ML20151T550

Informs of 860203 Filing of Util Response to Motion to Reopen Phase II Record:Iv;For Discovery & to Suspend Further Activity in Phase Iii. Supporting Documentation Re Exchange of Correspondence Encl.W/Certificate of Svc

ML20151T550
Person / Time
Site:	South Texas
Issue date:	02/03/1986
From:	Axelrad M HOUSTON LIGHTING & POWER CO., NEWMAN & HOLTZINGER
To:	Bechhoefer C, John Lamb, Shon F Atomic Safety and Licensing Board Panel
Shared Package
ML20151T554	List: ML20151T550 ML20151T584 ML20151T611
References
CON-#186-986 OL, NUDOCS 8602100301
Download: ML20151T550 (11)

Text

_ _ _ _ _ _

o NEWMAN Sc HoLTZINGER, P.C.

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Charles Bechhoefer, Esquire Chairman Administrative Judge Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Com;nission Washington, D. C. 20555 Dr. James C. Lamb, III Administrative Judge 313 Woodhaven Road Chapel Hill, North Carolina 27514 Frederick J. Shon Administrative Judge Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Houston Lightin.g & Power Co., et al.

South Texas Project, Units 1 & 2 Docket Nos. 50-498 OL, 50-499 OL

Dear Members of the Board:

We are today filing Applicants' Response to CCANP's

" Motion to Reopen the Phase II Record: IV; For Discovery and To Suspend Further Activity in Phase III."

The copy of CCANP's Motion provided to the Applicants was accompanied by a letter, dated January 17, 1986, from CCANP's counsel to Mr. Newman, one of the attorneys for Applicants, that was not sent to the Board. In our view, the letter, together with a subsequent letter from CCANP's counsel dated January 24, raises serious questions about the purpose for which the Motion has been filed. The Motion 8602100301 060203 PDR ADOCK 00000490 G PDR 7 J

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. Charles Bechhoefer, Esquire Dr. James C. Lamb, III Frederick J. Shen February 3, 1986 Page Two appears to be part of an effort, utilizing the processes afforded by the Board and NRC regulations, to pressure execu-tives of the Applicants, and particularly of Houston Lighting and Power Company, to abandon the South Texas Nuclear Project in order to forestall the filing of spurious criminal complaints and the initiation of other improper proceedings.

As stated in Mr. Newman's response of February 3, 1986, to CCANP's counsel we believe that his letters, seeking an advantage for his client in this proceeding in a way that rules of professional conduct for lawyers condemn, do not reflect the " honor, dignity, and decorum" appropriate to a court of law required of counsel by the Commission's regulations, 10 C.F.R. S 2.713(a). We enclose copies of the full exchange of correspondence for such consideration as the Board may consider appropriate.

Respectfully submitted, Maurice Axelrad Attorney for Applicants Enclosures cc: Service List L

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Lanny Sinkin, Esquire 1324 North Capitol Street Washington, D.C. 20002

Dear Mr. Sinkin:

This is in response to your letters of January 17 and 24, 1986. As the response we have filed to your motion of January 17, 1986, makes clear, we find nothing of conse-quence in CCANP's pleading, much less a " smoking gun."

But what follows would have to be said even if the case were otherwise.

As an attorney, I am troubled by the letter of January 17, 1986 accompanying your motion, even as you have modified it by your letter of the 24th. Although couched in terms of an attempt to initiate settlement negotiations, your letters continue the pattern of unfounded allegations against the senior management of HL&P and my law firm to which have now been added thinly veiled and improper threats.

I can assure you that neither our client nor we are concerned in the slightest by the actions threatened by you and your " colleagues." However, your letters reflect behavior unworthy of a member of the bar. I cannot conceive of passions running so high as to warrant what I believe most responsible attorneys would regard as an extortionate threat. In particular, I believe that your letters do not reflect " honor, dignity, and decorum" appropriate to a court of law as contemplated by the standards of practice before the NRC set forth in 10 C.F.R. 5 2.713(a). I therefore

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t Lanny Sinkin, Esquire February 3, 1986 Page Two feel compelled to apprise the ASLB of what I believe to be a breach of the standards for attorneys practicing before the agency, and I have done so.

As to the substance of your proposal, it is both unac-ceptable and unconscionable. HL&P believes that it is in the best interest of those it serves to complete the STNP as safely and promptly as possible. Accordingly, your demand for a letter " agreeing that Houston Lighting and Power will engage in serious discussions regarding cancellation'of STNP" is rejected.

Ve y truly yours, y

h Jack R. Newma Attorney for Applicants

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Dear Jack,

On my recent visit to Texas, I helped convene a meeting of interested parties to discuss how the South Texas Nuclear Project might be cancelled. Present was a broad cross section of industrial customers, cogenerators, public official representatives, consumer groups, and anti-nuclear groups.

In a day-long meeting, we discussed the current situation for STNP, including the regulatory climate at the PUC, the riskn for HL&P management at the NRC, the litigation among the STNP partners, and the other incentives to cancelling this Project. We also discussed alternatives to completing STNP.

The purpose of the meeting was to form a working group to develop a plan for cancellation which recogni:es the legitimate interests of ratepayers, stockholders, bond holders, utility executives, public officials, and the other people or entities affected by cancelling STNP. Once the plan is developed, a presentation will be made to utility executives and public representatives from the STNP partners.

The consensus of the meeting was that it made more sente to pursue a negotiated cancellation than to spend the next five years litigating in either the regulatory forums or the courts while the investment in the Project continued to grow.

At the same time, there was a general opinion that many of the partners, especially the individuals whose careers are so closely tied to the history of this Project, would not respond to such a plan unless they were forced to, that the risks will have to be greater than they are now before these enecutives will be willing to seriously negotiate cancellation.

Enclosed is a motion to reopen the Phase II record which CCANP is filing in the licensing hearings. As far as 1 am concerned, we finally have the smoking gun regarding the Guadron study. You and your colleagues, with good reason, have always been very optimistic that the NRC would never really do anything to stop STNP. Dut I am convinced that thu evidence in this motion to reopen will take SINP, or at least HLOP's senior management, beyond the ASLD's tolerance.

While a disqualification of HLOP'n senior management might be overturned in the upper reaches of the NRC, such a disqualification will seriously affect the viability of the Project and will lead other partners to join the Austin law suit against HLLP. The partners will not want to risk any further investment in the hopes that you can reverse the decision or that HLLP will make a radical change in the control of the corporation.

Some time ago, Jane Macon, then San Antonio City Attorney, arranged a meeting between myself, you, and Mr. Goldberg. At that L

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Jack Newman, Esquire Page Two i January 17, 1986 i meeting, I was asked what it would take to satisfy me regarding the South Texas Nuclear Project. I answered that our organization was dedicated .to stopping this project. As far as we were concerned we had no dispute with Houston Lighting and Power Company per se, but as long as Houston Lighting and Power Company insisted on proceeding with the project, we would be taking whatever steps we could to disqualify them from receiving the operating licenses.

The filing of this motion is the only action we are taking at this time. But I want you to know that my colleagues are suggesting that more pressure is necessary and that I follow through with further actions to convince HL&P to engage in serious discussions on cancellation of this Project. Among the actions suggested to me are:

1. a complaint be filed with the Justice Department alleging perjury and a conspiracy to obstruct the Nuclear Regulatory Commission on the part of the entire senior management of Houston Lighting and Power. This matter has already been brought to the attention of the Justice Department, but they agreed to take no action unless.we file a formal complaint;

2. a grievance be filed with the District of Columbia Bar regarding the performance of Newman and Holtzinger, P.C. in this proceeding;

3. preliminary discussions already held with Congressional contacts be pursued regarding the convening of Congressional hearings on the entire matter of.the commissioning, findings, and handling of the Quadrex Report, including the role of the Nuclear Regulatory Commission in reviewing and evaluating said Report.

It has never been the purpose of this intervention to send Don Jordan, Jerry Goldberg, and others of Houston Lighting and Power Company's senior management to jail for perjury or to have attorneys representing them disbarred. I would much rather play a part in negotiating a cancellation plan beneficial to the people of Texas and agreeable to all parties concerned. To that end, I ask you to consider the following suggestion.

I seek a letter from Mr. Jordan to me agreeing that Houston Lighting and Power will engage in serious discussions regarding cancellation'of STNP. I will show that letter to fcur key people already involved in the development of the plan for cancellation.

The purpose of showing them the letter will be to encourage them to redouble their efforts to develop the plan as quickly as possible. I can tell you that these four people represent significant public and industry decision makers capable of securing the agreement of a broad spectrum of parties to such a cancellation plan.

In the enclosed motion I asked for ninety days discovery and then ' hearings. If good faith negotiations commence on cancellation, I would be amenable to a stipulation for suspension of further proceedings on-this motion and, hence, on the ASLB opinion to be issued for Phase II.

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Jack R. Newman, Esquire F' A g e Three January 17, 1986 I would be happy to discuss this matter with you and personally regret that matters have reached this point. I do believe that by working together we can brina this matter to a fair co'nclusion for all involved.

Sincerely, Lanny Sinkin 1324 North Capitol Street Washington, D.C. 20002 (202) 797-8106 I

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- F- r i d a y . January 24. IWO Dj . .~.g[88gg - -

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Dt%r Jork, nitethed ie a copy of ther Jaisuar y 17 I'/On 1 et t er wh)rh x our office ' t requet ted I send to you. I hope von viewed the let ter c3 it was intended. 1.e. as a sincer e attempt to initiato s- 8.'t t J e.nen t

! negotiations at an opportune time.

My purpowe in writino was to inforni you of what ot tier v . r.ot perti es to thi s proceeding and not sub iett to my control. s ee e s-I the necesserv +uture coursse of thi s pr oceeda no. As J <-av in

. the attached letter, this is not a course I favor.

The poini of the i et ter was t o dr aw your attention i n whai 1-see as e pntential cr owi ng polararation which, it it g oo t-l l f or war el, n.v y f or ecl ose, or at lesst make far more difficult, any I- later ef f or ts to reach a settlement of this case and of the i

under1 vino proL,1em of what ta do about STNP.

Since in my view it would be a disservice to the people of T e>: as and all others affected by STNP to let this proceedino l'

produce .such polarization, I wanted to be sure that we did not l I c+e - what i view as an opportunity to resolve this case before matters cet out of hand. I sincerely believe that th15 is en l

. opportune -moment to bring together a broed cross !-ec t i on at l' interett - to bealn serious settlement talkn.

' si i he +ame t ime. I think we ar e at a st ar:1 + 1 cent cr ot n oods, in thiv .;ove where opportuni ties e:-:i st which can be lost t.v en irisi st enc e on a continued adversarial conf ront a11on. I al t-o t hi nk those opportunities ere avai1able on1y untii the ASLP 1ssues itS par tial i ni t i al decision ire Phase II.

I em trying to establish a place outside the advernertal erena wiser e we can cominuni cat e. Perhaps t hat i s not possible niven the super charned atniosphere which already surr ound e thte l e. eve.

i 14 there is anyt hi ng positive sou thini we can du. p l e v '. e

! Iet me 6. n uw .

l 52 nr er el y.

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@d,s e.,

Lannv'.atnLin 11'4 North Capatol bt r ecs t Washington. D.C. 2000'.'

C'OM 797-Ulub l

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ATTACHMENT TO LETTER OF JANUARY 24, 1986 s

Friday, January 17, 1986 Jack R. Newman, Esquire Newman & Holt:inger, P.C.

Tld4  : lf[, 1 1615 L Street, N. W.

Suite 1000 3 JAN 271986 Washington, D.C. 20036 gg Newman & Holtzinga, P.C.

Dear Jack,

On my recent visit to Texas, I helped convene a meeting of interested parties to discuss how the South Texas Nuclear Project might be cancelled. Present was a broad cross section of industrial customers, cogenerators, public official representatives, consumer groups, and anti-nuclear groups.

In a day-long meeting, we discussed the current situation for STNP, including the regulatory climate at the PUC, the risks for HL&P management at the NRC, the litigation among the STNP partners, and the other ancentives to cancelling this Project. We also discussed alternatives to completing STNP.

The purpose of the meeting was to form a working group to develop a plan for cancellation which recognizes the legitimate interests of ratepayers, stockholders, bond holders, utility executives, public officials, and the other people or entitles affected by cancelling STNP. Once the plan is developed, a presentation will be made to utility executives and public representatives from the STNP partners.

The consensus of the meeting was that it made more sense to pursue a negotiatet cancellation than to spend the next five years litigating in .ither the regulatory forums or the courts while the investment in the Project continued to grow.

At the same time, there was a general opinion that many of the partners, especially the individuals whose careers are so closely tied to the history of this Project, would~not respond to such a plan unless they were forced to, that the risks will have to be greater than they are now before these executives will be willing to seriously negotiate cancellation.

Enclosed is a motion to reopen the Phase II record which CCANP is filing in the licensing hearings. As far as I am concerned, we finally have the smoking gun regarding the Quadrex study. You and your colleagues, with good reason, have always been very optimistic that the NRC would never really do anything to stop STNP. But I am convinced that the evidence in this motion to reopen will take STNP, or at least HL&P's senior management, beyond the ASLB's tolerance.

While a disqualification of HL&P's senior management might be overturned in the upper reaches of the NRC, such a disqualification will seriously affect the viability of the Project and will lead other partners to join the Austin law suit against HL&P. The partners will not want to risk any further investment in the hopes that you can reverse the decision or that HL&P will make a radical change in the control of the '

corporation.

l Some time ago, Jane Macon, then San Antonio City Attorney, arranged a meeting between myself, you, and Mr. Goldberg. At that

3 Jack Newman, Esquire Page Two January 17, 1986 meeting, I was asked what it would take to satisfy me regarding the South Texas Nuclear Project. I answered that our organization was dedicated to stopping this project. As far as we were concerned we had no dispute with Houston Lighting and Power Company p.er se, but as long as Houston Lighting and Power Company insisted on proceeding with the project, we would be taking whatever steps we could to disqualify them from receiving the operating licenses.

The filing of this motion is the only action we are taking at this time. But I want you to know that my colleagues are suggestino that more pressure is necessary and that I follow through with further actions to convince HLLP to engage in serious discussions on cancellation of this Project. Among the actions suggested to me are:

1. a complaint be filed with the Justice Department alleging perjury and a conspiracy to obstruct the Nuclear Regulatory Commission on the part of the entire senior management of Houston Lighting and Power. This matter has already been brought to the attention of the Justice Department, but they agreed to take no action unless we file a formal complaint;

2. a grievance be filed with the District of Columbi a Bar regarding the performance of Newman and Holtzinger, P.C. in this proceeding;

3. preliminary discussions already held with Congressional contacts be pursued regarding the convening of Congressional hearings on the entire matter of the commissioning, findings, and handling of the Quadrex Report, including the role of the Nuclear

> Regulatory Commission in reviewing and evaluating said Report.

It has never been the purpose of this intervention to send Don Jordan, Jerry Goldberg, and others of Houston Lighting and Power Company's senior management to jail for perjury or to have attorneys representing them disbarred. I would much rather play a part in necotiating a cancellation plan beneficial to the people of lexas and agreeable to all parties concerned. To that end, 1 ask you to consider the following suggestion.

l I seek a letter from Mr. Jordan to me agreeing that Houston i Lighting and Power will engage in serious discussions regarding l cancellation of STNP. I will show that letter to four key people l

already involved in the development.cf the plan for cancellation.

l The purpose of showing them the letter will be to encourage them to redouble their efforts to develop the plan as quickly as

possible. I can tell you that these four people repr esent significant public and industry decision makers capable of securing the agreement of a broad spectrum of parties to such a cancellation plan.

In the enclosed motion I asked for ninety days discovery and l

l then hearings. If good faith negotiations commence on l

canc el l at i on , I would be amenable to a stipulation f or suspension i of further proceedings on th>a motion and, hence, on the ASLB opinion to be issued for Phase II.

/

.,\,

4 Jack R. Newman, Esquire Page Three January 17, 1986 I would be happy to discuss th2s matter with you and personally regret that matters have reached this point. I do that by working together we can bring this mrtter to a

~

bel i eve fair conclusion for all involved.

Sincerely, Gmit'.

Lanny inkin 1324 North Capitol Street Washington, D.C. 20002 (202) 797-8106

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