ML20247A534
| ML20247A534 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 09/07/1989 |
| From: | Reis E NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML20247A539 | List: |
| References | |
| CON-#389-9139 ALAB-920, LBP-89-10, OL, NUDOCS 8909120140 | |
| Download: ML20247A534 (22) | |
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UNITED 57tTES OF AMERICA NUCLEAR prJLATORY COMMtSSION '
89 SEP -8 A9 :36 1'*
BEFORE THE COMMISSION :n
- vva In the Matter of )
) Docket Nos. 50-443 OL PUBLIC SERVICE COMPANY OF ) 50-444 OL NEW HAMPSHIRE, et a_1,. ) Emergency Planning :
)
(Seabrook Station, Units 1 and 9) )
d MRC STAFF'S OPPOSITION TO WAIVER OF .
FINANCIAL QUALIFICATIONS REGULATION APPLICABLE TO FULL POWER OPERATION OF SEABROOK .
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Edwin J. Reis .'
Deputy Assistant General Counse'l Reactor Licensing Branch
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September 7, 1989 8909120140 890907 .
PDR ADOCK 050C0442 '
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION
. In the Matter of )
) Docket Nos. 50-443 OL PU3 TIC SERVICE COMPANY OF } 50-444 OL
. NEW HAMPSHIRE, et al. ') Emergency Planning
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(Seabrook Station Units 1 and 9) >
NRC STAFF'S OPPOSITIOh TO WAIVER OF FINANCIAL QUALIFICATIONS REGULATION APPLICABLE TO FULL POWER OPERATION OF SEABROOK Edwin J. Reis Deputy Assistan', General Counsel Reactor Licensing Branch September 7, 1989 f
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'l TABLE OF CONTENTS j PAGE I. INTRODUCTION . . . . ... . . . . .
4 . . . . . . . . . . . .. . .1 LII.' DISCUSSION ... . . . . . . . ..... . . . . . . . . . . . . . 2 A., The Appeal Board Improperly -
Determined That A Prima Facia Case For A Waiver of. The Financial Qualification Regulations Existed ... . . .:. . . . . . . . . . .=. . . . 2 B. The Tests'in CLI-88-10 for The Waiver of.the Financial Qualification' Regulations Were Not Met Here. ....................... 10 C. The Staff Has the Authority To Ascertain Facts To Enable It To Advise The Commission Whether, In The Staff's View. a Material Issue Exists Which Might Require.
The Waiver Of A Regulation .- . . . .. .. . . . . . . .- . . . 12 III. CONCLUSION ..-,..................... 15
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TABLE OF AUTHORITIES l P,ff_E COURT CASES Public Service Co. of New Hampshire E 5thte, 102 N.H. 66, 150 AC2d 810 T1959). .. . ... ...... ................. 9
' Union of Concerned Scientists v. NRC, 735 F.2d 1437 (D.C. Cir.1984), cert.
denied, 469 U.S. 1132 (1985) .................. 13,14 COMMISSION I_SS_UANCES Carolina Power and Light Co. (Shearon Harris Nuclear Power Plant, Units 1,2,3 and 4), ALAS-581, 11 NRC 233 (2980) . . . . . . . , . . . . . . 14 Clevfland Electric filt.minatir.g Co.
TFe" Fry Nuclear Plant, Onits 1 and f),
CLI-85-7, 23 NRC 233 (1986) .................. 6 l Consolidated Edisen Co., (Indian Point, Units 1, 2 & 3) ALAB-319, 3 NRC 188 (1976) ........... 15 Duke Power Co. (Catawba Nuclear Station.
Units 1 and 2), ALAB-813, 22 HRC 59 (1985) . . . . . . . . . . . ,4 Houston Power and Light Co. (Allens Creek Nuclear Generating Station, Unit 1),
ALAB-582, 11 NRC 239 (1980) . . . . . . . . . . . . . . . . . . . 4 Louisiana Power and Light Co. (Waterford Steam Electric Station, Unit 3), CLI-86-1, 23 NRC 1 (1986) ....... ................ 5,6 Northern States Power Co. (Monticello huclear Generating Plant, Unit 1),
CL1-72-31, 5 AEC 25 (1972) ................. 3,4 Pacific Gas and Electric Co. Iniablo Canyon Nuclear Plant, Units I and 2),
. ALAB-775, 19 NRC 1361 (1984) .................. 5 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2),
CLI-88-10, 28 NRC 573 (1988) .................. passim I
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Public Service Company of New Hampshire (Seabrook Station Units 1 and 2),
CLI-89-3, 29 NRC 234 (1989) .................. 2,3,10,11 Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2),
ALAB-920, 29 NRC (1989) .................. passim Public Service Company of New Hampshire
. (Seabrook Station, Units 1 and 2),
ALAB-895. 28 NRC 7 (1988) ................... 3
. Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2),
LBP-89-10, 29 NRC 297 (1989) .................. 1 Southern California Edison Co. (San Onofre Nuclear Generating Station, Units 2 and 3), ALAB-680, 16 NRC 127 (1982) . . . . . . . . . . . 14 Texas Utilities Generating Co.
(Comanche Peak Steam Electric Station, Units 1 and 2), CLI-81-24, 14 NRC 614 (1981) .......... 14 Virginia Electric and Power Co.
(North Anna Nuclear Station, Units 1 and 2), ALAB-551, 9 NRC 704 (1979) ............... 5 Virginia Electric and Power Co. (North Anna Nuclear Station Units 1 and 2),
ALAB-491, 8 NRC 245 (1978) ...................
5 REGULATIONS 10 C.F.R. 2.102(a) ...................... 13 10 C.F.R. E 2.104(c)(4) .................... I 10 C.F.R. 5 2.105(e)(1) . . . . . . . . . . . . . . . . . . . . . 15 10 C.F.R. 5 2.714(a) ...................... 1,6 10 C.F.R. E 2.734 . . . . . . . . . . . . . . . . . . . . . . . . 1,6
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10 C.F.R. 9 2.758 ....................... 6 10 C.F.R. 5 2.758(b)-(d) .................... 1,2 10 C.F.R. 9 2.758(b) ...................... 3,4 10 C.F.R. 5 2.758(c) ...................... 3 10 C.F.R. I 2.758(d) ...................... 3
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. 10 C.F.R. 6-2.760a/ . . . . . . .. . ...............
5 10C'F.P..'s2.785(b)(2)
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10 C . F. R . i 5 0. 3 3 ( f ) . . . . . . . . . . . . . . . . . . . . .. . . I' 10 C.F.R. I 50.57(a)(4)'. . .=. . . . . . . . . . . . . . . . . . .
1 New' Hampshire Code of Admin. R. PUC i '
'- 1603.02;' New Hampshire Rev. Stat.
l .i Ann. 398:3 . ... . . . . . . . . . . . . . . . . . .-. . . . . . ~7 New Hampshire Rev. Stat.-Ann. 378:3'. . . . . ... . . . . . . . .
7,8 New Hampshire Rev. Stat. Ann. 378:27 .-............. 9 MISCEll.ANEOUS 49 Fed. Reg. 35747 (September 24, 1984).. . . . . . . . . . . . . 8,9,14 Final Environmental Impact Statement'
' - For The Seabrook Construction Permit, December 1974 . . . . . . . . . . ............... 10 Seabrook FSAR Februa ry 1982~ . . . . . . . . . . . . . . . . . . . 10 m-_m___._ _ _ _ _ _ - ._._m_.____ . _ _-.-_m _. ___.__ ,___ _ - . _ _ _ _ _ ___. . . . _ _ . _ . _ -
URITED STATES OF AMERICA.
NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION In the M6tter of )
) Docket Nos. 50-443 OL PUBLIC SERVICE COMPANY OF ) 50-444 OL it. NEW HAMPSHIRE, el d. ) Off-site Emergency Planning and Safety Issues (Seabrook Station, Units 1 and 2)
NRC STAFF'S OPPOSITION TO WAIVER OF FINANCIAL QUALIFICATIONS REGULATION APPLICABLE TO FULL POWER OPERATION OF SEABROOK I. INTRODUCTION The NRC staff opposes the grant of the petition to waive the-l Commission's regulations in 10 C.F.R. il 2.104(c)(4), 50.33(f) and 50.57(a)(4), so as to permit litigation of Applicants' financial l qualifications to receive a full power license for the Seabrook Station.1/
In ALAB-920, August 20, 1989, the Appeal Board reversed the Licensing l
Board's determination in LBP-89-10, 29 NRC 297(1989), and found that the
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Attorney General of the Commonwealth of Massachusetts (Intervenor) had established a prima faci; case for a waiver of the financial qualification regulations which generally exempt electric utilities, such as the Applicants, from the requirement of a financial qualification review upon their applications for operating licenses for a nuclear power plants, and proscribe the consideration of their financial qualifications in NRC 1/ The petition to waive the regulations was submitted pursuant to 10 C.F.R. 6 2.758(b)-(d). If the petition is granted interveners could then move to reopen the record under 10 C.F.R. 6 2.734 and have their late-filed contention on financial qualifications considered for admission for litigation under 10 C.F.R. 2.714(e).
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1 adjudicatory proceedings. The Appeal' Board recognized that once Seabrook is producing a net ' amount' of power to the Applicant's electric power grid and the costs of operations of Seabrook were factored into the rate base, there would be no reason not to apply the financial qualification regulations as the Applicants would receive their costs of operatio'is through those rates. ALAB-920, slip. op, at 18. Nevertheless, it found I that a prima facia case was ma.de for. a waiver of the finar.cial i qualification regulations because the principal owner of Seabrook, the ]
l Public Service Company of New Hampshire (Public Service), which is in bankruptcy, might not immediately be provided with an increase in revenues after full power operation is authorized because of the operation of New j Hampshire law. ALAB-920, at 19, 22-23.
By order of August 22, 1989, the Commission permitted tne Applicants and Staff to address any matters they may wish the Commission to consider in reviewing ALAB-920 and deciding whether a waiver is appropriate. The j l
Staff opposes the grant of a waiver as the Appeal Board improperly l l
determined that a prima fac,ia case had been made for a waiver, of the l regulations and there is no basis in the record to conclude that there is a safety significant problem warranting e consideration of Appiicants' financial qualifications. See Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2) CLI-88-10, 28 NRC 573, 599 (1988); Id.,
CLI-89-3, 29 NRC 234, 239-40 (1989).
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II. DISCUSSION
. A. The Appeal Board Improperly Determined That A Prima Facia Case For A Waiver of The Financial Qualification Regulations Existed.
Sections 2.758(b)-(d) of the Commission's Rules of Prac.tice, 10 C.F.R. 6 2.758(b)-(d), govern the admission of contentions which generally
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-2 adjudicatory proceedings. The Appeal Board recognized that once Scabrook is producing a net amount of power to the Applicant's electric power grid and the costs of operations of Seabrook were factored into the rate base, there would be no reason not to apply the financial qualification regulations as the Applicants would receive their costs of operations through those rates. ALAB-920, slip. op. at 18. Nevertheless, it found that a prima facia case was made for a waiver of the financial qualification regulations because the principal owner of Seabrook, the Public Service Company of New Hampshire (Public Service), which is in bankruptcy, might not immediately be provided with an increase in revenues after full power operation is authorized because of the operation of New Hampshire law. ALAB-920, at 19, 22-23.
By order of August 22, 1989, the Commission pe mitted the Applicants and Staff to ac' dress any matters they may wish the Commission to consider in reviewing ALAB-920 ar.d deciding whether a waher is appropriate. The Staff opposes the grant of a waiver as the 4 peal Board improperly determined that a prima facia case had been made for a waiver' of the regulations and there is no basis in the record to conclude that there is a safety signific, ant problem warranting a consideration of Applicants' financial qualifications. See Public Service Company of New Hampshire I
(Seabrook Station, Units 1 and 2) CLI-88-10, 28 NRC 573, 599 (1988); Id.,
CLI-89-3, 29 NRC 234, 239-40 (1989).
II. DISCUSSION A. The Appeal Board Improperly Determined That A Prim:: Facia Case For A Waiver of The Financial Qualification Regulations Existed.
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l Sections 2.758(b)-(d) of the Conrnission's Rules of Practice, 10 l
l C.F.R. 9 2.758(b)-(d), govern the admission of contentions which generally
seek to raise issues which the Comission regulations provide may not be considered in the Commission's adjudicatory proceedings. Under 2.758(b) a petition to an a:ljudicatory board to waive a regulation may be filed on the sole ground "that special circumstances with respect to the subject matter of the proceeding are such that application of the rule or
. regulation (or provision thereof) would not serve the purposes for which the rule or regulation was adopted." The petition must be accompanied by an affidavit showing "the specific aspect of the proceeding as to which the application of the rule or regulation (or provision thereof) would not serve the purposes for which the rule or regulation was adopted, and shall set forth with particularity the special circumstances alleged to justify the waiver or exception requested." 10 C.F.R. E 2.758(b). Other parties t
may respond by "ccunter affidavit or otherwise." id. On the basis of the petition and other materials received, the board is to determine whether a prima facia showing has been made that ap911 cation of the regulation would l not serve the purpose for which it was adopted. 10 C.F.R. I 2.758(c). No evidence may be received on the matter and no discovery or' cross-examination may be permitted. Id. If on the basis of these submissions it is determined that a prima facia showing has been made that application of the regulation would not serve the purposes for which it was adonted.
the matter is certified to the Comission for a determination of whether the regulation shculd be waived (10 C.F.R. I 2.758(d)). If this showing is not made ite matter is not to be further considered. 10 C.F.R.
l 2.758(c).
As recognized in Public Service Company of New Hampshire (Seabrool Station, Units 1 and 2), CLI-89-3, 29 NRC 234, 239 (19E9); ALAB-895, 28 NRC 7,16 (1988) a showing supporting the waiver of a regulhtion must be compelling. Citing, Northern States power Co. (Monticello Nuclear l
Generating Plant, Unit 1), CLI-72-31, 5 AEC 25, 26 (1972). A prima facia case must be shown, i.e. "one that is ' legally sufficient' to establish a fact or a case unless disproved". ALAB-895, 28 NRC at 22. E The Appeal Board grounded its finding that a prima facia showing.had been made that application of. the financial qualification regulations
. would not serve .the purpose for which they wern adopted, or the premise that there might be a delay between the time a full power license was issued for Seabiook and the time the costs of operating Seabrook could be factored ir.to Public Services' rate base. ALAB-920, Et 22-23. The issue of the financial qualification of Public Service in this interim period was not, however., the basis of any petition or affidavit submitted to the Licensing Board. 3_/. Generally, issues and arguments not raised below may not be considered upon appeal and the Appeal Board erred in considering this matter. Houston Power and Light Co. (Allens Creek Nuclear Generating Station, Unit 1), ALAB-582, 11 NRC 239, 242 fl980); Duke Power Co.
(Catawba Nuclear Station, Units 1 and 2), ALAB-813, 22 NRC 59, 82-P3 (1985).
The issue of rate recovery during the interim period was only raised on appeal in a brief filed by the Seacoast Anti-Pollution League, without any citation of fact or support in the form of sh affidavit as required by i
L 10 C r.R. E 2.758(b). The entire statement on appeal was:
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2/ As with all motions the burden is on movant or petitioner to j establish the basis for relief.
10 C.F.R. 5 2.732; Public Service Company of New Hampshire (Seabrook Station, Units 1 ano 2), CLI-88-10, 28 NRC at 596-99.
3/ See Seacoast Anti-Pollution League's Fotion to Accept late-Filed Tsiitention on Financial Qualification in Fesponse to NRC Order CLI-88-10, January 25, 1989; Massachusetts Attorney General's Petition for a Waiver af or an Exception to the Financial Qualification Pules for Full Power Operation, February 1, 1989 I 4
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Second, there is no evidence as +o what power level in fact I results in generation of power for c%:nercial sale. It may well require power levels substantially in c.xcess of low power testing levels, said to be substantially below 5 percent of rated power, so that there may be levels of operation where the safety concerns are greater than those acknowledged by the Commission for low power, but where the alleged " cure" of commercial sales is not yet !
possible. Thus, even on the Licensing Board's flawed theory that i licensing can " cure" the financial qualification issue, there is no assurance of financial qualification for power levels above those dealt within the Commission's CLI 88-10 Decision, but which may not be at pfficient levels to assure the commercial generation of power.
Thus, the Appeal Board overreached in considering an application for a waiverwhichwasnotsupportedbyanaffidavit.5!
The Appeal Board nonetheless determined to examine the financial qualifications to operate in this interim period. 5/ It asked the 4/
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Brief on Behalf of Seacoast Anti-Pollution League on Appeal of Licensing Board Memorandum end Order Denying Financial Qualification Review for Seabrook Joint Owners, April 13,1989, at 12-13; see 31so 1 Brief of Massachusetts Atturney General in Support of His asieal o7 the Denial of His Petition for a Waive of the Financial Qualification Rules for Full Power Operation (LBP-89-10), April 21,1989, at 2 n.
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Here there were only assertions of counsel. Even " evidence presented
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in affidavit form must be given by competent individuals with knowledge of the facts or experts in the disciplines appropriate to the issues raised." Pacific Gas and Electric Co. (Diablo Canyon Nuclear Plant, Units 1 and 2), ALAB-775, 19 NRC 1361, 1367 n.18 (1984). There was hardly a basis upon which regulations could be waived in order to permit a reopening of the record to consider new issues. See Louisiana Power and Light Co. (Waterford Steam Electric Station, Unit 3),CLI-86-1,23NRC1,5Tf986).
6/ The Appeal Board did not raise this matter sua sponte. "The
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Commission's regulations tell both the licensing boards and us that, while we may give ' appropriate consideration' to a ' serious safety, environmental or common defense and security issue' we are to exercise that authority ' sparingly and only in extraordinary circumstances'. 10 C.F.R. i 2.760a, 2.785(b)f2)." Virginia Electric and Powe_r Co. (North Anna Nuclear Station, Units 1 and 2), ALAB-491, 8 NRC 245, 247 (1978); see also, Id. ALAB-551, 9 NRC 704, 707 (1979)." Such a determination to exercise sua sponte review authority must be based upon a determination in a separate order (FOOTNOTE CONTINUED CN NEXT PAGE)
Applicants to " address in a supplemental memorandum questions directed to determining whan following the issuance of a full power authorization, Public Service might expect to receive revenues now denied to it because of the anti-CWIP statute." Slip op. at 19. In asking for this information the Appeal Board acted contrary to the Commission's direction that the Appeal Board not make inquiries unless it first has knowledge that safety significant issues exist. -I The Appeal Board further erred in applying the information supplied pursuant to these questions and determining that a prima facia case wat made for a waiver of the regulations because Public Service might not (F0OTNOTE CONTINUED FROM PREViml5 PAGE) which "makes the requisite findings and briefly sets forth the reason for raising the issue." Texas Utilities Generating Co. (Comanche Peak Steam Electric Station, Units 1 and 2), CLI-81-24,14 NRC 614 (1981); Louisiana Power & Light Co. CLI-86-1, 23 NRC at 7 (1986),
cautions that a 'sua sponte review may be commenced only where an adjudicatory board has " specific facts". Here there were no specific facts upon which to base a sua sponte review and no separate order was issued setting forth findings and reasons for such a review. ,
7/ Louisiana Power & Light Co. supra; Cleveland Electric Illuminating Co. (Perry Nuclear Plant, Units 1 and 2), CLI-86-7, 23 NRC 233, 215 TIY86). The latter case emphasized that it is on an intervenor to show "true safety significance" exists before an adjudicatory board seeks further information from the parties. Although these cases arose in the context of motions to reopen, they stand for the proposition that an adjudicatory board may not make independent inquiries on matters not yet admitted for litigation unless the board has first determined that an issue of "true safety significance" exists. The issues concerning financial qualifications to operate in the interim period were raised in the ,
. context of motion to waive rules under 10 C.F.R. 5 2.758 and a t motion to reopen the record will be necessary to have any matter i concerning Public Service's financial qualifications litigated at
- this late stage of the proceedings. See 10 C.F.R.
$$ 2.734, 2.714(a). This is very different from the Ttaff's general authority to undertake preliminary inquiries for the purpose advising the !
Commission as to whether a waiver is necessary in particular ;
circumstances. See infra. Preliminary Staff inquiries do not !
l~ customarily place W4 nstter at issue in the hearing process, unless j l the Staff or ancther party appropriately requests a waiver. i l
immediately be provided with an increase in revenues after full power operations because of the operation of New Hampshire law. ALAB-920, at 19, 22. The Applicants, in answer to the Appeal Board's questions, stated that at such time as Seabrook "is actually providing service to customers" or " net generation to the grid", Public Service could recover costs
- associated with Seabrook under New Hampshire law; that some regulatory delay can be expected because rate schedules have to be filed and allowed to become effective; that rates could be suspended for as much as 18 months to enable their reasonableness to be investigated; that there were provisions for " bonded rates" and temporary rates during a suspension, which "may be required in ordar to avoid constitutional issues of confiscation"; and that "New Hnpstire provides opportunity for [Public Service] to start collecting such revenues promptly" even should the rates be suspended. U The Commission, in adopting the financial qualification regulations, recognized that there "could be a phase-in and other such delays in recovery of the costs of construction and operation, and that such delays did not upset the rationale that rate setting would provide adequate funds." CLI-88-10, 28 NRC at 598. The provisions of New Harrpshire law relied on by the Appeal Board do not upset this rationale. The Appeal Board particularly pointed to the provisions of New Hampshire statute that a notice of an intent to file a rate schedule must be given 30 days before such a filing (N.H. Code of Adm. R. PUC 1603.02), and that rate changes may not take effect until 30 hys after a rate schedule is filed (N.H. RSA
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378:3). ALAB-920, at 20-71. These appear to be normal phase-in 8/ Applicant's Response to Appeal Board Questions, July 25, 1989, Attached Memorandum.
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provisions for new rates. Moreover, nothing is pointed to in New Hampshire. law that prevents the notice of intent to file a rate schedule from beirg given and the rate schedule itself being filed well before the date that Seabrook is supplying power to Public Service's customers. See ALAB-920, at 19-20. There does not appear to be any period of delay other than the normal " phase-in" delay that the Comission recognized in adopting the financial qualification regulations.
The Appeal Board next dealt with the possibility that the New Nampshire Public Utility Commission might suspend rates. ALAB-920, at 20-21. But this is significant only if PUC also refuses to provide adequate temporary rates. However, as the Commission indicated in amending the financial qualification regulations, it will not be presumed that a utility commission would not allow the costs of safe operation of a nuclear plant. 49 Fed. Reg. 35747, 35747-48; see also ALAB-920, at 18.
It is pure conjecture to speculate that there might be substantial delays caused by a suspension of rates and a disallowance of temporary rates which would not allow a prompt recovery of Seabrook's costs of oi>eration once a full power license is issued. U The memorandum from Public Service's New Hampshire counsel, upon which the Appeal Board relied for its determination of " regulatory delay", specifically stated that temporary rates "to recover some or all of the costs associated with Seabrook operation" can be awarded "from the inception and during the 9/ The Appeal Board's words reveal the conjectural nature of any delay beyond that recognized in the adoption of the regulations where it
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states, "[w3hether the regulatory delay is relatively brief or extended, the fact remains that it is highly probable that, for some interval at least, Seabroo< would be operating above the five percent level (perhaps significantly so) with no additional revenues flowing to Public Service attributable to the Seabrook facility itself."
ALAB-920, at 22-23 [ Footnote omitted).
i pendency of-[ rate] proceedings" as such " temporary rates may be required in order to avoid constitutional issues of confiscation. N.H. RSA 378:?7; Public Service Co. of New Hampshire v. State,102 N.H. 66,150 A. 2d 810 (1959)." El This memorandum concluded that Public Service could recover its costs of operating Seabrook once the plant is rendering service to its customers (furnishing net generatic,.1 to the grid) and that these revenues may be recovered promptly through. temporary rates or bonded rate procedures even should the rate schedule be suspended. El Nothing in the record suggests that the authority of- the New Hampshire PVC to suspend rates while it examines their reasonableness is unusual among public services regulatory bodies or constitutes a special circumstance, particularly in view of the likelihood that temporary rates would be required in the interim to cover the costs of safely operating Seabrook. The purported existence of this " regulatory delay" was not a prima facia showing that the financial qualification regulations would not serve the purpose for which they were adopted, i.e.: rates set by utility commissions would provide sufficient funds for safe operation of $eabrook making unnecessary the examination of financial qualifications in NRC operating licensing proceedings. E l 10/ Applicants . Response to Appeal Board Questions, July 25, 1989, Memorandum Attachment at 4. Interveners did not challenge any matter in this Memorandum, although given the opportunity to do so.
ALAB-920, at 19.
11/ Id. at 5; cf. ALAB-920 at 22: "[F]ull power operation is scarcely TTEely to be accompanied by an immediate increase in revenues by reason of the receipt" of a full power authorization."
12/ 49 Fed. Reg. 35747, 35748-49 (September 24, 1984); CLI-88-10, 28 NRC at 598.
Moreover, the Appeal Board recited no facts pertaining to the power level at which Seabrook would provide net generation to the grid enabling Public Service to recover the costs of operating Seabrook through its rates and how long after full power authorization that was likely to occur. Without this information no basis existed for concluding that 3 3
l . safety significant issue existed. See CLI-88-10, 28 NRC at 599; CLI-89-03, 29 NRC at 239. E No basis exists in the record for the Appeal Board or this Commistion to conclude that the financial qualification regulations would not serve the psrpose for which they were adopted or that any significant safety issue exists which shculd lead to a waiver of those regulations.
B. The Tests in CLI-88-10 for The Waiver of the Financial Qualification Regulations Were Not Piet Here.
The Appeal Board concluded that under the tests in CLI-88-10, 28 NRC at 600, a p_ rima facia case had been made for the waiver of the financial qualification regulations. ALAB-920, at 24-28. A deeper look at those tests shows that the tests for a waiver are not met. First, the 13f The full power output of Seabrook is 1150 megawatts electric.
Affidavit of James E. Knight, attached. The power required to run a large nuclear power plant in excess of 1000 megawatts is about 50 megawai.ts, or 5 percent or less of full power. Id. (The Finel Environmental Impact Statement for the Seabrook ConsUuction permit, December 1974, at 3-1, stated that 50-60 megawatts would be required to operate Seabrook and that the plant would produce over 1150 megawatts of electricity. See also Seabrook FSAR S 10.1, February
.- 1982). Typically, power plants are synchronized to the electric power grid providing electric power to consumers at about 6 to 8 percent of full power. Id. Thus it appears that at 6 to 8 percent of full pcwer Seabrook miy well be "providing net generation to the grid" and that, under the Appeal Boerd's reasoning, the costs of operating that facility may well be added to Public Services' rate base at that time. Id.; ALAB-920, at 19-20.
! Commission looked at whether there was a motivation for safety shortcuts at the power level proposed. The Comission stated:
Shortcuts in safety at full power conceivably could avoid shutdowns or derating and thereby contribute to greater plant availability and revenue from power sales. But shortcuts in low-power testing
, safety will not lead to generation of more revenue from power sales. The only purpose of low-power testing is to further ensure plant safety by checking selected plant systems that cannot be checked without core criticality and confirming various operating There is every incentive to do the job well and no parameters.
rational incentive to cut corners.
28 NRC at 600. The Appeal Board provides no reason to conclude that shortcuts in safety wuuld be taken prior to the time the plant is connected to the grid enabling it to earn revenues from power sales, any more than during low power testing. See ALAB-920, at 24-25. Under the reasoning in CLI-88-10, no incentive is shown to cut corners.
Next, the Commission looked at the amount of money involved in low power testing and found it "relatively small" and "an insignificant fraction of the money already spent on the Seabrook project." It stated:
"It strains credibility to suppose that Applicants would jeopardize the billions already invested in Seabrook rnerely to save a few hundred thousand or even a few million dollars needed for safe low-power testing."
28 hRC at 600. There is no evidence that the amounts involved in taking the plant to power levels to enable it to enter the rate base are anything but "relatively small" compared with the money already spent on Seabrook.
There is no more basis to find that cost-cutting would occur in attempting to get the plant into the rate base than during low-power testing. b 14/ It is on Interveners to show that waiver to the regulations should be granted. See CLI-89>03, 29 NRC 234, 239 (1989). The Appeal Board's observation that it "is not incredulous" that corner cutting might ,
occur (ALAB-920, at 26), is not the measure of the burden which must '
be sustained in order to support a waiver of a regulation.
Finally, the Comission stated that no waiver of the financial qualification regulations is needed at low power because the safety riskt of low power testing are lov. CLI-88-10, 28 NRC at 600. After recounting this Comission determination, the Appeal Board stated "Yet just the opposite $s associated with full power operation." ALAB 920, at 26-27.
Here, also, the Appeal Board erred. If the Appeal Board was concern over safety was premised on extended operation at full power without adequate' ;
rate relief, the Staff has pointed out above that such assumption has no basis in the record. If the Appeal Board's concern over safety was directed toward the interim period between operation at 5 percent and operation at a higher level sufficisnt to qualify as providing " net ;
generation to the grid," it was a non sequitur to conclude that as the i
risk; of power operations below five percent were not of safety )
significance, the risks of power operations where the plant is producing net power to the grid was of safety significance without knowing if that level of operation was 5.5 percent, 8 percent, 15 percent or 70 percent of l 4
full poww operation. The Appeal Goard had no facts upon which to reach such a conclusion that a prima facia showing of a safety significant issue i
had 'been made whic'h would justify a waiver of the regulations under the ]
i standards set out in CLI-88-10. ;
C. The Staff Has the Authority To Ascertain Facts To Enable It To j Advise The Comission Whether, In the Staff's View, a Material !
Issue Exists Which Might Require the Waiver of a Regulatica. J The Appeal Board also stated that it was sending this matter to the Comiscion because the $taff was improperly attempting to gathe~r information in order to advise the Comission on whether the staff believed there wcs a financial problem that could affect the public health and safety. ALAB-920, at 28-30. The Appeal Board founded this view on i
l
- CLI-88-10 and the holding i'/i Unico o_f Concerned Scientists v. NRC, 735 l
l~ F.2d 1437 (D.C. Cir.,1984), cert. denied, 469 U.S.1132 .(1985).
l The Staff's conduct was not contrnry to the Commission's admonition in CL1-88-10. The Conrnission there stated (28 NRC at 601-02):
[T]he Staff has apparently advised Applicants that "we [ Staff] have required the Applicants to demonstrate, prior to commencement of low-power operation and there is reasonable assurance that they possess or can obtain the financial resources needed to conduct thet activity in a manner that does not endanger the public health and safety." This is flatly inconsistent with Staff positions in this case Only by obtaining a waiver of the rule, which the Staff <
has not rought here, may Staff assert authority to deny or condition the low-power testing license because of a concern about financial qualifications. Staff cannot have it both ways -- it cannot advise the Commissions that there are no ground for a rule waiver, and at the same tiri:e conduct its informal licensing review as if a waiver was in fact needed. See Union of Concerned Sc~entists vm NRC, 735 F.2d 1437 (D.C. Cir. 1984), cert. denied, ArkansLs Power & Light Co. v. UCS, 469 U.S. 1132 (1985).
The Commission there criticized the Staff's poorly Etated assertion that the Staff would requir_e the licensee to demonstrate its financial qualifications to the Staff. In this case, in Vesponse to Appeal Board l questiori concerning this aspect of CLI-88-10, the Staff indicated its
~
belief that this portion of CLI-88-10 did not preclude the Staff's ability to gather information to determine whether there were concerns which it should take to the Commission. Tr. 96-99. The Staff did not seek to
" assert its authority to deny or condition" a license. The Staff ;
indicated that it was not prohibited by CLI-88-10 from gathering information on whether there was a material issue that would affect safety
. in order to seek a waiver of the regulations from the Commission, if facts 4 so warranted. Pursuant to 10 C.F.R. E 2.102(a), the Staff may require an
~
applicant to supply additional information to enable the Staff to reach a conclusion and advise the Commission on whether the application should be j
- _ - - _ _ - _ _ - _ _ -_ -. 1
t P granted. E I n the Statement of Considerations on the amendment of theJ financial qualification regulations, the Commission stated that the-adoption of those amendments was not intended "to waive or relinquish its residual' authority . .. to require such additional information in individual cases as may be necessary for the Commission to determine if an
. application should be granted or denied . . ." The determination of the
" ultimate question here of whether Public- Service is financially
. qualified" is a matter for the Commission. 49 Fed. Reg. 35747, 35750, September 24, 1984; see ALAB-920, at 29. The Staff can, however, gather information so that it can advise the Commission on whether there is a material ' issue that. requires further exploration and seek a Comission waiver of the regulation, if facts warrant s.uch an action.
Nor is the UCS case contrary to this conclusion.- In that case the court struck d0wn a regulation prohibiting the litigation of matters material to licensing. 735 F.2d at 1447, 1451. Here there is no attempt to keep issues %aterial to licensing out of the hearing r)rocess, but merely an attempt to see if such issues exist. ' The court in UCS, stated that the Commission could itself determine if issues raised are material to licensing, i.e. fundamental flaws. 735 F.2d at 1448. Here the Staff indicated its ability to seek information so that it could knowledgeably 15/ In Carolina Power and Light Co. (Shearon Harris Nuclear Power Plant.
Units 1,2,3 and 4), ALAB-581, 11 NRC 233, 235, (1980), the Appeal Board stated: "And that the Commission may find the staff's analysis
. to be helpful hardly requires elaboration. Indeed, it is difficult to see how the Commission might reach an informed conclusion respecting the public interest necessity for a hearing . . . without having the benefit of the staff's expert judgement." The Comission modified the opinion and " adopt [ed] the Appeal Board's rationale for these conditions [ directing the Staff to review a matter) as its own," .Id., CL1-80-12 11 NRC 514, 517 1980). See also Southern T,alifornia Edison Co. (San Onofre Nuclear Generating Station, Units 2 and 3), ALAB-680, 16 NRC 127, 143(1982).
p advise the Commission if the issues raised ' were in its view "geriuine {
issues of material fact" relevant to licensing. Sy,id_. In sum, although the. Staff could not and had no intention to " conduct its licensing review as if a waiver was in fact needed," it could make preliminary inquiries to see . if the waiver is needed. Without being able to gather facts, the 1
(
Staff could not serve the Commission by knowledgeably advising the Comission on whether the financial qualification regulation should be waived and the matter subject to litigation. EI III. CONCLUSION For the above stated reasons it has not been established that application of the financial qualification regulations would not serve the purpose for which they were adopted or that significant safety issue exists which would warrant consideration of Applicants' financial qualifications. ALAB-920 should be reversed.
Respectfully submitted, Edwin J. Reis, Deputy Assistant General Counsel Reactor Licensing Branch Dated at Rockville, Maryland this 7th day of September, 1989
- 16/ The Staff's authority on uncontested matters is broader. 10 C.F.R. 6 2.105(e)(1). As stated in Consolidated Edison Co., (Indian Point, Units 1, 2 & 3) ALAB-319, 3 RC'188,190 (15 76); in connection with such matters. "In that situation, the decision whether and on what terms to issue an operating license is left entirely to the staff."
See also, Southern Calfifornia Edison Co., supra.
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