ifications. Rather, the Intervenors' contention only challenges the consequences of the amendment that would deprive them of notice and an opportunity for hearing on any future changes to the withdrawal schedule. Because Appendix H, III.B.3 currently requires that a proposed withdrawal schedule be approved See 48 Fed Reg 24.008, 24.008 0983) (where in statement of consideranons accompanymg Anal rule the 22 Comnussion notes that it changed the reportmg requirement in part 111 of the regulanon from a praposed 90 days of capsule withdrawal to one year from that ume "because capsule withdrawal schedules (alteadyl must be approved by the Director. ofhee of Nuclear Reactor Regulanon, as provided in paragraph 11 B1 of Appendit H").

23 Addiconally, we note that the Staff's interpretanon before us of Appendit H. Ill B 3 conRiets with its mrerpietation of that same prousion in Genene letter 9101. The letter to all NRC reactor heense holders accompanymg the genene letter states that "secuon 11 B 3 of Appendit H to 10 CFR Part 50 requires the submittal to. and approval by, the NRC of a proposed withdrawal schedule for matenal specimens before implementauon.

Hence, the placenwns of this schedule in the [lechnical specineauonsi duplicates the controls on changes to this schedule that have been established by Appendix H " letter to all Holders of operating Licenses or Construction Pernuts for Nuclear Power Reactors from Jarnes G. Parilow, Associate Director for Projects. office of Nuclear Reactor Regulauon dan 4.1991) In %e sein, the genene letter itself states that "[tlhe removal from the [ technical speci6 canons) of the schedule for the withdrawal of reactor sessel matenal surveillance specimens will not result in any loss of regulatory control because changes to this schedule are controlled by the requirements of Appendix H ta 10 CFR Part 50" Genene Letier 91-01 dan. 4.1991) at 2. See also CLi-9k21. 38 NRC at 119 (where the Comnussion charactenzes the genene lener as mdicaung that "the Comnu.sion's regulanons under 10 CFR Part

50. Appendix H. I t! B 3. already mandare pnor NRC approval of any changes to the withdrawal schedule"). In its response to the Intersenors' summary duposanon motwn, the staff cuphenusucally desenbes ;n a footnote its carher condicong inteipretation of Appendix H. t il B 3 by statmg that "[iln hmdsight. It appears that [Genene Letterl 91-01 does not express the staff's views on this matter with precisna" NRC staff Response at 27 a 33 The statf also indicales that it is developmg clan 6cauon for the sta.cments in the generic lener and considenng whether a rulemabag as necessary No such clanfaanon or rulemalung has occurred to date Needless to say, it appears that the staff's interpretanon of Appendit H. ill B 3 in the genene letter is correct 148

l by the agency prior to implementation, any such requested change is a request for a material licensing action that triggers section 189a hearing rights.24 Thus, as long as this regulatory provision remains in its current form, the grant of the Intervenors' motion requires that the agency treat any future proposed with-drawal schedule as a license amendment and provide notice and an opportunity

!a a hearing in accordance with section 189a of the Atomic Energy Act.

With our resolution of these motions for summary disposition, there are no j

further matters for decision in the proceeding and the proceeding is terminated.

In accordance with 10 C.F.R. 6 2.786(b)(1), Commission review of this Mem-orandum and Order may be sought by filing a petition for review within 15 days after service of this Memorandum r.ad Order. Requirements regarding the length and content of a petition for review and the timing, length, and content of an answer to such a petition are set forth in 10 C.F.R. 6 2.786(b)(2)-(3).

It is so ORDERED.

THE ATOMIC SAFETY AND LICENSING BOARD Thomas S. Moore ADMINISTRATIVE JUDGE Richard F. Cole ADMINISTRATIVE JUDGE i

Charles N. Kelber ADMINISTRATIVE JUDGE Rockvific, Maryland 4

October 4,1995

• See Unoon of Concerned Scorntrsts v NRC,135 F 2d at 1451. See generally Crn ens Amareness Network v NRC,59 F.3d 284,294 (1st Cn 1995) l 149

~-

_-~

Cite as 42 NRC 150 (1995)

LBP-95-18 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:

James P. Gleason, Chairman Dr. Jerry R. Kline G. Paul Bollwerk,111 Thomas D. Murphy, Altemate Board Member in the Matter of Docket No. 40-8027-EA (ASLBP No. 94-684-01.EA)

(Source Material License No. SUB-1010)

SEQUOYAH FUELS CORPORATION and GENERAL ATOMICS (Gore, Oklahoma Site Decontamination and Decommissioning Funding)

October 26,1995 MEMORANDUM AND ORDER (Approval of Settlement Agreement)

Pending before the Board is a proposed Settlement Agreement (hereinafter Agreement) submitted by the Nuclear Regulatory Commission (Staff) and Sequoyah Fuels Corporation (SFC).' Native Americans for a Clean Environment and the Cherokee Nation (Intervenors) filed objections to the Agreement, and replies to the objections have been submitted by the Staff and SFC.2 The Board I Joim Motion for Approval of Seulernent Agreement (Aug 24. 1995).

2 Intervenors' Response to Joint Monon (Sept 8.1995); NRC Staff Reply to Intersenors' Response (Sept 22.

1995); SFCs Reply to Intervenors' Response (Sept. 15. 1995). In the interest of completeness, the Board grants, and considers herein, the Intervenors' Monon for trave to Reply to SFE and NRC Staff (Sept. 25.1995) amt SFCs Monon for Leave to Respond to Intervenors' Motion (Sept 29. 1995).

150

received objections to the Agreement submitted by the Tulsa District Corps of Engineers to the NRC Staff.3 SFC, Intervenors, and the Staff filed comments on the Corps of Engineers' concerns. The Staff's counsel has also forwarded a letter from the Office of the Attorney General of Oklahoma requesting additional time to review the Agreement.4 BACKGRGUND This proceeding involves an NRC October 15, 1993 Order to SFC and its parent corporation, General Atomics (GA), concerning fulfilling a regulatory obligation for ensuring decommissioning funding of SFC's licensed facilities located at Gore, Oklahoma. The Agreement, appended hereto, proposes to re-lease SFC from liability under the Order and the pending igation in exchange for SFC's agreement pledging all its net assets and revenues to the decommis-sioning completion.

Intervenors' objections are based on four assertions: first, that due to a provision in the Agreement that SFC's obligations thereunder are " subject to the rights of senior lien-holders," the Board should authorize discovery concerning the particulars of such liens to prevent creditors from plundering SFC's assets.

Intervenors, in particular, allege that a lien involving a note to the Kerr-McGee Corporation (Kerr-McGee) does not appear to be the sole res[ionsibility, if any, of SFC (Intervenors' Response to Joint Motion at 4-8); second, the Agreement does not protect from SFC creditors

• funds from two accounts (decommissioning reserve and escrow) that have been previously set aside for decommissioning ou. at 814); third, that a review of the " reasonableness" of SFC's business contractual arrangements with an organization, ConverDyn, needs to be undertaken (id. at 14-15); and fourth, since the Agreement, based on SFC's commitments thereunder, rescinds the October 15, 1993 NRC Order against it, the NRC should not permit SFC to be exempt from future assessments for decommissioning in the event SFC resumes business operations. Nor should any successors in title to SEC's property be absolved from liability for decommissioning funding (id. at 14-16).

The Corps of Engineers, Tulsa District, complains that the Agreement limits financial commitments by SFC and GA for decommissioning costs and would foreclose future action on enforcement of such costs in the event of a failure to fully fund remediation of federally owned areas adjacent to the SFC facility.

These areas presumably are under the jurisdiction of the Corps of Engineers.

On behalf of the Department of Wildlife Conservation, the Oklahoma Attorney 3 1siter, sanford to NRC tounsel (Sept. 11.1995) 4 trtter. Hale io NRC Counsel (Sept 29.1995) 151 l

l l

j j

General's Office expresses a concern that the Agreement may permit creditors to divert SFC resources and its letter hints of SFC's financial difficulty and a possible bankruptcy plan.

DISCUSSION He Agreement defines SFC's net assets as the company's gross assets, subject to SFC's obligations to ConverDyn and the rights of senior lien-holders; net revenues are defined as SFC's gross revenues after paying necessary expenses subject again to SFC's obligations to ConverDyn and the rights of senior lien-holders. See Agreement, Definitions, l.d and 1.e.

He Staff and SFC stipulate that SFC cannot provide funds for decommissioning in excess of its net assets and net revenues, as those terms are defined, and cannot obtain financial assurances for decommissioning beyond pledging its net assets and revenues.

See Agreement at 1 (p.160, infra). Intervenors' first question concerning the possible plundering of SFC's revenue and assets by creditors raises the issue as to what SFC can commit for decommissioning costs after it pledges all its possessions in terms of assets or revenues. Intervenors concentrate on a lien on SFC's property supporting a Kerr-McGee promissory note which is also an obligation of two other subsidiaries of GA, See Intervenors' Reply to SFC and NRC Staff at 2-6. In Intervenors' view, GA might influence SFC to pay the indebtedness to Kerr-McGee alone thus diverting funds required for decommissioning for an obligation partially owed by GA's other subsidiaries.

Id. at 3.

Intervenors do not present arguments of substance here. Whatever the legal status of creditors' claims against SFC, they are unaffected by the terms of the Agreement proposed. Such claims, if any, can only be resolved by action between the claimant and SFC. The NRC is neither impacted by nor involved in the resolution of other parties' legal disputations. And the same conclusion holds for the arguments advanced concerning the SFC debt to Kerr-McGee.5 It i

is immaterial to the consideration of the Agreement before us. The legal rights and duties related to this obligation exist regardless of the action contemplated by the proposed Agreement and have no relevance to whether the Agreement should be ratified. The NRC is not left helpless in the event of any deception on the part of SFC. As the Staff points out, any transfer of SFC assets and revenues to claimants who had no legal entitlement to them would subject SFC to "an enforcement action (by the NRC).

for violating the Settlement Agreement."

5 Although not rehed on for this opimon it should be noted that sFC has subnutted a letter refleeung Kerr-McGee's intenuon not to seek legal acuon agamst the sFC unul aher the pending settlement Agreement is approved and imrienwnted and decomnussiomng completed. sFC's Motion for trave to Respond to Intervemws' Motion..

152

i Under the Agreement, SFC must commit all of its net assets and revenues to the completion of decommissioning. See Staff Reply to Intervenors' Response at 4-5. It is also noted that SFC is obligated to provide the Staff with copies of annual audited financial statements as well as make financial records available for Staff inspection. Agreement at 5 (p.164, infra).

l The reasoning underlying the Board's conclusions concerning Intervenors' first objection, supra, also negates any validity to the second - that concerning the protection of two decommissioning accounts from the claims of creditors.

Both the Staff and SFC point out that the Intervenors misconstrue the nature of these accounts and that neither is affected in any manner by the Settlement Agreement. Suffice it to state that these accounts are required to be established pursuant to SFC's license and NRC regulations, and neither is impacted by the Agreement. The net assets and revenues of SFC are to be utilized for decommissioning expenses under the Agreement and, if any funds considered in either or both reserve accounts are secured for decommissioning, such allocations are not changed by the pending Agreement. The Agreement is not intended to, nor does it, permit any financial allocations or obligations for j

decommissioning previously committed by SFC to be obviated by the terms therein. The Agreement and SFC and Staff statements concerning this matter make it evident that any monies committed or obligated for such purposes would simply become part of the net assets and revenues that, after the payment of reasonable and necessary expenses, are pledged by the Licensee to decommissioning. See NRC Staff's Reply to Intervenors' Response at 5-7; SFC's Reply to Intervenors' Renewed Opposition at 4-9.

In regard to Intervenors' third argument, that the " reasonableness" of SFC's

- arrangements with ConverDyn be reviewed, we fail to understand how the Board

)

can undertake an analysis of the merits of SFC's business transactions or what objective such scrutiny would serve. Intervenors offer no suggestion as to the criteria the Board should utilize in any evahiation of SFC's contractual arrangement with ConverDyn. In the Agreement, SFC commits itself to

" diligently pursue" its contractual rights with ConverDyn until decommissioning has been satisfactorily completed. And it should be noted that the Staff retains enforcement authority to compel SFC's compliance with the Agreement. See Agreement at 4 and 6 (pp.163 and 164-65, infra).

Finally, Intervenors' contentions raise the specter of the Agreement failing to obligate SFC for decommissioning expenses, if the Corporation pursues other profitable business activities, and that successors in title to SFC's property would be absolved from decommissioning indebtedness. Intervenors' first argument has no foundation since it is clear, as the Staff points out, that the Agreement reaches SFC's present and future assets and revenues from all sources and, with regard to the second, no provision of the Agreement immunizes any successors in title 153

from decommissioning expenses. See Staff Reply to Intervenors' Response at 8-9.

As indicated, supra, the Tulsa District Corps of Engineers in correspondence to the Staff has submitted objections to the proposed Agreement. Although the letter purports to reflect the participation of the Corps as a partner in "any Settlement Agreements," the Tulsa District is not a party in this proceeding.

Consequently, the allegations contained in this correspondence cannot be con-sidered in the evaluation of the Agreement. It does appear that a misunder-standing may exist on the part of the District Office concerning the provisions of the Agreement, since, despite allegations to the contrary, the Agreement does provide for financial commitments on the part of SFC and does not exempt Gen-eral Atomics from the NRC October 25,1993 Order With respect to the letter addressed to NRC Counsel from the Oklahoma State Attorney General's Office, the correspondence indicates, on behalf of the State's Department of Wildlife Conservation, concern over certain terms of the Agreement and requests ad-ditional time to consider its effect on State interests. Similar to the opinion expressed above, the State of Oklahoma is not a party to the proceeding herein and, consequently, the Board lacks jurisdiction to review the concems raised in the State's communication.

In light of the foregoing, and all of the circumstances of this proceeding, the Board finds no basis for disapproving the proposed Agreement. A settlement of contested proceedings has long been encouraged by the Commission. See 10 C.F.R. 69 2.759, 2.1241. In guidance to boards on licensing proceedings, j

the Commission's policy statement encourages boards to conduct settlement conferences for the purpose of resolving contentions by negotiation. Statement of Policy on Conduct of Licensing Proceedings, CLI-81-8,13 NRC 452,456 (1981).

In evaluating agreements on enforcement orders, the Staff's position for settlement, under the Commission's prescriptions of 10 C.F.R. 6 2.203, is required to be provided "due weight" by the Board but if required in the "public interest," an adjudication of the issues involved therein may be ordered. The premise underlying the terms of the Agreement appears to be that the agency will receive from SFC all that the NRC would be entitled to receive in the absence of an agreement and a decision issued in NRC's favor. Even in the event of the financial failure of the organization producing a bankruptcy filing as intimated by the State of Oklahoma correspondence, supra, the Staff would be in no worse position than a bankruptcy filing during or after a decision in the present litigation. The result would be the same since the agency would1._eive from the licensee all that a Bankruptcy Court Judge would allow under existing bankruptcy laws. It should be noted that the possibility of bankruptcy filings are always weighed in the development of settlement agreements and we have 154 l

n

..n-..

no reason to suspect its impact - or lack thereof - has not been evaluated here.'

In summary, the avoidance of protracted and needless litigation is in the public interest and an objective of settlement negotiations.7 The appropriateness of the Agreement submitted for our approval should be viewed in the light of the allegations made by the Staff in the October 15,1993 Order that forms the foundation of this proceeding. The fundamental charge of that order is that the funding plan SFC proposes for decommissioning its facility at Gore, Oklahoma, is not adequate to meet the Commission's regulations and that GA, as an active parent organization, is responsible for providing for any deficiencies therein.

Although settlement negotiations are currently being undertaken with GA,8 there is no waiving of the agency's claims against GA expressed or implied by the terms of the Agreement before us. Accordingly, since the charges against GA still exist and SFC pledges to furnish all of its assets anu revenues that it would have to provide if a judgment were to issue against it in the proceeding, we cannot conclude that there is an issue herein that requires an adjudication in the public interest.

Pursuant to the Commission's regulations (10 C.F.R. I 2.203), and upon con-sideration of the Joint Motion for Approval of the Settlement Agreemer.t, we find that settlement of this matter as to Sequoyah Fuels Corporation's participa-tion as a party, as proposed by the parties to the Settlement Agreement should be approved. Accordingly, upon consent of the parties to the Settlement Agree-ment, and giving due weight to the views of other parties to this proceeding, the Settlement Agreement is hereby approved and incorporated into this Order, pur-suant to section 61 and subsections (b), (i), and (o) of section 161 of the Atomic Energy Act, as amended, 42 U.S.C. $s 2093, 2201(b), 2201(i), and 2201(o),

and is subject to the enforcement provisions of the Commission's regulations and Chapter 18 of the Atomic Energy Act of 1954, as amended, 42 U.S.C.

Q 2271, et seq. Sequoyah Fuels Corporation is hereby dismissed as a party to this proceeding.

I In accordance with 10 C.F.R. 65 2.760 and 2.786, this Order constitutes the final action of the Commission 40 days after the date of issuance, unless any party petitions for Commission review or the Commission takes review of the decision sua sponte. Commission review of this Order may be sought by filing a petition for review within fifteen (15) days after service of this Decision. Any other party to the proceeding may, within 10 days after service

'h should not be expected that ermronrnental protection of the pubhc heahh and safety can be vinated by bankruptcy proceednags. See Msdlantic Bank v. New Jersey Department of Enveronmental Protectron. 474 U s.

494 (1986L 7 The staff indicates that settlement negouanons and dehberations have consuned a 6-rnonth penod of urne See NRC staff Reply to latervenors' Response to Joint Motion for Approval of Agreernent at 1.

8 See Board order Extending Discovery stay (oct 13.1995L 155

4 of a petition for review, file an answer supporting or opposing Commission review. Requirements regarding the length and content of a petition for review or an answer to such petition are specified in 10 C.F.R. 9 2.786(b)(2)-(3).

IT IS SO ORDERED.

FOR THE ATOMIC SAFETY AND LICENSING BOARD' James P. Gleason, Chairman ADMINISTRATIVE JUDGE 4

Jerry R. Kline ADMINISTRATIVE JUDGE Rockville, Maryland October 26,1995 l

Separate Statement by Bollwerk, J.

Because I have concerns about certain aspects of the proposed settlement agreement between Sequoyah Fuels Corporation (SFC) and the NRC staff, I am not prepared at present to make the requisite "public interest" finding pursuant to 10 C.F.R. 5 2.203. Specifically, I would ask for additional clarification from SFC and the staff regarding several matters.

)

i 1.

STAFF ENFORCEMENT AUTHORITY UNDER l

THE AGREEMENT I

Paragraph 7 of the agreement states that "[nlothing in this Agreement shall limit the NRC Staff's ability to take appropriate enforcement action to enforce SFC's compliance with this Agreement

" In responding to concerns ex-pressed by intervenors Native Ameaicans for a Clean Environment (NACE) and the Cherokee Nation regarding the improper dissipation of SFC assets and

' Copies of this Order are being sent this daic to couowl for Sequoyah Fuels Corporanon General Alornics and interwnors NACE and the Cherokee Nanon by facsinule transnusssion and to staff counsel by E-rnail transnussion through the agency's wide area network systers 156 i

revenues,' both SFC and the staff suggest that this provision gives the staff the necessary authority to rectify any problems in this regard. See SFC's Reply to. Intervenors' Opposition to Settlement Agreement (Sept. 15,1995) at 6-7

[SFC Reply); NRC Staff's Reply to Intervenors' Response to Joint Motion for Approval of Settlement Agreement (Sept. 22,1995) at 4 5 [ Staff Reply].

According to the staff, this clause provides ample protection because it allows the staff to " bring an enforcement action against SFC seeking sanctions for violating the Settlement Agreement if SFC did not seek the return of such funds to be added to its pool of assets or revenues." Staff Reply at 5.

The October 1993 enforcement order at issue in this proceeding makes it apparent that an essential staff concern is the possibility that SFC revenues and assets will ultimately be insufficient fully to cover the costs of decommissioning SFC's Gore, Oklahoma facility. See 58 fid. Reg, 55,087, 55,089 (1993).

Consequently, a central component of the public interest assessment of the SFC/ staff settlement agreement now before the Board must be the degree to which the agreement ensures that the already limited assets and revenues of SFC will be protected from inappropriate dissipation so as to be available for decommissioning. And if, as the staff's own description suggests, staff enforcement authority does not reach beyond requiring SFC to ask for the improperly disbursed funds back, a legitimate question seemingly exists about the degree to which the proposed agreement serves the public interest function of properly maintaining the pool of decommissioning funds.2 Undoubtedly, this potential problem of improper disbursement and recapture of SFC funds would be of considerably less concern if the agency has the authority to maintain an action to recover improperly disbursed funds from the party receiving those funds. Whether this authority exists is, at best, problematic.

Therefore, befere approving the agreement, I would explore with the parties the question of the agency's authority in this regard. And, if it turns out that the agency's enforcement arsenal does not include this authority, the sufficiency of the staff's oversight efforts relative to the reasonableness of SFC expenditures and disbursements likely should be the subject of further scrutiny as well.3 Although none of the parues have raised or addressed the pomt, as a procedural matter there is a quesuon 3

whether the concerns about the settlement agreement expressed by NACE and the Cherokee Nanon in response to the Jomt monon for approval of the settlement agreement should be considered as, and assessed under the standards govermng the adnussibihty of. late-6 led contennons. See 10 C F R.12 714axi1 2 in considering the sufficiency of the protecuan afforded by the proposed agreement, the constraints on sFC's assets and revenues suggests that any staff enforcement action against sFC for improperly dnbursing assets is not hkely to produce more decomnussioning funds 3 Paragraph 5 of the proposed agreement prostdes that the staff will hase the nght to receive sFC annual audited financial statements and to have reasonable access to sFC financial records and books for audit purposes The staff has declared that it did not seek funher measures relaung to oversight of sFC expenditures such as pnor staff approval, because of a concern about intrusion into the managernent of the daily affairs of sFC. See staff Reply IContmueJ1 157

l II. BANKRUPTCY AND NOTICE TO THE STAFF In responding to intervenor concerns about the dissipation of assets to repay the claims of SFC creditors, SFC indicates that it has few secured creditors. The largest appears to be the Kerr McGee Corporation, which holds a $10.6 million note giving Kerr-McGee a lien on SFC's property, plant, and equipment. See SFC Reply at 3-4. While SFC seemingly is in default on this note because it has not made any principal or interest payments since August 1993, Kerr-McGee apparently will not make any attempt to foreclose on or otherwise enforce the note until decommissioning is completed.*

l

~ The degree to which SFC's response puts these intervenor concerns to rest is tempered by a recent submission from the State of Oklahoma that SFC may be considering bankruptcy. 'Ihe Board has not provided the parties with an opportunity to respond to the State's suggestion, leaving me unable fully to

)

assess its validity.5 On its face, however, it raises the specter that, because the agency seeking decommissioning funds in a bankruptcy proceeding may well be only an unsecured creditor, see Dollar Savings Association v. Eisen (in re METCOA. Inc., fdba The Pesses Co.), Case No. B83-00415, Adv. No. B85-0092, slip op. at 17-18 (Bankr. N.D. Ohio Nov. 18, 1986), some SFC assets will fall beyond the agency's reach for dedication to funding decommissioning activities.

Current agency regulations require that a source materials licensee like SFC need only inform the staff of a bankruptcy after it has occurred. See 10 C.F.R.

@ 40.41(f). Prior to approving this agreement, however, I would seek information from SFC and the staff regarding the likelihood of bankruptcy. At the same time, I would explore with the staff the question of whether, if the egreement provided for reasonable prior notice from SFC of its intent to file for bankruptcy, the staff 4

as 5 n.2. If the agency has no authonty to recapture improperly disbursed funds, then the quesuon of whether the staff oversight mecharusms included in the agreenrnt are adequate seemingly is an issue that merits further exploranon.

4 As part of an addinonal reply 6hng. sFC supphed a letter from a senior Kerr McGee ofncial staung that Kerr-McGee has no plans to imriate collecuon on the sl06 nulhon note unul decomnussioning is completed see sFC's Reply to Intervenors' Renewed Opposition (sept. 29.1995) at 3-4 Kerr.MeGee's aenon in this regard is not particularly surpnsing. gnen that foreclosure on the note bkely would bnng the sFC propeny back mio Kerr.McGee's hands, along with the accompanying responsibihty for clean-up of comanunanon on the property 8 This subnussion is in a september 29,1995 letter from the Attorney General of oklahoma to staff counsel, a copy of wiuch was provided to the Board by staff counsel by letter dated october 5.1995.

i The state of oklahoma is not a party to this proceeding Nonetheless, under the agency's rule govermng interested goveranental encues it readily could become a parucipant in this case see 10 C F R. 5 2 715(c).

Moreover, the recogruzed hnutanon that the state must "take the proceeding as it hnds it." see Pacific Gas and acctnc Co (Diablo Canyon Nuclear Power Plant. Units I and 2). ALAB-600.12 NRC 3. 8 (1980). hkely would not preclude the state from commenung on the proposed settlement Panicularly in the context of the Board's "pubhc interest" deternunanon regarding the pendmg settlement proposal. giving the state's concerns rninimal recogmuon by affording the other partes an opporturury to address them does not seem untoward

\\

l 158 l

I

_.,m would be able to take any action prior to bankruptcy that would provide it with j

a preferential claim to secure SFC assets for the purpose of decommissioning, l

IIL GLOBAL SETTLEMENT j

General ' Atomics (GA), the other object' of the October 1993 enforcement order, and the staff currently are engaged in negotiations in an attempt to settle the staff's claims that GA is jointly and severally liab!c for decommissioning funding for the Gore facility. Based on the infornation now before me, I am

]

unable to conclude that action now to approve a f.eparate settlement between SFC and the staff-as opposed to waiting to give " global" consideration to all settlements encompassing GA, SFC, and the staff-is in the public interest.

Putting aside any jurisdictional questions about the ntent and nature of GA control over SFC, there is a clear linkage between GA and SFC by.

reason of their parent-subsidiary relationship and the involvement of GA and its subsidiaries, including SFC, in the ConverDyn partnership agreements under which a substantial portion of any SFC revenue purportedly is to be generated, in l

light of these inter-relationships, it would seem that the Board's best opportunity fully to understand and assess the implications of any staff settlement with either GA or SFC would come when the Board has before it staff settlements with both parties that would resolve this case in toto,'

Because of this concern, before approving this settlement agreement I would request additional briefing by the parties on the question of why delaying a Board ruling on the SFC/ staff agreement until the conclusion of the ongoing settlement

. negotiations.betwcut GA and the staff is inconsistent with the public interest in ensuring that the settlements reached in this proceeding provide adequate funding for decommissioning SFC's Gore facility.

l

' Also in this regard, in contrast to the stated conclusion in the staff's october 1993 order that the ConverDyn agreenrnis were inadequate to ful611 the decommissiovung funding requirements of 10 C F.R. Il4036,4042, in the absence of funchng comnutnwnts from GA, see $8 Fed. Reg $5.09192. it is not now apparent whether the sFC/ staff agreement is consistent with these regulatory requirernents. The agreement does not provide any speci6c decommissicmng funding Agure for shah sFC is hable, whether through the ConverDyn agreements or otherwise, and GA's contnbuuon to decommissiorung funding. if any, is soll indeternunate because of the j

pendency of settlement negotiations. By decoupling the settlenwns agreements of GA and sFC, the Board has

)

not abandoned its preroganve. in assessmg whether the pubhc inserest will be served by any GA settlement, to consider whether the decomnussiomng funds generated under the SFC settlement agreement and the GA settlement 1

agreement, in combinacon, mill cover the total costs of decommissicrung the Gore facthty and 'he rami 6 canons

)

of any fundmg shortfalt 159

'I

ATTACHMENT SETTLE 51ENT AGREEMENT THIS AGREEMENT is made by and between Sequoyah Fuels Corporation

("SFC") and the Staff of the United States Nuclear Regulatory Commission

("NRC" or " Commission"), to wit:

WHEREAS, on October 15, 1993 the Commission issued an order to SFC and General Atomics ("GA") (58 Fed. Reg. 55087 (Oct. 25,1993)) (the

" Order"), relating to the site decontamination and decommissioning funding for the facilities located in Gore, Oklahoma that are licensed under NRC License No. SUB-1010, Docket No. 40-8027 ("Sequoyah Facility"); and WHEREAS, a hearing on the Order o now being held before an Atomic Safety and Licensing Board (the " Board i m Docket No. 40-8027-EA, and SFC and the NRC Staff are parties in such hearing; and WHEREAS, the NRC Staff and SFC understand and acknowledge titat, in meeting any obligations that SFC has under existing regulations or may have under future regulations, SFC cannot provide funds for decommissioning the Sequoyah Facility in excess of all of its " net assets" and " net revenues," as those terms are defined in this Agreement, and is unable to obtain and provide financial assurance for decommissioning beyond pledging all of its net assets and net revenues; and WHEREAS, the NRC Staff and SFC understand and acknowledge that it is in the public interest to avoid the dissipation of their manpower and financial resources in litigation, particularly since it is in the public interest that SFC's resources be devoted to completion of decommissioning of the Sequoyah Facility; and WHEREAS, both the NRC Staff and SFC have engaged in negotiation and compromise because they recognize that certain advantages and benefits may be obtained by each of them through settlement and compromise of the controverted matters now pending; and WHEREAS, the NRC Staff and SFC believe that this Agreement is in the public interest.

NOW, THEREFORE, in consideration of the mutual promises made herein, SFC and the NRC Staff agree as follows:

1.

Definitions. The following terms used in this Agreement are defined as follows:

a.

" Gross assets." SFC's gross assets include, but are not limited to, cash and cash equivalents on hand, accounts receivable, materials and supplies inventories, prepaid expenses, unbilled receivables, 160

property, plant and equipment, and any other known or future assets owned or acquired by SFC.

b.

" Gross revenues." SFC's gross icvenues include, but are not limited to, standby fees and additional standby fees received by SFC under the "Sequoyah Fuels Corporation Standby Agreement" (Nov.19, 1992) with ConverDyn, revenues received by SFC under the "Se-quoyah Fuels Corporation Conversion Services Agreement" (Nov.

19,1992) with ConverDyn (these foregoing two agreements are here-after collectively referred to as the "ConverDyn Arrangements"),

revenues received by SFC under contracts for conversion services with entities listed in Schedule C of the foregoing agreement, rev-enues f rom the sale or salvage of plant, equipment, material or sup-plies, cash flow from financing activities, and any other known or future revenues derived by SFC from whatever source.

c.

" Reasonable and necessary expenses." SFC's reasonable and nec-essary expenses include:

(1) reasonable and necessary expenses paid by SFC that are consistent with SFC's obligations under this Agreement and its business needs and sound judgment, exercising due care j

to preserve its assets and revenues for the completion of i

decommissioning; and (2) salaries and benefits of SFC personnel and expenses for con-tractor personnel that are reasonable and commensurate with salaries and benefits of personnel performing similar functions for other companies engaged in activities of similar complex-ity in the nuclear industry; and (3) payments for taxes, utilities, reasonable and necessary insur-ance expenses, reasonable and necessary professional services, license fees, inspection fees, and any other payments made to fulfill SFC's contractual obligations; and (4) payments for conversion services provided by ConverDyn in satisfaction of SFC's current conversion contracts; and (5) reasonable and necessary costs incurred in meeting SFC's on-I going decontaminat:on and decommissioning obligations, in complying with regulatory requirements, and in complying with orders or otherwise fulfilling obligations in' posed by competent federal, state, and local governmental authorities; and 161 i

i l

(6) reasonable and necessary costs incurred in the sale or salvage of SFC's plant, equipment, materials and supplies; and (7) costs paid for goods and services provided to SFC by GA and/or its parent companies, affiliates and subsidiaries ("Re-lated Companies") that are rendered to SFC at rates consistent with those charged by GA, and/or Related Companies, to other customers for comparable services, and not in excess of rates otherwise available to SFC for performance of such services; and (8) general and administrative expenses and overhead costs and expenses allocated to SFC by GA and/or Related Compa-nies (not covered by the services charges referred to in sec-tion 1.c.(7) immediately above) that are allocated in accor-dance with established practices for allocating expenses among related privately held corporations, consistently applied, and consistent with generally accepted accounting principles; and j

(9) payments of debts incurred by SFC including principal and interest payments to SFC's creditors, including, but not limited to, those made in accordance with the two revolving notes, for $4.5 million and $2.5 million, respectively, currently in place with GA (the two notes together are hereinafter referred to as the " Lines of Credit"). All such payments shall be made in accordance with the reasonable and ordinary terms and conditions of SFC's agreements with its creditors.

d.

" Net assets " SFC's net assets are its gross assets, subject to its obligations to ConverDyn and subject to the rights of senior lien-holders.

e.

" Net revenues." SFC's net revenues are its gross revenues that are available after SFC has paid its reasonable and necessary expenses, subject to its obligations to ConverDyn and subject to the rights of senior hen-holders.

j 2.

SFC will carry out the funding plan described in the Preliminary Plan for Completion of Decommissioning submitted to the NRC on Rbruary 16, 1993, by devoting all of its net assets and net revenues to the completion of decommissioning of the Sequoyah Facility, in accordance with the requirements of the NRC, the Environmental Protection Agency, and any other state or federal agency with jurisdiction, until the NRC Staff determines that such decommissioning has been satisfactorily completed.

162

3.

SFC specifically pledges by this Agreement to devote all of its net assets and net revenues to completion of decommissioning and pledges to diligently pursue and use its best efforts to preserve all of its contractual rights under the ConverDyn Arrangements, until the NRC Staff determines that such decommissioning has been satisfactorily completed.

4.

In committing its net assets and net revenues to the completion of decommissioning, SFC's expenditure of funds to pay its reasonable and necessary expenses shall be consistent with its business needs and sound judgment within the following terms and conditions:

a.

SFC shall not enter into any agreement, or any amendment to an agreement, with GA and/or Related Companies which would require SFC to pay interest charges or fees in excess,2f those charges and fees normally charged by GA and/or such Related Companies for such loans to a similarly situated Related Company or to accept terms and/or pay interest charges or fees higher than those that would be available to SFC in a similar transaction negotiated at arms length with another lender; and b.

acknowledging and understanding that GA has deposited sums of money in two cash collateral accounts held by GA at a financial institution so that SFC could obtain a letter of credit for purposes of compliance with Oklahoma's workmen's compensation require-ments ($500,000) and a letter of credit for purposes of compliance with 1" CFR 5 40.36 ($750,000), that GA's deposit of these sums of money reduces the funds available to SFC pursuant to the Lines of Credit currently being provided by GA to SFC, and that SFC is obligated to repay these sums of money and would do so under the terms of the Lines of Credit, nothing in this Agreement shall be construed to prohibit or limit: (1) the return to GA of its funds currently held in the cash collateral accounts which support SFC's letters of credit;(2) the substitution of SFC funds for the cash col-lateral accounts held by GA, if SFC has the funds available to do so; or (3) the repayment of funds to GA by SFC under the terms of its Lines of Credit and in fulfillment of its obligations, if SFC has the funds available to do so; and c.

any sale or disposition of assets, as appropriate, reasonable and warranted in SFC's discretion, including the sale or transfer of assets to GA or Related Companies, shall be made at prices that assure that SFC receives payment at fair market value or salvage value upon the sale of such assets, such prices to be established either in good faith 163

arms length negotiations, exercising sound business judgment, or by obtaining an objective evaluation by an expert third party; and d.

SFC will exercise due care to preserve its entitlement to standby fees and additional standby fees by fulfilling its contractual obligations pursuant to the ConverDyn Arrangements.

5.

Until the NRC Staff determines that the decommissioning of the Se-quoyah Facility has been satisfactorily completed, SFC will provide the NRC Staff with copies of those annual audited financial statements in which SFC's financial information is consolidated. In addition, SFC will make its financial records and books available for audit by the NRC Staff at any reasonable time.

6.

The NRC Staff and SFC agree that SFC's commitments in the Agree-ment represent a good faith effort to provide for the funding of the decommissioning of the Sequoyah Facility and to assure that its assets and revenues are effectively utilized to fulfill SFC's obligations and to complete decommissioning. Therefore, the NRC Staff hereby rescinds the Order insofar as it applies to SFC and accepts the terms of this Agreement in lieu of those provisions of the Order that are directed to SFC. Subject to the provisions of section 7 below, the NRC Staff also agrees to forbear from taking any enforcement or other action against SFC or its current of former officers, directors or employees (relating to their actions in their official capacities), (a) based upon any alleged requirement to provide funds for decommissioning the Sequoyah Facil-ity or to pro'.:de financial assutance for decommissioning the Sequoyah Facility beyond the commitments of all of SFC's net assets and net rev-enues provided for in this Agreement, whether such requirement arises under any current NRC regulations or under any future regulation that might alter, redefine or clarify the currently applicable requirements, or (b) based upon the facts alleged in the Order and/or those reasonably known by the NRC that are related to the subject matter of the Order.

7.

Nothing in this Agreement shall limit the NRC Staff's ability to take appropriate enforcement action to enforce SFC's compliance with this Agreement, or to take appropriate enforcement action based upon mate-rial information that is not currently available to or known by the NRC Staff or based upon evidence that any representation in this Agreement is incomplete or inaccurate in a material respect. The NRC Staff and SFC acknowledge that the terms and provisions of this Agreement, once approved by the Board, shall be incorporated by reference into an order issued by the Board, as the term " order" is used in subsections (b), (i) and (o) of section 161 of the Atomic Energy Act of 1954, as amended 164 l

l l

(the "Act"),42 U.S.C. 9 2201, and shall be subject to enforcement pur-suant to the Commission's regulations and Chapter 18 of the Act, 42 U.S.C. Q 2271 et seq.

8.

Nothing in this Agreement shall be construed to limit the NRC Staff's ability to continue to pursue litigation with GA regarding those provi-sions of the Order, and any related factual allegations in the Order, that are directed to GA.

9.

The NRC Staff and SFC understand and acknowledge that this Agree-ment is the result of a compromise and shall not for any purpese be construed as an admission of the facts alleged or conclusions of law drawn in the Order, as an admission of the alleged joint and several re-sponsibilities of SFC included in Section VII.A and other sections of the Order, or as an admission by SFC of any violation of 10 CFR 6 40.36, 10 CFR 5 40.42, or of any statute, regulation, license condition, or other regulatory requirement.

10. The NRC Staff and SFC agree that no inference adverse to either party shall be drawn based upon the parties having entered into this Agreement.

They further agree that any factual findings or conclusions of law reached in any proceedings against GA relating to the Order shall not be binding on SFC, and SFC shall not be prejudiced by such findings or conclusions in any subsequent administrative or judicial proceedings involving SFC.

11. The NRC Staff and SFC agree to file a joint motion requesting that the Board approve this Settlement Agreement and dismiss SFC from the proceeding, pursuant to the Commission's regulations in 10 CFR 6 2.203. Upon approval of this Settlement Agreement by the Board, without any substantive modification by the Board, the NRC Staff and 1

SFC agree that they will not appeal the Board's approval or otherwise

]

seekjudicial review of such approval. If this Agreement is not approved i

by the Board, or if this Agreement is approved by the Board but is modified in any substantive manner by the Board, or if any body or court to which the Board's approval is appealed reverses such approval or affirms the approval but modifies the Agreement in any substantive j

manner, either the NRC Staff or SFC may void this Agreement by giving written notice to the other party within ninety (90) days of such action by the Board, body or court, unless such 90-day period is extended by

)

written agreement of both parties. The NRC Staff and SFC agree that under such circumstances and upon request they will negotiate in good faith to resolve differences.

165

12. This Agreement shall become effective upon final action approving this Agreement by the Board.

IN WITNESS WHEREOF, the NRC Staff and SFC have caused this Settle-ment Agreement to be executed by their duly authorized representatives on this 18th day of August,1995.

FOR SEQUOYAH FUELS FOR THE NUCLEAR CORPORATION:

REGULATORY COMMISSION John H. Ellis Hugh L. Hompson, Jr.

President Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support

)

6 166

.-ww-mu-a-m.r.wm.,

---avmumaw-..ww4,agsa a -w.4c, mans,_m-,

mum,,-ggg,,,

k l

I Directors' Dec..sions i

Under 10 CFR 2.206 i

d s

l w

w

~ __

Cite as 42 NRC 167 (1995)

DD-95-21 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS Carl J. Paperiello, Director in the Matter of Docket No. 40-8027 SEOUOYAH FUELS CORPORATION (Gore, Oklahoma Facility)

October 23,1995 The Director of the Office of Nuclear Materials Safety and Safeguards de-nies in part a petition dated March 11,1995, filed with the Nuclear Regulavy Commission (NRC) by Native Americans for a Clean Environment (NACE),

requesting that the NRC take action with respect to the Sequoyah Fuels Corpo-ration (SFC) facility in Gore, Oklahoma. The petition requests that the NRC:

(1) reverse the NRC Staff's decision to permit SFC to proceed with site charac-terization without submitting a final Site Characterization Plan (SCP) by issuing an Order or a Confirmatory Action Letter obliging SFC to submit a final SCP by a date certain; (2) obtain a copy of the Environmental Protection Agency's (EPA) title search or perform a title search of all property used in connection l

with the SFC license in order to clarify the identity and ownership of all prop-l erty subject to NRC License No. SUB-1010; (3) issue an order forbidding SFC, Sequoyah Fuels International Corporation, Sequoyah Holding Corporation, or l

any other associated corporation that holds title to property under NRC License l

No. SUB.1010 from transferring any interest in any of its property before SFC l

applies for and receives a license amendment authorizing transfer; and (4) before l

issuing any such license amendment, find reasonable assurance that any entity acquiring an interest in the SFC property fully understands the nature of the li-abilities and responsibilities it is undertaking for cleanup and long-term care of the site and that it has the financial capability to carry out those responsibilities.

The Petitioner's request that SFC be ordered to submit a written final SCP by a date certain is denied. Petitioner's request that NRC perform a title search of property subject to NRC License No. SUB-1010 was citisfied by EPA's provision of a copy of the title search it had performed. Action on 167 1

s 5

l Petitioner's request for an order forbidding the transfer of any mterest in land subject to NRC License No. SUB-1010 before SFC applies for and receives a license amendment permitting such transfers is unnecessary because applicable regulations address Petitioner's concerns. Likewise, Petitioner's request that, before granting such a license amendment application, NRC ensure that potential purchasers of property be subject to NRC License No. SUB-1010 to be fully apprised of their obligations for site remediation and long-term care and that NRC ensure that such potential purchasers are financially qualified to do so, is unnecessary because applicable regulations address Petitioner's concerns.

DIRECTOR'S DECISION UNDER 10 C.F.R. s 2.206 L INTRODUCTION j

Native Americans for a Clean Environment (NACE) submitted to the Nuclear Regulatory Com nission (NRC), a " Petition for an Order Requiring Sequoyah Fuels Corporation to File a Final Site Characterization Plan (SCP) and for an Order to Obtain a License Amendment" (Petition) dated March 11,1995. NACE requested NRC to take action with respect to the Sequoyah Fuels Corporation (SFC or Licensee) pursuant to 10 C.F.R. s 2.206. The Petitioner requests that NRC:

(1) reverse the NRC Staff's decision to permit SFC to proceed with site characterization without submitting a final SCP, by issuing an Order or a Confbmatory Action Letter obliging SFC to submit a final SCP by a date certain; (2) obtain a copy of the Environmental Protection Agency's (EPA) title search or perform a title search of all property used in connection with the SFC license, in order to clarify the identity and ownership of all property subject to NRC License No. SUB-1010; (3) issue an order forbidding SFC, Sequoyah Fuels International Corpo-ration, Sequoyah Holding Corporation, or any other associated corpo-ration that holds title to property under NRC License No. SUB-1010 from transferring any interest in any of its property before SFC ap-plies for and receives a license amendment authorizing transfer; and (4) before issuing any such license amendment, find reasonable assur-ance that any entity acquiring an interest in the SFC property fully understands the nature of the liabilities and responsibilities it is un-dertaking for cleanup and long-tenn care of the site and that it has the financial capability to carry out those responsibilities.

The petition alleges the following bases for its requests:

l 168 l

l l

l i

l l

(1) The NRC Staff illegally and improperly excused SFC from its obli-gation to submit a final SCP; (2) SFC is presenting a " Trust Indenture" to several towns and the county of Sequoyah for the creation of an industrial park; (3) Neither SFC's letter to Mr. Main (Secretary of Commerce, Oklahoma Department of Commerce), the Fact Sheet, nor the Trust Agreement, itself, refers to the fact that SFC has been ordered by NRC and EPA to characterize the extent of the contamination in the 1400 acres that surround the 85-acre processing area, the focus of site characterization and remediation efforts; nor do those documents refer to the other sources of potential contamination, consisting of groundwater migration from the admittedly contaminated processing area, effluent streams and ditches, and the Carlisle School (located on the land proposed for an industrial park, and used by SFC as a laboratory);

(4) The Trust Indenture depicts the 1400 acres of land subject to NRC License No. SUB-1010 as the candidate area for the industrial park; SFC has made conflicting representations regarding the size of the

" facility" or " site" to NRC and in the Trust Indenture.

SFC responded to the petition by a letter dated March 29,1995, and requests that the petition be denied in all respects.

By letter dated March 31, 1995, NACE supplemented its petition. NACE states that SFC is conducting site characterization by utilizing the EPA Facil-ity Investigation Workplan (FIW), which was prepared for the EPA pursuant to requirements of the Resource Conservation and Recovery Act (RCRA). Peti-tioner asserts that by relying on the FIW to conduct site characterization, SFC has neither understood nor implemented NRC Staff criticisms of the draft SCP.

Petitioner asserts that NRC should require SFC to submit a written final SCP because the FIW does not:

(1) Resolve NRC comments related to site hydrogeology and vertical and lateral contamination; (2) Resolve NRC sample density concerns; or (3) Provide for characterization of the DUF, processing, decorative pond, and parking lot areas.

By letter dated May 10,1995, the Director, Office of Nuclear Material Safety and Safeguards acknowledged receipt of the petition, and informed the Petitioner that the petition would be evaluated under section 2.206 of the Commission's regulations.

I have completed my evaluation of the matters raised by the Petitioner and have determined that, for the reasons stated below, the petition is denied in part, was satisfied in part, and NRC regulations address the Petitioner's concerns related to the requests for issuance of orders related to tiansfer of property.

169

l l

II. BACKGROUND l

From 1970 until July 6,1993, SFC operated a uranium conversion facility at j

a site located in Gore, Oklahoma, under the authority of NRC License No. SUB-1010, issued pursuant to 10 C.F.R. Part 40. The main process was the conversion of uranium oxide (yellowcake) to uranium hexafluoride. A second process, initiated in 1987, consisted of the conversion of depleted uranium hexafluoride j

to uranium tetrafluoride, the first step in producing depleted uranium metal.

i After the discovery of contaminated soil surrounding structures used by SFC for its licensed activities, NRC Staff issued an order suspending SFC's j

authorization to operate its conversion facilities. See " Order Modifying License

]

(Effective Immediately) and Demand for Information," EA 91-067 (Oct. 3, i

1991). After studies by SFC, operational and organizational changes by SFC, extensive NRC inspections, and several public meetings, NRC, on April 16, 1992, lifted the order suspending the SFC license and authorized SFC to resume operation of its conversion facility.

In November 1992, SFC (and subsequently in writing) informed NRC that operation of its main process for the conversion of uranium oxide (yellowcake) to j

uranium hexafluoride was permanently terminated and that the second process, the conversion of depleted uranium hexafluoride to uranium tetrafluoride, would be terminated by July 1993. SFC formally notified NRC of its intentions to i

terminate all conversion processes and seek license termination in accordance with 10 C.F.R. 5 40.42(c), in a letter dated fbbruary 16, 1993. In addition, a i

proposed plan to address decommissioning issues related to the SFC facihty, entitled " Preliminary Plan for Completion of Decommissioning (PPCD)," was enclosed in its letter of February 16,1993.

By letter dated March 23,1993, NRC Staff notified SFC that its 10 C.F.R.

$ 40.42(c) notification had been accepted, and that activities at the site should be limited to those related to decommissioning. By letter dated July 7,1993, SFC i

notified NRC Staff that SFC had ceased all operational licensed activities. Since that time, SFC has restricted its activities to disposal of contaminated material i

and planning for decommissioning.

On August 4,1993, SFC and EPA Region VI signed an Administrative Order on Consent (AOC), establishing a schedule for compliance with section 3008(h) of the Solid Waste Disposal Act, as amended by the RCRA, as further amended by the Hazardous and Solid Waste Amendments of 1984,42 U.S.C. 5 6928(h).

The AOC required SFC to perform a number of tasks aimed at monitoring site conditions, site characterization, corrective measures, and financial assurance.

A key element of the AOC is the RCRA Facility Investiption (RFI) Workplan.

The RFI Workplan data needs closely parallel those of an NRC SCP. For SFC's site, both the RFI Workplan and the SCP involve characterization of much of the same property. The major difference between the RFI Workplan and the 170

SCP rests only on the constituents that are analyzed (nonradioactive materials for EPA and radioactive materials for NRC).

l Common to both plans is the characterization of the soil, bedrock, and groundwater underlying the site. SFC agreed to drill a series of wells la the next lower water-bearing strata to better define the geology underlying the site j

and to sample for contamination. These wells are in addition to the 100 wells previously installed by SFC at the site. Whether or not the deeper wells planned by SFC to address EPA concerns will also satisfy NRC concerns related to the vertical extent of radiological contamination will have to await the evaluation of sample analyses.

To avoid unnecessary duplicative regulatory actions, EPA and NRC drafted a site-specific Memorandum of Understanding (MOU). Under the terms of this MOU, EPA and NRC will exchange pertinent documents, keep each other infctmed of planned actions, and, to the extent possible, coordinate major characterization and remediation tasks on similar schedules. The MOU was signed by EPA on September 21,1995, and by NRC on September 25,1995.

SFC submitted to EPA a draft RFI Workplan in January 1994. EPA reviewed the draft RFI Workplan and provided SFC comments in a letter dated August j

25,1994 Based on the comments provided by EPA, SFC made changes to the

}

draft RFI Workplan and a final Workplan was approved by EPA in December 1994. In accordance with the requirements of the AOC, SFC must submit a final RFI Report to EPA by December 1995, SFC submitted a draft SCP to NRC in January 1994 Interested persons, including EPA, the United States Geological Survey (USGS), and NACE 4

reviewed the draft SCP and provided comments to NRC. Consistent with the i

Staff's commitment to NACE, in a letter from J. H. Austin (NRC) to D. Curran (NACE), dated December 9,1993, to keep NACE involved in the review process, the NACE comments were discussed with representatives of NACE, NRC, and SFC in a May 31,1994 meeting.

NRC Staff performed an extensive review of the draft SCP and of all the comments regarding the draft SCP. Where appropriate NRC Staff factored those comments into NRC Staff's comments, which were transmitted to SFC by letter dated November 3,1994. The essence of NRC Staff's comments was that SFC l

must do substantially more sampling than proposed in the draft SCP. Additional sampling is necessary to reliably identify the types and extent of contamination i

on and around the SFC site. NRC Staff requested that SFC address the Staff's comments, or provide the basis for not making changes to the SCP.

In its November 1994 quarterly report to EPA, required by the AOC, SFC raised concerns related to possible duplication of SFC's decontamination and decommissioning efforts that could result in unnecessarily increased costs.

In January and February 1995, NRC Staff engaged in technical discussions with SFC regarding the November 3,1994 comments of the Staff concerning 171

l l

l the draft SCP. The discussions covered a broad range of issues related to site characterization and scheduling.

l By letter dated February 5,1995, the Director, Division of Waste Manage-ment, Office of Nuclear Material Safety and Safeguards, confirmed NRC Staff's understanding of SFC's verbal commitment, by telephone in early Itbruary 1995, to use NRC Staff's comments of November 3,1994, during site charac-terization and in SFC's preparation of its Site Characterization Report (SCR).

Furthermore, NRC agreed with SFC that the schedule for the SCR should par-l allel that for the RFI Report, in order to minimize possible redundancy and associated costs, and to facilitate the effective utilization of SFC resources. Ac.

I cordingly, NRC gave SFC a due date of January 15, 1996, for submission of a draft SCR. The Staff also reminded SFC that NRC may establish legally bind-ing requirements, if necessary, to ensure timely and effective remediation of Site Decommissioning Management Plan (SDMP) sites. The SFC facility is an SDMP site. In its March 29,1995 response to the petition, SFC again committed I

to address the NRC's comments on the SCP during conduct of the site charac-terization effort. SFC confirmed its understanding of the Staff's November 3, 1994 comments by a letter dated June 2,1995, in which SFC again committed to incorporate those Staff comments into its SCR.

III. DISCUSSION A.

Petitioner Requests That NRC Staff Reverse Its Decision To Permit SFC To Proceed with Site Characterization Without Submitting a Revised SCP, by Issuing an Order or Confirmatory Action Letter Requiring SFC To Submit a Written Final SCP Petitioner contends that by not requiring SFC to submit a written final SCP, NRC Staffillegally and improperly excused SFC from its obligations in violation of the:

(a) Timeliness in Decommissioning Rule; (b) NRC's " Action Plan to Ensure Timely Cleanup of Site Decommis-sioning Management Plan Sites"(Action Plan),57 Fed. Reg.13,389 (Apr.16,1992);

(c) NRC's December 29,1992 Demand for Information to SFC; (d) MOU between NRC and EPA; and i

l (e) NRC's commitments to Petitioner in a letter dated December 9,1993, that SFC would be required to demonstrate how it would sample all potentially contaminated areas as part of the SCP.

NRC Staff weighed the potential benefits, and the increased costs of and delays in decommissioning, of requesting SFC to revise its draft SCP in accor-dance with NRC Staff comments or to incorporate these revisions into the site 172 l

l l

I 1

l l

l l

I l

l characterization process and to demonstrate that the NRC comments were ac-commodated in the proposed decommissioning plan. SFC understood the NRC comments and had already agreed to incorporate into the site characterization process and SCR. Therefore, NRC Staff concluded that the objectives of site characterization could be met, and data appropriate to support a proposed de-commissioning alternative could be produced, if NRC Staff's comments were.

j implemented during site characterization. NRC Staff's action was intended to j

avoid potentially costly delays in decommissioning and to prevent duplication of regulatory actions, based on work already under way as a part of the EPA-approved RFI Workplan.

I:

Additionally, the Staff's action was consistent with agency efforts to stream-line the Site Decommissioning Management Plan (SDMP) regulatory review process.' The SFC site is an SDMP site. This streamlining involves, among other things, discontinuance of NRC Staff review of SCPs and SCRs prior to the submittal of decommissioning plans. Site characterization information will be considered by NRC Staff in its review of decommissioning plans. NRC regulations do not require the submission of SCPs or SCRs, but do require site characterization data to be submitted with the decommissioning plan. See 10 C.F.R. 6 40.42(f)(4)(i). Streamlining the SDMP process is consistent with NRC regulations.

Streamlining promotes a more coordinated and focused review of the li.

censee's characterization information and places greater emphasis on issues that affect the selection and implementation of a decommissioning approach.

Contrary to Petitioner's assertion, NRC Staff's action was consistent with the Timeliness in Decommissioning rule. Those amendments to NRC regulations establish specific time periods for submission of a decommissioning plan and completion of decommissioning, and were intended to reduce potential risk -

to public health and the environment at facilities after licensed activities have ceased. See " Timeliness in Decommissioning of Materials Facilities," 59 Fed.

Reg. 36,026 (July 15,1994). The Staff's February 5,1995 letter allowed SFC to proceed with site characterization on the condition that SFC include in its SCR the Staff's November 3,1994 comments regarding the draft SCP. The Staff determined that inclusion of those comments would produce adequate site characterization and would reduce delay. Although site characterization and the data derived during site characterization are' necessary inputs to a j

decommissioning plan,2 SCPs and SCRs are not expressly required by NRC regulations. The Staff did not release SFC from the " timeliness" rule or I

I On May 19,1995. the NRC staff bnefed the Comnussion on sDMP Pohey and Program issues. mcluding the staff's implenentation of streamhmng 2 The hcensee's decommissioning plan must include a desenption of the site. buildings. and outside areas affected by licensed activines 10 C F R. I 40 42(f M4Xit 173 m,_

from the requirement to submit a decommissioning plan. See 10 C.F.R. 6 40.42(f)(1). De Staff's action reduced potential delays in site characterization and decommissioning, and cannot be considered to have contributed to any delay in SFC's decommissioning the SFC site.

Contrary to being in violation of the NRC's Action Plan, NRC Staff's Rbru-ary 5,1995 letter to SFC was consistent with the plan. The Action Plan was intended to encourage compliance with NRC timeliness in decommissioning regulations. He Action Plan is not itself a rule and contains no enforceable standards. The Action Plan refers to submittal of an SCP, but does not recuire NRC approval. The Action Plan encourages licensees to enter into early con-sultation with NRC Staff regarding site characterization and decommissioning issues. Such consultation is intended to address site-specific conditions to en-sure that site characterization is appropriately planned and conducted, and of sufficient depth to support a selected decommissioning option. Consistent with the Action Plan, NRC Staff engaged in site-specific technical discussions with SFC regarding not only NRC's comments on the draft SCP, but also the com-ments of NACE, the USGS and EPA. See Section II, supra. The NRC Staff's Rbruary 5,1995 letter to SFC was consistent with the Action Plan, and cannot be considered to have contributed to any delay in compliance with timeliness requirements for decommissioning, for the same reasons that the Staff's action was consistent with the Timeliness in Decommissioning Rule.

Petitioner does not explain, nor is it apparent how, the NRC Staff's February 5,1995 letter contravened the December 29, 1992 Demand for Information (DFI) to SFC. As Petitioner notes, the February 13,1993 Preliminary Pbn for Decommissioning, submitted by SFC in response to the DFI, commits SFC to submission of an SCP to NRC and to implementation of the SCP by early 1994. The Staff in its Rbruary 5,1995 letter did not delay the submission or implementation of the SCP. To the coitrary, the Staff permitted SFC to proceed expeditiously with an SCP that NRC had reviewed and considers adequate, as long as the Staff's November 3,1994 comments are incorporated, which SFC has undertaken to do.

Contrary to Petitioner's assertion, NRC Staff's action in its letter of February 5,1995, did not violate the (then draft) MOU between NRC and EPA. The then draft MOU, as well as the final MOU, state that NRC will ensure that SFC develops and implements an SCP, which NRC Staff has done. Moreover, in the spirit of the EPA and NRC site-specific MOU, NRC and EPA have worked together to avoid unnecessary duplicative regulatory actions and their attendant costs. Specifically, after consultation with the EPA, NRC Staff agreed in its February 5,1995 letter to SFC's request that the schedule for site characterization and submission of the SCR should parallel that of the EPA RFI Workplan. The development of the EPA MOU and NRC MOU was a major consideration in NRC Staff's action allowing SFC to proceed with site characterization and to 174

incorporate NRC Staff's comments in the SCR, rather than to require submission of yet another version of the SCP, Contrary to the Petitioner's asserti ns, NRC Staff's action by its letter of February 5,1995, did not violate NRC's commitments to Petitioner, made in a letter dated December 9,1993, that SFC would be required to demonstrate how it would sample all potentially contaminated areas as part of the SCP. The December 9,1993 letter also stated that NACE's concerns would be addressed during NRC Staff's review of the SCP.

NRC Staff met these commitments to NACE. NACE reviewed the SFC draft SCP and provided comments m NRC Staff. NACE's comments were discussed in a meeting on May 31, 1994, with representatives from NACE, NRC, and SFC. All applicable NACE comments were incorporated into NRC Staff's comments and transmitted to SFC by letter dated Nover:ber 3,1994.

SFC verbally committed, by telephone in early Rbruary 1995, to use NRC Staff's comments of November 3,1994, during site characterization and in SFC's preparation ofits SCR. SFC confirmed its understanding of the Staff's November 3,1994 comments by a letter dated June 2,1995, in which SFC again committed to incorporate those Staff comments into its SCR. Accordingly, contrary to Petitioner's assertion, there is no basis to conclude that NACE's concerns will not in fact be addressed. Moreover, NRC remains committed to ensuring that SFC conduct a complete and accurate characterization of all radiological contamination on the SFC site and on property affected by SFC's licensed activities, through reviews of SFC's SCR and a subsequent decommissioning plan.

By letter dated March 31, 1995, NACE supplemented its petition. NACE states that SFC is conducting site characterizatior, by utilizing the RCRA Facility Investigation Workplan. Petitioner asserts that by relying on the EPA Workplan to conduct site characterization, SFC has neither understood nor implemented NRC Staff criticisms of the draft SCP. Petitioner asserts that NRC should require SFC to submit a written final SCP because the EPA Workplan does not:

(1) Resolve NRC comments related to site hydrogeology and vertical and 4

lateral contamination; (2) Resolve NRC sample density concerns; or (3) Provide for characterization of the DUF, processing, decorative pond, and parking lot areas.

As explained above, NRC Staff concluded after a series of discussions with SFC, that SFC does understand the Staff's November 3,1994 comments 1

regarding the draft SCP. Moreover, SFC has committed itself to incorporating those Staff comments during site characterization and in the SCR. In addition, NRC Staff concludes, after review of the EPA-approsed RFI Workplan, that:

175

(a) The approved RFI Workplan adequately addresses NRC comments re-garding questions of hydrogeology and the vertical and lateral extent of contamination; (b) The RFI Workplan, draft SCP, and the SFC commitment to incorporate NRC Staff's comments on the draft SCP into site characterization activities will together ensure adequate sampling for site characterization; and (c) The SCP provides for adequate characterization of the DUF, processing area (Unit 29), the decorative pond (Unit 26), and parking lot (Unit 31)

(see Figure 2 of the SCP).

NRC Staff has neither violated nor excused SFC from complying with any NRC regulatory requirements, the MOU between NRC and EPA, any NRC Staff commitments to Petitioners, or the December 29,1992 DFI to SFC. Petitioner has raised no health and safety concern arising from NRC Staff's action by letter of February 5,1995, permitting SFC to address and implement the Staff's November 3,1994 comments during site characterization and in the SCR.

Additionally, the Staff's action was consistent with agency efforts to streamline the SDMP review process. Furthermore, to require submission of a written final SCP would unnecessarily delay decommissioning of the SFC site and unduly raise the costs of decommissioning. Finally, and most importantly, NACE comments on the draft SCP were incorporated into the final NRC comments on the draft SCP. The Licensee intends to conduct site characterization in accordance with these comments and must demonstrate this before the NRC approves the decommissioning plan.

In view of the above, there is no basis to require SFC to submit a written final SCP.

B.

Petitioner Requests That NRC Obtain from EPA a Copy of Its Title Search or Perform a Title Search of All Property Used in Connection with the SFC License By letter dated April 20,1995, Mark W. Potts (EPA Region VI), provided to Lance Hughes, on behalf of NACE, a copy of a document entitled m liminary re Property Search Document; Sequoyah Fuels Corporation: Gore, C klahoma."

The document is dated July 26,1994, and was prepare ( t)y PRC Fr.vironmental Management, Inc., for EPA. The document identifies SFC as the sole owner of the 85-acre process area of the Sequoyah Fuels facility and the approximately 2l00 acres of land surrounding the facility. A copy of 6is report has been placed in the SFC licensing docket and is available through either NRC's Public Document Room (PDR) at 2120 L St. NW, Washington, DC 20037, or the local PDR (LPDR) at the Stanley Tubbs Memorial Library,101 E. Cherokee, Sallisaw, OK 21801.

176

Petitioner has identified no inconsistencies between the Trust Indenture and any representations to NRC regarding the size of the " facility" or " site." The i

land subject to NRC license SUB-1010 is principally the 85-acre site along with any adjacent lands that have been affected by licensed activities.3 The copy of e

a " Trust Indenture" submitted by Petitioners neither describes the SFC facility or site, nor does it describe any lands subject to the Trust Indenture.' Article V merely identifies the Trust Estate as all property coming into the possession of the trustees pursuant to the Trust Indenture. The enclosure to a letter dated August 18, 1994, from John Ellis, President, SFC, to the Oklahoma Department of Commerce, both of which were attached to the petition, describes the proposed industrial park as a site of 1430 acres on the east bank of the Kerr-McClelland Waterway. Clearly the proposed industrial park surrounds or includes, in part, the SFC site, but is not identified by the Trust Indenture as all or part of the property subject to NRC License No. SUB 1010.

Petitioners have not raised a safety concern regarding the identity and i

ownership of lands subject to NRC License No. SUB-1010. Moreover, because EPA provided a copy ofits title search, the Petitioner's request has been satisfied.

C.

Petitioner Requests That, Before Permitting Transfer of Land Subject to License No. Sub-1010, NRC Find Reasonable Assurance That Any Entity Acquiring an Interest in the SFC Property Fully Understands the Nature of the Liabilities and Responsibilities it Is Undertaking for Cleanup and Long-Term Care of the Site and That It Has the Financial Capability To Carry Out Those Responsibilities NRC regulations 10 C.F.R. 9 40.42(c)(2) and 40.42(d) and License Condition No.14 of NRC License No. SUB 1010, require that any real property subject to the License or affected by licensed activities must be remediated by SFC in accordance with an approved decommissioning plan, such that the property is suitable for release in accordance with NRC requirements. This means that SFC may not transfer or release, by sale or any other means, property subject to NRC License No. SUB-1010, or property affected by SFC's licensed activities, until SFC remediates such property and SFC demonstrates that the property meets NRC criteria for release.

3.ieensed acuvihes do not include rafhnate spreading because the treated raff nate is released for unrestncted use l

pnar to spreading However,if NRC deternuned that treated raf6nate spreading sigruncantly affected adjacent huids, then NRC would consider the need for additmnal characterizaiion and remediahon 4 sFC derues having contributed any corporate resources to drafung or developing the pr iposed Trust indenture or in circulating it to local commumnes, but states that it has openly punued development of an mdustnal park with local and state officials to replace jobs lost as a result of closing the sFC plant. sic states that a local commumty group SAFEST. has been working on the Trust indemure with the sequoyah County Comnussion. See letter of John H. Ellis. President sFC dated March 29,1995, to Janrs M Taylor. Execuuve Director for operanons.

NRC.

177

. ~..

c.-

,~.

a 4

..w 0

It is not apparent from the NACE petition, and no information has come to the attention of NRC Staff to indicate, that there has been a transfer of any real property subject to or affected by activities conducted pursuant to NRC License No. SUB-1010. It does appear that several local governmental authorities, including Sequoyah County and the cities of Gore, Vian, and Webbers Falls, have entered into an agreement to participate in the proposed Trust Indenture.

In its response to the petition, SFC committed to inform NRC of any proposal SFC receives for transfer of property adjacent to the industrial area, before SFC acts on any such proposal SFC also states that at some future time, SFC may dispose of real property unaffected by licensed operations at the SFC facility, and would do so only after notifying NRC. In the case of affected areas, SFC states that it will dispose of such property that has been released by NRC, after SFC demonstrates that appropriate criteria have been met.

Before real property used in connection with or affected by activities con-ducted pursuant to NRC License No. SUB-1010 could be transferred to a person without authority to engage in NRC-licensed activities, that property must be decommissioned to meet the criteria for release for unrestricted use. See 10 C.F.R. fl 40.4 and 40.42, and License SUB-1010, Condition 14. Since the pro-posed Trust Indenture would involve the transfer of land for the purposes of an industrial park, it appears that the potential transferees have no plan to engage in NRC-licensed activities. Thus, the decommissioning criteria for release of such property would be for unrestricted use.5 If SFC were to decommission property used in connection with its licensed activities to meet NRC criteria for release for unrestricted use, the transferee would assume no obligation to remediate or to engage in long-term care of such property, and NRC would have no regulatory authority over the transfer of or the transferees of such property.

If property used in connection with activities conducted pursuant to NRC License No. SUB-1010 were transferred to a person who seeks authority to engage in NRC-licensed activities, including decommissioning activities such as remediation or long-term care, SFC would be required to obtain written permission from NRC prior to the transfer. See 10 C.F.R.140.46. At that time, it would be appropriate for NRC to ensure that the transferee is capable of meeting NRC requirements for decommissioning and all other applicable licensing requirements and the transferee must obtain an NRC license.

In view of the above, Petitioner's concerns about the potential transfer of property to the Trust and state, and potential transferees of such property, are adequately addressed by applicable regulations.

5 The Comnussion is currently evaluanng proposed changes to the rules governmg release enteria Src "Rasho-logwal Cntena for Decornmissiomng." 59 Fed. Reg 43.200 ( Aug. 22.1994) SIC will have to comply with all NRC requirernems for release to unlicensed mdmduals under any revised rules 178

D.

Petitioner Requests That NRC Staff Issue an Order Forbidding SFC, Sequoyah Fuels International Corporation, Sequoyah Holding j

Corporation, or Any Other Associated Corporation That Holds Title to Property Subject to NRC License No. SUB-1010, from Transferring Any Interest in Such Property Before SFC Applies for and Receives a License Amendment Authorizing Such a Tcansfer As explained above, SFC owns the land subject to NRC License No. SUB-1010. Before SEC may transfer or release any property used in connection j

with, or affected by, its licensed activity to a person not authorized to engage in i

NRC-licensed activity, that property must be remediated in accordance with an approved decommissioning plan to meet NRC criteria for release for unrestricted use. See Section III.C, supra. There is no NRC requirement that a licensee obtain NRC permission to transfer property that has been remediated to meet NRC's criteria for release for unrestricted use.

If SFC were to transfer property subject to the license or affected by licensed activity to persons for the purpose of engaging in licensed activity, section 40.46 j

requires that SFC obtain written permission from NRC before transferring such property and the transferees must obtain an NRC license. Petitioners, however, have provided no evidence that such a transfer is contemplated or imminent.

Petitioners have raised no safety concern regarding a potential transfer of property used in connection with or affected by activities pursuant to NRC License No. SUB-1010, or potential transferees of such property. See Section III.C., supra. Moreover, since protection of the public health and safety, in the event of a transfer of such property to the proposed Trust Indenture, is already accomplished by NRC regulations, there is nojustification to issue the requested order.

IV. CONCLUSION The institution of pro::eedings pursuant to 10 C.F.R. 6 2.202 is appropriate only where substantial health and safety issues have been raised. See Consol-idated Edison Co. of New York (Indian Point, Units I,2, and 3), CLI-75 8,2 NRC 173,175-76 (1975); Washington Public Power Supply System (WPPSS Nuclear Project No. 2), DD-84-7,19 NRC 899 (1984). This is the standard I have applied to determine whether the action requested by Petitioner is war-ranted. For the reasons given above, Petitioner's request that SFC be ordered to submit a written final SCP by a date certain is denied. Petitioner's request that NRC perform a title search of property subject to NRC License No. SUB-1010 was satisfied. Action on Petitioner's reque h s. uder forbidding the trans-fer of any interest in land subject to NRC License No. SUB-1010 before SFC applies for and receives a license amendment permitting such transfers is unnec-179 1

essary because applicable regulations address Petitioner's concerns. Likewise, Petitioner's request that, before granting such a license amendment application, NRC ensure that potential purchasers of property be subject to NRC License No. SUB-1010 to fully be apprised of their obligations for site remediation and long-term care and that NRC ensure that such potential purchasers are finan-cially qualified to do so, is unnecessary because applicable regulations address Petitioner's concerns.

As provided by 10 C.F.R. 5 2.206(c), a copy of this Decision will be filed with the Secretary of the Commission for the Commission's review. The Decision will become the final action of the Commission 25 days after issuance, unless the Commission on its own motion institutes review of the Decision within that time.

FOR THE NUCLEAR REGULATORY COMMISSION Carl J. Paperiello, Director Office of Nuclear Material Safety and Safeguards Dated at Rockville. Maryland, this 23d day of October 1995.

180