ML20199L052

Suppl to Motion Supporting Terminating Proceeding.Argues That Board Has No Jurisdiction Over Surrender of Cps. Surrender of Permits to Director of NRR Should Render OL Proceeding Moot

ML20199L052
Person / Time
Site:	Marble Hill
Issue date:	07/02/1986
From:	Voigt H LEBOEUF, LAMB, LEIBY & MACRAE, PSI ENERGY, INC. A/K/A PUBLIC SERVICE CO. OF INDIANA
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20199L045	List: ML20199L038 ML20199L052
References
OL, NUDOCS 8607090299
Download: ML20199L052 (13)

Text

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ..

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BEFORE THE ATOMIC SAFETY AND LICENSING' 16 JL ~7 M0:46 BOARD If?fSNINl In the Matter of )

)

PUBLIC SERVICE COMPANY OF INDIANA, INC. )

WABASH VALLEY POWER ASSOCIATION, INC. ) Docket Nos. 50-546

) 50-547 (Marble Hill Nuclear Generating )

Station, Units 1 and 2) )

)

SUPPLEMENT TO MOTION TO TERMINATE PROCEEDING Introduction On April 4, 1985, Public Service Company of Indiana, Inc. (" PSI") and Wabash Valley Power Association, Inc.

(" Applicants") filed a Motion to Terminate Proceeding

(" Motion") for the operating license proceeding before the Atomic Safety and Licensing Board (" Licensing Board").

On May 30, 1986, the Licensing Board issued a Memorandum and Order Directing Briefs (" Order") requiring the Applicants to supplement the Motion with additional information outlined therein. Order at 2. PSI hereby submits this Supplement to the Motion to Terminate Proceeding as directed by the Licensing Board.

8607090299 860702 PDR ADOCK 05000546 G PDR l

Background

PSI filed its application for a construction permit to ' !

build Marble Hill Units 1 and 2 on July 1, 1975. See 40 Fed.

Reg. 47,219 (1975). The application was noticed for hearing, and a large number of interventions were ultimately granted.

See Public Service Company of Indiana, Inc. (Marble Hill Nuclear Generating Station, Units 1 and 2), ALAB-322, 3 N.R.C.

328 (1976).1/ Commencement of the public hearings was delayed, ALAB-374, 5 N.R.C. 417, 420 n.1 (1977), which led PSI to request a limited work authorization ("LWA") to permit commencement of preliminary site work. Following the completion of environmental review and hearings on certain environmental issues, the Atomic Safety and Licensing Board authorized issuance of an LWA. LBP-77-52, 6 N.R.C. 294 (1977). Thereafter, hearings were completed on the remaining contentions, and the issuance of construction permits was authorized. LBP-78-12, 7 N.R.C. 573 (1978). The construction permits were issued on April 4, 1978.

Approximately one year later, both PSI and NRC raised questions concerning whether safety-related concrete work at Marble Hill was being properly performed. In addition, the NRC expressed concern about the adequacy of PSI's quality assurance 1/ Further citations to the Marble Hill proceeding will omit the case name.

program. PSI agreed to suspend safety-related construction activities pending a comprehensive review. On August 15, 1979, NRC issued a confirmatory order setting forth various steps that PSI was to undertake, subject to NRC review, prior to the resumption of construction. See CLI-80-10, 11 N.R.C. 438 (1980). The NRC letter was gradually rescinded and completely withdrawn by March 27, 1981, at which point the full range of construction activity was resumed.

The delay resulting from the suspension of safety-related construction, inflation, and the added cost of additional NRC requirements following the 1979 accident at Three Mile Island caused a significant increase in the estimated cost to complete the Marble Hill Units. The estimated time to complete construction was also extended.

In January of 1983, the Public Service Commission of Indiana ordered an investigation into the costs of Marble Hill and ordered PSI and other parties to develop a plan to ensure that PSI would be able to finance the completion of the project if the Commission determined that the project should be completed. Public Service Commission of Indiana Order, Cause No. 36818, January 20, 1983, Findings 12 and 13. Hearings were held on the proposed PSI plan during the summer of 1983. In

( August of 1983, the Governor of Indiana (who was not a party to

( 'the Indiana Commission proceeding) took the unprecedented I action of requesting that the proceeding be suspended while a 1

task force, appodnted by the Governor, independently reviewed l

the Marble Hill Project. In December of 1983, the Governor's task force issued its report recommending, among other things, that the Marble Hill Project be cancelled, that PSI and its shareholders absorb the substantial portion of Marble Hill costs, and that PSI reassess its dividend policy. The Governor of Indiana subsequently adopted the report of his task force.

Due to this interference and PSI's subsequent inability to finance the project, PSI, on December 30, 1983, suspended all construction at Marble Hill effective January 3, 1984, and, on January 16, 1984, announced that it was unable to continue to finance the construction of Marble Hill because the actions of state government had cut off PSI's access to capital markets.

In November 1984, PSI officially abandoned the project.

Since being required to cease construction on Marble Hill:

1. PSI has received two emergency rate increases (Orders in Cause No. 37414 March 8, 1984, and March 7, 1986);

2. PSI's financial emergency still exists (March 7, 1986, Order in Cause No. 37414 at 14);

3. PSI has written off approximately $2.4 billion (prior to applicable credits) of its cost of Marble Hill (all of the retail jurisdictional portion) and will not recover this investment in Marble Hill (PSI 1985 Annual Report at page 12; March 7, 1986, Order in Cause No. 37414 at 65) ;

4. As a result of the write-off of PSI's Marble Hill investment, PSI's common stock equity was reduced from $1,473,761,000 at December 31, 1984, to

$172,248,000 at December 31, 1985. (PSI 1985 Annual Report at 93);

5. PSI has omitted its common and preferred stock dividends and cannot resume common stock dividends until 1989, at the earliest, unless a dividend payment is required to implement a specific financial restructuring transaction (March 7, 1986, Order in Cause No. 37414 at 66) ;

6. PSI is limited as to the amount of capital expenditure that can be made through 1988 (March 7, 1986, Order in Cause No. 37414 at 66); and

7. PSI may not file for a general rate increase prior to January 1, 1989, except for an emergency caused by conditions beyond PSI's control (March 7, 1986, Order in Cause No. 37414 at 66).

Statement of the Case i

On February 24, 1983, the Applicants filed Amendment 22 to the licensing application. This amendment was in the form of a complete revision of the application. It requested specifically that an operating license be issued for the Marble Hill facilities. Notice that the Commission had received the application for an operating license was published on March 25, 1983. 48 Fed. Reg. 12,608 (1983). Pursuant to that notice, the present operating license board was convened. 48 Fed. Reg.

19,964 (1983).

On April 4, 1985, the Applicants filed the Motion to terminate the operating license proceeding. Included with the Motion, but not attached thereto, was a copy of a letter dated March 1, 1985 addressed to the Director of Nuclear Reactor Regulation (" Director") . It informed the Director that PSI thereby surrendered the construction permits for the Marble

Hill facilities. The letter enclosed a copy of PSI's site stabilization plan. 1 The NRC Staff responded to the Motion on April 24, 1985 by requesting the Licensing Board to defer ruling on the Motion "until the Staff has an opportunity to complete its review of the site restoration [ sic] plan." Based on this response, the Licensing Board noted the Staff's assumption that the Motion is directed to the construction permits. Order at 2.

The March 1, 1985 letter was included with the Motion for the sole purpose of supporting the Applicants' contention that the operating license proceeding is moot in light of the surrender of the construction permits. The Motion requests only that the Licensing Board terminate the operating license proceed'ing . However, in view of the Staff's position and the fact that the Applicants mailed a copy of the site stabilization plan to the Licensing Board, the Licensing. Board directed the Applicants to " supplement their motion explaining exactly what they seek from the respective components of the Nuclear Regulatory Commission and to support their supplement by citation to the controlling law." Order at 3.

Discussion I In its Order, the Licensing Board correctly interpreted the Applicants' intention to invoke the Licensing Board's jurisdiction for the " sole and ministerial purpose of terminating of the operating licensing proceeding." Order at i

.i

3. The Motion is not directed to the construction permits.

Nor do the Applicants, having previously surrendered the construction permits, seek anything from the Director.

PSI maintains that the surrender of the construction permits to the Director renders the operating license proceeding moot. For this reason, the Motion should be granted.

Furthermore, PSI disagrees with the Staff's conclusion that the Licensing Board has jurisdiction over the construction permits by virtue of the provision for the withdrawal of an application in 10 C.F.R. S 2.107.

The licensing and regulatory authority conferred by the Atomic Energy Act ("Act") is carefully circumscribed and the materials and facilities over which that authority may be exercised are specifically enumerated. See Sections 53, 57, 101, and 103 of the Act, 42 U.S.C. SS 2073, 2077, 2131, and 2133 (1982). In pertinent part, the Act authorizes the Commission to license " utilization" and " production facilities." 42 U.S.C. S 2133.

The licensing authority of the Commission with respect to nuclear power reactors is derived from Section 101 of the Act, which prohibits, inter alia, the acquisition, possession, or use of "any utilization or production facility except under and in accordance with a license issued by the Commission pursuant to section [103 or 104]." 42 U.S.C. S 2131. Section 103 authorizes the Commission to issue licenses for

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" utilization facilities," which are defined in section 11 of j the Act, 42 U.S.C. S 2014(cc):

(1) any' equipment or device, except an atomic weapon, determined by rule of the Commission to be capable of making use of special nuclear material in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public, or peculiarly adapted for making use of atomic energy in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public; or (2) any important component part especially designed for such equipment or device as determined by the Commission.

As evidenced by the affidavit of Paul W. O' Conner attached to the Staff Response to Applicants' Motion to Terminate Proceeding, neither Marble Hill unit is a

" utilization facility" as defined by that statute:

With construction only 57% and 35% completed and the core support components and reactor coolant systems of Marble Hill, Units 1 and 2 not completed, the units are incapable of making use of special nuclear material. . . . Accordingly, Marble Hill would not satisfy the first part of the definition of a utilization facility.

Affidavit of Paul W. O' Conner at 2. Moreover, the voluntary termination of construction at Marble Hill and the surrender of the construction permits to the Director assure that the facilities will not in the future be " utilization facilities."

Thus, no license is necessary or available.

Because the licensing authority of the Commission is limited to facilities that utilize special nuclear material, Commission rules promulgated under the authority of the Act l

cannot regulate facilities that are incapable of utilizing l

i l

l special nuclear material. Administrative agency action "can not exceed or extend the scope provided by its statutory base." Trenton Chemical Co. v. United States, 201 F.2d 776, 778 (6th Cir. 1953), cert. denied, 345 U.S. 994 (1953). In other words, the jurisdiction of any agency "is circumscribed by the authority granted" by Congress. Stark v. Wickard, 321 U.S. 288, 309 (1944).

Once a facility becomes capable of utilizing special nuclear material, the Commission may exercise its regulatory authority over its operation and the termination of its operating license. Thus, 10 C.F.R. S 50.82 provides explicitly for Commission jurisdiction over the voluntary termination of an operating license for a utilization facility. Unlike the termination of an operating license, which requires the disabling of a utilization facility, the voluntary termination of construction and the surrender of a construction permit do not involve the disabling of a facility capable of utilizing nuclear material. No regulation promulgated by the Commission governs the voluntary surrender and termination of a construction permit. Any such regulation would not be within the authority granted the Commission by Congress under Section i 103 of Act, 42 U.S.C. S 2133.

Nonetheless, the Staff urges the Licensing Board to take jurisdiction over the construction permits under the l authority of 10 C.F.R. S 2.107. The Staff is incorrect in assuming that this regulation concerns the construction permits i

that have been issued.

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The provision for withdrawal of an application in 10 C.F.R. 5 2.107 does not apply to issued permits, but to applications. The construction permits for the Marble Hill facilities were granted on April 4, 1978. As of that date, 10 C.F.R. S 2.107 was no longer applicable to the construction permits. Furthermore, Amendment 22 to the application makes no reference to construction permits. This amendment was in the form of a complete revir.Lon of the original application.

Effective as of the date of Amendment 22, the only application in existence is that for the operating license. Therefore, 10 C.F.R. S 2.107 does not apply to the surrender of the construction permits.

Accordingly, the Licensing Board does not have jurisdiction over the surrender of the construction permits.

The surrender of the construction permits to the Director renders the operating license proceeding moot.

Conclusion For the foregoing reasons, the Motion should be granted.

Respectfully submitted, LeBOEUF, LAMB, LEIBY & MacRAE By dMr . &

(?artner y Of Counsel: 1333 New Hampshire Avenue, N.W.

Suite 1100 MICHAEL F. McBRIDE Washington, D.C. 20036 JAMES W. MOELLER (202) 457-7500 Attorneys for Public Service Company of Indiana, Inc.

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

)

In the Matter of )

)

PUBLIC SERVICE COMPANY OF INDIANA, INC. )

WABASH VALLEY POWER ASSOCIATION, INC. ) Docket Nos. 50-546

) 50-547 (Marble Hill Nuclear Generating )

Station, Units 1 and 2) )

)

CERTIFICATE OF SERVICE I hereby certify that I have served copies of " Supplement to Motion to Terminate Proceeding" by deposit in the United States mail, first class, postage prepaid, or, as indicated by an asterisk, by hand delivery, to the following persons this 2nd day of July 1986:

• Ivan W. Smith, Esq., Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555

• Mr. Gustave A. Linenberger Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission l Washington, D.C. 20555

• Dr. Oscar H. Paris Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission j

Washington, D.C. 20555

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• Myron Karman, Esq.

Office of the Executive Legal Director U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Thomas M. Dattilo, Esq.

311 East Main Street Madison, Indiana 47250 Docketing and Service Branch (3)

U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Harold G. Cassidy, Ph.D.

Save the Valley 605 West Second Street Madison, Indiana 47250 Mr. Fred Hauck Save the Valley R.R. #3, Tower Heights Shelbyville, Kentucky 40065 Mr. Tom Zeller, President Indiana Sassafras Audubon Society 6620 East State Road 45 Bloomington, Indiana 47401 Mr. Tom Zeller, Vice President Valley Watch, Inc.

P.O. Box 2262 Evansville, Indiana 47714 Mr. Edward P. Martin General Manager Wabash Valley Power Association, Inc.

P.O. Box 24700 722 North High School Road Indianapolis, Indiana 46224

- u ud . N a 19 = a Jam s W. Moeller

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