ML20203J351

Discusses 971014 Request for Reconsideration or in Alternative,Motion to Delay Effectiveness of Portion of Final Policy Statement on Restructuring & Economic Deregulation of Electric Utility Industry

ML20203J351
Person / Time
Issue date:	02/20/1998
From:	Hoyle J NRC OFFICE OF THE SECRETARY (SECY)
To:	Newell G SPIEGEL & MCDIARMID
References
CLI-88-10, NUDOCS 9803040061
Download: ML20203J351 (5)

Text

, GAIA W a 8 p u o, UNITED STATES 3'

NUCLE AR REGULATORY COMMISSION 5  : 4 WASHmGTON. D C. 20 % 5-0001 o,  ? '

%, ,/ February 20, 1998 SECRETAny Gary J. Newell, Esq.

Spiegel & McDurmid 1350 New York Aven';e, N. W. '

Washington, D. C. 20005 4798 E RE: FINAL POLICY STATEMENT ON THE RESTRUCTURING AND ECONOMIC -

DEREGULATION OF THE ELECTR;C UTILITY INDUSTRY

Dear Mr. Newell:

By letter dated October 14,1997, you filed " Publicly Gwned Systems' Request for Reconsideration or, in the Alternative, Motion to Delay Effectiveness of a Portion of the Final Policy Statement in Order to Receive Additional Pubuc Comment", on behalf of eight municipal and cooperatively owned electric utility systems (" Publicly Owned Systems"). The Publicly Owned Systems requested that the Commissien reconsider that portion of the Final Policy Statement which addressed joint e.nd several . ability of co-owners / licensees' of nuclear plants.

For the followir.g reasons, the Commission declines to reconsider or delay the effec',iveness of that portion of the Final Policy Statement. -

The Final Pe! icy Statement did not create a binding rule or regulation. It in no way altered any e private contractual arrangements. Moreover, it expressed no change in prior NRC practice or g policy. It set forth a view thai the NRC may, under unusual, soecific circumstances, consider imposing joint and several responsLility on co-owners /iicensees of nuclear plants. A statemet, of policy creates no binding regulation or rule fcr licensees. See Limerick Ecology Action v.

NRC 869 F. 2d 719,736 (3rd Cir.1989). Thus, no rigMs or obligations of licensees are affec'ed by the policy statement.

In addition, the NRC ha. not stated that it wi!! abrogate contractual relations cre ting pro-rata responsibilities or interfere with a pro-rata division of responsibility. In fact. the NRC acknowledged that pro-rata tiimion of responsibility is the norm. and should remain the operative stanoard. Rather, the NRC expressed the view that in oxtraordinary circumstances, where public heal+ and safety is adversely aMected, it would consider imposing joint and }/

several responsibility in order to address the health and safely lssue. This does not represent t/ l departure from previous Commission practice. See, e.g., Public Service Company of New Hampshire (Scabrook Station, Units 1 and 2), CLI-8810,28 NRC 573 (1988). fy g

The Final Policy Statement is fuliy consistent with the " Proposed Rule on Financli. Assurance 'lP~f6 Requiremants for Pcommissioning Nuclear Power Plants," (62 Fed. Reg. 47588 (September 10,1997)), wherein the NRC noted that the broad imposition of joint and sew 21 liability for decommissioning costs may not be necessary because the Cor,missicn generally conside s the hvel of financial assurance for decommissioning to be adegate. Thus the NRC saw "no

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g G. Nwell 2-need to impose an addi%nal regulatory obligation of joint liability on co-owners or co-licensees." 62 Fed. Rt.c. 47586 at 47594. If the Publicly Owned Systens, nevertheless, believe there is some inconsistency between the proposed rule and the Final Policy Statement, they may offer such comment with respect tc the proposed rule.

The Commission did not intend to create additional uncertainty regarding liability, especially recognizing the present climate of electric utility restructuring. Rather, the Commission desires to clearly state possible courses of action should circumstances dictate. The Final Policy Statement does not impose any regulatory obligation on licensees. As stated above, it is a statement of policy, not a binding rule. It merely leaves open, and gives notict., of, the possibility that under certain unusual c rcumstances, the NRC may consider imposing joint and several liability.

The Commission sees no need to delay the effectiveness of that portion of the policy statement pending additional comment. The comment period for the draft policy statement, which was open from September 23,1996 until February 9,1997, provided ample time for comment on all issues raised. It is unlikely that an additional comment period would provide information or insight on this issue not previously brought to the attention of the Commission.

For the foregoing reasons, the Commission declines to reconsHar or delay implementation of the Final Policy Statement.

Sincerely,

/

Jo n C. Hoy , $3cretarv

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need to impose an additional regulatory obligation of junt liability on co-owners or co-i - licensees." 62 Fed. Reg. 47588 at 47_594.~ if the Publicly _ Owned Systems, nevertheless,

. believe there is some inconsistency between the proposed rule and the Fire Policy Statement,

they may offer such comment with respect to the proposed rule.-

l _ The Commission did not intend to create additional uncertainty regarding liability, especially

_ recognizing the present climate of electric utility restructuring.- Rather, the Commission desires to clear'y state possible hourses of action should circumstances dictate. The Final Policy l Statement does not impose any regulatory obligation on licensees. As stated above, it is a statement of policy, not a binding rule. It merely leaves open, and gives notice of, the possibility 1

that under certain unususi circumstances, the NRC may consider imposing joint and several liability.

The Comtrission secs no need to delay the effectiveness of that portion of tne policy statement.

L pending additional comment. .The comment period for the draft policy statement, which was i open f om September 23,1996 until February 9,1997, provided ample time for comment on all

- Issues :alsed. It is unlikely that an additional comment period would provide information or insight on this issue not previously brought to the attention of the Commission.

i For the foregoing reasons, the Commission declines to reconsider or delay implementation of

the Final Policy Statement.

Sincerely,

j. Omm*( $1GWD BY John C. Hoyle, Secretary I_

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G. Nemil need to !npose an additional regulatory obligation of joint liability on co-owners or co-licensees." 62 Fed. Reg. 47588 ct 47594. If the Publicly Owned Utilities, nevertheless, believe there is some incons!stency between the proposed rule and the Final Policy Statement, they may offer such comment with respect to the proposed rule.

The Commission did not intend to create additional uncertainty regarding liability, especia'!y recognizing the present climate of electric utility restructuring. Rather, the Commission desires to clearly state possible courses of action should circumstances dictate. The Final Policy Statement dcas not impose any regulatory obligation on licer.Jees. 's stated above, it is a statement of policy, not a binding rule. It merely leaves open, and ives notice of, the possibility th.at under certain unusual circumstances, the NRC may conside imposing joint and soveral liability.

The Commission sees no need to delay the effectiveness of at portion of the policy statement pending additional comment. The comment perioc ior the aft policy statement, which was open from September 23,1990 until February 9,1997, pr ided ample time for comment on all issues raised, it is unlikely that an additional comment riod w' ald provide infortration or insigra .c this issue not previously brought to the atten 'on of the Comraission.

For the foregoing reasons, the Commission decline to reconsider or delay implementation of the Final Policy Statement.

Sin erely, John C. Hoyle, Secretary l

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SECRETARY January 20, 1998

! COMMISSION VOTING RECORD i

i DECISION ITEM

SECY-97-274 4 TITLE: RESPONSE TO REQUEST FOR I

RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY STATEMENT ON RESTRUCTURING AND ECONOMIC

! DEREGULATION OF THE ELECRIC UTILITY I

INDUSTRY ADDRESSING JOINT AND SEVERAL 1 LIABILITY The Commission (with all Commissioners agreeing) approved the subject paper as recorded in the Starf Requirements Memorandum (SRM) of January 20, 1998.

This Record contains a summary of voting on this matter together with the individual vote sheets, views and comments of the Commissioners, and the SrtM of January 20, 1998, i

John C. Hoyle Secre[ary of the Commission

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. '98 Attachments:

1. Voting Summary

2. Commissioner Vote Sheets

3. Final SRM cc: Chairman Jackson Commissioner Dicus Commissioner Diaz Commissioner McGaffigan OGC EDO PDR DCS

c VOTING

SUMMARY

SECY-97-274 RECORDED VOTES NOT APRVD DISAPRVD ABSTAIN PARTICIP COMMENTS DATE CHRM. JACKSON X X 12/18/97 COMR. DICUS X 12/30/97 COMR. DIAZ X 01/07/98 COMR. McGAFFIGAN X X 12/19/97 COMMENT RESOLUTION In their vote sheets, Chairman Jackson and Commissioners Dicus, Diaz, and McGaffigan approved the staff's recommendation.

Chairman Jackson and Commissioner McGaffigan provided comments, which have been incorporated into the guidance to staff as reflected in the SRM issued on January 20, 1998, and its enclosure.

. NOT ATION VOTE RESPONSE SHEEI TO: John C. Hoyle, Secretary FROM: CHAIRMAN JACKSON

SUBJECT:

SECY-97-274 - RESPONSE TO REQUEST FOR RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY STATEMENT ON RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY ADDRESSING JOINT AND SEVERAL LIABLITY OF OWNERS w/ edits Approved X Disapproved Abstain Not Participating Request Discussion COMMENTS:

See attached adits.

/b [wk SIGNATldRE /

Release Vote / X/ December 18, 1997 _

DATE Withhold Vote / /

Entered on "AS" Yes No

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date Gary J. Newell, Esq.

Spiegel & McDiarmid 13"? Mm York r. venue, N. W.

WuNrrwen D. C. 20005 4798 RE: FINAL POLICY STATEMENT ON THE RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY CYar Mr. Newell:

By letter dated October 14,1997, you filed " Publicly Owned Systems' Request for Reconsideration or, in the Attemative, Motion to Delay Effectiveness of a Portion of the Final Policy Stat sment in Order to Receive Additions Public Comment", on behalf of eight muracipal and cooperatiwly owned electric utility systems (" Publicly Ovtned Systems"). The Publicly Owned Systems requested that the Commission reconsider that portion of the Final Policy Statement which addressed joint and several liability of co-owners / licensees of nuclear plants.

For the following reasons, the Commission declines to reconsider or delay the effectiveness of s that portion of the Final Policy Statement.

The Final Policy Statement did r.ot create a binding rule or regulation. It in no way altered any private contractual arrangements. Moreover, it expressed no change in prior NRC practice it set forth a view that the NRC may, under unusual, specific circumstances, consider imposing joint and several responsibility on co-owners / licensees of net. lear planta. A statemor,t of policy creates no binding regulation or rule for licensees. See Limerick Ecology Action v. NRC, 869 F. 2d 719,736 (3rd Cir.1989). Thus, no rights or obligations of licensees are affected by the policy statement.

In addition, the NRC has not stated that it will abrogate contractual relatior.a creating ;vo-rata responsibilities or interfere with a pro-rata division of responsibility, in fact, the NRC acknowledged that pro rata division of responsibility is the norm, and shm',d remain the operative standard. Ra+her, the NRC expressed the view that in ext - edinary circumstances, where public health and safety is adversely affected, it would cons %r imposing joint and several responsibilW. This does not re present a departure frorr previous Commission practice.

See, e.g., Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2),

L CLI-88-10,28 NRC 573 (1988g The Final Policy Statement is fully consistent with the "Froposed Rule on Financial Assurance 62 Fed. Reg. 47588 (September Requirements for Decommissioning Nuclear 10,1997)), wherein the NRC noted that the imposition of join Power Plantg(t and several liability for decommissioning costs may not be necessary because the Commission considers the level of financial assurance for decommissioning to be adequr+e. Thus the NRC saw "no need to impose an additional regulatory obligation of joint liability on co-owners or co-li:ensees."

62 Fed. Reg. 47588 at 47504. If the Publicly Owned Utilities, nevertheless, beneve there is some inconsistency between the proposed rule and the Final Policy Statemerit, they may offer

-2

!i- Gary J. Newell l (n 7 v

i such comment with respect to the proposed rulef jThe Final Policy Statement does not impose any regulatory obligabon on licensees. As hbove, it is a statement of policy, not a binding rule. It merely leaves open the possitri that under certain unusual circumstances, the NRC may consider imposing joint and several 'lity.

The Commission sees no need to delay the ectiveness of tiet porbon of the policy statement pending add #tional comment. The ccwsr period for the draft policy statement, which was open from September 23,1996 until F 3,1997, provided ample time for comment on all issues raised. Itis unlikely that an comment period would provide information or insight on this issue not previously ht to the attention of the Commission For the foropoing reasons, the C mission declines to reconsider or delay implementation of the Final Policy Statement.

1 Sia:erely, John C. Hoyle, Secretary

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N OT ATIO N VOTE i RESPONSE SHEET TO: John C. Hoyle i Secretary of the Commission l >

4 FROM: COMMISSIONER DICUS

SUBJECT:

SECY-97-274 - RESPONSE TO REQUEST FOR j RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY FTATEMENT ON RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY ADDRESSING JOINT AND SEVERAl. LIABILITY OF OWNERS l

l Approved _X_ Disapproved __ Abstain Not Participating _ _ Rsquest Discussion COMMENTS:

fn t u$L M eu in SIGRA7Q88 Release Vote / X / --

be Jo, 1995 DATE

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Withhold Vote / /

Entered on "AS" Yes 1 No ASO393%7 \p

, NOT ATIO N VOTE RESPONSE SHEET TO: John C. Hoyle, Secretary FROM: COMMISSIONER DIAZ

SUBJECT:

SECY-97-274 - RESPONSE TO REQUEST FOR RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY STATEMENT ON RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILITY INDUSTRY ADDRESSING JOINT AND SEVERAL LIABLITY OF OWNERS Approved xx Disapproved Abstain Not Participating Request Discussion 3

COMMENTS: wo C:DW

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SIGNATUREQ

~ dd Release Vote / x f l ~7 - 9 5 DATE Withhold Veie / /

Entered on "AS" Yes No 4Er#%W t P-

. NOT ATION VOTE RESPONSE SHEET- )

l TO: John C. Hoyle, Secretary FROM: COMMISSIONER MCGAFFIGAN

SUBJECT:

SECY-97-274 - RESPONSE TO REQUEST FOR l RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY STATEMENT ON RESTRUCTURING AND ECONOMIC DEREGULATinN OF THE ELECTRIC UTILITY INDUSTRY ADDRESSING JOINT AND SEVERAL LIABLITY OF OWNERS j fL h -

Approved X Disapproved Abstain Not Participating Request Discussion CbMMENTS:

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ELO4h SIGNATURE //U U U-Release Vote l N/ \ 1, l'thl' 7

DATE I Withhold Vote / /

Entered on "AS" Yes X No 97^2 wrA3a

J date Gary J. NewsN, Esq.

Spiegel & McDiarmid 1350 NewYork Avelue, N. W.

Washingten, D. C. 20005-4798 RE: FINAL POUCY STATEMENT ON T;1E RL JRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTluTY INDUSTRY Deer Mr. Nowou:

Byletter dated October 14,1997, you flied " Publicly Owned Systems' Request for Reconsideration or, in the Allemative, Motion to Delay EfilerAlveness of a Por1 ion of the Fhel Policy Stoloment in Onler to Receive Additional Public Comment", on behalf of eight nmanicipal and -:+g+ud; owned electric udBty systems (" Publicly Cwned Systms"). The Publicly Owned Systems requested that the Commission reconsider that portion of the Final Policy Statement which addressed joint and several lisbuity of co owners 4iceneses of nucieer plMs.

For the following reasons, the Commission docunes to reconsider or deley the effectiveness of that portion of the Final Policy Statement.

The Final Policy Stoloment did not create a binding ruls or reguistion. It in no way altered privets contractual anangements. Moreover, it expressed no change in prior NRC lt set forth a view that the NRC moy, under unusual, specific cinnamelances, consider joint and sovmal responalbiNty on co ownersAlconeses of nucieer plants. A statement of policy creates nr., binding reguistion or rule for licensees. See Lkr>vick Ecology Acdon v. NRC, 889 F. 2d 719,738 (3rd Cir.1989). Thus, no rights or obligelicm of licensees are affected by the policystatement .

In addition, the NRC has not stated that it wiu abrugets contractuel relations creating prtwate responsibulues or interfere with a pnwale division of responeitdIty. In fact, the NRC acknowledged that pnHals division of responeitdW9 the nonn, and should remain the Mp M operseve stonderd. Rather, the NRC aspressed the view that in adraongnery circumstances, pahere oubuc heesh and safety is adversely aNected, it would consider imposing joint and (8 several term L This doss not represent a depature fWsn previous Commission proches.

$g See, e.g., Puhsc S6 vdos Company c(New HampsMrs (Seeksook Stebon, Units 1 and 2), .cF CLl-8810,28 NRC 573 (1988),

+11 & 1

, The FinalPolicyStatementl'sfuBy with the" Proposed Rule on Amurance

, Requirements for r'+x_, i'n':+iq Nuclesr Power Plants" (82 Fed. .47588 (Septemtw 10,1997)), wherein the NRC noted that V..--f!F of joint and sever habEltyfor bacouse the Cer,,E' *:9E- '-f+. the level of f+x{

noenc. % '_ fore  :' +iq+x..1r:-;..e costs may not be d.o be e Tnus ihe NRe now no need impose an additional regulatory obhgelion of joint EdbiRty on co owners or codicensees."

82 Fed. Reg. 47588 at 47594. If the Publicly Owned Utill6es, nevertheless, believe there is some 1w 'r 1.cy between the proposed rule and the Firal Pokcy Statement, they may oNor

_ _ _ _ _ _ _ _ _ _ _ _ _ __m___-_-_ - - - - - - _ _ - - - - _ - - - - - - - - - - - - - - - - - - - - - - - - - _ _ - - - - - - -

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7 Gary J. Newed 2-i f

l auch commentwith roepect to rule. The Final Policy Statement does not impose any reguleictyobigation on es. As stated above, it is a statement of policy, not a l'

V% rule. It merelyleaves '

the possibility that under certain unusual circumstances, the

NRC may considerimposing shd several habihty, 4

The Commission sees no need to delay the effectiveness of that portion of the policy shtement

Pending adc9tione! comment. The comment period for the draft policy statement, which was open from September 23,1996 until February 9,1997, provided ample ame for comment on all

leeues raised. It is unlikely that an additional comment period would provide information or insight on this issue not previously brought to the attenbon of the Commission.

For the foregoing reasons, the Commission declines to reconsider or delay implementation of the Final Policy Statement.

l Sir core, John C. Hoyle, Secretary s

1 1

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g)s t a o p< '

[ e UNITEo STATES

, NUCLEAR REGULATORY COMMISSIGN

, [ E WASHINGTON.D C. 20MS 0001 D '

January 20, 1998 k ....

SECRETARY

/

MEMORANDUM TO: L. Joseph Callan Executive director for Operations Karen D. Cyr e ral ns 1 FROM: ohn C. le

SUBJECT:

STAFF REQUIREMENTS: SECY-97-274 - RESPONSE TO REQUEST FOR RECONSIDERATION OR DELAY OF IMPLEMENTATION OF THE PORTION OF THE FINAL POLICY STATEMENT ON RESTRUCTURING AND ECONOMIC DEREGULATION OF THE ELECTRIC UTILlTY INDUSTRY ADDRESSING JOINT AND SEVERAL LIABILITY OF OWNERS The Commission declined to reconsider or delay implementation of its Final Policy Statement on the Restructuring and Economic Deregulation of the Electric Utility Industry as requested by eight municipal and cooperatively owned electric utility systems, and approved the proposed recponse to Gary J. Newell, ESO, of the firm Speigel and McDiarmid, subject to the enclosed editorial revisions. The revised letter to Mr. Nev. ell should be forwarded for the signature of the Secretary of the Commission.

(SECY Suspense: 01/30/98)

(EDO/OGC) cc: Chairman Jackson Commissioner Dicus Commissioner Diaz Conimissioner McGaffigan CIO CFO OCA OlG Office Directors, Regions, ACRS, ACNW, ASLBP (by E-Mail)

PDR DCS c SECY NOTE: This SRM, SECY 97-274, and the Commission Voting Record will be made publicly available 5 working days from the date that the letter to Newellis signed and dispatched.

I blNdNo%- s}y

2 EDITOPIAL CHANGES TO NEWALL LETTER (SECY 97-274)

. Paragraph 2, line 2: Insert 'or policy" after ' practice" at the end of sentence 3.

. Paragraph 3, line 6: inst,rt

• in order to address the health and safety issue" after

' responsibility' at the end of sentence 3.

. Paiegraph 3, line 8: substitute a period for the mmma at the end of the sentence.

• Paragraph 4, line 2: Move the comma inside the final the quotation mark in sentence 1.

. Paragraph 4, line 3: Insert ' broad

• before " imposition

• in sentence 1.

. Paragraph 4,line 4: In ort ' generally" after " Commission" in sentence 1.

. Paragraph 4: End paragraph 4 with sentence 3. Begin new paragraph 5 with the following insert: "The Commission did not intend to create additional uncertainty rgarding liability, especially recognizing the present climate of electric utility restructuring. Rather, the Commission desires to clearly state possible courses of action should circumstances dictate." Sentences 4,5, and 6 of existing paragraph 4 should be added to new paragraph 5, subject to insertion of *, and gives notice of," after "open' in sentence 6 (line 11, existing paragraph 4).

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