ML20128P230

Memorandum & Order (Admitting Party).* Grants AL Mosbaugh to Be Admitted as Party to Proceeding.W/Certificate of Svc. Served on 930219

ML20128P230
Person / Time
Site:	Vogtle
Issue date:	02/18/1993
From:	Bloch P, Carpenter J, Murphy T Atomic Safety and Licensing Board Panel
To:	Mosbaugh A AFFILIATION NOT ASSIGNED, GEORGIA POWER CO., NRC OFFICE OF THE GENERAL COUNSEL (OGC)
References
CON-#193-13637 93-671-01-OLA-3, 93-671-1-OLA-3, LBP-93-05, LBP-93-5, OLA-3, NUDOCS 9302240191
Download: ML20128P230 (31)

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LBP-93-5 IhcNi7%d NrFebruary18, 1993-in w UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION , SERVED FEB 1 9 1993 ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:

Peter B. Bloch, Chair Dr. James H. Carpenter Thomas D. Murphy In the matter of Docket Nos. 50-424-OLA-3 50-425-OLA-3 GEORGIA POWER COMPANY, et al. Re: License Amendment (Transfer to Southern (Vogtle Electric Generating Nuclear)

Plant,-Units 1 and 2)

ASLBP No. 93-671-01-OLA-3 MEMORANDUM AND ORDER (Admitting a' Patty)

MEMORANDUM We have decided to grant the' petition of A31en L.

Mosbaugh to_be admitted as a party-to this case.

We find that Mr. Mosbaugh's petition meets the~

applicable criteria. He suffers an injury in fact because he has alleged, with an adequate basis, that an. operating license for a nuclear power plant should.not be transferred 1

to en entity'that_ employs in senior ' positions individuals alleged to have submitted material f aise and . misleading safety information to.the United States Nuclear Regulatory Commission (NRC). The allegation establishes, for -.the

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purpose of determining standing, the seriousness of the situation to which Mr. Mosbaugh may be exposed. He is at risk because he owns a house 35 miles from the Vogtle Electric Generating Plant (Vogtle) and lives there one week a month.2 The Staff of the Nuclear Regulatory Commission (Staff) and Georgia Power Company, et al, (Georgia Power) have _

argued that Mr. Mosbaugh may not intervene in this license amendment case because ;he management deficiencies he alleges, if true, are already present in Georgia Power and that no new risk is added by amending the license to transfer authority to Southern Nuclear. We disagree with this way of conceptualizing the risk. Mr. Mosbaugh has standing because he has alleged, with an adequate basis, that the proposed amendment does not meet the safety requirements of the NRC. We would not deprive him of his right to intervene because the material safety deficiencies '

he has alleged may already be occurring.2 i

1 See below, beginning on page 19, for further facts .

about standing.

2 Georgia Power rlso has argued that Mr. Mosbaugh should be denied standing i acause he has already filed a 5 2.206 petition. However, that argument is invalid. That a petition concerning Georgia Power may be pending does not preclude intervention in this license amendment case.

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--32-t T 'i I. LBackground?  ;

y Georgio Power,E!nc. , et al . (Georgia Power )? proposes. to >

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amend its license to operate Vogtle. The proposed. amend-

- ments'would have no effect'on-the ownership _fof-Vogtle, but' it would allow - Southern Nuclear' . Operating:- Company,- Inc. , .

(" Southern Nuclear") to become. the . operator - thus, operation vould pass f rom one wholly-owned subsidiary df.-'

'l Southern Company -(Georgia Power) to -another (Southern D

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Nuclear).

, On: October 22, 1992, Allen-L. Mosbaugh and Marvin B.

-Hobby filed a petition to intervene. Staff filed its answer ..

1 on November-2,.1992 (" Staff Answer").~ ' Georgia Power'" file'd

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1992 ~( " Georgia -- Power Answer").

its answer on November 6, Mr. Hobby.'s petition was dismissed for lack of-standing'by-our Memorandum and, Order of November 17, 1992, e Even though the proposed amendment ~wouldJtransfer the-

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authority to operate Vogtle from GeorgiaLPower to Southern-Nuclear,-executive management would continue _to be the~same key people. To summarize how similar- the staffing would be,-

. we- quote verbatim (with footnote numbers - changed. uto; ' be -

consecutive vithin this opinion]' from: the -NRC . Staff'sf

. Response to: Licensing . Board Questions, February: 5, 1993~

(Staff Response-to-Board) at'3-4:

Southern Nuclear has been identified, since March 1991, in chapter 13 of-the Final Safety Analysis Report (FSAR), as providing support services: for-r T

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. the Vogtle facilities._2 See : Revision- 1, : dated

-March 1991; Revision 3, dated December 1992.' The

-Vogtle Electric Generating Plant ~ FSAR f 13;1'.1.2, .

Rev. 1 3/91, sets forth the- organizational arrangement -regarding Vogtle in terms - of the-corporate affiliation of various management' officials. The executive vice president for; nuclear operations is an officer of Georgia Power Company, Alabama Power Company,- and- Southern Nuclear Operating Company, Inc. . FSAR, i 13.1.1.2.1.1. The senior vice president for nuclear . operations is an of ficer -- of- all ' three supra named corporations. FSAR 9 13.1.l.2.1.2.

The vice president for nuclear for f the Vogtle facilities is an officer of Georgia Power Company and Southern Nuclear Operating Company, Inc. FSAR-5 13.1.1.2.1.5. Since March 1991', th FSAR-has shown that a number of officers.of Georgia' Power company are also of ficers of Alabama Power Company.

and Southern Nuclear Operating. Company, Inc.. Fee also Figure 13.1.1-1.5 2[ Staff footnote.1.] 10 C.F.R. 5-50.34(b)(6) requires-that the FSAR submitted on application for an operating-license shall provide, among other matters: .." The following information concerning facility operation: ( 1 ) T h e _.~a p p l i -

cant's organizational structure, allocations or responsibil-ities and authorities, and personne1' qualifications require-ments." Although that regulation does not require- revisions.

to an FSAR after a plant is licensed, 10 C.F.R.-5 50..71(e) provides that a licensee shall-periodically update its.FSAR, to keep it current, and submit- those revisions to the Commission.

• [ Staff footnote 2.] A copy-of Revision 3 wacisent to.

the Licensing Board by Licensee's - counsel on January. 21, 1993.

5[ Staff footnote 3.} Further, . Southern Nuclear's provision of technical support services for, the; Vogtle.--

' facility has been discussed among Georgia Power Company and!

NRC's Office of -Nuclear Reactor Regulation!and NRC's Region-al: Office in Atlanta, Georgia ~since 1988. S e e..N R C M e e t i n g --

Summary,-dated March 25, 1988 . .. .. _The.NRC conducted-an>

innpection.of the Vogtle facilitiesiinLthe summer of 1991.-

As a part of that inspection, . NRC. in'spectors vis ited D the

' Southern Nuclear Operating Company offices. in ' Birmingham, Alabama._ _ The primary purpose:vas to gain a more_ detailed' working knowledge-'of the various Vogtle support-activ_ities and groups. The inspection report-concluded: "No viola-( cont inued . .-._ );

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Mr. Mosbaugh's 2 principal allegation. > i s that Southern Nuclear lacks the: character and competence to operate a nuclear power plant. Briefly, Mr.- Mosbaugh alleges that'in 1988 Southern Company began making changes at Vogtle that eventually would lead to the filing of the pending applica - ,

tion. The first operative step was the organization of a~ _

Southern Nuclear Operating Company ( SON,OPCO) project. Atf i

the time, Mr. Mosbaugh served as Superintendent of Engineer "

ing Service, at the Vogtle Plant, -with 400. employees report'- i ing to him.6 Mr._Moscaugh concluded.that the organization of SONOPCO marked a change-from-a " conservative" to a-more:-

" risk taking" attitude in the operation'of Vogtle ' He,was particularly concerned that SONOPCO seemed less ' concerned >

1 about NRC report ing- requ i rements .a -Mr. Mosbaugh alleges that, subsequent to the time that SONOPCO began to_. have :

influence, Georgia Power filed false and misleading reports li i

with the NRC and its officials filed material false =!

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5(... continued) tions or deviations were identified." NRC Inspection Report .

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Nos.: 50-424/92-22 and 50-425/92-22 at ' pages. ' 13 a nd _ 15 ', .

dated October 28, 1991. .. . . Ei

'Recommende'd Decision and Order, ' Allen Mosbauch v.

Georcia Power Company,. 91-ERA-1, J11 ( Oct.ober 30,- 1992)  ;

(Mosbaugh Labor Case) at 4-5; " Georgia Power ~ Company 's  ;

Answer to the December 9, 1992 Amended-Petition of Allen Li ~

Mosbaugh", December 22, 1992' '(Georgia Power's- Second' Answer),. Exhibit:3.

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Mosbauch Labor ' Case at 6. We consider that- this:

information,' submitted by' Georgia -Power, places- the allegations in context.

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Mosbaugh Labor Case at 6. )j y

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statements in response to NRC questions.F At least,some of. 1 the charges initiated . by Mr. Mosbaugti are- suf ficiently serious that the. Staff ' has referred t h e m - t o . t h e _U n i t e d States Justice Department for evaluation with respect D to possible criminal prosecution.5  ;

II. Contentions.and Basis Traditionally, contentions are . discussed -in cases-involving intervention only after there has been a findirig _.

of standing. However, in license. amendment cases there may ,

be an interrelationship between what is alleged in' the-contentions and whether there is standing. This ~ ocurs because " injury in fact" in an amendment -case depends on whether the alleged risk to health and safety is signific'nt- a and involves " obvious potential for of fsite consequences.""'

'" Amendments to Petition to Intervene and Request for-

• Hearing" -(Mosbaugh), December .. 9 , l1992. (Amendments to-Petition) at 15-19.

20"NRC Staff Response to Allen L. Mosbaugh's' Amendments' _

to Petition -to Intervene- and Request; for Hearing;. and

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ContingenttMotion to Defer the Staff's ReplyLto. Contentions ~

and- Rulings ' on _ Contentions," December 30, 1992 (Staff's:

Second_ Response)'at 6-7.-

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See . a further explanation of- this legal standard below,,

beginning on.page 18. -

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-A. Legal; Background We are convinced that ' the granting of .the requested-amendment legally = requires that- Southern Nuclear, have thex character and competence to operate a nuclear' power. plant.;

The brief22 of the Staff of the . Nuclear Regulatory-Commission is highly persuasive on this point, and we adopt it verbatim (footnotes changed to be consecutive 1 in this opinion), as follows:

Section 182 of the Atomic Energy-Act, 42.USC 9 2231, provides that ~ the Commission,- by rule or regulation, may require such information as 'i t determines to be necessary to . decide the:

" character of the applicant."- The Commission has' y" enacted no regulations- in regard .to .the:

~" character" of. an applicant.- .However, .the Commission - addressed the character of licensees

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and applicants in Metropolitan Edison Company (Three Mile Island Nuclear Station, Unit No.- 1),

CLI-85-9, 21 NRC 1118, 1136-37 '(1985); Houston-Lighting and Power (South Texas Project, Units 1 and 2), CLI 80-32, 12 NRC 281, 291.(1980); see also Metropolitan Edison Co. ^(Three Mile TS1and - '

Nuclear Station, Unit 1),oALAB-772, 19 NRC 1193,- ,

1206-08 ('1984),'and Houston' Lighting-&. Power Co,.

(Soutn Texas Project, Un:. ts 1 & 2), LBP-84-13, 19 NRC 659, 673-679 (1984). Each. of the cited decisions indicate that ther character of an applicant = may- be considered? in -appropriate licensing actions. In 2'hree: Mile Island, 21' NRC 1136-37, the Commission stated:

A generally applicable ~ standard = for -  ;

integrity is whether there. is reasonable assurance'that the. Licensee

! has sufficient. character to operate the.  :

plant; in a manner. consistent.-with public health and safety and applicable NRC ' requirements. - The Commiss ion . = in -

making'this determination may_ consider

, evidence ~ :regarding . licensee behavior L 2aNRC Staff Response- to Licensing- Board Questions:

-(February 5,:1993) at 4-6.

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having a rational connection to the safe operation of a nuclear power plant. This does not mean, however, that every act of licensee is relevant.

Actions must have some reasonable relationship to licensee's character, i.e., its candor, truthfulness, willingness to abide by regulatory requirements, and acceptance of responsibility to protect public health and safety. In addition, acts bearing on character generally should not be considered in isolation. The pattern of licensee's relevant behavior, --

including corrective actions, should be considered (Footnote omitted}.

In South Texas 12 URC at 291, the Commission stated:

In large part, decisions about licenses are predictive in nature, and the Commission cannot ignore abdication of knowledge by a license applicant when it is called upon to decide if a license for a nuclear facility should be granted."

We believe that the above issues relating to technical competence and to character permeate the pleadings filed by Citizens. They do deserve a full adjudicatory hearing, as they will no -

doubt get in the operating liccnse proceeding, and they do deserve

"(Staff footnote 4.] Equally, and perhaps of more concern, the Commission cannot ignore false statements in documents submitted to it- Congress has specif-ically pro-vided that licenses may be revoked for " material false statements," see section 186a of the Atomic Energy Act, and we have no doubt that initial license applications or re-newal applications may also be denied on this ground,-cer-tainly if the falsehoods were intentional, FCC v. NOKO, 329 U.S. 223 (1946), and perhaps even if they were made only with disregard for the truth. Leflore' Broadcasting Company-

v. FCC, F . 2d __ ( D . C . Cir. No. 78-1677, June 5, 1980);

Virginia Electric and Power Company v. NPC, 571 F.2d 1289 (4th-Cir. 1978).

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expeditious treatment because .they:

.could prove disqualifying."

The licensee has:-requested that-amendments be issued to the Vogtle licensees to grant permission for' Southern Nuclear'instead of~ Georgia Power tof 7j operate the Vogtle f acilities. The-issuance of- an #

1 operating license or amendment-. requires an-affirmative _ finding of compliance with'the Atomic L Energy Act, thei Commission's- regulations -- andf reasonable assurance of health and safety of the public. 10 C.F.R. 6 50.57. If personnel who will be involved.in;the operation of the: facility lack:

character ,to operate the _ facility, .then the- ,

requested operating license or. amendment may-not. ,

he issued. - South Texas, supra, 19 NRC at 669 and  ;

831 and Three Mile Island, supra, 21 NRC at 1137, N.37.

i B. Contentions

-1. De Facto Transfer of Control-Contention 1 states:

The Southern Company (working in conjunction.with

• its corporate affiliates and officers) effectuated-transfer of control of the operation of the~ Vogtle Electric Generating Plant.from theilicensees to a de facto corporation,- known - Das the.-Southern Nuclear Operating Company, vithout, the. knowledge-or consent of the-co-owners of Plant 1Vogtle. The corrupt corporate policy effecting the creatlanuof.

the de f acto Southern; Nuclear Operating Company -

resulted in1the creation of aLmanagementichain of: z command - so lacking in:' character, competence, integrity, candor,' truthfulness and willingness to abide byfregulatory requirements astto represent a threat to;the health and safety of1the public and/orL represent a . potential 1 unsafe 4 -operating condition which must be corrected . before formal' transfer of' operating responsibility may1 pass'to.

the~ Southern Nuclear Cow.pany, Inc.

"[ Footnote-5 in' original.} -We11nclude, of course, the -

false ~ statements charge in this category.

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-Imme'd iately , the- Board notes that t h e '.. p a r t - o f - t h e contention _ alleging lack of knowledge or consent of the co .

owners of.Vogtle has not been shown to be. relevant.- For similar reasons, the word " corrupt" in the second--sentence of the contention also has not been'shown to be relevant.or - <

appropriate. On the other hand, as a-legal basis for_this contention. Mr. Mosbaugh cites" 10 CFR 6 50.54(c) (here -

inaf ter "nonalienation requirement), which states:--

Neither the license, nor _ any right= thereunder:

. . . shall be transferred, assigned, or disposed-of in any manner, either voluntarily- .or involuntarily, directly - or indirectly, through

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transfer of control of the Jicense'to any-person,-

unless the. Commission shall, after securing-full information, find that= .the - .ransfer is in accordance with the provisions and - the act L and_

give-its consent in writing'.6

"" Petitioner's Brief -in Response-to the Board's Request for Information," February 5, -1993 (Mosbaugh . Response :to--

Board) at.2.

- The cited regulation is relevant Lto Mr. Mosbaugh's  :

contention but relates to facts that the other-participants:

do.not accept as true. See, particularly, '" Georgia Power:

4 Company's Brief-in-Response to the. Board's; January _ 15,-l1993 +

Request ^ for. Information: and : Briefs,"- February 4, -1993' (Georgia Power's Response to Board)-at 11-19.-. (Also'see &

at 10, asserting that "since each'offthe Vogtle units began.

operation, it (Georgia Power]; has. been- in control: of J the operation of Plant Vogtle1. .z ;")

Ou r : record-. does not ' indicate that: the U.S. Nuclear,-

Regulatory ' Commission - has given . its. consentL in writing.:to any_ change of control of operations._.See Tr. 74'(Georgiat ,

. Power's counsel states that- Southern Nuclear ^.ist notL mentioned in the license)- and Tr. 74-5 .(Georgia L Power's counsel- does not provide reference- to_ "any . formal wayoin :

which the NRC' was-informed or agreed to that.- kind ' of organizational structure") f but; see Georgia . Power's Response to Board at 14-15. (Use of Southern Nuclear as?a support services company and the double-hatting of! officers - were-disclosed in three Updated Final Safety . Analysis Reports; (continued...)'.-

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He also cites la CFR 6 50.34(b)(6)(1)(hereinaf ter " reporting

• i r equ i r emen t " ) , .27 which- requires the. NRC to be.: informed ,

about: "The applicant's organizationa'l structure,'~ allocation of responsibilities and authoritiesi _ and personnel quali-fication requirement He then states that, contrary to the.nonalienation and-

. reporting requirements, that Southern Company.escablished a de facto board of directors of what was called the "SONOPCO" project. Mr. Joseph M. Parley is alleged to hve been the-chairman of that Board and to'have reported;directly to the Board of Southern Company 'about _ Georgia Power Company's nuclear units. Mr. Farley was not - an officer of Georgia =

Power Company.is Mr. R. P.-Mcdonald, who is invol: red in-the-rur..'ing of Southern Nuclear, allegedly had a set of joint:

8'(... continued)

No mention-of formal NRC approval.- No statement concerning, control having passed away from_ Georgia ~ Power, as alleged.)

27 50.36(c)(5),

Georgia Power ~a lso cites '10- CFR .s !-

50.36/b)(6)(1) and Generic Letter:NoE 88-06. Accordingfto its : view of the: facts,- it' is- in compliance with : these requirements. But Georgia Power does not . discuss' Mr.

Mosbaugh's allegations. Hence, its argument ~ is more helpful in understanding its underlying - factual position than ini

~ determining whether-to-admit the: contention. The decision about whether to admit does_not. require us'to-make deter -

minations concerning the truth of-the. allegations.

sMosbaugh cites Hobbv v'. GPC,1 case No.190-ERA-30,'at~

308, 39-40, 13-14,- attached to a 10 C.F.R. 5 2.206 petition filed - by Mosbaugh on -July 8, 1991; see Amendments -to

Petition at 6-14.

2'See " Phase III Proposed Southern Nuclear Organization:

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Chart (Plants Hatch and Vootle only are shown)," tendered;by -

Georgia Power, ff. Tr 116.

responsibilities with Mr. Farley -

who served in "non-l 1

operating areas" - and the two jointly served as chief executive of the project with respect to administrative matters.2 Mr. Farley also is alleged to have worked closely with the SONOPCO Technical Services vice president.22 Mr. Mcdonald, who was an officer of Georgia Power, allegedly gave contradictory and misleading testimony about the management structure and formation of SONOPCO.22 Georgia Power's Senior Executive Vice President testified that he thought Mr. Farley was an officer of Georgia Pover.22 Georgia Power's principal defense is that these allegations - involving past actions - are irrelevant to the license amendment application. We find, however, that this conclusion is not warranted. Mr. Mosbaugh has ade-quately alleged, with basis, that the formation of Southern Nuclear's relationship to Vogtle violated NRC regulations, evidencing a lack of a trustworthy character in-Southern Nuclear. If this contention were sustained, we might direct 2 Amendments to Petition; see especially p. 7.

22 Mosbaugh cites Hobbv v. GPC, case No. 90-ERA-30, at 37-38, attached to a 10 C.F.R. 6 2.206 petition filed by-Mosbaugh on July 8, 1991; see Amendments to Petition at 9.

22 Amendments to Petition at 10-11, 12, 23 Mosbaugh cites Hobby v. GPC, case No. 90-ERA-30,-

Hearing Tr. at 690-91, attached to a 10 C.F.R. 5 2.'206 petition filed by Mosbaugh on July 8, 1991;.see Amendmer.ts to Petition at 9.

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that the ' license. amendment be denied or conditioned Eoni changes in_the_' structure and' personnel:of-Southern Nuclear..

We note that 10_CFR-6 2.714(b)(2)(iii) r equ i res . . the specification of how the application fails to contain information that it should contain. - In this instance, Mr.

Mosbaugh has alleged material-facts that are relevant to the application. The omission of thase facts from the applica-

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tion is ~not surprising, since _ they' are adverse to the interest of the applicant. Consequently, . Mr. Mosbaugh fulfills the requirements of this section because - the ,

omission from the application of the facts he has alleged.is material-to proper consideration of the amendment.

For the reasons we have just stated', we-find that this contention - -amended to delete irrelevant material,. as' determined in the beginning of this section of- our memorandum - has met the criteria of 10-CFR 6-2.714(b)(2) and shall be admitted as a contention.-

2. Character of Southern Nuclear-Mr. Mosbaugh attempts to 'show a f actual' -basis .for; contentions- -2, 3 and- 4 in one' fell _ swoop.2' However,:

contentions 2 and 3 deal with Southern-Nuclear,;and we have decidedtocobsiderthosetwo. contentions-separatelyfromi-2' Amendments'to Petition at 14-19,

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contention 4, which relates to Southern Company. Contention:

2 stiates:

a The Southern Nuclear Operating Companyt Inc. , does not possess the requisite character, competence and integrity, and does- not have tne candor,-

truthfulness and willingness _to ' abide- by regulatory requirements to become'the licensee to operate the Vogtle Electric Generating Plant.

Contention'3 states:

The Southern Nuclear Operating Company, Inc., a wholly'ovned subsidiary of The Southern Company, does not possess _the- requisite character, competence and_ integrity, and does not have'the candor, truthfulness and villingness to abide by regulatory requirements to become the licensee'of the Vogtle Electric Generating Plant, and_as such transfer.of the license represents an increased-risk ' to the health and safety of- the public and/or represents a potential unsafe operating condition which must be corrected before responsibility for operating- plant Vogtle :can be transferred to the'  ;

Southern Nuclear Operating Company, Inc. >

As a basis for his contentions, Mr. Mosbaugh alleges that, "SONOPCO's highest levels of management ~ conspired to-submit and did submit materially' f alse information to the' -

NRC concerning critical safety-related- information pertaining to a - March - 1990 Site. Area - Emergency. "2r lIn:

support of this allegation, Mr..Mosbaugh describes evidence that, among other things , . implicates Mr. R.P. Mcdonald -'=an officer 'of Southern Nuclear - in materialif alse statements..

in --Licensee: Event Report 90-006. . One - of the alleged-material false statements is the intentional. falsification-of data on diesel engine starts _in order to' persuade'_the NRC 25

< Amendments to Petition at-15.

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- to permit _ vogtle _ to t restart.2' The eviderce 7that 1Mr.

Mosb'aughlintein'ds to introduce includes -' Mr. Mosbaugh's own1 eyewitness testimony plus tape. recordings- of relevant conversations.- He states:that he made the tape recordings, which are currently in the possession of the NRC's_ Office'of Investigations (01) .27 Mr. Mosbaugh also'. c laims that he made tape' recordings,--

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currently- in possession. of: OI , . that- provide irrefutable evidence that Mr. Mcdonald swore to a variety-- of- other f alse statements before the NRC.2a From his memory _ of ' events, refreshed by these tape recordings, it would appeaf that:Mr.

Mosbaugh- also could provide eyewitness testimony - of the underlying events.

We find that there_ is adequate basis for Mr.; Mosbaugh's.

• contention that at least one senior 1 officer of Southern 1 i

Nuclear is' lacking in character and ' competence. and that Southern Nuclear lacks the integrity required of a licensee for. the operation of a. nuclear.-- power ~ plant.- If.' this A

. contention were: sustained, we might direct that-the. license amendment be -denied or conditioned on changes in -the structure and-personnel.of Southern Nuclear.-

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27 Amendments to' Petition at 15-16.

asAmendments'to Petition at 17-19.

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For- the reasons above, these contentions-~have2 met the: ,

criteria of 10 CFR 6-2.714(b)(2) and shall be admitted.--

3. Character of Southern Company Contention 4-states:

The Southern Company, by virtue of the corporate structure and make-up of the.- Southern Nuclear Operating. Company, Inc., Board -of Directors, controls and directs the management of its wholly

. owned subsidiary, the Southern Nuclear ~ Operating Company, Inc. Because-the Southern Company.does not have-the requisite: character, competence-and- ,

integrity, and does not have the candor, truth ~

fulners and ' willingness to ! abide by regulatory requiremen.ts required of a licensee and because the Southern Company exercises substantial control over management of the Southern Nuclear Operating. .

Company, Inc., transfer of the Vogtle . Electric Generating Plant license to the-Southern Nuclear operating Company, Inc.,. represents;an increased risk to the health and safety of J the public and/or-represents.a potential unsafe operating condition 1 '

which must be corrected before said transfer.can occur.

We have -considered. this contention and find that- Mr.

Mosbaugh has not provided an adequate basis for questioning..

- the. character of-Southern-Company, its of ficers ori direc--

- tors, beyond-the allegation already admitted ^as Contention 1." Consequently, we will not admit this seps ate.conten-1 tion. However, our. denial of this1 contention; will not! in itself bar Mr.'Mosbaugh from introducing evidence relevant to. appropriate remedies involving' Southern Company if he~ ,

first succeeds in. demonstrating the1need for- remedies- by; "See Amended Petition at 15-20. _

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N establishing wrongdoing by _ Southern: Nuclear .orLits organita-4 ,

q tional~ predecessor.

s III. Standing-As set forth in Pacific Gas and- Electric Coltgany (Diablo Canyon Nuclear Power Plant, Units 1 and~2), LBPa92 -

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27 (September 24, 1992), a petitioner for' intervention must, ,

.i as a prerequisite to achieving party status, establish that it has standing and that it has proffered at leas t 'orie viable contention. To establish standing,' a petitioner inust i

demonstrate an " injury in fact,"20 that the -injury fail.s 38 To establish the basis-for standing, petitioner must; show injury in fact._ It is . easy to .; misunderstand this standard because the' phrase " injury in fact" as used .in this context does not bear -its normal everyday-. meaning. _ JFor -

example, a person living. 45. miles from a nuclear powersplant.

who canoes - in the general vicinity of- the plant-.- hasi been found to suffer " injury , in f act"' Trom' an amendment Lof - as power plant license in order,to permitvthe expansion-.-.ofothe' -

capacity of the-spent.. fuel pool, Vircinia Electric Power Ch (North Anna Power Station,-Units 1 and-2), ALAB 522,w9- .

'y' w NRC 54, 57-(1979). _ _ . .

Careful analysis reveals. that,- of courseOtheffuel pool?

was not even built at'the. time "injuryLin fact" was-; alleged.!

No accident had occurred. NoLreleasebof nuclear materials' 4 had occurred. Hence, in fact, there_had-.not.been<anyJinjury-to the petitioner as.those,vords.are-commonly used. :Never-theless, he was said to have'been injured-'in fact,becauseLof!

the possibility of an accident. Of icourse, this was an.

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- early stage of-the case in which he-had not;yet proved-that-there_was a possibility of an accident. What the petitioner-had to-do to.obtain party status--was-to= submit' contentions 1 (with an adequate basis) vhose subs _equent proof could result in.a finding of.-injury it fact to him.

So:1 injury in= fact

' is indeed the same, in=this context, es an allegation'that. ._ _ ,

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a real injury might reasonably be expected to-occur'in'the future. .

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within the zones of interest sought to be. protected by the-statutes, and- that the injury may be redressed. by a' favorable decision in this-proceeding. Public Service Co.

~

of New Hamoshir.g .(Seabrook Station, Unit 1)~, CLI-91-14, 34' NRC 261, 266-67 (1991).  ;

In Florida Power & Licht Co. (St. Lucie Nuclear Power Plant, Units 1 & 2), CLI-89-21, 30 NRC 325 (1989), the Commission noted that, in construction permit or operating license proceedings for nuclear reactors, residence of a person within 50 miles of a facility would be sufficient 1to confer standing. The Commission went'on to hold'that this 50-mile presumption did not apply in all operating license

.- amendment proceedings but only in those involving :a

• significant amendment involving " obvious potential for-offsite consequences." id., 30 NRC at 329-30.

In our Memorandum and Order of- November 17, 1992 (unpubli.shed) slip op, at 7, we noted:

. . . that. petitioner alleges that he resides 35 miles from the plant <and that?he has some addi -

tional contacts with the plant. For an. amendment-case, residence at that: distance,- with s o m e --

additional contacts, does not automatically result in standing.. Boston Edison comnanv. (Pilgrim Nuclear Power Station), LBP'85-24,-22 NRC 97, 99 (1985)(petitioner, who lived 43-miles from the plant and allegedly consunted fish and cranberries,

. did not show a reasonable' scenario' through which the-amendment could produce an injury), aff'd on othe r_,qrounds , ALAB-816, 22 NRC 461 (1985).

We also noted:

.. . . that Georgia Power challenges Mr. ..osbaugh's statement that he actually resides at the property

__-_..---..-~..-:L.-._---_.-._______._i-. ~

19 -

he owns 35 miles from the plant. It bases itu claim on the fact that he receiven electric bills at an address in the State of Ohio. It also apparently has some other undisclosed source of "1.1 formation and belief . " This is enough of a basis for us to require Mr. Mosbaugh to amend his petition to state specifically hov much of the time ne resides at his Georgia residence.

As a result of our concerns about standing, we held an evh.cntiary hearing on this limited subject at our prehen.

ing conference in Augusta, Georgia on January 12, 1993. As a result of that hearing, and after evaluation of all the evidence, we find that the significant facts concerning g standing are:

• Mr. Alan Mot baugh owns a detached house located approrimately 35 miles from the Vogtle Plant."

e From about 1985 to f all of 1990, Mr. Mosbaugh and his family resided full time in the house he built."

• Since August of 1991, Mr. Mosbaugh's family has rt. sided in Ohio but Mr. Mosbaugh has continued to live in his house in Georgia about seven days of every month."

"Tr. 15.

"Tr. 15-16, 30.

"Tr. 17, 18, 39-40. (Mosbaugh's family also comes to Georgia about three weeks per year.) Tr. 49-50, 51.

We note that Georgia Power and the Staff would have us decide standing based on legal residence. To determine whether Mr. Mosbaugh has had sufficient exposure to Vogtle to support standing, we do not consider it necessary to determine, either as a matter of state law or of federal (continued...)-

(

4 ..

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. Mr. Mosbaugh is currently seeking employment-l either in Georgia or Ohio. He also is considering starting his own business. The outcome of this job-seeking process vill cause him to live either j in Georgia or in Ohio.5' Mr. Mosbaugh has alleged - that his health, _ safety, t

property rights and personal finances could be affected by. ,

transfer-  !

an order granting Georgia Pover's request to control of Vogtle to Southern Nuclear." We conclude that the exposure that Mr. Mosbaugh has to Vogtle is sufficient- ,

to sustain the claim for standing.

IV. Conclusion t.

We conclude that Mr. '4osbaugh has met =a ll the requirements for standing. He has proffered at least- one viable contention, demonstrated an " injury in f act,"_ alleged +

1 a health-and-safety injury that falls within-the zones of interest sought to - be protected by the - statutes ,, and- ..

demonstrated that the injury may- be redressed b'y a f avorable 1

decision in this' proceeding.

Southern Nuclear must_ meet the regulatory. requirement that it. demonstrate its character,and competence-before it -

33( . . . continued ) _

common-law, whether Mr.- Mosbaugh- is a legal '" resident":- of the State of Georgia.

3'Tr . 36-3 7, 44-46. .,

35 Petition at 2-3.

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be granted operating authority over a nuclear power plant, i Where the contention raised alleges, as-here, that Southern-  !

Nuclear officials have intentionally withheld material safety information from the NCC, the issue is ~ one which j affects the safety of the entire. plant.- The risk of non-safety conscious management is as great as many other risks  !

1 that could be adjudicated in an operating license case. For-this reason, ve are considering a significants amendment  ;

involving obvious potential for .offsit'e consequences.T fiqrida Pover-r, Licht S h (St. Lucie Nuclear Power Plant, Units 1 & 2), CLI-89-21, 30 NRC 325 (1989).

In this case,-a few-key individuals who are' currently employed-by the licensee, Georgia Power, are also employed ~

Because

~

by the prospective licensee, Southern Nuclear."

a they are key employees of Southern Nuclear, their character _ ,

is relevant to approval of the requested amendment. . How- '

ever, Georgia Power and'the' Staff would deny Mr.=Mosbaugh standing because the proposed amendment ~ vill not: increase the' risk to.which he is already exposed. We have' concluded that.this argument is not valid.

Mr.'Mosbaugh has? raised a valid safety concern related?

to the transfer of authority that ic being requestedin the-  ;

pending license amendment. We-have concluded that!it is not

- a defense to Mr. Mosbaugh's allegations'of ' deficiencies--that.

~ % detailed description of the extent of.. overlap of senior' personnel is set forth.beginning at page.3, above.- >

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those deficiencies may already exist. We do not recognize as a defense the conditional argument that if key people in Southern Nuclear are lacking in character and competence then the same people working for Georgia Power are similarly lacking and therefore there is no loss or " injury" to Mr.

Mosbaugh due to the transfer of authority.

An analogous issue was decided in Northeast Muclear.

Enerav comoany (Millstone Nuclear Power Station, Unit No.

2), LBP-92-28, September 30, 1992 (Millstone), 35 NRC ,

slip op, at 2-3, 13-19. Millstone concerned an amendment necessitated by a calculational error that would have permitted a fully loaded spent fuel pool'at Millstone to have had a criticality constant or K ,, of as much as .963, which is in excess of the maximum value of .95 permitted by NRC regulctions. The purpose of the. amendment was to. place new restrictions on the fuel _ pool and to' require new blocking devices so that the maximum- permitted K rre would'not be exceeded. Thus, it i s clear. that the-amendment Would' have made things safer. Nevertheless, the Licensing Board-ruled that it vould admit a-contention.that alleged that the new, admittedly safer fuel' pool arrangement, still-did-not-meet regulatory requirements. The Licensing Board said,

35.NRC , slio op. a,t-18:

We return to' Licensee's argument that'.it was the prior calculationalierror,.'not the-which caused a reduced. margin of safety,' amendment, -therefore:

an injury . in' fact.- . That- argument ~ depends ' too heavily on- compartmentalized reasoning.-

The potential for1 reduc'ed' safety here (injury in f act)

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i is both the prior calculational error and' an '

amendment which does not redress that error but  !

permits operation of the spent fuel pool according .

to its terms. The two concepts are logically 1 inseparable. l i

Assuming that the record of the proceeding were to demonstrate that the risk from the calculational error is not abated by Amendment-  !

158, ma redress by a  !

denialinterested of that-personsamendment."y_ haveas Licensee True, '

states, that action vould not correct the prior- .,

calculational error, but i t would - remove the l authority to operate the spent fuel pool under.an ,

inadequate amendment. Such a denial vould return the matter to the Licensee and the NRC enforcement 'I staff for a proper resolution of the problem.  ;

In our case, Mr. Mosbaugh should be given the oppor- j tunity to oppose the issuance of an amendment. .He vould be injured if the authority to operate Vogtle were transferred  ;

to people who lack the character and competence to operrate q

that nuclear power plant. See Public Service Company of New I Hamoshire, et al. (Seabrook Station,1 Unit 1), CLI-91-14, 34

• NRC 261 (1991) at 267 (appearing to suggest that petitioner would have had standing to challenge the transfer' of operatino authority-over the Seabrook plant on the grounds of character - alleged harassment of workers at- another L

plant).

t

"[ Footnote 11 in the original.) In-the real world-of NRC adjudications, applicants for licenses and amendments to i licenses accept modification as a condition - of i ssuance.

Seldom are NRC ad'judicators. f acedj.with an up or down choice. .

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i V. Staff Motion for Delay i I

Staff stated that it could not respond to Mr.

Mosbaugh's contentions because a pending criminal i investigation of Mr. Mosbaugh's charges has been referred to the Department of Justice for its action. _ Staff stated:-  ;

Each of Mr. Mosbaugh's contentions maintains that the proposed transfer for which permission is .i sought in the subw c Mcense amendment may not  !

take place because r* i. elleged lack of " candor, truthfulness and e W111ngness to abide- by regulatory requiremente' of- the proposed transferee, Southern Nuclear Operating Company, Inc. As a basis for contentions 2, 3 and 4, Mr.

Mosbaugh makes allegations regarding material i falso statements attributed to officers and [he also mentions) a related investigation. Sne_ i Amendments to Petition at 15-16, n.10. These  ;

alleastions are beino pursued by the Depattment of ,

Justice for possible criminal prosecution, and until this investication la complete the NRC StaL[  ;

is unable to take a poc:ition on the allegations -'

contained in the contentions. [ Emphasis added; concluding footnote omitted.) .

We do not find that the'. Staf f provided' us with an adequate reason not to comment on the proffered contentions, as there is no indication that the materials forwarded by_'

this agency for potential criminal'. prosecution would .be -

relevant to the adequacy of. the basis provided by Mr.

'Mosbaugh for his contentions. It vould appear that - the material being kept_ confidential'would either be Irrelevant-or would provide additional' grounds for questioning. the .

. character and competence of Southern Nuclear. There is no reason to believe that the allegedly confidential; materials- .

would destroy the basis for the contentions.

k p '-

i We recognize .that' Georgia Power could be suf fering f rom a potential difficulty. Access to these confidential files l could permit it to rebut the basis -for the proffered.

contentions. However, the standard for assessing the basis for contentions is far less than what would be required to G.

accept their truth. Part of the basis for'the contentions is the personal knowledge of tar.14osbaugh. Part'is tapes that-14r. tiosbaugh says he made and apparently has listened to. His statements, about what he has seen and'about what I

he believes to be in the tapes, provide adequate basis for his contentions. Hence, we have been able to act on-the .

contentions even though the Staff did not. file its comments

- on them. [

We note that Georgia Power did respond to these contentions in Georgia Power Company's Answer at-20-26,-as well as some general remarks that preceded these pages.

VI. Consolidation of Contentions We have examined the contentions we have admitted and have determined, in the interest-of efficiency, that they-

~

amount to the'folloVing one_ contention:

The license to operate the Vogtle Electric Genera-ting' Plant, Units 1 and 2,-should not be-trans-

.ferred to Southern Nucleari Operating Company, r

Inc., because it lacks-the requisite character, ~ ,

competence and integrity,. as vell as~ the.necessary .

candor, truthfulness'and willingness toiabide by

-regulatory-requirements, i

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s We shall order that the admitted contentions all be consoli-dated so that this one contention, originally submitted in slightly altered form as Contention 2, will be the only one pending before us.38 VII. Discovery - Negotiations; Staf f to Show Good Cause It is the policy of this agency to ad]udicate all its cases promptly and efficiently. There is an opposing policy: to protect the confidentiality of documents contained in cr:minal prosecutions pursued by the agency.

In this case, these apparently conflicting interests could be harmonized if the parties could reach an agreement on how the relevant information can be chared pursuant to a protective order that contains a carefully constructed provision that would keep all potential defendants, and all potential counsel for those defendants, ignorant of the contents of the investigation.

If those negotiations succeed, discovery or partial discovery of investigative documents can commence. If they fail, we vill need to harmonize the policies for efficient adjudication and those for protecting criminal prosecution.

38 Contention 1, which we have admitted, alleges a lack of character of Southern Nuclear allegedly occurring from the actions of Southern Company. The principal issue in Contention 1 is stated in the consolidated contention.

Should Mr. Mosbaugh demonstrate the truth of the '

consolidated contention, we would then need to fashion a remedy and might at that point admit evidence (or stipulations) concerning the role of Southern Company, for the purpose of fashioning a remedy.

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To assist us in doing that,.ve vill schedule f111ngs by the parties. The first filing vill be that of the Staffe to-show cause why discovery of prosecution documents should not '

start immediately. In its filing, the Staff should include l ansvers to the following questions: '(1) What deadline, -i f

{

any, can the- Staff agree to as the latest date that-discovery can start?, (2) How does the Staff comparcJthe. ,

importance of the civil questions relating-to the adequate- l t

assurance of safety for the continued operation'of the plant-and a decision on the-licence amendment, to the importance -

of possible criminal prosecution?

1 VIII. Other Discovery and Scheduling Other discovery, which may not be .related :to- ,

confidential documents that are posstessed'by.the Office of-Investigation or the United States Justice' Department, may~ .

commence immediately. The parties shall commence negotiations concerning an appropriate . schedule for this

~

"other discovery," which may be reopened after .other documents become available.- tf_there.is no agreement on a schedule before March 8, 1993, the parties shall' simultaneously file suggested discovery and~ trial schedules. q on that date.-  ;

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~ ORDER l l

For all the foregoing reasons and upon consideration of ,

the entire record in this matter, it is this lath day of February, 1993, ORDERED, that: 1

1. Mr. Allen L. Mosbaugh is admitted as - a party to this case. ,

2. The following contention is' admitted as-th'e only :l ;

contention in this case:

l The license to operate the t'ogtic Electric Genera- ,

ting Plant, Units 1 and 2- should not be trans-ferred to Southern Nuclear Operating Company, Inc.,.because it lacks-tne requisite character, ,

competence and integrity, as well as the'necessary i candor, truthfulness and willingness to abide by regulatory requirements. ,

3.- Discovery shall commence immediately.

4. Negotiations among the parties shall commence J immediately, concerning: (a) a protective order 'and an ,

insulating wall that might- make the~ discovery of investigative documents possible at this time, and (b).a l schedule for_ concluding discovery and holding a prehearing conference and a hearing.

i On March 1

5. 8, 1993, - the Staf f shall file a brief-showing cause why discovery of prosecution-related documents. -

should not . commence immediately. On that same date, the 2'The schedule should. include a future date on which thel parties will discuss the scheduling of witnesses during-the hearing, stipulations.to reduce the need' for live testimony, _*

and any other ' prehearing matters the parties choose .to raise.

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9 parties shall simultaneously file their suggested schedule for the case, including the events mentioned in the accompanying Memorandum. On March 18, 1993, Mr. Mosbaugh and Georgia Power Company shall file their response to the Staff's March a brief.

FOR THE ATOMIC SAFETY A!1D LICENSI!1G BOARD I/tr a+ NM

/'/JamesH. Carpenter Administrative Judge um fhomas D. Murphy

. hw i V AdmitfB rative Judge

/

,

• D peter B.-Bloch Chair Bethesda, Maryland

e 1 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of GEORGIA POWER COMPANY, El AL, Docket No.(s) 50-424/425-OLA-3 (Vogtle Electric Generating Plant, Units 1 and 2)

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing LB H&O (LBP-93-5) - 2/18/93 have been served upon the following persons by U.S. mail, first class, except as otherwise noted and in accordance with the requirements of 10 CFR Sec. 2.712.

Office of Comission Appellate Administrative Judge Adjudication Peter B. Bloch, Chairman '

U.S. Nuclear Regulatory Comission Atomic Safety and Licensing Board Washington, DC 20555 U.S. Nuclear Regulatory Comission '

Washington, DC 20555 Administrative Judge Administrative Judge James H. Carpenter Thomas D. Murphy Atomic Safety and Licensing Board Atomic Safety and Licensing Board U.S. Nuclear Regulatory Comission U.S. Nuclear Regulatory Comission Washington, DC 20555 Washington, DC 20555 John Lainberski, Esq.

Office of the General Counsel Counsel for Georgia Power Company U.S. Nuclear Regulatory Comission Troutman Sanders Washington, DC 20555 Suite 5200, 600 Peachtree Street, N.E.

Atlanta, GA 30308 Ernest =L. Blake, Jr., Esq. Michael D. Kohn, Esq.

David R. Lewis, Esq. Stephen M. Kohn~, Esq.

Shaw, Pittman, Potts & Trowbridge Kohn, Kohn & Colapinto, P. C.

2300 N Street, N.W. 517 Florida Avenue, N.W.

Washington, DC 20037 Washington, DC. 20001

,,0 c.

Docket No.(s)50-424/425-OLA-3 LB M&O (LBP-93-5) - 2/18/93 C. K. _HcCoy V. President Nuclear, Vogtle Project Georgia Power Company Post Office Box 1295 Birmingham, AL 35201 Dated at Rockville, Md. this 19 day of February 1993 /

Office of the Secretary of the Commission D

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