ML20126G951

Intervenors Motion for Alteration of ASLB 801202 Order.Nrc Confused & Misled ASLB So That ASLB Perception of Issues & Scheduling Did Not Conform W/Nrc 800922 Memo & Order. Certificate of Svc Encl

ML20126G951
Person / Time
Site:	South Texas
Issue date:	03/16/1981
From:	Buchorn P, Sinkin L Citizens Concerned About Nuclear Power, INC., CITIZENS FOR EQUITABLE UTILITIES
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20126G945	List: ML20126G941 ML20126G951 ML20126G955 ML20126G961
References
NUDOCS 8104020570
Download: ML20126G951 (16)

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/fe e Exnibit 1 UNITED STATES OF AMERICA NUCLEAR REGULATCRY CCMMISSICN 8EFCRE THE ATCMIC SAFETY AND LICENSING BOARD in the Matter of HOUSTON LIGHTING AND PChER l-Docket Nos. 50-493 COMPANY, ET AL i

50-499 e

I (South Texas Project, Units 1 and 2 l

i INTERVENCR MOTION FCR ALTERATION OF BOARD CRDER DATED CECEMSER 2, 1980 Cltlzens Concerned About Nuclear Power (CCANP) and Citi-rens for Equitable Utilities (CEU), intervenors in those pro-ceedings submit this Motion for Alteration of Board Order dated December 2, 1980 because:

(1) The Order in question is a product of a prehearing conf erence conducted by the Soard on November 19, 1980. Inter-vernors contend that actions of the NRC staff, specifically the private NRC/ Applicant meeting and subsequent letter of November 14, 1980, con f used. and misled the Board as to the Intent and purpose of the Nuclear Regulatory Commission Memorandum and Orcer of September 22, 1980.

(2) As a result of this confusion and misdirection, the Scard perception of the issues and scheduling of the expedited hearing, as reflected in the transcript of the November prehear-Ing conference and December 2 Crder, are not in conformance with the September 22 Memorandun and Crcer.

(3) The impact of the December 2 Order is to ceny inter-venors relief specifically mandated by the Commission.

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Introduction On April 30, 1960, the Director of the NRC's Office of Inspection and Enforcement issued an Crder to Show Cause wnich provided that the licensee or any af fected party could request a puolic nearing.

On May 27, 1980, the CCANP and CEU requested such a public hearing by telegram. On May 28, 1980, CCANP submitted supportive evidence and arguments for the request.

Cn September 22, 1980, The Nuclear Regulatory Commission issued a Memorandum and Order denying the Intervenor's request for a public hearing but providing for " alternative relief in the context of a pending operating license proceeding for these facltitles."

On September 24, 1980, the ASLB issued a Memorandum and Order shich requested the parties to make suggestions for implementing tne September 22, 1980 NRC Memorandum and Ceder.

Shortly after the ASLB request, intervenor representatives participated in discussions with Richard Slack, Counsel for NRC staff regarding the ASLS request.. Appl icants a l so partici patec in discussions with Mr. Black.

On October 15, 1980, Yr. Black sent a letter to all parties conveying what Mr. Black termed partial agreement on j

the expanded contentions. (Attachment 1)

Cn October 22, 1980, Applicants sert a letter to alI certies suggesting a -formulation of the issues differenT from

v. Slack's. (AT?achment 2) r 1

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Satisfied witn the Black letter fccmulation, Intervenors subml?ted no further comments.

On October 27, 1980, Mr. Bernard Scrdenick, new Counsel for NRC staff, wrote to the ASLB and all parties that the October 22, 1980 letter from Applicants indicated differing views on the issues justifying a prehearIng conference.

On Octocer 30, 1980, the ASLS issued an orcer setting a prehearing conference for Wednesday, November 19, 1980.

On November 14, 1980, Intervenors received by taxicab a letter from Mr. Bordenick setting forth a reformulation of the j

issues arrived at in a meeting between NRC staf f and Applicants.

(Attachment 4)

Intervenors were neither informed about nor invited to participate in this meeting. The major dif f erence between the Black letter and the Bordenick/ Applicant letter is that the second letter included acts by the Appi icants since the Order to Show Cause in every issue where the history of non-compliance appeared. The Black letter dealt strictly with the history of non-compliance.

On November 19, 1980, the ASLB convened the prehearing conference. the basis for discussion was the Bordenick/ Applicant formulation of November 14 rather than the Black formulation of October 15.

intervencrs' first contention is that the Bordenick/Ap-ptIcant formulation introduced ccnfusion into the proceedings both by the nature of its contents and its last minute service on the Board and Intervenors. the Black formulation avoiced

-3 such confusion.

On December 2, 1980, the ASLS issued an Order accepting various issues for consideration at the expedited QA/QC hearing.

Included in the accepted issues were:

I ssue ' A.

If viewed without regard to the remedial steps taken by HL&P, would the record of HL&P's compliance uita NRC i

requirements, including, (1) the statements in the FSAR referred to in Section t

V.A. (10) of the Order to Shcw Cause; (2) the instances of non-compilance set forth in the Notice of Violation and the Crder to Show Cause; (3) the extent to which HL&P abdicated responsibility for constructico of the South Texas Project (STP) to Brown &

Root; and (4) the extent to which HL&P failed to keep itself knowledgeable about necessary construction activitles at SIP, be suf ficient to determine that HL&P does not have the necessary i

managerial competence or character to be granted !! censes to operate the STP7 issue B. Was HL&P taken sufficient remedial steps to I

provide assurarce that It,cw has the managerial competence and character to operate STP safely.

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All issues accepted in the Crder were to be heard toge-ther in the expedited hearing.

ll. Olscussion

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Intervences contend that the con'usion and misdirection i

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4 produced by the 2crdenick/ Applicant letter produced a Board Order on December 2, "1980 wh ich' dees not conform to the intent and purposes of t he Commission's September 22, 1980 Memorandum and Order.

i The Commission Meniorandum and Order contains the felicw-Ing st3tements:

(1) "The history of the South Texas Project - at least 12 separate NRC investigations over a 2-1/2 year period, resulting in conferences with the licensee, several prior items e

of non-compliance, a deviation, five.Immediate action letters, and now substantiated allegations of harrassment, intimication and threats directed to QA/QC personnel and apparent false statements in the FSAR - is relevant to the issue of the basic competence and character of Houston."

(2) " Central to that issue (basic competence and charac-ter of Houston] are two questions: whether the f acts demonstrate that the licensee has abdicated too much respcosibility for

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construction to its contractor,. Brown anc Root, Inc.,

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whether the f acts demonstrate an unacceptable failure on the I

part of Houston to keep itself knowledgeable about necessary

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construction activities."

(3) "Either abdication of responsibil ity or abdication of knowledge, whether at the construction or operating phase, could form an indeoendent and sufficient basis for revoking a license or denying a license appl! cation on grounds of lack cf competence ( l.e., techn l ea l ) or character qual 1 f ication on 'he i

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part of the ! Icensee 'or :11 cense appiicant." (emphasis added)

(4) (Commissions Gilinsky and Bradford! "The Commission has indicated.that abcication of responsibility or abdication of knowledge could form an indecendent and sufficient basis for denying or revcking a !Iconse."

(5) "In large part, decisions ebeut licenses.are predic-tive In nature, and the Commission cannot ignore ebdication of-i responsibility or abdication of knowledge by a license applicant when it is called upon to decide if a license for a nuclear..

facility should be granted."

t (6) "IWle expect -the Board to look at the broader-ramifications of these charges in order to determine whether, H proven, they should result in denial of the coerating license aDolicaticn." (emphasis added)

(7) "For this reason, we are orderino the Board to issue i

an early and separate decision on this aspect of the operating 1Icense dec!slen."

On September 23, 1980, the day after the issuance of the NRC Memorandum and Order, Chairman Ahearne, testi f ying under oath before the Subecmmittee on Oversight and Investigations, Committee on Interstate and Foreign Oceterce, U.

S. house of j

Representatives, stated:

" Consistent with recent case law at our agency, the Commission declined to order a hearing on the intervenor's quality assurance allegation in the context of the enforcement ection.

However, recognl: Ing the seriousness of those allegations and the information uncovered by Mr.

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' Stello, the Ocemission unanimously agreed that the intervences shou!d be permittec to f ul! y litigate those charges in the pending operating !! cense proceed ing 'or the South Texas f acility, and that the licensing board in that case should lssue an expedited, partial initial decision on those char-t ges.

The Commission Indicated that the operating l icense appl ication might be denied i f the facts support an unacceotable abdication of either res-pons ibil ity for or knowledge about the South Texas project cn the part of The Applicant." (Tr. at 7-8) i intervenors centend that the purpose of the September 22, 1980, NRC Memorandum and. Order was to provide Intervencrs alternative relief to elther a public hearing on the Crder to Shcw Cause or a potential petition to revoke the construction

. permit under 10 C.F.R. 2.206. This retlef was to be a separate determination by the ASLB of whether the past non-compliance showed HL&P lacks the character and competence to receive an operating iicense.

Intervenors contend that statement (1) from the NRC Vemorandum and Orcer clearly points to the history of non-compilance, but not the actions taken by the Applicant subse-quent to the Order to Show Cause, as the relevant evidenu of i

competence and character.

The Commission makes the entire history of non-ccmpi lance the relevant basis for judging cha "

recter.

Statement (2) from the Memorandum and Order points to two central issues in determining character and ccmpetence:

ebdication of responsibility to the contractor and failure to i

keep : nformed about construction.

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Statements (3) anc (4) say either ' of the two central issues could form an i ndepencent and sufficient basis for license denial by showing lack of character and c;mpetence.

Intervenors contenc that the words " independent and suffIclent" are an unambiguous statement to the effeet that just the non-compliance, with no consideration of f uture acts could produce a license denial.

Statement (5) uses the term " predictive" to describe the licensing process and points to the two central issues as a bas!s for predicting future Applicant behavior. The two central issues - failure to exercise oversight and failure to keep informed - refer directly to broader ramifications of the violations found in the Order to Show Cause. These are past failures being used to predict future performance, particularly the question wnether Houston Lighting and Power should receive an operating license. The seriousness of these violations might also be used to predict enether the reforms initiated after the Order to Show Cause will be effective, but that i s a separate question and prediction. To say the reforms should be part of predicting operaing performance i s to say that there are three central issues, not two as tne Commission stated.

Statement (6) takes the broader ramifications one step further to raise the ultimate issues of character and competence.

Statement (7) is a direct order from the Nuclear Regula-tory Commission to the ASL3 to issue an early and sesarate decision on whether the acts of non-compl lance and the broader i

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ramifications of those acts are en indepencent' anc suf ficient i

basis 'or denial of the IIcense.

For purposes of tn i s mot ion, Statements (3),

(4),' anc l

(7) are the most impcrtant parts of the Commission's Memorendum and Ceder.

The transcript of the November 19, 1980 prehearing conference reflects that Intervenor representatives spent most of the morning trying to set cut the past acts of Applicants as a separate issue f rom -their remedlal acts, that 'is trying to return to the Black formulation rather than the S're,,t ek/Appi l-P cant formulations. The separation only reappec. :1 afier lunch-time negot?ations requested by the Chairman.

Once the issues were separated, Intervonors then argued that Statements (3) and (4) made the past acts an independent and sufficient basis for dental of the operating license. NRC Counsel and Appileants argued that such an independent determi-nation was not possible.

Intervences contend that the Chairman repeatedly perceived the question as looking 1Irst at the acts of nc7-ccmp!Tance to l

See if they nould justify revocation or denial, and then if so, whether actions taken subsequent to the Orde-to Show Cause reversed that conclusion. (Tr. at 247, 267, 285-286, 293, 298) in othar acrds, under the Chairman's formulation if the' answer to Issue A was "yes," the Board aculd then proceed to Issue 3.

In the transcript, it appears that one time Jr. Luebke (since rencved from the Board) and the Chairman did agree that

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_9 a "yes" on Issue A enced the matter (Tr. at 295), bur shortl'y thereafter, the Cha!rman returns to the "i f so" approach (Tr.

at 296).

The essential difference is that under intervenor formu-l ation, "yes" on issue A would lead directly to denial. A "no" on !ssue A woulo lead to examination of remedial actions.

Uncer the Intervenor formulation, the past acts wnuld be compa-red to some standard of character and competence would produce a denial and these proceedings would be over.

At the heart of the Chairman's position seems to be a perception that the Ccmmission would insist on comparison with remedial ects (Tr. at 298) and find the Board neg!! gent not to make such a comparison (Tr. at 299). Intervenors, on the other hand, contend that " independent and sufficient" mea:ns that independent and sufficient of remedial acts, the Board could find sufficient evidence in the acts of non-compliance and their broader ramifications to deny the operating license.

The third Intervenor argument in November centered on Statement '7) wnlen, Intervencrs contend, orcers an early and separate decision on the acts of non-ccmpliance end tneir

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broader ramifications es an independent anc sufficient basis fc-denia!. The Chairman stated his position that there would i

be no separate decision on issue A (Tr. at 296-297) but later 1

Indicatec +nere might be a decIs ton on issue A, but on1y after

-l taking avicence on issuo S. (Tr. et 299)

Mrs. Buenorn protested the Board's decisions and indicatec i

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. a desire to appeal. iTr. at'300). Unfortunarely, Mrs. Suchern's

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Intervenors contend inat Statements (3), ( 4 ),. c.n.d (7) should have governed'the November proceedings but did not, in good part because the Scrdenick/ Applicant letter diverted atten-tien from these statements. Intervencrs f urthett contend

• hat' the rulings of the ASLB deny Intervenors relief specifically, ordered for the Intervenors by the Ccmmission.

As now structured, the exped!ted hearings wili rot provide a separate and independent consideration of, and deci-Sion on Issue A.

While issue A is drawn separately, issue 8 and the Board intention to consider issue A in the centext of issue 8 removes the separate and independent relief. Furtherncre, the Chairman's statements indicate there will be no separate decision on issue A,

and the hearing itself is seneduled to include the actions taken by AppiIcant since the Order to Show Cause. The propesea witness IIst of the Applicant makes very clear that Issue A is not to be treated as a separate and 1

independent item. Applicants' proposed presentations are essen-tially the sare as the Scrdenick/ Applicant formulation would calI for.

(Attachment 3)

The-Bordenick/ Applicant letter and its subse: vent in-t i

fluence on the Scara Order of Decemter 2 raises another question.

In the September 24, 1980 Vemorandum and Order of the Board, all ::arties were invited to suggest a means of implementing instruct' ens of the Ccmmission on September 22. The suggestions I

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_11 wore to be " additional contentions or parts of contentions which should ce adeitted into this proceeding

• o reflect the matters encompassed by the show-cause. order but not presently contained in Contentions I and 2, as well as to comply with the Commission's mandate to consider additional questions." The phraso "additionel contentions or parts of contentions encompassed by the show-cause order.but not presently contained in lontentions 1 and 2" and the " Commission's mandate to consi-L der additional questions" address a consideration of abdication of responsibility, f allt re to keep informed, and lack of cha-racter and competence. Intervenors contend that neither the Commission Memorandum and Ceder nor the Board's subsequent 6

request envisloned a new contention by Applicants that the Applicant's remedial acts ancelled out any adverse offects the illstory of non-compllance might have on the application-for an operating iicense.

In essence, the Bordenick/ Applicant letter submitted this new contention four days prior to the prehearing conference in November. And the new contention was not submitted in such a way as to be clearly perceived and responded to as a new contention; rather, it was siloced into these proceedings enmeshed in the contentions the Commission, Soard, and previous NRC staff clearly intended to consider as new contentiens. We 9

object to the new contention itself and certainly object to the i

Surreptitious entry of this contentien into these proceedings.

We note in passing that the Applicant's purpose.in i

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. entering this new contention is also to challenge the Order to Shcw Cause itsetf. A clear example of this intention appears in the March-2, 1981 Applicant letter identifying witnesses.

- (Attachment 5) On page 7,

Applicants state the third panel "will testify on the alleged false statements in the FSAR concerning laboratory testing on backf il ! material and inspec-tion of backfill placement referred to in the Show Cause Crder and will demonstrate that these statemen+s are not ' f a l se ',. "

(emphasis added) 10 C.F.R f 2.202(e) states in part:

"The consent of the licensee to the entry of an order shall constitute a waiver by the Ilcensee of a hearing, findlncs of fact and conclusions of law, and of all r ight to seek Commission and judicial review or. to cor, test the val idity of the order in any forum." (empt3 sis added)

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This new contention places an-additional burden on intervenors to be prepared to comprehensively address the voluminous Applicant response to the Crder to Show Cause, a response which is still being developed and implemented, and to defend the Order to Show Cause. Under the Commission Memorandum r

and Crder and the Black formulation, there was not such burden.

E For the sbove and foregoing reasons, Intervenors present this Motion and seek the following relief:

A separate hearing only on issue A followed by a decision i

on Issue A before proceeding any further.

In the alternative, Intervenors request either:

i (1) a return to the issues as set forth in the October 15, 1960 letter from Mr. Richard Black, or 4

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, (2) a refermulation of the December 2, 19S0 issues as folIcws:

Issue A as written issue B eliminated Issue C eliminate "and B" from parenthetical remark issue 0 eliminate "and HL&P's responses thereto (filings of May 23, 1980 and July 28, 1980), and actions taken pursuant thereto" issue E as written f

Issue F as written In the alternative, pursuant to 10 C.F.R. 52.718(l),

Intervencrs hereby request the Board to certify to the Nuclear Regulatory Commission'the following questions:

1.

In the Iight of the Nuclear Regulatory Commission Memorandum and Order of September 22, 1980, CLI-80-32, 12 NRC and speciflealIy in Iight of that part of the Vemorandum and Craer which states:

"Either abolcation of responsibility or abdicatien of 1

kne s l edg e, unether at the construction or operating phase,

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could form an independent and sufficient basis for revoking a license or denying a license application on grounds of lack of competence (l.e. technleal) or character qualif icatlen. on the-part of.the Iicensee or IIcense applicant,"

cid the Commission intend the Atomic Safety and Licensing Scard q

in these proceed ings to reach a determination on wnether, independent of any remedial. acts by Applicants, the acts of non-

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. compilen.co and their orcacer ramifications form a -suf ficient Dasis to deny the operating license?

2. In Iight of that.part of the Memcrandum and Order which states:

"(Wle are ordering the Scard to issue an early and separate decislen on' this aspect of the operating iicense i

proceedings,"

did the Commission ' intend the Atomic Safety and Licensing Board in these proceedings to:

a. provide a separate hearing on Issue A as it appears in the Board's Order of Cecember 2, 1980,

b. require evidence and witnesses to be presented on issue A as a separate item, and c.

Issue a separato decision on Issue A?

The crux of the dif ference between the Board and the intervenors is the nature of the relief the Commission intended to give intervenors 19 the Commission's Memorandum and Ceder of Septemcer 22, 1980. <f the Board and Intervenors cannet reach a resoituico of these differences, the Commission is.the logical f

party to resolve the differences.

lntervenors urder that if certification is granted, ?!.3 i

Commission be provided eith:

(1) the Board Order of September 24, 1930 (2) the Black letter of Octeter 15, 1980 (Attachment 1)

(3) the Applicant letter of October 15, 1960 (Attachment 2) t (4) the Scrdenic< letter of October 27, 1980 (Attachmen? 3)

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. (5) the Scrdenick letter of' November 14, 1980 (Attachment 4)

(6) the transcript of the November 19, 1980 prehearing conference (7) the December 2, 1980 Board Order (Exh'Ibit 2)

(S) the A0plicant witness letter of Maren 2,.

1981 (Attachment 5)

(9) the transcript of relevant portions of this proceeding.

Respectfully submitted,

/s/

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Lenny.$1nkin Peggy Buchorn Citizens Concerned About Citizens for Equitable Nuclear Power Utilities 5

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Certificat, of Service l

'lle hereby certif y that the foregoing document has been served on the following individuals and entities by hand (*) or by deposit in the U.S.

Mail, first class, postage prepaid on this [Ph day of March, 1981.

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<4 ?tu kuus_+N Peggy Buenorn Lanny6#inkin Charles Bechhoefer, Esquire

• Mr. Jack Newman Chairman Lowenstein, Newman, Reis, Atomic Safety and Licensing Board Axelrad, & Toll U.S. Nuclear Regulatory Commission 1025 Connecticut Avenue, N?l Washington, D.C.

20555 Washington, D.C.

20036 Docketing and Service Section (7)

Dr. James C.

Lamb

• 313 Woodhaven Road Office of the Secretary Chapel Hill, North Carolina 27514 U.S.

Nuclear Regulatory Commission Washington, D.C.

20555 Mr. Ernest E.

Hill Lawrence Livermore Laboratory Atomic Safety and Licensing University of California Board Panel P.O.

Box 809, L-123 UlS. Nuclear Regulatory Commission Livermore, Ca.

94550

?lashingt on,

D.C.

20555 Atomic Safety and Licensing Edwin J.

Reis

• Office of the Executive Appeal Panel (5)

Legal Director U.S.

Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C.

20555 Washington, D.C.

20555 Brian E. Berwick Assistant Attorney General for the State of Texas 5

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C-U.S. Nuclear Regulator'5 v Comission f

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In the Matter of Houston Lighting and Pcwer Comoany g al.

(South Texas Project, Units 1 and 2T~

Occket Nos. 50-498 and 50-499

Dear Mr. Chairman:

This is in response to the Board's Memorandum and Order of September 24, 1980, inviting comtrents from the parties with respect to what further steps shoulu be taken in this proceeding to implement the instructions of the Commission as set forth in its Memorandum and Order, dated September 22,1980 (CLI-80-32).

NRC Staff Counsel has made numerous contacts with the parties concerning the

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Board's Memorandum and Order.

Our di-scussions have centered around the need for further contentions in the QA/QC area, and discovery and hearing schedules.

It appears that these discussions have been fruitful and partial agreement has been reached regarding the expansion of admitted contentions and scheduling.

l In light of the Acolicant's letter to you dated October 6,1980 (letter from Jack R. Newman to The Honorable Charles Sechhoefer), which indicates that the Apolicant intends to present " comprehensive testimony on the concerns of the Board regarding technical qualifications which are reflected in the Board's Memo-randum and Order of September.24,1980," the parties believe that an expansion of the presently admitted contentions is not necessary to comply with the Com-mission's v.emorandum and Order.

However, to ensure tnat all aspects of this imoortant matter are presented and examined before the Licensing Board, the Staff croposes the' following hearing procedures:

1.

The Acolicant will file testimony and make a comolete evidentiary presenta-tion on CA/CC matters reflected in (a) Intervenors' Contentions 1 and 2, (b) the N0tice of Violation and Order to Show Cause to Houston Lighting and p h r (hllP) dated Aoril 30, 1980, and (c) the Comission's Memorandum and Crder, surel, which include the following:

A.

Does HL&P have the necessary comoetence and character to operate the South Texas facility?

(1) Did HL&P 3tJicate too much resocnsibility to 3rown and Root for :N cons:ruc::cn of tne South Texas facility?

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(2) Did HL&P keep itself knowledgeable about necessary construction activities?

(3) Did HL&P make " material false statements" in its FSAR or other documents pertaining to its operating license application?

B.

Is HL&P's QA/QC program for the operation of South Texas sufficient?

C.

Is there reasonable assurance that the South Texas facility is con-structed to an acceptable level of quality and safety?

2.

The Acclicant has the ultimate burden of proof with respect to the QA/QC issue, and should present its case first.

3.

Tne NRC Staff will file testimony and present witnesses who were responsi-ble for and carticipated in the investigation conducted by the NRC Region IV Cffice of Inspection and Enforcement.

The NRC Staf f will also present testimony on its review of the QA/QC program as reflected in the South Texas FSAR.

4.

Intervenors can present testimony and witnesses in support of their con-tentions and will be free to conduct cross-examination on any issue raised by direct tes timony.

The above four items reflect the Staff's understandina of a mutually agreeable way to oroceed with the evidentiary hearing on the QA/QC issues based on our preli'ninary discussions with the carties.

However, since it does not represent a ccrolete sticulatun of the issues or the procedures, any party should be allowed to coment on this proposal.

Insofar as a discovery schedule is con-cerned, it is the Staff's understanding that all parties do not contemplate a need for extensive further discovery but, in any event, discovery should be completed by December 15, 1980. This discovery schedule would allow a pre-hearing conference in January,1981 which would establish the date for pre-filed testitrony and a scnedule for hearing.

The Staff contemolates that hearings should co-ence 3,round late March, early-April,1981.

Finally, tne Staff wishes to note the appearance of Edwin J. Reis and the withdra al of Stechen M. Schinki as NRC Staf f Counsel in this proceeding 7

' Notices of 'ccearance anc Withdrawal attached).

Mr. Sernard M. Bordenick all be as;uning the role as lead attorney and all future telephone communi-ca tians 3nculd te directed to him at 301-492-6638.

In the absence of Mr. Menenick, I can be reached at 301-492-7317.

Sincerely, f

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October 22, 1980 Charles Bechhoefer, Esquire Chairman Atomic Safety and Licensing Board United States Nuclear Regulatory Commission Washington, D.

C.

20555 Re:

In the Matter of douston Lighting & Power Company (South Texas Project, Units 1 and 2)

Docket Nos. STN-4980L and STN-4990L)

Dear Mr. Chairman:

Applicants are in receipt of the NRC Staff's letter of October 15, 1980, regarding further steps to be taken in this proceeding, and we agree with the Staff's proposed order of presentation.

As indicated in our letter of October 6, 1980, Appli-cants intend to present comprehensive testimony on the concerns regarding the technical competence and character of Applicant, Houston Lighting & Power Company (HL&P), as reflected in the Board's Memorandum and Order of September 24, 1980.

Applicants are in the process of developing their presentation so that they can be prepared to go to hearing at an early date, as the Board has suggested.

In preparing our presentation we have reviewed the factual issues that have been raised in this case, and relevant decisions of Appeal Boards and Licensing Boards.

Our review suggests that further clarification of the issues suggested in the Staff's October 15, 1980, letter is necessary.-

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Charles Bechhoefer, Esquire October 22, 1980 P, age Three Specifically, (1)

Do the asserted deficiencies in the QA/QC program for the construction of the STP, as reflected in the aforementioned documents,. require an adverse finding on the issue of HL&P's technical qualifications to operate the STP? 2/

(2)

Do the HL&P and Brown & Root (B&R) construction quality assurance organizations and practices, including the changes therein as reflected in the aforementioned documents, constitute substantial evidence of HL&P's capability and commitment-to safe operation of the STP? 3/

(3)

Do HL&P's organization and procedures for monitoring the construction of STP, including the' activities of its architect-engineer-constructor, provide reasonable assurance that HL&P can fulfill its responsi-bility under its license and NRC regulations 2/

See Virginia Electric and Power Co. (North Anna Nuclear Power Station, Units 1 and 2), LBP-77-68, 6 NRC 1127, 1150 (1977), affirmed ALA3-491, 8 NRC 245 (1973); Duke Power Co. (William 57 McGuire Nuclear Station, Units 1 and 2) ALAB-143, 6 AEC 623, 626 (1973); Southern _

California Edison Co. (San Oncfre Nuclear Generating Station.. Units 2 and 3), LBP-73-36, 6 AEC 929, 938 (1973), affirmed in pertinent part ALAB-248, 8 AEC 957, 974 n.

24 (1974); Ducuesne Light Co. (Beaver Valley Power Station, Unit 1) ALAB-408, 5 NRC 1383, 1387 (1977).

3/

See Beaver Valley, supra; Commonwealth Edison Co. (Zion Station, Units 1 and 2) ALA3-226, 8 AEC 381, 400-401 (1974); North Anna, supra.

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's Charles Bechhoefer, Esquire October 22, 1980 page Five Applicants believe that the clarifications suggested above are essential in order that they be able to proceed promptly to prepare and present their case first as sug-gested by the Staff.

If the issues are clarified in the manner suggested above, Applicants are prepared to proceed without further discovery.

If the issues are not so clari-fied, Applicants could require further discovery.

For ex ample, if the alleged " false statements" are other than those identified in issue B, above, additional discovery may be necessary in order to assure that the scope of Applicants' direct testimony is adequate.

Since it is possible that either the NRC Staff or the intervenors may have differing vi'ews as to precisely how the issues should be clarified, Applicants urge the Board to schedule an early prehearing conference at which the Board could finalize both the statement of the issues and the schedule.

In the interim, we can assure the Board that we are generally proceeding with preparation of our presentation so that we will be able to go to hearing at the earliest possible date.

Finally, we wish to inform the Board that, depending on how the issues are framed, Applicants may wish to file motions for summary disposition with respect to certain of the issues. Accordingly, we respectfully request that in establishing the schedule.for this proceeding the Board include specific provisions for the filing of such motions and responses thereto.

Respectfully,

/4ptA -.

Jack R.

Newdan Robert H. Culp David B.

Raskin 1025 Connecticut Ave., mi Washington, D.

C.

Finis Cowan Thomas Hudson Melbert D.

Schwarz 3000 One Shell plaza Houston, Texas 77002

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD IN THE MATTER OF S

S HOUSTON LIGHTING & POWER S

DOCKET NOS. STN-4980L COMPANY, ET AL.

S STN-4990L S

(South Texas Project S

Units 1 and 2)

S CERTIFICATE OF SERVICE I hereby certify that copies of the attached letter from Jack R. Newman to Charles Bechhoefer in the above-captioned proceeding, were served on the following by deposit in the United States mail, postage prepaid, or by hand delivery this 22nd'of October, 1980:

Dr. James C. Lamb, III 313 Woodhaven Road Chapel Hill, North Carolina 27514 Dr. Emmoth A. Luebke Atomic Safety and Licensing Board U. S. Nuclear Regulatory Commission i

Washington, D.

C.

20555 Bernard M.

Bordenick, Esquire Hearing Attorney Office of the Executive Legal Director U. S. Nuclear Regulatory Commission Washincton, D.

C.

20555 Edwin J.

Reis, Esquire Counsel for NRC Staff Office of the Executive Legal Director U. S. Nuclear Regulatory Commission Washington, D.

C.

20555 Richard W.

Lowerre, Esquire Assistant Attorney General for the State of Texas Post Office Box 12548, Capitol Station Austin, Texas 78711 I

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October 27, 1980 Charles Bechhoefer, Eq., Chairman Dr. Cnacth A. Luebke Atomic Safety and Licensing Board Atomic Sa fety and Licensing Board U.S. l!uclear Regulatory Coninission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555

[

Dr. James C. Lamb III

('

313 Woodhaven Road Chapel Hill, NC 27514 In the Matter of Houston Lighting and Power Company, et al_.

i (South Texas Project, Units 1 and 2)

Docket Mos. 50 498, 50-499 Gentlemen:

1 The NRC Staff is in receipt of the letter dated October 22, 1980, to Chairman Bechhoefer from Applicant's counsel.

This letter was written in response to Staff's letter of October 15, 1980, regarding further steps to be taken in this proceeding.

See the Board's Memorandum and Order of September 24, 1980, inviting comments from the parties with respect to what further steps should be taken in this proceeding to implement the instructions of the Connission as set forth in its Memorandum and Order dated September 22,.1980 (CLI-80-32, pp. 16-19).

As anticipated by Applicant at page 5 of its letter, the Staff "[has] differing views as to precisely how the issues should be clarified...."

Because of this disagreer.ent, the Staff agrees with Applicant in urging that the Board schedule an early prehearing conference at which the Board could finalize both the statement of the issues and a schedule.

Sincerely,

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M;(1, ff V Bernard M. Bordenick Counsel for NRC Staff cc: "cibert Schwarz, Jr., Esq.

Mr. Lanny Alan Sinkin "rs. Peggy Suchorn Richard W. '.cuerre, Esq.

Jack R. New ran, Esq.

Atomic Safety and Licensing Board Parel Atomic Safety and Licensing Appeal Euard Docketing and Service Section p g pg g, F 7 0 l o 2.7 0 rd 5

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NUCLEAR REGULATORY COMMISSION f

WASHINGTON. D. C. 20555 k,4 Yj#

e Novem::er 14, 1980 Charles Bechhoefer, Esq., Chairman Dr. Emmeth A. Luebke Atonic Safety and Licensing Board Atomic Safety and Licensing Board r

U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Comission Washington, DC 20555 Washington, DC 20555 Dr. James C. Lamb III 313 Woodhaven Road Chapel Hill, NC 27514 In the Matter of Houston Lighting and Power Company, et al.

(South Texas Project, Units 1 and 2)~

Docket Nos. 50-498, 50-499 Gentlemen:

Enclosed is a copy of a "STP Proceeding Proposed Supplement to Statement of Issues" which has been agreed to between counsel for the NRC Staff and counsel for the Applicant.

Applicant is also arranging to deliver copies-to the intervenors today.

Sincerely, t'

Bernard M. Bordenick Counsel for NRC Staff Encios ure As Stated I

cc w/ encl:

Melbert Schwar:, Jr., Esq.

Pat Coy Mrs. Peggy 8uchorn Richard W. Lowerre, Esq.

Jack R. Newmar., Esq.

l Atomic Safety and Licensing Board Panel Atomic Sa'fety and Licensing Appeal Board Docketing and Service Section

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's STP PROCEEDING PROPOSED SUPPLEMENT TO STATEMElli 0F ISSUES

• Issue A.

In light of HL&P's performance in the construction of the' South Texas Project (STP)- as reflected, in part, in the Notice of Violation and Order to Show Cause dated April 30, 1980, and HL&P's responses thereto (filings of May 23, 1980 and July 28,1980), and actions taken pursuant thereto, do the current HL&P and Brown & Root (B&R) construction QA/QC organizations and practices meet the. requirements of 10 CFR Part-50, Appendix 3, and thus provide reasonable assurance that consturction of STP can be completed in confonnance with the Construction Permits and other applicable requirements?

Issue B.

In light of the overall record of HL&P's compliance with NRC require-ments including:

(1) the statements in the FSAR referred to in Section V.A.(10) of the Order to Show Cause; (2) the instances of non-complianc? set forth in the Notice of Violation and the Order to Show Cause; (3) HL&P's actions in reply to the Order to Show Cause; (4) t.he extent to which HL&P abdicated responsibility for con-I struction of the South Texas project to Bronc & Root; and (5) the extent to which HL&P failed to keep itself knowledgeable about necessary construction activities at STP,

• /

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The following Statement of Issues is in addition to Intervenors previously admitted contentions.

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