ML20236F760
| ML20236F760 | |
| Person / Time | |
|---|---|
| Site: | Browns Ferry, Fort Calhoun  |
| Issue date: | 10/02/1987 |
| From: | Voigt H LEBOEUF, LAMB, LEIBY & MACRAE, NEBRASKA PUBLIC POWER DISTRICT, OMAHA PUBLIC POWER DISTRICT |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20236F724 | List: |
| References | |
| TAC-66352, NUDOCS 8711020283 | |
| Download: ML20236F760 (8) | |
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,, e, L-iUNITED STATES OF' AMERICA.
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NUCLEAR REGULATORYJCOMMIESION~
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' In.the Matter ~of a
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- NEBRASKA'PUBLIC POWER DISTRICT'.
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. Docket'No'. 50-296 4.
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- In the Matter of
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. OMAHAPUBLIC POWER; DISTRICT Docket No. 50-285
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b REQUEST FOR EXEMPTION D
d Introduction
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Pursuant to:10-C.F.R..S 50.12(a)(2)(v),-Nebraska-1 Public Power District.-("NPPD") andLOmaha Public Power Di~ strict-( " OP PD )' (collectively "the Districts"), each.of which is-a
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political subdivision of the State of Nebraska, hereby' apply q
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- for.a schedular. exemption from the requirements of 10 C.F.R.LS fl
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50.54(w)(1), as amended by 52 Fed. Reg.. 28963 (1987).
The new J
requirements become effective on October 5, 1987, and the
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' Districts will'not be able to comply with them by that date or i
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- within 60 days thereafter.
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The State'of Nebraska is unique in that its entire supply'of' electricity comes from publicly-owned entities.
Together.with Lincoln Electric System, the Districts provide j
- virtually the entire generating capacity for the State.
NPPD owns and operates'the Cooper nuclear generating station, with
' an accredited 1 capacity of 778 megawatts.1/
During 1986, NPPD's share of' Cooper. represented l'3.7% of NPPD's generating capacity.. It:has produced as much as 25% of NPPD's annual I
energy supply.
OPPD owns and. operates the Fort Calhoun nuclear i
. generating station,Lwith a net electrical capacity of 476 l
1 megawatts.
During'1986, Fort Calhoun represented 24% of OPPD's generating capacity.
Over the past'10 years, it has supplied i
about 44.4% of OPPD's total generation.
Obviously, closing Cooper'and Fort Calhoun would have a devastating effect on energy. supply in Nebraska and on the economy of the entire State.
Each of the Districts currently maintains $585 million of property insurance obtained through American Nuclear Insurers and the Mutual Atomic Energy Reinsurance Pool.
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By contract, 50% of the net power and energy of Cooper is made available to Iowa Power and Light Company.
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Q Neither District is'a member of Nuclear Electric Insurance i
Limited ("NEIL").
Under the provisions of the Nebraska Constitution, as interpreted by the Nebraska Supreme Court, there is considerable doubt as to whether the Districts may lawfully purchase insurance'from NEIL, which is the only. insurance available to comply.with the Commission's new regulations.
The Nebraska' Constitution provides in Article XI, Section 1 that:
I No city, county, town, precinct, munici-pality, or other sub-division'of the_ state, shall ever become a subscriber to the capital stock, or owner of such stock, or any portion of interest therein of any railroad, or private corporation, or association.
In Nebraska Leacue of Savinas and Loan' Associations v.
Mathes, 201 Neb. 122, 266 N.W.
2d 720 (1978) and again in Nebraska Leacue of'Savinos and Loan Associations v. Johnson, 215 Neb. 19, 337 N.W.
2d 114 (1983), the Nebraska Supreine Court held that Article XI, Section 1 prohibits Nebraska political subdivisions from depositing funds in a mutual' savings bank because the depositor becomes a member with voci..; rights and 1
the right to share in profits.
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The Nebraska Constitution further provides, in Article XIII, Section 3, that:
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LTheVcreditlof ths state sh~al10never be given
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orLloaned.in7 aid of'anyLindividual', associa-1 lt
~ tion,lorocorporation,'except'that'the state D
mayfguaranteelor makeL1ong-term,. low-1 interestiloans:to Nebraska; residents. seeking; "adultL or. post high school education at any.
$public~or'privatelinstitution in thisEstate. qualifications'forband4the' repaym q
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. loans ~shall be as' prescribed,by.ther Legislature'.
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~The1 Nebraska' Supreme Court has' held that the' prohibition appliesito' political 1 subdivisions, as.well as;the' M
cStateLitself, and-forbids the. lending offeredit to a; private'
- enterprise, even1though the' enterprise ~is intended to' serve the publicogood.
E.o.,fState ex'rel. Beck v.' City of York,'164 r
-Neb.?223,'82 N.E 2d1269.
Effective on March 29, 1985,~NEIL amended its charter
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andl. bye-lawsLto permit NEIL to' accept non-voting' members and to.
provide that such members would not share in any-distributions-made by'NEIL, but instead would receive premium' adjustments.
.In addition, NEIL proposed to issue endorsements to'its' standard' Decontamination Liability and Excess property Insurance' policy that would give'non-voting members the right to prevent any pledge or assignment of their Retrospective premium Adjustment' obligations.
The changes in NEIL's charter and bye-laws, together with the proposed policy endorsements, were designed to satisfy the limitations of Nebraska law discussed above.
Based upon NEIL's actions, the Districts
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'O' submitted applicationsDto.NEIL.for decontamination and property.
insurance.
By letters from NEIL dated June 28, 1985, the
- Districts were advised that their applications for non-voting i
membership and decontamination and property isurance had been accepted by NEIL, but that NEIL would not issue policies to the Districts until they had secured a declaratory judgment from 1
the Nebraska Supreme Court that non-voting membership in NEIL and'the issuance of policies with appropriate endorsements would not violate the Nebraska Constitution.
On, July 1, 1985, the. Districts jointly commenced an action for a declaratory judgment in the District Court of
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Lancaster County, Nebraska.
On December 1, 1986, the District Court issued its decision.
The District Court declined to grant a declaratory judgment, stating that there is no actual controversy involved.
i The District Court went on to say that if.a declaratory judgment were proper the Court would hold that membership by the Districts in NEIL would violate the Nebraska Constitution.
The Districts appealed the ruling of the District Court.
The case has been fully briefed before the Supreme Court,.and oral argument has been waived.
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-Recent Developments On~ August 5,;1987,-the: Commission's1 amended
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regulations werefpublished in the Federal Register.,~The l-
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Districts' called'tosthe attention of the attorneysffor'NEIL"the c
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Commission.'.s assertion; a't 52 Fed. Reg. 28966-67f,'that the adoption'of the amended regulations would preempt state 1
i prohibitions against-purchasing nuclear property insurance.-
i The, Districts' inquired.whether'NEIL would go ahead and issue policies based upon the Commission's findings and conclusions.
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- They were advised that NEIL was unwilling to rely upon the Cominission's determination and thatL NEIL would require either ' a l
fa'vorablecruling.by the Nebraska Supreme Court.in the i
' litigation.be' fore it or a declaratory' judgment by a Federal-court upholding the Commission's assertion of-preempt' ion.
i The Districts also submitted the Commission's i
amendments toLthe Nebraska Supreme Court and requested expedited consideration of the pending appeal.
The Supreme i
Courtfresponded by. remanding the case to the District' Court to permit the District Court to reconsider its opinion in light of the. Commission's action.
On August 24, 1987, the Districts
' asked the Nebraska District Court for expedited reconsideration.
On September 23, 1987, the District Court
' issued a further opinion that essentially restated the holdings iniits December 1, 1986 opinion.
The Districts plan promptly i j 1
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to renew their appeal to the Nebraska Supreme Court and askTthe Supreme Court to expedite'its consideration of the case.
Assuming that the Nebraska Supreme Court ultimately J
refuses to grant a declaratory judgment that the Districts may, consistent with Nebraska law, purchase insurance from NEIL,.the r
Districts plan to commence an action for a declaratory judgment in the United States District Court in Nebraska and ask the Federal court to declare that the Commission's new regulations preempt any provisions of the Nebraska Constitution that may
. prevent the-Districts from purchasing insurance from NEIL.
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I Obviously, the necessity to obtain one or more final court decisions before the Districts can purchase the necessary f
insurance means that they will not be able to comply with the Commission's amended regulations in a timely manner.
Hasis for Exemptions The Districts have asserted, and the Commission has found, 52 Fed. Reg. 28966, that they are unable to provide equivalent protection in lieu of purchasing the NEIL coverage.
The Districts have repeatedly stated to this Commission, and to the Nebraska courts, that they desire to purchase insurance from NEIL as a matter of prudent business judgment and good utility practice.
The Districts in no way seek to avoid compliance with the Commission's regulations.
Rather, they s m_______._._._
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- find themselvestin.the"positi'on_ofIbein'g unable'to comply.
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L-Iunless 'and'until.a' satisfactory final' ruling can-'be obtdinedl
- from-e'itherl,aLstate.or Federal court.
The' Districts therefore.
require 1afschedular exemption to give them time ~to:obtain such-I
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a' ruling.
Requet'c for' Relief q
The Districts ~ request that'the Commission issue'a
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'. schedular ~exempti.in from the' requirements of' amended g
S.n50.54(w)(1) to. cont'inue until ajsatisfactory' final.. order from a stat ~e or; federal? court has been: obtained and NEIL 'has issued
.the necessary policies'to the. Districts.-'To comply with the l
60-day." grace period" in the Commission's regulations,-it is-i -
further. requested that the exemption be. issued by December 5, 1
l'987.
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Respectfully. submit'ted, LeBOEUF, LAMB, LEIBY & MacRAE i
J By 4AAt/
8 d partner 6 1333.New Hampshire Avenue, N.W.
1 Suite 1100 Washington, D.C.
20036 I
202/457-7500
'I Attorneys for Nebraska Public i
Power District and Omaha Public Power District
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October 2, 1987 {
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