ML20236N973
| ML20236N973 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 08/07/1987 |
| From: | Dignan T PUBLIC SERVICE CO. OF NEW HAMPSHIRE, ROPES & GRAY |
| To: | NRC COMMISSION (OCM) |
| References | |
| CON-#387-4181 OL-1, NUDOCS 8708120174 | |
| Download: ML20236N973 (12) | |
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L C'C% i August,r.,r:
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Dated:
7, 1987 UNITED STATES OF AMERICA 9
before the
((.
NUCLEAR REGULATORY COMMISSION
)
Ir. the Matter of
)
)
PUBLIC SERVICE COMPANY
)
Docket Nos. 50-443-OL-1 OF NEW HAMPSHIRE, ET AL.
)
50-444-OL-1
)
(Seabrook Station, Units 1
)
(Onsite Emergency and 2)
)
Planning and Safety
)
Issues)
)
APPLICANTS' RESPONSE TO INTERVENERS' MOTION FOR LEAVE TO FILE A SUPPLEMENT TO INTERVENERS' APPLICATIONS FOR A STAY OF LICENSING BOARD ORDER AUTHORIZING OPERATION UP TO FIVE PERCENT OF RATED POWER Under date of July 31, 1987, Town of Hampton (TOH), New England Coalition on Nuclear Pollution (NECNP), and Seacoast Anti-Pollution League (SAPL) (hereafter " Interveners") f.4 ted a
Motion for Leave to File a Supplement to Interveners' Applications for a Stay of Licensing Board Order Authorizing Operation up to Five Per Cent of Rated Power.
For the reasons set forth below, the Applicants say that the motion should be denied.
The motion is apparently designed to bring to the Commission's attention a recent Form 8-K filing which Public Service Company of New Hampshire (PSNH) made with the Securities and Exchange Commission.
Therein PSNH indicated that in the event that it and its investment bankers were not successful 8708120174 070007 PDR ADDCK 05000443 0
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v (wf Ahin ln relatively short time) in putting together a financial
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- pfari,-'it will be difficult, if Mot impossible, for the company l
wto avoid proceedingsfunder.the B&n'kruptcy.dode>."
In addition to s
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,"many other deficiencies,s.the mot 2bn is premature'~ inasmuch as it
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.i is. premised an the concept that PSNH wiliji.in fact, fail to come s
.t up with a financial plan and will, in fact, have to seek the s
s protection of the Bankruptcy' Courts.
These conditions precedent N
.have yet to occur, t's In addition, the Interveners state that " absent relief in 1
the Bankruptcy Courts, Applicants, as constituted, have admitted x
'jh 1 to insuperable financial obstacles to obtaining a full power operating license for Seabrook."
This presumably requires the issuance of-the requested stay (until an operating license at 1
' full power. issues) under the. principles announced in Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), CLI-87-02, 25 NRC (1987).
The problem is that the 4
alleged insuperable obstacle, PSNH's. bankruptcy, is not yet a fact, and, if it were a fact, it still would not be an insuperable obstacle.
In the event that PSNH went bankrupt, j
4 there is nothing in the law to prevent it, as debtor in possession, or another entity from operating Seabrook.
Thus there is, at present, simply no insuperable obstacle in fact or j
j in law.
l The motion should be denied for another reason.
The 1
regulations of the Commission no longer require the demonstration I
of-financial qualifications.
Interveners are aware of this, but
(
2 L
i g..:
seek to overcome:the a fo-tiori result ~which flows from this lack of regulatory basis by attaching a copy of a petition under 10
'CFR 2.758 which they have filed with the Licensing Board.
This Petition is as meritless as the in'stant motion.
'A copy of the
. Applicants' answer thereto is attached hereto, marked "A," and incorporated herein by reference in opposition to the motion.
CONCLUSION The motion should be denied.
Respectfully submitted,
')
s_
Thontas ( g, Lewald
' nan, Jr.
George H.
Kathryn A.
Selleck Ropes & Gray 225 Franklin Street Boston, MA 02110 (617) 423-6100 Counsel for Applicants a
1 f.
3 1
J Dated: August 7, 1987 I
l J
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION i
before the ATOMIC SAFETY AND LICENSING BOARD
)
)
In the Matter of
)
I PUBLIC SERVICE COMPANY
)
Docket Nos. 50-443-OL-1 CF NEW HAMPSHIRE, ET AL.
)
50-444-OL-1
)
(Seabrook Station, Units 1
)
(Onsite Emergency and 2)
)
Planning and Safety
)
Issues)
)
APPLICANTS' RESPONSE TO INTERVENERS' PETITION TO WAIVE REGULATIONS 50.33(f) AND 50.47(4) TO THE EXTENT NECESSARY TO REQUIRE APPLICANTS TO DEMONSTRATE FINANCIAL QUALIFICATION TO OPERATE AND TO DECOMMISSION SEABROOK STATION Under date of July 31, 1987, the Town of Hampton (TOH), the New England Coalition on Nuclear Pollution (NECNP), and Seacoast Anti-Pollution League (SAPL) (hereafter " Interveners") filed a Petition to Waive Regulations 50.33(f) and 50.47(4) (sic) to the Extent Necessary to Reauire Applicants to Demonstrate Financial Qualification to Operate and to Decommission Seabrook Station.
For the reasons set forth below, the Applicants state that a determination should be made pursuant to 10 CFR 2.758(c) that no prima facie showing has been made.2
- The Appeal Board has directed that, despite any possible jurisdictional questions which may be involved, the Licensing Board is to entertain the petition at bar in the first instance.
Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), Unpublished Memorandum and Order (Aug.
4, 1987).
O lt
LW E
.To.begin with', the petition is-premature.
The gravamen of
'the. petition is a so-called-8-K filed'by Public Service Company i
of New Hampshire (pSNH). ~ That document. states that in the event.
.that PSNH is'not successful in its efforts, together with its-Linvestment bankers, in~ coming up with a financial plan within a l
.relatively short' time, "it will be difficult, if-not impossible, for the Company to avoid proceedings under the Bankruptcy Code."
The 8-K does not state that PSNH will fail in its efforts.
In'any event the Int'ervenors take the position that the alleged,"likely, bankruptcy of Applicants' lead' owner is wi,thout precedent." *To the contrary, th'ere is p'recedent and'it.does not i
support-the position offthe interveners.
In the Shoreham proceeding, the Licensing; Board dealt with a'similar petition.
Long Island' Lighting Co. (Shorcham Nuclear Power Station ~, Unit 1), LBP-84-30, 20 NRC 426, 430-36 (1984).
Therein, the Licensing Board'fuliy examined the history of the Commission's Financial Qualifications rule and reached the conclusion on facts similar, if not congruent, to those.at bar that no prima facie showing had been made.
Inter alia, the Shoreham Licensing Board observed:
"In order to show that the regulations should be' waived, Interveners would have to show
{
that LILCO cannot-recover its operating costs
{
through rate regulation.
Interveners have indicated that the New York PuSlic Service 1
l Commission has instituted a prudency investigation and that its Staff has proposed to deny $1.8 billion in Shoreham related construction costs.
Yet this proceeding has not been. concluded and thus its outcome remains wholly speculative."
20 NRC at 433 2
_____-_____-___A
- p
.,8 (Emphases in original).2 s
s
's l
"Nor does this situation present issues of considerable safety significance for which a
. reasonable assurance now of the future outcome of the rate proceeding would be
' desireable.. Interveners do not allege that any particular safety problems result from LILCO's " dire" financial situation;'and apparently none exist.
In fact, their only fear is that "the citizens of the State and County could be faced with an irradiated plant whose owner cannot afford to operate, s_ hut it down, or clean it un safelr." [ Record Cite).
Although possible, it is not probable that this fear will be realized.
It is unlikely that LILCO would not be found financially qualified to operate Shoreham'if and when it satisfies all applicable NRC prerequisi.tes to. operation.
In a-dition, the New York' State PUC is unlikely to deny LILCO
-ressonable operating costs, if and when Shoreham commences commercial operation, since it has generally done so."
Ist at 433-34 (footnote omitted, emphases added).
The above quoted language from the Shoreham decision highlights two faults in the Petition at bar.
First, it is speculative as to whether or not the event which is a prerequisite to its having even surface validity (the seeking of protection.under the Bankruptcy Code by PSNH) will, in fact 2 Per contra, a draft report issued by the consultant hired by PSNH's regulator, The New Hampshire-Public Utilities Commission, has tentatively concluded that approximately $333.5 million of the total to date cost of Seabrook, $4.8 billion, (or j
approximately seven per cent) was imprudently incurred.
See New Hampshire Public Utilities Commission, Executive Summary, Review of the Reasonableness of the Costs and Management of the Seabro'ok Station, Touche Ross and The Nielsen-Wurster Group, July 1987, passim.
While this does not, of course, mean that the NHPUC will agree fully with its consultants, it certainly places PSNH in a better situation vis-a-vis its rate regulator than existed when the Shoreham petition was dealt with by the Licensing Board in that case.
3 i
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occur.
Second, the petition misstates what the special circumstance are that would have to exist before a prima facie showing could be made.
With respect to the latter matter, the Petition, after highlighting the portion of the Statement of Basis published by l
the Commission in 1984 when the current Financial Qualification Rule was promulgated that emphasizes the Commission's power under 2.758 to waive the rule, see Petition at 7, goes forward on the assumption that the Commission therein said something it did not say.
The Commission did not say that Bankruptcy (or other financial problems of the operating utility) per se could result-in an exce~ption oh a waiver under 10 CFR 2.758.
Rather the
" threshold showing" that had to be made was that:
"[T]he local public utility commission will
(
not allow the total cost of operating the J
facility to be recovered through rates." 49 i
Fed. Reg.,35751 (Sept. 12, 1984).
In other words, it is the attitude of the relevant rate i
regulator that is crucial, not the question of whether the operator may go into reorganization.
The Petition does not even begin to address the attitude of the New Hampshire Public Utility
]
i Comruission towards allowing suf ficient funds to be recovered to cover all operating costs of Seabrook.8 This is fatal, we 8Possibly in recognition of this deficiency, the Interveners spend a great. deal of time discussing the so-called " anti-QUIP" i
laws in New Hampshire. Petition at 4-5.
However, there is nothing unusual about Seabrook's situation.
Any nuclear power plant which is denied a full power license will create a problem j
of the same nature as conjured up in the Petition for Seabrook.
]
A request for waiver cannot be premised upon an assumption that a full power license will be denied.
See Long Island Lighting Co.
)
o 4
submit.
Again the words of the Shoreham Licensing Board are instructive:
"In the present context of financial qualifications, there is no basis to speculate even if Interveners' most dire financial forecasts are realized, that the plant could not be operated in accordance with all safety requirements by either a restructured LILCO or by some other entity.
This would be subject to En NRC assessment of any significant change in the entity proposing to operate the Shoreham plant (e.g.,
LTLCO in some form of bankruptcy or a different utility operator) if and when such a proposed change is necessitated by the outcome of the State rate proceedings or other circumstances.
Indeed, based on the PSC's general position [ cite to footnote
~
following), it is more speculative to assume that'no entity wou'1d be. permitted the rate relief to cover the costs'of operation'of Shoreham than it is to assume that there would be a variety of financial arrangements which would permit some qualified entity to do so.
For example, an entity not saddled with LILCO's present terms of debt service on construction funds could need a lesser degree of rate relief than LILCO would to cover its costs."
Id. at 433 n.
7 (first emphasis added).
Substitute "PSNH" for "LILCO" in the immediately above quoted statement, and it would be equally applicable, on all fours, and dispositive.
The final attempt to save this deficient petition is to include more rank speculation as to what might occur in the event a trustee is appointed in a bankruptcy proceeding.
Petition at 6-7.
Prescinding from the fact that the appointment of a trustee (Shoreham Nuclear Power Station, Unit 1), CLI-83-17, 17 NRC 1032 (1985).
5
)
- i in Chapter IX proceeding is, by no means, automatici it is fair
'to assume'that any trustee who.is appointed will do everything he l
or she can to preserve the major asset of the debtor.
In the L
case of PSNH, the major asset is Seabrook.
CONCLUSION-L A determination should be made that no prima facie showing L
has been made.
l Respectfully submitted, fr..- ~ ~ &:'
l'
-= A_
/
1
,, 7, Thomas G. D $ 'n, Jr. '
L.
~
George H.'Lecald, Kathryn A.
Selleck Ropes & Gray 225 Franklin Street Boston, MA 02110 (617) 423-6100 Counsel for Applicants 3
-See 11 U.S.C.
1104(a).
6
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R; l
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t UCCFETEr M iy CERTIFICATE OF SERVICE 7
'87 E 10 A11.:09 I,
Thomas G.
- Dignan, Jr.,
one of the attorneys for the-Applicants herein,-hereby certify that on August 7,,n1987, I made service of'the within document by mailing copie.,si
. ' ~,
r thereof,. postage prepaid, to:
Mam.
Lando W.
- Zech, Jr., Chairman Thomas M. Roberts Nuclear' Regulatory Commission, Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 Kenneth M. Carr Frederick M. Bernthal Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, DC 20555.
Washington, DC 20555 Alan S.
Rosenthal, Chairman Howard A. Wilber Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Appeal Panel U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, DC 20555-Washington, DC 20555 Gary J.
Edles; Mr. Ed Thomas Atomic Safety and Licensing FEMA, Region I Appeal Panel:
442 John W. McCormack Post U.S. Nuclear' Regulatory Office and Court House Commission Post Office Square Washington, DC 20555 Boston, MA 02109
.Admini,strative Judge Sheldon J.
Robert Carrigg, Chairman
.Wolfe, Esquire, Chairman Board of Selectmen Atomic Safety and Licensing Town Office Board Panel Atlantic Avenue U.S. Nuclear Regulatory North Hampton, NH 03862
-i
. Commission Washington, DC 20555 Dr.' Emmeth A.
Luebke Diane Curran, Esquire Atomic Safety and Licensing Andrea C.
Ferster, Esquire Board Panel Harmon & Weiss U.S.
Nuclear Ragulatory Suite 430 Commission 2001 S Street, N.W.
Washington, DC 20555 Washington, DC 20009 1
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-Dr.
Jerry Harbour Stephen E. Merrill, Esquire
' Atomic Safety and Licensing Attorney General
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Board Panel George Dana Bisbee, Esquire U.S.~ Nuclear Regulatory Assistant Attorney General
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Commission-Office of the Attorney General Washington, IX:
20555 25 Capitol Street Concord, NH 03301-6397 Atomic Safety and Licensing Sherwin E. Turk, Esquire Board Panel Office of the Executive Legal U.S. Nuclear Regulatory Director Commission U.S.
Nuclear Regulatory l
Washington, DC 20555 Commission Washington, DC 20555 Atomic Safety and Licensing Robert.A. Backus, Esquire
.{
Appeal Board Panel Backus, Meyer & Solomon U.S. Nuclear Regulatory ~
116 Lowell Street-Commission P.O.
Box 516 i
-Washington, DC 20555 Manchester, NH 03105 Philip Ahrens, Esquire Mr.
J.
P.
Nadeau Assistant Attorney General Selectmen's' Office LDepartment of the Attorney.
10 Central Road' L
General Rye, NH 03870 f
Augusta, ME 04333 Paul McEachern, Esquire Carol S.
Sneider,. Esquire Matthew T.
Brock, Esquire Assistant Attorney General l
Shaines & McEachern Department of the Attorney General
-25 Maplewood Avenue One Ashburton Place, 19th Floor P.~O.. Box.360 Boston, MA 02108
'Portsmouth, NH 03801 Mrs. Sandra.Gavutis Mr. Calvin A. Canney Chairman, Board of Selectmen City Manager RFD 1
-Box 1154 City Hall Kensington, NH 03827 126 Daniel Street Portsmouth, NH ~03801 i
Senator Gordon J. Humphrey Mr. Angie Machiros
-U.S.
Senate Chairman of the Washington, DC 20510 Board of Selectmen
.(Attn:
Tom Burack)
Town of Newbury Newbury, MA 01950 Senator Gordon J.
Humphrey Mr. Peter S. Matthews One Eagle Square, Suite 507 Mayor Concord, NH 03301 City Hall (Attn:
Herb Boynton)
Newburyport, MA 01950 l l
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[a:
Mr. Thomas.F. Powers, III Mr. William S.
Lord Town Manager.
Board of Selectmen Town of-Exeter' Town Hall'- Friend Street
'10 Front' Street'...
Amesbury, MA 01913 Exeter,.NH -03833
.H.
JosephLFlynn, Esquire Brentwood Board of Selectmen
' Office of General' Counsel RFD Dalton Road Federal Emergency Management Brentwood, NH 03833
. Agency-500 C Street, S.W.
Washington, DCl 20472
-Gary W.
Holmes, Esquire Richard A. Hampe, Esquire
. Holmes.& Ells
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Hampe and McNicholas
.47 Winnacunnet Road 35 Pleasant Street
'Hampton, NH- 03841 Concord,. NH ' 03301 Judith H.'Mizner,-Esquire Charles P.
Graham, Esquire
'Silverglate, Gertner, Baker McKay, Murphy and Graham l
' Fine, Good & Mizner 100 Main Street 88 Broad Street Amesbury, MA 01913 Boston, MA 02110 a f / f f k _: -
Thom'as G.~ Dign 1 )