ML20151G639
| ML20151G639 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 07/22/1988 |
| From: | Dignan T PUBLIC SERVICE CO. OF NEW HAMPSHIRE, ROPES & GRAY |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20151G642 | List: |
| References | |
| CON-#388-6801 ALAB-895, OL-1, NUDOCS 8807290058 | |
| Download: ML20151G639 (11) | |
Text
.
e Q0$
mo Fy,Qdfbuly22, 1988 UNITED STATES OF AMERICA before the NUCLEAR REGULATORY COMMIgg'.gg' BRANLL
)
In the Matter of
)
)
PUBLIC SERVICE COMPANY
)
Docket Nos. 50-443-OL-1 OF NEW RAMPSHIRE, ET AL.
)
50-444-OL-1
)
(Seabrook Station, Units 1
)
(Onsite Emergency and 2)
)
Planning and Safety
)
Issues)
)
APPLICANTS' RESPONSE TO THE COMMISSION'S ORDER OF JULY 14, 1988 Under date of July 14, 1988, the Commission issued an order in the above entitled proceeding, in which it directed the Applicants, inter alia, to file a response to address matters which the Applicants desire the Commission to consider in reviewing the Appeal Board's finding on the petition of the Attorney General of The commonwealth of Massachusetts seeking an exemption or waiver from certain of the Commission's regulations regarding financial qualifications.
Statement of the case In ALAB-895, the Appeal Board certified to the commission a waiver petition filed by the Attorney General of The Commonwealth,of Massachusetts (Mass AG) in this proceeding under 10 CFR 5 2.758.
The thrust of this petition was to seek waiver of the regulations which prohibit 8807290050 080722 1h gDR ADOCK 05000443 g0
- PDR,
examination, during an operating license proceeding, of an electric utility-applicant's financial ability to operate a nuclear power plant insofar as these regulations would prohibit such an inquiry prior to, and in light of, contemplated low power operation of Seabrook Station.
The Appeal Board reached the conclusion that Mass AG had set out a crima facie case that the regulations at issue would not serve the purpose intended in connection with low power operation of Seabrook.
As stated in ALAB-895,1 the gravamen of the determination that a crima facie case had been made was a single fact, 1 3.,
the decision of one of the joint owners of Seabrook, Massachusetts Municipal Wholenale Electric Company (MMWEC), to attempt to get out of the project.
As characterized by the Appeal Board, a second supplement to Mass AG's theretofore insufficient petition had made the necessary orima facie case because:
"It clearly establishes that the joint owner with the fourth largest interest in Seabrook has ceased its monthly payments and is moving to get out of the project.
Because MMWEC already had made pre-funded payments to the project, which at current expenditure levels will continue to meet its obligations for two to three months, the impact of MMWEC's action is the same as if the Board of Directors voted on June 1 to cease payments effective on August 2 or September 2.
As matters now stand, the remaining joint owners and applicants will have a substantial 11.59340% deficiency in monthly operating lALAB-895 at 37 ff.
2
4 expenses and additional funds necessary to operate Seabrook safely at low attheexpirationofthatperiod."gower
.The Appeal Board then went on to say:
"It is possible, of course, that other joint owners will step forward to meet the short fall caused by MMWEC's action, although it is a reasonable inference from the Attorney General's documentation with respect to those owners and the possibility of a shortfall by PSNH that the other joint owners will not do so.
It is also possible that MMWEC may return to the fold.
Indeed,-any number of possibilities can be postulated.
But the Attorney General's prima facie case need not foresee and foreclose every such possibility.
In the same way that the Attorney General cannot meet his burden by soeculatina on future events, soeculation on future events cannot defeat the Attorney General's cresent showina that. as matters now stand, the acolicants will have more than an eleven cercent shortfall in the funds necessary to oDerate Seabrook safelv at low Dower."
(Emphasis added).3 4
Argument In the above quoted language set forth with emphasis, as well as elsewhere in ALAB-895,4 the Appeal Board made clear that speculation cannot be relied upon to supply a necessary element of a prima IAsia case.
Yet this is, as seen below, exactly the activity that the Appeal Board itself engaged in to reach the result it did in ALAB-895.
2ALAB-895 at 37, 3ALAB-895 at 37-38.
4ALAB-895 at 35-36.
3
4 -~
t To begin with, the Appeal Board has speculated that MMWEC will, in fact, persist in its course and actually default in its obligation to make payments in the. event that no other solution is reached with respect to the matter.
MMWEC has never so stated or voted.
Indeed, in his Second Supplement to his petition, Mass AG states:
"Althouah the June 1.
1988 action of the MMWEC Board of Directors does not exolicitly call for eermanent suscension of Davments towards the costs of the Seabrook plant, it clearly has increased the level of risk associated with continued expenditures by any of the other joint owners and can only be seen
&s further reinforcing the capital market's already solid lack of interest in Seabrook related financings.n5 Indeed, it is clear from the General Manager's Report to the Board of Directors of MMWEC of May 26, 1988, that severe consequences follow from an actual default which no prudent management and Board of Directors would lightly undertake.6 Furthermore, the press release which MMWEC issued on June 1, 1988, and which was furnished to the Appeal Board in an 5Second Sucolement to Massachusetts Attorney General James M.
Shannon's Petition Under 10 C.F.R. 2.758 for a Waiver of or Exceotion from the Public Utility Exemotion from the Recuirement of a Demonstration of Financial Oualification at unnumbered page 5, paragraph numbered 4 (June 2, 1988).
In short, the language quoted in the text shows that the status is no different than the situation of the PSNH bankruptcy which the Appeal Board held not to establish a crima facie case, 1.g.,
there is an increased level of risk -
nothing more.
6This report was part of the Mass AG's Second Supplement.
The consequences of actual default are set out on page 9 thereo,f under "Option 5 - Nonpayment of Construction Cost Under JOA" "Disadvantages."
4
Advice to the Appeal Board under date of June 2, 1988, states that MMWEC intends to get out "in a financially responsible manner" and "that details regarding MMWEC's withdrawal from the project will be determined by the course of negotiations with other project owners."
In short, MMWEC has not said it will, in fact, refuse to pay if no other solution is forthcoming; there exist heavy economic and legal incentives for MMWEC not to take such a course of action; and to say MMWEC will definitely take such a course of action is, we respectfully suggest, an exercise in speculation.
Such speculation is not permitted under the Appeal Board's ovn analysis as set forth above.
The Appeal Board entered into further, and apparently erroneous, speculation on the question of whether a solution to the MMWEC problem would be forthcoming as the result of the activities of other Seabrook owners:
"It is possible, of course, that other joint owners will step forward to meet the shortfall caused by MMWEC's action, although it is a reasonable inference from the Attorney General's documentation with respect to those owners and the possibility of a shortfall by PSNH that the other joint owners will not do so."7 Calling it "a reasonable inference" does not make a speculative statement any less a speculation.
And it may be wholly wrong as shown by the Affidavit of John F.G.
Eichorn, Jr. which accompanies this response.
Indeed, given 7ALAB-895 at 37.
5
4 the history of Seabrook and its financial history in particular, the reasonable inference, if it is permissible in this setting at all,8 is that, as stated in the Eichorn Affidavit, a solution will be found.
Seabrook has been
' buried by its opponents on numerous occasions on one thecry of economics or another, yet it has always survived and has been constructed in a manner that has led to excellent SALP reports and no contention even being admitted for litigation as to the quality of construction.
Indeed, repeated charges of alleged defects in construction, made outside of the litigation process, by plant opponents and Congressmen allied with them have consistently been proved erroneous upon thorough investigation by this agency.
The foregoing illustrates the major defect in the legal reasoning process which the Appeal Board engaged in.
The Appeal Board went to great pains to demonstrate that there could be grounds upon which the waiver requested by Mass AG could be granted other than an inability to obtain sufficient rates to assure safe commercial operation.
Accepting that analysis as accurate, this dces not mean that the other exceptions can be based upon speculation.
When, as, and if, the Seabrook project, in fact, runs short of funds and thereby is unable adequately to fund safety related matters, 8 If it be a reasonable inference that the other joint owners will not "step forward," it is an equally permissible "reasonable inference" that "KMWEC may return to the fold,"
ALAB-895 at 37, in light of the heavy legal penalties that may befall KMWEC if they, in fact, default.
6
then the crima facie case is made and not before.
To say otherwise is to speculate.
Prescinding from all of the foregoing, it is also to be noted that in his filing, the Mass AG has not even attempted to demonstrate that the shortfall resulting from an MMWEC default, ehould it actually occur, would result in any compromise of safety.
Again what is relied upon is speculation to the effect that such a shortfall would necessarily result in a compromise in safety.
No such speculation should be permitted in this area either.
Finally, as pointed out in the Eichorn Affidavit, if anything should occur which renders it likely that a shortfall in financing will, in fact, occur, the Applicants are required by law,9 and have committed, to notify the Commission so that it can take whatever action it deems appropriate.
9113 Duke Power Cot (William B. McGuire Nuclear Station, Units 1 and 2), ALAB-143, 6 AEC 623, 625-26 (1973).
7
.4 4
Conclusion The-. request for an exemption or waiver should be denied.
Respectfully submitted,
/[ M n?k/
A s T,. Di n, Jr.
George H.
ald Kathryn A.
Selleck Ropes & Gray 225 Franklin Stre Boston, MA 02110 (617) 423-6100 counsel for Aeolicants l
8 l
k
i 6
1 l
CERTIFICATE OF SERVICE h)kh I, Thomas G. Dignan, Jr., one of the attorneys for the Applicants herein, hereby certify that on 3&lMU2fD $4hW6 I made service of the within document by depositing copies l
thereof with Federal Express, prepaid, for pelivery to (or l
where indicated, bydepositingintheUni(kfjppaf;esjmg}l, first class, postage paid, addressed to):
BRANCH Alan S.
Rosenthal, Chairman Howard'A. Wilber Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Appeal Panel U.S.
Nuclear Regulatory U.S.
Nuclear Regulatory Commission Commission East West Towers Building East West Towers Building 4350 East West Highway 4350 East West Highway Bethesda, MD 20814 Bethesda, MD 20814 Thomas S. Moore.
Mr. Ed Thomas Atomic Safety and Licensing FEMA, Region I Appeal Panel 442 John W. McCormack Post U.S.
Nuclear Regulatory Office and Court House Commission Post Office Square East West Towers Building Boston, MA 02109 4350 East West Highway Bethesda, MD 20814 Administrative Judge Sheldon J.
Robert Carrigg, Chairman Wolfe, Esquire, Chairman Board of Selectmen Atomic Safety and Licensing Town Office Board Panel Atlantic Avenue U.S.
Nuclear Regulatory North Hampton, NH 03862 Commission East West Towers Building 4350 East West Highway Bethesda, MD 20814 Administrative Judge Emmeth A.
Diane Curran, Esquire Luebke Andrea C.
Ferster, Esquire 4515 Willard Avenue Harmon & Weiss Chevy Chase, MD 20815 Suite 430 2001 S Street, N.W.
Washington, DC 20009 Dr. Jerry Harbour Stephen E. Merrill, Esquire Atomic Safety and Licensing Attorney General Board Panel George Dana Bisbee, Esquire U.S.
Nuclear Regulatory Assistant Attorney General Commission Office of the Attorney General East West Towers Building 25 Capitol Street 4350 East West Highway Concord, NH 03301-6397 Bethesda, MD 20814
6 I
Adjudicatory File Atomic Safety and Licensing Sherwin E. Turk, Esquire Board. Panel Docket (2 copies)
Office of General Councel U.S.
Nuclear Regulatory U.S.
Nuclear Regulatory Commission Commission East West Towers Building One White Flint North, 15th Fl.
4350 East West Highway 11555 Rockville Pike Bethesda, MD 20814 Rockville, MD 20852
- Atomic Safety and Licensing Robert A.
Backus, Ecquire Appeal Board Panel Backus, Meyer & Solomon U.S. Nuclear Regulatory 116 Lowell Street Commission P.O.
Box 516 Washington, DC 20555 Manchester, NH 03105 Philip Ahrens, Esquire Mr. J.
P.
Nadeau Assistant Attorney General Selectmen's Office Department of the Attorney 10 Central Road General Rye, NH 03870 Augusta, ME 04333 PP.ul McEachern, Esquire Carol S.
Sneider, Esquire Matthew T.
Brock, Esquire Assistant Attorney General Shaines & McEachern Department of the Attorney 25 Maplewood Avenue General P.O.
Box 360 One Ashbutton Place, 19th Fl.
Portsmouth, NH 03801 Boston, MA 02108 Mrs. Sandra Gavutis Mr. Calvi5 A.
Canney Chairman, Board of Selectmen City Manager RFD 1 - Box 1154 City Hall Route 107 126 Daniel Street Kensington, NH 03827 Portsmouth, NE 03801
- Senator Gordon J. Humphrey R.
Scott Hill-Whilton, Esquire U.S.
Senate Lagoulis, Clark, Hill-Washington, DC 20510 Whilton & McGuire (Attn:
Tom Burack) 79 State Street Newburyport, MA 01950
- Senator Gordon J. Humphrey Mr. Peter S. Matthe'ws One Eagle Square, Suite 507 Mayor Concord, NH 03301 City Hall (Attn:
Herb Boynton)
Newburyport, MA 01950 Mr. Thomas F.
Powers, III Mr. William S.
Lord Town Manager Board of Selectmen Town of Exeter Town Hall - Friend Street 10 Front Street Amesbury, MA 01913 Exeter, NH 03834 i
t.
H. Joseph Flynn, Esquire Brentwood Board of Selectmen Offico of General Counsel RFD Dalton Road Federal Emergency Management Brentwood, NH 03833 Agency 500 C Street, S.W.
Washington, DC 20472 Gary W.
Holmes, Esquire Richard A.
Hampe, Esquire Holmes & Ells Hampe and McNicholas 47 Winnacunnet Road 35 Pleasant Street Hampton, NH 03841 Concord, NH 03301 Judith H. Mizner, Esquire Charles P. Graham, Esquire 79 State Street, 2nd Floor Murphy and Graham Newburyport, MA 01950 33 Low Street Newburyport, MA 01950 Lando W, Zech, Jr., Chairman Thomas M.
Roberts, Commissioner U.S.
Nuclear Regulatory U.S.
Nuclear Regulatory Commission Commission one White Flint North One White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, MD 20852 Rockville, MD 20852 Kenneth M.
- Carr, Frederick M.
- Bernthal, Commissioner Commissioner U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission One White Flint North One White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, MD 20852 Rockville, MD 20852 Kenneth C.
- Rogers, William C.
Parler, Esquire Commissioner Genel 'l Counsel U.S.
Nuclear Regulatory Office of the General Counsel Commission One White Flint North One White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, MD 20852 Rockville, MD 20852 Marjorie Nordlinger, Esquire Deputy General Counsel Office of the General Counsel One White Flint North 11555 Rockville Pike Rockville, MD 20852 i
/
Thtfffsis G.
r.
(*=U.S.
First Class Mail.)