ML19326A721

Utils Appellate Brief Supporting Motion for Determination That Facility Is Grandfathered for Purposes of Operation. ASLB Denial of Motion in Error.Certificate of Svc Encl

ML19326A721
Person / Time
Site:	Davis Besse
Issue date:	01/23/1976
From:	Charnoff G, Reynolds W CLEVELAND ELECTRIC ILLUMINATING CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, TOLEDO EDISON CO.
To:
References
NUDOCS 8002270889
Download: ML19326A721 (34)

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, _ . _ _ N UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of' )

)

THE TOLEDO EDISON COMPANY and )

THE' CLEVELAND ELECTRIC ILLUMINATING

) NRC Docket No. 50-346A ~

COMPANY )

)

(Davis-Besse Nuclear Power Station, )

Unit 1) )

APPLICANTS' APPELLATE BRIEF IN SUPPORT OF THEIR MOTION FOR DETERMINATION THAT DAVIS-BESSE UNIT 1' IS " GRANDFATHERED" FOR PURPOSES OF OPERATION

'l January 23, 1976 I

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INDEX Page TABLE OF AUTHORITIES... . . . . . . . . . . . . . . . . i

INTRODUCTION. . . .. . . . . . . . . . . . . . . . . . 1 l BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . 2 ARGUMENP. . .. . . . . . . . . . . . . . . . . . . . . . 7

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A. The Licensing Board's Decision. . . . . . 8 B. Legislative History . . . . . . . . . . . 15 C. Implications of Section 105c(6) . . . . . 22 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . 24 3

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r TABLE OF AUTHORITIES CASES: Page(s)

Allen v. State Board of Election, 393 U.S. 544 (1969). . . 11 Brennan v. Midwestern United Life Insurance Co., 259 F. Supp. 673, 680 (D. Ind. 1966). . . . . . . . . . . . . 12

,- Cities of Statesville v. AEC, 441 F.2d 962 (D.C. Cir.

, 1969) . . . . . . . . . . . . . . . . . . . . .. . . . . . 2 City of New York v. Train, 494 F.2d 1033, 1037 (D.C.

Cir. 1974), aff'd 95 S. Ct. 1991 (1975) . . . . . . . . . 16 Consumers Power Company (Midland Units 1 and 2) proceeding Docket Nos. 50-329A and 50-330A (decided July 18, 1975) . 6 District of Columbia v. Orleans, 406 F.2d 957, 958 (D.C.

Cir. 1963). . . . . . . . . . . . . . . . . . . . . . . . 18 Equal Employment Opportunity Commission v. Kimberly-Clark Corp., 511 F.2d 1352, 1362 (6th Cir. 1975). . . . . 10 Hecht v. Pro-Football, Inc., 444 F.2d 931 (D.C. Cir.

1971)_. . . . . . . . . . . . . . . . . . . . . . . . . . 18 Hill v. Whitlock Oil Services, Inc., 450 F.2d 170, 173 (10th Cir. 1971). . . . . . . . . . . . . . . . . . . . . 10 J.I. Case Co. v. Borak, 377 U.S. 426 (1964). . . . . . . . . 11 Louisiana Power and Light Company (Waterford Steam Electric Generating Station, Unit 3), CLI-73-75, 6 AEC 619, 620 (September 28, 1973) . . . . . . . . . . . . . . 15 Montana Power Co. v. FPC, 445 F.2d 739, 746 (D.C. Cir.

1970) cert. denied, 400 U.S. 1013 (1971). . . . . . . . . 18 National Automatic Laundry & Cleaning Council v. Schultz, 443 F.2d 689, 706 (D.C. Cir. 1974). . . . . . . . . . . . 12 National Petroleum Refiners Ass'n v. FTC, 482 F.2d 672, 676 (D.C. Cir.) cert. denied, 415 U.S. 951 (1973) . . . . 10, 11 Peyton v. Rowe, 391 U.S. 54, 65 (1968) . . . . . . . . . . 12 Portland Cement Ass'n. v. Ruckelshaus, 486 F.2d 375, 380 (1973), cert. denied, 417 U.S. 921 (1974), appeal after remand, 513 F.2d 506 (D.C. Cir. 1975) . . . . . . . . . . 18 i

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CASES (continued) : Page (s)

Starks v. Orleans Motors Inc., 372 F.'Supp. 928, 932 (D. . La. ) , aff'd, 500 F.2d.1182 (5th Cir. 1974). . . . . 12 Tcherep. tin v. Knight, 389 U.S. 332, 336 (1967). . . . . 12 Train v. Colorado PIRG, 373 F. Supp.991, 992 (D. Colo.

1974), 507 F.2d 743 (10th.Cir. 1974), cert. granted, 95 S. Ct. 2393 (June 2,1975) . . . . . . . . . . . . . 11, 12 STATUTORY AND LEGISLATIVE MATERIALS:

Section 105c(2) , Atomic Energy Act of 1954, as amended, 42 U.S.C. S2135c (2) . . . . . . . . . . . . . . . . . . 21, 22 Section 105c(6), Atomic Energy Act of 1954, as amended 42 U.S.C. S2135c (6) . . . . . . . . . . . . . . . . . . 2, 22, 23 24 Section 105c (8) , Atomic Energy Act of 1954, as amended, 42 U.S.C. S2135c(8) . . . . . . . . . . . . . . . . . . 3, 4, 7, 8, 9, 10, 12, 13, 14, 15, 16, 18, 20, 25, 26 Report By The~ Joint Committee On Atomic Energy Accompanying S4141 at 29 (September 29, 1970) . . . . . 22 116 Cong. Rec. 9440 (daily ed. September 30, 1970)

(Statement of. Congressman Holifield) . . . . . . . . . . 19 116 Cong. Rec. 9444 (daily ed. September 30, 1970)

(Statement of Congressman Holifield) . . . . . . . . . . 17 116 Cong. . Rec. 9445 (daily ed. September 30, 1970)

(Statement of Congressman Jones) . . . . . . . . . . . . 17 116 Cong. Rec. 9446 (daily ed. September 30, 1970)

(Statement of Congressman Hosmer) . . . . . . . . . . . 1, 19, 20 116 Cong. Rec. 9447 (daily ed. September 30, 1970)

(Statement of Congressman Hosmer) . . . . . . . . . . . 1, 20 116 Cong.: Rec. 9449 (daily ed. September 30, 1970)

(Statement of Congressman Hosmer) . . . . . . . . . . . 17 ii

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STATUTORY AND LEGISLATIVE MATERIALS (Continued) : Page(s) 116 Cong. Rec. 19256 (daily ed. December 2, 1970)

(Statement of Senator Hart) . . . . . . . . . . . . . . 23 116 Cong. Rec. 19253 (daily ed. December 2, 1970)

(Statement of Senator Pastore). . . . . . . . . . . . . 17 OTHER:

Petition For Writ of Certiorark . filed in Train v.

Colorado PIRG, 507 F.2d 743 (l'thO Cir. 1974), cert.

granted, 95 S. Ct. 2393 (June 2, 1975). . . . . . . . . 11 9

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January 23, 1976 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board

. In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) NRC Docket No. 50-346A COMPANY .)

)

(Davis-Besse Nuclear Power Station, )

Unit 1) )

APPLICANTS' APPELLATE BRIEF IN SUPPORT OF THEIR MOTION FOR DETERMINATION THAT DAVIS-BESSE UNIT 1 IS " GRANDFATHERED" FOR PURPOSES OF OPERATION INTRODUCTION

1. By its order dated January'8, 1976, the Atomic Safety and Licensing Appeal Board (hereinafter The Appeal Board) accepted referral of the ruling by the Atomic Safety and Licensing Board (hereinafter The Board) on Applicants' Motion For A Deter-mination That Davis-Besse Unit 1 Is " Grandfathered" For Purposes Of Operation. The Appeal Board also directed each party to ad-dress the'following three issues: -

(a) The considerations relied upon by the Licensing Board in reaching its decision, including those set out in footnote 3 on page 7 of its memorandum and order; (b) The legislative history of Section 105c insofar as it bears on the question pre-sented, including the inferences to be drawa from and weight to be given to the remarks of Representative Hosmer which appear at 116 Cong. Rec. 9446-47 (daily ed. September 30, 1970); and L

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. . m (c) Whether Section 105c(6) of the Act per-

~mits the licensing of a nuclear power

-facility even though unfavorable anti-trust consequences might result therefrom if the Commission deems it necessary to protect the public interest and, if so, the implications this has for the question presented.

Applicants submit that a careful consideration of each of these

. issues requires that the operating license for Davis-Besse Nuclear Power Station, Unit 1, be grandfathered prior to com-pletion of the antitrust review undertaken with respect to its previously grandfathered construction permit. Before addressing each of these issues, however, it is instructive to recount the facts which spawned this controversy and the statutbry frame-work in which it arises.

- I. BACKGROUND

2. On August 1, 1969, The Toledo Edison Company

. (Toledo Edison) and The Cleveland Electric Illuminating Company (CEI) filed with the Atomic Energy Commission a joint application for a license to construct and operate Davis-Besse Unit 1 pur-suant to the then existing statutory scheme of ths Atomic Energy Act which' required that the license application be submitted under Section ~104 (b) of the Act. See Cities of Statesville v.

AEC, 441 F.2d 962 (D.C. Cir. 1969) (en banc). The above-cited section contemplated no' antitrust review.

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3. However, effective December 19, 1970., Congress passed Pub. L.91-560 which, with certain exceptions not rel-evant here, rendered what were formerly Section 104 (b) license applications, applications for commercial licenses under Section 103. Section 103 applications _were thereafter subject to an antitrust review under amended Section 105c of the Atomic Energy Act to determine whether the licensed activities of an applicant for a construction permit would " create or maintain a situation inconsistent with the antitrust laws."

4. Not unmindful of the fact that 1970 amendments to the Atomic Energy Act could create hardships and delay for those plants for which license applications were pending with the Commission on the effective date of the legislation, Congress added Section 105c(8) to ameliorate the problem. .That Section provides as follows:

With respect to any application for a con-struction permit on file at the time of enactment into law of this subsection, which permit would be for issuance under Section 103, and.with re-spect to any application for an operating license in connection with which a written request for an antitrust' review is made as provided for in l paragraph (3), the Commission, after consultation with the Attorney General, may, upon determination that such action is necessary in the public inter-i est to avoid unnecessary delay, establish by i rule or order periods for Commission notification and receipt of advice differing from those set l

forth above and may issue a construction permit i

or operating license in advance of consideration i of and findings with respect to the matters

! covered in .this subsection: Provided, that any 1

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construction permit or operating license so I issued shall contain such conditions as the Commission deems appropriate to assure that any subsequent findings and order of the Com-mission with respect to such matters will be given full force and effect..

As of December 19, 1970, the pending Davis-Besse Unit 1 appli-cation for a construction and operating license had not been approved and hence became subject to Section 103. Hearings were conducted on the application in December, 1970, and January and February, 1971. On March 24, 1971, the Commission issued a construction permit.~1/ Since antitrust review was in its for-mative stages, the Commission, acting pursuant to Section 105c(8) issued the permit subject to "such conditions as the Commission deems appropriate" following its antitrust review.

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5. Toledo Edison and CEI promptly began construction of Davis-Besse Unit 1.without any hint of the protracted delay that antitrust review in conjunction with the grandfathered

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Construction Permit CPPR-80 was issued containing the following

, condition:

This permit shall be subject to an antitrust review by the Attorney General pursuant to Section 105c of the Act. The applicants shall furnish to the Commission such information as the Attorney General determines to be appropriate for the conduct of this review and the rendering of his advice with respect to this permit. The Commission may hold a hearing on antitrust matters on the recommendation of the Attorney

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General or at the request of any person and, on the basis of its findings made after such hearing, the Commission will continue, rescind, or amend this (footnote continued) 1--

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-s-construction permit would precipitate. Indeed, in July, 1971, after having reviewed Applicants' projected activities, the

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Department of Justice advised the Commission that it saw no need for a hearing on_the antitrust issue.

6. Nevertheless, on July 6, 1971, the City of Cleveland petitioned to intervene in the Davis-Besse Unit 1 1/ (Footnote continued) permit to include such conditions as the Commission deems appropriate. The applicants shall comply with any order or license con-dition made by the Commission pursuant to Section 105c of the Act with respect to the licensed activities.

We would note, moreover, that in a follow-on condition to the construction permit, the Commission indicated that if any one of these specified conditions were not complied with, an operating license would not be issued. Completion of antitrust review was not one of these conditions. For the Appeal Board's convenience, we quote that provision in full:

This' permit is subject to the limitation that a license authorizing operation of the facility will not be issued by the Commission unless (a) the applicants submit to the Com-mission, by amendment to the application, the complete final safety analysis report, portions of which may be submitted and evaluated from time to time; (b) the Commission finds that the final design provides reasonable assurance that the health and safety of the public will not be endangered by the operation of the facility in accordance with procedures approved by it in connection with the issuance of said license; and-(c) the applicants submit proof of finan-cial protection and the execution of an indemnity agreement as required by Section 170 of the Act.

,. s proceeding, requesting a hearing in order to raise the antitrust question. The Commission delayed referring the City's petition to an Intervention Board until January 21, 1974. Finally, on March 15, 1974, the Intervention Board granted the City's petition and for the first time announced that it would hold hearings on the antitrust questions in the Davis-Besse Unit 1 proceeding.

Consolidation of antitrust hearings on the Davis-Besse Unit 1 application with those on Davis-Besse Units 2 and 3 and Perry Units 1 and 2 accounted for further delay, with the result that on December 8, 1975, over six years and four months after the application for a construction permit for Davis-Besse Unit 1 was filed the antitrust hearing mandated by the 1970 amendments first began. It is estimated that the evidentiary hearing will con-tinue into May-June of this year. Using the timetable in the Consumers Power Company, (Midland Units 1 and 2) pr'oceeding,

. Docket Nos. 50-329A and 50-330A, decided July 18, 1975, as a.

guide, we can expect approximately one year to elapse between 2/,

the date the record is closed and the time of decision.~

7. Construction of Davis-Besse Unit 1 has proceeded in the interim. It is now almost complete and expected to be

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In Consumers, the record was. closed on June 20, 1974. Briefs

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w9re filed on hugust 8, 1974, with reply briefs on November-22, l 1974. A decision was rendered on July 18, 1975. Even accounting l fo.- the aberrant circumstances in Consumers, one should not be tot sanguine that the time between closing of the record and dati of decision will be less than ten months.

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. ready for fuel loading in September, 1976. With this schedule in mind, Davis-Besse Unit l'will be an important factor in assuring the reliability of the power. supply in the State of Ohio and be-cause of its relatively low fuel costs, it is expected to contribute to the stability of electric power costs for consumers of electricity in Ohio. In the absence of a determination by the Appeal Board that an operating license may issue under Section 105c(8) subject

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to the outcome of the pending antitrust proceeding, Davis-Besse Unit 1 cannot be relied upon for operation in 1976 and'1977 and more expensive alternate generation will have to be used or acquired,

.if available, to meet the power requirements of Ohio consumers of electricity.

II. ARGUMENT

8. The controversy presented to this Appeal Board arises because construction of Davis-Besse Unit 1, authorized to begin by a grandfathered construction license issued in March, 1971 will in all likelihood be completed prior to the time the antitrust review undertaken in conjunction with that license is complete; in that event, the salutary shield from hardship and delay which Con-gress intended the grandfathering of construction licenses to supply will be eroded. Thus, to give effect to the grandfathering clause

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The September, 1976, date marks a revision from the projection in' Applicants Motion For Determination That. Davis-Besse Unit 1 is" Grandfathered"For Purposes Of Operation, at 2 (November 4, 1975) that Davis-Besse Unit 1 would be ready for fuel loading in the second quarter of 1976.

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of .Section 105c(8) whi ch Congress promulgated and the grandfathered license which the Comission granted, Applicants' operating license must likewise.be grandfathered.

A. The Licensing Board's Decision

9. The Licensing Board bottomed its decision on several grounds: (1) that since by the language of .the section, Congress formulated ameliorative relief in only two situations,neither of which is apposite here, under customary canons of construction there is no need to engage in statutory interpretation or construction.

See Memorandum and Order Of The Board On Applicants' Motion For Determination That Davis-Besse Unit 1 Is " Grandfathered" For Purposes Of Operation, at 4-5 (docketed January 7,1976) (hereinafter cited as Board. Memorandum and Order); (2) neither the' inferences to be drawn from the statutory scheme nor the legislative history support Applicants' position Id. at 5; (3) and even if the Commission had authority to grandfather the operating license, Applicants have not proposed interim conditions to assure as Section 105c(8) requires, that subsequent findings and orders "will be given full force and offect." Id. at 7 n. 3. While deferring to part II B-our discussion of the legislative history, we would note that the Board refrained from citing that legislative history which it claimed does not support Applicants' Motion. We address grounds (1) and (3) seriatim.

10. The limited compass of the section, coupled with canons of statutory construction, served as the first ground for the Board's decision. Congress authorized the grandfathering of

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construction permits, like Applicants', submitted under Section 104(b) prior to the 1970 amendments, and of operating licenses pending as of December 19, 1970, where intervention to obtain antitrust review in the plant's construction permit proceeding had been denied under Section 104 (b) and the construction permit granted. Reasoning that Congress could have but refrained from authorizing grandfathering of operating licenses like the instant one where antitrust review of a grandfathered construction permit exceeds the time it takes to construct the plant, the Board con-cluded that Congress did not intend Section 105c(8) to apply to the instant case. Thus, the Board stated that:

The situation before us is not unlike that considered in Unexcelled Chemical Coro.

v. U.S., 345 U.S. 59 (1953) in which the result of explicit congressional consideration of a problem area was challenged as inconsis-tent with the legislative intent. * * * [N] here Congress .in Section 105c (8) specifically~ con-sidered the circumstances under which license clauses were to ' grandfathered' it is not our role to assume that Congress had in mind other unspecified circumstances. (footnote omitted)

Board Memorandum and Order at 6-7.

11. Irrespective of the vitality of the canon of con-struction which the aforementioned language exalts, see paragraph 12 infra, Applicants would initially take issue with the unartic-ulated assumption underlying the Board's view -- that Congress even considered the possibility that the situation befalling Applicants could arise. In a review of the legislative history of the so-called practical value amendments to the 1970 Act, Applicants have not discovered any indication that Congress 1

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entertained even the remote possibility that antitrust review of grandfathered construction permits would exceed the con-struction time for a nuclear power plant. See legislative his-tory, discussed in paragraph 22 infra. Thus, to assert, as the Licensing Board did, that "it is not our role to assume that Congress had in mind other unspecified circumstances," see Board Memorandum and Order at 7, is to question beg. Rather Applicants' Motion-evokes consideration of how to give effect to the salutary purpose manifested by Congressional passage of Section 105c(8) in a situation which Congress did not contemplate.

12. The passage quoted above from the Board's Memorandum and Order is reflective of the maxim expressio unius est exclusic alterius -- the expression of one thing implies the exclusion of another thing. That maxim as well as other time-worn canons of construction employed by the Board -- that in the face of unambig-uous language, there is no need to engage in statutory interpreta-tion, (see Board Memorandum and Order at 5) -- cannot justify a failure to examine Congressional intent in adopting Section 105c(8).

That maxim is at most only a guide to construction not a positive command, Ecual Employment Opportunity Commission v. Kimberly-Clark Corp., 511 F.2d 1352, 1362 (6th Cir. 1975); Hill v. Whitlock Oil Services, Inc., 450 F.2d 170, 173 (10th Cir. 1971). Moreover, it has become increasingly under attack as unreliable. See National Petroleum Refiners Ass'n. v. FTC, 482 F.2d 672, 676 (D.C.-Cir.)

t cert. denied, 415 U.S. 951 (1973). And its undifferentiated application would assuredly have been fatal to the claim in J.I. Case Co. v. Borak, 377 U.S. 426 (1964) that despite the fact that Section 27 of the Securities Exchangc act of 1934 on its face authorizes only declaratory relief for a violation of Section 14 (a) of the Act, a private cause of action for such a violation exists under Section 27. See also Allen v. State Board of Election, 393 U.S. 544 (1969) (upholding standing of private citizen to sue under the Voting Rights Act of 1965, 42 U.S.C.

S1973c despite the fact that Section 1973j only authorized the Attorney General to bring suit) .

13. The second canon relied upon by the Board -- that

-the absence of ambiguity in language obviates the need for statu-tory construction, see Board Memorandum and Order at 5 -- merits no higher esteem. Indeed, the Department of Justice appearing 4/

on behalf of the Nuclear Regulatory Commission and the EPA, de-cried the application of such a litmus formula by the Tenth Circuit in construing a provision of the Federal Water Pollution Control Act in Train v. Colorado PIRG, 507 F.2d 743 (10th Cir. 1974),

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In Train v. Colorado PIRG, the District Court characterized the suit as one brought to challenge "the accord worked out between and followed by the Atomic Energy Commission [ predecessor of the Nuclear Regulatory Commission] and the Environmental Pro-tection Agency as to the correlation of the Federal Water Pollution Control Act and-the Atomic Enorgy Act" See Colorado PIRG v.

Train, 373 F. Supp. 991, 992 (D. Colo. 1974). It is thus clear that in the Petition for Certiorari filed, the Departmeht of Justice was spokesman for the NRC.

cert. granted 95 S. Ct. 2393 (June 2, 1975) remonstrating that:

The court below concluded that the statutory language was clear, and that resort to legisla-tive history was therefore inappropriate (App. A, infra, pp. 120-130). This approach to statutory interpretation has been repeatedly rejected by this Court. See, e.g., Boston Sand & Gravel Co.

v. United States, 278 U.S. 41, 48, Cass v. United States, 417 U.S. 72, 77-79. See Petition For A Writ Of Certiorari'at 16-17, Train v. Colorado PIRG No. 74-1270, cert. granted 95 S. Ct. 2393 (June 2, 1975).

14. In addition to unduly exalting the above referenced canons, the Licensing Board also blinded itself to those precepts of construction apposite, as here, where Congress passes ameliora-tive legislation. Such legislation is to be liberally construed, see Pcvton v. Rowe, 391 U.S. 54, 65 (1968); Tcherennin v. Knight, 389 U.S. 332, 336, (1967); National Automatic Laundry & Cleaning

. Council v. Shultz, 443 F.2d 689, 706 (D.C. Cir. 1974), to provide a remedy not avoid one. Starks v. Orleans Motors Inc., 372 F.

Supp. 928, 932 (D.La.), aff'd, 500 F.2d 1182 (5th Cir. 1974);

Brennan v.. Midwestern United Life Insurance Co., 259 F. Supp. 673, 680 (D. Ind. 1966) (a statute with a broad remedial purpose shculd not easily be rendered impotent to deal with a new and unique situation within the scope of the evil intended to be eliminated).

15. In addition to relying upon only selected canons of construction, the Licensing Board appeared to rest its denial of Applicants' Motion upon a perceived failure of Applicants to demonstrate that an operating license could be granted with con-ditions. satisfying'the proviso of Section 105c(8) that:

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Any construction permit or operating license so issued shall contain such conditions as the Commission deems appropriate to assure that any subsequent findings and orders of the Commission with respect to such matters will be given full force and effect. -

In its Memorandum and Order at 7, n. 3, the Board stated:

" Applicants have not proposed interim conditions, nor is there a record.upon which this Board may now determine which if any conditions might be appropriate."

16. As Applicants' understand the import of the language quoted from Section 105c(8), it is only to assure that whatever conditions are imposed as a result of antitrust review in conjunction with a grandfathered license -- whether construction or licensing -- will become obligatory upon the licensee. In asserting that Applicants have failed to propose in'erim t condi-tions and noting the absence of any record upon which the Board may determine which conditions may be appropriate, the Board appears to suggest that Applicants seeking to make avail of the grandfather-ing provision must anticipate antitrust findings that will be made and propose conditions tailored to cure those findings before antitrust review is completed.

17. If indeed that is the Board's position, Applicants would submit .that the Board has misread Section 105c (8) . The Board's reading certainly conflicts with that.of the licensing board issuing _ construction permit CPPR-80 for the Davis-Besse

r Unit 1 Station, for that permit conditioned grandfathering only upon the proviso 'that " [t]he Applicants shall comply with any order or license condition made by the Commission pursuant to Section 105c of the Act with respect to the licensed activities."

An identical condition would similarly be appropriate as an interim measure in the operating license. The Board's reading, insofar as it envisions the necessity for an evidentiary hearing, would also flout the purpose of Section 105c(8) -- to permit con-struction or operation without delay due to antitrust review, see paragraphs 24-25 infra. The Board ac'knowledges the incom-

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patibility of the need for such a hearing with the purpose of the grandfathering provision, yet it enigmatically conc 1'u des that Section 105c(8) would require such a hearing before grandfathering can be granted.

18. Even if Applicants erroneously read Section 105c(8) to require only a condition such as that included in Applicants' construction permit and quoted above, Applicants assert that the Board incorrectly stated that " Applicants have not proposed interim conditions. . . ." Such conditions were in fact appended to Applicants' Prehearing Legal Brief as Appendix A, see Applicants' Proposed License Conditions For Davis-Besse Nuclear Unit 1 and Perry Nuclear Units 1 and 2. Such conditions offer to entitics making a timely request therefore inter alia (1) the opportunity to participate in the listed nuclear units by an ownership inter-l est,.a contractual prepurchase of power arrangement or a unit-

power purchase and (2) sufficient transmission services to enable delivery of the participating entity's share of nuclear power or an equivalent amount of replacement power.-5/

19. Thus, Applicants submit that the Licensing Board based its denial on both a misapprehension of the thrust of the conditioning requirement of Section 105c(8) and an oversight of facts which directly relate to the crucial issue in NRC antitrust review, namely access to nuclear power. See Louisiana Power and Light Company (Waterford Steam Electric Generating Station, Unit 3), CLI-73-75, 6 AEC 619, 620 (September 28, 1973). Moreover, the Board reverently invoked selected canons of construction to the exclusion of other precepts more germane, see paragraph 14 supra.,

to justify a failure to examine the legislative history of Section 105c(8). This Appeal Board has directed all parties to address that history, and it is to it that we now turn.

B. Legislative History

20. Applicants have undertaken to examine the

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Applicants' proposed license conditions, reflecting the Companies' policies were first filed with the Licensing Board as early as March 14, 1975. They provide for the joint establishment of a reserve arrangement between the Company providing nuclear power out of its ownership share in the designated unit and the participating entity.

The ' minimum reserve requirement is to be set by agreed criteria, but if no' agreement can be reached on the criteria for determining reserves, the proposed license ccnditions provide that the partic-ipating entity's minimum reserve requirement shall be determined on the~ basis of the smallest reserve requirement agreed to by the Com-pany under other similar reserve arrangements then in effect -- but in no event shall the entity's minimum reserve be less than its largest single block of nuclear capacity out of any of the designated nuclear units involved in this proceeding.

f legislative history focusing particularly upon legislators instru-mental in drafting and facilitating passage of the 1970 amendments, for their views are of particular importance. City of New York

v. Train, 494 F.2d 1033, 1037 (D.C. Cir.1974) , aff'd 95 S. Ct.

1991.(1975). Thus, the following analysis is based on the state-ments of Congressman Holifield, Chairman of the Joint Committee on Atomic Energy, Senator Pastore, Vice-Chairman, and Congressman Hosmer, co-author _of H.R. 18679, which as amended by Senate deletion.

of a section having no bearing here, contained the relevant 1970 amendments.

21. As was noted supra, Applicants examination of the legislative history has unearthed nothing to indicate that Congress even considered the possibility that what has transpired in the instant case could arice. Thus, it is pointless to ascribe any

' significance to the fact that Section 105c(8) may be read as not

. explicitly authorizing the Commission to grandfather the operating license of a nuclear plant which is to be completely constructed prior to termination of antitrust review undertaken in conjunction with the grandfathered construction permit.

22. That Congress had no conception that antitrust review could consume more time than construction of a plant would take is evidenced by a comparison of the time estimations made concerning length of antitrust review and construction. Projec-tions of four to six and five or six years construction time were offered by Congressmen Holifield and Hosmer respectively. Compare

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116 Cong. Rec. 9444 (daily ed. September 30, 1970) with Id. at 9449.-6/The only legislator making reference to a finite time which antitrust review was expected to consume was Senator Pastore.

Although the bill does not specifically deal with the objective of avoiding delay incident to the change in posture from 104b to Section 103 status, aside from antitrust considerations, it would be the height of folly to stretch out un-necessarily the increasingly long interval be-tween an application for a construction permit and the regulatory decision on the permit. A few years ago, this period approximated 7 to 9 months. Now, the interval is closer to 18 months, and has approached 2 years in some cases. 116 Cong. Rec. 19253 (daily ed. December 2, 1970).

Thus, to the extent finite time projections were expressed, lead-ing sponsors of the 1970 amendments anticipated that construction would take at least twice as long as antitrust review. Apparently sponsors could not conceive that over six years after an applica-tion for a construction permit was filed, antitrust review would still be taking place. Accordingly, it is not surprising that Congress may have made no explicit provision for grandfathering an operating license for a plant the construction permit of which had been grandfathered.

23. In statutory interpretation, it is of ten a court's task to consider that answer the legislature would have made as i

-6/ l Congressman Jones' projection was six years. See 116 Cong. Rec.

9445 (daily ed.' September. 30, 1970).

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l to a problem that was neither discussed nor contemplated. Portland Cement Ass'n. v. Ruckelshaus, 486 F.2d 375, 380 (1973), cert.

denied, 417 U.S. 921 (1974), appeal after remand,'513 F.2d 506 (D.C. Cir.1975) ; Montana Power Co. v. FPC, 445 F.2d 739, 746 (D.C. Cir. 1970), cert. denied, 400 U.S. 1013 (1971) ; District of

' Columbia v. Orleans, 406 F.2d 957, 958 (D.C. Cir. 1968).-6/ This same lot ~has fallen upon this Appeal Board. Applicants submit that obeisance to the premium Congress placed on expeditious antitrust review to iasure that low cost nuclear power would be made available to the public without delay requires that the operating license for Davis-Besse Unit 1 be grandfathered. The flexibility which Section 105c(8) was intended to confer upon the Ccanissien can be exercised by a determination that to give full effect to the legislative intent underlying the authorization to grandfather constr.ation permits such as that of Davis-Besse Unit 1, an operating license must also be grandfathered.

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The Board dismissed Hecht v. Pro-Football,Inc., 444 F.2d 931 (D.C. Cir.,1971) and Montana Power Commission v. FPC., 445 F.2d 739 (D . C .1Cir. 1970), cert. denied, 400 U.S. 1013 (1971) as

" inapposite or'_ insufficiently supportive of the propositions for which they are advanced." Board Memorandum and Order at 6. Appli-cants quoted from Hecht'that " congressional statutes . . . should not be interpreted so-as to lead to absurd or obviously unintended irrational results," 444 F.2d at 945, and cited Montana Power Commission for the proposition that it is appropriate for a court in~ interpreting a statute.ta) discern how the legislature would .

have dealt with-a problem, where that problem was not expressly

. contemplated. 445 F.2d at.746; Since these cases unquestionably stand for the propositions for which they were cited by Applicants we assume that by its above-quoted statement, the' Board intended-

~

to express only its vicw that the propositions advanced in those i

cases and reliedLupon by: Applicants did not gov,ern this case.

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24. The need for expeditious antitrust review was prominent in the mind of sponsors. Congressman Holifield articu-lated this concern:

The bill contemplates that all aspects of the antitrust considerations constituting part of the Commission's total licensing precedure, including the ultimate findings by the Commission would be dealt with in such a way as not to im-pose an additional delaying factor. We believe a separate board can be utilized by the Commission in connection with such antitrust considerations.

This feature of the total licensing process should be completed by the Commission before the radioloaical health and safety matters are concluded in the licensing procedure. 116 Cong.

Rec. 9440 (daily ed. September 30, 1970)'

(emphasis added).

Congressman Hosmer was equally emphatic:

We want to see this licensing procedure as an aid in obtaining a safe and adequate supply of power to the people - not an impediment. We want no snags whatsoever to cause delay because of licensing. Id. at 9446

25. The anticipated hardship which protracted antitrust review would create was identified as delay in making low cost power available to the public.

e The purpose here is to avoid hardships as specified at the top of page 32 of our r6 port on this bill. Now, hardships are not limited to, say, situations where the utility involved might risk bankruptcy by any delay. . What the committee is talking about here is things that might delay or impede bringing necessary and desirable

. power to the utility system. In short, hardship in the sense of this bill has y w--

., s a very broad and liberal connotation.

Statement of Congressman Hosmer, 116 Cong. Rec. 9446 (September 30, 1970)7/

26. Finally, Congress perceived Section 105c(8) as allowing for " flexibility (which could] be benevolently and sensibly used to help avoid unnecessary delays in the scheduling of needed power plants" Id., not as mandating a mechanical treat-ment which the Licensing Board applied. That flexibility, Appli-cants maintain, could be appropriately employed by grandfathering the operating license for Davis-Besse Unit 1, in order to give full effect to the grandfathered construction permit.

27. Such a measure could not be opposed on the grounds that Congress did not want utilities to derive the benefit of operating nuclear power plants before antitrust review was com-pleted. Congress evinced no such principled opposition. Indeed Section 105c(8) authorizes grandfathering of an operating license in the circumstances enunciated in Section 105c(3). Moreover, permitting utilities to operate a plant subject to conditions to be subsequently imposed upon completion of antitrust review does 7/

~

See also 116 Cong. Rec. 9447 (daily ed. September 30, 1970)

(Statement of Congressman Hosmer) :

What we are trying to do is to specify the procedures which will be employed for the first time 'by both the Justice Department and the AEC, so that the_ licensing of this great source of power will not be impeded and power can go on the line and be available to-our people.

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not in way increase their leverage: to avoid the imposition of conditions. Non-compliance with Commission conditions could result.in rescission of the license, just at a time when the utility _is-beginning to realize some return on a prodigious capital investment.'

28. ' Finally,'except in unique circumstances Congress' clearly did not intend that antitrust review delay issuance of an operating license and hence operation of a nuclear plant. The 1970 amendments revised Section 105c(2) to provide that the pro-visions concerning potential antitrust review would not apply to a license to operate a Section 103 facility-for which a construction permit has been issued unless the Commission determines such review is advisable on the ground that significant changes have occurred in the licensee's activities cn proposed activ-ities subsequent to the previous review by the Attorney General and the Commission under this subsection in connection with the construction permit for the facility.

'42 U.S.C. S2135c(a) 8/

~

8/

The Department of-Justice divines that the principal thrust of this section is that prelicensing review attendant to an

. operating license:could be avoided only_when there has been a

~ first_ review by .the Attorneyf General and the Commission which

has run its course, i.e., through hearing and the. imposition of conditions. See Response of the Department of Justice To 1 Applicants' Motion That Davis-Besse Unit 1 be Exempted From Pre-

licensing Review?at 6 n. 4 (Filed November 28,'1975).- If the iDepartment's view is correct, it merely1 reaffirms the basic i

. proposition that. congress was led =to understand that the antitrust H review urged.uponfit-by the Department,'among'others, would not be-l so. protracted that it'could not be completed-without delaying ,

i plant, operation.

(footnote continued) '

s

?

In this case, if the Motion requested is denied the operating license for Davis-Besse Unit 1 will be viewed as to antitrust aspects immediately after imposition of conditions as a result of antitrust review undertaken in conjunction with the grand-fathered construction permit. Thus, insufficient time will have elapsed to bring the condition of Section 105c(2) -- significant changes in licensee's activities -- into play. Antitrust-wise, there is nothing to be gained by not grandfathering the operating license for Davis-Besse Unit 1.

C. Implications of Section 105c(6)

29. The final issue which the Appeal. Board directed the parties to address concerns the import of Section 105c(6) to the pending controversy. That section provides as follows:

In the event the Commission's finding under paragraph (5) is in the affirmative, the Commission shall also consider, in determining whether the license should be issued or con-tinued, such other factors, including the need for power in the affected area, as the Com-mission in its judgment deems necessary to pro-tect the public interest. On the basis of its findings, the Commission shall have the author-ity to issue or continue a license applied for, 8/ .(Footnote continued)

If indeed the Department's divination were accurate, moreover one would expect that a similar concern would have been voiced in'the Joint Committee Report. The Report evidences no such concern. Rather it emphasizes the Committee's view that in the absence of significant intervening changes between antitrust review and the' application for an operating license, "two such exercises" would be nonsensical. Rcport By The Joint Committee On Atomic Energy, Accompanying S4141 at 29 (September 29, 1970).

l.

I to refuse to issue a license, to rescind a license or amend it, and to issue a license with such conditions as it deems appropriate.

42 U.S.C. S2135c(6).

30. This section generated considerable congressional discussion focusing upon whether the commission could license a nuclear power facility even though unfavora'ble antitrust conse-quences would ensue therefrom. The Joint Committee Report clearly indicates that such a condition, though undesirable, could obtain.

While the Commission has the flexibility to consider and weigh the various interests and objectives which may be involved, the com-mittee does not expect that an affirmative find-ing [of inconsistency with the antitrust laws]

under paragraph (5) would normally need to be overridden by Commission findings and actions under paragraph (6). The Commission believes that except in an extraordinary situation, Commission imposed conditions should be able to eliminate the concerns entailed in any affirma-tive finding under paragraph (5) while, at the same time, accommodating the other public inter-est concerns found pursuant to paragraph (6).

-Joint Committee Report at 31.

Senator Har't entertained the same view of Section 105c(6) , noting that a license could be issued permitting an applicant to con-struct or operate a plant even though adverse antitrust findings had not yet been cured. Thus he admonished that " [il f the appli-l

! ' cant or holder _of the license does not cure the antitrust findings, then the AEC may suspend or revoke the license regardless of the

'need for power in the affected area.'" 116 Cong. Rec. 19256 (daily ed. December 2, 1970).

-1 7

31. To the extent Section 105c(6) is germane, it reflects that in the case of an irreconcilable conflict between the public interest in obtaining low cost nuclear power and the need to cure certain anticompetitive situations, Congress intended to allow the latter to accede to the former in appropriate cir-cumstances. Moreover, even short of such a conflict, Section 105c (6) authorizes the Commission to permit a plant to operate where an anticompetitive situation has been found to exist but st.11 remains to be cured by the licensee. It would thus have been incongruous for Congress to have empowered the Commission in the public interest to permit operation of a nuIclear plant

-found to create or maintain an anticompetitive situation, and yet to have forbade such operation where antitrust review had not yet been completed. To this extent, Section 105c(6) en-

'hances Applicants' position.

4 III. CONCLUSION

32. Resolution of the issue now before this Appeal Board is of paramount impdrtance to the public as well as the -

nuclear energy industry. In attempting to cure a deficiency in the Atomic Energy Act of 1954, Congress may have failed to make explicit provision to insure that the energy shortage which prompted the turn to new sources of energy would not be aggravatco. But this failure was not intentional. Indeed the legislative history of the 1970 amendments reveals that Congress

7 o .-

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sought to forestall the possibility that antitrust review would delay the time when nuclear power would be made available to the public.

33. The undesirable delay will occur, however, if upon completion of the construction of Davis-Besse Unit 1 and before completion of antitrust review, a grandfathered oper-ating license is not granted by the Commission. Applicants have endeavored to demonstrate that nothing in the legislative history of the 1970 amendments would militate against the relief they seek. Indeed that history, as well as statutory provisions rela-ted to Section 105c, reveal that Congress had no principled opposition to grandfathering an operating license in these cir-cumstances and suggest in fact that the ameliorative purposes motivating _ Congress to adopt Section 105c(8) could be frustrated if the relief is not granted.

34. Nothing in the Licensing Board's Memorandum and Order detracts from the support marshalled above for Applicants' position. That Board rested upon two canons' of constructi,on, holding that on its face Section 105c(8) did not apply. But those' canons are not possessed of any talismanic quality; nor, as the Department of Justico-and the NRC argued in another case, can they be invoked to countenance a failure to engage in more than cosmetic statutory interpretation.

35. The Licensing Board expressed misgivings about ,

Applicants' position in'part because nothing on the face of the

T. ~

. s 26 -

statute could serve as an explicit vehicle for granting the requested relief. Applicants submit that in view of the fle::i-bility which Congress deemed Section 105c(8) to confer, it would not be inappropriate for the Commission to determine that an operating license for Davis-Besse Unit 1 should be grandfathered in order to give full force and effect to the grandfathering of the construction permit which that Section empowered the Commission to grant. Indeed, since Congress contemplated only a limited anti-trust role at the operating stage, one inapposite here, and a licensee's operation of a nuclear plant would not impair the Com-mission's authority to impose appropriate conditions if adverse antitrust findings are made, no interest would be jeopardized and indeed.the public interest would be furthered if the operating license of Davis-Besce Unit 1 is grandfathered.

36. By reason of the foregoing, Applicants submit that the Licensing Board erred in denying Applicants Motion For A Determination That Davis-Besse Unit 1 Is " Grandfathered" For Purposes Of.An Operating License.

Respectfully submitted, ,

SHAW, PITTMAN, POTTS & TROWBRIDGE O

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Gerald Charnoff Wm. Bradford Reynolds Jay H. Bernstein Robert E. Zahler Dated:fJanuary 23, 1976

b . .. .

. -s UNITED STATES OF AMERICA NUCLEAR, REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) NRC Docket No. 50-482A COMPANY )

)

(Davis-Besse Nuclear Power Station, )

Unit 1) )

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing

" Applicants' Appellate Brief In Support Of Their Motion For Determination That Davis-Besse Unit l Is 'Grandfatherod' For Purposes Of Operation" were served on all the persons listed on the. attached. Service List by deposit in the United States mail, postage prepaid, this 23rd day of January, 1976.

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( 'n,h, .1 (h /( I :/

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9,/

Gerald Charnoff

. Counsel for Applicants $, l l

Dated: . January 23, 1976

I . . . ,

N

. UNITED-STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY ) NRC Docket No. 50-346A

)

(Davis-Besse Nuclear Power Station, )

Unit 1) )

SERVICE LIST Alan S. Rosenthal, Esquire John M. Frysiak, Esquire Chairman Atomic Safety and Licensing Board Atomic Safety and Licensing Panel Appeal Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Washington, D.C. 20555 Atomic Safety and Licensing Michael C. Farrar, Esquire Board Panel Atomic Safety and Licensing U.S. Nuclear Regulatory Commission Appeal Board Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C.

20555 Mr. Chase R. Stephens

, Docketing and Service Section Richard S. Salzman, Esquire U.S. Nuclear Regulatory Commission Atomic Safety and Licensing 1717 H Street, N.W.

Appeal Board Washington, D.C. 20006 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Benjamin H. Vogler, Esquire Roy P. Lessy, Jr., Esquire Douglas V. Rigler, Esquire Jack R. Goldberg, Esquire Chairman Office of the Executive Legal Atomic Safety and Licensing Director Board . U.S. Nuclear Regulatory Commission Foley, Lardner, Hollabaugh Washington, D.C. 20555 and Jacobs Chanin Building - Suite 206 Joseph J. Saunders, Esquire 815 Connecticut Avenue, N.W. Steven M. Charno, Esquire Washington, D.C. 20006 Melvin G. Berger, Esquire Anthony G. Aiuvalasit, Esquire Ivan W. Smith, Esquire Ruth Greenspan Bell, Esquire Atomic Safety and Licensing Janet R. Urban, Esquire Board Panel Antitrust Division U.S. Nuclear Regulatory Commission Department of Justice Washington, D.C.- 20555 Washington, D.C. 20530

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, n , _6

. N Reuben Goldberg, Esquire Russell J. Spetrino, Esquire David C. Hjelmfelt, Esquire Thomas A. Kayuha, Esquire Michael D. Oldak, Esquire Ohio Edison Company Goldberg, Fieldman & Hjelmfelt 47 North Main Street 1700 Pennsylvania Ave., N.W. Akron, Ohio 44308 Washington, D.C. 20006 Terence H. Benbow, Esquire Wallace E. Brand, Esquire A. Edward Grashof, Esquire Pearce & Brand Steven A. Berger, Esquire Suite 1200 Winthrop, Stimson, Putnam 1000 Connecticut Avenue, N.W. & Roberts Washington, D.C. 20036 40 Wall Street New York, New York 10005 Frank R. Clokey, Esquire Special Assistant Thomas J. Munsch, Esquire Attorney General General Attorney Room 219 Duquesne Light Company Towne House Apartments 435 Sixth Avenue Harrisburg, PA 17105 Pittsburgh, PA 15219 Mr. Raymond Kudukis David Olds, Esquire Director of Public Utilities William S. Lerach, Esquire City of Cleveland Reed Smith Shaw & McClay 1201 Lakeside Avenue Union Trust Building Cleveland, Ohio 44114 Box 2009 Pittsburgh, PA 15230 James B. Davis, Director Robert D. Hart, Esquire Lee A.'Rau, Esquire Department of Law Joseph A. Rieser, Jr., Esquire

^

1201 Lakeside Avenue Reed Smith Shaw & McClay Cleveland, Ohio 44114 Madison Building - Room 404-1155 15th Street, N.W.

Donald H._Hauser, Esquire Washington, D.C. 20005 Victor A. Greenslade, Jr., Esq.

The Cleveland Electric Edward A. Matto, Esquire Illuminating Company Richard M. Firestone, Esquire 55 Public Square Karen H. Adkins, Esquire Cleveland, Ohio 44101 Antitrust Section 30 E. Broad Street, 15th Floor John Lansdale, Esquire Columbus, Ohio 43215 Cox, Langford and Brown 21 Dupont Circle, N.W. Christopher R. Schraff, Esquire Washington, D.C. 20036 Assistant Attorney General Environmental Law Section Leslie Henry, Esquire 361 E. Broad Street, 8th Floor

-Michael M. Briley, Esquire Columbus, Ohio 43215 Roger'P. Klee, Esquire

-Fuller, Henry, Hodge &-Snyder James R. Edgerly, Esquire P.O. Box 208S _ Secretary and General Counsel Toledo, Ohio' 43603 Pennsylvania Power Company One East Washington Street New Castle, PA 16103 l

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