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UNITED STATES OF AMERICA NUCLEAR REGULATORY CCMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of:
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EOUSTON LIGHTING & POWER 5
5 Docket Nos. 50-4980L 5
50-4990L 5
(South Texas Project, 5
Units 1 & 2) 5 5
TESTIMONY ON BEHALF OF HOUSTON LIGHTING & PO'a'ER CO.".PANY, E. I A.L.
OF MR. DON D. JORDAN 0500150577 050703 PDR FOIA LE I GHTOO4-2'73 PDR g
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2 3l 4i5' UNITED STATES OF AMERICA 6j NUCLEAR REGULATORY COMMISSION 7i I
BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 10,
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In the Matter of:
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HOUSTON LIGHTING & POWER 14 COMPANY, ET AL.
5 Docket Nos. 50-4980L 13 50-4990L 16 17 (South Texas Project, ig Units 1 & 2) 19 20 21 TESTIMONY OF DCN D. JORDAN 22 23 24 i Q. 1 Please state your name and occupation.
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1 I am Don D. Jordan, President and Chief Executive 47 '
23 Officer of Houston Lighting & Power Company (HL&P).
29 30 Q. 2 Please describe your educational and employment 31 '
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background.
33 i 34 l A. 2 I received a BBA degree in industrial management 3f from the University of Texas in 1954.
I received a law 37 degree in 1969 from the South Texas College of Law.
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39 I have been employed by HL&P since 1954.
I joined the 40 41,
Company as a Power Consultant in the Marketing Department 42 43 ;
and served in a number of administrative positions of increas-44,
t5 i ing responsibility.
In November 1971, I was elected Vice o6 President and Assistant to the President.
Since then I have 47 0
been elected to the following positions:
Group Vice President 50 51 in January 1973; Board of Directors in April 1974; President and Principal Administrative Officer in December 1974; and Prcsident and Chief Executive Officer in April 1977.
Q. 3 What is the purpose of y~our testimony?
A. 3 My purpose is to convey te this Board, the Nuclear R gulatory Commission, and the public our corporate commitment to the safe construction and operation of the South Texas Project (STP) and my personal commitment to that objective.
I am acutely aware that this Board has been instructed
'by the Commission to inquire into HL&P's managerial competence and character as they affect our ability to safely complete
'End operate the STP.
These questions are extremely serious.
My testimony will describe some of the steps we have taken to assure that STP meets all applicable regulatory require-ments.
These matters will be discussed in much more detail in the testimony of other witnesses we will be presenting.
I believe the facts as set forth in my testimony, as well as the testimony of others, will demonstrate that we appreciate the magnitude of the task at STP, that we are equal to it and that there is not, and never has been, any
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ccrious question as to our corporate integrity or competence.
Q. 4 As a matter of background, describe HL&P's busi-RCss.
A. 4 We generate, transmit and distribute electric cnergy in an area of approximately 5000 square miles in the 4
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Texas culf Coast region.
Houston is the largest city in our 5
6 service area; we also serve 157 smaller cities, villages and 9,
3i communities.
We operate generating stations with an installed 9
10 net capacity of 12,115 MWe.
We are the nation's sixth 11 i 12 largest utility in terms of electrical sales, and we employ 13 14 more than 8,000 people.
13 16 Q. 5 Is HL&P subject to regulation by various govern-17 -
mental entities?
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5 Yes.
EL&P is subject to regulation by the Public 2
Utilities Commission of Texas and also by 82 incorporated 23 municipalities most of which continue to exercise original 24 85 jurisdiction over HL&P's rates and services.
Our activities i'
.7 are also regulated by many other state and federal agencies 23 29 with important safety and environmental responsibilities 30 31 I including EPA, the Corps of Engineers and, of course, the 32 NRC.
33 3l Q. 6 Have business conditions over the past decade had 36 '
a significant effect on HL&P?
37 38 A.
6 Yes.
EL&P has seen, and is still seeing, an 39 incredible increase in the number of customers we sebie.
40 41 During the 1970s the population of our service area grew by 42 43 4
44 more than a million, and the number of customers rose by
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3 almost 350,000.
The average annual increase in customers 47 since 1977 has been about 70,000.
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This enormous growth has required that we undertake a mnjor construction program.
The urgency of this task was underscored by the fact that in 1975, when the construction ptrmits for STP were issued, virtually our entire system was d: pendent on natural gas as a fuel.
As fuel prices rose and rcstrictions on the use of natural gas became law, the Company began vigorous efforts to change its generating system mix to a combination of coal, lignite and nuclear fuel.
STP is a major component of our generation expansion program.
The importance of the Project to the welfare of our region cannot be overemphasized.
Q. 7 Who are the executives of HL&P responsible to you for activities associated with the South Texas Project?
A. 7 The EL&P executives with primary responsibility are our Executive Vice President, Mr. George W. Oprea, and our Vice President, Nuclear Engineering and Construction, Mr. Jerome H. Goldberg.
These senior executives are with me today and will present testimony on aspects of the Project for which they are responsible.
Q. 8 How did you react to the NRC's enforcement actiod last year?
A. 8 Let me say, first, that Mr. Oprea kept me apprised of the progress of the NRC's investigation and of the interim findings of that investigation in late 1979 - early 1980. _ _ _ _ _ _ _ _ _
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5 In particular, he informed me of his meetings with representa-6; tives of Region IV of the NRC's Office of Inspection and y
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Enforcement and their preliminary conclusions.
10 Nevertheless, I was deeply disturbed by NRC Investiga-11 12 tion Report 79-19 and the findings reflected in the Notice 13 14 of Violation and the Order to Show Cause.
Mr. Oprea and I 10 15 went to Washington immediately after issuance of the Notice 17 ig of Violation and Order to Show cause to meet with Mr. Stallo, to.
jf NRC Director of Inspection & Enforcement.
I was impressed 2' '
by the concern which Mr. Stello and his staff expressed 2
23 regarding the performance at the STP ' and it was following 24 25 that meeting that I made the organizational changes I will 2
7 describe later.
The advice I received from Mr. Oprea and 23 l 29 !
our advisors was that, although issue might be taken with 30 '
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details in the NRC Investigation Report (and the significance, 32 33 i from a safety standpoint, of many of the violations), careful 34 5 35 l study of the underlying causes indicated a need for management 30 improvements which had to be faced squarely.
Of greatest 38 importance was the expansion and restructuring of our quality 39,
40 l assurance / quality control organization.
These changes will'
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41 42 I be described in detail in the testimony of Mr. Oprea, Mr. Fra:ar 43 1 44 ',
and Mr. Amaral.
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Q. 9 Were you kept advised of the Company's response 47 to the NRC's Show Cause Order?
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A. 9 Mr. Oprea kept me informed of the approach being taken by the Company on all major aspects of the response.
I was particularly interested in the question of how best to organize the QA/QC function, the first item identified for study in the NRC's Order.
I met with Mr. Oprea and we discussed various organizational alternatives.
The testimony of Mr. Oprea and Mr. Amaral discusses the pros and cons of cach alternative.
I concurred with Mr. Cprea for the reason stated in his testimony, that third party inspection had sarious drawbacks.
I shared Mr. Oprea's conclusion that a strengthened QA/QC organization on the part of both HL&P and Brown & Root, Inc. (B&R) is essential and we have taken major steps in this direction.
As part of our response to the NRC's Order, I decided to assign our most senior engineering-oriented executive, Mr. Oprea, to essentially full-time service on the STP.
His broad range of experience in all of the Company's engineering related activities is now largely focused solely on the STP.
Mr. Oprea began his essentially full-time involvement in the Project in the summer of 1980 and that involvement will
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continue for an indefinite period.
I also approved moving the head of our corporate QA i
department to the STP site with full time responsibility for the Project, reporting directly to Mr. Cprea.
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41 5i Q. 10 Has EL&P taken other steps to strengthen its 6
organization for construction and operation of STP?
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A.
10 Yes.
These are discussed in detail in Mr. Oprea's 9
10 i testimony.
I would like, however, to highlight one step 11 12 :
which has added significantly to our corporate capability.
13 14 After an intensive search, in which I actively participated U.,
15 over many months, we obtained the services of a highly 17 ig experienced nuclear engineer with vast management experience so
~f in nuclear construction to assume major responsibility for 2
the STP.
Mr. 'Jerome H. Goldberg, a former Vice-President of 13 Stone & Webster, is now our Vice President for Nuclear 24 25 Engineering and Construction, and his involvement is already 2
7 making a difference in our management of the Project.
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Q. 11 What is your reaction to the charge that EL&P 30 l 31 i has " abdicated its responsibility" to its contractors for 32 '
STP or failed to keep itself knowledgeable about necessary 33,
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construction activities.
3o i 36 i A.
11 I do not feel it is fair to state that EL&P 37,
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" abdicated its responsibility" to its contractors or failed 39 to keep itself knowledgeable.
40 41 42 As discussed in more detail in Mr. Oprea's testimony, 43 1
44 EL&P had established a substantial team of technical and
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g engineering personnel to manage the STP, particularly in 47 1
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quality-related functions.
Mr. Oprea and I communicated 49 50 51 i
frequently and there was nothing to indicate that there was any significant problem in QA/QC or, more generally, in our NRC compliance record.
The NRC findings, however, did trigger a wide-rarging review of the adequacy of our manage-m;nt of the STP from which we have profited.
With our fossil projects, we had found that good results could be achieved in constructing generating faciliries by placing upon the contractor substantial responsibility for the construction of a generating facility that met standards of safety and reliability.
We recognized from the outset, however, that nuclear construction' required more active participation by the owner.
This has become increasingly apparent over the years in our STP program and has resulted in the assignment of more highly qualified and motivated pnople in large numbers, as well as training and re-training in the importance of quality performance.
I am persuaded that EL&P is fully aware of the absolute accessity of providing guidance and programmatic direction to our contractors and that the changes we have instituted
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are having the desired effect of making our presence felt in almost every phase of their work.
Our recruiting program is hl aimed at further strengthening our role and visibility as Project manager.
Cur prospects are for an even stronger organization, and I expect further improvements in performance.
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Q. 12 Do you intend to play a continuing role in the 6i
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oversight of STP?
9, A.
12 Yes.
I will continue to stay in touch with the 10 other officers of the Company who are concerned with the 11,
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i Project, particularly Mr. Oprea and Mr. Goldberg.
In addi-3 13 tion, I will continue to receive and review the regular 1r 16 written reports prepared by the B&R and HL&P staff -- the 17,
15 Consolidated Monthly Reports, as they are known.
19 l 20 Last year I participated in a " Quality College" program 27 given by Mr. Philip Crosby, a noted quality assurance consul-32 93,
That experience reemphasized to me the unique impor-
}4 tant.
29 tance of " building quality into" STP.
I should note that it
-e has been a published policy of HL&P that a strong, independent 28 1
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quality assurance function shall be a point of every nuclear 29 I 31 or fossil plant project.
That policy, as published in all 32 !
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company QA Manuals, is attached.
(Attachment No. 1).
34 l I have also attended as many meetings as possible of 35 i 36 I the STP Management Committee (consisting of representatives 37 f 38 '
of all of the co-owners) at which progr'ess and problems are 39 40 reviewed.
I will continue to do so.
41 l 42 I and other chief executive officers of our co-owners 43 '
have met periodically with B&R management to review the 44 ;
status of uhe Project.
In the period since the NRC enforce-4*
4j ment action, I have been in frequent communication with B&R 49 00 51 _ _ _-.
management.
In joint meetings of the senior executives of EL&P and B&R, including their President, I have expressed my concerns and emphasized my commitment to correcting the conditions noted by the NRC and to assure that the Project m ats our safety and reliability goals.
I intend to remain in close touch with B&R management.
I will also continue to attend the significant hearings and proceedings related to the Project, such as the meeting hold in August 1980 in Bay City by the NRC's Office of In;pection and Enforcement.
Q. 13 Do you have any concluding remarks?
A. 13 Yes.
I believe that we have made marked improve-mants in STP in response to our own heightened sensitivity to the complexities of a nuclear project and, frankly, as a 1
retult of the NRC's enforcement action.
I am not saying that our problems are completely behind us.
That would be unrealis, tic in a job which depends for its success on thousands l
of human interactions each day.
I can say, however, that we will meet head-on any instance in which professional discipline breaks down or full cooperation and candor among the crafts, I
i supervision and management are impaired.
The extraordinary importance of the Project to each of l
l tha co-owners of the Project and to the public from both a l
l power supply and safety standpoint will demand continued vigilance.
I believe, however, that we can proceed with
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4 5l increased assurance that STP activities will be carried out 6!
in accordance with approved plans and procedures and in full
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compliance with regulatory requirements.
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If T. HUDSON:10:A la 15 17 ;
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I Attachr.ent No. 1 Houston p
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E!cctric Tcwer HJ J.
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Housten. Texas 77001 0ecember 9, 1974 RO Bcx !700 I n.l To All Officers and Department Heads:
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l A Quality Assurance Program has been authori:ed for implemen-tation within the Meust:n Lighting 5 Power C:mpany.
This Program l
l defines requirements and provides methods of positive quali:y con:rci in all engineering, procurement, construc': ion, and operation ac:ivi:les 5.
The associated with the Ccmpany's nuclear and fossil power plan:
scope of the Program enecmpasses all applicable requirements of the Code of Federal Regulations, ASatE Soile: and Pressure Vessel Code, and other appropriate industry recogni:ed ccdes and standards.
The authority to implement the requirements of the Quali:y Assurance Program is delegated to the stanager - Quali:y Assurance who has :he complete suppor: cf the Company's Executive stanagemen: and w 11, by organi:a:ional arrangement, be kept free frem cost and scheduling influences. His authority, as defined in :his Program afanual, ex: ends to all quality assurance ac-ivities performed by and for Houston Li-gh:ing 5 Power Company.
Decisions made by the 51anager - Quality Assurance on such matters are made in the name of this Company, and may be overruled only by :he Executive Vice President.
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D. D. Jcrian Presiden
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1:
I ask that he take the witness stand and be sworn in.
2l JUDGE LAMB:
Okay.
We'll take a five-minute i3' break.
4; (A brief recess was had.)
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JUDGE BECHHOEFER:
Back,on the record.
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6; Whereupon, R
d 7 i DON D. JORDAN Nl 8'
a witness herein, having been duly sworn and cautioned to d
9 testify the truth, the whole truth and nothing but the truth, zsg to l was examined and did proceed to testify upon his oath as z
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follows:
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DIRECT EXAMINATION
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13 BY MR. NEWMAN:
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Mr. Jordan, you have before you a document of 4
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15 12 pages, with a one-page attachment which is entitled, i
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" Testimony on Behalf of Houston Lighting & Power Company,
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17 et al., of Mr. Don D. Jordan."
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18 I A.
Yes.
That is correct.
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And was that document prepared under your
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supervision, Mr. Jordan?
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A.
Yes, it was.
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O Is it true and correct, to the best of your 23 knowledge and belief?
,.4 A.
Yes, it is.
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And you adopu it as your testimony in this ALDERSON REPORTING COMPANY. INC.
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proceeding?
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I do.
l 3l MR. NEWMAN:
All right.
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Mr. Chairman, without objection I ask that the i
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testimony of Don D. Jordan as previously identified be l ]'.
6 incorporated into the record, and we have furnished sufficient
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7I copies to the reporter for that purpose.
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MR. GAY:
Mr. Chairman, CEU does have objection 4
9-and we move to strike the portions of Mr.-Jordan's testimony 10 l beginning on Page 3, Line 44, and continuing through the z
lj 11 entirety of Page 4 and finally concluding at Line 23 on Page 5.
.D The reason for that objection, Your Honor, is this, j
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the questions and the answers contained therein, Questions and a
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Answers 4, 5 and 6 are irrelevant and i= material to any issue
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before this adjudicatory body.
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, d 16 No offense intended to Mr. Jordan, it's typically Q
l d 17 the kind of information that we would expect to find from the
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president of a utility before a regulatory body of the state 19 in order to obtain increases in rates.
It has need for power
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i 20 issues in that particular comment that I would take strong 21 objection to before the Public Utility Commission.
I 22 I don't think there is any need for any need for l
23 power issues in this proceeding.
That is not before this body, i
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24 and I would move that this irrelevant and i= material information i
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25 ! be stricken from the record.
ALDERSON REPORTING COMPANY. INC.
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MR. NEWMAN:
Mr. Chairman, if I may respond, the L
2i testimony that Mr. Jordan has described is relevant, given the i
3 very general nature of the Commission's charge to the Board to 4l inquire into the area of competence by Houston Lighting & Power.
5l It indicates genera ly the nature of the enterprise d
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and it does indicate, for example, that the corporation is I
7 regulated by a number of different agencies, and it does, I i
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8l think, provide a useful background with respect to the over-all d
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9-character in a very broad sense of this corporation's character zo 10 in the sense of what does it perform, what does it do generally, j
11 how does it conduct its business.
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j 12 i I think that given the latitude normally afforded in 5
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13 proceedings of this type, with respect to the relevance of a
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testimony, I think that the material referred to by Mr. Jordan j
15 j is well within that type of material which would normally be
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allowed in an administrative proceeding and I see no harm or A
l 17 prejudice resulting from it.
wz 18 JUEGE SECHHOEFER:
Mr. Newman, if the Scard were to
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g 19 l ask questions about the incredible increase in the number of l
f 20 customers on cross-examination, you know, on what is this j
l 21l based, give me your details, how did you get this information, i
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would you have an objection, because that could take an i,
23 extended period of time and I would think if it's in the direct i
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24 testimony it's going to be subject to cross-examination.
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25 MR. NEWMAN:
Well, it's hard to answer that ALDERSON REPORTING COMPANY,INC.
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question, Mr. Chairman.
2" If it's simply to explain the incredible increase 3
and the answer is simple and straightforward growth in the area 4i and new families moving into the area, I think that's a very I
5; simple matter to respond to.
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6I I can't tell you in advance what I would object to,
'9 7l but obviously to the extent that there is specific statements
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made here, there is some reasonable degree of cross-examination d
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which must be permitted.
I think the extent of that cross-
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examination has to be determined case by case.
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j 11 l MR. REIS:
Mr. Chairman, if the Staff could be heard.
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As I recall the contentions in the proceeding, need for power is 5
d 13 l not one of them at all.
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Therefore, as general background to the testimony E
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and the fact that HL&P is a regulated industry, I think we can M
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let it in for those sorts of things, subject to appropriate e(
17 cross-examination but I don't think -- I think we could i
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18 probably stipulate to limit it just as a statement of what the 1
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19 service is that is being rendered generally by HL&P and that 20 l
it is a regulated industry.
i 21 And we can do that in this proceeding particularly I
22 because need for power is not a contention anywhere in the OL i
23 proceeding, and I think that the Applicants would stipulate I
i 24 that if it ever should arise as an issue, this material in these 1
25 statements would not be cited or relevant to an in-depth 1
ALDERSON REPORTING COMPANY. INC.
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'l consideration of that issue.
2 MR. NEWMAN:
Mr. Chairman, we would agree to l
3l stipulate to that effect.
The testimony is entered simply to l
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4; show the nature of the corporation's activity and size and I
5i the fact that it's a regulated organization.
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6' MR. GAY:
Mr. Chairman, my objection stands.
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~7 don't see any particular harm to the materials, but I must warn i
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the Board that I will feel compelled to cross-examine Mr. Jordan dn 9!
on some of these matters if it remains within the record.
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If it's perceived by the Board that the 82 z
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11f incorporated municipalities has some bearing on the character a
E and competence of this particular utility, I'm going to have to y
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13 cross-examine on the extent of the regulation of those 1
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14 i incorporated bodies.
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I see none of this material as being relevant or u=
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16 material to the issues before the Board, s
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17 (Board reviews document.)
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h 24 25 ALDERSON REPORTING COMPANY. INC.
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1l JUDGE BECHHOEFER:
The Board is going to uphold i
2 that objection for the most part.
We will allow the first i
3l sentence of 4 to stay in purely as general background, and we I
4' would also allow statements that HL&P is subject to regulation 5l by a number of public utility bodies.
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6 Unless the Applicant intends to rely on particular I
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regulation by particular bodies as a part of its case, we don't Xj 8'
think that matter needs to be included, and we do believe it d
9 would be subject to cross-examination.
And I'm speaking 10 particularly about the need for power matters.
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To the extent rapid growth was a cause of some U.j 12 l events in the past, that perhaps could be brought out by the N
13 specific witnesses who may wish to use that, but I don't think n
14 as a matter of general background it should be in there unless k
2 15 it's subject to cross-examination, and we believe it would be
- u 16 subject to a considerable amount of cross-examination, so I de i
17 think we will uphold the motion to strike, with the exceptions 5
18 that we have indicated.
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MR. GAY:
So it's my understanding, Mr. Chairman, 19 R
20 that the entire answer to No. 5 remains in, but you are granting 21 the motion as to Lines 8 through 14 on Page 4, and as to l
22 Lines 34 through 38 on Page 47 23 JUDGE SECHHOEFER:
We are granting it starting with 24 the fifth word on Line 5 through Line 15, and then we are i
i 25 leaving the word *yes" in at Line 20 but striking the rest o' i
ALDERSON REPORTING COMPANY,INC.
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that, through Line 23 on Page 5.
2 (General discussion and review of testimony.)
3 JUDGE BECHHOEFER:
Subject to that, are there any 4
objections?
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MR. GAY:
No, Your Honor.
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6l JUDGE BECHHOEFER:
Mr. Hager, any objections?
k7 MR. HAGER:
No, Your Honor.
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8l JUDGE BECHHOEFER:
With the exception of the lines d
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we have deleted, the testimony will be accepted into evidence I
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(See attached pages.)
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J ALDERSON REPORTING COMPANY, INC.
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23, Il CROSS-EXAMINATION I
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BY MR. GAY:
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Good morning, Mr. Jordan.
My name is Jeffrey Gay l
4l and I will be asking you a few questions this morning so as to l'
5 avoid confusion of Jordan cross-examining Jordan.
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6l I'd like to begin with just,a couple of questions 7i on the completeness of reports from Brown & Root as to the 3
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8 engineering and design work for the South Texas Project, and d
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9-let me begin, just to preface it, I may ask you a number of I
E 10 questions on cross-examination that call for "yes" or "no" f
11 l answers, just to kind of expedite where we're going, but I want B
i-j 12 you to feel free, because of the nature of this proceeding, to 3=
13 respond with "yes" or "no" and then take an opportunity to add E
l 14 qualifying statements for further explain for the record as you
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A.
Thank you very much.
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4 Mr. Jordan, let's begin with the question of is it
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17 18 l true that at the time HL&P received its construction permit for I:
19 the South Texas Project from the Nuclear Regulatory Ccmmission I
20 that Brown & Root had represented to HL&P that as much as 50 1
i 21 to 60 percent of the engineering work on that project was l
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complete?
l 23 MR. NEWMAN:
Mr. Chairman, I'm going to object to l
24 that question.
That's nowhere within the scope of the direct 25 examination.
Irrelevant.
I ALDERSON REPORTING COMPANY. INC.
l izzs 1l MR. GAY:
Mr. Chairman, I think that the issue i
2 that Mr. Jordan has to get to before this body is the character 3
and competence of the utility and the work that is being done 4
at the South Texas Project.
5 Now, I think that Mr. Jordan has knowledge of the j
6l background of the work done by Brown & Root.
If he does not, 7l then he should be able to state that.
It's a very direct,
)N 8l straightforward question and I think that it -- I will show l
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within a couple of questions, a short few questions, how this
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is relative to the issue of character and competence of this
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JUDGE BECHHOEFER:
Well, do you plan to show that z3 13 i it's relevant to the particular testimony that you have before
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Because the scope of that testimony is what defines the --
I 15 MR. GAY:
I think that there is testimony from
! d 16 Mr. Jordan as to consultants brought in on this project to o
Il 17 evaluate the QA-QC matters before this Commission.
'Ea 18 Mr. Jordan refers in a very general sense to the E
19 fact he supports the statements of Mr. Oprea presented,later in 20 this period with regard to the decisions made by HL&P to keep 21 Brown & Root in charge of not only construction but also QA-QC, 22 and I think that it is important for the mission of this soard i
23 to get a background as to the problems that first arose with t
i 24 Brown & Root when HL&P identified that there may have been scme 25 discrepancies presented by Brown & Root, and the nature of l
I ALDERSON REPORTING COMPANY. INC.
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i 1226 35 1l those discrepancies and the action taken by the management of 2'
HL&P and what consultants were brought in over a period of time, 3l and that's where my questions will be going.
4!
MR. NEWMAN:
Mr. Chairman, the question is what 5) degree of engineering had been represented as having been j
6 completed at a given point in time.
g i
7 i That is not relevant to any matter in this testimony.
K I
j 8
MR. REIS:
Mr. Chairman, in connection with this d
l 0
9l I would like to call the Board's attention to Lines 34 10 !
through 42 on Page 3 of Mr. Jordan's testimony.
E i
j 11 ;
(Board reviews document.)
U f
12 '
MR. GAY:
In addition to that, Mr. Chairman, I
=
3 5
13 would like the Board to note Lines 41 through 42 on that same a
l 14 i page.
k j
15 It is Mr. Jordan's very broad assertion that there
=
E 10 has never been any serious question as to the corporate m
l 17 integrity and competence of HL&P, and I think that that's the 2
4 18 issue that's before the Board, and the Board has reali::ed that j
i C
19 it's very difficult to determine what is character and l
a t
A 20 competence, and I think there is going to have to be some l
t l
21 latitude in the cross-examination so that this Board can get 22 an idea of how to define character and competence and what it's 23 meant over a period of time within HL&P.
j 24 MR. NEWMAN:
Mr. Chairman, I think it is important U
in considering ruling on this that we do have a large number of ALDERSON REPORTING COMPANY. INC.
1227 I
l 1',
witnesses who are far more intimately familiar with the details 2!
of the engineering program than might be expected of Mr. Jordan, 3,
or that is even contemplated in Mr. Jordan's testimony, and I i
4!
think we might be wasting the time of the Board by pursuing 5l this line of questioning with Mr. Jordan.
And as I say, it is h
I lj 6
not within the scope of his direct examination.
)k 7.
MR. GAY:
Mr. Chairman, I assure you that I do not
!;5 l
8i regard Mr. Jordan as an expert in engineering and I will not ld
,d 9,
be asking him any questions about engineering matters.
iI i6 10 My question is direct and to the point of whether i
g 11 ;
or not he had any knowledge of the representations frem Brown &
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12 !
Root as to the completeness of the project, the completeness 5
l
,E 13 i of the engineering.
It's just a straightforward information
'E matter.
How much knowledge did the management of HL&P have.
14 l W
MR. NEWMAN:
That matter might well be put to the
' g 15
,a
' g*
16 senior engineering or technical officer of the corporation.
,o d
17 '
(Bench conference.)
as JUDGE BECHHOEFER:
We will allow the question, but A
18.i 5
actually Mr. Jordan may answer, Mr. Jordan the witness may 19 X
4 20 answer, rather than Mr. Newman, to the extent of his knowledge.
21 BY MR. GAY:
l 22 G
Mr. Jordan, would you like for me to repeat the l
23 question, after all this?
24 A.
I would.
l 25 G
The question was, is it true that at the time that I
ALDERSON REPORTING COMPANY. INC.
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HL&P received its construction permit -- and by the way, can 2
you give us the, time on that before I proceed further with the 3
question?
4!
A.
We got the first concrete poured on that job in 1976.
5!
The construction permit was received late in 1975, as I recall.
]
6 G
Now, the question again is, at the time of that k7 issuance from the NRC, the construction permit, did you have Xj 8
any representations from Brown & Root that the engineering for dd 9
that project was from 50 to 60 percent ccmplate?
10 A.
Mr. Gay, you can get the more specific information
)
II l cn that from Mr. Cprea.
5 i
(
12 !
At the time that construction was started, it was E3 g
13 <'
my understanding that the eingineering on the project was well l
14 along and perhaps in the neighborhood of 50 percent as the 15 '
project was conceived at that particular time.
a d
16 I think you understand the project today is G
l 17 considerably different than it was then, but as the project 22 18 was conceived at that time it was -- or it was my understanding E
i 19 at least that the engineering was approximately 50 percent l
2 20 '
complete.
21 4
I understand the qualification and I appreciate it.
j t
l 22 '
The next question, Mr. Jordan, is did you later f,
1 23 '
discover that Brown & Root had made scme misrepresentations f
24 to HL&p as to the extent of the engineering that had been l
25 completed?
l l
ALDERSON REPORTING COMPANY. INC.
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1 A
We later discovered that the engineering was not 2
completed to the degree that I thought that it was.
I would not 3l go so far as to say that it was a misrepresentation, but the O'
engineering was not as complete as it had been indicated to me 5l that it was.
i 6
G Is it true that you later discovered that at the 7
time of that issuance the engineering by Brown & Rect was 8'
approximately eight to nine percent racher than 50 percent?
J d
9' A.
It was something in that neighborhood as the 10 project had been developed.
As to whether or not the yardstick i
11 '
that you measure that engineering by was exactly the same, you a
1 j
12 '
can explore that further with Mr. Cprea.
5=
13 0
Okay.
Can you tell me when you discovered the
,5 14 ' discrepancy?
15 A.
No, I can't tell you the exact date or month that d
16 that came about.
I don't recall that, but Mr. Oprea probably 0
17 would.
'E 18 4
okay.
What I'm interested in now, Mr. Jordan, and h
19 g
you can use some latitude in answering, is what your response 20 was at t.he time you discovered the discrepancy?
21 MR. NEWMAN:
Mr. Chairman, I'm going to object to 22 this line of questioning.
I think what you're seeing here is 23 chasing down a rabbit ersil, and it's not relevant to any matter l
24 in Mr. Jordan's testimony, nor is it a matter relevant to the P
23lcharacterofthecorporation.
Thena are :;uestions on scme l
I i
ALDERSON REPORTING COMP ANY. INC.
1230 09, 1;
point of dispute with respect to Brown & Roo t.
These are i
2i kinds of matters that may come up at a PUC proceeding.
They 3
have no place here.
There's nothing that's relevant in 4f Mr. Jordan's testimony to this material.
5 I can see the Board allowing one question, but when j
6 it expands to two and three and four and now the fif th 7:
question down through this narrow area that is not covered in 2
)
8l his testimony, I think we're not using the time of this hearing d
=
9, productively.
I F
to <
Ma. CAY:
Mr. chairman, I think we could proceed
]
11 through this rather rapidly if we could just get the responses a
f 12 '
from Mr. Jordan without these interruptions.
s I think that the Board can see very quickly that g
13 '
l 14 this goes to the issue of character and competence, which I
I 15 i Mr. Jordan is ultimately responsible for in HL&P, and if he le,
doesn't have the answers, who's going to have them?
F 17 Now, Mr. Oprea may well have been the person in 18 charge of engineering at the south Texas Project, but it's on l
b 19,
the record in Mr. Jordan's testimony that Mr. Cyrea was g
20 respons'ible to Mr. Jordan, and I think that we have to get 21 I this out from Mr. Jordan to find out what kinds of repre-i 22 '
sentations were made by Brown & Root and what the response was i
23 of the company, because it goes ultimately to the issue of 24 character and ecmpetence, which is an extremely broad issue 25 before this 3 card.
ALDERSON REPORTING COMPANY. INC.
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MR. NEWMAN:
I keep hearing a conclusionary t
2 statement, Mr. Chairman.
I hear no connecting language.
What 3,
we hear is the question and then the statement that it goes o!
to character and competence.
It's never explained how it goes 5!
to character and competence.
l I
lj 6
MR. GAY:
It's a matter of time, Mr. Chairman, if i-7 this company knew of discrepancies, and Mr. Jordan didn't want s
to use the word misrepresentation, that's a conclusion for the
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'd f
a 9
Board to find.
l 10 Certainly it's obvious from the answers Mr. Jordan i
has given that there were discrepancies in representations from 11 1 a
l 12 '
Brown & Root to HL&P and the Board should question what kind of I
13 response HL&P gave to the discovery of those discrepancies, whether or not they considered at that time removing Brown &
Ilo i
15 j Root from the project or taking any kind of disciplinary action
- y le against them.
o 17 MR. NEWMAN:
I don't believe that the record W
18 ;
supports counsel's characterization of anything that's happened
'h 1l 19 ; here as a discrepancy.
That's counsel's testimony, and it l
20 reflects his attempt to try to get that into Mr. Jordan's 21 testimony.
There's no basis for that statement, and I believe I
22 that no connection has been made between the question and the l
23 subject matter of Mr. Jordan's testimony.
i 24 Again, I would caution that we're going down here l
25 on a path not very diasimilar from that which we have gone i
ALDERSON REPORTING COMPANY. INC.
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