ML20038B975

Comments on Further Conduct of Expedited Proceeding Per ASLB 811008 Order.Comments Discuss Quadrex Rept Intervenor New Contentions & Scheduling.Certificate of Svc Encl.Related Correspondence

ML20038B975
Person / Time
Site:	South Texas
Issue date:	12/03/1981
From:	Newman J HOUSTON LIGHTING & POWER CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL
To:	Bechhoefer C, Eva Hill, John Lamb Atomic Safety and Licensing Board Panel
References
NUDOCS 8112090385
Download: ML20038B975 (10)

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December 3, 1581 Charles Bechhoefer, Esquire ,. x 8 , r 1\] ((/ cg/

Chairman, Administrative Judge ,

Atomic Safety and Licensing Board Panel t I' g U.S. Nuclear Regulatory Commission fk($. ~_.,

Washington, D. C. 20555 , g3 ,

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Dr. James C. Lamb, III Administrative Judge Q y),

313 Woc-dhaven Road 9/ ,f Chapel Hill, North Carolina 27514 Nhl lI "

Ernest E. Hill Administrative Judge Lawrence Livermore Laboratory Post Office Box 808, L-46 Livermore, California 94550 Re: Houston Lighting & Power Co. et al.

South Texas Project, Units 1 & 2, Docket Nos. STN 50-498, STN 50-499

Dear Members of the Board:

Applicants have reviewed the filings of the NRC Staff, CEU and CCANP responding to the Board's Order of October 8, 1981, seeking the views of the parties on the further con-duct of the expedited proce' eding. The essential difference among the parties concerns the extent to which the Quadrex Report should be considered in this expedited phase of the hearing and, presumably, reflected in the Partial Initial Decision contemplated by CLI-80-32. We offer the following Dso'$ .s I(

'8112090385 611203 PDR ADOCK 05000498 G PDR

Lowzxstz2x, NzwxAN, Rzta & AXzLRAD Charles Bechhoefer, Esquire

.. Dr. James C. Lamb, III Ernest E. Hill Page Two

' December 3, 1981 comments to facilitate consideration of this matter at the forthcoming prehearing conference. */

I. Views of Parties on Quadrex Matters NRC Staff and Applicants are of the view that matters associated with the Quadrex Report should not be heard in this phase of the proceeding. CEU's view is that issues A-E cannot be decided without considering the Quadrex Report and that all further proceedings involving Quadrex matters should be defe. red until on-going reviews of the Quadrex Report are- completed.

CCANP seeks the admission of new contentions based on Quadrex matters and relatively prompt hearings on these contentions without regard to whether the Quadrex reviews are completed; CCANP apparently contemplates further hear-ings on these matters after those reviews are finished.

II. Background of Quadrex Report Before discussing the merits of the various positions, some review of the background and present circumstances of the Quadrex review is necesrary. The Quadrex review was initiated by Mr. Goldberg shortly after assuming responsi-bility as Vice President Mr.for Nuclearasked Goldberg Engineering for a and Con-relatively struction at HL&P.

unstructured examination which sought, among other things, reasons why engineering was not staying apace of construc-tion on the STP. HL&P undertook this review to obtain an Although HL&P independent assessment by a third party.

realized that it would be difficult for a newcomer to the project to assimilate and fully appreciate all relevant information within a limited period of time, no attempt was made to direct the consultant in the preparation or editing of its report because such actions could have undermined the very purpose of the activity.

The report was about six weeks in preparation and was received by HL&P at a May 7, 1981, review meeting with Mr. Goldberg ordered Quadrex, attended by Brown & Root.

• / We also discuss briefly at the close of these com-ments responses to other matters raised by CCANP in pleadings of November 23 and 24, 1981.

- LowzNSTEIN, NzwxAw, Rzia & Axzz. nan Charles Bachhonfor, Esquire-Dr. James C. Lamb, III Ernest E. Hill Page Three December 3, 1981 an immediate review to determine whether information. con-tained in the report identified matters which were poten-tially reportable under 10 CFR 50.55 (e) . Three such de-ficiencies were identified, and Region IV was notified on-May 8, 1981. One of these items was subsequently de-termined not to be reportable, while the other two were the

subjects of written reports submitted wi thin 30 days.

In addition, Mr. Goldberg, aware of.the interest that NRR would have in a review of STP design and engineering, had earlier informed Mr. Sells, Licensing Project Manager-for the STP, that a consultant had been engaged to conduct such.an independent review. When issuance of the Quadrex Report was imminent, Mr. Goldberg offered to meet with Mr.

Sells to bring'him up to date on the review,.and it was

agreed that Mr. Sells' attendance at the hearings at Bay City during the week of May 11 presented the earliest opportunity to meet. They met late that week, at which ,

time Mr. Goldberg described the report as containing a 2 number of specific findings, as well.as'certain general conclusions, and pointed out that a number of matters re-

, quiring detailed review had been identified, mentioned that Region IV had been notified of three deficiencies 4 deemed reportable, and summarized the_ Company's plans for reviewing and evaluating the report.

Contemporaneously, Brown & Root, at the direction of

Mr. Goldberg, began the detailed review of the Quadrex i findings, which is still under way. No additional report-able deficiencies have been identified to date.

In the interim, as the Board is aware, HL&P has re-l tained Bechtel Power Corporation to assume responsibilities as architect-engineer and construction manager for the STP.

i Bechtel has already created a special team under tha leader-ship of a very experienced engineering manager to assess the Quadrex Report. Meetings have been initiated among HL&P, Bechtel, B&R and Quadrex personnel designed to enable i Bechtel to hear firsthand the views and comments of the Quadrex review team responsible for developing the report

. and to obtain from B&R additional available information bearing upon the Quadrex findings. Bechtel plans to issue a report in early 1982, which will resolve some of the con-cerns based on the Bechtel review performed to date, and will identify the remaining areas which will be analyzed in i detail as part of the engineering transition effort. Upon i completion of the engineering transition activities, a

! summary of disposition of the Quadrex findings will be furnished to the NRC. The NRC Staff, according to its i

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- Lowzx:nrz!x, NzwxAw, Rzza & Axztnin Charles Bachho2fer,. Esquire Dr. James C. Lamb, III

*' Ernest E. Hill Page Four December 3, 1981 letter of November 23, 1981, to the Board, plans its own review of this matter.

, Without at all prejudging the results of the on-going

Quadrex review, Applicants note that not only has the' review to date not found any additional reportable deficiencies but it has also confirmed that a number of findings are without-foundation. However, as the NRC Staff stated in its re-sponse of November 12 to CEU's Motion to Suspend Construc-

tion

i

. . any overly broad characterization

.of this repcrt . . . is both simplistic and counterproductive to an understanding of what that report means relative to the entire project. Only after Bechtel has had an opportunity.to perform its evalua-tion and the NRC Staff has reviewed the work can the implications of the Quadrex Report's findings be delineated for the balance of the plant's design and construc-tion." .

III. Status of the Quadrex Report as it Relates to Parties' Views We believe that the Quadrex Report'has been, and con-tinues to be, handled by HL&P in an orderly and professional manner. Aspersions on HL&P's character and on its officers as reflected in CCANP's pleadings concerning the handling of the Quadrex Report are utterly baseless. The more important aspect of CCANP's views, however, it its proposal for early hearings and a. decision on some Quadrex matters following a 90-day discovery period, and thence further hearings and another decision on Quadrex matters following completion of the Bechtel r eview. This suggestion entails great ineffi-ciencies in the hearing process and would tend to create a 1 cumulative and dis rdered record. No benefit can accrue from premature consideration of Quadrex matters before HL&P and NRC Staff reviews have been completed.

An alternative suggested by CEU would defer hearings on all issues except Contentions 1-2 pending completion of the i Quadrex reviews because, as CEU contends, issues A-E cannot i

be decided without consideration of tr.e Quadrex matters.

Clearly, adoption of the CEU suggestion vould mean that this expedited hearing would not result in a decision until late- '

1982 or 1983. As CEU infers, such a path may be a departure i

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Lowzwarz1x, NewxAN, REID & AXz1.OAD Charles Bechhoafer, Esquiro

. Dr. James C. Lamb, III Ernest E. Hill Page Five December 3, 1981 from the expedition mandated in CLI-80-32 and probably re-quires some new direction from the Commission. Applicants do not believe that such a departure is warranted. The Quadrex Report does not deal with construction-related QA/

QC deficiencies which are the subject of issues A-E as established by the Board pursuant to CLI-80-32. But CEU perceives a more fundamental dimension in the Quadrex matter -- an entirely separate basis for findings on the character and competence of HL&P. We believe this concern is entirely misguided, */ but, clearly, any determination on issues A-E bearing on tee character and competence of HL&P would be subject to reconsideration, if warrant ed, based on evidence relating to the Quadrex Report adduceo at sub-sequent hearings. **/

Further, important considerations of public policy require completion of the expedited hearing in early 1982.

The proceeding has now involved 35 hearing days, about 9,000 pages of transcript, and exhibits totaling many thousands of pages. The Applicants have basically completed their pre-sentation, the intervenors have no evidence to present thereon and the testimony of the NRC Staff is basically prefiled. With a minimum of additional effort the record for this aspect of the proceeding can be completed in early 1982 in one coherent whole. Sound administrative practice would compel that the record be completed, proposed findings

• / We believe that the Quadrex Report reflects favorably on HL&P's competence and character. Although there was no requirement for such a review, HL&P of its own volition obtained an independent assessment of the status of design and engineering. This, we think, l is an important indication of the seriousness with which HL&P views its responsibilities to achieve a quality facility that satisfies all regulatory re-

! quirements.

• • / Applicants emphasize that we are not suggesting that matters arising from the Quadrex Report not be heard by the Board. To the contrary, we fully agree that such matters should be heard, but at an appropriate time, which, as the NRC Staff aptly points out in its filing of Noevember 23, 1981, would be after the Quadrex findings have been evaluated by HL&P, through Bechtel, corrective measures are proposed and imple-mented, and the Staff has reviewed those actions.

Lowzxs.Trix, SzWMAx, Rzza & AxzteAn Charles Bschho2fer, Esquire

, Dr. James C. Lamb, III Ernest E. Hill Page Six

, December 3, 1981 filed and a Partial Initial Decision issued, subjcct. of course, to the reservations mentioned above. It would be particularly ef.ficient to do this during early 1982, taking advantage of available time while the review of Quadrex matters is being accomplished. There can then be a less complicated, better focused hearing later in 1982 dealing solely with Quadrex matters. Such a second hearing would take only a few days, could be followed by proposed findings limited thereto and would allow a second Partial Initial Decision to be issued promptly.

In essence Applicants favor tne approach tentatively suggested ^by Chairman Bechhoefer during the conference call on November 10: prompt completion of the current expedited hearing; an intermediate phase during 1982 dealing with the Quadrex Report; and a final phase of the operating license hearing later dealing with any remaining issues.

IV. CCANP's New Contentions For the reasons summarized above', CCANP's twenty pro-posed new contentions (1-9, 11 and 13-22) dealing with Quadrex and Quadrex-related matters are clearly premature.

Their injection into the proceeding at this point would disturb severely the process contemplated by CLI-80-32. */

Contention 10 (alleged collapse of the STP partnership) is unfounded but, in any event, highly remote and specula-tive in terms of its relationship to HL&P's character and competence. It clearly has no place in this expedited phase of the proceeding.

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Contention 12 (HL&P's inadequate appreciation of quality deficiencies in B&R's construction and QA programs) is without basis since no new information regarding those

! programs is alleged.

Contentions 23-26 grew out c2 CCANP's misunderstanding of I&E Report 81-28. We note that the NRC Staff intends, ir.

l

~*/ A separate CCANP motion of November 24, 1981, asks the ASLB to recommend enforcement action to the Com-mission on essentially the same grounds. If CCANP's proposed new contentions are premature, its request for enforcement action is even more singularly in- ,

appropriate. The ASLB has absolutely no record be-fore it upon which to base such a recommendation and the' matter is pending before the NRC Staff, which has the technical expertise to monitor STP activities.

LowzNnz1N, NzwxAx,'Rzza & Axzt. nan Charles lBechho3fer, Esquire Dr. James C. Lamb, III-Ernest E. Hill

-Page Seven December 3,.1981

-any event,;to. introduce all of the 1981 I&E reports and, of course, the_ parties could thus question NRC witnesses about the report. Applicants can without difficulty put on a witness to clarify.CCANP's misunderstanding and shall do so if requested by the Board.

V. Scheduling Suggestions i

Both the Applicants and the NRC Staff nave submitted t'o the Board a proposed restructured. Issue D.

All parties seem to agree that Issue F should be de-ferred until.a subsequent phase of the operating license hearing.

If the Board concurs in the position of the Applicants (and impliedly of the NRC Staff) that no additional conten '

i tions should be heard in this expedited proceeding, hearings on Issues A-E (including restructured Issue D) and Conten-

{ tions 1-2 could be completed promptly. Taking into account

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scheduling suggestions contained in the pleadings of the NRC Staff and the Intervenors, Applicants suggest that the Board i adopt a schedule along the following lines.

i First, as the NRC Staff has pointed out (p. 3), Appli-cants must supplement their prefiled testimony by submitting

evidence on (1) the revised QA/QC program for the balance of construction, (2) the functional relationships between HL&P,

(

Bechtel and the constructor, and (3) Bechtel's qualifica-tions to perform architect-engineering and construction j management services. Applicants anticipate filing such in-l formation by December 11, 1981. */

s i In view of the limited scope of such new information, L Applicants suggest that the Board require that all discovery requests be submitted within 10 days after service of the foregoing information and be responded to within 14 days of I service of the request. Thus, assuming that Applicants L serve the information on the parties by hand on December 11, any new interrogatories would be filed by December 21, and L discovery would be completed by January 11, 1982. Any supplemental or revised testimony by any party on these

• / The Staff also notes that Applicants will need to file the qualifications of the new constructor, when named.

Applicants expect to do so in January, 1982, and see no reason why this should occasion any delay in the hearing schedule here proposed.

i I

, Lowzxnexx, NzwxAN. Rzza & Axzz. nan

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Ch2rlea Erchho5for, Esquire

, Dr. James C. Lamb, III Ernest E. Hill Page Eight December 3, 1981

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subjects should be filed by January 25, 1982; and testimony thereon could be heard beginning February 9.

In the meantime, there is no reason why the hearings could not resume on January 18, 1982. */ As suggested by Applicants and the NRC Staff, the first witnesses to be heard at the resumed hearings would be the three panels of NRC Staff witnesses. It is only after such testimony is completed that the HL&P witnesses would be presented on the new information, as well as the remaining HL&P witnesses on plans for plant operation. As noted above, such testimony could be scheduled any time after February 9, 1982. They would be followed by the NRC Staff's witnesses on the re-vised QA/QC program and management for operations.

Respectfully submitted, W& '

Sick R. Newman Of Counsel:

Lowenstein, Newman, Reis

& Axelrad 1025 Connecticut Avenue, NW Washington, D. C. 20036 Baker & Botts 3000 One Shell Plaza Houston, Texas 77002 Attorneys for HOUSTON LIGHTING & POWER COMPANY, Project Manager of the South Texas Project, acting herein on behalf of itself and the other Applicants, CITY OF SAN ANTONIO, TEXAS, acting by and through the City P'.tblic Service Board of the City of San Antonio, CENTRAL POWER AND LIGHT COMPANY and CITY OF AUSTIN, TEXAS.

cc: Certificate of Service

-*/ Suen hearings could resume on January 18 even if '

the foregoing schedule concerning the new informa-tion slips somewhat. The only constraint is that the witnesses on the new information could not ap-pear until 15 days after their testimony was filed.

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UNITED STATES OF AMERICA bM NUCLEAR REGULATORY COMMISSION I.M _-a A 'SN

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BEFORE THE ATOMIC SAFETY AND LICENSING BOARD /

Tc ,!, W In the Matter of ) N / g ~1 i' U y.

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HOUSTON LIGHTING AND POWER ) Docket Nos. 50-498 OL COMPANY, ET AL.

) 50-499 OL (South Texas Project, )

Units 1 and 2) )

CERTIFICATE OF SERVICE I hereby certify that copies of Applicants' letter to the Atomic Safety and Licensing Board dated December 3, 1981, have been served on the following individuals and entities by deposit in the United States mail, first class, postage pre-paid, or by arrcnging for hand delivery as indicated by asterisk, on this 3rd day of December, 1981.

Charles Bechhoefer, Esq.* Brian Berwick, Esq.

Chairman, Administrative Judge Assistant Attorney General Atomic Safety and Licensing for the State of Texas Board Panel Environmental Protection U.S. Nuclear Regulatory Commission Division Washington, D.C. 20555 P.O. Box 12548, Capitol Station Austin, Texas 78711 -

Dr. James C. Lamb, III*

Administrative Judge William S. Jordan, III, Esq.*

313 Woodhaven Road Harmon & Weiss Chapel Hill, North Carolina 27514 1725 I Street, N.W.

Washington, D.C. 20006 Ernest E. Hill

• Administrative Judge Kim Eastman, Co-coordinator Lawrence Livermore Laboratory Barbara A. Miller University of California Pat Coy P.O. Box 808, L-46 Citizens Concerned About Livermore, California 94530 Nuclear Power 5106 Casa Oro Mrs. Peggy Buchorn San Antonie, Texas 78233 Executive Director Citizens for Equitable Lanny Sinkin*

Utillties, Inc. 2207-D Nueces Route 1, Box 1684 Austin, Texas 78705 Brazoria, Texas 77422

, Jay M. Gutierrez, Esq.*

Office of the Executive

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" Legal Director U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory C mmission Washington, D.C. 20555 Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Docketing and Service Section Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Maurice Axelrad 1

.