ML20214Q125

Memorandum & Order CLI-86-15,directing Aslab to Determine Admissibility of Consolidated Intervenors Contention Into CPPR-126 Extension Proceeding.Served on 860919

ML20214Q125
Person / Time
Site:	Comanche Peak
Issue date:	09/19/1986
From:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
CON-#386-770 CLI-86-15, CPA, NUDOCS 8609240185
Download: ML20214Q125 (10)

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0LFEitP UNITED STATES OF AMERICA USNRC

, NUCLEAR REGULATORY COMMISSION N SEP 19 A10:05 COMMISSIONERS:

Lando W. Zech, Jr., Chairman [0CkbiEdirdiN Thomas M. Roberts M NCH James K. Asselstine Frederick M. Bernthal Kenneth M. Carr SEWED SEP 191986 In the Matter of TEXAS UTILITIES ELECTRIC COMPANY, et al., Docket Nos. 50-445-CPA (Comanche Peak Steam Electric Station, Unit 1)

MEMORANDUM AND ORDER CLI 15 l This matter is before the Consnission on a question certified to it by the Atomic Safety a'nd Licensing Appeal Board (" Appeal Board") regarding the admissibility of a contention into a construction permit ("CP") extension -

proceeding. The Texas Utilities Electric Company ("TUEC") seeks an extension of construction permit CPPR-126 which authorizes it to construct Unit 1 of the proposed two-unit facility at Comanche Peak near Glen Rose, Texas. We l have discussed the background facts surrounding this episode elsewhere, so we will not repeat them at length here. _S f g Texas Utilities Electric Company

-(Comanche Peak Steam Electric Station, Unit 1), CLI-86-4, 23 NRC 113 (1986).

Briefly, TUEC submitted a untimely application for an extension of the CP which the Staff approved. The Citizens Association for Sound Energy

(" CASE"), an intervenor in the ongoing operating license proceeding, filed 8609240185 860919 PDR ADOCK 05000445 C PDR

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a request for a hearing on the construction permit extension under Section 189a of an Atomic Energy Act ("AEA"), 42 U.S.C. 5 2239(a). We referred the request to the Atomic Safety and Licensing Board (" Licensing Board") for a post-extension hearing under 10 CFR Part 2. See 23 NRC at 121. The Licensing Board began proceedings to define and resolve contentions whether TUEC had demonstrated " good cause" for extension of the permit. See Section 185 of tae AEA, 42 U.S.C. 5 2235; 10 CFR 5 50.55(b) (1986).

On May 2, 1986, the Licensing Board issued a Memorandum and Order admitting CASE and an individual named Meddie Gregory as a consolidated intervening party with one consolidated contention. See ASLBP No.

86-528-02-CPA (May 2, 1986). ("ASLBPOp") That contention alleges that:

Applicants have not met their burden of proving that the delay in completion of construction was not caused by their own dilatory conduct.

a. Applicants have not given any reason for the existence of the delay. They only assert they need more time to complete a reinspection, redesign, and reconstruction program but they do not disclose the reason why such programs are needed or that the reason for delay was not intentional and without a valid purpose.

b. The real reasons for the delay in construction completion were that:

1. Applicants deliberately refused to take positive action to reform their QA/QC program in the face of consistent criticism, and

2. Applicants have failed to properly design their plant, specifically:

1. Applicants failed to correctly apply fundamen-tal engineering principles, ii. Applicants failed to properly identify unique designs in their PSAR,

3 iii. Applicants constructed much of their plant prior to its design having been completed, iv. Applicants have failed to comply with 10 CFR Part 50, Appendices A and B, including their failure to promptly identify and correct design deficiencies, and deliberately refused to take positive action to correct such deficiencies.

ASLBP Op. at 7. Essentially, the contention appears to allege that TUEC had a corporate policy to construct the plant in violation of NRC requirements, and that subsequent discovery and efforts to correct these violations caused the delay. Therefore, argues CASE, the delay does not constitute " good cause" because of the deliberate, intentional, and knowing nature of the violations which caused it. .,

Both TUEC and the Staff have appealed the decision admitting that contention to the Appeal Board. The permittees assert that any delay for reinspection and correction of defects, regardless of their root cause, is

" good cause" for an extension under both the statute and NRC regulations, citing the Commission's decision in Washington Public Power Supply System (WPPSS Nuclear Projects Nos. 1 & 2), CLI-82-29, 16 NRC 1221, 1230-31 (1982) l ("WPPSS"). The Staff challenges the admissibility of the contention on two other grounds which are not relevant to the question before us today.1 1

The Staff argues that (1) the Licensing Board incorrectly relied upon information developed in the licensing proceeding to cure deficiencies in the basis supporting the intervenors' contentions and (2) in light of the intervenors' statement that it does not seek denial of the permit but instead seeks imposition of certain conditions on the construction permit, together with the Licensing Board's determination that it lacks authority to impose those conditions, a hearing is not warranted. See NRC Staff's Brief to the Appeal Board at 3 (May 12, 1986). These issues are not before us at this

[ Footnote Continued]

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The Appeal Board certified a question to us under 10 CFR 6 2.718(1)

(1986) and our Statement of Policy on Conduct of Licensing Proceedings,

! CLI-81-8, 13 NRC 452, 456, (1981). That question reads: "Is the admitted CASE / Gregory contention... foreclosed as a matter of law by [WPPSS]" Texas Utilities Electric Company, et al. (Comanche Peak Steam Electric Station, Unit 1), Appeal Board Memorandum and Opinion (July 2,1986)("511 pop.").In answering the question below we have carefully reviewed all of the relevant papers and arguments of the parties to the Boards below.2 Initially, we must start with language of the statute at issue which provides in pertinent part that "[u]nless the construction or modification of the facility is completed by the completion date, the construction permit shall expire, and all rights there under be forfeited, unless upon good cause shown, the Consnission extends the completion date." Section 185 of the AEA, 42U.S.C.2235.(Emphasisadded.) The regulation implementing this statute states that the applicant must complete construction "by the latest comple-tion date" or face forfeiture of its rights under the permit. "Provided, however, that upon good cause shown the Commission will extend the completion date for a reasonable period of time. The Commission will recognize, among other things, ... [ specific enumerated acts] and other acts beyond the .

[FootnoteContinued]

time and we express no opinion on them. The Staff does not support TUEC's broad interpretation of " good cause" as defined in WPPSS. See Transcript of Oral Argument Before Atomic Safety and Licensing Appeal Board, at 28-32 (June 18, 1986).

2 We assume, for purposes of decision, that the contention as alleged is true.

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i control of the permit holder, as a basis for extending the completion date."

10 CFR 6 50.55(b) (1986) (emphasis added).

As we read the statute, the implementing regulation, and agency case law, a pennittee may demonstrate good cause for a CP extension in two differ-ent ways. First, as the regulation in 10 C.F.R. 9 50.55(b) expressly contem-plates, a pennittee will demonstrate " good cause" for the extension if it demonstrates that there was good cause for the past delay in plant i completion. Public Service Company of New Hampshire (Seabrook Station,

. Unit 2),CLI-84-6,19NRC975,978(1984)("Seabrook");WashingtonPublic i

Power Supply System (WPPSS Nuclear Project No. 2), ALAB-722,17 NRC 546, 551 (1983). Indeed, most past CP extension requests have alleged good cause for

the past delay. Our decision in Seabrook further defined good cause for the j past delay. In Seabrook the Connissioy. was confronted with contentions in the CP extension proceeding that related to need for power, cost of comple-l tion and financial , consequences to the utility and ratepayers. There was no attack on the sufficiency of applicant's asserted reasons for the past delay.

, In this context, we stated that in order to defeat an extension request based

on good cause for the past delay

"First, the construction delays at issue have to be traceable to .

the applicant. Second, the delays must be ' dilatory.' If both prongs are met, the delay is without ' good cause.'" Washington i Public Power Supply System (WPPSS Nuclear Project No. 2), ALAB-722,

17 NRC 546, 551 (1983). In other words, the proponent of the contention must articulate some basis to show that the applicant is responsible for the delay and has acted intentionally and without a valid business purpose. Id_. at 553.

Supra at 978.

On the other hand, a permittee may also demonstra,te good cause for a CP extension by showing not that there was good cause for the past delay, but i ,

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6 that there h now goo'd cause for the NRC to allow more time for plant comple-tion. Unlike the first way to show good cause, which focuses on the pennit-tee's past actions, the second option focuses upon the permittee's current and future actions. WPPSS addressed efforts,to correct safety deficiencies in relation to this second method to show good cause.

Our holding in WPPSS was intended to encourage licensees to conduct vigorous internal investigations and remedial safety actions by not penaliz-ing them for any completion delay caused thereby. See 16 NRC at 1230-31. On its face, WPPSS does not distinguish among innocent, negligent, or inten-tional violations of NRC requirements as the root cause of the deficiencies requiring correction. Moreover, we believe that WPPSS underlying philosophy intended no such distinction necessarily to be controlling. For example, if a utility were to adopt a corporate policy to construct the plant in willful violation of NRC requirements, but were then to reverse that policy, remove the wrongdoers, and. embark on a new effort to construct a safe plant in full compliance with NRC requirements, we could find that the new policy consti-tuted " good cause" for an extension. We.will not penalize a current manage-ment for the mistakes of its predecessors in this regard. See, e.g.,

Metropolitan Edison Company (Three Mile Island Nuclear Station, Unit 1),

CLI-85-2, 21 NRC 282, 296-306 (1985); Metropolitan Edison Company (Three Mile Island Nuclear Station, Unit 1), CLI-85-9, 21 NRC 1118, 1135-40 (1985). This interpretation furthers the policy expressed in WPPSS of encouraging efforts to search out and correct safety deficiencies.

We turn now to the contention at issue in this proceeding. In its CP extension request TUEC asserts good cause by alleging that the delays that

7 have been required to date, and the additional time that will be required in D

the future, are to determine and correct safety problems. CASE charges in response that TUEC had a corporate policy to construct the plant in violation of NRC requirements, and that later discovery of this policy and efforts to correct the violations caused and is causing delay. For purposes of analysis, we turn first to the method to show good cause described in WPPSS.

If_thepermitteeisseekingthepermitextensionbecauseitclaimsgoodcause for the NRC to allow more time for plant completion under WPPSS,3 this particular contention is barred by our WPPSS decision because, as currently worded, it focuses only on the permittee's past conduct. If a permittee is seeking a CP extension solely because more time is needed to correct defi-ciencies, a contention worded like this one and directed only at past conduct would not be sufficient, even if true, to defeat the extension.

We focus next on the first method to demonstrate good cause for a CP extension by showin.g good cause for the past delay. A simple, mechanical i application of the holding in Seabrook leads to the conclusion that a finding that construction delays arose from a deliberate corporate policy to construct the plant in violation of NRC requirements would virtually never defeat a CP extension. Such a corporate policy could hardly be characterized as " dilatory" conduct if, as is most likely to be the case, the policy was intended to speed construction. And if we go funther and apply the Seabrook

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See letter from permittee's counsel to Secretary Chilk dated l

February 4, 1986 at page 6 and" Opposition of Texas Utilities Electric Company, et al. to Request for Stay" dated February 13, 1986 at page 13.

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8 elaboration of what is meant by " dilatory," we would be hard pressed to avoid the. conclusion that the policy, while intentional, had the valid business purpose to speed construction.

But in Seabrook there was no contention like the one before us in this case. And the Seabrook analytical framework would lead to the same result --

dismissal of the contention as insufficient to defeat the extension request'

-- even if the deliberate corporate policy to construct in violation were an ongoing one, for even an ongoing policy would presumably have the valid business purpose to speed construction and not be " dilatory." Yet to grant a CP extension request in the face of a finding that the past delays were caused by a past and still ongoing policy of deliberate violations would be to reward such wrongdoing. Surely the drafters of the Atomic Energy Act cannot~have had this in mind when they allowed CP extensions for good cause.

We conclude that the Seabrook framework for testing contentions in a CP extension proceeding does not work well when applied to the type of CP extension request and contention at issue in this proceeding. We therefore decline to extend it to this case. Instead, the question is whether, in view of the safety purposes of the Atomic Energy Act, the need to evaluate and correct safety deficiencies can be good cause for delays in construction completion even when those deficiencies resulted from deliberate corporate wrongdoing. Our analysis here proceeds along the same lines as the analysis under the second way to show good cause, and leads to the same result. We should not reward wrongdoing by granting a CP extension in the face of a finding that construction delays arose from deliberate wrongdoing, but we also should not penalize a current management for the mistakes of its

9 predecessors. We believe that the appropriate balance is struck by holding that if there was a corporate policy to speed construction by violating NRC requirements, and that policy was discarded and repudiated by the permittee,

, any delays arising from the need to take corrective action would be delays for good cause. Thus, if a permittee is seeking a CP extension because of delays associated with the need to correct safety problems, a contention, worded like this one, that is directed only at past conduct would not be sufficient, even if true, to defeat the extension.

The Appeal Board should determine the admissibility of the consolidated intervenors' contention in accord with this guidance.

The additional views of Commissioner Bernthal are attached.

It is so ORDERED.

For be Commission nrok [

W TAMUEL J. CllILK

. W

%, pecretaryofthe Commission l

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Dated at Washington, D.C.

this y of September, 1986. ~

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Comissioner Bernthal's additional views I concur in the result reached in the proposed order; in my judoment the criteria set forth in ALAB-722 (and applied by the Canmission in the Seabrook proceeding) for determinino whether a utility has been dilatory in executing a construction project could never have been intended to apply to circumstances such as those present in the Comanche Peak case.

But I am troubled that the term " valid business purpose" should ever have i found its way into the Commission's lexicon of jurisprudence in construction permit extension cases -- as if the Commission were equipped to make judgments on matters of business and economics. Indeed, such terminology is reminiscent of the Commission's dubious charge to rule on "need for power" and " financial qualifications."

I question whether the Commission today should ever deny a construction permit extension request on other than public health and safety grounds.

The original purpose of the so-called " latest date for completion of construction" inserted in all permits was related solely to questions .~

of adequate uranium supply for commercial reactors -- a consideration that has long since lost its currency.

Issues of economics and " business purpose" are more properly the subject of prudency hea' rings before state public utility commissions. Therefore, I believe the Commission should modify its rule regarding construction permit extension requests so that the rule is based solely on public health and safety considerations. Considerations of economics should be left to those with a statutory mandate and expertise in that arena.

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