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Transcript of 870205 Oral Argument in Bethesda,Md Re Emergency Planning Exercise.Pp 1-100
	ML20210J845
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Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	02/05/1987
From:	; NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
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{{#Wiki_filter:ORGN O UNITED STATES 1 NUCLEAR REGULATORY COMMISSION IN THE MATTER OF: DOCKET NO: 50-322-oL-5 LONG ISLAND LIGHTING COMPANY (Shoreham Nuclear Power Station, Unit 1) \\ OU LOCATION: BETHESDA, MARYLAND PAGES: 1-100 DATE: THURSDAY, FEBRUARY 5, 1987 fp6 / 0\\ {k flLL 66 ( D s ACE-FEDERAL REPORTERS, INC. Official Reportm 444 North Capitol Street Wasbington, D.C. 20001 'DFS kochk $[888jg (202) 347 3700 DR NATIONWICC COVERACE i

7230 01 01 1 marysimons 1 UNITED STATES OF AMERICA ,r \\ () 2 NUCLEAR REGULATORY COMMISSION 3 BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD 4

g 5

In the Matter of: 6 LONG ISLAND LIGHTING COMPANY

Docket No. 50-322-OL-5 7

(Shoreham Nuclear Power ~s (EP Exercise) 8 Station, Unit 1) 9

X 10 Nuclear Regulatory Commission 11 5th Floor Conference Room 12 East-West Towers 13 4350 East-West Highway g-U 14 Bethesda, Maryland 20814 IS Thursday, February 5, 1987 16 The oral argument in the above-entitled matter 17 convened, pursuant to notice, at 9:30 o' clock a.m.

18 BEFORE: 19 ALAN S. ROSENTHAL, Chairman 20 Atomic Safety and Licensing Appeal Board 21 U. S. Nuclear Regulatory Commission l 22 Bethesda, Maryland 20555 23 l 24 l 254 ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nanonwide Cosetage 8@33m

7230 01 01 2 corysimons 1 GARY J. EDLES, Member im !.m) ' 2 Atomic Safety and Licensing Appeal Board 3 U. S. Nuclear Regulatory Commission 4 Bethesda, Maryland 20555 5 HOWARD A. WILBER, Member 6 Atomic Safety and Licensing Appeal Board 7 U. S. Nuclear Regulatory Commission 8 Bethesda, Maryland 205'55 9 APPEARANCES: 10 on Behalf of Long Island Lighting Company: 11 DONALD P. IRWIN, ESQ. 12 Hunton & Williams 13 707 East Main Street 14 P. O. Box 1536 15 Richmond, Virginia 23212 16 On Behalf of Suffolk County: 17 LAWRENCE COE LANPHER, ESQ. 18 KARLA J. LETSCHE, ESQ. 19 Kirkpatrick & Lockhart 20 South Lobby, 9th Floor 21 1800 M Street, N.W. 22 Washington, D.C. 20036-5891 23 24, i () ACE-FEDERAL REPORTERS, INC. 202 347.)?00 Natenwide Ceerage m)W

7230 01 01 3 marysimons 1 On Behalf of the State of New York: (_)_ 2 RICHARD J. ZAHNLEUTER, ESQ. 3 Special Counsel to the Governor 4 Executive Chamber 5 Room 229 6 State Capitol 7 Albany, New York 12224 8 On Behalf of FEMA: 9 WILLIAM R. CUMMING, ESO. 10 GEORGE W. WATSON, ESQ. 11 Federal Emergency Management Agency 12 500 C Street, S. W. 13 Washington, D.C. 20472 14 On Behalf of the NRC: 15 EDWIN J. REIS, ESQ. 16 BERNARD M. BORDENICK, ESO. 17 U. S. Nuclear Regulatory Commission 18 7735 Old Georgetown Road 19 Bethesda, Maryland 20814 20 21 22 23 24 (Z) ACE-FEDERAL REPORTERS, INC. 202 147 3700 Nattonwide Coserage 80lk336 646

l 7230 01 01 4 marysimons 1 PROCEEDINGS o) l 2 JUDGE ROSENTHAL: This Board is hearing oral g, 3 argument today on the petition of the Federal Emergency 4 Management Agency seeking leave to appeal from portions of 5 the Licensing Board's December 11, 1986 order in the 6 emergency planning exercise phase of this operating license 7 proceeding involving the Shoreham Nuclear Power Station. 8 More particularly, FEMA challenges the admission 9 to the proceeding of Contentions EX-15 and EX-16 advanced 10 by the intervenors, Suffolk County, et al. 11 The oral argument is governed by the terms of our 12 January 21 order. As provided therein, each of the 13 participants has been allotted 30 minutes for the f 14 presentation of its or their argument. 15 The order of presentation is FEMA, the applicant, 16 Long Island Lighting Company, the intervenor, Suffolk 17 County, et al., and the Nuclear Regulatory Commission 18 Staff. FEMA and the applicant may, if they so desire, 19 reserve a reasonable portion of their time for rebuttal. 20 The members of this Board are fully familiar with 21 the background of the controversy as well as with the 22 appellant positions of the respective parties as developed 23 in their briefs. 24 Counsel should therefore proceed immediately to 25 the heart of their arguments. In this connection the Board ACE-FEDERAL REPORTERS, INC. 202 347-)?00 Nationside Coverage 800 33 4 646

7230 01 01 5 marysimons 1 will expect counsel to focus upon the questions read to / ~ !, ) 2 them on the telephone yesterday. Those questions are 3 these: 4 1. Whether FEMA's status in this proceeding 5 entitles it to challenge the admission of the contentions 6 in issue. 7 2. Whether in any event there is sufficient 8 justification for interlocutory review of the admission of 9 those contentions. 10 In that connection, FEMA counsel will be expected 11 to particularize the irreparable programmatic harm that 12 FEMA assuredly will suffer unless the contentions are 13 excluded from the proceeding at this time, n i/ 14 3. Whether the admission of the contentions was 15 erroneous. 16 I will now ask counsel to identify themselves 17 formally for the record, and I will start with Mr. Cumming. 18 MR. CUMMING: My name is William R. Cumming. IM 19 the counsel for the Federal Emergency Management Agency. 20 With me this morning is George Watson, Associate General I 21 Counsel for the Federal Emergency Management Agency. 22 JUDGE ROSENTHAL: Thank you, Mr. Cumming. 23 Mr. Irwin. 24 MR. IRWIN: My namo is Donald Irwin. I am with the law firm of Hunton and Williams, the Richmond office, l rs 25 l ACE-FEDERAL REPORTERS, INC. 202 347.)?00 Nationwide Coserage RA))M6M

T7230 01 Ol' 6 .marysimons 1 and I am the counsel for Long Island Lighting Company. .l ) 2 ' JUDGE ROSENTHAL: Thank you, Mr. Irwin. ~ 3 Mr. Lanpher.. 4 MR. LANPHER: -I am Lawrence Coe Lanpher appearing 5 for Suffolk County. With me is Karla J. Letsche of our law 6 firm of Kirkpatrick and Lockhart also. 7 I advised the Board yesterday by telephone call 8 that due to some scheduling dif ficulties it was possible 9 that Ms. Letsche will be presenting the argument instead of 10 me, and in fact she will present the argument. 11 JUDGE ROSENTHAL: Very good, Mr. Lanpher. We 12 will be happy to hear from Ms. Letsche. 13 Mr. Zahnleuter.. ("% \\J 14 MR. ZAHNLEUTER: My name is Richard J. Zahnleuter 15 and I represent the State of New York and Governor Mario 16 Cuomo. 17 JUDGE ROSENTHAL: Are you intending to 18 participate in the argument? 19 MR. ZAHNLEUTER: No, sir. 20 JUDGE ROSENTHAL: All right. Thank you. l 21 Mr. Reis. l l 22 MR. REIS: My name is Edwin J. Reis. I represent 23 the NRC Staff. With me at counsel table is Bernard M. j l l 24 Bordenick. i 25 JUDGE ROSENTHAL: All right. l l ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 304336-6646 ..~.n.. ....~.s

7230 01 01 7 m3rysimo'ns 1 Now do I assume that there has been no alteration r3 '(y 2 on the part of FEMA and the applicants of the 30-minute 3 allocation for each of those parties? 4 MR. CUMMING: The only alteration, Judge 5 Rosenthal, is the fact that we would like to reserve 10 6 minutes of the 30 minutes allocation to FEMA for rebuttal. 7 JUDGE ROSENTHAL: All right. 8 Now do you want to reserve part of your time, Mr. 9 Irwin? 10 MR. IRWIN: Yes, sir, I would. 11 JUDGE ROSENTHAL: How much? 12 MR. IRWIN: Approximately 10 minutes. Frankly, I 13 believe the issues have been well and thoroughly briefed /7 kl 14 and I don't expect to use the 20 minutes that I would 15 otherwise use. .a 16 JUDGE ROSENTHAL: Well, that's heartening. 17 (Laughter.) -18 On the other hand, the Board may consume some of -19 your time with questions. So I wouldn't plan on an early l 20 departure. l l 21 (Laughter.) 22 All right, Mr. Cumming, we will hear from you. 23 24 5 () l l ACE-FEDERAL REPORTERS, INC. u 202-347 3700 Nationwide Coverage 800 3E%86 . m...

7230 01 01 8 l mOrysimons 1 ORAL ARGUMENT l m() 2 ON BEHALF OF THE FEDERAL EMERGENCY MANAGEMENT AGENCY 3 MR. CUMMING: Once again for the record my name 4 is William R. Cumming and I am counsel for the Federal 5 Emergency Management Agency on this matter. 6 I would also like to state on the record that I 7 have never been employed or associated with any of the 8 parties in this matter. I do not have any financial 9 interest in either the nuclear power or elect generating 10 industry. 11 JUDGE ROSENTHAL: We were prepared to assume as 12 much. 13 (Laughter.) O 14 MR. CUMMING: To direct the focus of my argument 15 to particularly the Board's questions as stated previously, i 16 does FEMA's status allow it to challenge the admission of .17 contentions, FEMA footnoted in its brief in Footnote one 18 that its status before this proceeding was unclear. 19 Actually, FEMA's status has never been unclear in 20 its own mind. We believe that our status before the 21 Licensing Boards and the Appeal Boards are governed by the 22 Memorandum of Understanding between the Federal Emergency 23 Management Agency and NRC, the most current version of 24 which was. signed and made effective April 18th, 1985. pg 25 JUDGE ROSENTHAL: Where do you find in that G ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 900-336-6 9 6

l 7230 01 01 9 carysimons 1 Memorandum of Understanding a basis for FEMA's entitlement /~~ '()- 2 to challenge the admission of contentions? I couldn't find 3 anything in that Memorandum of Understanding that could 4 possibly serve as that basis. 5 MR. CUMMING: We believe that we have no basis to 6 challenge the admission of contentions because we are not a 7 party. We are a non-party. In fact, we have agreed with 8 the filing of the staff that was filed on December 2nd, 9 1986 concerning the Licensing Board order of November 19th 10 which dealt with our status. 11 The Board has treated us as a party for whatever 12 reasons appear because counsel for FEMA had vigorously 13 tried to represent his agency and witnesses before that (9 x' 14 proceeding. 15 JUDGE EDLES: Mr. Cumming, if you are not a 16 party, and I recognize that the Memorandum of Understanding 17. says you are not a party to our proceedings, how are you 18 here? 19 MR. CUMMING: Because we believe that the Board 20 has discretion, the Appeal Board has discretion pursuant to 21 its own authority to determine an issue of considerable 22 interest, a generic interest, and the standards are 23 documented in a case that went back, the Marble Hill case. 24 JUDGE ROSENTHAL: But that was brought by a 25 party. Supposing that somebody walked in off the street (g %) l I ACE-FEDERAL REPORTERS, INC. 202 347 3700 NationwideCo erage 800-336-6646

7230.01 01 10 marysimons 1 and said that they had read this Licensing Board decision g) (, 2 and they thought that decision was dead wrong and in the 3 public interest the Appeal Board order reverses. 4 Now do you think that our discretion would extend 5 to entertaining that kind of complaint from somebody who is 6 a total non-party to the proceeding? 7 MR. CUMMING: Conceivably. Actually what has 8 happened in this case, and the FEMA status goes back, as 9 you know, before the Boards and the NRC back to 1980. 10 There is a need for consistent-policy treatment of FEMA 11 based on an Appeal Board clarification of our status. 12 With respect to your discretion, if in fact FEMA, 13 and FEMA is involved in this proceeding for a variety of 14 reasons. One is apparently the full Commission, which had 15 authority to conduct, evaluate, review, decide and make a 16 finding of reasonable assurance on its own, that that it 17 was necessary and appropriate for FEMA to conduct that 18 exercise. i 19 Pursuant to an exchange of correspondence, FEMA 20 did in fact because of its understanding of its obligations 21 under the Memorandum of Understanding conduct jointly with 22 the NRC an evaluation of the exercise of February 1986. 23 JUDGE ROSENTHAL: I understand all that, but I 24 don't understand what relevance that has to your standing i 25 as a non-party to complain of the admission of these l (-)e s_ ACE-FEDERAL REPORTERS, INC. E-347-3700 Nationwide Coserage 800-336-6686 m

7230:01 01 11 .marysimons 1 contentions, and in that connection I would like to ask you (m () 2 this. Did you request the staff, the NRC staff to file a 3 petition for directed certification because, as you know, 4 the staff's current position is that while they disagree 5 with you on the merits of the controversy, they do believe, 6 so they have told us in their brief, that this matter 4 7 warranted appellate resolution at this time. 8 Now isn't there something in the Memorandum of 9 Understanding or somewhere else to the effect that you 10 folks participate in these proceedings through the staff, 11 -the NRC staff and, if so, I would have thought that your 12 remedy here would have been to have asked the staff to call 13 upon us to review this. 14 MR. CUMMING: We did ask the staff and it is so 15 stated in our filing with the Board. 16 JUDGE ROSENTHAL: All right, and the staff turned 17 you down. 18 MR. CUMMING: That's correct. 19 JUDGE EDLES: But, Mr. Cumming, to follow up on i 20 Mr. Rosenthal's question, the Memorandum of Understanding 21 does say that if there are disagreements between the 22 lawyers representing FEMA and the NRC staff those 23 disagreements are resolved through the administrative ' 24 . hierarchies by General Counsel on the NRC sido and a FEMA 25 representative on the other. j v f ACE-FEDERAL REPORTERS, INC. -202 147 3700 Nationwide Coverage 80 4 336-6646

7230 01 01 12 marysimons 'l Why should we now get into the act? I understand . ss - (,) ' 2 your argument that we have discretion to do certain things, 3 but in terms of the standing point, why don't we simply say 4 let the Memorandum of Understanding put to you sort of an 5 administrative resolution of these fratricidal battles, so 6 to speak, with the NRC staff and take it up with the 7 General Counsel or whoever? 8 MR. CUMMING: The differences cannot be resolved. 9 JUDGE ROSENTHAL: I think that we understand your 10 position on that issue. 11 Perhaps at this point it would be profitable for 12 you to go on and explain to us just what is the irreparable 13 programmatic harm that your agency will suffer unless the O' 14 contentions are excluded from the proceeding now, and I 15 stress at this time. 16 MR. CUMMING: To restate the question, is there 17-sufficient justification for interlocutory review by the 18 Board based on the irreparable harm that FEMA will suffer 19 unless the contentions are excluded at this time, was based 20 on a variety of reasons which I will try and articulate to 21 the Board. 22 First of all, FEMA as a policy matter believes 23 that given its limited resources it must give the fullest 24 attention to currently operating nuclear power plants, 25 currently licensed nuclear power plants. t ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 804336-6M6

L7230 01 01-13

marysimons 1

.The. reallocation of resources from operating to }(). 2 non-operating-plants dictated!by our having to justify in ~ 3 essence what we did not do rather:than what we did do may 4 have_an impact on our capability of dealing with currently T 5 operating plants. 6 JUDGE'EDLES: Does that mean'you are going to 7 have to put other or different witnesses on the stand and: 8 people are going to have to talk about things that would 9 not otherwise be committed to this hearing? Is that what' '10 you mean? 11 MR. CUMMING: The witnesses that FEMA has 12 designated, and let me remind the Board that no staff 13 witnesses were ever designated for the proceeding. FEMA 14 designated witnesses on the-basis that it understood its 15 role was to support, explain, justify, if you will, what it 16 had done on the day of the exercise. 17 There is in fact some indication that the Board 18 fundamentally misunderstood the concept of emergency 19 planning, and I say that for the following reason. FEMA 4: 20 has never tested all observable elements in a plant in a 21 single test. 22 JUDGE EDLES: Mr. Cumming, I think I understand 23 that. Please see if you can come back and help me with 24 ,where exactly is the irreparable injury here? I mean you 25 said to me that FEMA is going to have to reallocate its O ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nation aide Coverage 800 33M646

7230 01.01 14 .marysimons 1 _ limited resources. I am very sympathetic to that argument, () 2 but you'have to tell me how it is going to do that. 3 MR. CUMMING:.The reason it will have to do that 4 is many of the witnesses and the people involved with 5 documenting what is already before the Board as an issue in 6 the admitted Contentions 15 and 16 we believe will require 7 FEMA to devote resources, the same resources that would be 8 involved with support of the witnesses in the hearing in 9 order to make a credible presentation and explain 10 accurately on the public record exactly why we did or did 11 not do something. 12 We also expect and anticipate that the whole 13 history of emergency planning will in fact be reviewed by O s' 14 that Board and that the applicant will attempt to review 15 whether in f act this exercise compared f avorably or 16 unfavorably with other exercises conducted by FEMA in the 17 past. That will necessitate an extensive and lengthy 18 document production as well as witness testimony giving a 19 rationale as to why in fact FEMA did or did not do 20 something in the past concerning other exercises. 21 JUDGE ROSENTHAL: So your irreparable injury is 22 at bottom the necessity to expend additional resources in 23 terms of witnesses and people who collect documents and the 24i like. 25 MR. CUMMING: That is one basis and we have O ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coverage 80433M646

7230 01 01 15 marysimons 1 others. (~n ( J-2 JUDGE ROSENTHAL: All right. What are your other 3 bases besides this necessity to devote additional 4 resources? 5 MR. CUMMING: The other bases consist of several 6 things. First of all, there is an implication in-having to 7 litigate those contentions that FEMA must give an absolute 8 assurance as to what it did because it will be forced to 9 explain why it did not do something and that this contrast 10 is from reasonable assurance. 11 JUDGE ROSENTHAL: What is the irreparable injury 12 that stems from that? 13 MR. CUMMING: It's irreparable because it damages () 14 the credibility of the Federal Emergency Management Agency 15 with respect to the public's understanding of its role in 16 emergency planning, and it significantly impacts on the 17 credibility of the reasonable assurance we give to the 18 Commission when we in fact sign off on the dotted line, so 19 to speak, with respect to either a plan or exercise. 20 JUDGE EDLES: And you believe that you will not 21 be able adequately to explain that to the Licensing Board 22 and ultimately to us and the Commission? Is that where the 23 confusion will lie? 24 MR. CUMMING: We have already completed, or 25 tomorrow discovery closes on the OL-5 proceeding. Our O ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-336 6646

'7230 01 01 16 marysimons 1 witnesses have been fully deposed on their testimony or ~rx -(_) 2 what their outlines in the testimony are on 15 and 16, and 3 based on what we have seen from the depositions, the answer 4 is yes. It has an impact on our credibility. 5 JUDGE EDLES: Now you have confused me more. You 6 tell me discovery is about to come to a close and they have 7 already deposed all the witnesses. So whatever harm to 8 FEMA in terms of document production in depositions, all of 9 'that is going to be over tomorrow; is that correct? 10 MR. CUMMING: Discovery is a different issue than 11 presenting an argument at trial or hearing. 12 JUDGE EDLES: All right, but to the extent that 13 part of the irreparable injury is, as you mentioned earlier O \\' 14 I believe, you're going to have to produce lots of 15 documents and different people are going to have to be 16 served up and all of all, you are now telling me that, by 17 the way, all of that is going to be over tomorrow. 18 So even if we move with blazing speed here and 19 get an opinion out dismissing the contentions tomorrow or 20 the next day, I mean the damage is done, or part of the 21 damage is done. 22 MR. CUMMING: We would argue that in fact 23 irreparable harm may have already occurred in that in 24 testimony under oath there were questions raised concerning (~g 25 FEMA's conduct of this exercise versus other exercises, U ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 804336-6M6

7230 01~.01. 17 carysimons 1 whatever that may be. In fact, additional resources, and I ( 2 .must say that current operations are being disrupted by 3 what we_ feel we will have to present in the hearing. 4 JUDGE EDLES: Give me an idea now of what 5 additional resources are going to be expended'for the trial 6 of this. I mean you have presumably indicated the .7 witnesses who. are going to appear, and they have-been 8 deposed perhaps and documents produced. Are you going to 9 . serve up other witnesses that we don't yet know about? 10 MR. CUMMING: No. We ara'not going to-change the ,11 designated witness, but we are talking about the length of 12 time --- 13 JUDGE EDLES: So it's a matter of the length of-O 14 time they are going to be on the stand, for three days 15 instead of one day; is that what you're saying? 16 MR. CUMMING: No, that is not what FEMA 17 anticipates. If the Board were able to represent that FEMA 18 was on and off the stand in three days with respect to the 19 other parties' interest in our witness, that might in fact 20 be correct. But we believe that in fact because of 21 Contentions 15 and 16 we will have a substantially more 22 lengthy proceeding, our witnesses will be on the stand far 23 longer than three days, and in fact perhaps even months. 24 JUDGE EDLES: How much longer is far longer? 25 MR. CUMMING: I just said, maybe months. ) I ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverase 800 33HM6

7230 01 01 18 marysimons 1 JUDGE EDLES: And if we get these two contentions () 2 out of there they will not be on for months; is that what 3 you're telling me? 4 MR. CUMMING: I would say it substantially 5 confines the scope of the proceeding to what we did on the 6 day of the exercise and not what we did not do and why we 7 did not do it. 8 JUDGE ROSENTHAL: The staff seems to think that 9 you have taken these contentions beyond the bounds that the 10 Licensing Board intended for them. Indeed, the staff now, 11 as you know, supports the admission of the contentions. 12 Do you think that the staff has misread them or 13 misread the Licensing Board's intent? O \\> 14 MR. CUMMING: I would state, and I am not arguing 15 to the technicalities, that FEMA just in drafting 16 testimony and preparing witnesses is uncertain as to how 17 the fundamental flow criterion, which this Board in 18 Footnote 71 in the Sharon Harris Plant proceeding, and I 19 think it's ALAB -- it's around 840 or 845, I'm sorry I 20 don't have the citation right at hand, discussed what a 21 fundamental flaw is, which is mentioned in each of these 22 contentions. 23 Let me read just briefly: "Although at the time 24 the decision below was rendered the Commission had not 25 spoken on the use of a fundamental flaw test, it has since 1 m ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coserage 800 336 6M4

7230 01 01 19 marysimons 1 expressly approved the standard. (See Long Island Lighting () 2 citation.) The Commission therein made it clear that the 3 term ' fundamental flaw' means a deficiency which precludes 4 a finding of reasonable assurance that corrective measures 5 can and will be taken." It goes on. 6 In fact, in our post-exercise assessment at page 7 8 our definition of deficiency is remarkably similar. It 8 states: " Deficiencies are demonstrated and observed 9 inadequacies which cause a finding that offsite emergency 10 preparedness was not adequate to provide reasonable 11 assurance that appropriate protective measures can be taken 12 to protect the health and safety of the public living in 13 the vicinity of a nuclear power f acility in the event of a iG i-14 radiological emergency." 15 JUDGE EDLES: So what you're saying is that you 16 call a deficiency is what the Sharon Harris Board called a 17 fundamental flaw and they are roughly the same. 18 MR. CUMMING: That's right, and we found five 19 deficiencies in the LILCO exercise. 20 JUDGE EDLES: And you are presumably prepared to 21 discuss deficiencies in the plant I gather from your brief. 22 MR. CUMMING: That's correct. 23 JUDGE EDLES: So where is the problem here? 24 MR. CUMMING: The problem as we started on this fS 25 issue was how was FEMA irreparably harmed. The answer is u ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage StollMM6

7230 01 01 20 marysimons 1 once we took our slice we found there were deficiencies. O 2 You in essence by admissien of those conteneiens are asxine 3 us in one way to prove a negative, and it basically 4 involves FEMA in the role of trying to explain and justify 5 what it did not do. 6 It's very comfortable with what it did. I know 7 of no precedent where one Federal agency has an 8 administrative body that examines what other agencies did 9 not do, but I can see that this might be --- 10 JUDGE ROSENTHAL: All right. You've got a 11 position on the merits. You say you are very comfortable 12 with what FEMA did. Why doesn't FEMA just present that 13 position to the Licensing Board. If the Licensing Board v 14 construes the FEMA obligation in its initial decision 15 broader than you think it should be construed, there may 16 then be an appellate remedy available to you. 17 What we are dealing with here is why should we l 18 step in at this interlocutory stage. There is a legion of l 19 Appeal Board decisions to the effect that one of the things 20 that we will not look at at an interlocutory stage is the 21 admission of contentions. Now that is a large hurdle for l 22 you to overcome here, and I still have some question as to 23 whether you've done it. 24 MR. CUMMING: Why should FEMA be involved in a 25 lengthy and complicated proceeding in which it has no v ACE-FEDERAL REPORTERS, INC. m 3.,.31. ~ _u. m.,. m >> -

7230 01 01 21 ma'ysimons 1 control over the time frame in which its witnesses will r (~% (_f 2 testify to explain on the record beyond the scope of its 3 post-exercise assessment? 4 The NRC staff signed off on the exercise pursuant 5 to the MOU. They approved it. 6 JUDGE EDLES: FEMA, excuse me, participated in 7 the earlier phases of this proceeding I assume? 8 MR. CUMMING: That is correct, on the plan. 9 JUDGE EDLES: On the plan, and how long were your 10 witnesses on the stand there? 11 MR. CUMMING: At least several weeks as I 12 understand it. 13 JUDGE EDLES: So in other words, we are looking Ok-) 14 forward presumably to yet another several weeks no matter 15 what we do here. I mean is that a reasonable inference to 16 draw. 17 MR. CUMMING: You are characterizing this as 18 FEMA's time involvement. FEMA's time involveme'nt is in 19 fact a factor, but I should state that FEMA must go on the 20 record for a lengthy time to explain if these contentions 21 are admitted and if evidence of other proceedings are shown 22 as to why we did or did not do something, the public will 23 be concerned as to why we gave reasonable assurance if in 24 here hypothetically we did something more arguendo than we 25 did in the past of why we didn't do that at other sites. O ACE-FEDERAL REPORTERS, INC. 202347.)?00 Nationwide Coserage kn))&fM6

7230'01 01 22 marysimons 1 Incidentally, I should state on the record that-tje 2 this is not something that FEMA is trying to keep secret. 3 In a lengthy analysis of scenario development,. exercise 4 design and problems with emergency planning, the General 5 Accounting Office on August ist, 1984 issued a report 6 called "Further Actions Needed To Improve Emergency 7 Preparedness Around Nuclear Power Plants" where'many of 8 these same issues were highlighted. 9 JUDGE EDLES: Mr. Cumming, again, I'm not 10 unsympathetic to your arguments that we ought not to be 11 mucking around in how FEMA does its business. 12 My problem is if we allow the contentions in, I 13 understand there will be a commitment of resources by your 14 agency over which you have to some degree no control, and 15 that is a troublesome element, I agree. I mean I would not 16 want some other agency telling us how to direct our 17 resources. I understand that. 18 But if it's only some additional minor increment 19 in time, then that's less bothersome than it might 20 otherwise be, and I can certainly understand your notion 21 that if at the end of the case we were to say how you ought 22 to run your business in a way different from the way you 23 think you ought to do it, then that may be, indeed, a 24 problem for the agency. 25 I guess what I don't see, other than the O ACE-FEDERAL REPORTERS, INC. 202 347-)?OI) Nationwde Coterage 90th))46M6

7230 01 01 23 marysimons 1 commitment of time and effort without minimizing that, is ) 2 how your sort of program operations would really be hurt 3 here. 4 MR. CUMMING: In addition to the disruption of 5 current operations, you've put our. credibility at stake. 6 The public wants to know basically what goes on with 7 respect to emergency planning. They are entitled to an 8 explanation. 9 Someone must think that FEMA's credibility is 10 important or the NRC would have conducted this exercise on 11 its own. 12 JUDGE ROSENTHAL: Do you think the admission of 13 these two contentions by the Licensing Board puts FEMA's O 'V 14 credibility --- 15 MR. CUMMING: Absolutely. 16 JUDGE EDLES: Because you are going to be forced 17 to explain to the public as well as us why you did one 18 thing in one place and one thing is another? 19 MR. CUMMING: That is correct. 20 JUDGE ROSENTHAL: Why does it put your 21 credibility at risk? If you've got a good explanation I 22 would think that that would enforce your credibility and 23 not destroy it. -24 MR. CUMMING: Well, that goes back to my previous 25 point. As a policy matter FEMA believes it is more O t ACE-FEDERAL REPORTERS, INC. 1 202 347.)?a) Nat6cnwkte Coserase 8 6 336-( M 6

7230 01 01 24 marysimons 1 important to devote its limited resources to currently () 2 operating plants, and we think that we in this post-3 exercise assessment conducted an adequate evaluation. We 4 are willing to defend what was in the post-exercise 5 assessment. 6 You have to understand, and I think I should 7 state this before I go to your third question on the 8 contentions --- 9 JUDGE ROSENTHAL: You probably better get into 10 that third part. I will extend your time a little bit, but 11 you've already gone over the 20 minutes that you had 12 reserving 10 minutes for rebuttal. (0 13 MR. CUMMING: I'll be happy to retreat, but let l Ns> 14 me just briefly state something with reference to the third 15 question. 16 JUDGE WILBER: Does FEMA make a distinction 17 between an exercise at an operating plant? You're talking 18 about devoting resources to operating plants. Do they make 19 a distinction between an exercise at an operating plant 20 from that which is conducted at a plant that is seeking 21 license? Is there any difference in their analysis or 22 review? 23 MR. CUMMING: It makes no difference on our 24 analysis, but wo are committed by regulatien to conducting 25 periodic exercises, which is an extensive and lengthy ACE-FEDERAL REPORTERS, INC. 202 347.)?no NationwWe Cosera6e 80N)MM6 , = - _ _

7230 01 01 25 marysimons 1 process, at each plant in the country on a cycle. So we (~h (_) 2 are committed to that right now. 3 JUDGE WILBER: But an exercise let's say in the 4 fifth year, and I think you called it a six-year cycle, but 5 an exercise in the fifth year may be no different than an 6 exercise that was conducted prior to the issuance of a 7 licenser is that what I understand? 8 MR. CUMMING: That is correct. 9 JUDGE WILBER: You may no special effort prior to 10 the issuance of a license? 11 MR. CUMMING: That is correct. The reason, and 12 let me explain just briefly. We say six year in our brief 13 because NUREG 0654 has not been formally amended.

However, (D

\\~l 14 FEMA changed its regulation on the exercise cycle almost 15 two years ago, and in fact we do currently operate on a six 16 year rather than on a five-year cycle. 17 I believe the Commission also has a proposed rule 18 which deals with that issue. 19 JUDGE EDLES: The proposed rule deals with a pre-20 license exercise as I recall. 21 MR. CUMMING: That's correct. But we in essence 22 make no distinction. 23 With respect to the third issue, and I will try 24 and deal briefly with it, the GAO report I mentioned 25 earlier was issued in August of '84. ACE-FEDERAL REPORTERS, INC.

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7230 01 01 26 marysimons 1 JUDGE EDLES: Excuse me, Mr. Cumming, with Judge (,) 2 Rosenthal's indulgence maybe he can charge me with a minute 3 or two of your time, but I've got to ask this. The 4 Commission's regulations, Appendix E, distinguishes between 5 a full participation exercise before a license is issued 6 and various other kinds of exercises afterwards. I don't 7 know that they characterize them, although they say that in 8 these follow-up exercises the State at least partially 9 participates on an annual basis. 10 The Commission has drawn a distinction as far as 11 I can read our regulations betwoon what you do at a full 12 participation exercise before the license issued and what 13 you have to do on a continuing basis. (~3 () 14 What you are telling me is that FEMA does not 15 draw that distinction. As far as you are concerned all of 16 those things are roughly the same. 17 MR. CUMMING: That is correct. 18 I should briefly state that there is a 19 parallelism betwoon the two regulatory schemos in that 44 20 CPR 350.5 roads precisely the samo as 10 CFR 50.472 I 21 believo it is. We also at 44 CFR 350.2J define full 22 participation. 23 JUDGE EDLES: Where is that defined? 24 MR. CUMMING: 350.2J of 44 CFR. 25 Prior to the Union of Concerned Scientists casos g-)S L l ACE-FEDERAL REPORTERS, INC. 202 347.)?00 Nationwkle Coserage RXh))MM6 A--.... -

7230 01 01 27 marysimons 1 exercises as I understand it were not litigable. That is ( ) 2 one of the reasons that FEMA has concerns about whether 3 this is a road map for what we may anticipate in the 4 future. 5 The regulatory schemes of the two agencies do 6 dif fer and in important respects. Now one of the reasons 7 that FEMA was unable to make a bottom-line finding is that 8 its regulatory scheme prohibits it. It has never been 9 amended to deal with utility only plans. 10 However, significantly we have constantly 11 believed that NRC does have the authority to review utility 12 only plans, and we have tried to support that to the extent 13 that we believed we could legally and as a policy matter. 14 JUDGE EDLES: I don't think anyone is in 15 disagreement on that point. We all. agree that utilities 16 can file plans and they can be reviewed by the NRC. 17 MR. CUMMING: If I may just have two minutes, 18 Judge Rosenthal, I will try and clean up. 19 The Union of concerned Scientists which we read, 20 too. In fact, I found out about the case when I first saw 21 it in the Federal Second. FEMA was not party to that 22 case. FEMA's understanding of that case is that the court i 23' left to the NRC's discretion as to what was material in a 24 licensing with respect to exercises. 25 In CLI-86-11 the Commission for the first time O ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nanonwate roverage k n )) M A46

7230 01 01 28 marysimons 1 refined what it felt was material. What we think is in i em() 2 fact material to the Commission is what they understand 3 FEMA finds material in an exercise. That is why we think 4 we were requested to participate in and conduct an 5 evaluation of the Shoreham exercise. 6 FEMA is important even though arguably in the 7 regulatory scheme, and we defer completely to you on this, 8 there is a provision 50.47C1 which indicates that the 9 failure to meet the planning standards, and that is what 10 the exercise is all about, it is in fact just a test of a 11 portion of the planning standards of the observable portion 12 of the planning standards, an argument can be made as to 13 why if 15 and 16 go to why we didn't test certain of the -) 14 observable portions --- 15 JUDGE EDLES: Exc0se me for interrupting. 15 and 16 16, at least as I read them, and tell me where I'm wrong, 17 say simply the commission's regulations require you to 18 conduct a, full participation exercise before we issue a 19 license. This here wasn't a full participation exercise 20 and therefore doesn't. comply with the regulation. I think 21 that's it in a nutshell. 22 Saying that, by tho way, it's not a fuli 23 participation exercise, it doesn't do this, it doesn't do 24 this, it doesn't do this and it doesn't do this. Why isn't 25 that a litigable contention? I guess I don't un6arstand O ACE-FEDERAL REPORTERS, INC. 202 347-)?(1) Natkm*6dt Cottragt StXk))&%M )

t 7230 01 01 29 marysimons 1 that. I mean why isn't compliance with the Commission's ,,() 2 emergency planning rule something that the Licensing Board 3 ought to be able to look at? 4 MR. CUMMING: Basically all the other planning 5 elements and, first of all, I mentioned the two sections, 6 44 CFR 350.5 and 10 CFR 50.47-2 are parallel.

There, 7

unfortunately, is not direct translation of compliance with 8 those planning standards although there is suggested [ l 9 guidance in NUREG 0654 and synchronization with what is a 10 specific exercise deficiency. 11 So, in other words, the Board is forced to try 12 and rationalize two disparate schemes and it's a difficult 13 task. f'% 14 Now FEMA can only operate based on what it knows 15 and feels that it is the responsibility of NRC to determine 16 how FEMA's operation integrates in its operations in both 17 the adjudicatory scheme as well as the regulatory scheme. 18 FEMA's open. We never published a regulation concerning 19 how FEMA would deal with the utility only plan. 20 Although our legal analysis is that we were l 21 obligated to support NRC because NRC had the obligation 22 legally to in fact conduct and review that plan. l 23 JUDGE WILBER: Does FEMA consider this Shoreham 24 exercise a full-participation exercise? l r-) 25 MR. CUMMING: But-for the lack of participation ( (/ l ACE-FEDERAL REPORTERS, INC. m,.3,,, m. m. a. e,,,. mn.

7230 01 01 30 marysimons 1 by State and local government, FEMA considered this to be () 2 both a full-scale, a term which has been used on occasion, 3 or a full-participation exercise. 4 JUDGE ROSENTHAL: Thank you, Mr. Cumming. I'll 5 provide you with the 10 minutes for rebuttal. 6 MR. CUMMING: Thank you very much, Your Honor. [ 7 JUDGE ROSENTHAL: Mr. Irwin. 8 ORAL ARGUMENT 9 ON BEHALP OF THE LONG ISLAND LIGHTING COMPANY 10 JUDGE ROSENTHAL: I'm going to say at the outset, i l 11 Mr. Irwin, that I was rather surprised to find very little, i 12 if any, discussion in our brief about anything other than 13 the merits of the admission of these two contentions. <~ l k >T 14 I didn't see your brief address either the 15 question as to whether FEMA has standing to complain about 16 the admission of contentions or oven perhaps more important 17 the question as to whether interlocutory review is 18 appropriate here given the long line of Appeal Board i 19 precedents to the effect that we just do not review on an 20 interlocutory basis the admission of contentions. 21 I mean your brief just didn't address those 22 issues, and I'm somewhat surprised to find that it didn't t 23 given the fact that you were supporting the FEMA endeavor 24 to have us review this matter interlocutorily. 25 MR. IRWIN: Well, I guoss the answer to that is ACE-FEDERAL REPORTERS, INC. m.m.,m,

s. _ u. a.,,.

7230 01 01 31 marysimons 1 f airly straightforward, Judge Rosenthal. We didn't take ()) 2 the appeal. We think obviously that the admission of the 3 contentions was incorrect. LILCO did not take the appeal 4 and we thought we could best contribute on the merits of 5 the argument. 6 The intervenor's brief was filed the same day as 7 ours and had the Appeal Board invited response to briefs, 8 we certainly would have contributed to a discussion of that 9 subject. 10 JUDGE ROSENTHAL: Wasn't consideration given by 11 LILCO to seeking interlocutory appellate review on the 12 directed certification route which would have at least 13 obviated the problem of FEMA's standing? (~T N1 14 MR. IRWIN: Yes, sir, we gave that consideration 15 and we rejected it simply on a judgment call basis. 16 We have, frankly, a set of concerns that 17 intertwine with those of FEMA, and I may as well put one of 18 them right on the table right. 19 Right months ago the Commission directed that an 20 expedited proceeding be conducted and we acon't even 21 finishod with discovery yet. 22 All along we havo had to make judgment calls. 23 We, for instance, wished to have summary disposition as a 24 phano of the proceeding below and the Licensing Board said 25 that's fine, it's a free country, but it will cost you at ACE-FEDERAL REPORTERS, INC. 202147.)hu Nanonwkle Coverese

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7230 01 01 32 marysimons 1 least two months before you get to hearing. () 2 The Commission's regulations require us to obtain t l 3 an exemption if we don't have a decision out of a Licensing 4 Board within a year af ter an exercise. It will be more 5 than a year af ter the exercise before we even set foot in a 6 hearing room with testimony in hand. 7 So we made judgment calls, and we frankly decided t 8 against appealing, not because we thought that the 9 Licensing Board was right, but as you can tell from our 10 brief we think they were dead wrong on a very important 11 issue. But, frankly, we thought we would get through the i 12 end of this quicker by long process we took and then by 13 taking an interlocutory appeal. ( 14 JUDGE EDLES: Mr. Irwin, give me your 15 professional judgment as to how much additional time is 16 going to be taken by the litigation of these contentions? 17 MR. IRWIN: Mr. Edles, that is hard to predict, 18 but let me try. I can't recall exactly how long FEMA was 1 i 19 on the stand the first time. The definition of "several" 1 20 in the dictionary is I believe between three and seven, and i 21 FEMA was on the stand somewhere within that period I 22 believe. I 23 JUDGE EDLES: Is that days or weeks? 24 MR. IRWIN: Weeks, sir. I think it is probably 25 closer to three than to savon, but it's still a substantial l ACE-FEDERAL REPORTERS, INC. m. 3.,.,,. m _ u. e,.,... ..o3 - 1 1

7230 01 01 33 marysimons 1 amount of time. s () 2 These two contentions change the nature of this 3 proceeding from being focused on what was done by 4 approximately 1,100 personnel from Long Island Lighting 5 Company and other organizations on February 13, '86 to what 6 was not done and why not, and what the standards for 7 comparison of the Shoreham exercise against over 100 other 8 exercises are. It radically changes. It's not just an 9 issue. It's not simply the indicia'of an issue, but it's 10 an indicia of a v ole new dimension to a proceeding. 11 So what I'm saying I guess is that I think it 12 could be a very substantial addition of time to FEMA's 13 case. !'s - 14 JUDGE EDLES: I understand that, but the 15 Commission's regulations say that there is supposed to be a 16 full-participation exercise before you get an operating 17 license. Why can't an intervenor come in and say you, 18 LILCO, have not conducted a full-participation exercise? 19 Maybe you can dispose of it on summary disposition and 20 maybe you can put in evidence and clearly demonstrate it is 21 a full-participation exercise. Mr. Cumming says it is. So 22 I assume he will be able to demonstrate that. I don't 23 underetand why this is the kind of thing we ought to kick j 24 out of the contentions. 25 MR. IRWIN: I think you have to go back to ACE-FEDERAL REPORTERS, INC. x.m.r., s._a. o.,.

7230 01 01 34 marysimons I looking at what the Commission intended to be litigable ,,(,) 2 exercises, and to come back to address for a second why the 3 Appeal Board ought to consider this issue here. 4 This is the first intensely litigated piece of 5 exercise litigation that has ever occurred. It is in many 6 ways a threshold case. This is probably not the last 7 interlocutory appeal or attempt at one that the Appeal 1 8 Board will see. Therefore, it is important that issues of 9 this kind be considered. 10 This issue opens a whole new dimension in the 11 case. You have to go back to what the Commission said. 12 When the Commission was remanded in the UCS case it was 13 given leave by the court to exercise its-historic latitude Akl 14 in determining what was in and what was out of litigation, 15 and the Commission stated that the basic, and I'm reading 16 here from 50 Federal Reg. 19323, "The basic effect of the 17 court's decision and of the rule change is that the results 18 of pre-exercising emergency preparedness may be subject to 19 litigation." 20 It said exactly the same thing substantially in 21 CLI-86-ll where it said, and I quote again, "Under our 22 regulations and practice the staff review of exercise 23 results is consistent with the predicted nature of 24 emergency planning, and it is restricted to determining if 25 the exercise itself revealed any deficiencies which ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 80433MM6

7230 01 01 .35 nyrysimons 1-preclude a finding of reasonable assurance." ( x '. } )' 2 Now what we have gotten into here is not the 3 exercise itself, but the process by which an exercise is 4 developed. t, 5 Now any applicant has a peripheral role in the 6 process of exercise formation, but it,is FEMA operating 7 pursuant to a Memorandum of Understanding, to NUREG 0654, 8 to its own Guidance Memorandum 17 that basically shapes 9 objectives for this exercise and as for other exercises. 10 There is no absolute cookie cutter, Mr. Edles. 11 There are 170 some aspects of an emergency plan that are 12 evaluated. FEM considers only between 60 and 70 of them 13 to be observable, it has only 30 some objectives and it ()) \\_ 14 doesn't have all those objectives in every exercise. It's 15 an inherently discretionary and expert process. 16 ' JUDGE EDLES: Well, I'm not suggesting that this 17 wasn't the full participation exercise and a FEMA witness 18 can get on the stand and say, look, all we need is to look 19 at 30 items and we can tell you whether everything will 20 work well, and maybe that's right. I'm not disagreeing 21 with that. b 0 22 Khy I don't understand is why you don't want us 23 to hear that? j 24 MR. IRWIN: It's an extraordinary commitment of a 25 resources and I submit an inappropriate one where there is g

J l

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7230 01 01 36 m2rysimons 1 no allegation that the process itself miscarried. You have () 2 two expert agencies, each of them acting within the scope 3 of its expertise engaging in a normal process. 4 Suffolk County and the other intervenors have 5 expressly disclaimed any allegation that the process of the 6 exercise formation miscarried. They've said they basically 7 did it at Shoreham just as they did anywhere else. 8 JUDGE ROSENTHAL: What's wrong, Mr. Irwin, with 9 the analysis of the staff? Let me quote from the staff's 10 brief at page 17. They say "There.is also no question, the 11 staff submits, but that the sampling must be broad enough 12 to give reasonable assurance that the emergency plans can 13 be implemented. As the Licensing Board has articulated its 14 interpretation of Contentions EX-15 and 16, this is 15 precisely the issue admitted for litigation, whether the 16 exercise was broad enough to be a proper test of the plan." 17 Now is the staff wrong in its understanding of 18 the Licensing Board's interpretation of those contentions 19 or does it simply make no difference that even if that is 20 the thrust of the contentions they're still out of the ball 21 park? Which is it? 22 MR. IRWIN: It's I think something close to the 23 latter, Mr. Rosenthal. The staff rightly understood the 24 Licensing Board and the Licensing Board and the Licensing 25 Board misapprehended the Commission. fg (J ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 8043364646

7230 01 01 37 marysimons 1 The Licensing Board in its December 3rd order, or ,em ) 2 the December lith order, I can't remember and I get the -l 3 dates mixed up, but the second order it issued acknowledged 4 that there is a facial difference between exercise results 5 and exercise formation, but in Licensing Board's view the 6 two concepts blur. I submit the Licensing Board is simply 7 wrong there. 8 JUDGE ROSENTHAL: May I interrupt there. The 9 Licensing Board is wrong in its belief that it is 10 appropriate to litigate whether the exercise was broad 11 enough to be a proper test of the plan? Is that a 12 litigable issue or is it not? 13 MR. IRWIN: It's not categorically non-litigable, ("} s-14 but there is not a properly framed contention here. The 15 Commission made it prima facie non-litigable by focusing on 16 exercise results, but what you have here --- 17 JUDGE EDLES: Let's take a different exercise 18 result ~ scenario. 19 MR. IRWIN: Okay. 20 JUDGE EDLES: FEMA and LILCO call each other on 21 the phcne and say we're going to conduct an exercise on 22 such and such day and how will it be conducted. It will be 23 conducted, but I will call you. I'm in charge of LERO. At 24 9 o' clock I will place a person-to-person phone call to gg you, Mr. FEMA and we will for 15 minutes discuss whether we 25 V ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 804336-6646 = - - - - -

I -7230 01 01 38 morysimons 1 think this LILCO plan can work, and at the end of that you j3 -(_) 2 will issue a report _saying yes, you think it can or no, you-3 think it can't. 4 The Commission contemplated that if that were the 5 case that no one would be able to say, by the way, that 6 type of exercise doesn't qualify under the Commission's 7 rules. 8 MR. IRWIN: No, sir. You have jus', illustrated 9 exactly the type of contention which I would say is 10 admissible, but there is no such allegation here. 11 If those facts were known, and if there were also 12 an allegation, as I submit there should be, that this is 13 contrary to the practice which was developed over six years (~h 'l 14 in hundreds of exercises as well as to good common sense 15 and sufficiency of testing, that would be an admissible 16 contention because it would essentially say a process --- 17 JUDGE EDLES: But, Mr. Irwin, I think that the 18 intervenors, I don't think you are giving them ample 19 credit. They have not, as far as I can see, at least in 20 the contentions, said, look, this isn't the kind of 21 exercise that has been conducted a hundred times before. 22 What they have said is quite simply the Commission's rules 23 require a full-participation exercise and this isn't a full-24 participation exercise. Ergo, the Commission's rules 25 aren't satisfied. 0,, i ACE-FEDERAL REPORTERS, INC. l 202-347-3700 Nationwide Coverage 800-336-6 4 6

7230 01 01 39 m2rysimons 1 Now I don't quite understand why that isn't -() 2 roughly speaking a correct characterization of their' 3 contention. '4 MR. IRWIN: I think it is a correct 5 characterization of their contention,.Mr. Edles. What I am '6 saying is that in the context of exercise development, 7 which is a complex process for'which there is a pattern and 8 practice extending over six years. 9 The mere allegation that something is not a full-10 participation exercise gets one inherently into judgmental 11 and expert processes, and without some allegation that the 12 process miscarried somehow, I think what you are.doing is 13 opening up a vast uncharted threshold or wilderness of 14 litigation which I frankly don't think the Commission 15 contemplated in its remand. 16 JUDGE ROSENTHAL: Now wait a minute. I would t .17 _like=to get.back to the way that the staff characterized 18 the issue. The staff suggests that the issue before the 19 Licensing Board presented by these contentions is whether 20 this exercise was sufficient so that the results of the 21 exercise could form a basis for a finding that there is 22 reasonable assurance that adequate protective measures can 23 and will be taken. 24 Now my question for you, Mr. Irwin, No. 1, is can i t ~25 the Licensing Board consistent with Commission decisions ! C? ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-336 4 46 -1 c-

'7230 01.01 40 I-[ - () 2 exercise'was sufficient so that the results of the exercise ~ 3 could form a basis for a finding of reasonable assurance 4 that adequate protective measures can and will be taken? '5 Is that an issue open to the Licensing Board? i 6 MR. IRWIN: Yes, sir, and.I have no quarrel with 4 '7 that as it's focused on the results of'the exercise. 8 ' JUDGE ROSENTHAL: All right. Now supposing that 9 we were to come down with a' decision in which we said we j -- 10 interpret Contentions 15 and 16 as raising that question, 11 and that-Licensing Board'in litigating those contentions,. 12 that is what youLare to litigate them against, against that 13 question, whether the exercise was sufficient, et cetera, 14 just as the staff has set forth at page 17 of their brief. 15 .Now if we were to tell a Licensing Board that is 16 what we interpret the contentions to mean and that is what 17 you are to. proceed on the basis of,Lis'there any problem? 18 MR. IRWIN: I guess I have to do something that l 19 counsel isn' t permitted to do. I have to ask the Board a 20 question. 21 JUDGE ROSENTHAL: You're perfectly free to do so. 22 MR. IRWIN: Is the Board to be confined to l 23 evaluating the exercise within the four corners of what was 24 demonstrated, or may it look beyond what was demonstrated 25 or attempted to be demonstrated to decide whether that ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-3.W6646 - t r: n - - ..=

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/ -7230 01 01-~ '41 'marysimons 1 . exercise so. shaped'is:potentially sufficient? h 2 ' JUDGE EDLES: Without attempting to avoid your. 3 question, Mr. Irwin, my guess is that it is going to be 4 hard to distinguish those two things in the abstract in 5 advance.. If you ask a question at the hearing and you can 6 see more or less where you are going with that line of 7 questioning, I think the Licensing Board at that point can 8 say, look, yes, that's within what the Appeal Board thought I 9 or.outside what the Appeal Board thought. But it is kind 10 of-hard, because I agree with you that there is kind of an 11 overlapping here and to some degree you might have to take 12 a peak at what FEMA had-in mind when it set up this 13 exercise in order to resolve'the question. I {' 14 But why shouldn't we leave that'for the Licensing l 15 Board and for you folks to thresh out at the hearing? 16 MR. IRWIN: Simply, Mr. Edles, because I don't .17 .think that is what the Commission had in mind. The 18 Commission tal'ked about exercise results. It didn't talk i I 19 about exercise formation. There was a process which was in 20 place and has been in place and is an expert process. That 21 process has not been challenged. But what is happening is - l 22 that by the back door that process is being challenged. l 23 JUDGE EDLES: Who decides what elements are to be 24 tested?.Does LILCO serve up its plan or does FEMA say we 25 want tested elements A, B, C, D and E? .O ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 800-33M646 ,..-----,,,.-.,n, .-.....--.-.n . + -.. +.. -, .-.-~.=.w-=...,., a-., ..,n. n.

.7230 01 01 42 marysimons 1 MR. IRWIN: Typically what happens, as I s is that the organization which is going to 2 understand it, 3 be responsible for the conduct of an exercise, be it.a 4 utility, a State, a State plus localities or whatever, 5 tenders to FEMA a proposed set of objectives and a 6 scenario. FEMA also has a proposed set of objectives. In 7 both cases they are derived from standard guidance 8 contained in Guidance Memo 17 or its successor draft, EX-3, 9 which in turn is derived from NUREG 0654. 10 There is a process of discussion and FEMA holds 11 the whip hand in that discussion quite obviously, and the 12 NRC participates in that discussion as do representatives 13 from other agencies. The objectives and the scenario ( L 14 having been agreed upon are kept in absolute secrecy from 15 the players and they then go forward. 16 Now the problem I have with the contentions is -17 that LILCO could have done a hundred percent perfect job on 18 the exercise objectives and a hundred percent perfect job 19 in fulfilling the exercise scenario. But because of the 20 actual structure of the exercise, a process over which it 21 did not have ultimate control, the exercise could te deemed 22 deficient, notwithstanding that FEMA in its expert judgment 23 thought it was sufficient and the NRC signed off on it. 24 JUDGE ROSENTHAL: Mr. Irwin, deficient in what 25 respect? Deficient in the respect that the results of the O ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage NO336-6646

7230 01 01 43 marysimons 1 exercise could not form a basis for a reasonable assurance ()' 2 finding? 3 MR. IRWIN: Insufficient I suppose in that the 4 exercise as agreed upon and help could not form a 5 sufficient structure for a finding no matter how perfectly 6 that structure was executed on the day of the exercise. 7 JUDGE'EDLES: The real nub of the problem then, 8 as I understand it, is FEMA, the NRC staff and to some 9 degree an applicant get together and decide on the scenario 10 for the exercise acknowledging that the government here has 11 the whip hand, as you described it, and the real problem I 12 take it is now you've got-this Licensing Board 13 secondguessing this intramural decision that had been made f" 14 earlier and that is really where the conflict comes in, 15 isn't it? 16 MR. IRWIN: That's right. At least where there 17 is no allegation that that intramural decision-making 18 process was either fraudulent, insufficient, inadequate or 19 whatever. There is no allegation of that here. 20 JUDGE EDLES: The only allegation here is that it 21 doesn't meet the Commission's regulatory requirements. 22 MR. IRWIN: But that is why you have expert 23 agencies and discretion and presumptions of regularity. If .24 you had a total willy-nilly free-form litigation on 25 everything that is not spelled out to the last jot and ,O ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-336-6646 .. ~.. -

'7230 01'011 44 merysimons 1 ' tittle in the_ Commission's regulations, you.would have I)' 2 every_ licensing case like Shoreham. I mean in all 3 seriousness you've got to exercise some presumptions. 4 The problem with the Board's admission here is 5 that it simply didn't recognize what the Commission said in-6 focusing on results and it did not pay deference to the-7 interagency --- 8 JUDGE EDLES: Now one of the problems _we have, if 9 we are now in agreement as to kind of what's happening, is 10 that you have the NRC staff here at least a player in round 11 one of the exercise construction saying well, we don't 12 really see anything terribly inconsistent in having the 13 Board look at certain things now along the lines that Mr. O-14 Rosenthal has suggested. 15 What do I do with that-line of argument? 16 MR. IRWIN: You recognize two things. One, they i 17 have changed their mind and, two, they've been wrong 18 before. 19 (Laughter.) 20 Nothing is engraved in stone. I think there is a 21-legitimate process in here that ought to be given deference 22 and there is no allegation that the process miscarried. 23 You've got to pay attention to what FEMA says. 24 We have to, and let me add a couple of things to what Mr. 25 Cumming said. O-ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-336 4 86 ..,,--..m.._ = -. .x _,~ 2

7230'01 01 45 m;rysimons 1 FEMA has, as I understand it, a proposed witness () 2 panel of three witnesses. Only one of them is a FEMA 3 employee. The other two are contractors for Argonne 4 National Laboratory. Those fellows work on dozens of 5 plants. If they have prior commitments to operating plants 6 we may not be able to get them for as long as they will be 7 needed. We have already had to delay aspects of this 8 proceeding because FEMA has had other legitimate tasks to 9 perform. It's a significant hardship on FEMA. 10 There is also a cost to the Commission's own 11 processes because if this proceeding is opened up wide than 12 is fairly inferable from the Commission's intent, then 13 every other exercise proceeding, every renewal proceeding ( 14 is going to be subject to the same kind of process. 15 JUDGE EDLES: But we're talking about what, one 16 other case like this? I mean we're not talking about a 17 lot. 18 MR. IRWIN: No, sir. You have biennial exercises 19 at,every operating plant and every operating --- 20 JUDGE EDLES: But how many are there in the 21 pipeline, one more maybe? 22 MR. IRWIN: There are two other plants, as I 23 understand it, that have not received their licenses yet, 24 but after licenses are issued, Mr. Edles, those plants have 25 to have periodic exercises. ACE-FEDERAL REPORTERS, INC. E347-3700 Nationwide Coverage 800-336 4 46

7230 01 01 46 marysimons 1 JUDGE'EDLES: But the periodic exercises, I () 2 thought I agreed with Mr. Cumming that the periodic 3 exercises are under a wholly different scheme, and that's 4 not a full-participation exercise under the Commission's 5 rules, relicensing and all that stuff. 6 MR. IRWIN: No, that's not correct. Some of them 7 do not need to be full-participation exercises, but some of 8 them do. 9 JUDGE EDLES: Under the Commission's rules? 10 MR. IRWIN: Yes, sir, as I understand it. 11 JUDGE-WILBER: Appendix E, what is it, F-1, 12 specifically gives you a different flavor of what the 13 initial exercise should be, that you should test as much as 7m (-) 14 possible, as much as reasonably possible. 15 MR. IRWIN: I believe that is simply the 16 definition of a full-participation exercise, Mr. Wilber. 17 JUCbE WILBER: That definition is down in the 18 footnote, but I'm talking about up in the text of Appendix 19 E where it says you will test as much as possible before 20 the issuance of a license. 21 MR. IRWIN: My understanding is the same as Mr. 22 Cumming about that, namely, that a full-participation 23 exercise is a full-participation exercise. That is 24 distinguished from a so-called partial participation 25 exercise where one simply tests command and control ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-3364 646 i-..- ~

7230 01 01 47 .marysimons 1 functions. <s() 2 In a full-participation exercise one deploys bus 3 drivers, ambulance drivers, traffic control personnel or 4 traffic guidance personnel, one calls hospitals and so 5 forth, and it doesn't matter whether a plant is in pre-6 licensing or post-licensing. 7 In fact, in a deposition two days ago concerning 8 New York State operating plants there have been 12 9 exercises conducted in New York State alone since 1982, and 10 of them New York State and FEMA considered 10 to have been 11 full-participation exercises. So they come up, and if 12 there is an allegation of inadequacy all operating plants 13 are subject to the same kind of thing. 14 Now the route is slightly different, and I 15 presume one would have to go by a 2206 petition rather than 16 having a plant captive in a Part 50 process. 17 JUDGE ROSENTHAL: Does there have to be a finding 18 made by somebody that reasonable assurance exists that 19 adequate protective measures can and will be taken? 20 MR. IRWIN: I'm sorry, Judge Rosenthal, I lost 21 you. 22 JUDGE ROSENTHAL: Does somebody have to make an 23 affirmative finding that there is reasonable assurance that 24 adequate protective measures can and will be taken? 25 MR. IRWIN: Yes, sir. ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-33M646 - = - -

i i 7230 01 01 48 carysimons 1 JUDGE ROSENTHAL: All right. Now does the ,~() 2 exercise play some role in the making of that finding? 3 MR. IRWIN: Absolutely. 4 JUDGE ROSENTHAL: Well, if that's the case, I 5 don't understand why it isn't entirely relevant whether the 6 exercise was in the staff's words sufficient so that the 7 results of the exercise could form a basis for that 8 finding. 9 If you have an exercise that is extraordinarily 10 limited in scope, and it might be nothing more than the 11 LERO official meeting in a tavern over a drink with 12 somebody from FEMA. Obviously the fact that the exercise 13 didn't turn up any flaws would scarcely warrant a finding 14 that reasonable assurance existed. 15 Why can't they go into the exercise, as the staff 16 suggests, for that limited purpose, was the exercise, not a 17 . perfect exercise, but was it at least good enough so that 18 the results, which is what we are interested in, could form 19 a basis for the reasonable assurance finding? 20 MR. IRWIN: There is no theoretical reason why an 21 inquiry is absolutely prohibited. My problem is twofold. 22 One, that the situation you posited is not Shoreham's 23 situation. 24 JUDGE ROSENTHAL: I didn't say it was. 25 MR. IRWIN: But it's important because you make O ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-33MM6 ~

I 7230 01 01 49 mnrysimons 1 it easy. The Shoreham case is not that case. That case I ) 2 would be easy to say, if the guys got together over a beer 3 and they said it would be a good exercise and the liked the 4 plan. Well, on the first day of discovery you would find 5 that out and then you could compare that against the 6 requirements of NUREG 0654 which says as many elements of a 7 plan should be observed as possible. Well, how do you 8 observe them? Well, we looked at the bubbles in the beer. 9 JUDGE ROSENTHAL: We're not that extreme. We are 10 at some point short of that, but what difforonce does it 11 make? Why isn't it always open to inquiry as to whether 12 the exercise was sufficient so that some degree of 13 reliability could attach to the results? ,(J 14 MR. IRWIN: Because while without suggesting that 15 such an inquiry is not permissible, there is no allegation 16 here, no basis for comparison and no standard. All they 17 are saying is you didn't test the sirens and therefore the 18 exer,cise is inadequate. The regulations don't say that. 19 Now I'll be frank to admit to you that if you got 20 to a hearing --- 21 JUDGE EDLES: Why wouldn't that -- excuse me for l 22l interrupting, but why wouldn't that then be simply amenable l 23 to a motion for summary disposition at the proper time? 24l You just come in and say, look, as a matter of law you l 25 haven't made out a case here. That's a little bit ,w N.] ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage S64336-6M6

7230 01 01 50 marysimons 1 different than allowing it in as a contention. rx () 2 MR. IRWIN: As a practical matter, Judge Edles, 3 that was one of the things LILCO contemplated. As I 4 indicated earlier, the Licensing Board felt that a summary 5 disposition process would create a long delay and we 6 didn't. Alternatively you could look at it in a hearing 7 and arguably wrap it up. 8 But you'll notice that there are some 13 9. allegations there each one of which either independent or 10 commingled. There is no allegation that there is a bright 11 line violation of a single regulation. Nowhere does it say 12 that sirens are absolutely required to be sounded or that 13 the Coast Guard is' absolutely required to be --- k. 14 JUDGE ROSENTHAL: Are you now saying there is no 15 assigned basis for the contentions? I didn't understand 16 that that was the thrust of either your position or FEMA's. .17 MR..IRWIN: I am not talking about a specific 18 basis argument, Mr. Rosenthal. What I'm saying is that the 19 determination of what has to be reviewed is an amalgam of 20 an expert process. There is no argument here that it was 21 the nature of that process that miscarried. 22 So in the absence of that kind of allegation, I 23 think what you have got to do is look at what the 24 Commission said, and it talked about results. The sentence i 25 you keep reading to me from Ms. Wagner's brief is a very l ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coverage 800-336-6646

7230'01 01 51 marysimons 1 interesting sentence because it mixes the concept of () 2 results and sufficiency and it doesn't define the term 3 " sufficiency." 4 JUDGE EDLES: Excuse me, let me come back to 5 that. The Commission said we are to look at the results. 6 Let's assume that FEMA and the NRC staff and LILCO got 7 together and decided they are going to put together a 8 partial participation exercise in compliance with the 9 rules. 10 Do you mean to tell me that all we could do under 11 the Commission's case is look at the results of that 12 partial participation although you and I and everybody in 13 the room knows that that doesn't comply with the 14 Commission's rules? That just doesn't seem to make sense 15 to me. 16 MR. IRWIN: The exercise would be known as a 17 partial participation exercise. 18 JUDGE EDLES: They call it that, but you're 19 telling me that I can only look at the results and I can't 20 look to see if the partial participation exercise meets the 21 requirements of a full participation exercise in the 22 Commission's rules. That's what you're saying. 23 MR. IRWIN: No one would, or at least I would 24 never urge that a partial participation exercise be used 25 for the purposes that required a full participation 7sq> ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-336-6646 f ~_

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d( ). 2 JUDGE EDLES: But what you are arguing is that I' I 3 .can't look to see if what you actually exercise is what the 4 Commission expected you to exercise. l 5. MR. IRWIN: No, I don't think that's the case, 6 Mr.~Edles. I think I know what the Commission expected, 4 7 and that was for the expert process of its staff and that 8 of the FEMA staff to create something which was 9 presumptively valid as a structure. Then you go out and 10 test it and we see how the people who actually ran through i 11-their paces did. 12 What I think we are wrestling with is the fact 1 13 that you're not sure and I'm not sure and nobody is a (" ! \\ 14 hundred percent sure of what the Commission said when they 15 said look at the results of an exercise. It may well be 16 that this is a classic issue of the kind that ought to be 17. bucked up to the Commission after this Board has its good 18 crack at it because I submit to you - well, I think I know ~ 19 what the Commission intended, but I'm not omniscient. + - 20 JUDGE ROSENTHAL: I think if you want to reserve 1 21 some time for rebuttal --- 22 MR. IRWIN: I would like to reserve it. 23 JUDGE ROSENTHAL: All right. j 24 We will take a 10-minute recess and then hear i-25 from counsel for the intervenors. () 26 (Recess taken.) ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 800 336 4646 m.

7230 02 02 53 m rysimons 1 JUDGE ROSENTHAL: You may proceed, Ms. Letsche. e's 2 ORAL ARGUMENT k) m 3 ON BEHALF OF SUFFOLK COUNTY 4 MS. LETSCHE: Thank you. Good morning, 5 gentlemen. 6 Basically, I think 'that our position is pretty 7 well laid out in our brief, and I will briefly address the 8 questions which you have expressly posed to us and then 9 respond to any questions that you might ask as a result of 10 the other argument today or our brief. 11 First of all, on the question of whether FEMA can 12 properly bring this appeal because of its status in the 13 case, it has been our understanding, based on the way FEMA (]) 14 has acted, that they have been acting like a party and, 15 therefore, in the process of bringing an appeal and other r 16 things that they have done before the licensing board seem 17 to have been taking on that status with themselves. 18 Therefore, we did not expressly challenge that in response 19 to their appeal. 20 However, if you all find that FEMA is not a party 21 for whatever basis, then as you indicated in some of your 22 l questioning, you should dismiss the appeal. l 23 i JUDGE ROSENTHAL: Well, what is a party? As you 24 l know, interested states and municipalities that invoke the 25 provisions of 10 CFR 2.715.C participate as nonparties. I Cl) i i ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-33M646 .n :- ' c .~ ,e u,

7230 02 02 54 Marysimons 1 think, indeed 2.715.C specifically states that they are not 2 parties, and yet we have held that they have appellate s C 3 rights. 4 Now, if FEMA to be equated with an interested 5 state nonparty, and if so, does it have appellate rights; 6 or it is yet a different breed of cat, so to speak? 7 MS. LETSCHE: Frankly, Judge Posenthal, I can't 8 answer that question because I don't know what breed of cat 9 they are. I think that is the problem here. No one is 10 really sure, given the MOU and given the way things have 11 happened in this proceeding and elsewhere. 12 JUDGE EDLES: You would agree, though, that we 13 are bound by the Memorandum of Understanding that the I '- 14 Commission has drafted with FEMA? O 15 MS. LETSCHE: I don't know what it means to say 16 that you are bound. As I understand that memorandum, it is 17 as you describe it, Judge Edles, that an agreement between 18 two agencies concerning how they will perform certain 19 administrative functions, I don't know, frankly, that that - 20 -in fact, I would assert that that memorandum does not rise 21 l to the level of a regulation and, therefore, can't change 22 what your regulations would require you to do as a 23 procedural matter. i 24 That is why this is a difficult situation, 25 i because you have a purported agreement between two <"N YA i I l ACE-FEDERAL REPORTERS, INC. l 202 347 3700 Nationwide Coserage 80(M36-6646 ~

7230 02'02 55 Merysimons_1 administrative agencies which says something, and then you (] 2 have your regulations and your precedent which tell you 3 something else, and then you have the parties acting 4 perhaps not always consistently with the terms of either 5 one of them. 6 I think the point that I want to make is that if 7 you find that FEMA is not a party as that term is used and 8 defined in your regulations, then you would have to dismiss 9 their appeal. If you find that they have been acting as a 10 party, then you know, that point kind of goes away and you 11 can go ahead. 12 JUDGE ROSENTHAL: Acting like a party, is that 13 the significance, the criterion, whether somebody acts like 14 a party, wears 'a sign saying, "I'm a party"? Just what is 15 it? I don't understand that, " acting like a party" 16 criteria. 17 MS. LETSCHE: Well, I wouldn't want to suggest i 18 that that is a legal criteria that rises to the level of 19 something that is in the regulations or even necessarily in 20 your case law. I guess the point I was making was that the 21 reason we did not challenge that aspect of the FEMA appeal 22 was because of the licensing board's holding below, finding 23 l that in this instance FEMA did appear to be acting as a i 24 l party and therefore that was not a point which we wanted to i l 25 pursue in the appeal.

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7230 02 02 56 MarySimons 1 JUDGE ROSENTHAL: All right. That's cleared up. -( ) 2 Let's move on to the second question. 3 MS. LETSCHE: Okay. I think the bottom line on 4 the whole question of whether or not you should entertain 5 this interlocutory appeal is very clear and is set forth in 6 the cases that, as somebody mentioned before, are legion. 7 There has been no demonstration here at all of any kind of 8 irreparable harm or indication that the admission of these 9 two contentions would have a pervasive negative impact on 10 the structure of this proceeding. 11 In light of that and in light of the fact that 12 even in oral argument FEMA was not able to set forth any 13 irreparable harm that could not be remedied upon a regular () 14 a'ppeal after the trial of the case -- 15 JUDGE ROSENTHAL: Well, let me ask you this. One 16 of the aspects of harm that was referred to by Mr. Cumming 17 was the expenditure of resources. Now, as you know, i 18 Ms. Letsche, when private parties have advanced that kind 19 of claim of harm, it has fallen on essentially deaf ears. 20 Do you think the claim has a sound or ring to it 21 l when it is advanced on behalf of a government agency that i 22 is subject to the strictures of budgetary limitations and 23 l the other things that you think a government agency from i 24 l that standpoint is in the same position as a private i 25 l litigant who talks about resource expenditures? (2) l 4 ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coserage 80 4 336 4 646 w a

7230IO2 02.' 57 MarySimons 1 MS..LETSCHE: With respect to this case, Judge {j 2 Rosenthal, which is the context in which I an answer that 3 question, I think the answer is clearly that that 4 particular claim that it will take up too much resources 5 should be rejected and does not begin to rise to the level 6 of irreparable harm. 7 That is true for several reasons. Number one, 8 the only resource allocation difficulty that I heard 9 expressed here was reference to discovery, which as 10 somebody noted is over, and the possibility that the FEMA 11 witnesses may have to testify for more than a short period 12 of time, which is of course undefined. 13 The fact is that FEMA has identified three 14 witnesses in this case. Only one of them is a FEMA 15 employee. The others two are contractors. That FEMA 16 employee is not even in the radiological emergency 17 preparedness program anymore; he has been transferred 18 somewhere else. So his involvement in this proceeding -- 19 and he is on detail, has been detailed to work as a witness 20 in this proceeding -- has no impact whatsoever on what FEMA 21 is doing with respect to other radiological emergency 22 planning exercises. 23 And whether or not the FEMA witnesses may have to 24 testify for two or three days or two or three weeks -- no 25 one can say that at this point -- is no different from what ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coverage 800 336-6646

7230 02 02 58 Merysimons I could happen in any proceeding. What did happen in the g) 2 earlier proceeding here -- I think they were on the stand y 3 for roughly three weeks at a couple of different time 4 periods. I mean, that is not irreparable harm, the fact 5 that they would have to expend resources. 6 Moreover, the purpose of this proceeding is to 7 analyze and evaluate the results of that exercise to 8 determine if the public health and safety of the people up 9 on Long Island can be protected. Now, FEMA did that 10 exercise, and FEMA has said, "We are going to stand behind 11 our report. We will support it, as we have to do that in 12 the proceeding," and they are doing that pursuant to their ~ 13 agreement with the NRC in the MOU. 14 JUDGE ROSENTHAL: What about their credibility 15 argument? I think Mr. Cumming suggested that if these 16 contentions remained in the case, that that would somehow 17 impact the credibility of FEMA. Do you agree with that? 18 MS. LETSCHE: Well, I have a couple of responses 19 to that. I have to confess I don't quite understand the 20 argument. But if what he is saying is that it would impact 21 ' -- I think he said something like it would impact FEMA's 22 j credibility in giving a reasonable-assurance findino -- the 23 l fact is that here they didn't give one. They refused to 1 24 l make a finding, so that argument doesn't seem even to be 25 Oo ACE-FEDERAL REPORTERS, INC. eum=. - -- s >e 'a c <. so*>>6 ee-

7230 02 02 59 M0rySimons 1 applicable here. (") 2 If he is suggesting it would hurt their (s 3 credibility because they would have to explain to the 4 public what they did, well, frankly, I think it's about 5 time they did that. They refused to hold a public meeting 6 in this case, although they have done that in every other 7 case to explain to the public what they did. If they have 8 to explain it in the course of this proceeding, I think 9 that's fine. 10 I think you were right, Judge Rosenthal, in 11 pointing out that if anything, that should enhance their 12 credibility as opposed to hurting it. 13 The other related point, though, which Mr. (Q/ 14 Cumming brought up, I believe, in this context wa's some 15 suggestion that it would be awful if the FEMA witnesses had 16 to talk about something they didn't want to talk abouti 17 such as other exercises or what they did in other places, 18 or justify why they did something differently here. 19 Well, there are a couple of important relevant 20 answers to that. Number one, other exercises are nowhere 21 in Contentions 15 and 16. They are not mentioned in 22 there. There is no need in writing testimony on 23 contentions to talk at all about other exercises. FEMA is 24 going to write prefiled testimony and submit it. 25 l According to the depositions of their witnesses ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800 336 6646

-7230 02.02. .60 .Marysimons 1 and according to statements that have been made publicly by ( 2 FEMA and'their counsel, FEMA's testimony is going to 3 consist basically of their post-exercise report a'nd some 4 presumably kind of small explanation of that. They don't 5_ need to address anything they don't want to address in 6 their prefiled testimony. 7 JUDGE EDLES: Ms. Letsche, is whether or not the 8 exercise is a full-participation exercise within the 9' requirements of'the Commission'.s regulations, is that a 10 matter of law that will be decided basically in briefs and 11' oral ~ argument, or is that something to which you would need 12 testimony and evidence? 13 MS. LETSCHE: I think it's a combination of the 14 two. I think the factual part is,'as stated in the 15 contentions, there may need to be some explanation of why 16 the failure to evaluate or the failure to' demonstrate 17 certain capabilities in fact prohibits you from making a 18 reasonable-assurance finding. That is related to the 19 express requirement in Appendix E that the point of a full-20 participation exercise is to include testing resources and 21 personnel in sufficient numbers to verify the capability to 22 respond to this scenario. 23 Now, you may need to have factual evidence which 24 l says, "If you don't know what 33 schools are capable of 25 doing, you can't assure the protection of the children." ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 800 336-6M6

7230 02 02 61 Mdrysimons 1 One of the subparts of these contentions at issue us you (] 2 only looked at one school and there are 33 of them out 3 there, and based on what the one school did -- and by the 4 way, you didn't even really observe that one -- you can't. 5 conclude that the kids can be protected. 6 So there is a factual element in that sense.' 7 Obviously, ultimately there is a legal element to it 8 because there needs to be a determination that the 9 regulatory requirement has or has not been met. 10 JUDGE EDLES: You mentioned that your contentions 11 do not in terms address other exercises at all. 12 MS. LETSCHE: That's right. 13 JUDGE EDLES: But implicitly what you are saying, 14 it seems to me, is that what they did here is something 15 different from what they did in the past. 16 Now, can I reasonably assume that you are not 17 going to ask them at trial what did they do when they 18 reviewed other plants? Is that what you're telling me? i 19 MS. LETSCHE: That's not the point of our /, i 20 contention. s/ 21 JUDGE EDLES: Without revealing your litigation / t 22 tactics here, I am trying to get at exactly what you are, ^ e i 23 going to be probing there at the trial. 24 MS. LETSCHE: Well, we will be alleging and J j l e 25' ; demonstrating in our testimony, Judge Edles, that the,' nV t ' e l / ACE-FEDERAL REPORTERS, INC. l / 202-347-3700 Nationwide Coserage 800 336-6646 i, .a

7230 02 02 62 Marysimons 1 failure to demonstrate and to evaluate various capabilities (]) 2 and elements of emergency planning that are set out in 3 those contentions resulted in an inability to find that 4 objectives had been met or that particular regulatory 5 requirements had been satisfied or that a reasonable-6 assurance finding could be made. 7 Now, we don't intend to be saying -- I am not 8 familiar with what happened in other exercises, and the 9 basis of our contentions -- 10 JUDGE EDLES: Excuse me. Would you agree that no 11 two exercises need be identical? I assume that's right. 12, MS. LETSCHE: That is certainly -- yes, I mean, 13 that is.certainly true, and we are not alleging that, as () 14 Mr. Irwin mentioned in his argument, the only way he 15 believes our contentions would be admissible is if we made 16 some kind of a challenge to the process or alleged some 17 kind of fraud, it sounded like he was saying, in the 18 conctruction or the creation of this exercise. We don't 19 allege that. 20 The process was what it was. In terms of l 21 ' negotiating objectives and deciding on a scenario. It may 22 very well have been -- the process may very well have been 23 just like every other exercise. I don't know and I don't 24 care. It was what it was. I 25 j Our point is that what that process resulted in 1 ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coscrage 800-336-6M6

7230 02 02 63 .MarySimons 1 on February 13, 1986, was an exercise the results of which (} 2 are not sufficient to enable you to make a reasonable-3 assurance finding. 1 4 JUDGE ROSENTHAL: In that connection, do you y 5 accept the staff's interpretation that Contentions 15 and 6 16 as set.forth at page 17 of its brief -- this is, as you 7 will~ recall, what I referred to in my dialogue with Mr. 4 8 Irwin? 9 Just to repeat it, "As the licensing board has 10 articulated its interpretation of Contentions EX-15 and 16, 11 this is precisely the issue admitted for litigation: 12 whether the exercise was broad enough to be a proper test 13 of the plan. 14 To the extent that the licensing board will be 15 looking at the scope of the exercise, it is not to 16 determine whether better exercises could be developed, but 17 solely to test whether this exercise was sufficient so that 18 the results of the exercise could form the basis for a 19 finding that there is reasonable assurance that adequate 20 protective measures can and will be taken." 21 Now, do you accept that articulation, as it were, 22 ; of the thrust of Contentions EX-15 and 167 23 ! MS. LETSCHE: With the addition of a reference to 24 ' the fact that the contention, as described roughly by the 25 staff in its second sentence, also includes the question of CE) i l ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 804336-646

17230 02 02 64 Mr.rysimons 1 whether or not the exercise met the regulatory requirements (~). 2 for a-full-participation exercise.. (. 3 JUDGE ROSENTHAL: All right. 4 MS. LETSCHE: Then, with that addition, generally 5 I would agree with that characterization. 6 JUDGE ROSENTHAL: All right. So you agree that 7 the issue is not whether this exercise was a perfect one or 8 . whether this exercise could have been better; the issue is 9 whether this exercise met r.egulatory requirements and was 10 at least broad enough to give confidence that the results 11-will support a reasonable-assurance finding? 12 MS. LETSCHE: I think that is generally correct, 13 yes. x -) 14 JUDGE ROSENTHAL: All right. 15 JUDGE EDLES: Let me come back a moment to 16 Mr. Irwin's point at the very end about what the Commission 17 intended here. Do you agree that one of the things that we 18 have to consider is what did the Commission mean when it 19 said we are to look at the results of the exercise? 20 MS. LETSCHE: Yes. I always have trouble with 21 that because I am not sure that anyone can really get into 22 the Commission's mind and -- 23 JUDGE EDLES: No, I am not asking the substance 24 of what the word "results" raeans, but what I am asking is 25 do you agree that somehow we have to discern what the O-d ACE-FEDERAL REPORTERS, INC. 202 Nationside Coverage 800-336-6M6 .. -347-3700

l 7230 02 02 65 Mnrysimons 1 Commission meant? I am not asking for the moment as to the (} '2' substance of what was in the minds of the Commission. What 3 I am asking is whether or not the word "results," when the 4 Commission said, "You look at the results," whether that is 5 something that we have to try to figure out what "results" 6 means. 7 MS. LETSCHE: In this case, I don't think you 8 need to worry about that at all. You have the UCS decision 9 out there, which says very clearly that intervenors in a 10 licensing proceeding are entitled to challenge any material 11 factors of a licensing decision. Under 5047.A.2, the 12 results of an exercise, FEMA's findings about an exercise 13 are to be considered by the NPC in making its licensing () 14 decision in its reasonable-assurance determination up or 15 down. 16 In this case -- and UCS also very clearly stated 17 that it is the evaluation of an exercise, the results of 18 the exercise -- those terms were both used in UCS -- that 19 intervenors have an absolute right to challenge. 20, In this case, when in addition you have the 21 regulatory requirement which says you need to have a 22. full-participation exercise, and our contentions allege 23 l that the results of this exercise, what this exercise 24 produced, was insufficient data to enable you to make a 25 i reasonable-assurance finding. Cl) l ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coverage 804336-696

7230 02~02 66 -MarySimons-1 JUDGE EDLES: Excuse me for interrupting, but let () 2 me-pick up my train of thought rather than yours. 3' Let's assume that what you are saying is correct, 4 that-the court requires us to look at material elements. 5 Why couldn't the Commission, in construing the court's 6 - mandate, say, "Look, we require a full-participation 7 exercise, and what we mean by that is that a full-8 participation exercise is what our staff and FEMA together 9 decide is a full-participation exercise," and basically, 10 you know, we sort of defer to that technical judgment. 11 Now, why wouldn't that be more or less consistent 12 with what the court -- now, I don't think that the court 13 really thought all of this stuff down all the way -- why ~() 14 wouldn't that be a reasonable interpretation, which would 15 essentially mean that a licensing board ultimately cannot 16 second-guess the administrative determination by FEMA, 17 concurred in by the NRC staff, that this constitutes a full-18 participation exercise? 19 MS. LETSCHE: Okay. I will tell you the one very 20 easy answer to that is that that would be a direct 21 contradiction to the regulations. 5047.A.2 says that i 22 FEMA's findings concerning the results of an exercise are a 23 rebuttable presumption. You can't rebut it if there is an 24 iron-clad assumption out there that you're not allowed to 25 even talk about it or challenge it. I think that would be ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coserage 800-336-6 4 6

7230'02'02 67 'M2rySimons 1 -the result of the analysis you just made, Judge Edles. l{]p 2; I think Mr. Irwin is playing sort of word games 3 here in trying to make some magic out of the word "results" 4 and suggests that when you're talking about the results 5 being a failure to have the data -- which is really'what 6 you're talking about in these Contentions 15 and 16 -- that 7 for some reason that isn't a result. 8 In trying to characterize our contentions as 9 attempting to challenge the process and being unsuccessful 10 in doing that, he is mischaracterizing it. We are not 11 challenging the process; we are challenging what happened 12 during that exercise and saying that it does not provide a 13 basis to make the necessary finding. () 14 JUDGE EDLES: You are saying that the word 15 "results," what the Commission must have meant when it 16 said, "Look at the results of the exercises," does the 17 exercise give us enough confidence to be able to make a 18 reasonable-assurance finding? That is really what the 19 Commission must have meant by the word "results." 20 l MS. LETSCHE: Well, that is certainly part of l 21 l what is a result of an exercise, and particularly when the 1 22 j Commission, even in the famous statement which people keep l 23 l quoting about fundamental flaws, what they talk about is a 1 24 l deficiency in the exercise that precludes a finding of I i 25 l reasonable-assurance. Well, if the deficiency is that you ACE-FEDERAL REPORTERS, INC. l 202-147-3700 Nationwide Coverage 800-336-6M6

-7230.02 02. .68-M2rysimons-1 didn't look at these things or you didn't demonstrate these 2 . things, that precludes the finding, and that is precisely

3 what these contentions at issue allege.

4 I think it is clearly within the requirements of 5 UCS and what the Commission had to say, that these 6 contentions should be admitted for. litigation, as the' 7 licensing board found. 8 JUDGE ROSENTHAL: Let me ask you a question going 9 back-to the second question that we had posed. The staff 10 believes that there is a public interest to be served in 11 this issue receiving appellate resolution now, despite the 12 fact that the staff does not accept FEMA's claims with 13 respect to the impact of the admission of these contentions 14 on FEMA's program. 15 Now, I take it you don't agree with the staff as 16 to that? 17 MS. LETSCHE: That's right. I don't think that 18 the fact that somebody is concerned about something is 19 sufficient to overcome the well-established case law out-20 there governing interlocutory appeals. I think that that 21 is what the staff's argument boils down to in this case. 22 JUDGE EDLES: But the concern is coming through 23 us from a sister federal agency. I mean, parties can 24!. depart from the NRC staff, parties can come in and out of 25 these cases and devote as much money or time or effort as ' ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 800-33MM6

~ --7230102 02 69 MarySimons 1 . kind of they want to, more cn: less. 2 FEMA has agreed to participate. It is an agency } 3 established under its own statute and regulations. It has .4 a presidentially appointed director. 5-Isn't it a little bit troublesome to have 6-licensing boards presumably all around the government 7 telling them, "We need you to commit to eight weeks' worth. .8 of work here as opposed to three weeks' work"? I mean,. if 9 we did that and every agency in the government began doing 10 that with every other agency, I mean, the place would be a 11 zoo or more of a zoo even than it is today. That's a real 12 problem for a federal agency that, frankly, doesn't exist 13 to quite the same degree for private parties who want

()

14 something, you know, want us to do something, and can 15 commit or not commit. 16 MS. LETSCHE: Well, there are two points that are 3 17 relevant to that, Judge Edles. Number one, in this case, 18 the licensing board tried very hard to allay FEMA's 19 concerns, and I think the point that the staff made in its 20 brief was that they did. I mean, the licensing board told l. 21 FEMA that -- and I am quoting from the December lith j 22 decision - "While FEMA may be questioned on its evaluation 23 of the exercise, it may not be questioned concerning 24 whether the exercise meets NRC requirements." I 25 l He also says, " Contrary to FEMA's fears, we have () i 4 ACE-FEDERAL REPORTERS, INC. i l 202-347-3700 Nationside Coverage 804336 M86 , ~,. -... . _,.. _... _. ~ _ _...

7230 02 02 70 MerySimons 1 not opened the hearing to issues concerning its conduct and i(') 2 design of the exercise, nor have we determined if the v 3 exercise must be the best possible." 4 As we said, the contentions don't allege that 5 there is something wrong with your process, and the 6 licensing board reiterated that with FEMA. 7 So I think that is number one, that although 8 there are concerns expressed here, your agency has done as 9 much as seems reasonable to allay those concerns. 10 Number two, I am not sure that this instance, 11 given what FEMA has agreed to do with the NRC under the 12 Memorandum of Understanding and what in fact it did do in 13 this particular proceeding -- that is, conduct a big ("); (_ 14 exercise with the understanding ahead of time that they 15 were going to defend that in the litigation, and everyone 16 knew then that the litigation was going to be a hard-fought 17 one --in that circumstance, I don't think it's quite right 18 to come in and now start saying, " Gee, we don't have the 19 resources," particularly when the question of how much 20 resources are going to be involved here is purely 21 l speculative. I 22 No one standing up here can tell you how long the 23 FEMA witnesses are going to be on the stand until their 24 testimony is filed, and based on what I understand their 25 testimony is going to be, it is not going to be hugely l CE) ACE-FEDERAL REPORTERS, INC. ~ 202 347-3700 Nationwide Coserage 800 336-6M6

t '7230 02 02-71 McrySimons 1 expensive.- AsfI. explained, none of the resources from FEMA L/ 't 2 involved in preparing that testimony are even involved in v. 3 the radiological program. They do have two contractors who 4. are working on it, but their only FEMA employee is not. 5 So I think that, given those circumstances of 6 this case, that you don't have the kind of irreparable harm 7 present that would justify your taking this interlocutory 8 appeal. 9 There is only one'other thing that I guess I 10 would like to add. That.is, in response to-an argument 11 made tar Mr. Cumming suggesting that it was his 12 understanding of how this proceeding should go that only 13 what FEMA found material during the exercise could be ) - 14 challenged. I have two responses I would like to make to l 15 that. 16-Number one, again that makes the FEMA findings - 17 irrebuttable, which would be directly contrary to 5047.A.2, 18' and also the UCS decision. 19 Even more significant, though, is that in this l 20 l case several of the items that are mentioned in these 21 contentions at issue -- that is, the failure to sound the 22 sirens, the failure to test the EBS stations, the failure 23 to look at very many schools, the failure to look at public 24 education materials -- were expressly cited by FEMA in 25 l their post-exercise assessment as problems. ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationside Coserage 800 336-6M6

7230 02 02 72 M rysimons 1 In fact, most of those problems have been stated ('~') 2 by FEMA to require a remedial exercise. \\~J l 3 Now, for FEMA to come up here and say that the 4 intervenors are not allowed to challenge the validity of 5 the initial exercise results because things were not 6 included, when FEMA itself, despite the fact that they 7 called this a full-participation exercise, has said that it 8 is a problem that these things were tested and you better 9 test them in a remedial exercise, is just not right. I 10 wanted to make that point because it is significant. 11 I think the bottom line here is that the 12 requirements to justify an interlocutory appeal have not 13 been met. In addition, if you were to overcome that () 14 hurdle, on the merits the licensing board here was right 15 and it should be affirmed. 16 JUDGE ROSENTHAL: Thank you, Ms. Letsche. 17 ORAL ARGUMENT ON BEHALF OF 18 THE NUCLEAR BEGULATORY COMMISSION 19 MR. REIS: If it please the Board. As Ms. 20 Letsche did, I would like to go directly to the questions 21 the Board has asked and then say that our brief, we 22 believe, is full and complete, and unless the Board has 23 questions we will submit the argument on the brief. 24 First, the first question was whether FEMA's 25 status in this proceeding entitled it to challenge the ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 800 33m

7230 '2 02 73 0 M2rySimons 1 contentions or issues. The first question is, we do not (')) 2 believe FEMA is a party to this proceeding and it is only 'n 3 parties which may appeal; therefore, it does not have an 4 entitlement. 5 JUDGE ROSENTHAL: It's not only parties that may-6 appeal, because interested states are not parties and they 7 may appeal. 8 MR. PEIS: That's right. Nor is it an interested 9 state. It is quite clear when we look at the statutory 10 base of 715 and what the Atomic Energy Act says as to that 11 gave rise to 715 allowing states and municipalities and 12 others to come in and advise the Commission, but the other 13 federal agencies were not thought of as to be states or () 14 municipalities. 15 JUDGE EDLES: But other federal agencies aren't 16 cosigners of Memorandum of Understanding with us for the 17 purposes of participation in adjudicatory proceedings. 18 Isn't that right? 19 MR. REIS: That is quite right, and that is one 20 of the reasons why we think that you should take 21 I discretionary review under 2.718.I. l 22 ! JUDGE EDLES: Your point is what, that it doesn't 23 matter really whether they're a party or not? 24 ! JUDGE POSENTHAL: What I don't understand, I i 25 l Mr. Pe is, is this: FEMA went to the staff, apparently, and '(1) i ACE-FEDERAL REPORTERS, INC. 202 Nat;onwide Coserage 804336-6M6 ..-.-...... -347-1700.. -. - -

7230 02 02 74 M2rySimons 1 asked the staff to file a petition for directed (" 2 certification. The staff declined to do so. J N]/ 3 Now, if the staff believes that this is an issue 4 that warranted interlocutory or appellate review and if the 5' staff further recognizes that FEMA is not a party in this, 6 therefore there may be some problems about FEMA's standing 7 to seek directed certification, it is difficult for me.to 8 understand why the staff didn't say, "Yes, FEMA, we don't 9 agree with you on the ultimate result, but we certainly 10 agree with you that this should be reviewed i'n the public 11 interest. We have standing, clearly, to seek directed 12 certification, and we will do it for you." 13 Now, I don't understand the staff's actions when () 14 it was asked by FEMA to carry the ball when the staff is 15 now telling us that interlocutory review is in the public 16 interest and in our discretion we should conduct it. 17 MR. REIS: When FEMA came to us and asked us to 18 certify this action, this was tied up, in our minds and I 19 think at the time in everyone's mind, with taking a 20 position on the merits of the admission of the 21 contentions. At that time we didn't do it. We still take 22 the position here, because FEMA is a sister federal agency, 23 i because it is especially called out in 5047 as necessary 24 and its opinions necessary for a determination, that it 25 should have directed certification. O ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coverage 800-336-6N6

7230 02 02 75 .MarySimons 1 However, our feelings on the merits were such" (^) 2 that we were not going to go forward and do that. 'v' 3 JUDGE POSENTHAL: You can't file a petition for .4 directed certification simply to obtain an appellate 5 resolution of an issue even if you think that the licensing 6 board's disposition, was correct? 7 MR. REIS: Judge Rosenthal, I can't say that 8 statement is wrong. I think you could. I don't think we 9 did it in this situation. I think our thinking at the time 10 was that, no, we didn't feel the decision below should be 11 upset, particularly given the limitation that the board 12 below put, an explanation the board below gave for its 13 admission to the contention upon reconsideration, and we O 14 didn'e fee 1 ie shou 1d be taken up. 15 FEMA felt so strongly that they did bring it 16 here. Now we think that this board, under its power to 17 certify matters to us, can properly consider this. 18 JUDGE ROSENTHAL: Why? You are familiar, 19 Mr. Peis, with the wrong line of appeal board decisions 20 applying the Marble Hill standard to endeavors to obtain l 21 interlocutory appellate review of admission of 22 contentions. Now, in light of that long line of appeal j 23 board decisions, why should we take this? 24 MR. REIS: Only because FEMA is called out 25 especially in 5047, special status, because it is called (1) l ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800 336-6646

17230 02 02 76 MarySimons 1 out in 5047 and the fact that it comes to us and says it is g-2 'another federal agency which we have a Memorandum of p\\-) 3 Understanding with that we should give deference to, says 4 you should consider this. Yes, I agree that that long line 5 of Marble Hill cases, ordinarily you say -- and it is 6 correct -- that interlocutory review should not be given to 7 the admission of contentions. But we view this because of 8 FEMA's -- 9 JUDGE POSENTHAL: Just because this is FEMA? 1 10 MR. REIS: -- place, because it is a federal -- 11 JUDGE ROSENTHAL: Just because this is FEMA? I 12 mean, are you telling us that if it's a a federal agency 13 -that is seeking this interlocutory appellate review, that () 14 we just put the Marble Hill tests completely to one side 15 and say, "Okay, simply because it's a federal agency, 16 interlocutory review is appropriate"?- 37 I ask that question because, again, in your brief 18 you explicitly state that you don't agree with FEMA as to i 19 the impact on FEMA's program. So that being so, it seems 20 to me what you're saying is it's enough that it's FEMA, i 21 that any time that FEMA or some other federal agency wants l i 22 l interlocutory appellate review they should get it, i 23 l notwithstanding the Commission's general proscription 24 l against interlocutory appellate review, and the appeal I 25 l board's stringent standards in Marble Hill. ! C') ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coverage 800 33H686 ~.

77 ,'7230 02 02 MarySimons 1 MR. REIS: First, again I would not generalize to r'v 2 all federal agencies. I would talk particularly about FEMA -V 3 here because of the place it has in 5047 and because of the 4-Memorandum of Understanding. 5 Now, looking at because of FEMA's concerns here 6 and because its fears were not allayed by the opinion on-7 reconsideration of the board below, I think that those are 8 special circumstances that rise above what we usually talk 9 about, and here the board should take and look at those as 10 a matter of discretion. 11 JUDGE ROSENTHAL: So any time that FEMA has an 12 articulated concern, even if they're not able to 13 demonstrate any basis for that concern, we should lay to p) (_ 14 one side the proscription against interlocutory appellate 15 review and step in and review the matter? Is that what you .16 are telling me? 17 MR. REIS: I am not saying, Your Honor, at any 18 time. What I am saying is that in this case, when FEMA 19 sincerely puts forth a position and seems quite sincere and 20 has pressed this again and again, that, yes, we think it is I 21 appropriate for you to do so. 22 JUDGE ROSENTHAL: So the test is sincerity? Just 23 as long as they are sincere, that we ought to review it, 24 - even if there is no discernible basis for their claim that 25 they are going to be irreparably injured. Is that what I l ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coverage 800-336-6646

i ~7230 02102: -78 MarySimons.1 am being-told?- 2i MR. REIS:. I don't think the sole test'is 3 sincerity. I think sincerity is an important part of it. ~ 4 JUDGE ROSENTHAL: Well, what is the rest of the i 5 test? 6 MR. REIS:. I think the very statements that.they-7 'say and that were partly tested here by the appeal board on 8 the effect on their resources. Now, we say.that their 9. resources would not be affected in the way they say they 10 would.but -- 11 JUDGE ROSENTHAL: But we don't accept that the 12 claim of impact on resources when it's advanced by anybody 13 else. Why should we accept it when it's advanced by FEMA? )( [ 14 Time and time again people have come to us seeking stays or 15 some other form of re' lief, arguing that the erroneous 16 action of the licensing board is going to have a serious 17 effect upon their resources. I think a universal answer to 18 that claim has been, "Too bad. That doesn't constitute 19 irreparable injury." Now, why does it make any difference 20 in this case? 21 MR. REIS: Because it's another federal agency 22 that is specially called out in the regulations that we 23 have to cooperate with and that we look to in the processes 24 of this organization, that the Commission looks to to help 25 it in making its determinations. That's the difference. ! C) i { i ACE-FEDERAL REPORTERS, INC. 202 347 3M Nationwide Coverage 80h336-M46

l 7230H02.02 79 .MarySimons 1 JUDGE ROSENTHAL: So special solicitude goes to .r~) 2 FEMA because they are a partner of ours in the matter of C 3 looking at emergency response plans? Is that really what 4 it comes down to ultimately? 5 MR. REIS: Special solicitude goes to FEMA 6 because they are a necessary witness or' participant in our 7 proceedings on emergency planning, and therefore there is 8 special solicitude for FEMA, yes, sir. 9 JUDGE EDLES: Mr. Feis, could you address for me 10 again the issue of the Commission's regulations which 11 require a full-participation exercise and what I believe to 12 be the suggestion of Mr. Irwin that somehow the 13 determination made by FEMA with the concurrence of the () 14 staff is not open to review by a licensing board in an 15 adjudication? 16 In other words, they call it a full-participation 17 exercise, therefore, what the Commission meant, the 18 Commission knew the process -- and I may be extrapolating a 19 little from Mr. Irwin's argun.ent -- but the Commission knew 20 the process and, therefore, what the Commission did was 21 ' essentially to waive its right to second-guess FEMA on what 22 constitutes a full-participation exercise. 23 l MR. REIS: I don't think that's what the 24 Commission did, Your Honor. 25 JUDGE EDLES: Okay, tell me what they did. CE) ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-33 4 6646

7230 02 02 80 .M;rySimons 1 MR. REIS: I think if we go back first to the (~' 2 amendment to the regulations after the UCS case was \\_). 3 decided, the Commission said -- and Mr. Irwin quoted the 4 provision to the effect that the basic effect of the 5 court's decision on the rule change, which follows, is that 6 the results of prelicensing emergency preparedness 7 -exercises may be subject to litigation. I think there it 8 is not limited to just what people say come out. What we 9 have to see whether those results are valid results because 10 it is only on those results that you go forward under 11 5047.A.2 and reach your reasonable-assurance findings -- 12 those results and other matters. 13 I do not think, in the CLI 8611, where they talk () 14 of fundamental flaw in the plan, they were limiting that. 15 Frankly, the language -- 16 JUDGE EDLES: Well, they talked about fundamental. 17 flaws in the plan. I suppose, had they said what would 18 have happened if they had said " fundamental flaws in the 19 exercise"? 20 MR. PEIS: Well, then there would be some 21 question, yes. I 22 JUDGE EDLES: That might have been different? 23 MR. REIS: Yes. But I think the question arises 24 here before the appeal board because they did say 25 " fundamental flaw in the plan." I tried to go back and o) \\~ i ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800 336 6646

7230 02 02 81 Marysimons 1 trace in the brief, I think with some success, showing that (s) the exercise is always under the heading of " plan," so that N 2 s 3 when we look at the plan and we look at what was probably 4 in the minds in order to -- and what the Commission said in 5 meeting the UCS case -- they were subsuming under the word 6 " plan" the exercise itself because the exercise is required 7 as part of the plan. 8 I think that as well addresses the merits of the 9 appeal, and if the board has no further questions -- 10 JUDGE ROSENTHAL: Do you accept Ms. Letsche's 11 amendment to the statement of the thrust of the 12 contentions, which is found on page 17 of the staff's 13 brief? She suggested that the inquiry also goes to whether () 14 the exercise complied with the Commission's regulat' ions. 15 ,MR. REIS: To the extent that it would not in the 16 same sense as any other minor or noncompliance might not 17 necessarily show you cannot make reasonable-assurance 18 findings. It would have to be a substantial noncompliance, 19 not some minor thing cf a "t" forgotten to be crossed or 20 something along that line. I think that is particularly 21 important in view of the Commission's words and concern 22 ' about there be a fundamental flaw and that we not litigate 23 minor or trivial matters. 24 JUDGE EDLES: But accepting that understanding, 25 l if the Commission's regulations require a full-ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 800-336-6646

7230 02 02 82 M2rysimons 1 participation exercise, it would be at least in the 2 . contention stage valid for an intervenor to say, "No, it ,f S V 3 doesn't comply with the regulations because this isn't a 4 full-participation exercise." 5 MR. REIS: Yes. 6 JUDGE EDLES: Down the road you could say, "Well, 7 that may be right technically, but it's not substantial. 8 It doesn't preclude a finding of reasonable assurance, all 9 of that kind of stuff." 10 MR. REIS: That's right. 11 JUDGE ROSENTHAL: Okay. You have said it very p 12 well. 13 JUDGE WILBER: Does the staff consider this a () 14 full-participation exercise? 15 MR. REIS: Yes, sir. As we say in our brief, we 16 do, and we think the evidence will show that. 17 JUDGE WILBER: Did the staff have input into the 18 development of the exercise? 19 MR. PEIS: Yes, we did. As was explained, LILCO 20 essentially drafts the exercise, drafts the objectives; it 21 ! goes to FEMA; and the RAC committee on which NRC is a i 22 l member, and I think even more with the RAC committee et 23 al., the staff takes part in approving that exercise and 24 l having that exercise amended if it is not satisfied that it 25 will be an exercise that meets the tests of the CE) I i ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800 336-6 4 6 .. ~

7230-02 02 83 7 .Marysimons 1-regulations, which is partly la full-participation exercise. -2 Looking at here also the Commission's statements 3 in previous decisions such as.CLI 8313, which said, "Yes, 4 you shall exercise this plan and you sha11'know that the 5 state has not really taken part in it," I think that those 6 allowances for the Commission's interpretations of its 7 regulations and-it said this proceeding should go forward 8 is taken into account in judging what is a full-9 participation exercise. 10 But the fact is that it has to, with all the 11 other decisions of this board and the Commission, meet the 12 standards of full-participation exercises. 13 JUDGE ROSENTHAL: Thank you, Mr. Reis. O 14 Ma. as1s= rhan* vou. 15 JUDGE ROSENTHAL: Mr. Cumming, you may have ten 16 minutes for rebuttal. 17 REBUTTAL ARGUMENT ON BEHALF OF 18 THE FEDERAL EMERGENCY MANAGEMENT AGENCY 19 MR. CUMMING: With respect to the staff's 20 argument, FEMA does believe that the board correctly 21 decided that FEMA witnesses could not testify as to what l 22 l this exercise was under NRC regulations. Staff has not 23 designated the witnesses, so I am not certain how that 24 testimony would get into the record at the trial. 25 JUDGE EDLES: I gather even FEMA now agrees that ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coserage 8433M646

.7230 02 02 84 -M;rySimons 1 whether this is a full-participation exercise within the 2 meaning of the Commission's regulations is a matter for the 3 Commission to decide in the adjudication? 4 MR. CUMMING: Absolutely. 5 JUDGE EDLES: Okay. All right. 6 MR. CUMMING: Also, with respect to intervenor's 7 argument as to their being precluded from rebutting FEMA's 8 conclusions, although FEMA did not make any ultimate 9 finding, it certainly did make findings and determinations 10 in its post-exercise assessment, and we believe that those 11 intervenors and applicants can take shots at those, present 12 testimony and rebut them or support them or do whatever 13 they can. O 14 aooos 80seura^t: ar cu i o, why te it aoe o9ea 15 to a licensing board to inquire into, again to quote the 16 staff's language, whether this exercise was sufficient so 17 that the results of the exercise could form a basis for a 18 finding that there is reasonable assurance that adequate 19 protective measures can and will be taken? 20 MR. CUMMING: The language is sufficient that it 21 actually does track directly from the Union of Concerned 22 ' Scientists case, and I believe that the question -- I am 23 I not sure which one of the judges asked it earlier -- as to 24 the Commission's use of the term " plan" reflected the fact 25 i that the plan is paramount in FEMA's concern. O l ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coserage 8433MM6

.7230 02 02-85 MarySimons 1 In fact, as. I believe it -was stated by Mr. Irwin, 2 not!all observable elements may have been tested, but in 3. . fact not all elements of the plan -- and the public record-4 -should be made clear -- can be' tested in an exercise. 5 FEMA.is vitally concerned that verification.of 6-elements not testable-by exercise, also of which may be'of 7 significance, be dealt with in its review process. In 8 fact, intervenors discussed the status of the principal 9 FEMA witness designated; in' fact, he is under consideration 10 to help buttress technically uniformly beyond that issue. 11 We do in fact have fewer than one FEMA staff person per -12 operating plant. 13 JUDGE ROSENTHAL: I am not so sure that goes to O 14 en au eio ea e 1 9o a to vou-1 et11 aoa t uaa r e aa 15 your answer as to whether-the licensing board can 16 appropriately inquire into whether the exercise was 17 sufficient so that the results of the exercise could form a 18 basis for the reasonable-assurance finding. Can they 19 inquire into it or can they not, yes or no? 20 MR. CUMMING: FEMA believes that they cannot. 21 JUDGE EDLES: But that is not something that FEMA 22 inquires into, is it? I mean, you told me earlier, I 23 believe, that you were specifically not going to make a 24 ! finding here as to whether there is or is not reasonable 25 assurance of adequate safety for the public. Isn't that O ACE-FEDERAL REPORTERS, INC. 202 347 3700 Nationwide Coserage 804 336 6

17230 02 02 86 Marysimons 1 right? (~') 2 MR. CUMMING: That's correct. %i 3 JUDGE EDLES: Excuse me for just a moment. You 4 are saying you are not going to make that finding, and yet 5 you say that we the NRC can't make that determination 6 either? I don't understand that. 7 MR. CUMMING: No. Absolutely not. But I would 8 argue that it is an unusual procedure in which if in fact 9 reasonable assurance does have to be found, not being fully 10 conversant with everything that the staff and the 11 Commission does, who in fact will make the reasonable-12 assurance finding? My understanding is that the Commission 13 would make the reasonable-assurance finding. () 14 JUDGE EDLES: The licensing board makes it in the 15 first instance, at least as to those matters before it, and 16 that will come up ultimately to us and eventually to the 17 Commission. It comes ultimately to us. 18 MR. CUMMING: I would think, if I was sitting as 19 a licensing board judge and this is one of the elements 20 that concerns me is that I might very well wish to consider 21 sufficiency, FEMA's position is, however, that they have 22 not been authorized to consider sufficiency. 23 JUDGE ROSENTHAL: Well, what does a licensing 4 24 ! board consider? How can the licensing board pass judgment i 25 ' on the results of an exercise -- and that is what it is CE) ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide cmerage 8 s 336-6646

7230 02 02 87 M rysimons I called upon to pass judgment on -- unless it also looks at 2 whether the exercise was sufficient so that those results (~} v 3 could form a basis for the reasonable-assurance finding? I 4 mean, is the licensing board just engaged in a charade? 5 MR. CUMMING: That is the conundrum of this 6 process. 7 JUDGE ROSENTHAL: well, I am sorry, but you know, 8 you see this case as -- 9 MR. CUMMING: I don't see it as a charade. I 10 don't see it as a charade. 11 JUDGE ROSENTHAL: You say this case indicates 12 these people are entitled to a hearing. Now, if they have 13 a hearing, it must be on some concrete issue. Now, if n(_) 14 you're telling me that the licensing board cannot go into 15 whether the exercise was sufficient to enable the results 16 of the exercise to form a basis for a reasonable-assurance 17 finding, I don't understand what the licensing board is 18 doing at all. 19 MR. CUMMING: We have been asked a similar 20 question. Actually what the -- 21 l JUDGE EDLES: I know what they're doing. They're 22 sitting there as a surrogate for the Commission, which in 23 my judgment at least and you haven't convinced me to the 24 contrary, has the ultimate responsibility here for making 25 the reasonable-assurance finding. It has not, as far as I CE) I i ACE-FEDERAL REPORTERS, INC. 200-347 3700 Nationwide coverase 80 4 336-6646

7230 02 02 88 MarySimons 1 am aware, yet delegated that responsibility to FEMA.

Now, 2

am I correct in that? p) 'w 3 MR. CUMMING: That's correct. That's absolutely 4 correct. 5 JUDGE EDLES: All right. Now, if that's true, 6 why can't the licensing board, serving as the Commission's 7 delegate -- this is the threshold stage here -- decide 8 whether the exercise helps to demonstrate that there is 9 reasonable-assurance of adequate safety? Yes, it does; or 10 no, it doesn't. 11 MR. CUMMING: The UCS case said that what the 12 Commission finds material may in fact be litigated. If the 13 sufficiency of the exercise is what the Commission directed {j 14 this board to do, then I would say that that is an issue. 15 How that is established -- 16 JUDGE EDLES: So you think the Commission has 17 delegated to FEMA the right to determine the sufficiency of 18 the exercise? I can't comprehend that. 19 MR. CUMMING: I think we are the expert agency. 20 JUDGE EDLES: Okay. I don't -- there may be -- 21 ' MR. CUMMING: There may be fundamental 22 disagreement -- 23 JUDGE EDLES: I do not believe that the 24 Commission has delegated that authority or has divested 25 itself of that authority and given it over to FEMA. As far O ACE-FEDERAL REPORTERS, INC. 202 347 3700 Naionwide Coserage 8533W446

IV '. 7230 02 02 89 M2rysimons 1 as I read the regulations, the Commission still hast in its 2 power the authority to make reasonable-assurance findings. (~)i 3 MR. CUMMING: That's right, and it is also able 4 to rebut. FEMA is rebuttable. Its findings are 5 rebuttable. 6 JUDGE EDLES: Okay. Let me work this through 7 just a little bit more now. You determine that this is a 8 full-participation exercise. The Commission has 9 regulations which define full-participation exercise. And 10 you are telling me that we can't look at the ambit, the ~ 11 scope, if you will, the design of the exercise, to ,'j i 12 determine whether -- the commission cannot determine Y 13 whether that exercise, as devised, meets the full-

()

14 participation requirements of its own regulations? That is' 15 what you are telling me, I think. y 16 MR. CUMMING: That is not quite what I am telling 17 you. 18 JUDGE EDLES: Okay. Tell me what you are saying. 19 MR. CUMMING: I am telling you that basically the "20 Commission finds material what FEMA finds material, and it 21 has a review process. In fact, both the GAO report .f-22 referenced earlier and the current Memorandum of 23 ' Understanding indicate how both preparation and evaluation 24 is conducted, and it is joint. So there is review at every 25 step of the way. Okay. O ACE-FEDERAL REPORTERS, INC. 202 147 l'00 Nationwide Costrage WS U6-6M6

7230 02 02 90 M3rySimons 1 FEMA uses the exercise as an evaluation e 2 technique, but we are equally concerned that, based on the ()m 3 admissions of 15 and 16, all the other things we don't 4 test, in addition to the observable elements, are equally 5 worthy of concern. 6 In fact, FEMA has over time been under 7 significant pressure to pricritize or indicate which of the 8 planning elements or which of the NUREG elements are most 9 significant. We think they are all significant, and we 10 think significant -- this goes to the irreparable harm -- 11 basically we have concerns with operating plants, just as 12 the Nuclear Regulatory Commission, and we are concerned 13 that some of the nonobservable elements may be equally () 14 significant. 15 So we do have an impact. However -- however -- 16 we think that there is implication in admission of 15 and 17 16 that somehow there was a sweetheart deal with LILCO. We 18 don't think LILCO got any better deal -- 19 JUDGE EDLES: I don't read that at all that way. 20 MR. CUMMING: -- or any worse. 21 Well, you may not. I am just telling you how 22 FEMA reads it. FEMA gave LILCO no better deal or no worse 23 i deal other than state and local participation, and we feel i 24 compelled as an agency to establish that at the hearing if 25 j these contentions are admitted. cL> \\ ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coverage 800-3364M6

7230 02 02 91 Marysimons 1 Incidentally, with respect to that, an earlier 2 question came up, and I believe it was misstated. FEMA in (~)% \\s 3 its regulations does not distinguish between exercises 4 between operating plants, the full-participation exercise 5 and NTOL plants. FEMA reserves the right -- and the 6 utility industry should be on notice that in fact because 7 of our concerns about the quality of earlier exercises -- 8 that we can in fact order as full-scale an exercise as we 9 wish. 10 JUDGE EDLES: I was not suggesting to the 11 contrary. What I was suggesting is that the Commission's 12 regulations appear to contemplate something perhaps 13 different for prelicense under its concerns than periodic ,-) (_ 14 post-license exercise. I wasn't certainly telling FEMA how 15 it ought to construe its own rules or how it ought to 16 operate. 17 I was simply saying that there is a reference in 18 the Commission's rules to a full-participation exercise 19 being necessary before the plant can be licensed and the 20 you can have periodic exercises, however that is defined, 21 ' after the plant gets its license. 22 MR. CUMMING: An important clarification. 23, JUDGE ROSENTHAL: All right. You have about two 24 minutes. 25 i /"N y ACE-FEDERAL REPORTERS, INC. 202 347-3700 Nationwide Coserage MA336-646

7230 02 02 92 Mr.rySimons 1 MR. CUMMING: All right. The only other thing I G(~x - would like to touch on is that the issue of sampling got 2 3 brought into the staff brief. FEMA has never represented 4 that it gives statistical, some sort of statistical 5 assurance. it is giving reasonable assurance. 6 Thic goes back to the staffing issue. One of the 7 reascns that Argonne is involved is because we need 8 additional evaluators due to the heavy exercise schedule. 9 It is also the reason that Idaho is involved, is because, 10 as documented in the GAO report, there was concern as to 11 whether the scenarios which are in fact one of the key 12 factors in determining whether in fact a full response will 13 be required, there were people more expert in looking at () 14 the onsite emergency and determining what the event was 15 that triggered the response. That is the explanation. 16 Now, in fact, the person who is on this board as 17 a designated witness is one of the key people at Idaho and 4 18 one of the key people at Argonne, and they have more than 19 one region to evaluate. FEMA will openly admit that we 20 don't have all the expertise. I can make personal judgment 21 as to whether that should be on board or not. But that's 22 the point, it isn't. 23 So with that, I think FEMA has no further 24, argument. 25 JUDGE WILBER: I have one question. You said all ()- I ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 600-336-6646

7230 02-02 93 MarySimons 1 elements are critical or equal or major, so the distinction 2 that I think the NRC regulations talks about major ) 3 observable elements. They are all major in your mind; is 4 that correct? 5 MR. CUMMING: You added a word which we think 6 would be a significant addition, and we think we have 7 always read implicitly in our regulations, because ours 8 talks about major observable elements -- it talks about 9 major elements; it does not use the word " observable." 10 That is a very important distinction. Both regulations of 11 both agencies are silent and do not include the word 12 " observable." And we give significant weight and are 13 significantly concerned as an agency with verification of ( ) 14 nonobservable 51ements. G 15 JUDGE WILBER: But they are all major. So 16 whether that word is'there or not, you would treat them all 17 equally? 18 MR. CUMMING: We would give equal weight to all 19 elements. As to which ones we choose to test in any 20 particular exercise, we believe it's our discretion, expert i 21 discretion. 22 JUDGE ROSENTHAL: Thank you, Mr. Cumming. 23 Five minutes, Mr. Irwin. 24 REBUTTAL ARGUMENT 25 ON BEHALF OF LILCO O ACE-FEDERAL REPORTERS, INC. 202-347 3W10 Nationwide Coverage M 33 H 646

.7230 02 02 94 MarySimons 1 MR. IRWIN: Thank you, gentlemen. I won't take 2 the full time. Let me state a couple of points quickly. 3 First of all, with respect to the basis for 4 FEMA's appeal, which is something we tripped over very 5 lightly before, there have been a number of arguments made 6 about the nature and basis of FEMA's participation. 7 It should not be forgotten also that FEMA got 8 into this whole area by virtue of two presidential orders, 9 one a presidential directive of December 7, 1979, and 10 Executive Order 1248, promulgated in 1980. So it is not 11 simply interagency understandings. There is a good deal of 12 authority which says that FEMA cannot extricate itself when 13 its interests are threatened or concerned. Obviously, it (]) 14 has rights which this board will have an opportunity to 15 deal with. But we shouldn't forget that basis. 16 Secondly, with respect to issues of harm which 17 are flowing from the admission or exclusion of these 18 ' contentions. FEMA has indicated that its resources are 19 being used more than they would be otherwise. We feel the i 20 board should not omit reference to Mr. Wilkerson's 21 affidavit. 22 Mr. Wilkerson is the point man on this project, and his I affidavit speaks specifically to programmatic problems. 23 ' i j 24 With respect to the timing of a decision here, l l 25 j the point has been made that considerable discovery has (1) i l ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coserage 804336 4 36

7230 02 02 95 MarySimons 1 taken place, and we suggest that maybe most of the harm has 2 occurred. Now, one can advance that argument to the point O,rw 3 that virtually any potentially injunctive situation 4 resolves itself by moot. So obviously, there are policies 5 against that. 6 JUDGE EDLES: But those policies, Mr. Irwin, are 7 implicated at the stay stage, and we had the papers before 8 us, we denied the stay, and so be it. Isn't that right? 9i MR. IRWIN: I concur -- I did not ask for a stay 10 myself on behalf of LILCO, simply because -- and this is 11 what I was going to get to -- another value to be 12 considered is the integrity of the Commission's own 13 processes. The Commission ordered this to be an expedited () 14 proceeding. It is not looking much like an expedited 15 proceeding. There is a time value to Long Island Lighting 16 Company of $50 million. Now, if money doesn't count here 17 in these proceedings, then we -- 18 JUDGE EDLES: But we would not rule on the 19 admissibility of contentions, saying, "By the way, the 20 Commission decided this would be expedited, so you're only 21 l entitled to three contentions. Sorry, you know, we just l 22 don't have time. Pick your three best." I mean, that is 23l not the way we do business here. l 24 j MR. IRWIN: And we are not suggesting that. What 25 we are suggesting -- e(_x; I l ACE-FEDERAL REPORTERS, INC. 1 202 347 3700 Nationwide Coverage 800-336-6646

I 7230 02 02 96 MerySimons 1 JUDGE EDLES: So that really isn't a relevant -- 2 I mean, I understand the Commission's said it's to be -~ 3 expedited. The answer is you take in admissible 4 contentions and then you get the licensing board to get 5 this case on the road. Isn't that the way you'd handle it? 6 MR. IRWIN: That's right. And the reason these 7 contentions are important and the reason they justify 8 threshold review is that they open up not just the question 9 of what happened at the exercise but, as Mr. Cumming said, 10 what didn't happened or, as I would have put it, not what 11 anybody did but the design of the exercise is. That is a 12 unique dimension. 13 One of the difficulties with these contentions, -{} 14 although Ms. Letsche said that the contentions do not 15 mention other exercises, the only way to establish their 16 validity or not is by reference to other exercises.- There 17 is no concrete guideline that requires 17 certain 18 elements. As I indicated, there are 160 or 170-some 19 elements in -- 20 JUDGE ROSENTHAL: Well, you're going to have to 21 l look at other exercises. Now, if you were going to 22 determine whether this was the best of all possible l 23 : exercises, then I could see you might look at other 24 ; exercises to determine whether they had elements which 25 should have been introduced into this exercise which would O ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-336-6686

F 7230 02 02 97 MarySimons I have made this exercise better. 2 But if the test is, as the staff suggests, g 'b ~ 3 whether this exercise was sufficient to enable a reasonable-4 assurance finding based upon the results of the exercise, I 5 don't understand why you would have to get into other 6 exercises. 7 MR. IRWIN: Because, Mr. Rosenthal, there is no 8 other basis, there is no defined checklist which says the 9 following elements must all be included. There are 160-10 some from which some 60 are winnowed down to 35, of which 11 some subset are tested, and it's a different subset in 12 every exercise. 13 For someone to say that the exclusion of this f'\\ - 14 element is definitionally sufficient to render it s_J 15 insufficient, well, heavens, we are going to have to look i 16 at other exercises to see whether that element was 17 universally included and then to see whether ten years of 18 history or seven years of history suggests that practice 19 suggests the result that the regulations and the NUREGs and 20 the guidance that's been rendered don't command. i 21 l That is a hellacious job, and we should not 22 underestimate it. 23 Now, let's get to, just very briefly once again, 24 ' what admission of these contentions entails. It is 25 entirely possible that LILCO could have conducted an CE) ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationwide Coserage 800-336-6646 . -.... ~.. -...... -.. _,..

-7230 02 02 98 Marysimons 1 exercise in which FEMA said, "LILCO fulfilled every , ~s 2 objective we set out. They did everything the scenario (_) 3 required, and they did it absolutely splendidly. But the 4 exercise is insufficient. Go back and try it again." 5 I submit to you that that is an absolute 6 miscarriage of an expert process. The limit on it, 7 Mr. Edles, is not what you suggested, which is that total 8 deference should be given to the staff and FEMA. There is 9 opportunity for inquiring into how that process went, and 10 that opportunity has been afforded in discovery. There has 11 never been an allegation that this exercise as it came out 12 of that formation process was materially different from 13 anything else, materially defective. That, it seems to me, ' I~J T 14 is pretty telling. k 15 JUDGE EDLES: Well, again, Mr. Irwin, I guess I 16 understand the argument that you are making, but let me 17 again put it in a different context. The Commission's 18 rules require a full-participation exercise. I assume for 19 the moment that the Commission is the ultimate arbiter of 20 what its rules mean. 21 Now, I gather what you are saying to me is the [ 22 Commission has delegated to FEMA and the staff working 23 jointly the authority to determine that the exercise that 24 you and the FEMA and the staff have devised is a full-25 participation exercise and that is not something that we () ACE-FEDERAL REPORTERS, INC. L 2"t"* '~"".

7230 02 02 99 Mnrysimons 1 are going to take a look at at the end of the case. Isn't (3 2 that what you're telling me? 'wl 3 MR. IRWIN: Not a hundred percent. What I have 4 been saying is there is a threshold allegation that should 5 be required. 6 JUDGE EDLES: All right. If it's fraud, if there 7 is'a bribe, if a FEMA official took a bribe when he created 8 the design, we can look at that. What else? 9 MR. IRWIN: An allegation that in every other 10 exercise that has ever been conducted; for an allegation 11 that there is an absolute requirement for a specific 12 element to be tested and a demonstration.that that is the 13 case; or an allegation that there had been a hundred [~ t 14 exercises and in every other one this was tested, here it 15 was not. That kind of thing. But there is no such 16 allegation here. 17 JUDGE EDLES: But what you are still saying is 18 that we accord substantial deference to FEMA in how we 19 construe our own regulations. That's what you're telling 20 us. 21 MR. IRWIN: FEMA in participation with your own 22 staff which concurred in it. 23 JUDGE EDLES: Okay. I 24 I MR. IRWIN: One last note. We all talk about the 25 word " sufficiency," which has become talismatic. It O i ACE-FEDERAL REPORTERS, INC. 202-347 3700 Nationwide Coverage 800-33M646

7230 02 02 100 -Marysimons 1 doesn't hurt to look back at the actual sentence in which x 2 that word resides in the UCS case. That sentence is worth 3 reading. 4 It says in the discussion of why-you have it 5 here, it says, "Whereas the preparedness exercises the 6 decision involves a central decision maker's consideration 7 and weighing of many other persons' observations and 8 firsthand experiences, questions of credibility, conflicts, 9 insufficiencies surface and the ordinary reasons for 10 requiring a hearing come into the picture." 11 In short, what the court of appeals was concerned 12 with there was the kind of process that should be invoked, 13 not the corpus of the litigation. I urge that we not get j{}} 14 off on that term unnecessarily. 15 JUDGE ROSENTHAL: Thank you. 16 MR. IRWIN: Thank you, sir. 17 JUDGE ROSENTHAL: On behalf of the entire board I 18 would like to thank counsel for the respective parties for 19 their spirited arguments this morning. 20 On that note, the petition of FEMA will stand 21 submitted. 22 (Whereupon, at 11:55 a.m., the oral argument in 23, the above-entitled matter concluded.) 24 25 m o ACE-FEDERAL REPORTERS, INC. 202-347-3700 Nationside Coserage 800-336-6646

CERTIFICATE OF OFFICIAL REPORTER k This is to. certify that the attached proceedings before the UNITED STATES NUCLEAR REGULATORY COMMISSION in the matter of: NAME OF PROCEEDING: LONG ISLAND LIGHTING COMPANY (Shoreham Nuclear Power Station, Unit 1) DOCKET NO.: 50-322-OL-5 PLACE: BETHESDA, MARYLAND f DATE: THURSDAY,' FEBRUARY 5, 1987 were held as herein appears, and that this is the original transcript thereof for the file of the United States Nuclear Regulatory Commission. (sigt) [ (TYPED) [ MARY C. SIMONS Official Reporter ACE-FEDERAL REPORTERS, INC. Reporter's Affiliation O}}

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