ML20137C258

Summary of Director'S Decision Under 10CFR2.206 of Mb Hobby & AL Mosbaugh,

ML20137C258
Person / Time
Site:	Hatch, Vogtle
Issue date:	03/18/1997
From:	Miraglia F NRC (Affiliation Not Assigned)
To:
Shared Package
ML20137C029	List: ML20137C024 ML20137C238 ML20137C258 ML20137C426
References
2.206, DD-97-06, DD-97-6, NUDOCS 9703240195
Download: ML20137C258 (26)

Text

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DD-97-06 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION Frank J. Miraglia Jr., Acting Director In the Aatter of )

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GEORGIA POWER COMPANY, ET AL. ) Docket Nos. 50-321,

) 50-366, (Vogtle Electric Generating Plant, ) 50-424, Units 1 and 2) ) and 50-425

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(Hatch Nuclear Plant, ) (10 CFR 2.206)

Units 1 and 2) )

SUMMARY

OF DIRECTOR'S DECISION UNDER 10 CFR 2.206 I. INTRODUCTION

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This is a summary of the final Director's Decision on the petition of Messrs. Marvin B. Hobby and Allen L. Mosbaugh (Petitioners) dated September 11, 1990, as: supplemented October 1, 1990, and July 8, 1991, 4

pursuant,to.10 CFR 2.206 (Petition). In CLI-93-15, 38 NRC 1 (1993), the CommissionvacatedandremandedadartialdecisiononthePetition,DD-93-8, "37 NRC 314 (1993), dated April 23, 1993, and directed that the NRC staff consider the outcome of a'pending licensing transfer proceeding on the Vogtle facility before acting na the Petition, due to the overlap in issues. After closure of the evidentiary record and before issuance of a decision, the Licensing Board terminated the Vogtle licensing transfer proceeding based upon a settlement agreement between Georgia Power Company (GPC or the lice..see) and the sole intervenor, Mr. Mosbaugh. The final Director's Decision addresses the matters considered in the partial Director's Decision and the balance of the Petition in light of the information disclosed in the licensing transfer

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amendment proceeding, in NRC inspections, investigations, and enforcement )

actions, and_ decisions by the Department of Labor.

Although Mr. Mosbaugh has withdrawn his interest in the 10 CFR 2.206 Petition, Mr. Hobby's request is still pending before the NRC. Inasmuch as i

, the Petition was jointly filed by Messrs. Mosbaugh and Hobby and it is difficult to segregate their concerns, the final Director's Decision addresses all matters raised in the Petition, as supplemented by the hearing record. I 1

II. DISCUSSION  ;

The Petitioners made a number of allegations about the management of the  !

GPC nuclear facilities (Hatch and Vogtle). Specifically, they alleged that:

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1. GPC illegally transferred its operating licenses to Southern

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Nuclear; 2,. GPC' knowingly i cluded misrepresentations in its response to s y concerns of a. Commissioner about the chain of command for the

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t Vogtle facility;< >

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3. GPC made interitional .fals$ statements to the NRC about the

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syeliability-of a d.iesel generator (DG) whose failure had resulted j

$ , in[a Site Area Emergency (SAE) at Vogtle;

,$. A G'PC' executive' submitted perjured testimony during a DOL j [/ proceeding under Section 210 of the Energy Reorganization Act;

5. GPC repeatedly abused Technical Specification (TS) 3.0.3 at the i

Vogtle facility; i 6~. GPC repeatedly and willfully violated Technical Specifications (TSs) at the Vogtle facility; l

7. GPC- repeatedly concealed safeguards problems from the NRC; I

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8. GPC operated radioactive waste systems and facilities at Vogtle in l 1

gross violation of NRC requirements;

9. GPC routinely used nonconservative and questionable management practices at its nuclear facilities; and, l

10. GPC retaliated against managers who made their regulatory concerns 1 known to GPC or Southern Nuclear management.

Mr. Mosbaugh had previously informed NRC's Office of Investigations (01) 1 of some of these allegations. The Petitioners requested the NRC to institute ;

proceedings and take swift and immediate action based on these allegations.

On October 23, 1990, Dr. Thomas E. Murley, who was then the Director, NRR, acknowledged receiving the- Petition and concluded that no immediate action was necessary regarding these matters. He made this determination based on completed and continuing NRC inspections and investigations of the licensee  !

and particularly,of the operation' of the Vogtle facility.

T0n July 8, 1991, the Petitioners submitted " Amendments to Petitioners

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MarvinHobby'sandAllenMosbaugh'sSeptembeh 11, 1990, Petition; and Response to' Georgia Power Company's_ April-1, 1991, Submission by its Executive Vice President, Mr. R. P. Mcdonald" (Supplement). In the Supplement the Petitioriers alleged thati

1. GPC's Executive Vice President made material false statements in  !

GPC's April l',1991, submittal to the NRC regarding the participants in an April 19, 1990, telephone conference call; and,

2. This same Executive Vice President made false statements to the NRC at a transcribed meeting on January 11, 1991, which discussed the formation and operation of Southern Nuclear. 1 l

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The Petitioners requested that the NRC take immediate steps to determine if GPC's current management'has the rsquisite character and competence to operate a-nuclear facility.j Ondugust 26, 1991, Dr. Murley acknowledged

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receivingthe'Supplem[ntahdinformedthePetitionersthatnoimmediateaction e: , *% j

was requihed'and'that the sp~ecificsissues raised in the Supplement would be l addressed in. a, Director's Decision (DD)e "

On October 22,1992, fin responseits a Federal Register notice of the i '

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proposed lissuanceofthese:licenseamendments(57FR47135, October 14,1992), ,

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Messrs. Mosbaugh and Hobby filed a, petition for leave to intervene and request  !

l for hearing. Mr. Hobby was denied intervenor status for lack of standing. In LBP-93-5, 37 NRC 96 (February 18,1993), Mr. Mosbaugh was admitted as an intervenor along with a single contention:

The license to operate the Vogtle Electric Generating Plant, Units 1 and 2, should not be transferred to Southern Nuclear Operating Company, Inc., because it lacks the requisite character, competence and integrity, as well as the necessary candor, truthfulness and willingness to abide by regulatory requirements.

The bases for the admitted contention alleged that (1) the license transfers had already.taken place because Southern Nuclear had assumed control of the operation of the Vogtle facility without prior approval from the NRC, and (2) officials of the 50h0PC0 Project (the predecessor organization to Southern Nuclear) conspired to submit false information to the NRC concerning safety-related information regarding DG testing following the March 1990 SAE.

On April 23, 1993, the Director, NRR, issued DD-93-8, NRC 314, in which i

he resolved several matters. In summary, the Director determined that:

1. No unauthorized transfer of the Vogtle licenses had nccurred;

2. There is no information beyond the Petitioners' opinions to support  !

the position that GPC's omission from a description of their chain s

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<- of command at a Commission meeting on March 30, 1989, was i intentional;  ;

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3. GPC .does not routinely threaten the safe operation of the Vogtle l fability by allowing entry into TS 3.0.3; 1

4. Although TS violations had occurred, Petitioners' claim that they t

were willful was not substantiated;

5. Failures to make timely reports to the NRC of safeguards problems were due to GPC's cumbersome system for evaluating security I

findings, rather than being due to any willful attempt to impede the  !

I reporting process; )

6. The relevant facts do not support a conclusion that GPC wilfully  !

violated NRC requirements or wilfully operated the radioactive waste.

system in a manner to endanger public health and safety; and,

7. The GPC nuclear facilities were being operated in accordance with NRC regulations and do not endanger public health and safety.

Decisions on the Petitioners' issues of intentional false statements to the NRC regarding DG reliability, perjured testimony by a GPC executive in a D0L proceeding, and discrimination against managers who raised regulatory

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concerns were deferred 'pending the completion of 01 investigations and the issuance of a DOL decision. ,

In'CLI-93-15, 38 NRC 1 (July 14, 1993), the Commission vacated and i

... ,- . y remanded DD-93-8, and directed that the staff consider the outcome of the

,> t I Vogtl'e license' amendm' e nt proceeding before acting on the Petition due to the '

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(over, lap;inlissues.

- s Several extensive reviews of the above concerns have been conducted by the NRC. The'NRCiperformed special inspections, 01 performed investigations,  !

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an. Atomic Safety and Licensing Board (ASLB) held hearings on the contention challenging Southern Nu'elear's character, and the Department of Labor (DOL) held hearings concerning alleged discrimination against Messrs. Hobby and Mosbaugh by licensee management.

Litigation concerning the contention in the license amendment proceeding was extensive and included over 35 prehearing depositions, over 12,500 pages of hearing transcripts, and nearly 600 documentary exhibits. After the hearings were completed and prior to issuance of an ASLB decision on the contention, Mr. Mosbaugh and licensee arrived at a settlement agreement that resulted in, among other things, Mr. Mosbaugh withdrawing his contention and filing a joint motion (with the licensee) requesting that the Board terminate the proceeding without issuance of a Board order setting forth its findings and conclusions. The Board granted the request and dismissed the contention (LBP-96-16, 44 HRC 59 (August 19,1996)).

The dismissal of the contention did not address the potential safety implications of the 2.206 Petition as supplemented by the hearing record. The staff has considered the testimony of staff witnesses, including staff enginecrs, supervisors, and senior managers, the technical issues raised, and the staff's observations and assessments of licensee performance to resolve the issues raised by the. Petition. The following is a summary of the conclusions in the Director's Decision. l A. Illeaal License Transfers; and Misrepresentations of Manaaement Control 1.' Illeaal License Transfdrs The Petition alleged that GPC improperly transferred control of its nuclear-licen,ses to Southern Nuclear in that Mr. Joseph M. Farley (who was an

. officer of GPC's parent company, Southern Company, and its subsidiary, i

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and was responsible for operating the GPC nuclear facilities and made or

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influenced' budget and hiring ' decisions, beginning with the first of three phases in the planned transition to Southern Nuclear. The Petitioners state that the nuclear officers in SON 0PC0 Project reported to Mr. Farley, rather than to Mr. Dahlberg, GPC's CEO, and that Mr. Farley controlled the Vogtle facility based upon his involvement in (1) controlling daily operations, (2) establishing and implementing nuclear policy decisions, (3) employing, supervising, and dismissing nuclear personnel, and (4) controlling costs. .

Intervenor also asserts that numerous documents and statements provided to the I NRC regarding the organizational structure and responsibilities for managerial 1

control of the Vogtle facility were inaccurate or incomplete because they do '

not show Mr. Mcdonald reporting to Mr. Farley or Mr. Farley functioning as the de facto Chief Executive Officer of the SON 0PC0 Project.

l The staff's review concluded that Intervenor's assertion that Mr. Farley l l

functioned as the de facto Chief Executive Officer of the SONOPC0 Project is not supported by the record. Mr. Mcdonald did not report to Mr. Farley regarding GPC licensed activities. The items cited do not demonstrate that Mr. Farley exercised control over licensed activities at GPC's nuclear  !

facilities during his involvement in the SON 0PC0 Project. Rather, the record shows that GPC controlled the" daily' operations of the Vogtle facility in accordance with a chain of command extending from the Vogtle General Manager, through the Vice President of the Vogtle; facility, through the Senior Vice President.- Nuclear Operations..through the Executive Vice President - Nuclear Operations,,to the President and CEO of GPC. A Huclear Operations Overview L  %

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Committee of-the GPC Board of Directors conducted periodic reviews of the regulatory and operational performance of GPC's nuclear plants. l 4

The hearing record shows that nuclear policy decisions for the Vogtle )

i facility were established and implemented by GPC, and there was no evidence I i

that Mr. Farley established the outage philosophy or any other operational policies for the Vogtle facility. Mr. Farley's' limited involvement in a 1989

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4 rate case matter before;the. Georgia Public Service Commission (i.e., his  !

.1 review of draft testimony regarding alternative performance standards) did not l

indicate any control lof GPC's nuclear operations or licensed activities, j i Interven[ also;provided noinformation that The Southern Company Management Council acted'as the SON 0PC0' Project board of, directors until the Project was

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m s Regarding the ' assertions that.Mr. Farley controlled the Vogtle facility

. through personnel decisions','the record does not show that Mr. Farley controlled GPC nuclear facilities by employing, supervising, and dismissing nuclearpersonnel[orthatGPCprovidedinaccurateinformationtotheNRC regarding Mr'. Farley'sz involvement with personnel matters.

J The hearing record does not support a conclusion that GPC misrepresented i i

its budgets affecting the operation of GPC licensed facilities. There is no basis to conclude that the particular process GPC used to develop its budget I

showed that Mr. Farley, The Southern Company, or SON 0PCO Project controlled the operation of the Vogtle facility. Rather, the record shows that GPC was responsible for the costs of the Vogtle facility. After review by GPC's Management Council, the operating and capital budgets were approved by GPC's j

President and CEO, and the capital budget was also approved by the GPC Board of Directors. The record does not support that Messrs. Farley and

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y. i, z i*' 9 EdwardLlAd'dison,.thePre~sidentandCEOofTheSouthernCompany, approved  ;

,GPC's nuclear ub*dgets. As'aiExecutiveVicePresidentofTheSouthern

Company. ..Mr.;Farley was-involved in reviewing the nuclear budgets as part of

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the normal. pro' cess for preparing annual budgets in the Southern system. Given

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- The' South'ern Company's, holding conipany status, Mr. Addison's involvement in

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reviefini.andhroviding'guidelinesandrequirementsforadequateearningsand reasonable' capital needs was' appropriate.

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.The record shows that GPC provided some inaccurate or incomplete ,

information to the 'NRC when d'escribing its organization and plans to form l V

Southern Nuclear, and when responding to the Petition. This information i

involved (1) the omission of Mr. Hairston when Mr. Mcdonald described the Vogtle chain of command during a March 30, 1989, meeting, (2) a 1989 FSAR organizational chart showing the position of Mr. Dahlberg as " Chairman and CE0" rather than " President and CE0", and (3) GPC's April 1991 written response to the Petition indicating that the GPC Management Council included l all Senior Vice Presidents (which was inaccurate because Mr. Hairston was not I i

4 a member), and indicating Mr. Farley's title in 1988 to be Executive Vice President - Nuclear of The Southern Company (a position he did not assume  :

until March 1, 1989). This inaccurate or incomplete information was of minor safety significance in terms of NRC understanding of the proposed transfers, did not mislead the NRC, and was not sufficient to warrant NRC enforcement action nor conclusions that (1) GPC concealed an unauthorized role of Mr. Farley or a de facto, unauthorized organization for control of GPC nuclear facilities, or (2) GPC lacks the requisite character and integrity to be a licensee. ,

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Thel s'tUf, has revil ewe'd th'e Vogtle Final Safety Analysis Report (FSAR),

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p l d, dhe? Vogtlh l'icenses',7 records of an9NRC Special Inspection conducted to review n +s .

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the, SON 0PC0 management. organization, and testimony of key officials taken

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under oath in the;1icense amendment proceeding, as well as the evidence b

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, proffered by the Intervenor in the license amendment proceeding. This

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(, jinformation established that the responsibility for decisions affecting the

. operation of the GPC plants rested with GPC's Senior Vice President - Nuclear l Operations;whoatthetimewasMr.Hairston. The Petitioners' concerns do j not warrant the conclusion that SON 0PC0 was in control. Rather, the staff finds that during the period of time in question, the chain of command was from the respective vice presidents for the Vogtle and Hatch facilities to Mr. Hairston. Mr. Hairston reported to Mr. Mcdonald, who reported to Mr. Dahlberg, President of GPC. Each of these-individuals was an elected officer of GPC, and the reporting chain at that time progressed up to the President of GPC.

Therefore, the staff concludes that GPC did not transfer control of the operating licenses for the Vogtle facility without the prior consent of the NRC and that GPC did not mislead the NRC in any material respect regarding control of the operation of the Vogtle facility.

2. Chain of Command Misrepresentations at a Commission Meetina The Pu itioners stated that during a Commission meeting to vote on the full power opr.ating license for Vogtle Unit 2 on March 30, 1989, GPC misled the Commission about the chain of command from the Vogtle Plant Manager to the CEO during their response to a question from one of the Commissioners.

Shortly after reading the transcript of the meeting, Mr. W. G. Hairston, on May 1, 1989,.sent the NRC a letter that corrected the meeting transcript, j . ,

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4 and noted that GPC had inadvertently omitted him in the management chain in their reply [ to the' Commissioner. 'The <1'e'tter further stated that the sc , y .

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orgkniz,ation was as described,on figures 13{1.1-1 and 13.1.1-2 of the FSAR.

,. 3 The' NRC previously' had been ~ apprised ofsthe GPC organization, including

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Mr.Hairston's.positihn,byan'FSARamendmentdatedNovember 23, 1988, and NRC staff members present at the Commission meeting were aware of the correct information.e-The staff has no basis to' conclude that GPC's omission of the  !

Senior' VP> position in their oral remarks was intentional. The staff l concluded,afterconsuitationwiththeCommission,thatGPC'somissionwasnot significant because the information would not likely have caused the Commission to reach a different decision regarding the Unit 2 license application. In addition, the staff had previously been provided and was aware of the correct information.- Thus, enforcement action was not appropriate.

3. Misreoresentations Concernina the SON 0PC0 Pro.iect The Petition asserted that GPC (Mr. Mcdonald) falsely stated during a transcribed meeting with the staff on January 11, 1991, that Mr. Farley had no i

responsibilities for administrative matters related to the SON 0PC0 Project.

Mr.- Farley claims he had been involved in SON 0PC0 administrative matters since the SON 0PC0 Project was formed in November 1988.

Based on the meeting transcript and his testimony during the ASLB hearing, Mr. Mcdonald's January 11, 1991, statement was not inaccurate in terms of the functions depicted on the charts discussed during the meeting.

Mr.' Mcdonald testified during the hearing that his statement was that prior to the incorporation of Southern Nuclear, Mr. Farley had been performing as a Vice President of The '

Southern Company, had been providing certain services to

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12 him under a contract with SCS, and had no responsibility for certain other administrative support that was depicted on organization charts discussed during the meeting. Administrative support was being performed by the Southern Company Services Vice President for Administrative Services (Mr. McCrary) for Mr. Mcdonald pursuant to the April 24, 1989, agreement.

While Mr. McCrary provided administrative services to support Mr. Farley's i role in guiding the formation of Southern Nuclear and Mr. Farley's general industry activities, Mr. McCrary did not report to Mr. Farley with respect to the administrative support function for the Vogtle facility.

B. Reportina of DG Reliability The Petitioners alleged that GPC made intentional false statements to the NRC about the reliability of a DG whose failure had resulted in an SAE at Vogtle. 01 conducted'an investigation and issued a report on December 17, l 1993. Based on its evaluation of the evidence gathered by 01, and other information, the NRC staff determined that, contrary to the requirements of 10 CFR 50.9, the licensee'had failed 'on four occasions to provide information concerning DG start counts (and the reasons for errors in those counts) to the

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NRC that,was complete and accurate n all material respects. An examination of how the p[erfornance failures of, licensee itaff, supervisors and managers

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contributed to these. errors resulted in the violations being judged by the NRC to collectively represent a'very significant regulatory concern. Enforcement

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action was taken by the issuance of a Modified Notice of Violation and Imposition of Civil Penalties (Notice) (EA 93-304, February 13, 1995) which characterized the violations as a Severity Level 11 problem. The licensee paid a $200,000 civil penalty on March 1, 1995. Corrective actions taken by licensee mant.gement have included:

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1. Making the initial notice of violation available to all employees and committing to posting an NRC Order if one is issued; ,

2. A letter from the Senior'Vice President to the Vice Presidents for I Hatch and Vogtle regarding the importance of thorough record keeping  !

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during-off-normal hours; j

3. Counseling of specific individuals by the Senior Vice President, and the' issuance of an " Oral Reminder" pursuant to the licensee's

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, y.4. A~ letter from the Executi've Vice President - Nuclear Operations to  ;

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t nucle,ar operations' employees;that stressed the importance of

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effective codmunications and the effective resolution of concerns;

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'5. Posting copies 'of 10 CFR 50.9 and encouraging employees to read it;

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6. Meetings held. by the. Senior Vice President - Nuclear Operations 'with

/_ - employees at the Hatch and Vogtle sites to discuss GPC's policy of ,

i open, complete and accurate communications with the NRC, and a  !

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letter to all. employees on the same subject; -

7. Management observation of communications with the NRC to ensure that the enforcement action does not adversely affect the completeness of  ;

statements; and,

8. Posting a notice to all employees of the availability of GPC's reply 1

to the initial notice of violation. '

The staff reviewed the licensee's corrective actions and concluded that the actions were sufficient.

1 The staff's evaluation also resulted in Demands for Information (DFis) )

being issued to the licensee and six individuals who acknowledged their roles and responsibilities in the activities that were the bases for the enforcement

14 action. The performance of the Vogtle General Manager (GM) through August 1990 contributed directly to each of the failures _to meet 10 CFR 50.9. GPC and that individual acknowledged his role and responsibility in the events underlying; the en'forcement action and informed the staff in separate letters dated Febru'ary 1,1995, that the individual had requested, and his current

.. p , v employer'(Southern Nuclear) had agreed to implement a personal training

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l program to strengtheihis ability to perform any future line management role 59 in support of licens;ed ac'tivities. Southern Nuclear and GPC committed that s,: . - ; ..' '

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?theform'erGMwouldnotassumesallnemanagementpositionforaGPCor

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%, Souther 6 Nuclear plant unies'sj he had satisfactorily completed training in

' management communications and responsibilities, and the NRC received 60 days

.I prior written' notice,of,the assignment. As documented in the February 13,

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'[1995, Modified Notice"of Violation and Imposition of Civil' Penalties, the staff concludeck that, in; light of these commitments, the staff had no present concerns with the character and integrity of the individuals or the licensee.

I arising out' of these events, and no further enforcement action was necessary.

C. DOL Testimony The Petitioners asserted that (1) GPC's Executive Vice President knowingly submitted false testimony in a D0L proceeding involving the discrimination complaints of two GPC employees and (2) that Mr. Hobby advised GPC's counsel before the DOL hearing that the proposed testimony was false and that GPC's counsel responded by advising him that the testimony would have to I

be changed.- l The DOL case resulted in a Decision and Remand Order (Decision) by the Secretary of Labor (Secretary) on August 4, 1995. The Secretary found that GPC had discriminated against Mr. Hobby for engaging in protected activities, l

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.15 and stated, in relevant part: "Because I found other evidence sufficient to establish 'that Complainant [Mr. Hobby) engaged in protected activity on '

January 2,'[1989 (the pre-hearing meeting),) it was unnecessary to consider at d

that juncture whether. counsel attempted to suborn Complainant to perjury.

Even if counsel did, .that evidence would not alter this decision."

j As discussed more fully below, based on the Secretary's Decision, and a

'similar. Decision in a proceeding Ee'garding an alleged unlawful termination of

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Mr.Mosbaush'semp1oyment,the>skahfissuedtwoSeverityLevelINoticesof

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i Violation to GPC. The staff'51so issued individual letters to certain senior 3

corporate managers admonishing the'm',to ensdre that a proper environment is

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I mai$tainhd in whichiempidyees'can express regulatory concerns without fear of retaliation, harassment,+1ntimidation, or discrimination.-

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D. lhe of TS 3.0.3 l The Petitioners asserted that GPC engaged in unsafe practices in that h (1) GPC repeated)y allowed the Vogtle facility to enter TS 3.0.3 by rendering both trains'of safety-related load sequencers for the DGs' inoperable, (2) GPC did not make the required notifications to the NRC when TS 3.0.3 was entered, 1

and (3) GPC failed to recognize that the loss of a load sequencer resulted in 4 entry into TS 3.0.3.

$ The staff reviewed entries inte TS 3.0.3 through inspections conducted j

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by region-based inspectors and the observations of the resident inspectors.

The staff also reviewed the completed maintenance work orders performed on the load sequencers and the related surveillance tests. The staff found several l

l instances in which the work performed would have required the load sequencers l l

to be de-energized. However, the associated unit was found not to have been j in Modes 1, 2, 3, or 4 at the time this work was performed and thus, no TS LC0 4

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i applied. The surveillance test review did not reveal ~any examples of the load  !

sequencers having'been de-energized while in Modes 1 through 4 at the time the test was performeu and thus, no TS LC0's applied. Based on its review, the staff concluded that GPC did not routinely allow the Vogtle facility to enter TS 3.0.3 by rendering both trains of safety-related load sequencers for the DGs inoperable.

In accordance with 10 CFR 50.72, Immediate Notification Requirements for Operating Nuclear Power Reactors, licensees are required to make immediate l

(i.e., within 1 or 4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br />, depending on the circumstances) reports to the NRC j of any declaration of an emergency class specified in the Emergency Plan, and certain non-emergency events. Non-emergency events include such items as the initiation of any nuclear plant shutdown required by the TS, any deviation from the TS authorized by 10 CFR 50.54(x), any condition where the nuclear power plant (including its principle safety barriers) becomes seriously degraded, and any natural phenomenon or other external condition that poses an actual threat to the safety of the nuclear plant or significantly hampers site personnel in the performance of duties necessary for the safe operation of the plant. In 10 CFR 50.73, Licensee Event Report System, events are identified for which written reports will be made to the NRC within 30 days. These events include several of. the events requiring immediate reports pursuant to 10 CFR 50.72, plus additional events such as any event or condition that alone could have prevented the fulfillment of the safety function of certain structures or systems. The Commission's regulations do not contain an explicit requirement that an entry into:TS 3.0.3, in and of itself, be reported. Licensees are required.by 10 CFR 50.72 to notify the NRC within I hour of the initiation of any plant shutdown required by the plant's TS.

. O 17 Thus, the NRC is promptly notified of entries into TS 3.0.3 if the plant initiates a shutdown as a result of the problem that caused entry into the TS.

There is no requirement to notify the NRC of ent'/ies into TS 3.0.3 if a shutdown is not initiated. The staff has no basis to conclude that the licensee's activities constituted unsafe practices or that these activities indicated that the character of the licensee, including those GPC individuals who will be employed by Southern Nuclear after the licenses are transferred, was unsuitable for operating a nuclear power plant.

E. Willful TS Violations The Petitioners stated that GPC willfully and knowingly violated Vogtle Unit 1 TSs during the October 1988 refueling outage by opening boron dilution valves required.to be locked closed by TSs. The Petitioners claimed that (1) the valves were ' opened while the coolant level in the reactor vessel was lowered t'o the mid-loop level, and that this placed the plant in an unanalyzed condition' creating the risk of an uncontrolled boron dilution accident and an inadvertent criticality,'(2) the valves *were opened to expedite the outage so the' plant could be placed,back' on line' according to the schedule, and (3) the violation of TSs 'to stay on: schedule was due, in part, to a senior management philosophy that outages must be scheduled assuming that everything goes right and that contingency or extra time is not to be included in the schedule.

After reviewing 01 Report 2-90-001 and responses to four DFIs, and after an enforcement conference, the staff sent letters to the Operations Manager, the Operations Superintendent, and the Shift Supervisor stating that no actions would be taken regarding their individual NRC licenses. The staff also stated that, although their actions did not meet NRC expectations, the evidence was insufficient to support a conclusion that their actions

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constituted an attempt to intentionally circumvent the TSs. On December 31,- -

1991, after consultation with the Commission, the staff issued a Severity .i Level III Notice of Violation and Proposed Imposition of Civil Penalty (EA 91- I 141). GF'C paid a $100,000 civil penalty on July 9,1992.

t With respect to the placement of the plant in a condition that could

'have resulted in an uncontrolled dilution event and. inadvertent reactor i criticality, the staff reviewed an analysis of this event that Westinghouse later performed for GPC. . The staff concluded that, although the TSs in effect i at the time were violated, the actual opening of the valves was of l insufficient duration to create a criticality event and did not endanger public health $nd safety.

With re'spect to the Petitioners' claim that the valves were opened to s  !

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, expedite the outage, the staff, based on its review, did not find sufficient l bsistoconc1'udEthattEisevolutionhadbeenperformedtomeettheoutage c

n ? m ,a ychedule. , The NRC did not requir'e4

, .,  ; ,i chemical cleaning before the utility M.' restartedth'ereactoh,andcleaningexpendedtimeduringtheoutage.

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P" u j , On February'26,!. 1990,' the staff found that the dilution valves

> identified above were required to be locked closed, but were not locked while l at mid-loop as required by'the TSs. The Petitioners assert that this is tanother example of a willful violation of TSs by Vogtle senior management.

Instead of ~ installing a mechanism to mechanically secure this valve, the lic'ensee had placed a hold tag on the valve, which provided only administrative control to precit.de valve operation. GPC subsequently agreed that this method was unacceptable and took action to install a mechanical locking device. On April 26, 1990, the staff issued Notice of Violation, 50-424,425/90-05-01, " Failure to Mechanically Secure Valve 1-1208-U4-176 During

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!. 19 Mode 5 As Required By TS 3.4.1.4.2.0" (Severity Level'IV). :The staff l concluded that,'although a violation occurred, the error in TS interpretation  !

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!~ was not an example of a willful violation of TSs by Vogtle senior management. )

[ Thus, there is no basis to conclude that GPC wilfully and knowingly violated 4

the TSs.-

F. Safeauards Problens-

~ The' Petitioners alleged that (1) GPC personnel, including a Vice t President and General Manager, and 'a Southern' Company Services Manager, ,

knowingly and repeatedly hid safeguards problems from the NRC and willfully

, refused to comply with reporting requirements, (2) the GPC Vice President made f false statements to'the NRC during an Enforcement Conference about the status j

_ . _>-S j of safeguards materials, , and.that.t the false statements probably influenced a <

subsequent civil penalty'ac'tionitaken by the NRC, (3) on July 23, 1990, plant

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.andSONOPCO[seniotsmanagement~preventedttheSiteSecurityManagerfrommaking

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e a notifi ation within I? hour,as requirN by 10 CFR 73.71, and (4) the manager was p'revented' froin makingMeecall'.ih order to delay or defuse the NRC's

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nm knowledge' of programmatic, problems on,the part of the licensee regarding the

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OI investig'ated the ' allegation that GPC knowingly and repeatedly hid safeguards'pbblems from the NRC and willfully refused to comply with mandatory reporting requirements. 01. also investigated the allegation that the GPC Vice' President made false statements to the NRC in an Enforcement-Conference concerning'the status of safeguards material. The investigations

-did not substantiate that GPC withheld pertinent information from the NRC at the time of the Enforcement Conference or that GPC management impeded the reporting of safeguards events. On the basis of the 01 investigations, the j

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. staff concluded that the Severity Level II violation and $50,000 civil penalty .

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issued by-the' staff.on. June 27; 1990, for failing to properly secure  !

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j safeguards \inf,rmation:was,approp,riatefor;thevolumeandcontentofthe o

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, safeguardssinformation inv'olvedl GPC't N civil penalty on July 27, 1990.

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, 40I talso investigated the allegation that plant and SONOPC0 senior j

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. . ., 7  : . i within I hourlas required by TO CFR'73.71 in two instances. After reviewing

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01's investigation results, the staff-concluded that both of the failures to  ;

c I make timely; reports'were due to the.GPC's cumbersome system for evaluating i l corporate security findings.through t'he site. security organization, rather ,

than due to any. willful attempt to ' impede the' reporting process.

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. G. Qgeration of Radioactive Waste Systems

. The. Petitioners asserted that GPC endangered public health and safety by operating a temporary. radioactive waste system known to be in gross violation i j of NRC requirements. The Petitioners also state that Vogtle's General Manager

]. (GM) had intimidated the members of the Plant Review Board (PRB) when they attempted to consider if the use of the waste system should be resumed.

f An KdC special Inspection Team reviewed these items and discussed its  !

findings in Stpplement I to Inspection Report 50-424,425/90-19, dated November 1 -1991. The licensee's operation of the radwaste systems was found

~to be acceptable. The inspection team concluded that although the system was originally installed without an adequate safety evaluation and did not meet regulatory guidance, the subsequent safety evaluations.were acceptable for the e . tem's use. One issue was identified in the inspection report as warranting further review by the licensee under the provisions of-10 CFR 50.59.

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Regarding the assertion that the GM had intimidated PRB members, the

' inspection team found one case where a voting PRB member felt intimidated and feared ret'ribution because the GM was present at the meeting. The staff  !

concluded that the allegation was substantiated. However, the PRB member stated that he did not change his vote in response to GM pressure, and the GM j subsequently met with the PRB members to allay their fears. Since the level of intimidation perceived by the PRB member was insufficient to have any affect on the PRB member's safety decision, and the GM subsequently addressed l 1

the intimidation concern with the PRB, further regulatory action based on this j event was not warranted. l H. GPC Statement On Manaaement Participation in a Telephone Call The Intervenor contended that GPC, in their April 1, 1991, response to the Petition, intentionally tried to conceal the participation of the Sen sor J VP - Nuclear Operations in an April 19, 1990, conference call regarding a i

Licensee Event Report (LER). j The Senior VP participated in one of at least two conference calls known i to have taken place on April 19, 1990, before the LER was issued that same 1

day. However, there is no evidence that the GPC corporate official who signed  !

the April 1, 1991, Petition response (the GPC Executive Vice President) was aware of the fact that 'the. Senior VP had participated in one of the April 19 conference calls. The staff ~ review of a transcript of Mr. Mosbaugh's surreptitiously recorded aud'io tape of the calls, that was admitted as evijence in the licensing proceeding, shows that the Senior VP joined one call lafterdecisionsweremade'onhowtoconveytheDGstartcountinformationin the LER, and the Senior VP did not participate in a second conference call that finalized the LER language. The staff has determined that there is 4

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, 1 , . ,a , . s 4 g- i 22 insufficient basis to conclude that GPC, in their April 1, 1991, response to ,

the Petition, intentionally tried ta conceal the participation of the Senior VP - Nuclear Operations in an April 19, 1990, conference call regarding the preparation of the LER.

I. Manaaement Retaliation The Petition alleged that GPC retaliated against managers who made their regulatory concerns known to GPC or SON 0PC0 management.

As noted previously, in 1990, Messrs. Hobby and Mosbaugh each filed a l complaint with D0L alleging, in part, that their employment terminations constituted unlawful discrimination against them for engaging in protected i

activities.(i.e., expressing safety concerns). The Secretary found that the terminations of employment resulted from unlawful discrimination by senior licensee management personr.el. The NRC reviewed the Secretary's decisions and determined that violnions of.10 CFR 50.7, (Employee Protection) had occurred.

Two Severity Level I Notices of Violation were issued to the licensee as provided for by the NRC's Enforcement Policy. Although the NRC took no enforcement. 'actionJdirectly against the individuals involved, the NRC did issue letters to several senior management personnel to emphasize that harassment, intimidation and discrimination against licensee employees for l engaging in'prote,cted activities is unacceptable. ,

GPC corrective' actions included emphasizir. to employees that they are i encouraged to.raisessafety concerns and that harassment, intimidation and

> s 3 discrimination.against employees for raising those concerns is contrary to a if . . .

strongly supported management policy prohibiting such retaliatory measures.

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Licen[eecorporatemanagementcommunicatedthismet.sageinwriting,andat 1 special meetings with site employees to focus on this concern.

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Thelstaff concludes,that the significant enforcement action by the NRC, in addition to ASLB hearing activities and the DOL Orders, is likely to l sensitize licensee management to the seriousness of problems of this nature I and ensure a proper environment in which employees can express regulatory r.oncerns without fear of retaliation, harassment, intimidation, or discrimination.

J. Manaaement Practices The Petitioners stated that GPC routinely used nonconservative and 1 i

questionable management practices at its nuclear facilities. Examples provided by the Petitioner include the improper use of TS 3.0.3 (see D. ,

above), willful TS violations (see E. above), safeguards problems (see ,

F. above), and operation of a radioactive waste system known to be in i

violation of NRC requirements (see G. above). To address the Petitioners' general characterization of licensee management practices as being i-nonconservative and questionable, NRC witnesses, including staff engineers, supervisors, and senior managers provided testimony during the ASLB proceeding on several technical issues in addition to observations and assessments of GPC's performance. fro'n 'several perspectives.

] The staff concluded;that GP'C's performance problems were not sufficient j l

to establish that' Southern Nucle'ar '(and the GPC employees who will' work for that company if the' transfers .were grant'e'd) lack the requisite character to be s

a licensee. 4 The staff cited GPC's overall' performance in keeping the NRC informed of DG post-repair and, trouble. shooting activities, GPC's technical v -

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competenceinaddressinithose' matters 1ndtheeffortsoftheGPCSeniorVice President-NuclearOperatibns'tokeeptheNRCinformedoferrorsasGPC became; aware of"them.

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24 In a letter, dated December 23, 1996, Southern Nuclear'and GPC iterated their 1995 comitment that the former GM would not assume a line management 1

position for a GPC or Southern Nuclear plant unless he had satisfactorily i

completed training in management comunications and responsibilities, and the ,

1 NRC received 60 days prior written notice of the assignment. The staff has

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j relied on this comitment in evaluating the proposed transfers. A condition has been included in the ,0rder authorizing these license transfers that the staff will receive 60 days prior. written notice af the licensee's intent to assign the individual to a line management position at Vogtle.

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s The staff has concluded'that,;although significant violations were a identified 'against GPCl in,the-past, corrective actions have been implemented.

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There has been no' showing'that Southern Nuclear or GPC (including the GPC ]

employees who will work for< Southern Nuclear if the transfers were granted)  ;

lacks the:requi 11!e character'to be a licensee. In light of the various regulatory a'cti is that have'alrea'dy been taken by the NRC on issues raised in

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the Petition, including the Order provision regarding the former Vogtle General Mana'ger, and corrective actions taken by the licensee, no further

, action is necessary.. I III. CONCLUSION As sumarized above, NRC has conducted several inspections, l

investigations, and technical reviews regarding the concerns in the Petition, and proceedings before NRC and D0L have been conducted regarding most of the concerns. Some of the concerns raised by the Petitioners were substantiated.

Violations of regulatory requirements have occurred. Notices of Violation and civil penalties have been issued to the licensee, letters have been issued to several individuals, and certain conditions regarding one individual are being

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1 25 imposed by NRC in conjunct' ion with the license transfers. To this extent, the Petitioners' request; for, action pursuant to 10 CFR 2.206 has been granted.

q, 'On'ihebasis'of'theNRCskaff'sreviewandtherecordoftheVogtle

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t license -transfer amendment proceeding, I conclude that no unauthorized transfer of.the Vogtle or Hatch operating licenses occurred, and that the GPC J nucleab fac.ilities are being operated in accordance with NRC regulations and

.db nb ' endanger the health and safety of the public. On balance, the evidence 1

q does not support the conclusion that GPC, SON 0PC0 Project, or Southern Nuclear l 1

deliberately provided false ~or misleading information to the NRC or that l Southern Nuclear or GPC (including the GPC employees that would be employed by Southern Nuclear if the proposed license transfer is authorized) lack the requisite character and integrity to be an NRC licensee as required by section 182 of the Atomic Energy Act, 42 USC 2232, and 10 CFR 50.80. Thus, there is no basis upon which to grant Petitioners' request that the operation of the l facility be modified, suspended or revoked.

With respect to Petitioners' request that the NRC institute proceedings and impose civil penalties based on the matters addressed in the Petition, the issues in the Petition that give rise to substantial health and safety issues have, in fact, been the subject of a lengthy proceeding and escalated enforcement actions by the NRC. Also, based upon the findings of the D0L, the CRC has addressed both Petitioners' specific concerns that they were discriminated against for engaging in protected activities (and the associated allegation that GPC retaliates against managers who make their regulatory concerns known) by taking escalated enforcement actions against GPC. Based on actions already taken by the NRC staff and the licensee, there is reasonable assurance that the GPC facilities operate with adequate protection of the

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t 26 i public health and safety. Therefore, I decline to take any further action with respect to matters raised in the Petition. To this extent, the f Petitioners' request for action pursuant to 10 CFR 2.206 is denied.

f A complete copy of the Director's Decision will be filed with the Secretary of the Commission for the Commission's review in accordance with 10 3 CFR 2.206(c) of the Commission's regulations. As provided by this regulation, the Director's Decision will constitute the final action of the Connission 25 f days after the date of issuance unless the Commission, on its own motion, l  ;

1 institutes a review of the Director's Decision in that time.

Dated at Rockville, Maryland, this18th day of March 1997.

' FOR THE NUCLEAR REGULATORY COMJSSION Til . P4 FrankJ.hagliaJr. Nctinghfector Office of Nuclear actor Regulation - i i

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