ML20138J155
| ML20138J155 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 12/13/1985 |
| From: | Pirfo O NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | |
| Shared Package | |
| ML20138J143 | List: |
| References | |
| OL, NUDOCS 8512170445 | |
| Download: ML20138J155 (14) | |
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UNITED STATES OF AMERICA 00txErro NUCLEAR REGULATORY COMMISSION W?C BEFORE THE ATOMIC SAFETY AND LICENSING BOARD '85 DEC 16 Pl2:53 LFDLE 0: ecc p In the Matter of ) UCCE rpG s,t; Mnc" cRANCH HOUSTONLIGHTINGANDPOWERCOMPANY,l Docket Nos. 50-498 ET AL. ) 50-499
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(South Texas Project, Units 1 & 2) )
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NhCSTAFF'SSUPPLEMENTALPROPOSED FINDINGS OF FACT AND CONCLUSION OF LAW ON THE REOPENED PHASE II HEARIt'G RECORD WITH REGARD TO CONTENTION 10 I. FINDINGS OF FACT A. Procedural Background A.1 The record for the Phase II hearings in this matter was closed on August 14, 1985. Tr. 15387. Subsequently, after the Applicants had ;
filed their proposed findings and conclusions on that Phase II record (but before intervenor and the Staff had made their filings), CCANP moved to reopen the Phase II record on October 16, 1985. "CCANP Motion to Reopen the Phase II Record: II"(hereinafter"CCANPMotion").1/ The CCANP Motion sought to have the Phase II record reopened for the purpose
-1/ CCANP also filed another separate motion to reopen on that date, "CCANP Motion to Reopen the Phase II Record: III," which was subsequently withdrawn.
8512170445 851213 8 DR ADOCK 050
of admitting four documents that are the typed versions of the notes taken by Mr. Charles G. Thrash, Secretary of the STP Management Committee, of four meetings of that Committee (or, in the case of the thirddocument[SeeApp.Ex.81],ameetingofthatCommitteewiththe Chief Executive Officers of the STP partners).
A.2 CCANP claimed that these documents undercut the position taken by the Applicants that~they did not regard the Quadrex Report as relevant and material to the Phase I issues and, thus, were not required to provide it to the Board shortly after its issuance. Intervenor contends that these documents show that HL&P had intended the Quadrex Report to assist it at the Phase I hearings and that these documents demonstrate that there was a direct link in the minds of HL&P senior management between the commissioning of the Quadrex Report, the Phase I hearings, and the ultimate licensability of the STP. See CCANP Motion, at 5-6.
A.3 The Applicants-and the NRC Staff each opposed the CCANP Motion. The Applicants claimed that CCANP mischaracterized the proffered documents and, to the extent relevant to Phase II, the documents were cumulative and would not modify the result which the Board would otherwise reach.
Applicants cited the untimeliness of the CCANP Motion as well. See
" Applicants' Response in Opposition to 'CCANP Motion to Reopen the Phase II Record: II'" (filed Oct. 31,1985).
A.4 The Staff opposed reopening because the motion was untimely and the notes offered were fragmentary and ambiguous. The Staff did,
nevetheless, acknowledge the seriousness of the safety issue to which the motion was directed. See "NRC Staff Response to CCANP Motions to Reopen the Phase II Record: II & III" (filed Nov. 5, 1985).
A.5 On November 14, 1985, just prior to the Staff's filing of its proposed findings and after the proposed findings were filed by the other parties, this Board granted CCANP's motion and ruled that the record should be reopened t'o admit three of the four proffered documents (see App. Exs. 79, 80,'and 81) and that further testimony should be taken of the various individuals invol'ved concerning the meetings in question so
-that an adequate record on Contention 10 could be created.
Memorandum and Order (CCANP Motions II and III to Reopen Record), LBP 85-45, 22 NRC , slip op. at 6-11 (issued Nov. 14,1985).
A.6 The reopened Phase II hearings were held in Houston, Texas on December 5 and 6, 1985. Applicants, the NRC Staff, and Intervenor CCANP participated at those hearings. .
B. Witnesses B.1 The Applicants presented the direct oral testimony of six persons at the reopened hearing: Messrs. Donley D. Jordan (Tr. 15398-436), Charles G. Thrash (Tr. 15437-503), Jerome H. Goldberg (Tr. 15504-581), George W.
Oprea (Tr. 15588-643), David G. Barker (Tr. 15643-695) and Dr. James L.
Sumpter (Tr. 15695-708). With the exception of Mr. Thrash, all the other HL&P witnesses had previously testified in this case. Neither Intervenor nor the NRC Staff offered witnesses.
B.2 Pursuant to the agreement of the parties, the Applicants' witnesses, wi_th the exception of Mr. Goldberg, were sequestered during the testimony. See Tr. 15392. Mr. Goldberg was designated as'the Applicants' representative and was not sequestered for most of the
. testimony. Id. With respect to a small portion of.Mr. Jordan's testimony, however, Mr. Goldberg was excluded from hearing that testimony. That portion of Mr. Jordan's testimony appears at Tr. 15424-428. -
C. Mr. Thrash's Notes of the Management Comittee Meetings (App. Exs. 79, 80 81)
C.1 The reopened Phase II hearings focused on three STP Management Comittee meetings conducted on December 4,1980 (see App. Ex. 79), and February 19 and 20,1981 (see App. Exs. 80 and 81). Certain notes
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recorded at those meetings, standing alone, might be construed (as CCANP argues) to indicate that HL8P comissioned the independent Quadrex engineering review in expectation of or preparation for the Phase I hearings before this Board. If true, that purpose for the engineering review would undercut Applicants' position that HL&P management officials did not view the Quadrex Report as relevant and material to these hearings so as to be reported to the Board under the McGuire doctrine.
C.2 Mr. Thrash was Secretary of the STP Management Comittee at the meetings in question and he continues in that role. Tr. 15438 (Thrash).
One of his duties was to take notes at these meetings which he would later use to create the minutes of the meetings for the comittee.
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Tr. 15438, 15443-44'(Thrash). Mr. Thrash's notes are in evidence as App.
Exs. 79, 80, and 81, and form the basis on which we granted CCANP's motion to reopen the record.
C.3 Mr. Thrash testified that his notes only. reflected from ten to twenty percent of what was actually discussed at the STP Management Commit, tee meetings, and should not be read as reflecting an integrated discussion. Tr. 15443-44 (Thrash).
C.4 Mr. Thrash testified that he first became aware of the proposed independent third party review of engineering, which was ultimately conducted by the Quadrex Corporation, at the Management meeting of December 4, 1980. Tr. 15475-76 (Thrash). His recollection is that this third party review of engineering was undertaken, among other reasons, to see if Brown & Root could support the project from an engineering point of view. I_d. at 15451-52, 15471. He does not recall that one of the reasons for the' review was to prepare for the Phase I hearings. M. at 15452, 15461. These general recollections are not based on his notes.
M.at15477.
C.5 While the "ASLB Proceedings" were listed as Item I-G on the proposed agenda for the December 4, 1980, Management Committee meeting (App. Ex. 82), Mr. Thrash could not recall it being discussed at that meeting. Tr. 15454-455 (Thrash); see Tr. 15466-68 (Thrash). It was not unusual for items on the proposed agenda not to be discussed at the Management Committee meetings. M.atTr.15454-15455.
C6 Mr. Thrash expla'ined that the emphasis in the notes (App. Ex. 79) on the "0L hearings" and the proximity with which references to the hearing appear in' relation to the engineering review discussion are attributable to his being as a lawyer. Tr. 15453 (Thrash). He testified that he was, probably more interested in the licensing hearing aspect of th. general discussion than were the owners' representatives at the meetings, thus he made note of it. Id.
C.7 Whehaskedwhythepurposeoftheindependentengineeringreviewwas not presented at the meeting, Mr. Thrash testified that it may well have been. The fact that the purpose does not appear in the notes is a problem with the " fragmentary" nature of the notes. Tr. 15479 (Thrash).
C.8 The Board finds that Mr. Thrash's notes of the Management Committee meeting are ambiguous and do not represent a complete picture of the discussisns within the Committee meetings.
D. The Purpose of the Independent Engineering Review i
D.I The purpose of the independent third party review of engineering was to ascertain objectively the status of engineering at STP, to evaluate B&R's engineering activities as these activities reflected on B&R's ability to complete the design of the plant in an efficient and orderly way, to judge what improvements were necessary, as well as to provide useful information for discussions with HL&P management, the other STP
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owners, and regulato'ry authorities. Tr. 15425-27 (Jordan); Tr. 15567-69 (Goldberg);Tr. 15631-34 (0prea); Tr. 15692-94 (Barker).
D.2 Mr. Goldberg was new to the project and he had "no way to know where to devote [his] attention" without acquiring a " benchmark" on engineering. Tr. 15505, 15520 (Goldberg). He hoped to acquire this benchmark though-the review.
I_d . He testified that'he decided to undertake a third party review within the first two or three weeks after coming on site. Tr.I5504(Goldberg).
D.3 Mr. Goldberg stated he had no way of knowing what the third party review of engineering would ultimately find. Tr. 15525 (Goldberg).
However, he also stated that it did not "take much imagination to surpect" that B&R was having problems in certain areas and that it was these areas wher~e HL&P wanted the review focused. Id. Quadrex was given very clear signals as to the areas HL&P wanted examined. Tr. 15541 (Goldberg). Mr. Oprea confirmed that the ultimate general results of the review were unknown at the time of its commissioning, although some problems in engineering were expected. Tr. 15619 (0prea). See Staff's Proposed Findings (filed November 19, 1985), at 10-11.
D.4 Mr. Goldberg did view the independent third party engineering review as providing a " side benefit" in that it would better prepare him for possible questions on engineering at the Phase I. hearings. Tr. 15554-15555,15562(Goldberg). He testified that he believed at the time the third party review was commissioned that he might be later called upon by
the Licensing Board 'to explain what he knew about engineering work at STP. Tr. 15553 (Goldberg). Mr. Goldberg stated that he did not want to appear before the Board as the HL&P Vice President of Engineering and Construction having little or.no knowledge as to the status of engineering. M . While he did not view engineering questions as relevant and material to the Phase I issues, he did perceive a " wide
. latitude" on the part of Licensing Boards to inquire into such matters.
M.atTr.15507,15553. He thought such information "could be very, very helpful in the e ent that this licensing board had any interest in the engineering status of the job." Tr. 15517 (Goldberg). He did not think such a review was necessary to deal with Phase I issues. M. at 15507; see Tr. 15523 (Goldberg).
D.5 Mr. Goldberg did not view the independent third party review as being necessary to indicate to the Board in Phase I that HL&P had fulfilled its responsibility for engineering at the STP. Tr. 15508 (Goldberg). Nor did he consider it to be an appropriate " corrective action" contemplated by the show cause order. M.;Tr.15561(Goldberg).
D.6 In discussions with Mr. Barker regarding the third party engineering review, Mr. Goldberg shared with him the thought that such a third party engineering review would be useful for answering questions in the licensing hearing as a " side benefit." Tr. 15535, 15569 (Goldberg).
Mr. Goldberg distinguished this " side benefit" from the " reasons" for the review. See id. at 15569.
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D.7 Mr. Oprea's con'currence alone was necessary, in Mr. Goldberg's view, to undertake the third party review. Tr. 15558, 15576-77 (Goldberg).
Mr. Oprea said his own " permission" to Mr. Goldberg was not formally required. Tr. 15624-25 (0preal.
D.8 Mr. Oprea and Mr. Goldberg both testified that in their discussions about,the commissioning of the independent third party review they did not discuss whether that review was related to the Phase I issues.
Tr. 15605 (0prea)'; Tr. 15507-15508 (Goldberg). Similarly, this purported relevance was not mentioned in their meeting with Mr. Jordan when the subject of the third party engineering review was discussed. Id.;
Tr. 15399 (Jordan).
D.9 Mr. Goldberg and Mr. Oprea never had any disagreement on the purpose or handling of the Quadrex Report. Tr. 15518-19, 15543 (Goldberg);
Tr. 15594 (0prea); see also Tr. 15496 (Thrash). See LBP-85-45 supra, at 9.
D.10 Mr. Oprea testified that he viewed the Quadrex study as an example of HL&P exercising its responsibility over the project, but did not contemplate the review being used as evidence in Phase I of the hearings on HL&P's managerial responsibility. Tr. 15621-15623 (0prea). While he echoed Mr. Goldberg's expectation of " wide latitude" in questioning by the Board (See Finding D.4 supra), he stated that he did not view this
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expectation as a primary or secondary purpose of the engineering review.
Tr. 15623-24 (0prea).
D.11 Mr. Jordan, Chairman of the Board and Chief Executive Officer of HL&P, did not regard the undertaking of the engineering review as one of the corrective actions contemplated by the show cause order (79-19) or the Applicant'.s response to that order. Tr. 15399-400 (Jordan). 'He did not expect the engin~eiring review to be used as evidence that HL&P was competently disch'arging its responsibilities for engineering at the Phase I hearings. M. At the time the decision te ao forward with the engineering review was made, the Phase I hearings were not discussed.
Tr. 15401 (Jordan). While Mr. Jordan was aware of the " secondary benefit" of the. review as seen by Mr. Goldberg (the possibility of Phase I questioning on engineering from the Board), this secondary benefit did not affect Mr. Jordan's testimony on the purpose of the review. M. Mr.
Jordan testified at the reopened hearings that he viewed the purpose of the engineering review as being distinctly separate from the preparation for the Phase I hearings, irrespective of the posssible " secondary benefit." Id.; see supra Finding D.1. Dr. Sumpter testified that, in his conversations with Mr. Loren Stanley of Quadrex, preparation for the NRC hearings was never given as a reason for conducting the engineering review. Tr. 15697-98 (Sumpter).
D.12 The decision to conduct the independent third party engineering review had been~made before the December 4, 1980 Management Committee meeting. Tr. 15612, 15614 (0prea). There was no necessity in HL&P's i
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view to present argum'ent for the review at the December 4,1980 (or later) Management Comittee meeting. I_d .
E. Discussion of Engineering Review at Management Comittee Meeting E.1 Mr. Goldberg and Mr. Oprea stated that the presentation of information to the Management Comittee on this review was done as "a matter of courtesy,". and that the committee's approval was not needed beforethethirdparthengineeringreviewcouldbeundertaken.
Tr. 15546-47 (Goldberg); Tr. 15614-15615 (0prea).
E. 2 The concurrence of the Management Comittee for undertaking the engineering review was not sought by Mr. Goldberg; yet, if serious objections had been raised by the Comittee Mr. Goldberg would have attempted to " clear the air so that no owner felt that [HL&P] was undertaking to do something that wasn't in the best interests of the project." Tr. 15558 (Goldberg). The importance of having engineering at the project in a position to support construction (i.e., the purpose of the review) certainly was not new to the Man'a gement Comittee, in Mr. Goldberg's view. Id_. at 15524. Mr. Goldberg stated that the Management Committee members were generally supportive of undertaking the third party engineering review. Tr. 15548-49, 15558-59; see also Tr. 15613, 15642 (0prea); Tr. 15460 (Thrash).
E.3 Mr. Goldberg testified that he conveyed to the Management Comittee that finding out the status of the engineering of the project was
4 absolutely essential 'as it would clearly identify where the project might be having difficulty. Tr. 15509 (Goldberg). To pursue the partners' hoped-for aggressive construction program, the engineering would "have to be in good shape" and the third party review was seen as the way to get "the best handle" on the status of engineering. M.at15509-10.
E.4 Mr. Goldberg acknowledged that the Thrash notes of the December 4,
~1980 Management Committee meeting could be read as stating that the purpose of the third harty engineering review was to " provide strong testimony at the OL hearing." Tr. 15523-24. Mr. Goldberg testified, however, that although the hearings were mentioned, the discussion at the committee meeting was considerably broader. M.at15524.
E.5 Mr. Oprea testified that Mr. Thrash's notes of the meetings did not fully reflect the reasons for the Quadrex review; nevertheless, these reasons could be understood by going through the notes and by considering the Management Committee's interest at the time in question. See Tr. 15615-18 (0prea). He further testified that the words used in the notes are not the words used to express the purpose of the third party assessment at the management meetings. Tr. 15639-40 (0prea).
E.6 Mr. Oprea attached no significance to the language of Mr. Thrash's notes (App. Ex. 79) that stated "then can provide strong testimony at OL hearing", he testified that this was only a general statement by Mr. Goldberg at the meeting and not intended as the purpose of the
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review. Tr. 15623 (0'prea). Mr. Oprea also felt that the comment attributed to him at the February 19 meeting (see App. Ex. 80, at p.
81037) -- that the engineering review would not affect the May hearings -- was not related to Mr. Goldberg's discussion at that meeting of a possible adverse third party engineering report. Tr. 15625-15627 (0prea). He did not exclude the possibility, at that time, of making some portions of the report known to the NRC and the Board under 10 C.F.R. 6 50.55(e). Tr. 15626-27, 15635-36, 15640-41 (0prea).
E.7 Mr. Barker, who was HL&P's Project Manager for STP at that time (Tr. 15644), also testified that the actual reason for the independent third party engineering review -- to assess the status of engineering at the project --is not mentioned in the notes of the Management Committee meetings. Tr. 15682-83 (Barker). Mr. Barker testified that he told the Management Committee of that purpose for the engineering review.
Tr. 15684 (Barker). He believed while the need for the review is recorded in the notes, no explanation is given of the purpose for the review. _Id_.
F. Conclusion F.1 On the~ basis of all the testimony of record, and in light of the fragmentary and inconclusive nature of the Thrash notes of the Management Committee meetings (see App. Exs. 79,80,81), the Board finds that there is inadequate support to conclude that the independent third party engineering review (Quadrex) was commissioned by HL&P.in expectation or in preparation for the Phase I hearings.
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-II . CONCLUSION OF LAW The review of engineering at the STP by the Quadrex Corporation has not been shown to have been undertaken by HL&P in preparation for Phase I testimony; while we view the Applicants' failure to notify this Board promptly of the Quadrex Report as a violation of its McQuire obligations, we do not find such failure to constitute an adequate basis upon which to disqualify Applicants from receiving an operating license. See NRC Staff's kroposed fin [ings of Fact and Conclusion of Law (filed Nov.19, 1985), at 114-119, 150.
Respectfully submitted, d & '
Oreste Russ Pirfo /y Counsel for NRC S 'ff Dated at Bethesda, Maryland this 13th day of December,1985 1
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