ML20129J117
Text
..
O R G \\ A,f
'l OFFICIALTRANSCRIPT OF PROGRhoINGS 4
4 4
gergg.
Nuclear Regulatory Commission
-Office of Nuclear Reactor-Regulations Tide:
Implementation of Southern Nuclear Operating Company Docket No.
50-348, 50-364, 50-425, 50-321, so-ass P-3 6
'l q6 l
l
!~
tocmON:
Rockville, Maryland Dm:
Friday, January 11, 1991 PA G E:
1 - 49 i
l i
l fg' um anzraw,0 carus,an 1612 K St. N.W., Suke 300
' :.y-. D.C. 20006 (232) 293-3950 i'
j
.9511040315 960827 PDR FOIA KOHN95 -211..
1 1
UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION 3
4 OFFICE OF NUCLEAR REACTOR REGULATIONS S
- - - - - - - - - - - - - - - -x 6
In the Matter of:
Docket Nos. 50-348, 7
IMPLEMENTATION OF SOUTHERN 50-364, 50-425 8
NUCLEAR OPERATING COMPANY 50-321, 50-366 9
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _x 10 Nuclear Regulatory Commission 11 One White Flint 12 17555 Rockville Pike i
13 Rockville, Maryland 14 15 The meeting was called to order, pursuant to 16 notice, at 10:40 a.m.,
Friday, January 11, 1991, when were 17 present.
18 PARTICIPANTS:
19
.G. Lainas NRC 20 K. McCoy Georgia Power Company 21 T.
Beckham Georgia Power CoLpany 22 J. Woodard Alabama Power Company
-23 R.P. McDonal_
Alabama Power, Georg'ia Power 24 D. Matthews NRC 25.
.S.
Hoffman "iRC l
l
2
)
1 PARTICIPANTS: (continued) 2 M. Kohn Kohn, Kohn & Culapinto 3
S. Varga NRR 4
G.
Holler NRC 5
D. Nash NRR/NRC 6
F. Allenspach NRR/NRC 7
E. Marschoff NRC/ Region II 8
E. McKenna NRC/NRR 9
L. Robinson NRC/OI 10-E. G. Adansam NRR/NRC 11 D. Spaulding NRR/NRC 12 L.
Long Southern Nuclear Operating Co.
13 D. Smith Oglethorpe Power Corp.
l 14 D. Hood NRR/PD2-3 j
15 J.P. Schaudies Troutman, Sanders, et al 16 Georgia Power Company 17 A. Domby Troutman, Sanders, et al 18 Georgia Power Company l
19 J. S. Wermiel NRR/DLPQ/LPFB 20 E.W.
Brach NRR/DLPQ/LPEB 21 C. Thomas NRR/DIPQ' 22 K.J. Jabbour NRC/NRR 23 24 25
--.~....
3 1
PROCEEDINGS 2
[10:40 a.m.)
3 MR. LAINAS:
Maybe I can start the meeting with a 4
few briwf, introductory remarks.
I think that first I want
'5 to thank you very much for coming today.
I know it Vasn't 6
easy, and I want you to know that we didn't have anything to 7
do with the weather out there.
You made it, and thank you 8
vary much for coming today.
9 The purpose of the meeting.is to discuss the
'10 information that you provided us in your letters of December 11 6th.
I. guess it was put on the docket for the Farley 12 Station, Vogtle and Hatch, and you are going to give us some 13 additional clarification of what you said there.
I might 14 say that this was a noticad meeting and an open meeting.
15 However, participation will.be limited to the licensee and 16 NRC.
What I am going to do a little later is go around the 17 room and everybody can identify themselves and their 18
' organization.
19 As you can see. the meeting is being transcribed.
20 I guess the purpose of this was to give us a good record of 21 he meeting for possible future reference.
With that, what 22 I think I would.like to n :s just start around the room.
23 MR. VARGA:
7 ; _- -. NRR.
24 MR. KOHN:
M;; ;,_ Kohn, representing Mr. Hobbe 25
- and Allen Mosbach.
4 1
MR. HOFFMAN:
Steve Hoffman, NRR project manager l
2 for Farley.
3 MR. MATTHEWS:
Dave Matthews, Project Director 4-responsible for the George Power Company.
5 MR. MCDONALD:
Pat Mcdonald, Executive Vice 6
President, Alabama Power Company and Executive Vice 7
President, Georgia Power Company.
8 MR. WOODARD:
Jack Woodard, Vice President, 9
Alabama Power Company.
i 10 MR. BECKHAM:
Tom Beckham, Vice President of plant 11 Hatch, Georgia Power Company.
12 MR. MCCOY:
Ken McCoy, Vice President of Plant i
l 13 Vogtle, Georgia Power Company.
i 14 MR. LAINAS:
Gus Lainas, NRR, Assistant Director 4
15 for Region II reactors.
16 MR. JABBOUR:
K. J. Jabbour, Hatch Project 17 Manager, NRR.
18 MR. THOMAS:
Cecil Thomas, Deputy Director, 19 Division of Licensing, Performance and Quality Evaluation.
i 20 MR. BRACH:
Bill Brach, Chief of Pe. 'ormance and 21 Quality Evaluation Branch, NRR.*
22 MR. WERMIEL:
Jerry Warmiel, Chief, Reactor 23 Assessment Branch, NRR.
24 MR. DOMBY:
Art Domby with the law firm of 25 Troutman, Sanders, Atlanta, Georgia, representing Georgia
5 1
Power Company.
i 2
MR. SCHAUDIES:
Jesse Schaudies, with Troutman, 3-Sanders, Lockerman, Ashmore, representing Georgia Power 7
I 4
company.
J i
5 MR. HOOD:
Darl Hood, NRC Project Manager for 6
Vogtle.
7 MR. SMITH:
Dan Smith, Oglethorpe Power f
8 Corporation.
9 MR. LONG:
Louis Long, Southern Nuclear operating 10 Company.
11 MS. SPAULDING:
Deidra Spaulding, Engineering 12 Intern, NRR.
13 MS. ADENSAM:
Eleanor Adensam, Project Director, 14 NRR.
I 15 MR. ROBINSON:
Larry Robinson, Office of 16
~nvestigation, NRC.
17 MS. MCKENNA:
Eileen McKenna, Section Chief, 18 Performance Quality Evalus icn Branch, NRR.
19 MR. MERSCH0FF:
Ellis Marschoff, Deputy Director 20 Projects, Region II.
21'
.KR. ALLENSPACH:
Fred Allenspach,-Performance and 22 Quality Evaluation Brang...
23 MR..NASH:
Carr*
^! a s h, Policy Development, NRR.
24 MR. HOLLER:
Oc Miler, office of General 25-Counsel, NRC.
i L;
6 r
.1 MR..LAINAS:
Thank you very much.
I guess with 2
that I.will turn it o'ver to you, Pat.
3 MR. MCDONALD:
The organization diagram really l
4 summarizes the material that I want to cover today, and as 5
well to talk around that.
However, first let us consider a s
6 little history.
The Southern Nuclear Operating Company is 4
7 intended to be a wholly owned subsidiary of the Southern i
4 f
8 Company.
In June 22, 1988 the Southern Company filed to 9
incorporate with the SEC to perform the Southern Nuclear 10 Operating Company.
That was June 22, 1988.
11 The SEC provided approval for that on December 14, j
12 1990.
On December 17, the Southern Nuclear Operating 5
13 Company was incorporated.
On December 18, the officers were.
i 14
' elected.
On January 1, 1991 there were employees that were k
15 transferred and double-hatted from the Georgia and Alabama 16 Power Company to the Southern Nuclear Operating Company as 17 well as from Southern Company Services to the Southern 18 Nuclear Operating Company.
When I refer to Southern l
19 Nuclear Company and SONOPCO, both of those should be 1
H2 O considered to be synonymous.
I 21 The functions of the Southern Nuclear Operating 7'
22 Company at this time are to' provide support services to
]
23 Alabama Power Company and Georgia Power Company for their i
1 24
. operation of the nuclear plants.
These support services 1
25 involve the corporate level support for engineering and
7 1
licensing and maintenance, the technical support for nuclear 2
fuel, generic licensing, vendor QA and some NDE services, 3
and administrative support involving such things as i-
-4
=anagement, budgets, document control,. procurement, i
]
5 performance matters and insurance.
s j
-6 The relationship among Alabama Power Company, 7
Georgia Power Company and Southern Nuclear is one where,the i
8 licensees who are Georgia'and Alabama Power Company, 9
maintain their licenses.
They continue to have their 10 licenses.
I am here speaking to you today as an officer of i
1 11 Alabama Power Company and Georgia Power Company.
We 12 maintain those licenses.
13 The services that Southern Nuclear provides is an i
14 administrative type of service, and it has the management of i
15 the personnel who are providing those services to those two k
16 companies.
The operating lines for licensed activities i
17 remain the same, they are unchanged.
Let me go over that i
18 and get right into the organization, and I am sure that we 19 will have some questions after going through this 1.
20 organization.
21 First, let's ::nsider on the left-hand side the 4
22 Alabama Power Company or; nization.
It's a hard line.
This
(
23 Alabama Power Company
.2 che Chief Executive Officer at 24-
-this time who is Elmer i _
'. 2.
I report directly to him.
I
~ 25 also report directly :a -
2111 Dahlberg, who is CEO of 1
-,n-,
4 2
8 4
1 Georgia Power.
I administratively report in my Southern 2
Nuclear at to Mr. Joe Farley, who is. President and CEO of 3
the Southern Nuciear company.
Reporting to me are the corporate secretary of 4
i 5
Southern Nuclear Company, the senior vice president of 6
Alabama Power and the senior vice president of Georgia l
7 Power, who is George Harriston.
The Vice President of i
]
8 technical services of Southern Nuclear, who is Mr. Lou Long 9
over there.
A presently vacant position, vice president of 10 administrative services for Southern Nuclear.
Notice the
~
11 annotations where you see the double or triple hatting, and 12 we will go into some discussion on that.
]
13 Going down the line from there, from Mr.
14 Harriston, reporting to him is Jack Woodard, Vice President j
15 of Farley, Alabama Power Company; Tom Beckham, Vice i
16 President of Hatch, Georgia Power Company; Ken McCoy, Vice 17 President of Vogtle, Vogtle Project.
Going back over here l
18 to Mr. Jack Woodard, here is our reporting chain to Jack
[
19 Woodard.
He has reporting to him three people; the. plant 20 manager reports directly to him who.is and remains -- the 21 plant staff remains a totally Alabama Power Company 22 organization.
He also has reporting to him a corporate 23 level support organization which provides the engineering 24 and licensing, project work, the administrative personnel 4-25.
matters, nuclear fuel liaison and that type of services.
t 4
-..n
- +
9 1
The support organization-has no line authority 2
whatsoever over the plant.
It is strictly a staff support 3'
orgad'ization. - Also reporting to Mr. Woodard is the manager l
4 of safety audit and engineering review who, in the case of j
5 Farley and only in the case of Farley, is double-hatted..He 6
remains an Alabama Power Company employee and functions in i
~
7 that role, and he is also a Southern Nuclear employee. He is 8
in that role, whereas the other two QA groups are not, 4
9 because we had a specification in the tech specs that 10 designated.that position as an Alabama Power Company 4
11 position.
We did not see any need to change that.
1 4
12 The people working for him are Southern Nuclear j
13 people.
That is the QA crganization that is on-site 'at 14 Farley.
Similar is the case fer Hatch and Vogtle, except 15 for Hatch and Vogtle their corporate level manager is not 16 double-hatted.
That same organization exists for the two l
-17 other projects.
?
18 Let us look now and see what this functionally 19 means.
First, in the services that are provided, the only a
20 people who are Southern Nuclear employees are those who have 21 hats as indicated-here in: uding this one, plus these 22 organizations -- these r:7. pert organizations in each of 23 these projects, off-sita :ucpert organiza?. ions.
The 4
-24 administrative departr.2.m
- the technical department in the 25 ccrporate sector.
Th: -
remain totally in Alabama 4.
v
~._. _ _ _
10 1
-Power Company and Georgia Power Company, strictly a line of i
l 2
accountability.
3 We had conducted assessments of this beforehand, 1
4 after we had talked with you before and before doing this, i
l i
5 we updated assessments.- We did 10 CFR 50.54 A, QA 6
considerations, and it is noticed that the lines of i
7 reporting are unchanged.
We have no reduction of any type j
8 of commitments.
We had 10 CFR 50.54 P security a
j 9
considerations, there is no decrease in securityt 10 CFR i[
- 10 50.54 Q, emergency plan, no decrease in emergency plan.
At d
11 10 CFR 50.59 safety evaluation there were no technical I
(
12 specifications and no un-reviewed safety guestions.
i 13 What we have is something that is essentially an f
14 administrative support organization.
These people now 15 provida --all the ones that.have a double-hat or Southern 16 Nuclear title, now obtain their paychecks from Southern 17 Nuclear.
Their pay is paid to them, their health benefits 18 and what have you.
19 In the case of the double-hatted people, let's
- 20 talk a minute about the double-hatting.
We will talk about 21 myself, which will be typical af the others.
I work for 22 three distinct different organizations.
I work for Alabama
{
23 Power Company, Georgia Power Company and Southern Nuclear.
24-In that, in my. Southern Nuclear hat, we have a contract with 25 each of these companies to provide administrative and these d.
a-
1 11 i
l l
1 other type of services.
We have a written contract.
2 My being an employee and reporting here, my t
3 performance evaluations, my salary-levels, my performance 4
4 evaluations, are performed by these three entities 5
individually.
Any changes in salary and what have you are performed independently by those three and.then are sent to 6
7 Southern Nuclear to combine into a white paycheck.
That is
- 8 a matter of the written agreements which we have, so[that at 9.
any one time there was a continuous complete line of 10-responsibility for all licensed operations.
11 You will see that I made some rough notes here.
i 12 Let's see if there is anything else that I forgot.
At this 13 point, I would like to ask fo'r questions.
It is really as 14 simple, I believe, as I have stated here.
15 MR. VARGA:
May I?
16 MR. MCDONALD:
Yes.
17 MR. VARGA:
It is purely hypothetical, and I am 4
18 somewhat confused.
Let me give you a hypothetical scenario.
19 Alabama Power at Plant Farley, let's say the plant manager 20 who is an Alabama Power employee, he wants to have a 21 maintenance supervisor, a new one.
He decides he is going 22 -
to hire that man.
He gess uc to Vice President of Farley, 23 who is now SONOPCO as saa. is Alabama Power, and that person 24 could say no, I don't :n:c. fou need that. I think maybe you 25J need somebody else er *
, somebody in mind.
12 1
The plant manager there says gee, I don't agree 2
with that.
The next~ step up is going to the vice president 3
of Nuclear which is now a triple-hatted man who does have 4
Alabama Power, but his loyalties are somewhat divided.
It 5
seems to me that before this plant manager can get somebody 6
up there that is only Alabama Power and that might support 7
his position would be up there to APC, the CEO.
8 MR. MCDONALD:
Let me address that in a real live
.9 case and not a hypothetical.
We had been having Mr. Bill 10 Shipman at the Vogtle plant serving as the acting general 11 manager at Vogtle.
12 MM. VARGA:
He would be below that --
13 MR. MCDONALD:
He was serving over here for Kan 14 McCoy.
It was acting.
He was acting, because we had an 15 abrupt departure.
We then had a personnel selection 16 committee, as is the rule in the Southern system.
The rule 17 in the Southern system that had jobs at those levels, you i
18 get candidates from other companies and you have 19 representatives from those other companies sit on a j
l 20 selection committee.
That selection committee makes 21 recommendations of who they think can best fill that job.
22 We went through the Southern Company process for 23-selecting people and got candidates for that.
We also 24 formed a selection group for that.
Now, as soon as those
~2 5 candidates were selected and that selection committee was
13 1
named, I called my boss at Georgia and said Mr. Dahlberg 2
here is where we are.
We have gone through the Southern 3
system in the normal fashion and filled all the 4
requirements.
Here are who are the candidates and here are 5
who the selection team is, and here is where it is meeting.
6 That selection team met and it met yesterday, and 7
I called Mr. Dahlberg in Phoenix, Arizona and said Mr.
8 Dahlberg, they have met and here is their recommendation but 9
we want your final approval for this job.
That is how it 10 actually happened.
11 MR. VARGA:
In that case, would there be any --
12 MR. MCDONALD:
Let me go ahead and add, this man 13 and this man were neither involved.
They neither yet know 14 how that thing has come out.
15 MR. VARGA:
Would it be possible, even after that 16 selection committee, would it be possible for a voice from J
17 down at the plant even though you have the selection 18 committee and all that, would it be possible for a voice to 19 be heard up there at the GPC level.
20 MR. MCDONALD:
He has call-ins all the time.
21 People can call him frem the plant at set dates.
We have a 22 program.
These people 2:2 in constant communication and 23 he's here all the ti=e.
ie can call here, they can call up 24 here, they can call up a.
They have the same employee 25 relationships that t.. x
- "2 always had.
It is completely
14 I
1 unchanged.
There has been no change whatsoever for this 2
plant.
3 MS. ADENSAM:
Pat, I have a question with a little 4
different twist.
How would you resolve a conflict between i
i 5
what the plant, as Georgia Power and Alabama Power might i
l 6
want and what the technical staff at SONOPCO felt was l
7 appropriate?
Does the Vice President at Farley simply sit I
down -- how are you assured that there is no conflict of 8
9 interest there?
1 10-MR. MCDONALD:
Let me respond to that.
Each of 11 these double-hatted employees are shared employees.
I will 12 explain to you that they work for two' companies and they get 13 performance reviews by two companies.
Jack Woodard is 14 always in charge of the Farley plant, always in charge.
15 Let's say that George Harriston or I, let's say 16 that Jack comes up and Jack works for both of us.
He says I 17' want to make Joe maintenance manager.
Well, generally, who 18 he selects as maintenance manager, Jack Woodard, he has the 19 authority to do that without referring to us but he confers 20 with us.
If he comes and says Jay Jones, I want him as 21 plant manager Lnd we might talk to him and say who is your i
22 other candidates.
We will talk about it and say well, all 23 right, if that's why you want hin'that's fine.
If not, we 24 will give some reason, just as though we are with no other 5
25 company in the whole world.
i l
15 1
Now, if he was talking about selecting another 2
person within that company, if he wants to select another
'3 person in another company, then we have to follow the normal 4
Southern Company processes where you request permission to 5
interview and consider somebody for a job and have a 6
_ selection process.
Did I answer you directly?
7 MS. ADENSAM:
Actually, I don't think you 8
understood my question.
I don't think I characterized it 9
right.
10 MR. MCDONALD:
I answered the wrong question.
11 MS. ADENSAM:
That's correct.
i 12
[ Laughter.]
t 13 MS. ADENSAM:
What I was more interested in was a 14 technical conflict; whether or not a technical specification 15 needs to be met; whether or not safety modifications need to I
16 be done; where the plants comes in and says we see a need 17 for this and the SONOPCO staff support staff supposedly says I
18 you guys are all wet, we don't think so.
How would that kind of conflict be resolved?
19 20 MR. MCDONALD:
Let's see if I can pose this 4
21 question in the right way and you help me.
Jack Woodard is 22 here.
Let's say his plant manager, let's say that we are 23 going to change the tinic.; in the motor operated valve a 24
'little bit, and let's 1 :u.:a that there's some spec about 25 the allowances on it.
.: 2 not a good example, but let's
4 16
-t 1
use that.
4
~2 Dave says we have had trouble with that valve and l
3 we have a problem in the timing of it, and we would like to 1
4 change it'and make it better and open it just a little bit i
I 5.
faster.
Jack just goes on and does business'like he always 4
6 has.
They talk back and forth.
If there's a question about 7
it, Jack may turn to his corporate support and say let's 8
look into this.
Let's get Westinghouse or Bechtel and see i
9 what they say about it, get a strong technical position, i
10 have an engineering study and engineering findings.
We put j
4 i
i 11 it down here after it's decided and pr.oposed and it may be i
i 12 sent through the on-site review committee and off-site i
13 review committee.
14 There is no change whatsoever than what he has I
15 been doing and what we will.be doing now.
4 16 MS. ADENSAM:
Let me take something that I think j
j 17 might be a little more significant from an organizational 18-standpoint.
Let's say you need to make a decision regarding 19 your steam generators, and whether you are going to need to i
20 replace them or not.
I
_21-MR. MCDONALD:
That's a good question.
That's a 22
~ good question.
23 MS. ADENSAM:
Your staff at your site has been j
~worki N with the steam generators.
They have been looking 24 4
rat the results also of all kinds of testing.
They are right i
. 25 i-
17 1
there, and if one of those tubes fail they are going to have 2
to mop it.
They have a view in timing and scheduling and 3
the safety significance of when you make those changes, what 4
you do to those steam generators.
5 Your SONOPCO support staff says no, you are all 6
wet.
You have four more years, five more years, another ten 7
years and they are good for this, we can patch them, we can 8
patch them.
How would you resolve those differences?
9 MR. MCDONALD:
You asked the right question.
This 10 so-called SONOPCO staff, Jack Woodard, he has working for 11 him a man named John Garlington who you know.
John 12 0 arlington is a general manager in charge of this thing.
13 John Garlington has a Southern Nuclear hat, but he is i
i 14 fulfilling exactly the shme position as he was. filling 15 before.
He is carrying out the same procedures, the same 16 review process.
17 The only difference about that is that he is 18 actually being paid by Southern Nuclear.
He is doing all 19 the programs that he was doing before with no change.
He 20 has no alternate authoritj to challenge any decision made by 21 that change.
He is a c:ntract employee filling the same job 22 that he did before.
Intailscrually, there has been no 23 change at all.
2 <4 MS. ADENSAM:
". :. : ~ am hearing you say is that 12 5
.from a technical-work
-- -his change is transparent to
18 1
the corporate staff supporting the plant?
2 MR. MCDONALD:
That's right.
Absolutely no 3
change.
4 MR. WOODARD:
For example, the steam generator one 5
is ongoing right now.
The way I view that particular 4
6 decision-making is the Southern Nuclear support general 7
Manager, John Garlington, his role -- we all know that we 8
need to replace steam generators.
What we don't know is 1
9 when.
Dave, the plant manager, wants them replaced six j
t months ago so he doesn't have the pain he just went through.
10 What John's role is, and he is actively doing this i
11 12 today for a meeting next week is, is to put together all of 13 the alternatives that he can think of, the different options i
14 that you have; maintenance type options and replacement i
15 options and attach economic. significance to them.
He does 16 that as a service to all of us.
The decision on which 1
17 option is picked will be made jointly by myself, George 18 Harriston, Pat Mcdonald and Dave Morrey.
19 With John, he's the guy that is giving us the 20 input on what his engineering shows as options.
He is 21 providing a service se that decision can be made by line 22 management.
23 MS. ADENSAM:
Okay.
24 MR. WOODARD:
That's no different from before.
25 MS. ADENSAM:
Let me ask you a question now.
19 1
Things are now different for you because you now have two 2
bosses.
Your performance in evaluating these options and 3
making a recommendation --
4 MR. MCDONALD:
No, he does not have two bosses.
5 He has no boss except one when it comes to matters of safety 6
.and carrying out the direction, supervision of those 7
matters.
He only has one.
8 MS. ADENSAM:
Okay.
9 MR. MCDONALD:
Only one.
10 MS. ADENSAM:
His performance is that of the 11 SONOPCO organization as you show it right here.
12 MR. MCDONALD:
The SONOPCO organization, all that 13 does it puts John Garlington there and pays him to do'the 14 job he was doing before.
15 MS. ADENSAM:
Jack's performance in this 16 particular matter is moot, because this issue is not before 17 them for decision; is that right?
Am I understanding you 18-correctly?
19 MR. MCDONALD:
That's right.
That example is a 20 good example. It's a good example.
As Jack said, Dave would 21 like to get rid of those things and get some that he doesn't 22 have to spend a long outaga for.
Jack is a little closer to-23 reality in terms of del _;rs, in realizing that you can do a 24 lot to steam generators
- :perate them quite safely.
25 come over hari 1.nc George and I have an opinion
20 i-1 and I have an opinion.
I have discussed this on several 1
2 occasions lately with Mr. Elmer Harris, including the day
<(
3 before yesterday morning at 6:00 o' clock.
He says, what do j
4 you think about those steam g6nerators?
I said, we are i
5 going to have some meetings but it's going to come down to a 4
6 financial tradeoff analysis.
It's not a matter of safety, 4
7 it's a matter of how much money you want to spend each year 1
8 and maintain them because they are safe.
It's gojng to come 9
down to a financial decision.
10 MR. MERSCHOFF:
Pat, it looks like you are in an 4
11 interesting spot.
What would happen if Mr. Dahlberg at Georgia Power was dissatisfied with your performance but Mr.
12 13 Farley and Mr. Harris were just as pleased as punch?
14 MR. MCDONALD:
There has been an occasion or two 15 that he has been dissatisfied.
7 16 MR. MER3CHOFF:
Do they have veto power?
Would 17 you then be fired if one of the three felt that your i
i 18 performance wasn't inclined --
19 MR. MCDONALD:
I don't want to find out.
20 (Laughter.)
21 MR. MCDONALD:
Let sa just discuss this.
I did have a disagreement with Mr. Dahlberg on one occasion, and I 22 23
'was' sitting in my office in Birmingham where we are co-24' located and he was sitting over in Georgia.
We didn't see t
25 things eye to eye.
So, being the subservient person that I
- .-,--,,---,-v.-,
4
1 21 1
am,-I said look, I will be in the car and be over there in
~
2 two and one-half hours.
I went over there and had a meeting 3
with him and resolved it.
4 The point is, is this is a direct link at all 5
times.
Every day on the day there are calls made from the j
6 plant to a representative on this corporate staff.
Jack has 7
three people who stand-duties and calls.
He has him as one i
8 of them, he has two people in this organization that does 9
it.
George or I, every day the plant gives us a status of 4
l 10 what has happened overnight, what the problems are, what the 11 projected schedules for the day is for each plant.
These 1
12 are phoned in and passed up to me.
13 Then, I call if there is something significant at 14 all.-
I will call or George will call Elmer Harris if it's 15 his, or Bill Dahlberg if it's his.
16 MR. MERSCHOFF:
Pat, there may come a day when 17 there's someone in that Executive Vice President's position i
18 that is not as easy to work with as you are.
One of those 19 three may wish to terminate the person in the next spot.
My 20 question is, does the CEO have that authority to remove the 21, person in that spot in his chain of command when the other 22-two wish it to not occur?
23 MR. MCDONALD:
_:u always want to ensure that the 24 authority to pay and aut.".:rity to hire and fire, that's part 25 of the test of who you 2.
icrXing for.
Yes, I think he has
~
22 1
1 every authority to say you are not going to work for me t
2 anymore and I am going to replace you in the Georgia plant.
l 3
He will tell this guy and this guy that I an unsatisfied i
4 with him and going to replace him.
Absolutely.
1 l
5 Lot-me go on and add that from an intellectual 6.
point of view all of this is transparent, because it really 7
doesn't -- there aren't conflicts that do develop.
This i
8 gentleman, this gentleman and this one and the President of 4
9 Southern Company and-the President of Southern Company 10 -
Services are members of the board of the Southern Nuclear
{
I l
11 Company.
Part of the job is trying to manage people.
)
12 If he's unhappy with who is here, that we have the 13 best chance of getting the best guy to get in that job out j
14 of the Southern system or elsewhere.
i 15 MS. ADENSAM:
Pat, where do you go from here?
16 MR. MCDONALD:
We just got here, Eleanor.
We 17 expect to be in this condition for a while, until such time l
18 as we move toward the transfer of license.
i 19 MS. ADENSAM:
You are not in a position to say 1
20 when you think that might be?
.I 21 MR. MCDONALD:
Not today, no.
22 MR. VARGA:
What does the dotted line between the j
23 President and CEO of SONOPCO and your position; what does 24' that mean?
. 25,
MR. MCDONALD:
That means that it's an
23 1
administrative, non-operational.
2 MR. VARGA:
He can't voice on you any particular 3
desires that he might have, having to do with one of the 4
plants?
5 MR. MCDONALD:
No.
He has no authority over these 6
license-related type operations nor over'the Alabama Power 7
Company people and Georgia Power Company people.
8 MR. LAINAS:
I think what you are saying Pat is 9
that what you are doing here is, you are completely 10 consistant in requirements of the license and there's been 11 no change in ownership; that, as far as the tech specs are 12 concerned, as far as those people that have been identified 13-in the tech specs; that, that remains the same?
The lines
]
14 of responsibility and authority are identified,and everybody 15 knows who has what responsibility, and you are in complete 16 conformance at this time with the license.
17 MR. MCDONALD:
I would go even beyond that.
We 18 have made it so simplistic that it doesn't encourage 19 conflicts as you were asking about.
It is a very simple 20 type of an organization, because these people only have two 21 hats.
They have nothing to do with this plant over here, 22 absolutely nothing, no responsibility of any-type.
23 You started asning one question and you might have 12 4 asked this question abcut what if they wanted to organize 25 their maintenance depart:3n one way.
4 24 i
You mean, at the site?
I.
1 MS. ADENSAM:
i.
2 MR. MCDONALD:
Yes, at the site.
What if they h
3 wanted to organize it?
That organizing in that maintenance I
j 4
department is still an Alabama Power problem.
What we do as i
j 5
a matter of Southern System Policy is, we try to keep them 6
somewhat the same so that we have comparative pay levels 7
between one company and the other and so that we work toward 8
the best type of organization.
But we do not try to
.9 standardize precisely the organizations because we want 4
J 10 people to try things and we want to grow, and if we l
- l 11 standardize we would probably freeze at some level of 12 mediocrity in organizational.
i i
13 MR. LAINAS:
Pat, let me ask you something.' Might l
14 you say something about the advantages of this organization, i
)
15 particularly in corporate.
16 MR. MCDONALD:
Yes.
There are lots of advantages, i
i 17 and I guess we realize more advantages and we can see them l
18 more clearly than we ever have.
It is amazing what all of t'
l 19 us learn virtually day by day by the ability to compara 20 plants and what is happening in plants.
If you have one 21 thing happening to one plant you can immediately ask the i
22 people what is happening there.
That is such a tremendous 23 advantage.
24 The problem with it is, in all these schemes that
-25 we have_in our industry and that NRC takes to send out w
4 25 1
notices and bulletins and what have you, there is a g,
2 frequency of things that are more prompt, that are more you l
3 might say out of the mainstream that never come up in those.
1 4
Yet, we can learn those within the system and they are more i
~5 valuable than we ever thought they would be. How does a i
j 6
certain valve work, or have you had this problem with a i
7 leak, or how does that get repaired.
8 The other thing that is important is in terms of i
9 financial management; how much is it costing you to do this 10 job.
This is more than that and why is it more than that.
l 11 We can go back and try to find.out, again, things that are a
12 not that transparent, Another example, we just had one.
We 1
l 13 had this matter of selection of personnel.
Before we got I
l 14 into this and toward this arrangement we have very poor 15 exchange of any people between the plant.
We have not had l
16 very many to date because we haven't wanted to change i
17 people.
People like where they grow up, they like to 18 promote within.
They are still project oriented within.
19 We have tried to do that.
By promoting within we 20 have a stronger spirited corps, and yet we have some 21 exchange.. We have, for examp1e, Bill Shipman who was at
?
4
/'
22
.Farley.
He then came over to vice president of this general 23
' manager working up here, and now he's been acting down at 24 Plant Vogtle.
We have also another advantage, is the i
25 propensity for various functions at these plants to work
26 1
together-like in maintenance.
Our maintenance managers meet 2
together now and lay out some plans that they then bring up 3
to these managers.
4 Another thing which we have done which I think has
]
5
.been particularly beneficial, we have had an analysis group 6
going on, three licensed operators, one from each project
-7 who take on a given area to do a comparative analysis 8
between the plants.
In that comparative analysis they might 9-look at things like control room manning or maintenance 10 administration or outage management, or various things.
11 Then they go and do an analysis or comparative analysis of 12 how that is done at one site versus another.
There are some 13 odd rules about it.
14 They are not allowed to make any recommendations 15 nor any findings.
They just assemble the data, and then 16 that data is turned over to these three gentlemen.
They 17 take that data and decide what could I learn from the other 18 plants to do to improve my plant.
I could go on.
-19 I think that we feel that it has been a very 20 positive thing in terms of career potentials, the future.
21 ~
As.you all know'the whole industry is'not talking about 22
' future plants. -Doing this and getting people together gives 23 people the feeling that
.;are is going to be a future in 24 nuclear power, and they d2el like they have teamed up with 25 some people that they-v.__ 32 better prepared to handle
27 1
that.
2 MR. VARGA:
Pat, you mentioned this transparent --
3 MR. MCDONALD:
You haven't thought that --
4 MR. VARGA:
I haven't thought that yet.
- First, 5
there's a CEO up there at SONOPCO who has administrative 6
functions only.
What does he do then?
7 MR. MCDONALD:
Let me tell you what they do.
He 8
is currently the president of ANEC.
You know what ANEC is, 9
American Nuclear Energy Council.
He is the Chairman of it, 1
10
.one of the industry organizations.
He is on the IMPOC
?
11 Committee, he's on the EDI Committee. He is deeply involved 12 in uranium handling and that type of thing.
He is deeply
]
13 involved in Southern Company matters of a general systems i
14 nature.
i 15 MR. VARGA:
In terms of all of that, that is i
L 16 encompassed by that kind of a trapezoidal --
1 4
17 MR. MCDONALD:
He represents you might say the 18' flow.of individualized type leadership.
Are those people 19 who are manning those jobs, are they trained well enough.
- 20 What are we looking for, for building people in the future.
21 He gets on administrative things.
When we get to budget and 22-compare all these budgets what we do is, we get the Alabama 23 budget and Georgia budget and we get all these people who i
24 are on the board together and have one big meeting and 25 present the-budget all at one time.
j i
1 l
1
t 28 1-Each of them can see what is happening.
We had 4
2 one of those meetings here about two months ago, and he gave 3
us some pointed comments and he gave some pointed comments, 4
and the Southern Company President gave us some pointed 5
comments.
They can each see what is happening in the others 6
and they can visually compare them.
We think and they think I
7 that it's promoting management all the way around.
1 I
8 MR. VARGA:
From your position down, everything is 91 solid line.
So now, there's a SONOPCO executive who has 10 solid-line control.
What things can you do on the plants 11 that you don't need Alabama Power'CEO or the Georgia Power i
12 CEO input; what kinds of things can you do?
13 MR. MCDONALD:
I can do those things that might be l
14 contained in the contract.
Through my Southern Nuclear hat, 15 I can go down here and have a guy who is giving us trouble -
16
- a Southern Nuclear employee who is not performing that job i
17 well -- I, through the organization, can impose discipline l
18 on him.
I can hire him, I can fire him, I can get somebody 19 new.
i 20 It's just that like we have in many other nuclear 21 plants, where the plants have people doing staff work under 22 contract.
23 MR. VARGA:
Ycu can do that to somebody who has 5
24 double hat, like Woodard an 3ONOPCO APC?
25-MR. MCDONAL2
. double-hatted, an officer?
29 1
MR. VARGA:
Yes.
2 MR. MCDONALD:
Yes, I could do that.
3 MR. VARGA:
You could do that independent of the i
4 Georgia Power?
5 MR. MCDONALD:
No, I couldn't do that independent i
j 6
of the Georgia Power.
7 MR. VARGA:
f3at was my question.
What is that l
8 you do independently?
i 9
MR. MCDONALD:
When you have a double-hatted a
10 person I could not do that independently.
I would have to l
11' work with those two.
12 MR. VARGA:
You couldn't do anything independent 13 down at the site organization except through th's related 14 CEO.
1 15 MR. MCDONALD:
That's right.
16' MR. WOODARD:
Pat, I think there's a confusing i
l 17 point.
MR. MCDONALD:
Did I say something wrong?
18 MR. WOODARD:
No, I think there's a perception 19 that isn't correct or I have a wrong perception.
He can do 4
20 anything --
21 MR. '.'ARGA:
He, who?
.22 MR. WOODARD:
Pat, in that example with Georgia i
23
' Power.
Right.
25 MR. WOODARD:
.Or Alabama, Power, that he could have
30
-1 done before that'ha can do by himself.
In other words, if i
2 he wanted to fire me --
i 3
MR. MCDONALD:
There is one example.
Let me i-4 follow up on that.
'Now, if I have this guy.who is Jack
[
5-Woodard -- since he's talking'about this -- Jack Woodard, I i
i 6
become unhappy with him.
Now, why do I become unhappy with 7
him?
Here is where I have to choose how I handle it.
If I t
j s
become unhappy with him because I don't think he's looking L[
'9-over the day to day business and things get away and he i
l 10 drops a head and runs water on the floor and things like l'
11 that, then I am going to say from my Alabama Power Company l
12 hat, you are not performing your safety-related duties j
13 properly and I am unhappy with them.
14 When I mark his appraisal sheet down for safety-15-related duties, I am going.to mark him down on that bad 16 enough that we are going to have to do something else.
On 17 the other hand if I say hey, you got a bunch of guys and you 18 got a bad morale down there in that support group by the 19 Southern Nuclear people and they now decided that they are 20 wearing white hats and Alabama Power is wearing green hats, 21' and they are ganging up on us.
You are not doing anything 22 about us.
23 From my Southern Nuclear hat I have to make those 24
' guys realize that they sra just like a contract employee and
- 25
~ knock that stuff off.
l l
31 1
MR. VARGA:
In the example if you stick with the L
2 SONOPCO APC Vice President and vou became unhappy with him 3
and wanted to get rid of him, you could do that independent 4
of sny further consideration up above.
j 5
MR. MCDONALD:
I could get rid of him as an APC 6
Vice President, you bet.
I could say you are not doing your 1
7 safety-related -- you are fired from being an APC Vice l
8 President from Farley Nuclear.
9 MR. VARGA:
But before all of this you had certain
)
10-forcing functions on you, certain pressures.
Now you have 11 another.
Now, to act like that now, you have another -- I 12 don't know what the pressure might be, but you have another 13 pressure on you now.
14 MR. MCDONALD:
Then, instead of going to Elmer 15 Harris and saying Elmer look, I have to get rid of Jack.
He 16 broke his -- it bothers his work all the time and that sort 17 of thing and he's just not doing his job. I have to go up 18 here to Farley and say hey, we got a problem.
We got a guy 19 who is about not to have a job.
When he gets laid off from 20 Alabama Power Company job we don't have any other jobs for 1
21 him, so it seems like we are going to have to lay him off 22 from Southern' Nuclear also.
23 MR. VARGA:
You can't do it independently?
24 MR. MCDONALD:
I can fire him from Alabama Power 25 Company, sure.
l
32 1
1 MR. VARGA:
My only point is, and it may not be a 2
valid point.
My only point is that when you are acting as
-3 APC, when you are wearing two hats, somehow that other hat 4
doesn't disappear necessarily.
You may have some other 5
people, you may have some other thinking behind you about 6
maybe somebody up there at the higher level in SONOPCO might 7
have said something or done something or given you some 8
influence.
That's my question.
9 MR. MCDONALD:
I think what we are really here 10 looking at is to make sure that there is the sanctity of the 11 operation, responsibility and control for safety-related 12 activities.
The sanctity goes right along with that hard 13 line.
That's the sync part, and that is by far the 14 overwhelming percentage.
15 For example, if you had to divide up what 16 percentage is this guy, an Alabama Power Company versus a 17 Southern Nuclear you might say it's 95-5.
Again, from an 18 intellectual point of view there is no difference.
It's 19 only when we get down to the what if question like you asked 20 that you have to stop and think.
21 KR. MATTHEWS:
Pat, I have two questions.
It may 22 be my faulty memory, but when you have discussed your plans 23 in previous meetings with Steve and myself and the EDO, I 24 did not recall this phase being as it appears to be now, on 25 extended in time.
I rac:11 this phase as being a brief i
1 c
4 33 1
transition between Security and Exchange commission approval
~
2 and transfer of license ownership.
Am I correct in that?
3 MR. MCDONALD:
I have not represented it as an
)
l 4
. extension in time.
i i
5 MR. MATTHEWS:
Neither did I deem it by my memory I
i j
6 as being indeterminate.
7 MR. MCDONALD:
Well, you --
8 MR. MATTHEWS:
As I said, it may be my faulty i
i 9
memory.
l 10 MR. MCDONALD:
In order to make these things J
^
11 happen we have a number of things to do.
We have our co-t 12 owners to ensure that all their board agreements -- to go 13 another step.
We have any problems that they might have i
14 with them.
You also have to do the bread and butter type of 15 thing of when you get down this road you have to brief 16 people and have them make selections on going to a new 17 company.
A thing like health benefits, that's complicated.
[
18 There has to be some step-wise action to do this, i
19 because to try to do it all at once would be pretty chaotic.
{
20 MR. MATTHEWS:
I don't disagree with that. I guess i
21
'what I am saying is that in your earlier representations to f.
22 us, did they incorporate and envision this organization 23 operating as it is right now?
i 24-
'MR. MCDONALD:
I think it's virtually identical, i
25 the way that we represented this before 1that this is a so-l
34 1
called phase II where we provide services and in phase III 2
there would be a transfer of license.
3 MR. VARGA:
Dave, what did you think was the final 4
phase?
I don't recall that.
What was the final phase, in 5
your perception?
6 MR. MATTHEWS:
My recollection was that there 7
might be a transition period between SEC apprcvel and a 8
request for amendment to us for transfer of license.
9 MR. MCDONALD:
That's what this is.
10~
MR. MATTHEWS:
But honestly, I viewed it in terms 11 of weeks if not months.
12 MR. MCDONALD:
It may be.
13 MR. MATTHEWS:
Okay.. If there was anything' that 14 surprised me on receipt of your letter it was that I heard 15 about this phase and not the latter phase.
i 16 MR. MCDONALD:
All right.
17 MR. MATTHEWS:
To be honest, the letter that I I
18 thought I was getting was going to announce transfer of 19 ownership and submittal of a license amendment.
20 MR. MCDONALD:
Ownership never changes.
21 MR. MATTHEWS:
I'm sorry, I meant transfer of 22 licenses.
'23 MR. MCDONALD:
When I submitted the letter to you
~
24 or we submitted the le :2r to you, I think it was on the 25 December 6th.
A 35 i
j 1
MR. MATTHEWS:
Yes.
i 2
MR. MCDONALD:
We said that we expect to.
At that i
i 3
time we didn't even have'SEC approval, and we didn't have i
4 the co-owners approval and all of that.
So, we expected to i
~
5 and we did it after the Southern Nuclear was formed on the i
i 6
.18th by the first quite rapidly.
The re'ason that we did it i
7 quite rapidly at that time for this group of people -- it's 8
very complicated if you don't switch somebody's company over
]
9 the first of the year and have all FICA deductions and all i
10 of that.
t 11 MR. MATTHEWS:
My perception was that I would be i
12 processing a license amendment very shortly after your SEC l
13 approval.
I 14 MR. MCDONALD:
We hope you will.
15 MR. MATTHEWS:
That was what impression I was left 16 with.
17 MR. VARGA:
What is the final step?
18 MR. MCDONALD:
The final step, if we are able to 1
19 take it all at one time is that you will basically erase 20 these from here and it will only be Southern Nuclear, and we 21 will be operating license pis.st as the licensee under 22-operating contracts.
23 MR. VARGA:
Transfer of license.
'24 MR. MCDONALD:
Transfer of license.
s 25-MR. MATTHEWS:- Basically I don't want to put words
- n
36 1
in your mouth, but that center line would become solid and 2
the other two lines potentially would become dotted.
3 MR. MCDONALD:
Yes, and the double-hatting would 4
all disappear.
5 MR. MATTHEWS:
All disappear, and it's a SONOPCO 6
operated company.
7 MR. MCDONALD:
Yes.
8 MR. MATTHEWS:
My second question was budget 9
authority.
Does Joe Farley have budget authority with 10-regard to expenditures affecting the plants, directly 11 affecting the-plants?
12 MR. MCDONALD:
These two man are budget authority.
13 MS. ADENSAM:
What about the support services 14 though?
15 MR. MCDONALD:
He.has budget authority in the 16 support.
He has budget authority for the various services, 17 for example, the building we have.
The building, the 18 administrative department, and all the sundry type of 19 things, stationary and all that, we handle through Southern 20 Nuclear.
21 MS. ADENSAM:
Mr. Garlington decidoJ that he needs 22 ten more engineers and another $2.5 million in contracts to 23 properly support Farley. He goes up and he's convinced 24 everybody and gets to Mr. Farley, and Mr. Farley --
25, MR. MCDONALO:
- fr. Farley has nothing to do with
A 37 2,
1 that.
2 MS. ADENSAM:
Okay, where is that slot?
3 MR. MCDONALD:
Jack Woodard in Alabama Power a
4 Company hat is responsible for assuring that the work is 5
done, that Alabama Power Company work is done.
At that time 6
if he says look, I have to have some more manpower because 7
the manpower can't do it and I want another man, then he's
}
8 first got to get an authorization from Alabama Power Company j
9.
to put another man on.
Then he hires a contract employee to 10 fill that staff position, and that contract employee is a Southern Nuclear employee.
11 i
j 12 MR. VARGA:
Finally, is this correct?
- Finally, l
l 13 the two wings will disappear, the dotted line becomes solid, 14 and all the double and triple hats disappear?
15 MR. MCDONALD:
Right.
16 MR. VARGA:
When will that happen, you don't know?
17 MR. MCDONALD:
As soon as practical.
18 MR. NASH:
You are saying that there will be no i
19 more Georgia Power Company and Alabama Power company?
20 MR. MCDONALD:
No.
I mean that we will perform i
21 the entire scope of services under a contract to Alabama 22 Power Company and to a group of owners including Georgia 23
' Power Company and three co-owners, of which Mr. Dan Smith is 4
1 24 the representative here today from oglethorpe.
25 MR. VARGA:
Who will be the license holder then?
38 1
MR. MCDONALD:
The license holder will be Southern i
2 Nuclear.-
3 MR. ROBINSON:
Two questions under that current 4
organization structure.
One, referring back to your 5
original remarks with respect to the composition of your 6
salary.
Does Alabama Power, Georgia Power and SONOPCO 7
contribute equally to your salary?
8 MR. MCDONALD:
No.
9 MR. ROBINSON:
What is the breakdown of that 10 contribution, percentage-wise?
11 MR. MCDONALD:
The contribution to salary is an 12 allocated number, but within that allocated number they set 13 the level.
)
l 14 MR. ROBINSON:
Do you have a rough idea 15
, percentage-wise?
16 MR. MCDONALD:
Yes, but I think that's not a 17 matter for discussion here.
18 KR. ROBINSON:
That wouldn't affect your 19 performance with respect to who you would rather do a better 20 job for?
4 21 MR. MCDONALD:
No, l
22 MR. ROBINSON:
The second que'stion is, if Elmer 23 Harris wants Mr. Woodard to remain on the job and Joe Farley 24 wants him fired, what has happened?
25 MR.-MCDONALD:
- day?
1 i
4 39 I
1-MR. ROBINSON:
Right now.
2 MR. MCDONALD:
He's'an Alabama Power Company i
3 employee.
Mr. Farley wants him fired?
l i
4 MR. ROBINSON:
Yes.
Mr. Harris wants to keep him l
5 and Mr. Farley wants him fired, and they can't resolve it.
i 6
MR. MCDONALD:
Mr. Farley can fire him as a 7
Southern Nuclear employee if he wants to.
The fact is, you 8
see, these people are all sitting on the Board of Directors.
2
-9 The reason they have that Board of Directors is to try to 10 make sure that those problems like that get ironed out.
11 MR. ROBINSON:
If it can't get ironed out?
12 MR. MCDONALD:
If it can't be ironed out, 13 obviously, the stronger hand in this is Alabama Power i
14 Company.
That's completely -- the sanctity of the license 15 and responsibility is absolute.
There can never be a 16 dilution, eruption or whatsoever in the sanctity of that 17 operational responsibility.
I 18 MR. LAINAS:
Pat, I have a question I want~to ask.
19 You mentioned a lot of the advantages I think, the pattern 1
20 of the organization and I can understand that.
But you 21 know, there it sort of a disadvantage in a way, because now
'22 there are three facilities involved and a lot of those lines 1
23 meet to George Harriston and yourself.
24 The question is, if a problem is happening at i
25 Hatch and Hatch is down for a length of time let's say and 4
40 1
then there's a question as to why -- a safety question, will j
2 you be influenced by your overall power production from both 3
Georgia Power and Alabama Power in trying to make safety 4
decisions with respect to Farley in considering -- how would
~
5 you face that?
6 MR. MCDONALD:
Can you state that again?
7 MR. LAINAS:
Suppose you are having problems with 8
a plant that is running and the other plants are down, and 9
there's a power demand on the system --
10 MR. MCDONALD:
There's a power to man on the
\\
4 11 system and there's a safety concern at one plant that is 12 down.
13 MR. LAINAS:
No, that's operating.
4 14 MR. MCDONALD:
That is operating.
4 15 MR. LAINAS:
In other words, would you stretch the 16 safety decision on that being influenced by the other plants 17 being down and the demands on the system?
18 MR. MCDONALD:
That's absolutely no different than 19 what we have had before this occur.
20 MR. LAINAS:
Or other types of --
21 MR. MCDONALD:
As 3 officer of those two 22 companies, my immediate responsibility is nuclear.
I am an 23 officer of.that company.
If the fossil plants are down and 24 we are trying to provide a load in any single company, I 25 have to do all I can to =2et that load.
-.. = _
. _ ~.
L' 41 l'
MR. LAINAS:
It's really no different then from i
l 2
any other utility that has multiple units.
1
~
3 MR. MCDONALD:
No, not at all.
We like to think 4
we have a better, more direct arrangement because we chose i
L in order to strengthen the leadership in mana~gement.
With i
6 this arrangement, with these three gentlemen, we chose that.
7l We have an arrangement like this to where we port and i
8 starboard it you might say.
We try to coordinate the i
{
9 reports, and George is the one that is directly responsible 10 for it but I fill in when he's gone.
11 When we get into a problem, one of us will l
12 probably go off with that problem and the other one would j
13 pay attention to the rest of the business.
For example, in -
14 steam generators I spent almost all my time on. steam t
15 generators and wasn't really too much involved in several 16 things at Georgia Power for a while because there was c
17 nothing going on.
Something happens at Georgia Power and 18 one of us will shift over there to give that attention.
19 MR. VARGA:
What are the general delays that are 4
20
' prohibiting an immediate implementation of the SONOPCO --
4-
'21 MR. MCDONALD:
It's the formality of signatures.
- 2 2.
We could not -- it's formalities.. We could.not get some of j
1 4
23
-the co-owner board. approvals and things like that and other i
'E24 approvals that they had to have, so we couldn't go forward 25-until we had Southern Nuclear.
So then, there's timing of
~
42 L.
1 meetings and timing of reviews.
It has nothing to do at i
j 2
this time that I know of, of anything --
i 3
MR. VARGA:
Are you experiencing resistance from 1
4 the other owners?
5 MR. MCDONALD:
We have experienced ' encouragement 6
from others.
Dan's company for example, has encouraged us
]
7 to proceed on as efficiently as we can.
i 8
MS. ADENSAM:
Do you have any contingency if these 9
issues don't get resolved and you are not in a position to 10 transfer licenses?
11 MR. MCDONALD:
Well, any contingency if they don't 12 get resolved?
13 MS. ADENSAM:
Would you --
14 MR. MCDONALD:
A month ago today we were sitting i
15 here, and the only difference a month ago today is we would 16 erase.that line and erase everywhere SONOPCO appears, 17 everywhere SONOPCO appears you would erase it.
For all 18 practical purposes there is no difference in the day-to-day 19 operation of the plants.
20 MS. ADENSAM:
You are continuing as of a month ago j
21 then?
c 22
~MR. MCDONALD:
Yes.
A month ago there was no line
- 23 here.
Mr.-Farley was performing his job as a Vice President 24-of the Southern Company.
He had no responsibilities for
'25 this administrative supper.
That administrative support u
r
43 1
that we had basically was being done, and he was a part of a 2
contract -- it was a contract to me from Southern Services i
3 for providing essentially much the same support we have here 4
now.
i 5
This' group, for example, was a Southern Company l
6 ervices organization that was under contract -- inter-
[
7 company contract essentially by me -- providing the same 8
thing that they are doing after the company is formed.
It l
9 is no different.
10 MS. ADENSAM:
I have one other question, a little 1
11 different shift.
I heard you earlier say that Mr.
12 Garlington in the support organization was working with the j
l 13 same procedures and practices and so forth that he did i
j 14 before.
l' 15 MR. MCDONALD:
Yes.
16 MS. ADENSAM:
Now, I would assume that the
}
i-17 gentlemen for the Hatch Project -- or ladies, as the case i
i 18 may be -- for the Hatch Project and Vogtle project are doing i
19 the same thing.
My question is, are they working with the i
20 same procedures as each other, or-the same procedures as i
21 they had before?
4 4
- 22 MR. MCDONALD:-
The business in each of these.
)
. 23:
projects is being carried on under the name of Georgia or 1
24 Alabama Power Company.
The communications that you will 25 see, the internal and external, will be in the name of
+,
. ~ _ -,
44 1
Georgia or Alabama Power Company.
2 MS. ADENSAM:
If Mr. Garlington, who went to Hatch 3
Project, he would have to deal with a different set of
- 4 procedures to conduct his business than he had when he was 5
working for Alabama Power?
6 MR. MCDONALD:
Absolutely, because they are 7
different already.
They had been different.
8 MS. ADENSAM:
That's what I was trying to 9
understand.
If Mr. Farley said what kind of procedures and 10 support organization is my company using he is going to get 11 three different sets?
12 MR. MCDONALD:
Right.
That'was the way it was 13 before and that's the way it will be after.
Right now, we 14 see no difference in that for the operating procedures.
15 Each of them will probably. remain fairly unique maybe over 16 time.
17 MS. ADENSAM:
Even when you transfer licenses you f
I 18 might still have unique sets of operating --
l 19 MR. MCDONALD:
Probably unique sets.
20 MS. ADENSAM:
Ckay, thank you.
21' MR. HOFFMAN:
In that case,~if the NRC is using 22 their communication that requires a program be developed and 23
-implemented at the site, are you saying-that we might see
-24 three different-approaches?
1 25 MR. MCDONALD:
Yes, indeed.
l
45 1
MR. HOFFMAN:
Even taough, let's say, it's 2
developed by your SONOPCO organization?
3 MR. MCDONALD:
Wait a minute.
4 MR. HOFFMAN:
I guess I am trying to find out --
S MR. MCDONALD:
Wait.
We don't have~a SONOPCO 6
organization developed.
We have contract employees working 7
within an Alabama or Georgia organization.
They are just 8
like IMPEL.
We have hired people when we didn't have people 9
to fill slots.
We have hired from a body shop, IMPEL, send 10 me a contractor.
He would come in and do all the work.
All 1
11 the utilities have had people in staff jobs.
I 12 We have people in staff jobs in essence doing 13 that, and they are called Southern Nuclear people.
14 MR. VARGA:
That would be GE -- SONOPCO.
15 MR. MCDONALD:
Yes.
16 MR. HOFFMAN:
I guess what I am looking for is 17 whether there is going to be any cross-polynization where 18 the goods from one site gets filtered into the others and 19 the bad fro 3 the others.
20 MR. MCDONALD:
It is --
21 KR. HOFFMAN:
Joint development, like in new 22 programs, new procedures --
23 MR. MCDONALD:
To the extent we can, we want to do 24 as much joint stuff as we can, where we can cut down on the 25 cost and increase the quality of the work.
46 1
MS. ADENSAM:
That only comes to a head in Mr.
2 Harriston's --
3 MR. MCDONALD:
No.
4 MR. MCCOY:
Could I give you an example of that, 5
Pat?
That is no different now than it was last year.
Once i
6 we formed our first organization, when we got a generic 7
letter saying that we were preparing a response to each of 8
us, our projects would prepare that response. Then, since we 9
are co-located in the same location we would talk about how 10 we are responding to that and try and see if we could i
11 b6nefit from the work that each of the groups have done.
a, 12 Then, we each have an independent position for our plan in I
13 the end.
14 MR. MCDONALD:
Dave, you probably noticed that you 15 get two letters.
You get two letters that are virtually 16 identical but different letterhead.
17 MR. WOODARD:
I will give you an example the.t 18 illustrates the principle that you are trying to get across.
19 Various disciplines from each plant meet periodically, like 20 health physics.
The plant health physicist at each plant, 21 they will often get together say at a given plant and 22 discuss certain issues and share problems and share 23 successes, and then tour that facility.
-24 They are a very close group.
I mean, they pick up 25 the phone and they talk c each other.
In the process of
~-
1 47 1
discussing issues and sharing information, sharing problems 2
and successes -- by the way, regulatory compliance is a 3
major thing they talk about, what kind of compliance 4
problems have you had and what kind of problems have you had 5
in being successful with INPO.
When it comes'down to 6
decision-making and policy-making, they don't set policy.
7 That comes back to the line organization and they know that 8
full well that they must do that.
i 9.
What happens is that they are able to function 10 like an industry group, only on a much closer knit and 11 continuous basis by being part of the same company.
That's i
12 one of the major successes that I have seen in the past
{
13 year, are these discipline meetings and sharing'information 14 and staying away from policy.
Let the policy decision be 15 made back through the line organization.
16 MR. HOFFMAN:
I guess during this Phase II, and it i
17 sounds like even when you change over the licenses, that in 18 response to some requirement we may see three responses.
19 One plant will say I am going to go out and test, one plant 20 will say I am not going to test but do it by analysis, and 21 the other plant is going to say I'm not going to do anything 22 at all.
23 MR. MCDONALD:
I would expect that you would 24 probably see basically three responses on a lot of issues.
25 MR. VARGA:
As I understand it, as a conscious
l 48 1
decision after coordination.
2 MR. MCDONALD:
Yes.
That's right.
3 MR. WOODARD:
When you say that, it sounds -- it 4
doesn't sound right.
In those cases we are usually very j
5' knowledgeable about what the other person has' submitted, and j
6 we have a reason why we are different.
7 MR. LAINAS:
Are there any other questions from 8'
the staff?
9 MR. NASH:
How about marketing decisions,
)
. 10' marketing power decisions being made.
I guess when you come
)
11 in'for a license I guess that's the relevant --
12 MR. MCDONALD:
The marketing power has nothing 13 whatsoever to do now or in the future.
The transfer of the 14 license, the same owners will continue to own the plant and 15 will, receive the output.
Southern is a very narrow scope 16 organization aimed solely at operating the plant.
17 MR. LAINAS:
Any other questions from the staff?
18
[No response.]
19 MR. LAINAS:
Steve, would you like to make a 20 comment?
21 MR. VARGA:
Thank you very much for coming in.
j l
22 MR. LAINAS:
We have been so efficient we 23
. circulated two attendance lists.
So, if you haven't signed
'24 in, would you mind.
With that, I would like to thank you 25' very much, Pat. I know it was very difficult for you to 2
I 49 1.
come here today.
Thank you for coming and thank you for 2
your assistance.
3 (Whereupon, at 11:50 a.m.,
the meeting concluded.J 4
5 6
7 8
9 in i
11 12 13 14 15 16 17 18 19 J'
20 21 22.
24 25 i,
'~-e c
j' REPORTER'S CERTIFICATE This is to certify that the attached proceed-ings before the United States Nuclear
_ Regulatory Commission 2
i in the matter of:
NAME OF PROCEEDING:
Implementation of Southern Nuclear Operating Company DOCKET NUMBER:
PLACE OF FROCEEDING: Rockville, Maryland i
were held as herein appears, and that this is j
j the original transcript thereof for the file of I
the United States Nuclear Regulatory Commission i
taken by me and thereafter reduced to typewriting by as or under the direction of the court report-j j
ing company, and that the transcript is a true and accurate record of the foregoing proceedings.
j O
Official Reporter Ann Riley & Associates, Ltd.
m u
m