ML20082Q878

Forwards Analysis Concluding That CP Can Be Extended Where Cause for Requested Extension within Permittees Control,Per 910822 Meeting.Minor Change to Antitrust Conditions Listed

ML20082Q878
Person / Time
Site:	Perry
Issue date:	09/04/1991
From:	Silberg J SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Malsch M NRC OFFICE OF THE GENERAL COUNSEL (OGC)
References
NUDOCS 9109130111
Download: ML20082Q878 (6)

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September 4, 1991 (nor) wes sees 1

Martin Malsch, Esq.

Office of General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re Construction Permit Extension At our meeting on August 22 on the Perry 2 construction per-mit extension, I promised to send you our analysis of whether a construction permit can be extended when the " good cause" is within the permittees' control. The enclosed memorandum con-cludes that " good cause" can be found where the cause for the requested extension is within permittees' control.

You had also asked whether any changes would be required to the antitrust conditions in the event that one of the permittees did not participate in the permit extension. Since the antitrust conditions refer to " Applicants" rather than named utilities, it would appear that the only change that would be required would be ,

a minor amendment to the definition of the term " Applicants."

The definit.lon appears in the first paragraph of Section 3.D of the Construction Permit. As currently written,_the definition states:

The word " Applicants" refers to the five com-panies in paragraph 1.B above.

By either deleting the word "five" in this sentenr:e or changing "five" to "four," the antitrust conditions would be consistent with the construction permit as it would be amended.

Please call if you have any questions.

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POR ADDCK 05000441 PDR kl 1

September 4, 1991 MEMORANDUM -

The purpose of this memorandum is to discuss whether a util-ity may receive an extension of a permit for the construction of ,

a nuclear power plant (" construction permit" or "CP") when the delay necessitating the extension may be due to factors within i the. control of the utility. The research concludes that the fact that delays necessitating an extension are partially or fully attributable to the actions of the utility does not preclude the extension of a construction permit.

-Under the Atomic Energy Act ("the Act"), a construction per-mit may be extended when the utility demonstrates " good cause" for an extension. 42 U.S.C. 5 2235 (1988). The Act does not define " good cause" or provide any other gu2 dance about the matters to be considered in deciding to grant an extension. NRC regulations do provide somewhat more guidance as to the meaning of " good cause":

[U)pon good cause.shown the Commission vill extend-the com-pletion date for a reasonable period of time. The commis- -

sion vill recognize, among other. things, developmental prob-lems attributable to the experimental nature of the facility-

or fire, flood, explosion, strike, sabotage, domestic vio-lence, enemy action, an act of the elements,-and other acts

! beyond'the control of the permit holder, as a basis-for ,

extending the completion date.

10 C.F.R. S 50.55(b) (1991).

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Even thoegh this regulation refers to acts "beyond the con-trol" of the utility, relevant decisions heve made clear that ,

factors within the control of the utility may also provide good cause. A Licensing Board has so held, concluding that, notwith-standing the focus of 10 C.F.R. S 50.55tb), "the position that only tautter s beyond the control of the permittee may be con-sidered as constituting good cause for tha delay" should be rejected. Northern Ind. Pub. Serv. Cr t (Bailly Generating Sta-tion, Nu;1 ear I), .BP-60-22, 12 NRC 19.,

208-09 (1980). ,

Other deci ,ns regarding the scope of construction permit extension proceedings, the admissibility of contentions in such proceedings, and the parameters of the good cause standard have also indicated that good cause may be found in situations other than when the reasons f or delay were beyond the cor. trol of the utility. The Commission has held that contentions that allege that a delay in construction was under the full control of util-ity management are admissible only to the extent that the inter-venor seeks to show that the utility "was both responsible for the delays and that the delays were dilatory and u.'.s; w i t hout

' good cause.'" Washinaton Pub. Power Supply Sys. (WPPSS Nuclear Project Nos. 1& 2), CLI-82-29, 16 NRC 1221, 1231 (1982) (WPPSS

1) (emphasis a ded). An Appeal Board decision has defined "d11a-tory" on the context of a CP extension as meaning "the inten-tional delay of construction without a valid purpose."

+' .  !

Washinaton1 Pub. Power Supply Sys. (WPPSS Nuclear Project No. 2),

ALAB-722, 17.NRC 546, 552 (1983) (WPPSS II) (emphasis added!.

- The Commission _ has expressed approval of this definition, c . iing that "the proponent of the contention must articulate some basis to.show that.the applicant is responsible for the delay and has acted intentionally-and without a valid business purpcse." Pub-lic Serv. Co. of N.H. (Seabrook Station, Unit 2), CLI-84-6, 19 NRC_975, 978 (1984), citina WPPSS II, 17 NRC at 553.

These decisions demonstrate that traceability of construc-tion delay to.the utility is insufficient in itself to preclude a

. good cause finding; in addition, the delay must be intentional and without a-valid purpose. Under this standard, actions taken with the-knowledge that delay would result, but without the intention of causing delay, and delays caused for financial rea-

. sons, are not'" dilatory" and thus may constitute good cause for an extension. See Seabrook 19 NRC at 979 n.2 (" delay for finan-cial reasons constitutes delay for a valid business purpose, and is therefore'not' considered ' dilatory.'"); WPPSS II, 17 NRC at 1552 n.6-(mere indifference by utility as to whether'its conduct-wasLeausing-delay was not enough to label such conduct as dila-tory);_Washinaton Pub. Power Suoply Sys. (WPPSS Nut 'ar Project No. 1), ALAB-771, 19 NRC 1183, 1190 (1984) (" Delay genuinely and primarily attributable to lower expected demand for power oc financial circumstances, whether of limited or indefinite r ..

3-

c.,

duration, presents a valid' business ~ purpose and is perforce not=

dilatory.").

The Commission has reaffirmed its position that good cause o may.be shown notwithstanding the fact that delay might have been caused by actions-of the utility. Texas-Util. Elec. Co.

(Comanche Peak Steam Electric Station, Unit 1), CL1-86-lS, 24 NRC

~397 (1986). In Comanche Peak,-the Commission-held that there

' vere two ways in which a utility could establish good cause for an extension. The first.was to demonstrate that there was good

-cause for the past - delay in plant completion. Id. at 400. Under

'this method, a decisionmaker may refer-to the " dilatory conduct" test discussed earlier. In addition, however,- a utility "may also-demonstrate; good cause for a CP extension ty showing not that there_was--good cause for the past delay, btt that there is

-now good-cause for the-NRC to allow =more time fo'. plant comple-tion." -14. at 401 (emphasis in original). Because this second method " focuses on the permittee's current and future actions,"

it-is-iro >1avant whether the past delay in completion was due to factors within-the utility's control. Id.1I 1/ - .The Commission in Comanche Peak also elaborated on the first-method for demonstrating good cause in a manner which fur-

.ther demonstrates that good cause-may-be shown even if delay is attributable to the actions of tne utility.. The interve-nor submitted a contention that alleged that the utility had a corporate policy to construct the plant in violation of NRC regulations,-and'that the discovery and subsequent Footnote continued on next page.

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4 As can-be seen, the good cause inquiry must go beyond a <

.' superficial inquiry-into whether the construction delay-vas due- t to forces within or beyond the control of the utility. While a *

i delay arising from-forces beyond the control of the utility vill-almost always support--a finding of good cause.for construction- -

permit extension,.it is in no way the case that delay due to forces within'the control of the utility vill necessarily or rou-tinely preclude-a finding of good cause. Instead, the inquiry must focusion whether the utility's delay was intentional, whether it had a valid business purpose, and whether, in-any-event, with an eye toward current and future events, the utility

'has demonstrated sufficient cause for an extension, a

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