ML19331B229

Exceptions to ASLB 770923 Decision Refusing to Suspend Plant Const Pending Completion of Remanded Issues Hearing.Order Violates Court of Appeals Ruling & Mandate

ML19331B229
Person / Time
Site:	Midland
Issue date:	10/03/1977
From:	Cherry M, Flynn P CHERRY, M.M./CHERRY, FLYNN & KANTER
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
Shared Package
ML19331B224	List: ML19331B223 ML19331B228 ML19331B229 ML19331B233
References
NUDOCS 8007280822
Download: ML19331B229 (26)

Text

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\J UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD OR IN THE ALTERNATIVE BEFORE THE NUCLEAR REGULATORY COMMISSION In the Matter of )

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CONSUMERS POWER COMPANY ) DOCKET NOS. 50-239

) 50-33 tc (Midland Units 1 and 2) )

Suspension Proceedings N' ,

c: 3 977 * %

ocT EXCEPTIONS TO LICENSING BOARD ,.y

• DECISION OF SEPTEMBER 23, 1977* y 9 $ e,g g,ep [ L,

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Pursuant to 10 C.F.R. S 2.762 (a) , all of the M Intervenors in these dockets other than Dow Chemical Ccmpany (hereafter "Intervenors") submit the following exceptions to the September 23, 1977 Order of the Licensing Board herein, refusing to suspend construction of the Midland plant pending ccmpletion of the hearings on the issues remanded to the Commission by the Court of Appeals and restriking of the cost-benefit analysis, as ordered by the Court of Appeals.

1. The fif th sentence of paragraph 3 of the Order is inaccurate and incomplete, because it fails to mention that

• These exceptions are being filed directly with the Appeal Board in view of the f act that the Licensing Board sua sponte referred its decision to the Appeal Board (Order,

p. 39). In view of that referral, these exceptions may be unnecessary to bring the entire decision and record before the Appeal Board. However, we are filing them as a protective measure and in the event that they are necessary.

8007280hh2

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the Court of- Appeals in Aeschliman v. NRC, 547 F.2d 622 (D.C. Cir. 1976), also directed a complete restriking of the cost-benefit analysis for the Midland plant.

2. The second sentence of paragraph 7 of the Order, a'nd footnote 3 thereto, are factually and legally erroneous because: (a) under the circumstances of this case suspension of the construction permits is required as a matter of law; (b) even if suspension were not required as a matter of law, the Order misstates the factors which should be considered in reaching a suspension decision; and (c) in this case as in Public Service Commission of New Hampshire (Seabrook, Units 1 & 2) , ALAB-3 6 6, 5 NRC 3 9 (1977),

there are several facts of such significance that, standing alone, any one of them justifies and even requires suspension of the construction permits.

3. Paragraph 9 of the Order is erroneous as a matter of law, because: (a) insofar as it states that sunk costs may be considered at all in this proceeding, it is directly contrary to the opinion and mandate of the Court of Appeals and to settled NEPA law as announced by the Court of Appeals.in this and other cases; (b) to the extent that it asserts that the only reason for not considering sunk costs is to punish an applicant who has withheld or misrepresented information, it is contrary both to the rulings of the Court of Appeals and to the Commission's decision in Public Service Company of New Hampshire (Seabrook Station, Units 1 & 2) ,

CLI-77-8, 5 NRC 503 (1977); (c) to the extent that it suggests sunk costs may be considered at any stage of this proceeding, it ignores the fact that in uhis case the central purpose of the suspension decision is to protect the integrity.

of 'the ultimate reranded decision (including the restriking of the cost-benefit analysis) , which both the Licensing Board and the Appeal Board have admitted will be impaired if construction continues and sunk costs are credited; and

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(d) to the extent that it authorizes consideration of sunk costs in connection with the suspension decision or. the ultimate remanded decision, it illegally rewards Consumers' -

deliberate and self-confessed tactic of racing ahead with construction as rapidly as possible in order to irretrievably taint both the suspension decision and the ultimate decision on remand.

4. Paragraph 10 of the order is factually incomplete, l because it f ails to mention Consumers' repeated statements. to Dow Chemical Company'that Consumers would proceed with con-struction as rapidly as possible in an attempt to at least tilt, if not actually foreclose, full and fair consideration of the issues remanded by'the Court of Appeals and a fair restriking of the ccst-benefit analysis.

5. -Paragraph 10 of the Order is inaccurate when it asserts that "none of these proposed stratagems were successful." In fact, Consumers' stratagem of proceeding widi construction as rapidly as possible in order to prejudice

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consideration of the issues remanded by- the Court of Appeals succeeded, because the Licensing Board's entire suspension decision is based on crediting Consumers with the money Consumers spent pursuant to that stratagem.

6. Paragraph 11 of the Licensing Board's decision is erroneous as a matter of law, to the extent that it asserts that "it is generally proper to use sunk costs in the comparison of alternatives," for the reasons stated in connection with paragraph 9 of the Order.

7. Paragraph 11 of the Order is both legally and factually inaccurate in asserting that "to ignore several hundred million dollars worth (of sunk costs] as a punishment would work an out-of-proportion injustice on those who will ultimately provide the money." It is legally inaccurate because as a matter of law sunk costs may not be considered in a proceeding of this kind; thus no injustice can result in not considering them. It is factually inaccurate.because it omits the fact that Consumers' self-confessed tactics in this proceeding have been to accumulate sunk costs as fast as possible; by omitting that fact, paragrapht 11 also omits the fact that by. not ignoring sunk costs, Consumers is rewarded for its deliberate efforts to turn the remand'd e l hearings into a futile mockery. ,

8. The last two sentences of paragraph 13 of the Order are erroneous as a matter of law, because: (a) they ignore the fact that the Commission's statements about the interim fuel cycle rule carefully left open the possibility that in any given individual case the rule would require suspension of a construction permit, and (b) they fail to independently consider and apply the interim fuel cycle rule to this case, but instead rely solely on a generali=ed (and inaccurately sc=marized) statement of the Commission.

9. Paragraph 13 of the Order is erronecus as a matter of law, because: (a) the interim fuel cycle rule on which it purports to rely is invalid, and (b) the parties to this proceeding have never been given the opportunity, by briefs or otherwise, to be heard concerning the applica-bility or effect of the interim fuel cycle rule in this Case.

10. The last sentence of paragraph 13 of the order is factually inaccurate, insofar as it asserts that fuel cycle issues are "of small =agnitude" in this case, because: (a) Dow Chemical Ccmpany regards'the cost of nuclear fuel as a major and possibly determinative facter in its judgment as to whether the Midlandsplant is economically beneficial to it; (b) the Cc=missien Staff itself concluded (in its Proposed Findings on the suspension issue) that if Dow considered existing nuclear fuel costs in determining whether or not to support the Midland plant, Dow might well decide not to suppcrt the plant; and (c) the Order fails to take into account the fact (admitted

by other Commission decisions, but ignored in the interim fuel cycle rule) that the administration officially opposes plutonium recycling, which means a substantial increase in net nuclear fuel costs.

11. Paragraph 10 of the Order is factually inaccurate, because it omits to mention the fact that Consumers deliberately drafted the testimony of.Dow witness Joseph Temple in such a way as to conceal from the Commission the realities of the Dow-Consumers ongoing dispute, and omits to mention the fact that Mr. Temple himself agreed on cross-examination that his testimony, as drafted by Consumers, was "not open, not honest, and not consisting of all the relevant information."

12. The second sentence of paragraph 15 of the Order incorrectly characterizes the Ccmmission's April 11, 1974 Order. That Order did reopen the proceedings, by receiving and reviewing the changed Dow-Consumers contracts.

However, the Commission conducted the reopened proceeding jgc parte and without notice to Intervenors.

13. Paragraph 16 of the Order is inaccurate inso-i far as it asserts (through use of the word " assumed") that the Court of Appeals' quoted language was merely precatory.

In fact, the Court of Appeals directed the Commission to take the changed Dow f acts into account in restriking the cost-benefit analysis (and under NEPA' the Guidelines of the Council on Environmental Quality, and the decided cases,

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the Commission is affirmatively obligated to do so in any event).

14. The last sentence of paragraph 19 of the Order is inaccurate, because the record shows that there is no economic advantage to the Midland project over a Dow-owned coal-fired plant, and in fact shows that a Dow plant, based on Dow's own figures, would be cheaper for Dow than the Midland plant.

15. Paragraph 20 of the Order is inaccurate in-sofar as it asserts that "the econcmic advantage of Midland steam" was an important factor in the decision reached during Dow's 1976 corporate review. In fact, both of the Dow witnesses testified that the dcminant factor in the outcome of that corporate review was Consumers' threats of litigation (which Dow's house counsel-described as " pretty damn close to blackmail").

16. Paragraph 21 of the Order is incomplete, because it o=its to mention that (even according, to the Commission Staff) the increased nuclear fuel' costs might i

well lead Dow to officially conclude that the Midland plant is no longer preferable to Dow, and cmits to note that the increased nuclear fuel costs represent a "significant change in conditions" within the meaning of the testimony of Dc" witnesses that Dow's corporate position of pro forma support for the Midland plant might vanish entirely in the event of "any significant change that might take place from the

' current conditions--that could include almost anything."

17. Paragraph 22 of the order is factually inaccurate because it fails to mention that one of the

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" options" Dow is deliberately keeping open is the option l f

j of withdrawing completely frca the Midland project and suing Consumers for breach of contract.

18. Paragraph 22 of the Order is inaccurate because it cmits to mention that one of Dow's concerns -

about the Midland project is Consumers' ability to finance i completion of the project--an ability called sharply into i

question both by Consumers' own internal memoranda concern-ing the project and by Consumers' attempts to get Dow to make an interest-free $400 million loan to consumers in order to complete the Midland project (an attempt which the President of Dow U.S. A. described as " extortion") .

19. The-last sentence of paragraph 23 of the order is. misleading, insofar as.it. suggests that.Dow might support the Midland plant more strongly by the time the remanded hearings are concluded. In fact, .Dow is likely i

to change its position adversely to Consumers because of continually escalating costs for the Midland plant, and j will not actively support the Midland project unless -

Consumers makes substantial changes in the Dow-consumers i- . contracts--changes which Dow regards as' essential, but

'which Consumers has so far refused to make because Cons'umers

.(as 'it has admitted to 'Dow) knows that the changes will

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-dramatically worsen the ability of the Midland plant to survive a fair cost-benefit analysis.

20. Paragraph 25 of the Order is' incomplete, because it fails to mention that the evidence at the suspension hearings conclusively established that the true demand for the Midland plant is already. substantially less than that projected by Consumers when the construction permits were issued (or even when the suspension hearings ,

began), and that less than three weeks ago Consumers revised its demand projections downwards yet again--including a 4

drop of fully 38.5% in its projected demand for 1979.

21. The eighth sentence of paragraph 27 of.the Order (stating that Consumers' sunk costs "are in the half billion dollar range") is inaccurate, because it omits to note that at least $200 million of the . sunk costs are recoverable by Consumers. The sentence is also irrelevant as a matter of law, because sunk costs cannot be considered in this proceeding for the reasons stated above in connection with paragraph 9 of the Order.

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22. The last sentence of paragraph 27 of the Order is both factually and legally erroneous. It is factually erroneous because, as stated in the preceding paragraph, a j large part of the sunk costs Consumers has deliberately incurred in connection with the Midland project are recoverable by. Consumers. It is legally erroneous because, for the reasons

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l stated in connection with paragraph 9 of the Order, sunk costs cannot be considered in this proceeding.

23. The first sentence of paragraph 28 of the Order is inaccurate, because: (a) all parties agree, and the Licensing Board found, that continued construction may have a decisive effect on the outccme of the cost-benefit analysis to the extent that sunk costs are considered; (b) the second sentence of paragraph 28 admits that continued construction will have adverse environmental effects, which will be both unnecessary and unjustifiable if the ultimate decision on remand is adverse to further construction of the Midland plant; and (c) both Consumers and the Board have admitted that continued construction increasingly tends to foreclose alternatives or modifications to the Midland '

plant in its present form, including modifications necessary-or desirable for safety reasons as well as for environmental reasons.

24. Paragraph 29 of the Order is inaccurate insofar as it asserts that a suspension would have a net adverse impact on Consumers, its investors and customers,5Dow, and the Michigan economy. In fact, suspension will not have a net adverse impact, because power from the Midland plant is not genuinely needed (and in any case can be obtained frcm other sources)-during the period of any delay in on-line dates

-caused by suspension, and because suspension avoids both e

the short term and the long term adverse environmental effects of continued construction, and because, even if the ultimate outcome of the remanded hearings is to authorize construction of,the Midland plant, construction can be completed in ample time to meet any real need for the plant notwithstanding.a suspension.

25. The last three lines of paragraph 33 of the order (stating that the shorter suspension period is unrealistic) .

are inaccurate, because: (a) the existence of the record developed so f ar on the suspension itaues may shorten

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1 the time needed to complete the remanded hearings, and (b) judging frcm its September 30, 1977 submission to the Board, Consumers believes that the remanded hearings can be ccmpleted in substan*ially less than nine months.

26. Paragraphs 31, 32, 34, the first sentence of paragraph 35, 36 (except for the first and last sentences),

37, and 38 are erroneous (because they consider only. a 15-month delay period and do not consider the shorter period which even Consumers regards as more probsble) , and irrelevant as a matter of law, because the cost of a delay required by

, NEPA is irrelevant to the Commission's obligation to comply with NEPA. Those portions of the Order are also improper as a matter of law because they fail to take into account the possibility that the ultimate decision will be to construct no plant, or a plant substantially different in size and design from the plant now proposed.

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27. Paragraph 31 of the Order is inaccurate because it omits to mention that when AFUDC amounts are removed from the calculation of increased plant costs (as paragraph 32 of the Order asserts they should be) , and when the substantial savings to ratepayers accruing from a suspension are taken into account (as paragraph 33 of the Order ataits they should be) , suspension will yield no, or at most a negligible, net increase in t6tal plant costs.

28. Insof ar e.s it states that the Staff " generally supports" Consumers' position on additional-plant costs, paragraph 32 of the Order is misleading and incomplete, because it fails to mention that the Staff did no independent examination of the increased plant costs issue but merely accepted, at face value and without inquiry, conclusory statements made by Consumers.

29. The last sentence of paragraph 34 of the Order is inaccurate to the extent it asserts that the Board has been given "no reason to dispute" consumers' estimated increases in the cost of nuclear fuel. Paragraph 43 of the Order admits that the Staff disputes those' cost estimates.

30. The portion of the last sentence of paragraph 37 following the semicolon is inaccurate and incomplete, because it fails to mention that Mr. 'Keeley admitted on cross-examination that his testimony concerning loss of jobs and the like was sheer unadulterated guesswork.

31. Paragraph 38 of the Order is inaccurate. Tha undisputed testimony is that Dow can and will wait until 1984

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for steam and electricity from the Midland plant (barring significant changes in other factors), no that any delay caused by suspension will not, in and of itself, cause Dow to pursue other means of filling its steam needs.

32. Paragraph 39 of the Order is factually and legally erroneous because it completely fails to consider the effect of energy conservation (both present and future) on the asserted need for the Midland plant, despite substantial evidence of record that energy conservation has had and will continue to have a major downward effect on Consumers' demand projections and despite the fact that energy conservation is a subject required to be considered by the ruling of the Court of Appeals and admitted to be important by paragraph 25 of the Order.

33. The second sentence of paragraph 39 of the Order is inaccurate and incomplete (and in fact irrelevant) bemitce it fai1 = to mention the fact, admitted by the Board in paragraph 23 of the Order, that Dow can fill its electrical and steam needs from sources other than the Midland project.

34. The portion of the third sentence of paragraph 39 following the comma in that sentence, and all of the fifth sentence of paragraph 39, are entirely inaccurate and erroneous as a matter of law. Intervenors do claim that there is no need for the Midland plant during any suspension period and also that the need for the Midland plant at any time has not been demonstrated. Further, the burden of proving a

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i need for the plant is on Consumers; it is not up to Inter-venors to prove that the plant is not needed, but rather NEPA imposes on the Commission an independent obligation to searchingly question any asserted need for the plant and arr'ive at its own judgment regardless of whether Intervenors even raise the question. The reason Intervenors posited their alternatives to Midland was to show that, even assuming that a need for power exists (which Intervenors

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deny), that need can be met more cheaply than by building the Midland plant.

35. Paragraph 41 of the Order is inaccurate and erroneous as a matter of law, because in computing the costs of the Midland plant and of alternatives thereto it erroneously considers sunk costs. Sunk costs may not be considered in this proceeding for the reasons set forth in connection with paragraph 9 of the Order above.

36. The antire discussion of alternatives in paragraphs 41-66 inclusive of the Order ~is factually and legally inaccurate and improper, because: (a) it is based l on the assumption that there is a need for; the power to l

be produced by the Midland plant (an assumption which is l improper for the reasons stated in connection with paragraph t

39 of the Order); (b) it takes sunk costs into account in determining whether any of the posited alternatives is economically preferable to the Midland plant (which is l

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erroneous for the reasons stated in connection with paragraph 9 of the Order) ; and (c) it improperly focuses on total alternatives to the Midland plant over the entire projected life of the plant, whereas the issue for suspension purposes is alternatives to the Midland plant during the suspension period and, in part because it is not the function of the suspension hearings to determine whether there are total alternatives to the Midland plant over its entire life, the record on that issue is far from complete.

37. The first sentence of paragraph 41 of the Order is improper and erroneous as a matter of law, because it fails to state that as a matter of law neither "the passage of time" nor "the expenditure of resources"--i.e., sunk costs--

can properly be considered in this proceeding in evaluating alternatives to the Midland project ' (either short-term or long-term alternatives).

.38. The fifth sentence of paragraph 41 of the Order is inaccurate in stating the capital costs of completion of the Midland plant, and the tenth sentence of paragraph 41 is correspondingly inaccurate in stating that the cost of a coal-fired facility is greater than the cost of completing Midland.

.In fact, the costs of completing Midland have been reliably estimated to be at least $400 million more than the cost figure stated in paragraph 41.

39. The last sentence of paragraph 41 of the Order is improper because it is sheer unsupported speculation.

40. Paragraph 42 of the Order is irrelevant and improper as a matter of law, because the issues in this

proceeding relate to a comparatively brief suspension of construction--not to the cost of the Midland plant over its entire life.

41. The second, third, and fourth sentences of paragraph 42 of the Order are inaccurate, and the figures quoted in those sentences are seriously ovarstated.

42. The Staff analysis discussed in paragraphs 43 through 51 inclusive of the Order (and, therefore, those ,

paragraphs of the Order) is seriously inaccurate because it-overstates coal and other costs, because it assumes a replace-ment facility substantially larger than that which would be needed even on Consumers' own load growth projections, and because it fails to take into account the time value of money, which the Board itself admitted is important in paragraph 33 of the Order.

43. The portion of- the -last sentam a of paragraph 44 of the Order following the semicolon is improper because it is sheer speculation unsupported by the record.

. 44. The second sentence of paragraph i f the Order is inaccurate, because (a) its stat $ ment that the Staff analysis "would be conservative for a later abandonment date" ignores the time value of money, the importance of which the Board conceded in paragraph 33 of the Order, and (b) its assumption that the projected date for the coal-fired alternative "becomes less realistic" in the event of a "later abandonment date for the Midland plant" is inaccurate and not supported by the record.

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45. The last two sentences of paragraph 52 of the Order are inaccurate.and incomplete; Midland Intervenors'

. Exhibit 26, cited in the last sentence of that paragraph, shows that a Dow alternative--not the Midland plant--is preferable economically at a 15% return on investment, and the undisputed testimony of Dow witnesses is that a 30%

return on investment is completely unrealistic.

46. To the extent that they assert or imply that the coal cost base prices or escalation rates used by Consumers are reasonable or correct, paragraphs 53 and 54 of the Order are inaccurate and misleading. The record shows that the coal cost figures used by Consumers are not correct, but rather are sericusly overstated.

47. To the extent that they assert that the coal cost base pr3ces or escalation figures used by the Staff are accurate, paragraphs 56 and 57 of the Order are inaccurate.

The record shows that the Staff's coal cost figures and escalation rate figures are inaccurate and are seriously over-stated.

48. Paragraph 59 of the Order ahd Table 1 of the Feld Testimony referred to therein are improper and irrglevant as a matter of law, because they take " sunk costs" into account in comparing alternatives to the Midland plant. Sunk costs may not be taken into account in this proceeding for the reasons stated in connection with paragraph 9 of the Order.

49.' Paragraphs 58 and 59 of the Order, and the Staff analysis on which they are based, are irrelevant and improper because they concern a plant far larger than that which is actually required to serve any reasonably projected needs in Consumers' service area.

50. The last two sentences of paragraph 62 of the Order are irrelevant and improper as a matter of law, because they take sunk costs into account. Sunk costs may not be considered in this proceeding for the reasons stated in connection with paragraph 9 of the Order.

51. The last sentence of paragraph 64, all of paragraph 65, and all of paragraph 66 of the order are improper and irrelevant as a matter of law, because all of them rely on the inclusion of sunk costs. Sunk costs may not be considered in this proceeding for the reasons stated in connection with paragraph 9 of the Order.

52. Paragraph 66 of the Order is improper and erroneous as a matter of law, for all the r'easons stated in connection with paragraph 9 of the Order and in addition l

because paragraph 66 of the Order ccmpletely contradicts and repudiates the ruling and mandate of the Court of Appeals in this case.

53. The fourth sentence of paragraph 67 of the 1

l Order is inaccurate and misleading, because it omits to state that on January 28, 1977 the Board advised the ACRS that the

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ACRS Report "as it now stands" does not satisfy the require-ments of the Court of Appeals, and because the Commission Staff admitted during the suspension hearings (and several months af ter the allegedly "new" ACRS Report was prepared) that it does not understand the ACRS Report.

54. The fif th sentence of paragraph 67 of the Order is inaccurate and incomplete, because the . statements made in that sentence are not merely "the Intervenors' position" but are facts the Staff has admitted to be true.

55. The last sentence'of paragraph 67 of the Order is inaccurate. The Staff has admitted that it does not understand the ACRS Report, and therefore it cannot conclude that the concerns expressed in the Report (which have not yet been explained) will not be foreclosed by continued construction. Further, Consumers has admitted that continued construction will foreclose design modifi-cations and other resolution of safety issues not pres'ently identified.

56. Paragraph 68 of the Order is improper and incorrect as a matter of law, because: (a) its attempt to

defer resolution of the issues raised by the ACRS Report to the operating license stage is directly contrary to, and a direct violation of, the ruling and mandate of the Court of Appeals in this case; (b) its assertion that consideration of safety items now should not occur "in the absence of some indication of a problem that will create serious safety

concerns" is complately circular and improper (since it is impossible to know whether such a problem exists without undertaking the very examination of the ACRS letter which the Board wants to postpone) ; and (c) paragraph 68 ignores completely the Staff. admission that the unexplained and unresolved items in the ACRS letter may have a significant effect on the cost-benefit analysis under NEPA, which as a matter of law means that those matters must be considered now and not deferred to the operating license stage.

57. Paragraph 69 of the Order is inaccurate and erroneous as a matter of law. QA-QC matters not only have' a direct and important bearing on safety issues in this proceeding, but also--as Consumers has admitted on numerous occasions--they have a dramatic bearing on the cost-benefit analysis for the Midland plant. Under Commission decisions and also as a matter of fundamental NEPA law, QA-QC matters must be considered in this proceeding for both of those reasons.

58. The first sentence of paragraph 71 of the l Order is inaccurate and improper,both factually and as a l matter of law,for all of the reasons previously stated in l

l these exceptions (which may appropriately be incorporated here by reference, inasmuch as the first sentence of para-graph 71 itself attempts to incorporate by reference the discussion in the previous parts of the Order) . In particular

and without limitation: (a) the asserted "need for the project" has never been demonstrated, either in terms of the total life of the project or in terms of the suspension period, and is irrelevant to the extent that the entire lif'e of the project is referred to; (b) any delay due to suspension will not have significant adverse effects, and in any event any such adverse effects are far outweighed by the admitted and serious adverse effects of continued construction on the integrity of the remanded hearings and the ultimate decision; (c) the " foreclosure of alternatives caused by construction and investnent" is merely another way of referring to " sunk costs," which cannot be considered in this proceeding for all of the reasons stated in connection with paragraph 9 of the Order; and (d) the " cost advantage over the plant's life of che use of nuclear fuel" is both total speculation completely unsupported by the record and also irrelevant, since what we are considering here is suspension for a comparatively brief period.

59. The second and fourth sentences of paragraphs l 71 of the Order are completely improper and irrelevant as a  !

l matter of law, since sunk costs cannot be considered in this i l

proceeding for all of the reasons stated in connection with paragraph 9 of the Order.

60. The third sentence of paragraph 71 of the Order is not only factually inaccurate, for all of the reasons stated in connection with "the foregoing parts of [the] order"

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in these exceptions, but also improper and irrelevant as a matter of law, since the economic cost of a suspension required in order to comply with NEpA is an irrelevant consideration.

61. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, because the second sentence of paragraph 72 of the Order, standing alone, requires suspension of the construction permits, as a matter of law, pending completion of the remanded hearings.

62. The first sentence of paragraph 72 is erroneous as a matter of law, since the last sen < e of paragraph 8 of the Order (concluding that the outcome of the remanded hearings is open to question) , standing alone and of itself, as a matter of law requires suspension of the construction permits pending completion of the remanded hearings in order to avoid the improper prejudice to the outcome of the remanded hearings which everyone admits continued construction will bring about.

63. The first sentence of paragraph 72 is improper as a matter of law in light of the findings con-tained in paragraph 10 of the Order, and in particular the last sentence of paragraph 10 of the Order. Those findings--

that Consumers has acted dishonestly in this proceeding, and that its dishonest tactics.may have succeeded in areas not presently apparent--require suspension of the co rstruction permits pending completion of the remanded hearings as a matter of law. l

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64. The first sentence in paragraph 72 of the Order is erroneous as a matter of law, because the findings made in paragraphs 23 and 24 of the Order--to the effect that Dow's continued participation in the Midland project is purely " speculative" and that the project is nothing but an albatross without Dow participation--require, of themselves and as a matter of law, suspension of the con-struction permits pending ccmpletion of the remanded hearings.

65. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, because the findings made in paragraph 25 of the Order (that energy conservation is an important issue in these proceedings) , coupled with the fact that the Order nowhere so much as mentions energy conservation in its discussion of the asserted need for the Midland plant, requires, as a matter of law, that the construction permits be suspended pending full consideration of energy conservation issues.

66. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, since in view of the last sentence of paragraph 32 of the Order (admitting that there is no way of knowing whether Constimers 'will actually suffer an economic loss on abandonment of the Midland project) ,

and in view of paragraphs 31 through 33 of the Order (which, taken together, show that any increase in total plant costs as a result of suspension will be negligible at most) , a suspension will not irreparably injure Consumers. On the

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other hand, it is admitted that continued construction will irreparably taint the cost-benefit analysis.

67. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, in view of the first sentence of paragraph 36 of the Order (wherein the Staff admits, apparently with the approval of the Board, that a suspension will not result in any inability on Consumers' part to serve its customers during the period of a suspension) .

Taken together with the admitted adverse impact of continued construction on the integrity of the cost-benefit analysis and the remanded hearings, that fact requires suspension as a matter of law.

68. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, because Consumers has not sustained its burden of proof that construction should be permitted to continue pending completion of the remanded hearings, as affirmatively appears from the last sentence of paragraph 8, all of paragraph 10, all of paragraph 23, all of paragraph 24, all of paragraph 25, all of paragraph 26, the last two sentences of paragraph 32', all of paragraph 33, all of paragraph 35, the first sentence of paragraph 36, the last two sentences of paragraph 36, the. eleventh sentence of paragraph 41, the third and fourth (up to the semicolon) sentences of paragraph 44, the first sentence of paragraph 62, the first two sentences of paragraph 64, the fourth sentence of paragraph 67, and all of paragraph 70, of the Order.

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69. The~first sentence of paragraph 72 is erroneous as a matter of law, because it is based entirely on an analysis which incorrectly assumes that sunk costs may be considered in this proceeding.

70. The first sentence of paragraph 72 is erroneous as a matter of law, because.the Order shows that if sunk costs are not considered, there are alternatives to.the Midland plant which are cheaper than the Midland plant. Furthermore, even on the basis of the figures used by the Board (and without considering the admitted probability that the costs of the Midland project will continue to increase),

the cost di'"a"ence between the Midland plant and the alterna-tives to it ranges from less than 5% (paragraph 41 of the Order, tenth sentence) to somewhat less than 16% (paragraph 49 of the Order, last two sentences) . As a matter of law, those differences are too small--even though, it will be o

noted, they include " sunk costs"--to justify the conclusion that all alternatives to the Midland project have now been foreclosed.

71. The first sentence of paragraph 72 of the Order is erroneous as a matter of law, because paragraph 70 of the Order, standing alone, requires suspension of the construction permits.pending completion of the full remanded hearings, and restriking of the cost-benefit analysis, ordered by the Court of Appeals.

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72. Taken as a whole, the Order violates the ruling and mandate of the Court of Appeals in every particular.

It agrees that the-Dow circumstances have drastically changed since the original construction permit grant, but declines to act upon that fact, contrary to the ruling of the Court of Appeals; it completely fails to consider energy conservation, though recognizing its importance, again directly contrary to the ruling of the Court of Appeals; it recognizes the ,

inadequacy of the ACRS Report (which prevents resolution of both safety and NEPA issues) , but refuses to act upon that fact, contrary to the ruling of the Court of Appeals; and it considers (and in fact rests its entire decision upon) " sunk costs," in direct derogation of the ruling and mandate of the Court of Appeals.

Respectfully submitted, One of the Attorneys for Intervenors Other Than Dow Chemical Company MYRON M. CHERRY i PETER A. FLYNN One IBM Plaza Suite 4501 Chicago, Illinois 60611 (312) 565-1177