ML20197D445
| ML20197D445 | |
| Person / Time | |
|---|---|
| Site: | Green County  |
| Issue date: | 11/22/1978 |
| From: | Pratt C POWER AUTHORITY OF THE STATE OF NEW YORK (NEW YORK |
| To: | |
| Shared Package | |
| ML20197D433 | List: |
| References | |
| NUDOCS 7811280302 | |
| Download: ML20197D445 (29) | |
Text
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O I
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of
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POWER AUTHORITY OF THE STATE
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Docket No. 50-549 OF NEW YORK
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(Greene County Nuclear Power Plant) )
APPLICANT'S RESPONSE TO MOTION OF LEHIGH PORTLAND CEMENT COMPANY FOR EXEMPTION FROM CERTAIN DISCOVERY Applicant, the Power Authority of the State of New York, submits this memorandum in opposition to the motion, dated November 7, 1978, by which Lehigh Portland Cement Company (" Le high") seeks a protective order exempting it (1) from certain document production requests made by applicant in two subpoenas duces tecum issued by the Chairman of the Atomic Safety and Licensing Board (hereinafter referred to as the " Licensing Board Chairman") on August 17, 1978 and October 9, 1978, respectively, and (2) from a request for production of documents by the Staff of the Nuclear Regulatory l
Commission ("NRC Staff") made on September 8, 1978.
Applicant opposes Lehigh's request for exemption from these discovery requests on the grounds (1) that the discovery requests seek documents that are highly relevant to issues underlying this proceeding, (2) that any claim of privilege based on the purported confidentiality of the documents in question i
has been waived by Lehigh because much of the subject matter 78112803p2_
{
5 4
e has already been publicly disclosed, (3) that Lehigh has also waived any privilege based upon a claim of confidentiality by the nature of its claims in this proceeding and (4) that Lehigh's request for exemption from discovery was made inordinately late, which tardiness has not been explained in any way by Lehigh.
INTRODUCTORY STATEMENT i
J In October 1977 Lehigh was purchased by a German cement producer, Heidelberger Zement Aktiengesellshaft
("Heidelberger").
Prior to Heidelberger's purchase of Lehigh, although Lehigh asserted that the impacts of the 4
design and construction of the Greene County Nuclear Power Plant ("Greene County Plant") would create interference with its production operations and that applicant's purchase of sufficient land for the Greene County Plant would preclude introduction by Lehigh of various modifications to its Cementon plant, it did not, however assert that the Greene County Plant's construction at Cementon was mutually exclusive h
with the continued operation of the Lehigh plant.
As specific complaints concerning the design and construction of the Greene County Plant were made by Lehigh, applicant responded to them, in many cases by amending the design of the plant.
Thus, most of Lehigh's specific claims had been resolved at the time of Lehigh's purchase by Heidelberger and it was applicant's 2
view in October 1977 that Lehigh's remaining valid com-plaints could and would be met.
Lehigh's position, however, changed dramatically subsequent to its purchase by Heidelberger.
Early in 1978 Lehigh made a new claim, namely that Lehigh had decided that it was required by economic circumstances to build a new plant at Cementon and that :he only location for its new plant was exactly the same area on which applicant planned to build the Greene County Plant.
Lehigh now claims that a new plant, of 600,000 metric tons annual capacity with modern technology, must be built at Cementon at a cost of approximately $65 million.
Lehigh further claims that it will close its existing Cementon facility whether or not it is permitted to build the new plant.
On April 6, 1978 Lehigh met respresentatives of NRC Staff for the purpose of setting forth its claim that if the Greene County Plant were constructed at Cementon, Lehigh would have to close its Cementon plant with substantial socio-economic consequences to the neighboring communities.
Following the April 6 meeting NRC Staff indicated that it planned to conduct depositions of selected Lehigh per-sonnel.
On August 22, 1978 NRC Staff took the combined deposition of Ralf Bohman, William Welsh, Charles Bortell and Edward Hyland.
Applicant decided to initiate a more lengthy and thorough examination of various Lehigh employees, some of whom had not been deposed by NRC Staf f.
Thus, Lee Cummings, director of Lehigh corporate planning was examined 3
[
on September 7th and October 12th.
Dwight Fielder, northeastern region administration manager, was examined on September 14th and 15th.
Donald M.
Kunkel, northeastern region vice president, was examined on September 15th and 26th.
Mr.
Kunkel was fired shortly after his deposition.
Ralf Bohman, formerly technical liaison between Heidelberger and Lehigh and now vice president for manufacturing, was examined on October 18th and 19th.
Applicant intended to examine William E. Welsh, Manager - Properties, on October 6th, but he was fired by Lehigh prior to that date.
Applicant has been frustrated to date in obtaining a statement from this crucial witness.
During this discovery period, applicant attempted to secure production by Lehigh of certain documents which were essential to an analysis of Lehigh's claim.
Thus, applicant served a subpoena duces tecum, dated August 17, 1978, a revised subpoena duces tecum served on Lehigh on September 8,
1978 and agreed to by Lehigh on September 14, 1978 (Tr.
4)*, and a subpoena duces tecum, dated October 9, 1978.
During the course of the depositionc, and through documents produced by Lehigh, considerable information was revealed concerning Lehigh's future plans at Cementon and
- The parenthetical references are to the stenographic transcript of the depositions and will be designated by date if the identity of the deponent is not clear from the context.
4
4 the prospects for success thereof.
For example, among the documents produced by Lehigh pursuant to applicant's subpoenas is a study prepared by Mr. Cummings in March, 1978, entitled
" Northeastern Region Analysis."
(Applicant's Exhibit 9, September 15 Tr. E8).
This market study analyses Lehigh's marketing prospects in the region.
It also details the operating facts of its own plant at Cementon, and of the competing plants in the region. This analysis paints a gloomy picture of Lehigh's marketing prospects in the region (a 1% annual increase for the region as a whole).
Mr.
Cummings concludes that with the volume of imported cement iprimarti,. om Canada and norway) the only way to justify building a new cement plant at Cementon is by driving inefficient (i.e., high cost) producers out of the market.
A table in this market study lists the production costs of Lehigh's competitors' plants in the region and makes clear that Lehigh's neighbors at Cementon, the Alpha Portland Cement Company and Marquette Cement Company plants, are likely to l
feel the impact of the competitive warfare that Lehigh seeks I
to commence in the northeastern region.
This information is vital to any determination of the economic feasibility of l
the new cement facility at Cementon.
Thus Lehigh revealed critical data on its own economic plans and on the state of its competition.
The August 17 and October 9, 1978 subpoenas duces tecum were issued by the Licensing Board Chairman pursuant to 10 CFR S2.720.
The subpoenas were duly served on Lehigh.
On 5
the face of each of the subpoenas Lehigh was advised of its right to move to quash, modify or condition the subpoena pursuant to 10 CFR S2.720(f).
10 CFR S2.720(f) provides 1
as follows:
1 "On motion made promptly, and in any event at or before the time specified in the sub-poena for compliance by the person to whom the subpoena is directed, and on notice to the party at whose instance the subpoena was issued, the presiding officer or, if he is unavailable, the Commission may (1) quash or modify the subpoena if it is unreasonable or requires evidence not relevant to any matter in issue, or, (2) condition denial of the motion on just and reasonable terms."
(emphasis added)
Lehigh moves under 10 CFR S2.740 and 10 CFR S2.790, neither of which sections specifically concern limitation or modification of a Licensing Board Chairman's subpoena duces tecum but rather cover other aspects of discovery practice.
ARGUMENT POINT I LEHIGH HAS WAIVED ANY CLAIM OF CONFIDENTIALI'rY Lehigh's assertion of a claim of privilege on the basis of confidentiality is, apart from the availability of any relief under a specific provision of the Commission's Rules of Practice, as to which see Point II below, subject to the obvious limitation that Lehigh can by its conduct l.
i l
l waive any right it may have to rely on the privilege and can elect to treat the data on a non-confidential basis.
See
)
e.g.,
Kansas Gas and Electric Company et al. (Wolf Creek Nuclear Generating Station, Unit No. 1) ALAB-327, 3 NRC 408, 417 (1976).
In the instant case, Lehigh's substantial disclosures during applicant's discovery program and the nature of its claim constitute independent waivers of any privilege based on confidentiality.
A.
Lehigh's Disclosures Constitute a Waiver of Its Claim of Privilege Wholly apart from the claims Lehigh is making, the numerous facts it has disclosed to applicant constitute a waiver.
Lehigh has disclosed that the extent of its proven quarry reserves at Cementon are approximately 56 years, in-formation which is contained in the engineering planning study (October 18 Tr. 132).
Lehigh has already revealed that it was considering importing aragonite, a substance used by cement makers to bolster dwindling limestone quarry reserves.
Lehigh has also disclosed many of the production figures.
The proposed facility will be 600,000 metric tons which takes into account an 85% capacity factor (October 18 Tr. 145).
Most notably, Lehigh has provided a map of its Cementon property showing the ground size and location of various components of the allegedly proposed plant (NRC Staf f Exhibit 1).
l l
While making the claim that the Heidelberger engineering I
planning study concerning Cementon contains confidential l
l information which would be of great interest to its compet-itors, Lehigh nevertheless throughout applicant's discovery program voluntarily disclosed both the type of information which is and is not in the engineering planning study.
The engineering planning study discusses access to the plant site "to a limited extent" (Sept. 15 Tr. 220), dock layout, including provisions for silos, a crane, etc. (October 19 Tr. 222) and j
the operational requirements at the new dock (September 15 Tr.
l
\\
240).
Equally interesting is what is not included.
No feasi-j l
bility study (as opposed to an engineering study, see Point l
l l
l l
II below) has been conducted (October 18 Tr. 46,47). There is no indication that any geological survey was conducted (October 18 Tr. 63) or that any investigation of ground water conditions at the site had been made (October 18 Tr. 63) or that any J
l borings at the site had been conducted (October 18 Tr. 45).
l l
There is additionally no indication that such data, even if it exists, appears in the engineering planning study.
The Heidelberger engineering planning study relied solely on Lehigh's general knowledge of the soil conditon at Cementon (October 18 Tr.46, 47).
No evaluation was made of the potential for site erosion and runnoff into nearby water bodies (October 18 Tr. 64,100).
No evaluation was made of how much the spoil cement piles would interfere with development of the allegedly I L
r L
proposed site (October 18 Tr. 93).
No estimates are provided of potential emissions in the Cementon engineering planning l
l study (October 19 Tr. 232).
Moreover, applicant, through l
other investigations, also obtained information concerning 1
l Heidelberger's operation and equipment, such as the nature of its operations and equipment at certain factories in Germany.
Moreover, Lehigh has asserted that the engineering planning study for its proposed $65 million plant at Cementon does not contain information with regard to the financing or potential profits of the proposed facility.
It is simply an engineering document.
The equipment to be used is "off-the-shelf" (September Tr. 200).
Thus, the units of equipment are not novel, nor is the layout confidential as it has been disclosed by Lehigh at the April 6, 1978 meeting with NRC Staff.
These facts make it extremely unlikely that such information would be " highly valu-able" to any of Lehigh's competitors in the northeast.
In fact, l
the willingness of Lehigh to share its more important economic analyses, such as the Northeastern Region Analysis or its analysis of a piece of equipment known as a four-state preheater, undercuts any reason to continue to withhold the purely engineer-ing a:1alysi s.
B.
Lehigh's Contention Concerning the Harm It Faces Constitutes a Waiver It does not need extensive discussion that discovery procedures are to be construed so as to permit broad and i
i thorough disclosure of the material facts. Pacific Gas and __-
l Electric Company (Diablo Canyon Nuclear Power Plant, Units 1
& 2), ALAB-410, 5 NRC 1398 (1977).
Thus an assertion of privilege or claim of exemption based on confidentiality should be examined closely.
This is particularly true in the instant case in which Lehigh has put in issue, by making the claim it does about its commercial incompatibility with the Greene County Plant the very issues on which it seeks to avoid discovery, namely the alleged necessity of building a new plant at Cementon and why the new plant must be built exactly where the Authority desires to build the Greene County Plant.
These are crucial issues for the Licensing Board to resolve.
After examining the documentary materials supplied by Lehigh, the Licensing Board may well determine that they fail to support the Lehigh claim.
It is well established that a privilege may not be used as both a shield and a sword.
The matters in controversy cannot be treated in a vacuum with discovery of relevant facts prevented by a claim of privilege.
This rule, which is often found in automobile accident cases involving a party's health condition, should also be applicable to business secret See discussion in 4 Moore's Federal Practica S26.60[6].
cases.
The federal courts, in reviewing Rule 26 of the Federal Rules of Civil Procedure, state that if one can demonstrate a clear need for certain information, then, on balance, such a situation should override an asserted privilege.
Sun Oil Co.
1 f
i 1
j l l
v.
U.S.,
514 F.
2d 1020 (Ct. C1. 1975). Helpful in this respect is the holding in Richards of Rockford, Inc. v. Pacific Gas &
q Elec., 71 F.R.D. 388 (D.C. Cal. 1976) wherein the court stated:
[g]uidelines for' striking balance betvcan discovery and nondisclosure of confidential matters include the nature of the proceeding, i
whether the deponent is a party, whether the information sought is available from other i
sources, and whether the information sought goes to the heart of the claim.
(emphasis added)
POINT II LEHIGH FAILS TO POINT TO SUFFICIENT AUTHORITY FOR ITS MOTION While Lehigh refers to two sections of the Commission's Rules of Procedure as a basis for its motion, 10 C.F.R.SS2.740 (c) and 2.790, analysis reveals that there is no basis under either section for restricting disclosure of the documents that Lehigh refuses to produce.
In fact, Lehigh does not rely upon the section concerning subpoenas, 10 CFR S2.720(f) because its motion is made eleven weeks after the time of the first subpoena's issuance.
Thus, Lehigh attempts to disguise its extraordinary tardiness in seeking protection by simply omitting all reference to the section concerning subpoenas.
Turning to the two sections it does rely upon, section 2.790 is not appropriate.
There seems to be no justification whatsoever for referring to this section which limits public disclosure of documents which have been conveyed to the i
_11 i
1 i
Commission.
Fansas Gas and Electric Company et al. (Wolf Creek Nuclear Generating Station, Unit No. 1) ALAB-327, 3 NRC 408 (1976).
The Commission does not have possession of the feasibility study other than the copy submitted to the Licensing Board for an in camera review in connection with this motion.
Turning to the other provision on which Lehigh seeks to rely, 10 CFR S2.740(c), this general provision regarding protective orders can hardly be intended to override the rule stated in 10 CFR S2.720(f) when discovery is sought through a subpoena duces tecum.
The latter section provides both when relief from a subpoena must be sought, namely, prior to the scheduled return date and the type of modification available concerning a subpoena.
The Licensing Board Chairman may (1) quash or modify the subpoena if it is unreasonable or requires evidence not relevant to any matter in issue, or (2) conditiondenial of the motion on just and reasonable terms.
Even if Lehigh's dilatoriness is not considered a sufficient reason for denying it relief, its reliance on 10 CFR 52.740(c) is misplaced.
Subsection (6) provides "that, subject to the provisions of SS2.744 and 2.790, a trade secret or other confidential research, development, or commerc.ial information not be disclosed or be disclosed only in a designated way."
In relying upon this section, Lehigh must show that the material for which it seeks exemption from disclosure falls into the category of a trade secret or confidential rePaarch, development, or commercial information.
The fact that Lehigh does not wish to produce this information is not sufficient to carry its burden on this matter. It must show, among other matters, that the information has been kept in confidence and that there is a rational basis for having customarily maintained the documents on a confidential basis.
This is particularly true in light of the volume of material Lehigh has produced that is pertinent to the assumed subjects of the withheld docum2nts. Fbreover, Inhigh's motion on the subpoena duces tectmi does not indicate precisely which items in the two it declines to provide.
On the contrary, it does no more.than refer to
'a certain engineering planning study performed by Lehigh Portland Cement Company's parent corporation, Heidelberger including a number of unspecified confidential documents and a Lehigh planning study relating to the construction of a r.cw cement production facility in an area other than the northeast United States referred to herein as the " green field" facility.
During the depositions, Lehigh declined to provide a number of documents requested on the basis of alleged confidentiality.
At least one of these purportedly confidential items is not covered by Lehigh's vague '
references to the two studies, namely in the subpoena duces tecum issued August 17, 1978, Item 25 which required Lehigh to provide a " study by Lehigh and unidentified steel corpo-ration regarding the purchase of granulated slag," which Lehigh declined to provide on the bases of alleged confi-dentiality (September 7 Tr. 11).
While applicant does not have detailed knowledge of the contents of these documents, as it has never had possession of them, it would appear that these documents are closely related to the engineering study that Lehigh refuses to produce.
The failure of Lehigh to include these items in its motion constitutes a waiver of its claim to confidentia-lity regarding these items.
Moreover, it is further evidence of the fact that Lehigh has not consistently maintained the information in the two studies it seeks to protect by this motion in a confidential manner.
The nature and scope of the Heidelberger engineering planning study of future use of the Cementon site is, of course, unknown to the Authority since it has not had the f
l opportunity to review that document.
It should be noted, i
however, that the characterization that Lehigh has given to that document has changed over time.
Lehigh originally designated it a " feasibility study" (August 22 Tr. 57).
1 During the course of the depositions, however, as many of l
the matters presumably covered by a feasibility study for a f l l i
I
new plant were revealed to not be disclosed therein, Lehigh changed the designation for this document to call it "an engineering planning study" (October 18 Tr. 42).
This altered characterization renders further doubt as to the real purpose of Lehigh's refusal to produce the document.
Much of applicant's interest in the feasibility study 1
l isoto be able to asses Lehigh's claim that it is unable to l
l build a new plant at Cementon except on the site designated 1
for the nuclear power plant.
Thus, it has sought to study the various equipment sizes and interrelationships proposed by Lehigh for use at Cementon.
Applicant is not interested in a highly technical presentation of every design detail of the proposed pieces of equipment, but in the size and inter-connection requirements of the equipment with each other, to the extent that these matters might affect the choice of a site by Lehigh for the purportedly required new plant.
Applicant understands that the engineering planning study for Cementon details which of existing equipment would be used for the new plant at Cementon and in what location they will be placed, but does not provide " analysis for each individual component" (October 19 Tr. 230).
Such information can hardly be considered confidential. o
l POINT III THE " GREEN FIELD" STUDY IS RELEVANT TO THIS CASE The October 10, 1978 subpoena and NRC Staff's letter j
dated September 8, 1978 request information regarding Lehigh's proposed " green field" plant.
Lehigh's claim that information on this plant, which is located in an area of the country other than that served by the Cementon facility, is irrelevant to consideration of the Cementon plant overlooks the fact that Lehigh's credibility about building any new plant at Cementon is very much at issue.
It is not the details of the t
proposal that interest applicant at this time as much as the possibility of having a companion study, in order to be able to evaluate the level of detail that has been developed, the size of the site, the type of equipment and the location of the equipment which might permit comparative analysis of the purportedly planned Cementon facility.
Lehigh's credibility in making what amounts to a last minute claim that it intends to build a $65 million cement plant on the exact location of the proposed nuclear plant is J
certainly in question in this proceeding.
Indeed, following 1
the April 6, 1978 meeting at which this purported plan was l
presented for the first time, it was just such a desire to explore both the facts of the matter and Lehigh's credibility _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ - _ _ _ - _ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _
that led to both the August 22, 1978 deposition by NRC Staff and to the subsequent depositions by applicant.
As the resvit of those depositions, Lehigh's credibility is even more open to question.
One o! the, documents produced by Lehigh as a result of discovery requests by the applicant was a memorandum of William E. Welsh, Manager a Properties for Lehigh, dated April 12, 1978.
(A copy of this memorandum is attached).
In that memorandum Mr. Welsh accurately indicated that the applicant must secure two construction permits, one from the NRC and the other from the Siting Board.
He discussed certain of the significant milestones required to obtain each permit.
Apparently Mr. Welsh believed that Lehigh has a
.potentially critical impact on the applicant's licensing scheme.
His memorandum makes clear that he thinks that Lehigh should use that influence to persuade the applicant to improve its financial offer to Lehigh.
He reported:
"In light of the instructions from senior management in Heidelberg, our Albany attorneys strongly recommend that we implement the tactical maneuvers listed below:
1.
April 6, 1978: Meeting with NPC Staff--
Presented for first time the 'LPC Position'.
A partial taking is equivalent to a total taking."
Mr. Welsh continued his schedule of " tactical maneuvers" through June 15. 1978 at which time Lehigh was to initiate preliminary actions necessary to secure environmental and construction permits for the new Lehigh plant.
The apparent goal of these tactical maneuvers was and is to persuade the.
l
d applicant to " negotiate seriously".
"PASNY is a formidable foe due to their extremely potent political influence, inexhaustible financial resources, and steadfast comtitment.
All of these factors are required for them to overcome the stern opposition, often emotional arising from some faction, wherever they attempt to build.
Therefore, Heidelberg's objectives can be attained only by Lehigh demonstrating similar fortitude.
"In the words of Mr. George T.
Berry, General Manager and Chief Engineer of PASNY, the Alsen site is ' license-able and buildable'.
That is why he selected Alsen in spite of severe deficiencies concerning access, transmission, and potential impact upon Lehigh.
Regarding Lehigh, he has always planned to negotiate, but nowhere near our terms.
"During our meeting with the NRC Staff, we demonstrated we possess the weapons to vitiate Mr. Berry's ' license-able and buildable' analysis.
Once we persuade him that we will indeed utilize these weapons, his propensity to negotiate seriously should increase markedly.
"Therefore, we should initiate th( tactics outlined above as soon as possible in order to convince Mr. Berry that his power p] ant site is in grave jeopardy.
Then, if PASNY's intranrigence q
prevails past August 1978, we shou'.d file, in 1
the respective dockets, our diracc cases which will probably defeat the siting,"
(Emphasis added)
This memorandum strongly suggests the conclusion that Lehigh is putting forward its new plant proposal at the Cemeni an site as a tactic to compel the applicant to offer Lehigh a handsome settlement.
Subsequent to receiving this
. memorandum of Mr. Welsh, but prior to the scheduled deposition of Mr. Welsh on October 6, 1978, Mr. Welsh was fired bv Lehigh.
Thus the applicant was unable to question i
him on this crucial document.
However, Lehigh's credibility was open to question in a number of other aspects.
For example, an underlying theme of the pre-November 1977 situation was the fact that Lehigh's Cementon plant had been marginal, from a profit or loss standpoint, for a number of years.
The price of cement in the northeastern United States, the region supplied by the Cementca plant, is lower than the price throughout most of the balance of the country (North-eastern Region Analysis, Applicane's Exhibit 9).
More-over, the market for cement in th-northeast has been growing relatively slowiy compared to the L91ance of the country.
(Id.)
Thus, Lehigh's Cementon facility had been less than the shining star of the company for some time.
The possibility that the applicant would pay Lehigh for the land to be taken at Cementon on a basis that recognized in some way the allegation of consequential damages had long been a major attraction to Lehigh.(Welsh memo)
Such proceeds might have termitted the closing of the Cementon plant and provided the capital for the construction of the green field plant.
Recently, the Lehigh Board of Directors considered (in the event of a decision to close down the Cementon facilities) the feasibility of purchasing an existing plant in another section of the United States (October 18 Tr. 78).
In fact, Lehigh (Heidelberger) is now shopping fcr new sites or existing plants to buy and appears interested in purchasing a couple of existing plants including one serving much of the same area as Alsen without regard to conditions at Cementon (October 19 Tr. 210).
Both Messrs. Bohman and t
Hyland have indicated that the Lehigh Board has discussed the possibility of purchasing another facility to replace Alsen (Occober 18 Tr. 77) and that Lehigh is considering the purchase of arother plant in another part of the United States (October 18 Tr. 168).
Lehigh/Heidelberger has shown an interest in purchasing another cement plant in Holly Hill, South Carolina (October 18 Tr. 168).
As late as October 1978 they were also interested in purchasing the Miron Cement Company which is based in Montreal, Canada (October 18 Tr. 168-170, October 19 Tr. 211).
They are also actively negotiating for other new sites to the extent that they are in the process of buying options on at least one specific site ( the "g ree field" plant) (October 12 Tr. 199).
For all of the above reasons, applicant questions whether Lehigh actually intends to build a plant in Cementon, whether or not the Greene County Plant is constructed there.
Applicant does not doubt, however, that Lehigh is intently studying the idea of buying and/or building a facility at a new location in the United States.
Consequently, applicant must compare the two documents in order to be able to assess whether the combined capital cost impact is within the capabilities available to Lehigh and its parent Heidelberger and also the comparative detail of the two facilities.
It is, therefore, the applicant's contention that the engineerir:g planning studies for both a new Lehigh f acility at Cementon and at a green field location should be provided in
order to fully analyze Lehigh's asserted claim that it will go out of business at Cementon unless it can build a new $65 million plant on the site of the Greene County Nuclear Power Plant.
COUCLUSION The motion of Lehigh Portland Cement Company for Exemption from Discovtry of Engineering Planning Studies for its alleged new Cementon plant and its " green field" plant should be denied.
Respectfully sub itted, O'\\
'\\
Ab Charles M.
Pra t Principal Attorney Q
ATTACHMENT #1
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INTRACOMPANY & OFFICE CORRESPONDENCE j
LEHIGH PORTLAND CEMENT COMPANY V.. Hyland, Vice President - Secretar/ and General Counsel E. Bohsan - Technical Cocrdinator DATE 70
_,m M u mincs - Director, C2rg;r;;cLe F1orM m.
g
,g FROM E. V,elsh. Manarer - PrcDerties
]
FILE SU BJECT Alsen Ccnderneticn WSE SEP AR ATE LETT ER FOR E ACH SUDJ ECT) antlemen:
The purpcses of this nemorandum are as follcms:
1.
Review the salient points o?scussed at our meeting en L' arch 31, 1978.
2.
Itemize our reco=endeticns fcr current and future acticns.
3.
Reviev. cur acecrplishments witn the NRC Staff during our meeting en April 6,1973.
Before any ecndernaticn acticn is forma.ly initiated or any centingent
- picn agreerent could come to fruition, the Pcwer Authority of the State of fie York (PASNY) must secure twc general permits.
One is issued under Federal jurisdicticn by the Atcmic Safety and Licensing board ( ASLB); the nther under Stste jurisdiction by the New York State Board for Elcc.ric Generaticn Ulting and the Envircnment (Siting Board). Both are equally irf ortant. Appendix "A" briefly describes some of the peculiar aspects of Ebch regulatcry mase.
Numerous milestone events must occur prior to the issuance of the requisite g< rmi ts. These events, and a projected timetable for them, are set forth in M Kndix "B".
TF t.imetable forecast is realistic, but optimistic, especially
!f
/;NY c mtin its tactics of permitting "stop issues" such as access IFF ovemeI.ts ano.tmpacts upcn Lehigh to dangle unresolved before the forum.
%c 'creeast is directly affected by many factors vhich are presently unknov.n.
of these factors such as the hearing schedules, the filing dates for the drect cases of the Staffs and other intervenors, and the extent of their direct CBSc should emerge in the relati d y near future.
The noteworthy aspects re-P'En, ' the timetable are:
first, PASNY will be hardpressed to secure even haporary permits prior to the 1979 construction seascn; and, second, it will i
l'etdly be late summer or early fall,1979, before any final permits are granted, ter.
There is virtually nothing Lehigh can do to accelerate the regulatory pace.
t, if Lehigh fails to exert strong concerted action, the regulatory process
<- Mrmteed to grind ever so slowly. Furtlermore, because of PASNY's poor
!'W rit.ation and serious judgemental errors regarding several matters including
" ' U, the ultimate outcome will be in doubt for at least fif teen months, h
Wy much longer.
2-April 3 2.
1978 In the unlikely event that PASNY ultimately prevails over streng Lehigh cppositicn, the subject of monetary award for damages would be unresolved for years while the case wends through the Court of Claims.
On the other hand, if PASNY were to settle Lehigh's contentiens, they The re-would eliminate at least ene and pcssibly both of the "Stop Issues".
mcval of these stumbling blocks tirbt accelerate the regulatory process enough for the temporary permits described in Appendix " A" to be issued soon enough to take advantage of the 19,79 construction seascn.
Vlhile Lehigh's positicn has always been very important to PASNY, it is now teceming critical to the timing as well as the ultimate approval of the siting at Cementen (Alsen). Depending upon the force and convicticn of Lehigh's positicn, the NRC could remand the application to its incipent stages, which would be a time setback of approximately two years for PASNY and probably result in their abandenment cf the site.
Naturally, the NRC strongly desires to license the proposed nuclear Ecwever, their predicament is that PASNY's ineptitude in satis-power plant.
f actorily resolving several momentous issues exposes the adequacy and probity of the Federal review to serious challenge. Ccnsequently, Lehigh's powerful and cogent presentation will cause the NRC Staff to force FASHY to either re-solve the Lehigh cententicns or abanden the site. Because of the lengthy time delay and resultant egregious financial consequences to PASNY, voluntary abandenment is not censidered a viable option for them.
In light of the instructicns from senior management in Heidelberg, our Albany attcrneys strongly recommend that we implement the tactical maneuvers listed below:
i 1.
April 6, 1978: Ideeting with NRC Staff -- Presented for first tine l
the "LPC Position". A partial taking is equivalent to a total taking.
2.
April 21, 1973: Promulgate to the Joint Forum revised interrogatory responses depicting the layout f or a new plant; mail a summary of Ralf Bohman's comnents to the NRC Staff and PASNY.
3.
April 21, 1978: Release letter from W. J. Young to Greene County, I
et 31 officially advising of our opposition to the Alternative IB access improvements.
(Serve on Joint Forum.)
4.
}.by 1, 1978:
Letter to Greene County Planning Departnent soliciting a meeting to discuss permits for a new cement plant.
(Serve on Joint Forum.)
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1 Arril 12. 147?
3-5.
June 1, 1973:
Letter from W. J. Young to Commiscicner Dysen, N.Y.
State Departrent of Comrerce, soliciting support for a new cenent plant.
6.
June 15,1978:
Initiate prelindnary actions necessary to secure en-vircnnental and canstruction permits for new Lehigh plant.
The rationale for each of these actions can be explained in greater detail upon request. Appendix "C" is a summary of Lehigh's tactical plans.
PASHY is a formidable foe due to their extremely potent political influence, inexhaustible financial resources, and steadf ast commitment. All of these factors are required for them to overcome the stern oppositica, often emotional, arising from some facticn, wherever they attempt to build. Therefore, Heidelterg's objectives can be attained cnly by Lehigh demonstrating sirilar fortitude.
In the words of Mr. George T. Berry, General Manager and Chief Engineer of PA3NY, the Alsen site is " license-able and buildable". That is why he selected Alsen in spite of severe deficiencies ccncerning access, trancaission, and potential impact upon Lehigh. Regarding Lehigh, he has always planned to ne-gotiate, but nowhere near our terms.
During our neeting with the NRC Staff, we demonstrated we possess the weapcns to vitiate Mr. Berry's " license-able and buildable" analysis. Once we persuade him that we will indeed utilice these weapcns, his prcpensity to negotiate seriously should increase markedly.
Therefore, we should initiate the tactics outlined above as soon as possible in order to convince Mr. Berry that his power plant site is in grave jeopardy.
Then, if PASMY's intransigence prevails past August 1978, we should file, in the respective dockets, our direct cases which will probably defeat the siting.
Very truly yours, W. E. Welsh CKB/dal Attachments: A, B, & C.
cc:
W. J. Young R. L. Browning R. D. Kline D. M. Kunkel l
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'l 47 AFFENDIX A:
DESCRIPTION OF FEF"ITS As mentiened in the text, two separate perndts must be obtained pricr to PA3:n appropriating the site adjacent to the Alsen facility.
They are both equally important to the eventual siting; however, the Federal one is probably less subject to intra-state political pressures. The refore, the Federal process is the more totrucus labyrinth.
The first and most encorpassing is a Constructicn Permit issued by the Atomic Safety and Licensing Board of the U.S. Nuclear Regulatoly Ccarissicn.
The process leading to this permit censumes over three years.
It involves two separate phases; namely, the radiaticn hazard and safety phase, plus the environmental phase.
Each phase proceeds concurrently under the guidance of separate project managers.
The radiation ha ard and safety issues arise from the Atorde Energy Act of 1954; although there is some legal dispute regarding the extent cf State jurisdiction in these areas, these matters are generally ccnsidered to be within the Federal prcvince.
The appropos sections of the NRC Staff conduct the radiaticn and safety reviev by scrutinizing the documents filed by the applicant and then prcpounding several rounds of formal questions. The end result of this process is the Safety Evaluaticn Report (SER) promulgated by the NRC Staff and reviewed by tre Advisory Committee en Reactor Safeguards ( ACRS).
This latter group is a body established by Congress, theoretically independent of the NRC.
In practice, the ACRS acts as an appeal body for irreccnciable disputes between the NRC Staff and the applicant for radiaticn hacard, safety and engineering design issues. The ACRS promulgates its own findings.
M st of the radiation and safety phase is well beyond the secpe cf challenge by Lehigh; ccnsequently, it is of little interest except to note that the ACRS issued a favorable report roughly within the tir originally established.
The environmental issues arise primarily from the Natienal Envircnmental Policy Act of 1969, its amendnents, and other Federal envirencental legislation since 1969.
These issues range across the gamut of environmental concerns such as air and water quality, terrestrial and acquatic ecology, geology and seismology, etc.
plus miscellaneous considerations termed land use and, socio-ecencmic impacts.
All of these natters are much more intangible than the radiation and safety matters which can usually be reduced to quantitative analysis.
Nevertheless, the environnental review must assess the proposed plant in accordance with a cost-benefit f ormula.
The end result of this review process is the Final Envircntental I
the NRC Staff assessment of the Statement (FES) which is, among other things, cost-benefit formula.
Once the FES has been issued and the contentions testimony heard, the ASLB is impowered to issue a Limited V ork Authorization (L.W. A.). This generally.
permits site preparation activities which would not be perr anent should a j
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APPENDIX A:
DESCRIPTION OF PFR"ITS 3 -
PAGF 2 Ccnstructicn Permit never be issued. The intent is to permit the initial stages C
of ccnstrugtien which awaiting the final rulings and thus contribute to efficient construction scheduling and management.
It should be noted that PASNY, in just ene cf their ill-advised tactical blunders, applied to the NRC in the fall of 1977 for an L.W.A.,
The request, which was grossly premature then and still is, has been held in obeyance by the ASLB.
The seco'4 and equally necessary permit PASNY must obtain is a Certificate of Environoratal Competitility from the N.Y. State Board en Electric Generation Siting and ;te Environment (Siting Beard). This Board is composed of statutory rembers t follows: Chairman, Public Service Commissicn; Concissioner, Department of En"ir amental Ccnservation; Conadssicner, Department of Health; Commissioner, Board of nealth and an AD HOC Member, appointed from the judicial district in which the plant is to be sited.
The Siting Board does not actually hear the testimeny as does the ASLB.
Instead, hearing examiners from the Public Service Commission and the Department of Environmental Conservation certify the record, forward it for review and make recommendations.
The procedure under which the record is ccmpiled is burdensome, tedious, and exceedingly time censuming. Succinctly, for the most part, the sare gamut of envircnmental issues reviewed in workshop by the NRC Staff and then refined into ecntentions admitted bercre the ASLB are also reviewed by the State. However, before the State all these matters are treated,in toto, during the administrative hearings. Consequently, an enormous amount of extraneous material becones subject to hearing testimony and cross-examinaticn resulting in an interminable and open-ended hearing process. One case has been in hearing stages for over four years.
A noteworthy item is there is no provision for a temporary permit under the State proceedings. However, PASNY has promulgated a legal memorandum postulating that the Siting Board could issue a " Partial Certificate".
The opposing parties, including the Staffs of the Public Service Commission and Department of Envircnnental Ccnservation have filed memoranda arguing the opposite.
The legal aspects of this controversy are nebulous and extremely
]
uncertain.
1 An L.W. A. without such a " partial certificate" or final Siting Board resolution would be insufficient to commence construction activity. However, 1
issuance of an L.W. A. would enable PASNY to exert their pow::rful political nuscle to prompt expeditious action by the Siting Board or lobby for a
" partial certificate".
)
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Ap ! *? !D IX " B" -
Projetc.d Tiret@le cf ISlestenc Evnnts Ma rc h 1072 -
Completien of cross-examination of the " Access Ic.provements.
" panel.
Anril 6. 1079:
Meeting between NRC Staff and Lehigh June 1.
3078:
Completien of "Need for Povier.
. " panel and the Joint Hearings of the Applicant's Direct Case.
Julv aur. 107?:
N.Y. State Staffs file their direct cases in Article 8 proceeding (case 80006).
Aururt 1978:
NRC Staff publishes the Final Environmental Statement (FES).
Santact or 107:
Filing of Lehigh direct case regarding cententions in in NRC Docket 50-549.
certerber }o73 Filing of Lehigh direct case regarding impacts upon Lehigh in Article 8 proceeding (Case 80006).
Sort erbar 1077:
Hearing of N.Y. State Staff Direct Cases in Case 80006.
yo.forher 1o78:
Hearing of Lehigh Contentions Testimony before ASLB in NRC Docket 50-549.
Noverbor 1478:
Hearing of Lehigh Direct Case in Case 80006 as well as the cases filed by the other intervencrs.
December 1978:
(1) Applicant's Retuttal and Surrebuttal by Intervenors (case 80006)
(2) Completion of hearings before ASLB (Docket 50-549).
Jan.-Feb. 1974:
Briefing in both case 80006 and Docket 50-549.
March 1979:
L.%.A. issued by ASLB (ccntingent*).
March 1979:
Recommended decision by Administrative Lav. Judges (case 80006).
Acril 1979:
Partial Certificate issued by Siting Board (contingent *).
p,y 1, 1o79:
Briefs on exception.
+ NOTE:
The contingency is tnat PASNY resolves in the reantine the many major issues presently dangling such as Access Improvements and the impacts upon Lehigh.
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ATFFMDI7 "0" (ecntinued) s Mny 15. 1070:
Replies on exception.
furuct 15. 1070:
Siting Board decision.
As is readily apparent frem the projectiens above, most of the inputs to both the Federal and State proceedings will occur prior to December 1978. The time subsequent to that date, but prior to the final decisions, will be ecnsumed in judicial gymnastics such as briefs, recommendatiens by hearing examiners, ccncideraticn of a voluminous record, and then rendering, by the respective boards, the final decisions.
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Ccnsequently, most of the crucial activity will occur within approximately 1
- t. ? next six months. Furthermore, the numerous dangling issues must be resolved by 'AS3Y within that same six months period. Otherwise, it v.ill be well nigh j
imp.1sible for the respective Boards to issue the temporary constructicn permits FASD. so desperately needs and vigorously seeks. Viithout these temporary permits, FASMY till net be able to commence censtructicn during the 1979 censtructien season Thus, even if the siting is approved in late 1979, the ecnstruction l
and ope. stional timetable would be two years behind schedule.
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8 AFPEMDIX "C" -
LPC Tactical Summary t'
Dacembor 107~:
Trenchant cross-examination of PA5NY " Land Use.
panel by LPC.
January 3073:
NRC Staff approaches LPC to arrange a workshop meeting.
Mar?h 15 lo78:
Meeting between NRC/LPC scheduled but deferred due to conflict with formal haarings.
March 28.1973:
Cross-exandnation of the Access Improvements panel by LPC. Applicant's plans for Access Improvenents clearly shm,n to be in total disarray.
Arril 6. 1078:
Rescheduled meeting between NRC Staff and LPC.
April 21.1978:
Submit to the joint forum revised interregatories de-picting LPC intended use of property PASNY has designated as the preferred site as well as summary of coarents of Mr. Ralf Bohman to NRC Staff en April 6, 1975.
April 22. 1978:
Letter to Greene County, et al formally objecting to Access Improvement Alt. IB.
Nav 1. 1078:
Letter to Greene County Planning requesting meeting to discuss plans for new plant.
June 1. 1975 :
Letter to Ccmmissicner Dysen, N.Y. State Departnent of Commerce who is a member of the Siting Board.
June 1o78:
Completion of the Applicant's "Need for Power.
" panel and the Joint Hearings as well.
Mav-June 1978:
Probable negotiatiens between PASNY/LPC.
Aumart 1074:
NRC Staff issues the Final Environaental Statement (FES) which sets forth their position regarding the findings they must make under NEPA; one of these must be that the siting will have a positive cost-benefit effect.
Auc. - Sant. 1973:
If negotiaticns between PASNY/Lehigh have not come to fruition, Lehigh file direct cases in both the Article 8 (State) and ASLB (Federal) proceedings designed to defeat the siting.
There is an excellent chance that the NRC will have no choice but to either withdraw support for PASNY's application or formally remand it to the incipient stages. The net effect of this latter action would be for PASUY to lose at least two years.
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