ML20211J307

Response to Case 861020 Supplemental Response to Applicant Motion for Protective Order Re 860627 Discovery & Motion to Compel.Documents Identified in Amended Response to Case Request Should Qualify as Privileged Work Product

ML20211J307
Person / Time
Site:	Comanche Peak
Issue date:	11/04/1986
From:	Burchette W HERON, BURCHETTE, RUCKERT & ROTHWELL, TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC. (FORMERLY
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20211J313	List: ML20211J307 ML20211J355 ML20211J414
References
CON-#486-1426 OL, NUDOCS 8611110101
Download: ML20211J307 (21)

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/[2d BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSIOQEI} g P Before the Atomic Safety and Licensing Board

, '86 NOV -7 Pl2:15 In the Matter of )

Texas Utilities Generating ) DocketNos.50-447JAL'.J aa n ic "

Company, et al. ) 1 50-445ttjk}kh*VIU-

)

(Comanche Peak Steam Electric )

Station, Units 1 and 2) )

RESPONSE OF APPLICANT TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC. TO " SUPPLEMENTAL CASE RESPONSE TO APPLICANTS' MOTION FOR PROTECTIVE ORDER RE 6/27/86 DISCOVERY AND MOTION TO COMPEL" INTRODUCTION Pursuant to 10 C.F.R. SS 2.740 and 2.741', applicant Tex-La Electric Cooperative of Texas, Inc. (" Tex-La") hereby responds to the " Supplemental CASE Response to Applicants' Motion for Protective Order re 6/27/86 Discovery _and Motion to Compel," dated October 20, 1986 (hereinafter cited as "Intervenor's Response and Motion")'. This response is being filed on behalf of Tex-La by its-general counsel who has made a special appearance in.the above captioned proceeding solely for the purpose of this filing. In the past, when responding to l

l discovery requests specifically directed to it, Tex-La's i responses have been filed by the attorneys for applicants who

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have already appeared in this proceeding. As to the instant response, those attorneys have indicated that they cannot agree I .w ith every position taken by Tex-La in the response and, I

therefore, have suggested that separate counsel for Tex-La l enter a special appearance in the case for the sole purpose of B611110101 861104 i PDR ADOCK 05000445 O PDR D Sc3

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. filing this response.

In its Response and Motion, intervenor CASE contends that the. Commission's Rules of Practice do not necessarily permit the assertion of the work product privilege in an NRC proceeding concerning documents considered privileged in j another adjudicatory proceeding, and that even if the privilege could be asserted, intervenor should be permitted discovery of these documents because they were not prepared in anticipation of litigation. Intervenor fu ther contends that, in any event, there is substantial need for the documents in the preparation t

of intervenor's case and th'a documents cannot be obtained by i.

other-means.

Tex-La submits that, contrary to intervenor's claims,

the work product privilege is fully applicable to the documents

( in question by virtue of their privileged status in the t

! currently ongoing litigation between Tex-La and applicant Texas Utility Electric Company ("TUEC") in Texas state court regarding the Comanche Peak project. Nor is intervenor's need t

for these documents so critical as to overcome the assertion of this privilege. Tex-La also requests, however, that, in the event the Board orders disclosure of the documents in question to CASE, such disclosure take place pursuant to certain restrictive conditions, discussed in part'III, below, which, while satisfying'the needs of the instant proceeding, will help to preserve Tex-La's ability to litigate effectively against TUEC in the state court case.

. ARGUMENT I. THE DOCUMENTS WIT'HHELD ARE WITHIN THE SCOPE OF PROTECTIVE ORDER 10 C.F.R. S 2.740 (b) (2) and F.R.C.P. 26 (b) (3)

As is detailed more fully below, the documents as to which Tex-La asserts a privilege were prepared in anticipation of the ongoing litigation which pits Tex-La and the other minority owners of Comanche Peak against TUEC and its affiliated companies, including Texas Utilities Generating Company ("TUGCO"). The subject matter of that litigation substantially overlaps with the subject matter of the operating license proceeding before the Board. The core factual issues in both proceedings concern deficiencies in the design, construction, and management of the Comanche Peak project.

The Texas litigation commenced in late May,1986, shortly af ter TUEC had been put on notice by Tex-La that Tex-La l

intended to stop payments to TUEC for its share of the project

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l costs and bring suit against TUEC for breach of its Joint l Ownership Agreement with TUEC. TUEC then brought an action I

alleging an anticipatory breach of contract against Tex-La, and seeking against all three minority owners, a declaratory j judgment as to the adequacy of TUEC's performance in designing, constructing, and seeking a license for Comanche Peak. 1!

! l 1/ Texas Utilities Electric Company v. Tex-La Electric

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Cooperative of Texas, Inc., No. 86-6809, District Court for Dallas County, Texas, A-14th Judicial District, Texas.

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. All three minority-owners later counterclaimed against TUEC, l alleging, among other things, that TUEC had violated various provisions of the Joint Ownership Agreement ("JOA"), including its commitment to use prudent utility practice in the design, construction and management of the project, and that TUEC had

. misrepresented the status of the_ project in negotiations which preceded the minority owners' respective purchases of ownership shares in the project, as well as subsequently in reporting to the minority owners on the project's progress, thereby violating certain common law and fiduciary duties and the Texas Deceptive Trade Practices Act.

The documents in question are documents prepared by Tex-La's engineering consultants and relating to their monitoring program of the plant. 3/ The monitoring program was conducted by Southern Engineering Company (" Southern")

through February, 1986. Thereafter it was conducted by GDS Associates, Inc. (" GDS"). $[

As Tex-La will demonstrate below, these documents, contrary to intervenor's contention, were not simply prepared in the ordinary course of business, but were prepared in 2/ Tex-La also claimed a privilege as to the monitoring reports themselves. However, intervenor does not contest this claim. Its motion to compel is directed only at certain supporting documents listed by Tex-La.

1/ Many of the personnel employed-by GDS are former Southern employees who formed GDS in February, 1986.

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. anticipation of litigation. Intervenor, however,-presents a threshold issue to be addressed first. Intervenor assumes, correctly, that Tex-La is asserting the privilege as to these-documents to prevent a waiver of the privilege as to this same category of documents in the Texas state court proceeding.

Intervenor Response and Motion at 3-4. Intervenor notes that "the courts are split concerning the extent to which F.R.C.P.

26 (b) (3) protect [ sic] materials prepared for one case against discovery in a second case," but admits that "where, as here, the cases are related the materials will usually be protected." Id. at 4 (citations omitted). Intervenor also notes that a strict reading of 10 C.F.R. S 2.740 (b) (2) precludes such protection. Id. at 2.

Tex-La agrees with intervenor's conclusion that, under the judicial interpretations of F.R.C.P. 26 (b) (3) , privileged materials prepared in anticipation of one case will be privileged in a second, related case. It should be noted, however, that any split among the courts on.this issue is more likely to be found among the federal district courts. The Supreme Court and the federal circuit courts of appeal generally support the extension of the privilege to the second case. See, e.g., FTC v. Grolier, 462 U.S. 19, 103 S.Ct. 2209 (1983); In Re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798 (3rd Cir 1979); In Re Murphy, 560 F.2d 326 (8th Cir. 1977);

! Duplan Corp. v. Moulinage, 487 F.2d 480 (4th Cir. 1973);

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- Republic Gear Co. v. Borg Warner Corp., 381 F.2d 551'(2d Cir.

1967).

Although 10 C.F.R. S 2.740 (b) (2) does specifically refer to materials " prepared in anticipation for the hearing,"

a liberal, rather than strict interpretation of this language is warranted. This Board has expressly noted that S 2.740(b) (2) encompasses the same work product doctrine set out by the Supreme Court in Hickman v. Taylor, 329 U.S. 495, 675 S.Ct. 385 (1947), "and more recently codified in Rule 26 (b) (3) of the Federal Rules of Civil Procedure." Texas Utilities Electric Company, 20 N.R.C. 1464, 1473 (1984). The rationale for extension of the work product doctrine to related cases, firmly established in the federal courts, applies equally-to an administrative proceeding such as the instant I licensing proceeding: it is still the protection of an attorney's ability to effectively represent his client in a related second proceeding that is at stake. As the Eighth Circuit stated in In Re Murphy,

[t]he primary purpose of the work product _ privilege is to assure that an attorney is not inhibited in his representation of his client by the~ fear that his files will be opened to scrutiny upon demand of an opposing party. . . . The work product privilege would be attenuated if it were limited to documents

that were prepared in the case for which discovery is sought. What is needed, if we are to remain faithful to the articulated policies of Hickman, is a perpetual protection for a work product. . . . Any less protection would generate the very evils that the Court in Hickman attempted to avoid.

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. 560 F.2d at;334. Accord [ngly,theBoardshouldusefederal court precedent as itsfsuide on this< issue and allow the privilege to be asserted'in this case.$/

Thecornerstoneofintebvenor'sargumentisthat, based on the substance and the date of the documents in question, they could not have_been prepared in anticipation of litigation.

This is simply not the case. . A chronology of events related to Tex-La's participation in the project from late 1984 through the May 1986 commencement Ii2 the Texas litigation supports c

Tex-La's claim that do'uments prepared by its engineering consultants after February 1, 1985, which includes all documents as to which the privilege is being asserted, were prepared in anticipat' ion of the litigation against TUEC.

As problems with the design, construction, and management of the plant were revealed through documents received from the NRC licensing proceeding, Tex-La indicated continued concern regarding these problems to TUEC, both.in the course of the monitoring program and.at joint owners committee meet'ings. By November, 1984, the severity of the problems had caused Tex-La to express its concerns to TUEC in a letter outlining eight specific problem

$/ The case law regarding the extension of the work product privilege to related cases, referred to by intervenor and cited herein generally relates to privileges in earlier cases being extended to subsequent litigation. In the case at hand, the litigations are concurrent. Logically, however, the principal is the same. Indeed, if a privilege can be extended to a later

. case, a fortiori'it should be permitted to extend to a

'- concurrent case.

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. areas and requesting consideration of these issues by TUEC and a meeting with TUEC to discuss these issues. A copy of this letter is attached hereto as Appendix A. Tex-La became even more concerned when it never received a response to this letter.

On January 8, 1985, the Comanche Peak Technical Review Team ("TRT") issued a report that was highly critical of TUEC's performance at Comanche Peak. Later that month, a meeting was held-at the NRC offices in Bethesda to discuss the TRT report and TUEC's response to it. As indicated in th'e attached affidavit of Mark D. Nozette (Appendix'B), an attorney at Heron, Burchette, Ruckert & Rothwell (" Heron, Burchette"),

Tex-La's general counsel, who reviewed the TRT report and attended the meeting noted above for informational purposes, the combination of TU's lack of response to Tex-La's November, 1984 letter and the plant's problems that surfaced in the January, 1985 report and meeting represented a major turning point in the perception of the project. It was these events that caused Tex-La and its attorneys to begin actively considering the possibility of a 159 su.t against TUEC.

As a further res. ult of JEaua f's events, Heron, Burchette became actively involved in the preparation of the monitoring reports, which theretofore had been prepared solely by Southern. In addition, commencing in April, 1985, Southern was retained directly by Heron, Burchette, and from that time forward, it (and later, GDS) has been acting as consultant to Heron, Burchette in connection with the litigation that was I

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being prepared and that now is in progress in Texas state court relating to Comanche Peak.

In April, 1985, Tex-La requested its attorneys, with the help of Southern Engineering, to prepare a detailed study of the history of the problems at Comanche Peak and of TUEC's potential liability to Tex-La as a result of these problems.

This report took several month's,td complete, and, around the

> time it was finished, a draft complaint against TUEC was prepared for filing in Texas, state court.

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After completion of these materials in late 1985, Tex-La commenced negotiations with TUEC to try and settle their differences. These negotiations lasted through the end of April of 1986. During this time period, Tex-La on several occasions indicated to TUEC that it was planning to bring a lawsuit against TUEC should these negotiations prove unsuccessful. On February 18, 1986, Tex-La also sent a letter giving it formal notice of its complaints regarding Comanche Peak, and formally demanding to be made whole, as required under the Texas Deceptive TradeiPractices Act S 17.50A prior to 1

the filing of a suit under that act. After the negotiations reached an impasse, Tex-La informed TUEC that it considered TUEC in breach of~the JOA and that, therefore, it would cease payments for its share of the project costs. At this point, Tex-La was on the verge'of filing its law suit against TUEC.

Only TUEC's filing of its declaratory judgment and anticipatory

. breach action on May 29, 1986, in Texas state court in Dallas averted Tex-La's filing. Tex-La's suit was eventually filed in the form of a separate law suit in Austin E/ and also as a counterclaim in TUEC's Dallas action. The above chronology clearly indicates that, as of February 1, 1985, Tex-La, with very good reason, anticipated litigation related to its l

participation in Comanche Peak.

Intervenor further contends that, even if Tex-La did anticipate litigation at that time, the documents in question are not the type of documents prepared in anticipation of litigation. In fact, however, the information in these reports and in their supporting documents go to the very heart of Tex-La's case against TUEC. They represent Tex-La's only opportunity for independent verification of the status of the design, construction, and licensing. effort for the plant. Once Tex-La made the decision to begin planning for possible litigation against TUEC, the work of its engineers and attorneys in the preparation of these reports took on an entirely new light. The purpose of the reports no longer was merely to. keep Tex-La apprised of events at the plant. Rather, 5/ Texas Electric Cooperative of Texas, Inc., et al. v.

Texas Utilities, et al., No. 399, 336, District Court of Travis County, Texas, 98th Judicial District. That action now has been abated, and the. Dallas action thus will form the vehicle for resolution of the dispute.

the reports served the added purpose of gathering, distilling, and analyzing information that would be used as part of the basis of a law suit against TUEC. Therefore, while the monitoring reports and related materials may have been prepared in the regular course of business prior to February, 1985, they were prepared with specific litigation in mind after that date.

II. THE DOCUMENTS IN QUESTION ARE NOT CRUCIAL TO INTERVENOR'S CASE Under 10 C.F.R. S 2.740 (b) (2) , a party seeking discovery may obtain certain privileged documents by showing that it has substantial need for the documents for the preparation of its case and that it cannot obtain the substantial equivalent of the documents by other means.

Intervenor characterizes the documents in question in the context of the monitoring program in support of which they were prepared. Intervenor's characterization of that program and the documents generated by it. indicate that intervenor totally l- misconceives the nature of the program. As a result, intervenor's belief that these documents are crucial to its case is mistaken. A description of the monitoring program is set forth in the affidavit of David C. Garlington, attached hereto as Appendix C. The following discussion draws on facts contained in this affidavit.

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- Intervenor describes the significance of the documents in question in the following manner:

The history of treatment of this material bears directly on the-performance of the management of TUEC and Tex-La,-both applicants in this proceeding, and whether either or both had a policy of covering up or ignoring serious deficiencies. These documents also provide insights into possible root causes of failures which are now surfacing since the Tex-La~ audits are at least as informative as audits performed by INPO or MAC and.TUEC's response to the problems which Tex-La was. identifying would be at least as '

relevant as its response to.other-audits. Either Tex-La was ignoring the problems and thus was and is unqualified

to be a permit holder or it was informing TUEC and TUEC was ignoring the problems.

Intervenor Response-and Motion at 8-9. This description by_

intervenor contains a' number of errors. First, it should be

-noted that the " management of Tex-La" is not and should not be an issue in the licensing proceeding. ' Tex-La.is not responsible.for the management of the design or construction of the plant. These responsibilities are assigned to TUGCO as Tex-La's agent pursuant to the JOA. Tex-La does have a i responsibility to its customers to monitor the plant's progress

!. and make sure that its agents are acting in compliance with their obligations under the JOA. The monitoring program helped fulfill this purpose, but does not have any bearing on the performance of Tex-La's management.

Intervenor's most fundamental misconception is its belief that Tex-La was in a position through the monitoring-program to independently discover new problems at the plant and identify their root causes and then either ignore these E . _ - ___ . , _ _.... - _.. . _ _ _ _ ___ - . . _ _ . . _ _ _ _ , _ _ _ _ _ _ . _ . . . - _ , _ _ _ _ _ . _ _ . ~ _ , _ - _ - _ . . .

problems or cover.them up. This misconception is exemplified by intervenor's description of the monitoring reports as

" audits." Intervenor Response and Motion-at 9. The monitoring reports in no way constituted audits in any sense of that word, 5/ nor was Tex-La ever in a position independently to.

discover new problems or root causes in the course of preparing the monitoring reports. The mere fact that the monitoring program did not commence until mid-1981, many years after the design and construction of the plant had started, suggests that~

the reports would not be useful in identifying the root causes of the plant problems.

5/ The published standards of the American National Standards Institute and American Society of Mechanical Engineers defines " audit" as follows:

[An audit is] a documented activity performed in accordance with written procedures or checklists to verify, by examination and evaluation of objective evidence, that-the applicable elements of the quality assurance program have been developed, documented, and effectively implemented in-accordance with specified requirements. An audit should not be confused with surveillance or inspection for the sole purpose of process control or product acceptance.

ANSI /ASME Standard N 45.2.12-1977, Requirements for Auditing of Quality Assurance Programs for Nuclear Power Plants, Section 1.4. Although the Tex-La monitoring program was based on

" objective evidence," it did not rely on checklists or written procedures nor did it have as its goal the verification of every aspect of Comanche Peak's Quality Assurance program. The site visits made as part of the Tex-La monitoring program were comparable to an ad-hoc surveillance or inspection of the plant.

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The information about the plant that formed the basis of each monitoring report was primarily received from TUEC in the course of site visits and meetings with plant personnel.

In addition, other information was gained by reviewing NRC documents, attending NRC meetings and hearings for informational purposes, and reviewing'various pleadings filed by the parties to the operating license and construction permit proceedings. Therefore, information gained through the monitoring program consisted of facts in the public domain or facts already known to TUEC. Tex-La's engineering consultants and attorneys then took these facts and distilled and evaluated them in a manner that would be useful for Tex-La for the purposes of business and, later, legal planning. Given the nature of-the monitoring program, therefore, it is a considerable exaggeration to describe them as "at least as informative as audits performed by INPO or MAC"'or to suggest that they might provide insights into the root causes of the plant's failures. In truth, intervenor has no substantial need for the information in question. 1/

2/ The only aspects of the monitoring program that might be characterized as an " independent investigation" of problems at the site would occur during site visits when Tex-La's engineering consultants would come across a very obvious deficiency, such as work areas cluttered with garbage. The

! discovery of such problems was based on casual and superficial i surveillance of the plant site. Such deficiencies usually related to basic construction practices, rather than.an aspect of the plant that was unique to nuclear construction or engineering. (See Garlington Affidavit at 2.) Whenever such  ;

deficiencies were observed, they were promptly reported to TUEC.

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III. DISCLOSURE TO CASE IN ANY EVENT SHOULD BE SUBJECT TO CERTAIN RESTRICTIVE CONDITIONS NECESSARY TO PROTECT TEX-LA In the' event that Tex-La is ordered to produce the 4

documents sought by CASE, Tex-La requests that the order provide Tex-La with the following protections necessary to preserve Tex-La's ability to litigate effectively.against TUEC in the currently pending Texas state court proceedings related 2

to Comanche Peak:

(a) CASE should be required to keep _the documents and

- their content confidential and should not be permitted to a disclose them to any other person or entity. Tex-La is concerned about preserving its expert work product privilege in the state court litigation. (See Texas Rules of Civil Procedure 166b.) While an involuntary disclosure of the protected documents to CASE,' pursuant to the ASLB's order, would appear not to cause a waiver of the privilege, the further, indiscriminate publication of the documents by CASE may well undercut Tex-La's right or ability to invoke the privilege in state court. Further disclosure by CASE, therefore, should be prohibited.

(b) While it may be customary that the other parties to an NRC proceeding, such as TUEC, are permitted to view the documents being disclosed to CASE, under the circumstances here -

i existing, any such disclosure to TUEC or its attorneys should

.tua severely limited, as follows: disclosure should take place l

- only to Ropes & Gray and, to the extent necessary, the law firm of Bishop, Liberman, Cook, Purcell &-Reynolds, or Roy Lessy, all of whom appear in this proceeding as attorneys for.both TUEC and Tex-La (as well as the other two applicants). To the extent that TUEC may have a legitimate need in the instant proceeding to know what documents have been disclosed to CASE, Tex-La's disclosure of such documents to the-aforementioned attorneys for TUEC would seem to amply satisfy that need. No similar disclosure, however, should be required to take place, either directly by Tex-La, or indirectly through the aforementioned attorneys, either' (i) to TUEC itself, or (ii) to the law firm of Worsham, Forsythe, Sampels & Wooldridge

("Worsham, Forsythe"). As explained above, in May 1986, TUEC elected to file suit against Tex-La (as well as the other two co-owners of Comanche Peak) in Texas state court, concerning certain disputes which have arisen among the Comanche Peak l ~

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! applicants over the adequacy of TUEC performance of its

{ obligations in designing, constructing and seeking a license l

for Comanche Peak. The documents produced for CASE should not be disclosed to TUEC for the simple reason that they could be I

! of considerable help to TUEC in its state court litigation i against Tex-La. Discovery in the NRC licensing proceeding i

should not be allowed to severely disadvantage Tex-La in its

! state court litigation, particularly where disclosure just to Ropes & Gray would fully satisfy whatever need to know TUEC may l

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claim, so that disclosure to TUEC, and the resulting disadvantage to Tex-La, are readily avoidable. S/

As for Worsham, Forsythe, notwithstanding the fact .

l that Worsham, Forsythe has for years appeared as Tex-La's attorneys in the instant proceeding,-it chose also to represent TUEC in the state court lawsuits which.TUEC now has pending against Tex-La. (Other firms are assisting Worsham, Forsythe in that representation, but Worsham, Forsythe appears to be acting as the lead attorney in the state court proceedings.)

While we do not wish here to discuss at length the propriety of Worsham, Forsythe's dual representation under the Code of Professional Responsibility, it should be obvious that Worsham,

-Forsythe's decision to represent one client against another client in a closely related matter creates for Tex-La a serious practical problem, in that Worsham, Forsythe is in a position to use information gained as Tex-La's attorneys in one proceeding against Tex-La in the other proceeding. This should l $/ Ample precedent exists for disclosing information sought t

through discovery only to a party's counsel, but not~to the party itself, where, as for example in the case of trade secrets, disclosure to the party would afford it an unfair advantage in a matter not related to the litigation. See, e.g.

Covey Oil Co. v. Continental Oil Co., 340 F.2d 993 (10th Cir.

1965); Struthers Scientific and International Corp. v. General-

Foods Corp., 45 F.R.D. 375 (D.C. Tex. 1968); American Oil Co.

v. Pennsylvania Petroleum Products Co., 23 F.R.D. 680 (D.C.R.I.

1959); Melori Shoe Corp. v. Pierce and Stevens, Inc., 14 F.R.D.

346 (D.C. Mass. 1953).

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. not be permitted to occur and, therefore,,Worsham, Forsythe should-not be allowed to become privy to the documents disclosed to Ropes & Gray. E/

For the foregoing reasons, to the extent this Board I orders Tex-La to produce documents for CASE, disclosure of-such documents by Tex-La to TUEC should be limited to Ropes & Gray (and the other law firms for Applicants who are not also representing TUEC in litigation against Tex-La), and should be made only on the condition that Ropes & Gray, and such other

, firms, not disclose such documents to TUEC, Worsham, Forsythe, or any other law firm representing TUEC in litigation against Tex-La. This Board clearly has the discretion and authority to fashion any reasonable protective order it deems necessary,.AS/ and it should exercise that discretion in this l

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i l 2/ To the extent that Worsham, Forsythe, may claim a need to l know what was disclosed to CASE, so as to be able to provide effective representation in this licensing proceeding, the simple answer is that Worsham, Forsythe has no one but itself to blame for whatever problems non-disclosure may cause, for it made the decision to represent TUEC in filing a lawsuit against the Comanche Peak co-owners, and it has voluntarily chosen, over the vigorous objection of those co-owners, to continue to l represent TUEC in the state court proceedings. Accordingly, Worsham, Forsythe should not now be heard to complain'about any adverse consequences of its own actions on the licensing effort.

1S/ See, e.g., E.I. DuPont de Nemours Powder Co. v. Mosland, 244 U.S. 100, 37 S. Ct. 575 (1917); 8 C. Wright & A. Miller, Federal' Practice and Procedure, S 2043 (1971).

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CONCLUSION For the foregoing reasons, the documents identified by Tex-La in its amended response to intervenor's June 27, 1986, request for production of documents should qualify as privileged work product. Furthermore, intervenors should not have access to these materials despite their privileged status, since'they do not provide information critical to intervenor's case. If, however, Tex-La nevertheless is ordered to disclose the documents in question to intervenor, Tex-La should be afforded the protections outlined above.

Respectfully submitted, 7%,

William H. Burchette Foster De Reitzes

- Peter J. Plocki Heron, Burchette, Ruckert &

Rothwell 1025 Thomas Jefferson Street, N.W.

Suite 700 Washington, D.C. 20007 (202)337-7700 Attorneys for Tex-La Electric Cooperative of Texas, Inc.

Dated: November 4, 1986

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.. . Appendix A i .

~ .- 3. x Tex.LA ELECTRIC COOPERATIVE OF TEXAS, INC.

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November 5, 1914

24. Ki & >f 9. Spence Texas uririgi,3 gou n+Lg Camxng Slupuf Tower 440 Nat& Olive Stuet L. B. 21 DalL1a, Texas 75201 RE: Tex-La's partici~timt in the Can1nche Peak PAcjec.t.

Dest Mike: _

1 an atiting on behalf of de Boa 1d of tLitechu of Tse-L1 af Texas to exptess our concetn avet be cuvtent stat"A .

of de Ce-he Peak P,toject and to ,tequest a, setting as socn as possible to discuss the folt=nig n1tteu:

(11 TUEC's I.nakirihf to obtain an opetaling License and Load fuel bt secordance wi& de time schedules pteviously projected by TUEC.

Ib1 TUEC's inabilia] to meet its atm consttuetion schedule.

(c) An update on be status of de issues now perliing before 2.he Nuclest Regulatorj Commission. More

, patin11tLg, we att concetned mid de .tecent htC

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fi J*=gs suggesting laptopet consts:Letion documentation u weLL as futste NRC findings 2*prive to q"a'ity asscutance.

ld) TUEC's comibnent .ta de ceprotion af both Unita (!) and [t1.

le1 TUEC's estent schedule for completion of de consttuction of Un.it (1) and Un.it (t) and a.

proiezted schedate for satisfaction c6 the NRC apetating License. .tequitenents.

(f) TUEC's DAfiM&g Q{ f53] Cfff knGQggfgf ffR hg ptoject and de Atzsans for such incteases, l

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l P.O. 80X 1623

• NACOGDOCHES. TEXAS 75961

• 409/560 9532 i

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(g) The adverse impacts de deiays and cost oveMans Me having on Tex-La*4 projected cost for de' Project and our ability to finance our contbtued particim%n at its cuarent tevel. .

th) Possible restructuring of Tex-La's ownership.-

in.terut in be project to reduce the adveMe impacts brought abou,t by de delays and ruult-ing cost overruns.

our obliga.These tion toareas ensueof.that concern we areneed doing.co be addrused everyuing because of dat can be done .to protect the istteres.t af om membe.rs as it reta.tes .to i

the Comanche Peak Project. We are writing in an effort to~

obtain answers to our conceAns and to seek assurances from TUEC that the Project is being constructed in accordance with prudett utility practices, dat both units will in fact, be completed and dat a reasonable projected comerc,,at l opeAation date be provided .that we can reiy upon.

We. apprecia.te. your atteattion to this matter and took forward to hearing from you soon regarding a mee, ting date.

ety yours,

. O, Nichots, President

ces Tex-La Board af Vitectors bk. John H. Bu.tts

' Mr. RobeAt M. Gross Ah. Wittiam H. Burchette i

a_ W