ML12354A530

NRC Staff'S Answer to Citizens Oversight'S Objection to the Use of Nondisclosure Agreements

ML12354A530
Person / Time
Site:	San Onofre
Issue date:	12/19/2012
From:	Catherine Kanatas NRC/OGC
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 23911, 50-361-CAL, 50-362-CAL, ASLBP 13-924-01-CAL-BD01
Download: ML12354A530 (8)

Text

December 19, 2012 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

In the Matter of ) ) SOUTHERN CALIFORNIA EDISON COMPANY ) Docket Nos. 50-361-CAL/50-362-CAL ) (San Onofre Nuclear Generating Station )

Units 2 and 3) ) )

NRC STAFF'S ANSWER TO CITIZENS OVERSIGHT'S OBJECTION TO THE USE OF NONDISCLOSURE AGREEMENTS INTRODUCTION Pursuant to 10 C.F.R. § 2.323(c), the staff of the Nuclear Regulatory Commission (Staff) files its answer to the "Objection by Citizens Oversight to the Use of Nondisclosure Agreements to Withhold Information from the Public by Southern California Edison" (Objection) 1 Because Citizens Oversight is not a party to this proceeding, the Objection is procedurally improper. Moreover, even if it were properly before this Atomic Safety and Licensing Board (Board), the Objection fails to address the relevant Commission precedent governing this issue. For both of these reasons, the Objection should not be considered by the Board. BACKGROUND On June 18, 2012, Friends of the Earth (FOE) submitted an intervention petition challenging, among other things, a Confirmatory Action Letter (CAL) 2 issued by the NRC to 1 Objection by Citizens Oversight to the Use of Nondisclosure Agreements to Withhold Information from the Public by Southern California Edison (Dec. 11, 2012) (Agencywide Document Access and Management System (ADAMS) No. ML12346A487) (Objection).

2 Letter from Elmo E. Collins, Regional Administrator, Region IV, USNRC, to Peter T. Dietrich, Senior Vice President and Chief Nuclear Officer, Southern California Edison Company, subject: Confirmatory Action Letter - San Onofre Nuclear Generating Station, Units 2 and 3, Commitments to Address Steam Generator Tube Degradation, (Mar. 27, 2012) (ADAMS Accession No. ML12087A323) (March 27 Letter). As defined in the NRC's Enforcement Policy, a CAL is a letter confirming a licensee's Southern California Edison Company (SCE) on March 27, 2012.

3 The CAL confirmed the NRC's understanding of SCE's return to service plan for the San Onofre Nuclear Generating Station (SONGS) Units 2 and 3 after the reactors shut down to address indications of a steam generator tube leak in one of the Unit 3 steam generators.

4 FOE argued that the Commission should either recognize that the CAL process is a de facto license amendment proceeding requiring an adjudicatory hearing or, in the alternative, exercise its inherent supervisory authority to convene a hearing.

5 On November 8, the Commission referred to the Board the questions of "whether: (1) the [CAL] issued to SCE constitutes a de facto license amendment that would be subject to a hearing opportunity under [s]ection 189a [of the Atomic Energy Act];

and, if so, (2) whether [FOE's] petition meets the standing and contention admissibility requirements of 10 C.F.R. § 2.309."

6 The Board held a conference call to discuss administrative matters in the CAL proceeding on December 3, 2012, 7 and issued a Scheduling Order on December 7, 2012. Among other things, the Board's Scheduling directed the parties to develop a Non-Disclosure

or contractor's agreement to take certain actions to remove significant concerns regarding health and safety, safeguards, or the environment. NRC Enforcement Policy at 68 (June 7, 2012) (ADAMS Accession No. ML12132A394). The NRC uses CALs as a way to emphasize and to confirm a licensee's agreement to take certain actions in response to specific issues. NRC's Enforcement Manual, Rev. 7, at 3-29 (Oct. 1, 2010) (ADAMS Accession No. ML102630150).

3 See "Petition to Intervene and Request for Hearing by Friends of the Earth" (June 18, 2012) (Petition to Intervene). The Petition to Intervene was supported by several declarations. The documents are in a single file at ADAMS Accession No. ML12171A409. FOE also submitted an application to stay on June 18, 2012. See "Application to Stay Any Decision to Restart Units 2 or 3 at the San Onofre Nuclear Generating Station Pending Conclusion of the Proceedings Regarding Consideration of the Safety of the Replacement Steam Generators," (June 18, 2012).

4 March 27 Letter at 1 (unnumbered).

5 Petition to Intervene at 2.

6 Southern California Edison Co. (San Onofre Nuclear Generating Station, Units 2 and 3), CLI-12-20, 76 NRC __ (slip op. at 5).

7 See Transcript of Southern California Edison Company, San Onofre Station, Units 2 and 3, December 3, 2012, Pages 1-39 (Dec. 3, 2012) (ADAMS Accession No. ML12342A154) (Transcript). Agreement to govern the disclosure of certain proprietary documents.

8 SCE filed a proposed Protective Order and Non-Disclosure Agreement on December 7, 2012, 9 which the Board granted on December 10, 2012.

10 On December 11, 2012, Citizens Oversight filed the instant objection to "the use of nondisclosure agreements by" SCE to protect proprietary documents.

11 Specifically, Citizens Oversight contends that SCE and the NRC have incorrectly identified the documents as proprietary and therefore the Board should order the release of those documents to the public.

12 DISCUSSION I. The Objection is Improper Because Citizens Oversight is Not a Party to This Proceeding

While Citizens Oversight has filed a hearing request in an unrelated proceeding also involving SONGS, Citizens Oversight is not a party to this proceeding and has not filed a hearing request for this proceeding.

13 Under NRC regulations, a "person who is not a party" to a proceeding may make a limited appearance statement in that proceeding as directed by the presiding officer, "but may not otherwise participate in the proceeding."

14 The Objection is not a limited appearance statement because (1) Citizens Oversight did not receive the Board's permission to make such a statement, 15 (2) Citizens Oversight's statements regarding its 8 See Scheduling Order.

9 See Joint Motion for Entry of a Protective Order (Dec. 7, 2012)(ADAMS Accession No. ML12342A455).

10 See Order (Granting Joint Motion for Entry of a Protective Order and Non-Disclosure Agreement) (Dec. 10, 2012) (ADAMS Accession No. ML12345A372).

11 Objection at 1.

12 Id. at 4-6.

13 Id. at 3. 14 10 C.F.R. § 2.315(a); see also 10 C.F.R. § 2.4 (defining the term "person" to include "any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group").

15 See 10 C.F.R. § 2.315(a) (noting that it is at the discretion of the presiding officer whether a limited appearance statement is permitted).

See also GE-Hitachi Global Laser Enrichment, LLC (GLE Commercial Facility), CLI-10-4, 71 NRC 56, 63 (discussing requesting permission to make a limited position on Non-Disclosure Agreements were not made "at any session of the hearing or any prehearing conference-", 16 and (3) the Objection does not serve the purpose of participation by non-parties under § 2.315(a); that is, "to alert the Board and the parties to areas in which evidence may need to be adduced."

17 As a result, the Objection plainly contravenes NRC regulations and the Board should not consider it. Moreover, NRC regulations do not explicitly provide for "objections" to Board orders. Instead, a party that believes it is aggrieved by a board order may seek redress from that board by filing a motion for reconsideration showing "compelling circumstances."

18 But, Citizens Oversight is not a party, and even if it was, it has not attempted to show such compelling circumstances, and the Commission has previously stated that an entity "normally could not make any motion in a proceeding to which it is not a party."

19 II. Citizens Oversight Has Not Addressed the Controlling Standards for Challenging a Proprietary Determination Even if the Board considers the Objection, it does not provide sufficient grounds for the relief sought. Specifically, it fails to address the relevant standards for withholding and releasing asserted proprietary information. Thus, the Objection does not advance a sufficient legal basis for releasing the information in question.

appearance pursuant to 10 C.F.R. § 2.315(a) and setting date by which person should make such a request). 16 See 10 C.F.R. § 2.315(a) (indicating when a person who is not a party, in the discretion of the presiding officer, may be permitted to make a limited appearance).

17 See Louisiana Power and Light Co. (Waterford Steam Electric Station, Unit 3), ALAB-732, 17 NRC 1076, 1087 n.12 (1983) (discussing purpose of limited appearance statements).

18 10 C.F.R. § 2.323(e).

19 Vermont Yankee Nuclear Power Corporation (Vermont Yankee Nuclear Power Station), CLI-76-18, 4 NRC 470, 471 n.1 (1976). The Commission has explained that its regulations permit licensees to request that the agency withhold proprietary information.

20 Under the first step of the withholding process, the NRC must determine if the information is "confidential."

21 As relevant here, information is confidential if its release may "cause substantial harm to the competitive position of the person from whom the information was obtained."

22 A licensee meets this test by showing "(a) the existence of competition and (b) the likelihood of substantial competitive harm."

23 Notably, a company can make this showing without demonstrating " 'actual competitive harm, i.e. harm directly caused by disclosure of the in formation to a company's competition."

24 Rather, under NRC precedent, a company may demonstrate competitive harm by showing the possibility of an injury from the use of the information by other groups, including "suppliers, contractors, labor organizations, creditors," customers and "an opposing citizens group."

25 If the NRC determines that information is proprietary, "it must determine whether the right of the public to be fully apprised as to the bases for and effects of the proposed action outweighs the demonstrated concern for protection of a competitive position."

26 The Commission has noted, "During the half century in which we have been exercising this balancing test, our weighing has been and continues to be informed by the strong legislative policy against disclosure of proprietary information."

27 Thus, "[t]he public interest to be weighed in this balance has been narrowly defined as an interest in determining the bases for and results 20 Private Fuel Storage (Independent Spent Fuel Storage Installation), CLI-05-01, 61 NRC 129, 160, 162-63 (2005) (discussing 10 C.F.R. § 2.790, the predecessor to 10 C.F.R. § 2.390).

21 Id. at 163.

22 Id. at 164.

23 Id. 24 Id. 25 Id. at 173.

26 10 C.F.R. § 2.390(b)(5).

27 Private Fuel Storage, CLI-05-01, 61 NRC at 180 (internal quotations omitted). of agency action (i.e., determining what the government is up to), and does not include incidental benefits from disclosure that may be enjoyed by members of the public."

28 Despite this clear and binding precedent, Citizens Oversight argues that the standard for withholding proprietary information should be a s howing by SCE that release would cause "an actual or threatened concrete and particularized injury."

29 Citizens Oversight argues that several documents at issue in this proceeding do not meet this standard because they represent "failed" designs that no "competitors will want to copy" and do not involve "patents or intellectual property related to the design of the steam generators."

30 But, the Commission has already explicitly rejected this narrow approach to establishing whether information is proprietary. As explained in Private Fuel Storage, a claim of proprietary information may be based on more than the direct injury of a competitor copying a design; instead propriety information may protect a variety of economic interests.

31 Thus, Citizens Oversight's Objection is contrary to controlling Commission precedent and should not be considered by the Board. Moreover, Citizens Oversight fails to show that its interest in these documents outweighs SCE's interest in protecting them from disclosure. The Commission has indicated that it will only release proprietary information when needed to inform the public of the results and bases for agency action.

32 But, the CAL itself plainly disclosed the objective of the government action 28 Id. at 179-80 (internal quotations omitted).

29 Objection at 6 (alterations in original).

30 Id. at 5. 31 Private Fuel Storage, CLI-05-01, 61 NRC at 173.

32 Id. at 179-80. and listed the supporting reasons.

33 Thus, the public's interest in having these documents fully disclosed does not outweigh SCE's interest in protecting its proprietary information.

34 CONCLUSION For the reasons discussed above, the Staff opposes Citizens Oversight's Objection. Respectfully submitted, /Signed (electronically) by/

Catherine E. Kanatas Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Mail Stop O-15 D21 Washington, DC 20555-0001 Telephone: (301) 415-2321 E-mail: Catherine.Kanatas@nrc.gov 33 Elmo E. Collins, Regional Administrator, Region IV, US NRC, letter to Peter T. Dietrich, Senior Vice President and Chief Nuclear Officer, Southern California Edison Company, Confirmatory Action Letter - San Onofre Nuclear Generating Station, Units 2 and 3, Commitments to Address Steam Generator Tube Degradation (Mar. 27, 2012) (ADAMS Accession no. ML12087A323).

34 In support of its arguments, Citizens Oversight also requests an exemption of the requirements in 10 C.F.R. part 73 (which prescribe requirements for the establishment and maintenance of a physical protection system which will have capa bilities for the protection of specia l nuclear material at fixed sites and in transit and of plants in which special nuclear material is used) (Objection at 5-6), but this request is inapposite to the issue of any proprietary and confidential commercial information addressed through the NDA. Similarly, Citizen Oversight cites Exec. Order (EO) 13,579, 78 Fed. Reg. 41,587 (July 14, 2011)(signed July 11, 2011) to assert that the government must do more.

Id. at 6. Again, this claim is inapposite, and the EO does not purport to replace the well-established principles of the Freedom of Information Act, and the protections from disclosure recognized by that act, as reflected in 10 C.F.R. § 2.390 and 10 C.F.R. § 9.17 (describing agency records exempt from disclosure).

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of ) ) SOUTHERN CALIFORNIA EDISON CO. ) Docket Nos. 50-361-CAL/ 50-362-CAL ) (San Onofre Nuclear Generating Station) )

)

) CERTIFICATE OF SERVICE

I hereby certify that copies of the "NRC STAFF'S ANSWER TO CITIZENS OVERSIGHT'S OBJECTION TO THE USE OF NONDISCLOSURE AGREEMENTS" in the above-captioned matter have been served on the following by Electronic Info rmation Exchange this 19th day of December, 2012.

/Signed (electronically) by/

Catherine E. Kanatas Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Mail Stop O-15 D21 Washington, DC 20555-0001 Telephone: (301) 415-2321 E-mail: Catherine.Kanatas@nrc.gov

Dated at Rockville, Maryland this 19th day of December, 2012