ML20151G570

NRC Staff Response to Joint Intervenors Petition for Review of ALAB-895.* Petition Should Be Denied.Certificate of Svc Encl

ML20151G570
Person / Time
Site:	Seabrook
Issue date:	07/22/1988
From:	Berry G NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To:	NRC COMMISSION (OCM)
References
CON-#388-6800 ALAB-895, OL-1, NUDOCS 8807290017
Download: ML20151G570 (15)

Text

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DOCKETED USHRC UNITED ST ATES OF AMERIC A NUCLEAR REGUL ATORY ~ COMMISSION '

58 11. 22 P3 :25 4 BEF0RE THE COMMISSION ;p r " ~ >

In the Matter of Docket Nos. 50-443 OL-01

.PU B LIC-.S E R VIC E C O MP A N Y O F 50-444 .0 L -01

< N E W H A M P S HIR E , et al,. l (On-site Emergency Planning

) - and Safety Issues)

(Seabrook Station, Units 1 and 2) )

NRC ST AFF RESPONSE TO JOINT INTERVENORS' PETITION FOR REVIEW 0F ALAB-895 I

k Gregory Alan Berry Counsel for N R C Staff 1 *

July 22,1988 l

8807290017 880722 PDR ADOCK 05000443 e G PDR

UNITED ST ATES OF AMERIC A

.. NUCLEAR REGULATORY COMMISSION

... REFORE THE COMMISSION In the Matter of Docket Nos. 50-443 OL-01 PUBLIC SERVICE COMPANY OF 50-444 O L-01 NEW H AMPSHIRE, et al. -

(On-site and Safety Emergency)

Issues Planning (Seabrook Station, Units 1 and 2) )

MP.C ST AFF RESPONSE TO JOINT INTERVENORS' PETITION FOR REVIEW OF ALAB-895 4

l 1 Gregory Alan Berry Counsel for N R C Staff July 22,1988 i

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UNTITED STATES OF AMERICA

. NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION In the Matter of Docket Nos. 50-443 OL-01 PUBLIC SERVICE COMPANY OF 50-444 OL-01 NEW HAMPSHIRE, g al. On-site Emergency Planning and Safety Issues (Seabrook Station, Units 1 and 2) )

NRC STAFF RESPONSE TO JOINT INTERVENORS' P,ETITION FOR REVIEW 0F ALAB-895 INTRODUCTION On July 12, 1900, theSeacoastAnti-PollutionLeague(SAPL),theTown of Hampton, and the New England Coalition On Nuclear Pollution (NECNP)

(collectively "joint interveners") filed e petition pursuant to 10 C.F.R. 6 ?.786(b) (erroneously denominated as an "Appeal") in which they reauest the Cormission to review the Appeal Board's decision in ALAB-895.1/ See 1/ Public Service Company of New Hampshire (Scabrook Station, l'r. i ts 1 and P), ALAP-89T, 28 NRC (JulyT,'T988). In ALAB-895, the Appeal Board also had before it a petition for waiver of the Comission's financial qualification rules filed by the Attorney General of the Comonwealth of Massachusetts. The Appeal Board found that the Attorney General's petition, which rested upon the announced tritention of the fourth largest co-owner of Seabrook to discontinue its contribution toward the maintenance costs of the Seabrook Station, nade out a prirre r facie case that Applicants might not have the resources necessaryTo operate the facility safely at low power.

See ALAB-895, slip op, at 37-38. Accordingly, pursuant to 10 C.F.R.

D .758(c), the Appeal Board certified the Attorney General's waiver petition to the Concission. As the Appeal Board noted, section 2.758(c) provides that "[o]nly the Comission is authorized to grant the petition and waive a rule." Id. , slip op. at 4. It is not necessary to address in this respoTse whether ALAB-895 is correct

$nsofar es it relates to the Attorney General's waiver petition since (FOOTNOTE CONTINUED ON NEXT PAGE)

2 Joint Intervenors Appeal Of Partial Denial Of Waiver Request (ALAB-895) To Review Financial Qualifications Of Public Service Company of New Hampshire

. (July 12, 1988) ("Petition"). In that decision, the Appeal Board affirmed the Licensing Board's August 20, 1987 order denying joint intervenors' request for a waiver of the Commission's financial qualification rules.

See Memorandum and Or, der (Denying Waiver Petition) (August 20, 1987)

(hereinafter "August 20 Order"). The Appeal Board agreed with the Licensing Board that joint intervenors had failed to carry their burden of cenonstrating that special circumstances exist such that the application of the regulations in question wculd not serve the purpose for which they promulgated. See ALAB-895, slip op, at 21-24. As explained below, Commission review of ALAB-895 is not warranted. ALAB-895 merely reaffirms the long established principle that a Commission regulation is not to be disregarded lightly; and that to obtain a waiver of or exception to a regulation a party must at a n.inimum demonstrate that circumstances are such that application of the regulation will not achieve its intended purpose. Joint intervenors' petition for review of ALAB-895 does not raise "an important matter that could significantly affect the environment, the public health and safety" or present "an important procedural issue or question of public policy." The Petition shculd be denied.

(r00TNOT'i CONTINUED FROM PREVIOUS PAGE) that question is not presented by the instant petition for review.

The Staff will adcress the question whether the Comission should grant the Attorney General's waiver petition in a separate response to be filed with the Comission on or before July 22, 1988. See Cermission Order at 2 (July 14,1988).

LEGAL STANDARDS

- Petitions for review, and responses in opposition, trust satisfy the requirementsof10C.F.R.(2.786(b)(2). Those requirements are:

(i) ' A concise summary of the decision or action of which review is sought; (ii) A statement (including record citation) where the matters of fact or law raised in the petition for review were previoulsy raised before the Atomic Safety and Licensing Appeal Boaro and, if they were not, why they could r.ot have been raised; (iii) A concise statement why in the petitioner's view the deci-sion or action is erroneous; and (iv) A concise statement why Comission review should be exercised. ,

10 C.F.R. 52.786(b)(2)(1-iv). The Staff will address each of these points seriatim.

DISCUSSION A. Suma,ry, of AL AB-895 In ALAB-E9E the Appeal Board, inter alta, affirmed the Licensing Board's dismissal of joint intervenors' petition for a waiver of the Comission's financial qualification regulations. The joint intervenors sought to have the Commission waive the rules which preclude inquiry into a regulated electric utility's financial qualification to operate a nuclear facility and require Applicants to demonstrate, prior to low power operation, their financial qualification to operate the Seabrcok Station.

Joint intervenors argued that application of the financial qualification rules would not serve the purposes for which they were adopted, t

{

g Joint intervenors' petition rested upon the claims that (1) the lead $

co-applicant, Public Service Company of New Hampshire, was experiencing

- financial difficulties which. may lead (and ultimately did lead) to the filing of a petition in bankruptcy and (2) New Hampshire state law .

precluded PSNH from recovering the costs of operating the Seabrook Station unless and until the facility received a license to operate at full power.

-These developments, argued joint intervenors, made it impossible fcr the ratemaking process to assure that funds needed for safe operation of the Seabrook Station would be made available to Applicants, which joint intervenors stated was the purpose of the financial qualification rules.

The Licensing Board found that the petition failed to make out a prima facie case that application of the financial qualification regulations would not achieve the purpcses for which they were adopted and denied the petition. The Board concluded that the "Commission did not implicitly or expressly centemplate or state that an operating license Applicant's financial distress and possible bankruptcy [an event which was yet to occur] were special circumstances which could result in an exception or waiver under 10 C.F.p. $ 2.758." August 20 Order at 7. The Licensing Board agreed with the Staff and Applicants that joint intervenors' petition failed to make cut a prima facie case because it did not demonstrate that, in event of the issuance of a full-pcwer license, the New Hampshire Public Utilities Comission would not allow recovery of construction and operation ccsts. Jd.at8.

On September 24, 1987, the joint intervenors filed an appeal of the Licensing Ecard's order. The Staff and Applicarts filed briefs in cpposition on October 26, 1987 and November 5,1987, respectively; and, on

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December 8, 1987, the- Appeal Board heard oral argument on the joint intervenors' appeal.

- Subsequent to _ the oral argument, two noteworthy events occurred.

Tirst, the New Hampshire Supreme Court issued an opinion upholding the constitutionality of that state's anti-CWIP statute. Essentially, the anti-CWIP law forbids return on or recovery of investments through utility rates before the project is completed and providing service to customers.

Second, on January 28, 1988, the Public Service Company of New Hampshire (PSNH) filed a voluntary petition in bankruptcy pursuant to Chapter 11 of the federal Bankruptcy Code. The folicwing day, January 29, 1988, the Appeal Board issued an order stating:

These developments. may affect the pending appeals and, at a minimum, require an opportunity for the parties to address their relevance and impact. Further, even if the recent developtrents and their ramifications do not alter the ultimate outcome of the Licensing Board's disposition on the merits of intervenors' original waiver petition, these new matters may precipitate the filing of additional waiver petitions.

Fen,orandum and Order at 2 (January 29, 1988) (unpublished). Accordingly, the Appeal Board afforded the joint intervenors 30 days from the service of its order "to amer.d their original petition, or to file a new one pursuant to 10 C.F.R. 6 2.756, in a further attempt to establish a prima facie case that application of the Corrn.ission's financial qualification rules with respect to low-power operation would not serve the purposes for which they were adopted." M.at3. In response to the Appeal Board's January 29, 1988 order, on february 23, 1988, the joint petitioners amended their original waiver petition to incorporate the two developments described above.

On July 5, 1988, the Appeal Board affirmed the Licensing Board's denial of the petition, stating:

On the basis of the f s. tors asserted by the appellants in their petition and in their supplemental brief before us, such conpelling circumstances are not present with respect to PSNH's low-power operation of the Seabrook facility. Therefore, the Licensing Board reached the correct result in denying the appellants' position. The appellants are ccrrect that PSNH's recent bankruptcy filing is the first by a major utility since the Great Depression and that bankruptcy raises a host of uncertainties for PSNH. Rut without more, these developments.

even when considered with the New Hampshire anti-CWIP laws, do not meet the test of section 2.758 for certifying their waiver petition to the Commission. Because PSNH's bankruptcy filing is so unprecedented, the appellants' arguments have a certain visceral attraction. Such a reaction, however, can never be a proper substitute for the showing required under 10 C.F.R. 5 2.758 -- the only basis on which we are authorized to act.

ALAB-895, slip op. at 15-16. The instant peti tior, filed by joint intervenors seeks review of this determinati3n.

B. The Matters Rai,s,ed In The Petition Were Raised Pelow In its petition for review, joint intervenors argue that the "Appeal Board erred in ruling that the bankruptcy of the largest Seabrook owner was not a sufficient basis, in itself, te waive the rule which ordinarily forecloses a financial qualification hearing." Petition at 5. Joint intervenors raised this argument below. See Joint Intervenors' Brief In SupportOfAppeal, passim,(September 24,1987).

C. The Appeal Board,_ Correctly Decided ,The Issues Paised In The Petition The Appeal Board did not err in rejecting joint intervenors' claim that PSNH's filing of a petition in bankruptcy, standing alone, warrants a

. waiver of the Comnission's financial qualification rules. Simply stated, the joint intervenors' petition, as amended, did not make out a prima

facie case that the purpose of the financial qualifications rules would not be served if they were applied in this proceeding. In this regard, the Appeal Board noted that "the Commission's purpose in promulgating the electric utility exemption to the finencial qualification regulations was to eliminate case-by-case review by the staff of an individual applicant's financial qualifications as part of the operating license review process and to remove such issue from adjudication in any operating license proceeding." ALAB-895, slip cp. at 16. The Comission took this action because it was persuaded "that the rate process assures that funds needed for safe operation will be made availeble to regulated electric utilities." 49 Fed. Reg. 35,747,35,750(1984). Thus, in order for joint intervenors to satisfy their burden 2/ under 10 C.F.R. ! ?.758, they were required to make out a prima facie case that PSNH did not have access to funding from the ratemaking process to operate the Seabrook facility safely. This they failed to do.

With respect to PSNH's filing of a petition in bankruptcy, joint intervenors were required to make out a prima facie case that the filing of the bankruptcy petition would result in the refusal or inability of the New Hampshire Public Utilitics Commission to permit Applicants to retoup the ecst of operating the facility. See ALAB-895, slip op at 21-22, 2/ There is no n: erit to joint intervenors' claim that in requiring a prima facie showing that PSNH's filing of a petition in bankruptcy deprives Applicants of the funds necessary for safe operation of the facility, the Appeal Board "reversed the burden of proof on an important safety matter from the applicants to the intervenors, contrary to the requirements of 10 C.F.R. 5 2.732." Petition et 5.

. Joint isservenors, as the "proponent of an order" under section P 758, bort: the burden of proof. See 10 C.F.R. 6 2.732.

P

- Joint intervenors did not even attempt to make this showing. Instead, joint intervenors stated, without~ elaboration, that "[j]urisdiction over

. PSNH as debtor in possession is now vested in the ll.S. Bankruptcy Court, which may or may not attempt itself to exercise rate-setting authority."

Joint Intervenor Response To Appeal Board Memorano;m And Order (February 23, 1988) at 5. Joint intervenors readily conceded, however, that this prospect was nighly unlikely. Id. at n.3.; see also ALAB-895, slip op. at 22-23.

Similarly, the Appeal .Doard was correct in holding that joint intervenors' petition, as amended on February 23, 1986, failed to demonstrate that Applicants were precluded by either the New Hampshire r

anti-CWIP law or any action of the Bankruptcy Court from expending currently available resources to operate the Seabrook Station safely at f low power. Joint intervenors' argument on this point consisted of nothing i

more than the unsupported assertion that Appiteants did net have the r funding necessary to conduct low power operations safely. See ALAB-895, j slip op, at 22-23. 3/  !

Essentially, joint intervenors argue that their waiver petition, as amended, should have been granted because of the special and unprecedented circumstance of PSNH's resort to the protection of the Bankruptcy Court.

What joint intervenors fail to grasp, however, is that in order to make  ;

1 out a prima facie case, it is not enough for the movant to demonstrate the i existence of "special circumstances." Rather, section 2.758(b) requires ,

3/ As noted ecrlier, the Appeal Board reached the opposite conclusion with respect to the Passachusetts Attorney General's waiver petition.

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, See n.1, ante.  !

the movant to demonstrate the existence of "special circumstances" such that "applica, tion of the rule or regulation (or provision thereof) would not serve the purposes for which the rule or reculation was adopted." 10 C.F.R.92.758(b)(emphasisadded). Since joint intervenors' petition, as amended, did not make this prima facie case, the petition correctly was denied.

D. Commission Review Is Not Warranted The grant or denial of a petition for review is within the discretion of the Comission. See 10 C.F.R. G2.786(b)(4). The Commission has stated that a petition for review will not ordinarily be granted "unless it appears the case involves an important n:atter that could significantly affect the environment, the public health and safety, . . . involves an important procedural issue, or raises an inportant question of public policy." 1.d . The instant petition for review does not satisfy any of ,

these standards. At bottom, the petition presents a single, simple issue:

Whether a waiver petition which fails to demonstrate that the application of the regulation in question will not serve the purposes for which it was aoopted should be granted. Clearly, the answer is no. Accordingly, joint intervenors petition for review of ALAB-895 should be denied. M 4/

The Staff will continue to follow its usual practice of monitoring developments bearing on Applicants' ability to maintain and operate the Seabrook Station safely and, pursuant to secticn 182 of the Atomic Energy Act, will require Applicants to demonstrate -- prior to i the conFenceCent of low pcwer operation -- that there is reasonable assurance that they possess or can obtain the financial resources

. needed to conduct that activity in a manner that does not threaten the public health and safety.

CONCLllSION

- For the reasons stated herein, the Petition for Review of ALAB-895 filed by the Seacoast Anti-Pollution League, New England Coalition On Nuclear Pollution, and the Town of Hampton si d be denied, sjectfullysubmitted,

/ f l b #lf4y)'

Greg alan B rry Counse r or NR Staff Dated at Rockville, Maryland this P2nd day of July 1988 e

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DOCKETED USNRC UNITED STATES OF AMERIC A N U'CLE A R R E G U L AT O R Y C H4MISSIO N 88 s. 22 P 3 :25 OF !gg[';j.j[p[

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BEFORE THE COMFISSION

- BiUMb In the Matter of Docket Nos. 50-443 OL-01 PUPLIC SERVICE COMPANY OF 50-444 OL-01 NEW H AMPSHIRE, et al. On-site Emergency Planning

) and Safety Issues (Seabrook Station, Units 1 and ? )

CER TIFIC A TE OF SE RVICE I hereby certify that copies of "NPC STAFF RESPONSE TO JOINT IN T E R VE N U RS' PETITIO N FO R RiiVIEW 0 F AL A B-895" in the above-captioned proceeding have been served on %e following by deposit in the United States mail, first class, or as indicated by an asterisk, by deposit in the Nuclear Regulatory Commission's internal mail system or, as indicated this 22nd day of July 1988.

Sheldon J. Wolfe, Esq. , Chairman

• Atomic Safety and Licensing Administrative Judge Board

• Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D C 20555 Washington, D C 20555 Ir ,.' ,

Dr. Jerry Harbour

• Docketing and Service Section*

Administrative Judge Office of the Secretary Atomic Safety and Licersing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regelatory Commission Washington, D C 20555 Washington, D C 20555 Dr. Emmeth A. Luebke Thomas G. Dignan, Jr., Esq.

Administrative Judge Robert K . Gad , III, Esq.

4515 Willard Avenue Ropes & Gray Chevy Chase, Maryland 20815 225 Franklin Street Boston, M A 02110 Atomic Safety and Licensing H . J. Flyn n , Esq .

A ppeal Panel

• Assistant General Counsel U.S. Nuclear Regulatory Commission Federal Emergency Panagement Agency l

Washington, D C 20555 500 C Street, SW Washington, D C 2047?

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Philip Ahren, Esq. Calvin A. Canney

. Assistant Attorney General .

City Hall Office of the Attorney General 126 Daniel Street

-State House Station Portsmouth , N H 03801 Augusta, ME 04333 Mr. Angie Machiros, Chairman Carol S. Sneider, Esq. Board of Selectmen Assistant Attorney General 25 High Road Office of-the Attorney General Newbury, M A 09150 One Ashburton Place,-19th Floor Boston, M A 02108 George Dana Bisbee, Esq. Allen Lampert Assistant Attorney General Civil Defense Director Office of the Attorney General Town of Brentwood 25 Capitol Street 20 Franklin Concord, N H 03301 Exeter, N H 03833 Elly n R . Weis s , E sq . William Armstrong Diane C urran, Esq. Civil Defense Director Harn.on & Weiss Town oF Exeter 2001 S Street, NW 10 Front Street Suite 430 Exeter, N H 03833

-Washington, D C 20009 Robert A. Backus, Esq. Gary 4. Holmes, Esq.

Backus, Meyer & Solomon Holmes & Ellis 116 Lowell Street 47 Winnacunnet Road Manchester, N H 03106 Hampton , N H 03842 Paul McEaEhern, Esq. J. P. Nadeau Hatthew T. Drock, Esq. Board of Selectmen Shaines & McEachern 10 Central Street 25 Maplewood Avenue Rye, N H 03870 P.O. Box 360 Portsmouth , N P 03801 Judith H. Mizner, Esq.

C h arles P . f. ra h a m , E s q . Silverglate, Gertner, Baker, McKay, Mu' phy & Graham Fine & Good 100 Main Street 88 Board Street A mesbury, M A 01913 Boston , M A 02110 Sandra Cavutis, Chairman Robert Carrigg, Chairman Board of Selectmen Board of Selectmen R F D #1, Box 1154 Town Office Kensington, NH 03827 Atlantic Avenue North Hampton, N H 03870 William S. Lord Peter J. Matthews, Mayor Board of Selectmen City Hall Town Hall - Friend Street Newburyport, M N 09150 Amesbury, M A 01913

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Mrs. Anne E. Goodman, Chairman

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Michael Santosuosso, Chairman Board of Selectmen Board of Selectmen 13-15 Newmarket Road South Hampton, NH 03827 Durham, NH 03824 Hon. Gordon J. Humphrey Ashod N. Amirian, Esq.

United States. Senate Town Counsel for Merrimac 531 Hart Senate Office Building -

376 Main Street Washington , D C ' 20510 Haverhill, M A 08130 Gregory / ATan ~ Berry Counsel (f 3r hR C Staff f[

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